SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 31, 1998
Cinergy Corp.
(Exact name of registrant as specified in its charter)
Delaware 1-11377 31-1385023
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
139 East Fourth Street, Cincinnati, OH 45202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 421-9500
<PAGE>
ITEM 5. OTHER EVENTS.
Reference is made to the press release of Cinergy Corp., dated January 28, 1999,
reporting annual consolidated earnings of Cinergy Corp., which is attached
hereto as Exhibit 99 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibit is filed herewith:
Exhibit
Designation Nature of Exhibit
99 Press release of Cinergy Corp., dated January 28, 1999
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cinergy Corp.
(Registrant)
Date: January 28, 1999 By: /s/ John P. Steffen
---------------------------------
John P. Steffen
Vice President and Comptroller
(Signature)
<PAGE>
EXHIBIT 99
News contact: Steve Brash 513-287-2226 (w) 513-231-6895 (h)
Angeline Protogere 317-838-1338 (w) 317-298-3090 (h)
Investor contact: Felicia Ferguson 513-287-4348
Website: www.cinergy.com
FOR IMMEDIATE RELEASE - January 28, 1999
CINERGY REPORTS ANNUAL EARNINGS
CINCINNATI - Cinergy Corp. (NYSE:CIN) announced today consolidated annual 1998
earnings per share of $1.65, which reflects a reduction of $.14 per share for
the effects of milder than normal weather, a charge of $.32 per share related to
a previously reported settlement with Wabash Valley Power Association and total
charges of $.54 per share in its power marketing and trading business for the
establishment of net trading liabilities.
Earnings of $1.65 per share in 1998 compared with $1.59 per share in 1997.
Earnings in 1997 reflected a one-time extraordinary charge of $.69 per share for
the windfall profits tax levied against the company's 50% owned UK subsidiary,
Midlands Electricity plc, and a reduction of $.14 per share for the effects of
mild weather.
In 1998, the company recorded its highest ever realized profit margin from its
Midwest trading operations, even though it increased its trading liabilities for
future periods. These adjustments were primarily based on projections of future
prices for transactions entered into prior to April 1998. The company continues
to experience extreme volatility and illiquidity in the market for future
periods.
(more)
<PAGE>
Page 2. Cinergy announces earnings
"Notwithstanding the charges in 1998, our underlying earnings were very strong.
We are repositioning the company for a more competitive market," said James E.
Rogers, vice chairman, president and chief executive officer of Cinergy. "We are
taking important steps to create opportunities for sustainable growth in future
earnings by investing in new domestic and international initiatives.
Consequently, we incurred $.20 per share in net expenses for these initiatives
in 1998."
Some of the company's key achievements in 1998 included:
Investments of more than $110 million in countries including the Czech
Republic, Estonia, Spain and the United Kingdom
Midlands Electricity's agreement to sell its supply business to National
Power plc, a first-of-its-kind separation of an electric supply business
from a distribution business in the UK
Sale of the company's interest in Edesur SA, an electric distribution
network in Argentina
The acquisition of a major gas marketing firm, ProEnergy, adding physical
gas supply and trading to the commodity portfolio
Trigen-Cinergy Solutions' agreements with seven major corporations and
governmental entities for energy systems and services
The launch of electricity futures trading on the New York Mercantile
Exchange with Cinergy as one of only four delivery points in the U.S.
For the fourth quarter of 1998, earnings were $.45 per share compared with $.70
per share in the fourth quarter of 1997. The company said the reduction in
fourth quarter earnings is primarily related to mild weather during the period
and charges of $.20 per share for unrealized losses in its power trading
portfolio. The reduction was partially offset by continued efforts to control
costs and the sale of the company's interest in Edesur, which contributed $.07
per share to earnings.
(more)
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Page 3. Cinergy announces earnings
Warmer than normal weather conditions in the fourth quarter were reflected in
regulated kwh and mcf sales which declined by 2.7 percent and 10.2 percent
respectively over the same period a year ago. For the year 1998, total electric
kwh sales were up 21.2 percent over the previous year reflecting the increase in
power marketing and trading volumes. Regulated gas mcf sales and transportation
volumes were down 7.6 percent when compared with 1997, primarily from the mild
weather conditions during much of the year.
Following are the unaudited Cinergy Corp. Consolidated Statements of Income and
Selected Operating Statistics.
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<TABLE>
<CAPTION>
CINERGY CORP.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Periods Ended
December 31, 1998 (unaudited) (in thousands, except per share amounts)
- --------------------------------------------------------------------------------------------------------------------------------
Quarter Ended Year Ended
---------------------------------- ------------------------------------
<S> <C> <C> <C> <C>
1998 1997 1998 1997
------------ ----------- ------------- ------------
Operating Revenues
Electric $964,377 $938,043 $4,747,235 $3,861,698
Gas 401,210 164,182 1,060,664 491,146
Other 18,133 12,681 68,395 34,258
------------ ----------- ------------- ------------
1,383,720 1,114,906 5,876,294 4,387,102
Operating Expenses
Fuel used in electric production 179,946 185,971 722,661 693,435
Gas purchased 338,261 90,742 857,010 266,158
Purchased and exchanged power 347,754 256,121 2,123,662 1,219,358
Other operation 187,020 180,008 813,884 693,395
Maintenance 47,558 36,918 192,498 176,472
Depreciation 76,529 72,964 298,855 289,077
Amortization of phase-in deferrals 5,624 3,371 22,298 13,483
Amortization of post-in-service deferred operating
expenses 1,091 1,091 4,362 4,362
Taxes other than income taxes 66,489 61,911 274,635 265,693
------------ ----------- ------------- ------------
1,250,272 889,097 5,309,865 3,621,433
Operating Income 133,448 225,809 566,429 765,669
Other Income and Expenses - Net
Allowance for equity funds used during
construction 875 (92) 1,668 98
Phase-in deferred return 1,811 2,002 7,243 8,009
Equity in earnings of unconsolidated subsidiaries 18,493 17,930 51,484 60,392
Other - net 19,510 (8,149) 1,435 (9,641)
------------ ----------- ------------- ------------
40,689 11,691 61,830 58,858
Interest and Other Charges
Interest on long-term debt 47,478 43,995 183,849 181,772
Other interest 16,225 16,109 67,219 59,948
Allowance for borrowed funds used during
construction (1,626) (681) (7,481) (5,400)
Preferred dividend requirements of subsidiaries 1,365 2,951 6,517 12,569
------------ ----------- ------------- ------------
63,442 62,374 250,104 248,889
Income before Taxes 110,695 175,126 378,155 575,638
Income Taxes 39,296 64,628 117,187 213,000
Net Income Before Extraordinary Item $71,399 $110,498 $260,968 $362,638
Extraordinary Item - Equity Share of Windfall
Profits Tax - - - (109,400)
------------ ----------- ------------- ------------
Net Income $71,399 $110,498 $260,968 $253,238
Other comprehensive income, net of tax 2,853 (374) 2,055 (1,476)
------------ ----------- ------------- ------------
Comprehensive Income $74,252 $110,124 $263,023 $251,762
Average Common Shares Outstanding 158,616 157,701 158,238 157,685
Earnings Per Common Share (1)
Net Income Before Extraordinary Item $0.45 $0.70 $1.65 $2.30
Net Income $0.45 $0.70 $1.65 $1.61
Earnings Per Common Share - Assuming Dilution (1)
Net Income Before Extraordinary Item $0.45 $0.70 $1.65 $2.28
Net Income $0.45 $0.70 $1.65 $1.59
Dividends Declared Per Common Share $0.45 $0.45 $1.80 $1.80
<FN>
(1) The after tax earnings per share impact of the extraordinary item
equity share of windfall profits tax in 1997 was $.69 for both basic and
diluted earnings per share.
</FN>
</TABLE>
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<TABLE>
<CAPTION>
CINERGY CORP.
SELECTED OPERATING STATISTICS For the Periods Ended December 31, 1998 (In thousands, except where noted)
- --------------------------------------------------------------------------------------------------------------------------------
Quarter Ended Twelve Months Ended
--------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
% Increase % Increase
1998 1997 /(Decrease) 1998 1997 /(Decrease)
------------- ---------- ----------- ------------- ---------- -----------
Operating Revenues
Residential $ 308,392 $ 343,936 (10.3) $ 1,268,611 $ 1,269,407 (0.1)
Commercial 194,675 208,505 (6.6) 809,875 810,436 (0.1)
Industrial 181,399 178,475 1.6 719,528 700,633 2.7
Other retail 22,560 35,250 (36.0) 111,556 128,600 (13.3)
Firm power sales 44,280 25,186 75.8 134,182 95,435 40.6
Non-firm power sales 304,035 275,935 10.2 2,006,248 1,272,463 57.7
All other 25,681 34,937 (26.5) 91,553 75,870 20.7
------------- ---------- ----------- ------------- ---------- -----------
Total regulated revenues 1,081,022 1,102,224 (1.9) 5,141,553 4,352,844 18.1
Total Pro Energy 278,575 0 100.0 658,771 0 100.0
------------- ---------- ----------- ------------- ---------- -----------
Total revenues $ 1,359,597 $1,102,224 23.4 $ 5,800,324 $ 4,352,844 33.3
KWH Sales
Residential 3,185,851 3,463,036 (8.0) 14,550,558 14,147,188 2.9
Commercial 2,932,232 3,006,433 (2.5) 12,523,524 12,033,975 4.1
Industrial 4,522,399 4,461,664 1.4 18,093,308 17,320,540 4.5
Other retail 444,620 461,801 (3.7) 1,815,432 1,824,900 (0.5)
Firm power sales 1,560,172 842,501 85.2 4,522,166 3,102,852 45.7
Non-firm power sales 12,649,037 10,272,262 (a) 23.1 73,036,029 54,351,119 (a) 34.4
------------- ---------- ----------- ------------- ---------- -----------
Total sales 25,294,311 22,507,697 12.4 124,541,017 102,780,574 21.2
MCF Sales
Residential 12,991 15,808 (17.8) 36,256 41,846 (13.4)
Commercial 3,870 6,017 (35.7) 13,999 19,141 (26.9)
Industrial 718 1,276 (43.7) 2,941 5,240 (43.9)
Other retail 475 869 (45.3) 2,150 2,813 (23.6)
All other 102 122 (16.4) 299 349 (14.3)
------------- ---------- ----------- ------------- ---------- -----------
Total regulated sales 18,156 24,092 (24.6) 55,645 69,389 (19.8)
Total Gas Transportation 15,868 13,781 15.1 57,881 53,448 8.3
------------- ---------- ----------- ------------- ---------- -----------
Total regulated sales and transporte34,024 37,873 (10.2) 113,526 122,837 (7.6)
Total Pro Energy 145,028 0 100.0 338,343 0 100.0
------------- ---------- ----------- ------------- ---------- -----------
Total sales 179,052 37,873 372.8 451,869 122,837 267.9
Customers (end of period)
Electric 1,437,270 1,412,554 1.7
Gas 436,935 455,030 (4.0)
KWH
Generated - net 13,877,996 14,459,074 (4.0) 56,919,362 54,849,772 3.8
Purchased and exchanged power 12,266,585 8,971,666 36.7 71,522,361 51,412,586 39.1
------------- ---------- ----------- ------------- ---------- -----------
Total 26,144,581 23,430,740 11.6 128,441,723 106,262,358 20.9
Losses and company use 850,270 923,043 (7.9) 3,900,706 3,481,784 12.0
------------- ---------- ----------- ------------- ---------- -----------
Total sales 25,294,311 22,507,697 12.4 124,541,017 102,780,574 21.2
Fuel Cost Per Million Btu $1.26 $1.33 (5.3) $1.27 $1.31 (3.1)
MCF
Natural gas purchased 17,759 23,665 (25.0) 54,804 69,957 (21.7)
Transportation received 16,821 15,046 11.8 58,849 54,682 7.6
Produced 16 5 - 22 26 (15.4)
------------- ---------- ----------- ------------- ---------- -----------
Total 34,596 38,716 (10.6) 113,675 124,665 (8.8)
Gas transportation 15,868 13,781 15.1 57,881 53,448 8.3
Losses and company use 572 843 (32.1) 149 1,828 (91.8)
------------- ---------- ----------- ------------- ---------- -----------
Total regulated sales 18,156 24,092 (24.6) 55,645 69,389 (19.8)
Cost per MCF Purchased (cents) 337.29 383.38 (12.0) 364.36 380.41 (4.2)
<FN>
(a) Restated
</FN>
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