-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, D5DvKr6ZGLSy462GKzqGdUef6OzKniCNVeXEVROfX3ExaefOys8vnIDHT02YhGIa 3jN8S6jqUWe+sKJM0fIzAw== 0000020290-94-000033.txt : 19941111 0000020290-94-000033.hdr.sgml : 19941111 ACCESSION NUMBER: 0000020290-94-000033 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941110 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINCINNATI GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000020290 STANDARD INDUSTRIAL CLASSIFICATION: 4931 IRS NUMBER: 310240030 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01232 FILM NUMBER: 94558757 BUSINESS ADDRESS: STREET 1: 139 E FOURTH ST, ROOM 362-ANNEX CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5132873852 10-Q 1 FORM 10-Q - PERIOD ENDED 9-30-94 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-1232 THE CINCINNATI GAS & ELECTRIC COMPANY (Exact name of registrant as specified in its charter) OHIO 31-0240030 (State of incorporation) (I.R.S. Employer Identification No.) 139 EAST FOURTH STREET, CINCINNATI, OHIO 45202 (Address of principal executive offices) (Zip Code) 513-381-2000 (Registrant's telephone number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No . ----- ----- Common Shares, Par Value $8.50 Per Share 89,663,086 Shares Outstanding as of October 31, 1994, all of which are held by CINergy Corp.
THE CINCINNATI GAS & ELECTRIC COMPANY and Subsidiary Companies CONSOLIDATED STATEMENT OF INCOME Three Months Ended Nine Months Ended Twelve Months Ended September 30 September 30 September 30 1994 1993 1994 1993 1994 1993 (Thousands of Dollars) OPERATING REVENUES Electric........................................... $368,470 $366,073 $1,031,535 $ 964,781 $1,349,198 $1,246,005 Gas................................................ 40,481 42,565 331,197 304,804 495,690 443,985 -------- -------- ---------- ---------- ---------- ---------- Total operating revenues......................... 408,951 408,638 1,362,732 1,269,585 1,844,888 1,689,990 -------- -------- ---------- ---------- ---------- ---------- OPERATING EXPENSES Gas purchased...................................... 16,013 20,857 189,059 181,617 288,279 267,835 Fuel used in electric production................... 91,062 96,626 252,491 248,552 337,218 324,100 Other operation.................................... 83,085 66,621 232,069 199,949 311,986 263,322 Maintenance........................................ 23,271 26,351 76,073 77,954 106,976 107,401 Provision for depreciation......................... 39,211 39,197 117,030 113,671 155,420 150,480 Post-in-service deferred operating expenses--net... 823 (1,694) 2,468 (7,305) 3,302 (9,330) Phase-in deferred depreciation..................... -- (1,609) (2,161) (6,915) (3,770) (10,090) Taxes other than income taxes...................... 47,049 45,138 146,186 137,702 191,851 180,589 Income taxes....................................... 24,489 12,341 77,241 51,197 95,053 66,011 Deferred income taxes--net......................... 2,701 19,454 14,618 34,473 20,106 42,286 -------- -------- ---------- ---------- ---------- ---------- Total operating expenses......................... 327,704 323,282 1,105,074 1,030,895 1,506,421 1,382,604 -------- -------- ---------- ---------- ---------- ---------- OPERATING INCOME..................................... 81,247 85,356 257,658 238,690 338,467 307,386 -------- -------- ---------- ---------- ---------- ---------- OTHER INCOME AND DEDUCTIONS Allowance for other funds used during construction. 631 320 1,522 2,669 2,007 3,370 Post-in-service carrying costs..................... -- 4,053 -- 12,082 18 14,701 Phase-in deferred return........................... 1,946 7,418 13,405 27,916 20,823 37,894 Write-off of a portion of Zimmer Station........... -- -- -- -- (234,844) -- Income taxes--credit Related to the write-off of a portion of Zimmer Station.......................................... -- -- -- -- 12,085 -- Other............................................. 2,202 2,425 5,734 5,425 9,715 9,291 Other--net......................................... (1,711) (860) (1,577) (2,803) (8,325) (2,908) -------- -------- ---------- ---------- ---------- ---------- Total other income and deductions................ 3,068 13,356 19,084 45,289 (198,521) 62,348 -------- -------- ---------- ---------- ---------- ---------- INCOME BEFORE INTEREST CHARGES....................... 84,315 98,712 276,742 283,979 139,946 369,734 -------- -------- ---------- ---------- ---------- ---------- INTEREST CHARGES Interest on long-term debt......................... 35,609 38,223 109,600 114,686 148,606 154,154 Other interest..................................... 585 790 2,287 1,953 2,783 2,581 Amortization of debt discount, premium and other... 1,365 809 3,752 2,428 4,676 3,795 Allowance for borrowed funds used during construction--credit.............................. (839) (629) (2,149) (2,936) (2,799) (3,706) -------- -------- ---------- ---------- ---------- ---------- Net interest charges............................. 36,720 39,193 113,490 116,131 153,266 156,824 -------- -------- ---------- ---------- ---------- ---------- NET INCOME (LOSS).................................... 47,595 59,519 163,252 167,848 (13,320) 212,910 Preferred dividends................................ 5,362 6,291 17,014 18,870 23,304 25,160 -------- -------- ---------- ---------- ---------- ---------- EARNINGS (LOSS) ON COMMON SHARES..................... $ 42,233 $ 53,228 $ 146,238 $ 148,978 $ (36,624) $ 187,750 ======== ======== ========== ========== ========== ========== AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (000).................................. 89,466 87,539 88,909 87,135 88,666 86,914 EARNINGS (LOSS) PER COMMON SHARE..................... $ 0.47 $ 0.61 $ 1.64 $ 1.71 $ (0.41) $ 2.16 DIVIDENDS DECLARED PER COMMON SHARE.................. $ 0.43 $.41 1/2 $ 1.29 $ 1.24-1/2 $ 1.72 $ 1.65-5/6
THE CINCINNATI GAS & ELECTRIC COMPANY and Subsidiary Companies Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS - --------------------- Electric operating revenues increased $67 million and $103 million for the nine and twelve month periods ended September 30, 1994, respectively, over the comparable periods of 1993, due to rate increases which became effective in May 1993, August 1993 and May 1994. Gas operating revenues increased $26 million and $52 million for the nine and twelve month periods ended September 30, 1994, respectively, over the comparable periods of 1993, due to the operation of adjustment clauses reflecting increases in the average cost of gas purchased, to rate increases which became effective in April and August 1993 and to increases in total volumes sold and transported of 4.4% and 5.2%. Gas purchased expense decreased $5 million for the three month period ended September 30, 1994, from the comparable period of 1993, due to a 20.5% decrease in the average cost per Mcf purchased and to a 3.4% decrease in volumes purchased. Gas purchased expense increased $7 million and $20 million for the nine and twelve month periods ended September 30, 1994, respectively, over the comparable periods of 1993, due to increases in the average cost per Mcf purchased of 1.1% and 4.1% and to increases in volumes purchased of 3.0% and 3.4%. Fuel used in electric production decreased $6 million for the three month period ended September 30, 1994, from the comparable period of 1993, due to a 2.4% decrease in the cost of fuel per kwh generated and to a 3.5% decrease in the amount of electricity generated. Fuel used in electric production increased $13 million for the twelve month period ended September 30, 1994, over the comparable period of 1993, due to an increase in the amount of electricity generated of 5.3%. Other operation expense increased $16 million, $32 million and $49 million for the three, nine and twelve month periods ended September 30, 1994, respectively, over the comparable periods of 1993, due to a number of factors, including voluntary early retirement program costs expensed in September 1994, the adoption of an accounting standard involving postretirement benefits and increased demand side management costs. Also contributing to the increases in other operation expense for the nine and twelve month periods were increases in gas production and electric production and distribution expenses. For a discussion on the voluntary early retirement program, see "Future Outlook" herein. Maintenance expense decreased $3 million for the three month period ended September 30, 1994, from the comparable period of 1993, primarily due to decreased maintenance on electric generating units and gas and electric distribution facilities. Post-in-service deferred operating expenses (net) increased $3 million, $10 million and $13 million for the three, nine and twelve month periods ended September 30, 1994, respectively, because CG&E is amortizing previously deferred amounts of depreciation, operation and maintenance expenses (exclusive of fuel costs), and property taxes related to Woodsdale Station and Zimmer Station in accordance with orders of The Public Utilities Commission of Ohio (PUCO). CG&E had been deferring these costs until they were reflected in rates and ceased deferrals in August 1993 on Woodsdale and May 1992 on Zimmer. CG&E is amortizing the deferred expenses over 10-year periods. Phase-in deferred depreciation was $2 million and $4 million for the nine and twelve month periods ended September 30, 1994, respectively, as a result of a PUCO ordered phase-in plan, in which rates charged to customers in the early years of the plan are less than that required to fully recover the depreciation expenses related to Zimmer Station (see "Future Outlook" herein). Taxes other than income taxes increased $8 million and $11 million for the nine and twelve month periods ended September 30, 1994, respectively, over the comparable periods of 1993, primarily due to higher public utilities gross receipts taxes resulting from increased revenues and to increased property taxes resulting from a greater investment in taxable property (including Woodsdale Station) and higher property tax rates. Post-in-service carrying costs decreased $4 million, $12 million and $15 million for the three, nine and twelve month periods ended September 30, 1994, respectively, from the comparable periods of 1993, as a result of discontinuing the accrual of carrying costs on the first five units of Woodsdale Station after the August 1993 effective date of new rates which reflect Woodsdale Station. Phase-in deferred return was $2 million, $13 million and $21 million for the three, nine and twelve month periods ended September 30, 1994, respectively, as a result of the PUCO ordered phase-in plan, in which rates charged to customers in the early years of the plan will be less than that required to provide the authorized return on investment (see "Future Outlook" herein). In November 1993, CG&E wrote off costs associated with Zimmer Station of approximately $223 million, net of taxes. The write-off represents amounts disallowed from rate base by the PUCO in its May 1992 rate order. CG&E had appealed the rate order to the Supreme Court of Ohio; however, in November 1993, the Supreme Court upheld the PUCO on the issue of the disallowance, ruling that the PUCO properly excluded costs related to nuclear fuel, nuclear wind-down activities and AFC from CG&E's rate base. Other (net) decreased $5 million for the twelve month period ended September 30, 1994 due to a number of factors, including costs incurred in 1993 associated with IPALCO Enterprises, Inc.'s intervention in the Merger between CG&E and PSI Resources. Interest on long-term debt decreased $5 million and $6 million for the nine and twelve month periods ended September 30, 1994, primarily due to refinancing of first mortgage bonds and pollution control revenue bonds at lower rates in November 1993, February 1994 and March 1994. FUTURE OUTLOOK - -------------- Merger Consummation - ------------------- On October 24, 1994, pursuant to an Amended and Restated Agreement and Plan of Reorganization dated as of December 11, 1992, as subsequently amended and restated, PSI Resources, Inc. (Resources), an Indiana corporation, merged with and into CINergy Corp. (CINergy), a Delaware corporation and registered holding company under the Public Utility Holding Company Act of 1935 (PUHCA), and a subsidiary of CINergy merged with and into CG&E, an Ohio corporation (collectively, the "Merger") in a transaction accounted for as a pooling of interests. Following the Merger, CG&E and PSI Energy, Inc. (Energy), an Indiana corporation, became subsidiaries of CINergy. Prior to the Merger, Energy was a wholly owned subsidiary of Resources. Each outstanding share of Resources common stock and CG&E common stock was exchanged for 1.023 shares and one share, respectively, of CINergy common stock, resulting in the issuance of approximately 148 million shares of CINergy common stock, par value $.01 per share. The outstanding preferred stock and debt securities of Energy and CG&E were not affected by the Merger. In its order approving the Merger dated October 21, 1994, the Securities and Exchange Commission (SEC) decided to reserve judgment for up to three years on whether CINergy can retain its gas operations and the non-utility businesses of CG&E and Energy. At the end of the three-year period, CINergy must file with the SEC seeking a decision on the gas divestiture and non- utility business issues, if these issues do not become moot before that time. Originally, CG&E and Resources were to be merged into CINergy as an Ohio corporation. Under this structure CG&E and Resources would have become operating divisions of CINergy, ceasing to exist as separate corporations, and CINergy would not have been subject to the restrictions imposed by PUHCA. However, The Indiana Utility Regulatory Commission (IURC) dismissed Resources' application for approval of the transfer of its license or property to a non-Indiana corporation. The IURC's decision was appealed, and on October 18, 1994, the Indiana Court of Appeals reversed the IURC's decision. This decision by the Indiana Court of Appeals did not alter the consummation of the Merger establishing CINergy as a registered holding company. The companies have estimated the nominal dollar value of savings from the Merger to be approximately $1.5 billion, computed on a revenue requirements basis, over the 10-year period from 1994 through 2003. The Merger is expected to yield several types of benefits which lower revenue requirements. These benefits include capital expenditure savings, production cost savings, labor cost savings, administrative and general savings, and cost-of-capital savings. The companies currently anticipate that the estimated Merger savings will be apportioned approximately equally between CG&E and Energy. With respect to the allocation of Merger savings between CG&E's ratepayers and CINergy's shareholders, as part of a settlement agreement with the PUCO, CG&E is permitted to retain all electric non-fuel savings from the Merger until 1999. The agreement also calls for CG&E to amortize its share of Merger transaction costs and costs to achieve Merger savings allocable to PUCO electric jurisdictional customers (estimated to be $17 million and $18 million, respectively) by January 1, 1999. In the third quarter of 1994, CG&E expensed $11 million representing the PUCO electric jurisdictional portion of its voluntary early retirement plan (VERP) costs. The remaining $6.4 million of VERP costs have been deferred for future recovery through rates. CG&E intends to amortize the PUCO electric jurisdictional portion of Merger transaction costs as recovered through the regulatory process in accordance with the agreement with the PUCO, and to continue deferring the non-PUCO electric jurisdictional portion of Merger transaction costs and future costs to achieve Merger savings (estimated to be $14 million including the $6.4 million mentioned above) for future recovery. Unless otherwise noted, the following discussion pertains solely to CG&E and its subsidiary companies. Liquidity and Capital Resources - ------------------------------- The construction expenditures for CG&E and its subsidiaries for the first nine months of 1994 were approximately $125 million (including $4 million of AFC) and are expected to be $192 million for the year 1994. Over the next five years, 1994-1998, construction expenditures are expected to be $1,343 million (including AFC of $54 million). These estimates are under continuing review and subject to adjustment. During the five year period, a total of $142 million will be required for the redemption of long-term debt and cumulative preferred stock at maturity or in compliance with mandatory redemption requirements. CG&E contemplates future debt and equity financings in the capital markets. Short-term indebtedness will be used to supplement internal sources of funds for the interim financing of the construction program. CG&E may continue to sell additional securities, from time to time, beyond what is needed for capital requirements to allow the early refinancing of existing securities. Under the terms of CG&E's first mortgage indenture, at September 30, 1994, CG&E would have been able to issue approximately $880 million of additional first mortgage bonds. As a result of the write-off of a portion of Zimmer Station in November 1993, CG&E will have inadequate coverage to meet the requirements of its articles of incorporation for issuing additional shares of preferred stock until late December 1994. CG&E has a $200 million bank revolving credit agreement that will expire in September 1996. The agreement provides a back-up source of funds for CG&E's commercial paper program. CG&E has not made any borrowings under this agreement. CG&E and its subsidiaries had lines of credit at September 30, 1994, of $123 million, of which $111 million remained unused. CG&E and its subsidiaries are currently authorized to have a maximum of $235 million of short-term notes outstanding. Rate Matters - ------------ Over the past two years, CG&E has received a number of electric and gas rate increases that will positively impact future earnings. The primary reasons for the electric rate increases were recovery of CG&E's investment in Zimmer Station, Woodsdale Station and other facilities used to serve customers. The gas rate increases reflect investments in new and replacement gas mains and facilities. As part of an August 1993 stipulation, CG&E has agreed not to increase gas base rates prior to June 1, 1995, excluding rate filings made under certain circumstances, such as to address financial emergencies. In August 1993, the PUCO approved a stipulation authorizing CG&E to increase annual electric revenues by $41.1 million and increase annual gas revenues by $19.1 million. In May 1992, the PUCO authorized CG&E to increase electric revenues by $116.4 million to be phased in over a three-year period through annual increases beginning each May of $37.8 million in 1992, $38.8 million in 1993 and $39.8 million in 1994. In response to an appeal by CG&E of the PUCO's May 1992 rate order, the Supreme Court of Ohio ruled, in November 1993, that the PUCO did not have authority to order the phased-in rate increase, and remanded the case to the PUCO to set rates that provide the gross annual revenues determined in accordance with Ohio statutes. The Court also said the PUCO must provide a mechanism which allows CG&E to recover costs being deferred under the phase-in plan through the date of the order on remand. At September 30, 1994, CG&E had deferred $83 million of costs, net of taxes, related to the phase-in plan. In April 1994, the PUCO approved a settlement agreement among CG&E, the PUCO Staff, and other interested parties addressing the November 1993 ruling by the Court. As part of the settlement, CG&E agreed not to seek early implementation of the third phase of the authorized rate increase, which means the $39.8 million increase became effective in May 1994 as originally scheduled. CG&E also agreed that it would not seek accelerated recovery of deferrals related to the phase-in plan. These deferrals will be recovered over the remaining seven-year period contemplated in the May 1992 PUCO order. In addition, CG&E agreed to a moratorium on increases in base electric rates until January 1, 1999 (except under certain circumstances), and, in return, received authorization to retain all electric non-fuel Merger savings until 1999. In May 1994, CG&E's Kentucky subsidiary, The Union Light, Heat and Power Company (ULH&P) agreed with the Kentucky Public Service Commission (KPSC) to an electric rate moratorium commencing after ULH&P's next retail rate case and extending to January 1, 2000. The KPSC also required CG&E and ULH&P to agree that, for 12 months from consummation of the Merger, no filings will be made to adjust CG&E's base purchase power rate and ULH&P's base electric rates. Voluntary Workforce Reduction - ----------------------------- CG&E and its subsidiaries recently completed a voluntary early retirement program (VERP) for eligible management, supervisory, administrative and professional employees. Of the approximately 160 employees who were eligible to participate in the program, 115 employees accepted the offer, resulting in a pre-tax cost of approximately $17.4 million. This cost is included in the costs to achieve Merger savings previously discussed. In the third quarter of 1994, CG&E expensed $11.0 million representing the PUCO electric jurisdictional portion of its VERP costs. The remaining $6.4 million of VERP costs have been deferred for future recovery through rates.
THE CINCINNATI GAS & ELECTRIC COMPANY and Subsidiary Companies CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended Twelve Months Ended September 30 September 30 1994 1993 1994 1993 (Thousands of Dollars) Cash Flows From Operations: Net Income (Loss)..................................... $ 163,252 $ 167,848 $ (13,320) $ 212,910 ---------- ---------- ---------- ---------- Adjustments to reconcile net income to net cash: Deferred gas and electric fuel costs--net......... (13,716) (2,183) (7,619) (8,994) Depreciation...................................... 117,030 113,671 155,420 150,480 Post-in-service deferred operating expenses--net.. 2,468 (7,305) 3,302 (9,330) Phase-in deferred depreciation.................... (2,161) (6,915) (3,770) (10,090) Allowance for other funds used during construction................................... (1,522) (2,669) (2,007) (3,370) Post-in-service carrying costs.................... -- (12,082) (18) (14,701) Phase-in deferred return.......................... (13,405) (27,916) (20,823) (37,894) Deferred income taxes and investment tax credits--net................................... 15,336 34,403 16,653 45,961 Write-off of a portion of Zimmer Station.......... -- -- 234,844 -- Deferred income taxes and investment tax credits related to write-off of a portion of Zimmer Station................................. -- -- (12,085) -- Other--net........................................ 37,733 (2,093) 59,237 (1,894) Change in current assets and liabilities: Receivables and unbilled revenues.............. 77,983 32,703 7,240 (22,281) Materials and supplies......................... 15,865 9,921 9,511 4,771 Other current assets........................... 1,532 (5,248) 2,237 (12,979) Accounts payable and other current liabilities. (47,864) (5,361) (21,939) 33,609 ---------- ---------- ---------- ---------- Total adjustments........................... 189,279 118,926 420,183 113,288 ---------- ---------- ---------- ---------- Net cash provided by operations............. 352,531 286,774 406,863 326,198 ---------- ---------- ---------- ---------- Cash Flows From Investing: Construction expenditures (less allowance for other funds used during construction)..................... (123,026) (145,975) (175,769) (203,817) ---------- ---------- ---------- ---------- Cash Flows From Financing: Common stock proceeds................................. 35,604 32,947 46,643 44,302 Long-term debt proceeds............................... 311,957 -- 608,957 12,590 Retirement of long-term debt and cumulative preferred stock..................................... (353,647) (6,513) (641,589) (384,479) Net short-term borrowings............................. (18,500) (27,920) (6,080) (2,419) Dividends paid on common shares....................... (114,357) (108,221) (152,076) (143,772) Dividends paid on preferred shares.................... (17,942) (18,870) (24,233) (26,242) ---------- ---------- ---------- ---------- Net cash provided by (used in) financing activities..................... (156,885) (128,577) (168,378) (500,020) ---------- ---------- ---------- ---------- Net increase (decrease) in cash and temporary cash investments............... 72,620 12,222 62,716 (377,639) Cash and temporary cash investments--beginning of period............................................. 4,570 2,252 14,474 392,113 ---------- ---------- ---------- ---------- Cash and temporary cash investments--end of period....... $ 77,190 $ 14,474 $ 77,190 $ 14,474 ========== ========== ========== ========== Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest (net of allowance for borrowed funds used during construction)........................... $ 97,522 $ 92,396 $ 156,992 $ 160,005 Income taxes.......................................... $ 74,681 $ 30,252 $ 98,214 $ 35,672
THE CINCINNATI GAS & ELECTRIC COMPANY and Subsidiary Companies CONSOLIDATED BALANCE SHEET ASSETS September 30 December 31 1994 1993 (Thousands of Dollars) UTILITY PLANT In service............................................ $5,294,105 $5,188,602 Less--Accumulated provisions for depreciation......... 1,569,273 1,472,313 ---------- ---------- 3,724,832 3,716,289 Construction work in progress......................... 65,984 69,351 ---------- ---------- 3,790,816 3,785,640 ---------- ---------- CURRENT ASSETS Cash.................................................. 6,347 4,570 Short-term investments................................ 70,843 -- Accounts receivable--net.............................. 176,578 206,210 Accrued unbilled revenues............................. 57,604 105,955 Materials and supplies................................ 136,652 152,517 Prepayments........................................... 19,393 29,053 Other................................................. 115,671 107,543 ---------- ---------- 583,088 605,848 ---------- ---------- OTHER ASSETS Post-in-service carrying costs and deferred operating expenses............................................ 149,747 154,636 Phase-in deferred return and depreciation............. 98,996 83,431 Amounts due from customers-income taxes............... 379,085 387,748 Other................................................. 153,286 126,220 ---------- ---------- 781,114 752,035 ---------- ---------- $5,155,018 $5,143,523 ========== ========== LIABILITIES CAPITALIZATION Common shares......................................... $ 761,700 $ 748,528 Additional paid-in capital............................ 337,165 314,218 Retained earnings..................................... 487,439 456,511 Preferred shares-- Not subject to mandatory redemption................. 80,000 120,000 Subject to mandatory redemption..................... 210,000 210,000 Long-term debt........................................ 1,837,776 1,829,061 ---------- ---------- 3,714,080 3,678,318 ---------- ---------- CURRENT LIABILITIES Notes payable......................................... 12,500 31,013 Accounts payable...................................... 80,718 122,620 Dividends payable on preferred shares ................ 5,362 6,290 Accrued taxes......................................... 205,563 222,219 Accrued interest on debt.............................. 41,338 29,123 Other................................................. 27,975 29,496 ---------- ---------- 373,456 440,761 ---------- ---------- DEFERRED CREDITS AND OTHER Deferred income taxes................................. 744,934 733,224 Investment tax credits................................ 136,985 141,520 Accrued pension cost.................................. 63,604 41,826 Other................................................. 121,959 107,874 ---------- ---------- 1,067,482 1,024,444 ---------- ---------- $5,155,018 $5,143,523 ========== ==========
THE CINCINNATI GAS & ELECTRIC COMPANY and Subsidiary Companies NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The accompanying information reflects, in the opinion of the management of CG&E, all adjustments necessary to present fairly the results for the interim periods. All such adjustments are of a normal recurring nature. Reference should be made to CG&E's Form 10-K for the year 1993 for additional footnote disclosure, including a summary of significant accounting policies. Reference is made to "Management's Discussion and Analysis of Financial Condition and Results of Operations" herein for information regarding CG&E's merger with PSI Resources, Inc. (Resources) and a voluntary early retirement program. Reference is made to "Item 5. Other Information" herein for information regarding unaudited supplemental condensed consolidated financial information for CG&E, Resources and CINergy. In April 1994, The Public Utilities Commission of Ohio (PUCO) approved a settlement agreement among CG&E, the PUCO Staff, the Ohio Office of Consumers' Counsel (OCC) and other intervenors addressing the November 1993 ruling by the Supreme Court of Ohio. As part of the settlement, CG&E has agreed not to seek early implementation of the third phase of the May 1992 rate increase, which means the $39.8 million increase became effective in May 1994 as originally scheduled. CG&E also agreed that it would not seek accelerated recovery of deferrals related to the phase-in plan. These deferrals will be recovered over the remaining seven year period contemplated in the May 1992 PUCO order. In addition, CG&E agreed to a moratorium on increases in base electric rates until January 1, 1999 (except under certain circumstances), and, in return, received authorization to retain all electric non-fuel Merger savings until 1999. In May 1994, CG&E's Kentucky subsidiary, The Union Light, Heat and Power Company (ULH&P) agreed with the Kentucky Public Service Commission (KPSC) to an electric rate moratorium commencing after ULH&P's next retail rate case and extending to January 1, 2000. The KPSC also required CG&E and ULH&P to agree that, for 12 months from consummation of the Merger, no filings will be made to adjust CG&E's base purchase power rate and ULH&P's base electric rates. PART II. OTHER INFORMATION Item 5. Other Information. - ------- ----------------- Unaudited Supplemental Condensed Consolidated Financial - ------------------------------------------------------- Information: - ------------ The following supplemental condensed consolidated financial information combines the historical unaudited consolidated statements of income and consolidated balance sheets of CG&E and Resources after giving effect to the Merger. The unaudited Supplemental Condensed Consolidated Statements of Income for the three, nine and twelve month periods ended September 30, 1994, give effect to the Merger as if it had occurred at October 1, 1993. The unaudited Supplemental Condensed Consolidated Balance Sheet at September 30, 1994, gives effect to the Merger as if it had occurred at September 30, 1994. These statements are prepared on the basis of accounting for the Merger as a pooling of interests. Intercompany transactions (including purchased and exchanged power transactions) between CG&E and Resources during the periods presented were not material and accordingly no adjustments were made to eliminate such transactions. In addition, the following supplemental condensed consolidated financial information should be read in conjunction with the historical consolidated financial statements and related notes thereto of CG&E and Resources. The following information is not necessarily indicative of the operating results or financial position that would have occurred had the Merger been consummated at the beginning of the periods, or on the date, for which the Merger is being given effect, nor is it necessarily indicative of future operating results or financial position. Supplemental Condensed Consolidated Statements of Income (in millions, except per share amounts):
Three Months Ended September 30, 1994 ------------------------------------- CG&E Resources CINergy --------- --------- ---------- Operating revenues.............................. $ 409 $ 283 $ 692 Operating expenses.............................. 328 247 575 --------- -------- ---------- Operating income................................ 81 36 117 Other income and deductions -- net.............. 3 3 6 Interest charges -- net......................... 37 20 57 Preferred dividend requirement.................. 5 3 8 --------- -------- ---------- Net income...................................... $ 42 $ 16 $ 58 ========= ======== ========== Average common shares outstanding (1)........... 89 56 147 Earnings per common share (1)................... $ .47 $ .27 $ .39
Nine Months Ended September 30, 1994 ------------------------------------ CG&E Resources CINergy --------- --------- ---------- Operating revenues.............................. $ 1,363 $ 868 $ 2,231 Operating expenses.............................. 1,105 749 1,854 --------- -------- ---------- Operating income................................ 258 119 377 Other income and deductions -- net.............. 19 6 25 Interest charges -- net......................... 114 55 169 Preferred dividend requirement.................. 17 10 27 --------- -------- ---------- Net income...................................... $ 146 $ 60 $ 206 ========= ======== ========== Average common shares outstanding (1)........... 89 56 146 Earnings per common share (1)................... $ 1.64 $ 1.06 $ 1.41
Twelve Months Ended September 30, 1994 -------------------------------------- CG&E Resources CINergy --------- --------- ---------- Operating revenues.............................. $ 1,845 $ 1,149 $ 2,994 Operating expenses.............................. 1,507 985 2,492 --------- -------- ---------- Operating income................................ 338 164 502 Other income and deductions -- net.............. (199)* 11 (188) Interest charges -- net......................... 153 71 224 Preferred dividend requirement.................. 23 14 37 --------- -------- ---------- Net income (loss)............................... $ (37) $ 90 $ 53 ========= ======== ========== Average common shares outstanding (1)........... 89 56 146 Earnings (loss) per common share (1)............ $ (.41) $ 1.60 $ .36 *Reflects the write-off of a portion of Zimmer Station of approximately $223 million, net of taxes.
Supplemental Condensed Consolidated Balance Sheet (in millions): September 30, 1994 --------------------------------------- CG&E Resources CINergy --------- --------- --------- Assets Utility plant -- original cost In service...................................... $ 5,294 $ 3,720 $ 9,014 Accumulated depreciation........................ 1,569 1,533 3,102 --------- --------- --------- 3,725 2,187 5,912 Construction work in progress................... 66 163 229 --------- --------- --------- Total utility plant........................... 3,791 2,350 6,141 Current assets.................................... 583 209 792 Other assets...................................... 781 307 1,088 --------- --------- --------- Total assets.................................. $ 5,155 $ 2,866 $ 8,021 ========= ========= ========= Capitalization and Liabilities Common stock (2).................................. $ 762 $ 1 $ 1 Paid-in capital (2)............................... 337 261 1,360 Retained earnings................................. 487 458 945 --------- --------- --------- Total common stock equity..................... 1,586 720 2,306 Cumulative preferred stock........................ 290 188 478 Long-term debt.................................... 1,838 878 2,716 --------- --------- --------- Total capitalization.......................... 3,714 1,786 5,500 Current liabilities............................... 373 648 1,021 Deferred income taxes............................. 745 310 1,055 Other liabilities................................. 323 122 445 --------- --------- --------- Total capitalization and other liabilities.... $ 5,155 $ 2,866 $ 8,021 ========= ========= =========
Notes to Supplemental Condensed Consolidated Financial Information: (1) The Supplemental Condensed Consolidated Statements of Income reflect the conversion of each share of CG&E common stock outstanding into one share of CINergy common stock and each share of Resources common stock outstanding into 1.023 shares of CINergy common stock. (2) The "Common stock" and "Paid-in capital" amounts reflected in the Supplemental Condensed Consolidated Balance Sheet reflect the conversion of each share of CG&E common stock outstanding into one share of CINergy common stock ($.01 par value) and each share of Resources common stock outstanding into 1.023 shares of CINergy common stock ($.01 par value). Item 6. Exhibits and Reports on Form 8-K. - ------- -------------------------------- (a) Exhibits: 27 - Financial Data Schedule (b) Reports on Form 8-K filed: Date of Report Items Reported -------------- -------------- October 24, 1994 Item 1. Changes in Control of Registrant Item 7. Financial Statements and Exhibits 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 thereunto duly authorized. THE CINCINNATI GAS & ELECTRIC COMPANY ------------------------------------- (Registrant) Date: November 9, 1994 Daniel R. Herche ------------------------------------- Daniel R. Herche, Controller (Duly Authorized Officer and Chief Accounting Officer) (Signature) EX-27 2 FDS FOR CG&E 9/30/94 FORM 10-Q
UT THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF THE CINCINNATI GAS & ELECTRIC COMPANY INCLUDED IN ITS FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1994 JAN-01-1994 SEP-30-1994 PER-BOOK 3,790,816 24,524 583,088 756,590 0 5,155,018 761,700 337,165 487,439 1,586,304 210,000 80,000 1,837,776 12,500 0 0 0 0 0 0 1,428,438 5,155,018 1,362,732 91,859 1,013,215 1,105,074 257,658 19,084 276,742 113,490 163,252 17,014 146,238 114,357 137,772 352,531 1.64 1.64
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