0000020290-95-000020.txt : 19950810 0000020290-95-000020.hdr.sgml : 19950810 ACCESSION NUMBER: 0000020290-95-000020 CONFORMED SUBMISSION TYPE: U-1 PUBLIC DOCUMENT COUNT: 14 FILED AS OF DATE: 19950809 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINCINNATI GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000020290 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 310240030 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1 SEC ACT: 1935 Act SEC FILE NUMBER: 070-08669 FILM NUMBER: 95560242 BUSINESS ADDRESS: STREET 1: 139 E FOURTH ST ROOM 362-ANNEX CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5133812000 U-1 1 FORM U-1 As filed with the Securities and Exchange Commission on August 9, 1995 File No. 70-____ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________________ FORM U-1 DECLARATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ____________________________________________ The Cincinnati Gas & Electric Company 139 East Fourth Street Cincinnati, Ohio 45202 (Name of company filing this statement and address of principal executive offices) CINergy Corp. (Name of top registered holding company parent) William L. Sheafer Treasurer CINergy Corp. 139 East Fourth Street Cincinnati, Ohio 45202 (Name and address of agent of service) The Commission is requested to send copies of all notices, orders and communications in connection with this Declaration to: Cheryl M. Foley James R. Lance Vice President, General Counsel Manager -- Corporate Finance and Corporate Secretary CINergy Corp. CINergy Corp. 139 East Fourth Street 139 East Fourth Street Cincinnati, Ohio 45202 Cincinnati, Ohio 45202 Item 1. Description of Proposed Transactions. A. Summary of Requested Authorizations. The Cincinnati Gas & Electric Company ("CG&E"), a wholly-owned utility subsidiary of CINergy Corp. ("CINergy"), a registered holding company under the Public Utility Holding Company Act of 1935 (the "Act"), proposes to submit to the holders of its outstanding capital stock, at a special meeting to be held on or about November 16, 1995 (the "Special Meeting"), a proposal and an alternative proposal to amend CG&E's Amended Articles of Incorporation (the "Articles") with respect to a limitation on the issuance of unsecured debt securities, as described below. In connection therewith, CG&E also proposes to solicit proxies from the holders of its capital stock and to pay the fees of a professional proxy solicitor. B. Proposals to Amend Articles With Respect to Unsecured Indebtedness. CG&E has outstanding 89,663,086 shares of common stock, $8.50 par value per share, all of which is held by CINergy. CG&E's outstanding preferred stock, all of which is publicly held, consists of two million shares of cumulative preferred stock, par value $100 per share (the Preferred Stock"), issued in four series. The Articles as currently in effect provide that, without the consent of the holders of not less than a majority of the total number of shares of Preferred Stock of all series then outstanding, CG&E shall not issue or assume any securities representing unsecured debt (other than for purposes of refunding outstanding unsecured indebtedness or redeeming or otherwise retiring outstanding shares of stock ranking prior to the Preferred Stock with respect to the payment of dividends or upon the dissolution, liquidation or winding up of CG&E) if, immediately after such issue or assumption, the total outstanding principal amount of all securities representing unsecured debt would exceed 20% of the aggregate of (1) the total principal amount of all then-outstanding secured debt of CG&E, and (2) the capital and surplus of CG&E, as stated on CG&E's books (the "20% Limitation"). CG&E proposes to submit to the holders of the outstanding shares of Preferred Stock of all series, and to CINergy, as the sole holder of all the outstanding shares of CG&E common stock, for consideration and action at the Special Meeting, a proposal to amend the Articles to eliminate the 20% Limitation (the "Proposal"). Approval of the Proposal requires the affirmative vote of the holders of not less than two-thirds of the total number of shares of Preferred Stock of all four series, voting together as one class, and an affirmative two-thirds vote from CINergy as the sole common stock holder. CINergy has informed CG&E that it will vote in favor of the Proposal (and, if necessary, the alternative proposal described below). In the event the Proposal fails to receive the requisite affirmative vote, CG&E proposes to seek approval at the Special Meeting of an alternative proposal amending the Articles to authorize CG&E to issue or assume unsecured debt securities in excess of the 20% Limitation through December 1, 2005 (the "Alternative Proposal"). Approval of the Alternative Proposal requires the same affirmative vote as the Proposal. CG&E believes that adoption of the Proposal (or, as appropriate, the Alternative Proposal) is critical to maximizing its financial flexibility and minimizing its financing costs. 1. Financial Flexibility. Although historically CG&E's debt financing generally has been accomplished through the issuance of long- term first mortgage bonds and only a modest amount of short-term debt, CG&E believes that in the long-run the various types of unsecured debt products will grow in importance as an option in financing its construction program and in refinancing high-cost first mortgage bonds. The availability and flexibility of unsecured debt is necessary to take full advantage of changing conditions in securities markets. In addition, although CG&E's earnings currently are sufficient to meet the earnings coverage tests that must be satisfied before issuing additional first mortgage bonds and preferred stock, there have been periods, including virtually all of 1994, when, because of its inability to meet the earnings coverage test in the Articles, CG&E was unable to issue any additional preferred stock. Given CG&E's desire to continue to rely on unsecured debt up to the maximum currently permissible under the Articles, a similar inability to issue preferred stock in the future would limit CG&E s financing options to either additional first mortgage bonds (assuming that the applicable earnings coverage test could be met) or additional common stock. As noted, CG&E's use of short-term debt is subject to the 20% Limitation. CG&E believes that the prudent use of short-term debt is vital to effective financial management of its business. Not only is short-term debt virtually always the least expensive form of capital, it also provides flexibility in meeting seasonal fluctuations in cash requirements, acts as a bridge between issues of permanent capital, and can be used when unfavorable conditions prevail in the market for long- term capital. Moreover, inasmuch as the 20% Limitation constrains CG&E s flexibility in planning and financing its business activities, CG&E believes that ultimately it will be at a competitive disadvantage if such limitation is not removed. The industry's new competitive options -- such as power marketers, independent power producers, and cogenerators -- generally are not subject to similar financing restrictions in their organizational documents. Many other utilities with charter restrictions the same as or similar to the 20% Limitation, including utility subsidiaries of registered holding companies, have solicited or are soliciting the same or similar amendments from their shareholders./1/ Indeed, CG&E's associate utility company, PSI Energy, Inc. ("PSI"), has no comparable provision in its charter. 2. Lower Costs. As stated above, CG&E's short-term debt issuances typically represent the lowest-cost form of financing. Although short- term debt inherently subjects the borrower to potentially greater interest-rate volatility, the cost of short-term debt almost never exceeds that of permanent capital. The 1994 merger of CG&E and PSI Resources, Inc. that created CINergy (the "Merger") resulted in a combined system that is larger and financially stronger than either company would have been on a stand-alone basis. This in turn has prompted CG&E to reassess its historically modest use of short-term debt. By increasing its use of short-term debt, CG&E may be able to lower its cost structure even further, thereby making its energy products more competitive, increasing earnings and reducing its business risks. But with the 20% Limitation in place, at the same time as CG&E seeks to rely increasingly on unsecured debt, the availability and concomitant benefits of short-term debt would be hampered. With the above benefits in mind, CG&E this year sought and received approval from the Public Utilities Commission of Ohio (order dated May 4, 1995 in Case No. 95-358-GE-AIS) to increase the maximum amount of short- term debt it is permitted to have outstanding at any one time from $200 million to $400 million. However, under the 20% Limitation, CG&E estimates that it would have only approximately $150 million of short-term debt capacity, based on estimated capitalization as of December 31, 1995. Drafts of the notice of the Special Meeting, the related proxy statement and form of proxy are included as Exhibits B-1, B-2 and B-3, respectively. A more detailed statement of the proposals and of the supporting reasons is set forth in the draft proxy statement, to which reference is hereby made. C. Solicitation of Proxies. CG&E has determined to retain the services of Morrow & Co., Inc. ("Morrow"), a professional proxy solicitor, to assist in the solicitation of proxies from the holders of the Preferred Stock, and requests authority to pay Morrow a fee not to exceed approximately $8500, plus reimbursement of out-of-pocket expenses estimated not to exceed approximately $5000. As set forth in Item 5, in order to give CG&E adequate time to solicit proxies in advance of the Special Meeting -- particularly in light of the super-majority voting requirement for adoption of the proposals -- CG&E requests that the Commission issue an order by not later than October 2, 1995 permitting it to solicit proxies as proposed herein. D. Statement Pursuant to Rule 54. Under Rule 54, in determining whether to approve the issue and sale of a security by a registered holding company for purposes other than the acquisition of an exempt wholesale generator ("EWG") or a foreign utility company ("FUCO"), or other transactions by such registered holding company or its subsidiaries other than with respect to EWGs and FUCOs, the Commission shall not consider the effect of the capitalization or earnings of any subsidiary which is an EWG or a FUCO upon the registered holding company system if the conditions set forth in Rule 53(a), (b) and (c) are satisfied. As set forth below, all applicable conditions of Rule 53(a) are and, upon consummation of the proposed transactions, will be satisfied, and none of the conditions specified in Rule 53(b) exists or, as a result thereof, will exist. The following discussion assumes the CINergy system's existence for the dates and periods in question. Four CINergy companies are EWGs or FUCOs: PSI Argentina, Inc. ("PSI Argentina"), Costanera Power Corporation ("Costanera") and E P EDEGEL, Inc. ("EDEGEL") are EWGs, and PSI Energy Argentina, Inc. ("Energy Argentina") is a FUCO. For further information with respect to such entities, reference is made to the Application-Declaration in File No. 70- 8589. Rule 53(a)(1): The average of CINergy's pro forma consolidated retained earnings for the four consecutive quarters ended June 30, 1995 was $909 million, and CINergy's aggregate investment in EWGs and FUCOs at June 30, 1995 was approximately $20 million, or approximately 2% of consolidated retained earnings. Rule 53(a)(2): CINergy maintains books and records enabling it to identify investments in and earnings from each EWG and FUCO in which it directly or indirectly holds an interest. At present, CINergy does not hold any interest in a domestic EWG; Rule 53(a)(2)(i) is therefore inapplicable. In accordance with Rule 53(a)(2)(ii), the books and records and financial statements of each foreign EWG and FUCO which is a majority- owned subsidiary company of CINergy are kept in conformity with and prepared according to U.S. generally accepted accounting principles ("GAAP"). CINergy will provide the Commission access to such books and records and financial statements, or copies thereof, in English, as the Commission may request. In accordance with Rule 53(a)(2)(iii), for each foreign EWG and FUCO in which CINergy directly or indirectly owns 50% or less of the voting securities, CINergy will proceed in good faith, to the extent reasonable under the circumstances, to cause each such entity's books and records to be kept in conformity with, and the financial statements of each such entity to be prepared according to, GAAP. If such books and records are maintained, or such financial statements are prepared, according to a comprehensive body of accounting principles other than GAAP, CINergy will, upon request of the Commission, describe and quantify each material variation from GAAP in the accounting principles, practices and methods used to maintain such books and records and each material variation from GAAP in the balance sheet line items and net income reported in such financial statements, as the case may be. In addition, CINergy will proceed in good faith, to the extent reasonable under the circumstances, to cause access by the Commission to such books and records and financial statements, or copies thereof, in English, as the Commission may request, and in any event will make available to the Commission any such books and records that are available to CINergy. Rule 53(a)(3): Less than two percent of the total number of employees of CINergy's utility subsidiaries render services, at any one time, to Costanera, PSI Argentina, EDEGEL and Energy Argentina. Such services have heretofore been rendered, in part, by employees of PSI in accordance with the Commission's order in PSI Resources, Inc., et al., Rel. No. 35-25674, 52 SEC Docket 2533, 2534-35 (Nov. 13, 1992), and by employees of CG&E in accordance with business practices established prior to the Merger and the registration of CINergy as a holding company under the Act. Pursuant to the Commission's October 1994 order in File No. 70- 8427 authorizing the Merger and related transactions (Rel. No. 35-26146), CINergy Services is authorized to provide administrative, management and other support services to utility and nonutility associate companies, including those that are EWGs or FUCOs. Rule 53(a)(4): CINergy is concurrently submitting a copy of this Declaration, and will submit copies of any Rule 24 certificates hereunder, as well as a copy of Item 9 of CINergy's Form U5S and Exhibits H and I thereto, to each of the public service commissions having jurisdiction over the retail rates of CINergy's operating utility subsidiaries at the time such documents are filed with the Commission. Rule 53(b): The provisions of Rule 53(a) are not made inapplicable to the authorizations herein requested by reason of the provisions of Rule 53(b). Rule 53(b)(1): Neither CINergy nor any subsidiary thereof is the subject of any pending bankruptcy or similar proceeding. Rule 53(b)(2): Average consolidated retained earnings for the four quarters ended June 30, 1995 equaled $909 million, versus $979 million for the four quarters ended June 30, 1994, a difference of approximately $70 million or 7%. Accordingly, the restriction set forth in this provision of the Rule is inapplicable. Rule 53(b)(3): For the twelve months ended June 30, 1995, CINergy had net income of approximately $910,000 attributable to its direct and indirect investments in EWGs and FUCOs. Rule 53(c): Inasmuch as Rule 53(c) applies only if an applicant is unable to satisfy the requirements of Rule 53(a) and (b), it is inapplicable here. Item 2. Fees, Commissions and Expenses. The fees, commissions and expenses to be incurred, directly or indirectly, by CG&E or any associate company thereof in connection with the proposed transactions are estimated as follows: U-1 filing fee. . . . . . . . . . . . . . . . $ 2,000 Printing. . . . . . . . . . . . . . . . . . . 15,000 Postage and handling. . . . . . . . . . . . . 5,600 Fees and expenses of Morrow . . . . . . . . . 13,500 Fees of CINergy Services, Inc.. . . . . . . . 60,000 TOTAL . . . . . . . . . . . . . . . . . . . . $96,100 Item 3. Applicable Statutory Provisions. Sections 6(a), 7 and 12(e) of the Act and Rules 54, 62 and 65 are or may be applicable to the proposed transactions. Item 4. Regulatory Approval. No state or federal regulatory agency other than the Commission under the Act has jurisdiction over the proposed transactions. Item 5. Procedure. In order to afford CG&E adequate time for the solicitation of proxies in advance of the Special Meeting to be held on or about November 16, 1995, particularly in light of the super-majority (66-2/3%) approval requirement for the proposals, CG&E requests that the Commission issue and publish not later than October 2, 1995 an order under Rule 62(d) permitting the solicitation of proxies proposed herein, together with the requisite notice under Rule 23 with respect to the filing of this Declaration. CG&E further requests that such notice and order specify a date not later than October 27, 1995 as the date after which the Commission may issue an order permitting this Declaration to become effective with respect to the balance of the transactions proposed herein, and that the Commission issue such order not later than October 30, 1995. CG&E waives a recommended decision by a hearing officer or other responsible officer of the Commission; consents that the Staff of the Division of Investment Management may assist in the preparation of the Commission's orders; and requests that there be no waiting period between the issuance of the Commission's orders and their effectiveness. Item 6. Exhibits and Financial Statements. (a) Exhibits: A-1 Amended Articles of Incorporation of CG&E effective January 24, 1994 (filed as an exhibit to CG&E's 1993 Form 10-K in File No. 1-1232 and hereby incorporated by reference). A-2 Regulations of CG&E as amended, adopted June 16, 1995 (filed as an exhibit to CG&E's Form 8-A, dated July 24, 1995, in File No. 1-1232 and hereby incorporated by reference). B-1 Draft of notice of special meeting of stockholders. B-2 Draft of proxy statement. B-3 Draft of form of proxy for special meeting. C Not applicable. D Not applicable. E Not applicable. F Opinion of counsel. G Form of notice and order permitting the solicitation of proxies. (b) Financial Statements: FS-1 CG&E Consolidated Balance Sheet at June 30, 1995. FS-2 CG&E Consolidated Statement of Income for the Twelve Months Ended June 30, 1995. FS-3 CG&E Consolidated Statement of Changes in Retained Earnings for the Twelve Months Ended June 30, 1995. FS-4 CINergy Consolidated Balance Sheet at June 30, 1995. FS-5 CINergy Consolidated Statement of Income for the Twelve Months Ended June 30, 1995. FS-6 CINergy Consolidated Statement of Changes in Retained Earnings for the Twelve Months Ended June 30, 1995. FS-7 Financial Data Schedule of CG&E (included in electronic submission only). FS-8 Financial Data Schedule of CINergy (included in electronic submission only). Item 7. Information as to Environmental Effects. (a) In light of the transactions proposed in this Declaration, the Commission's action in this matter will not constitute any major federal action significantly affecting the quality of the human environment. (b) No other federal agency has prepared or is preparing an environmental impact statement with regard to the proposed transactions. SIGNATURE Pursuant to the requirements of the Act, the undersigned company has duly caused this Declaration to be signed on its behalf by the undersigned thereunto duly authorized. Dated: August 9, 1995 The Cincinnati Gas & Electric Company By: /s/ William L. Sheafer --------------------------------- Treasurer ENDNOTES /1/ See, e.g., Blackstone Valley Electric Company, Rel. No. 35-26320 (June 28, 1995); Alabama Power Company, Rel. No. 35-26118 (Sept. 7, 1994). EX-99.B.1 2 DRAFT OF NOTICE OF SPECIAL MEETING Exhibit B-1 DRAFT THE CINCINNATI GAS & ELECTRIC COMPANY 139 East Fourth Street Cincinnati, Ohio 45202 __________________________ NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON _____________, 1995 To the Shareholders Of The Cincinnati Gas & Electric Company: NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of The Cincinnati Gas & Electric Company ("CG&E") will be held at its principal offices, 139 East Fourth Street, Cincinnati, Ohio, on _____________, _______________, 1995 at _____ a.m. , eastern time, for the purposes of: (1) removing from the Amended Articles of Incorporation ARTICLE FOURTH, Clause 6-A(b), limiting CG&E's ability to issue unsecured indebtedness; (2) in the event Proposal (1)is not adopted, amending ARTICLE FOURTH, Clause 6-A(b), to authorize CG&E to issue or assume unsecured indebtedness in excess of 20% of CG&E's secured indebtedness, plus capital and surplus, until December 1, 2005; and transacting such other business as may legally come before the meeting. Only shareholders of record at the close of business on _________, ___________, 1995, will be entitled to vote at the meeting and at any adjournment thereof. Shareholders, whether or not they now expect to be present at the meeting, are requested to mark, date and sign the enclosed proxy, and return it promptly. An addressed envelope, on which no postage stamp is necessary if mailed in the United States, is enclosed for use in returning the proxy. A shareholder executing and delivering the enclosed proxy has the power to revoke it at any time before the authority granted by the proxy is exercised. THE CINCINNATI GAS & ELECTRIC COMPANY BY CHERYL M. FOLEY, SECRETARY Dated: _____________, 1995 EX-99.B.2 3 DRAFT OF PROXY STATEMENT Exhibit B-2 DRAFT THE CINCINNATI GAS & ELECTRIC COMPANY 139 East Fourth Street Cincinnati, Ohio 45202 (513) 381-2000 PROXY STATEMENT Introduction This Proxy Statement is first being mailed on or about __________, 1995 to the shareholders of The Cincinnati Gas & Electric Company, an Ohio corporation ("CG&E"), in connection with the solicitation of proxies by the Board of Directors (the "Board") of CG&E for use at the Special Meeting of Shareholders to be held on ___________, 1995, or any adjournment or postponement of such meeting (the "Special Meeting"). Effective October 24, 1994, the business combination (the "Merger") of CG&E and PSI Energy, Inc., an Indiana corporation ("PSI Energy"), was consummated and Cinergy Corp., a Delaware corporation ("Cinergy"), became the holding company for CG&E and PSI Energy. Pursuant to the Merger, the former common stock holders of CG&E and PSI Resources, Inc. became holders of common stock of Cinergy. CG&E is an operating utility primarily engaged in providing electric and gas service in the southwestern portion of Ohio and, through its principal subsidiary, The Union Light, Heat and Power Company, in adjacent areas in Kentucky. PSI Energy is an operating utility primarily engaged in providing electric service in north central, central, and southern Indiana. Cinergy also owns all the common stock of Cinergy Services, Inc. ("Cinergy Services") and Cinergy Investments, Inc. ("Cinergy Investments"). Cinergy Services provides management, financial, administrative, engineering, legal and other services to Cinergy, CG&E, PSI Energy, Cinergy Investments and subsidiaries thereof. Cinergy conducts its non-utility businesses through Cinergy Investments and its subsidiaries. As a result of the Merger, Cinergy became the owner of all outstanding shares of CG&E's common stock. Issued and outstanding shares of CG&E's cumulative preferred stock have voting rights under certain circumstances. Voting Securities, Rights and Procedures Only holders of record of CG&E's voting securities at the close of business on ________________, 1995 (the "Record Date") will be entitled to vote at the Special Meeting. The outstanding voting securities of CG&E are divided into two classes: common stock and cumulative preferred stock. The class of cumulative preferred stock has been further issued in four series with the record holders of all shares of the cumulative preferred stock voting together as one class. The shares outstanding as of the Record Date, and the vote to which each share is entitled, are as follows: Class Shares Outstanding Votes Per Share ------- -------------------- ----------------- Common Stock (Par Value 89,663,086 1 vote $8.50 per share) Cumulative Preferred 2,000,000 1 vote Stock (Par Value $100 per share) The affirmative vote of the holders of two-thirds of the outstanding shares of each of CG&E's (i) common stock and (ii) cumulative preferred stock, all series voting together as one class, is required to approve each of the proposals to be presented at the Special Meeting. Abstentions and broker non-votes will have the effect of votes against each proposal. Cinergy has advised CG&E that it intends to vote all of the outstanding shares of common stock of CG&E in favor of Proposal 1, and, if necessary, Proposal 2. Votes at the Special Meeting will be tabulated preliminarily by Cinergy Services acting as transfer agent for CG&E. Inspectors of Election, duly appointed by the presiding officer of the Special Meeting, will definitively count and tabulate the votes and determine and announce the results at the meeting. CG&E has no established procedure for confidential voting. There are no rights of appraisal in connection with the proposals to be presented at the Special Meeting. Proxies The enclosed proxy is solicited by CG&E"s Board, which recommends voting FOR both items. All shares of CG&E's common stock will be voted in accordance with the Board's recommendations. Shares of CG&E's cumulative preferred stock represented by properly executed proxies received at or prior to the Special Meeting will be voted in accordance with the instructions thereon. If no instructions are indicated, duly executed proxies will be voted in accordance with the recommendations of the Board. It is not anticipated that any other matters will be brought before the Special Meeting. However, the enclosed proxy gives discretionary authority to the proxy holders named therein should any other matters be presented at the Special Meeting, and it is the intention of the proxy holders to act on any other matters in accordance with their best judgment. Execution of a proxy will not prevent a shareholder from attending the Special Meeting and voting in person. Any shareholder giving a proxy may revoke it at any time before it is voted by delivering to the Secretary of CG&E written notice of revocation bearing a later date than the proxy, by delivering a duly executed proxy bearing a later date or by voting in person at the Special Meeting. CG&E will bear the cost of the solicitation of proxies by the Board. CG&E has engaged Morrow & Co., Inc. to assist in the solicitation of proxies for a fee estimated to be $8,500 plus reimbursement of reasonable out-of- pocket expenses. Proxies will be solicited by mail. In addition, officers and employees of Cinergy and/or its subsidiaries and/or CG&E may solicit proxies personally or by telephone; such persons will receive no additional compensation for these services. CG&E has requested that brokerage houses and other custodians, nominees and fiduciaries forward solicitation materials to the beneficial owners of shares of CG&E's cumulative preferred stock held of record by such persons and will reimburse such brokers and other fiduciaries for their reasonable out-of-pocket expenses incurred in connection therewith. The solicitation of proxies has been approved by the Securities and Exchange Commission (the "SEC") under the Public Utility Holding Company Act of 1935, as amended, (the "1935 Act"). The Proposals [have been/must be] approved by the SEC under the 1935 Act [, and CG&E's application for such approval is pending.] Security Ownership of Certain Beneficial Owners and Management As noted above, Cinergy owns all the outstanding common stock of CG&E. The only two holders of record known by management of CG&E to be beneficial owners of more than 5% of any series of CG&E's cumulative preferred class of stock as of the Record Date are set forth in the following table. Name and Address Amount and Nature Percent of Beneficial Owner of Beneficial Ownership of Class ------------------- ----------------------- -------- U.S. Leasing International, 247,500 shares 12.38% Inc. 733 Front Street San Francisco, California 94111 Household Finance 105,000 shares 5.25% Corporation 2700 Sanders Road Prospect Heights, Illinois 60070 CG&E's directors and executive officers do not beneficially own any shares of any series of CG&E s cumulative preferred stock as of the Record Date. The beneficial ownership of Cinergy's common stock held by each director, as well as directors and executive officers as a group, as of the Record Date, is set forth in the following table: Amount and Nature Name of Beneficial Owner (1) of Beneficial Ownership ------------------------ ----------------------- Jackson H. Randolph ______________ shares James E. Rogers ______________ shares (2) George H. Stinson ______________ shares Directors and executive officers as a group ______________ shares (3) ________________ (1) No individual beneficially owns more than 0.___% of the outstanding shares of common stock of Cinergy. (2) Includes _____ shares which Mr. Rogers has the right to acquire within 60 days pursuant to the exercise of stock options. (3) Includes _____ shares which respective director and/or executive officer individually has the right to acquire within 60 days pursuant to the exercise of stock options. Business to Come Before the Special Meeting The following proposals are the only items of business expected to be presented at the Special Meeting: PROPOSAL 1: To remove from the Amended Articles of Incorporation (the "Articles") ARTICLE FOURTH, Clause 6-A(b), limiting CG&E's ability to issue unsecured indebtedness; and PROPOSAL 2: In the event Proposal 1 is not adopted, to amend ARTICLE FOURTH, Clause 6-A(b), to authorize CG&E to issue or assume unsecured indebtedness in excess of 20% of CG&E s secured indebtedness, plus capital and surplus, until December 1, 2005. Explanation of Proposals PROPOSAL 1: Without the consent of the holders of CG&E s preferred stock, the Articles currently prohibit the issuance or assumption of any unsecured notes, debentures or other securities representing unsecured indebtedness (other than for the purpose of refunding outstanding unsecured indebtedness or for the redemption or retirement of outstanding shares of stock ranking prior to the preferred stock with respect to the payment of dividends or upon the dissolution, liquidation or winding up of CG&E) if, immediately after such issuance or assumption, the total outstanding principal amount of all securities representing unsecured debt (including unsecured securities then to be issued or assumed) would exceed 20% of the aggregate of (1) the total principal amount of all outstanding secured debt of CG&E at the time of such issuance or assumption, and (2) the capital and surplus of CG&E, as stated on CG&E's books. For reasons more fully discussed in Reasons for Proposals below, this proposal, if adopted, would eliminate this restriction from the Articles. PROPOSAL 2: In the event that Proposal 1 above is not adopted, CG&E proposes that the Articles be amended to allow CG&E to issue and assume securities representing unsecured indebtedness in excess of 20% through December 1, 2005, without an additional vote of preferred shares. Specifically, ARTICLE FOURTH, Clause 6-A(b) would be amended to read in its entirety as follows: Clause 6-A. * * * * "(b) Issue any unsecured notes, debentures or other securities representing unsecured indebtedness, or assume any such unsecured securities, for purposes other than the refunding of outstanding unsecured indebtedness theretofore incurred or assumed by the Company or the redemption or other retirement of outstanding shares of stock ranking prior to the Cumulative Preferred Stock with respect to the payment of dividends or upon the dissolution, liquidation or winding up of the Company, whether voluntary or involuntary, if, immediately after such issue or assumption, the total principal amount of all unsecured notes, debentures or other securities representing unsecured indebtedness issued or assumed by the Company and then outstanding (including unsecured securities then to be issued or assumed) would exceed 20% of the aggregate of (i) the total principal amount of all bonds and other securities representing secured indebtedness issued or assumed by the Company and then to be outstanding, and (ii) the capital and surplus of the Company as then to be stated on the books of account of the Company; [provided, however, that the above- stated limitation shall not be applicable for the period beginning December 1, 1995, to and including December 1, 2005;] or", with the text of the amendment set forth in brackets. Reasons for Proposals As you are probably aware, recent regulatory, legislative, and market developments point toward a more competitive future in the electric and gas utility industry. We share in that view and believe that increased competition is not only a foregone conclusion, but that the next several years are likely to be dynamic and potentially trying times in our industry. As competition intensifies, flexibility and cost leadership will be even more crucial to success in the future. And given that the electric and gas industry is extremely capital intensive, controlling and minimizing financing costs are essential ingredients to operating effectively in the new competitive environment. It is, therefore, for those two reasons, flexibility and cost leadership, that you are being asked to vote in favor of the above proposals. CG&E believes that adoption of Proposal 1 is key to meeting the objectives of flexibility and cost leadership. Proposal 1, if adopted, would eliminate the current provision of CG&E's Articles that limits the total amount of CG&E' s unsecured indebtedness to 20% of the total amount of CG&E's secured indebtedness, plus capital and surplus. Historically, CG&E's debt financing generally has been accomplished through the issuance of long-term first mortgage bonds and a modest amount of short-term debt. First mortgage bonds represent secured indebtedness because they place a first priority lien on substantially all of CG&E's assets. The First Mortgage Indenture between CG&E and its bondholders contains certain restrictive covenants with respect to, among other things, the disposition of assets and the ability to issue additional first mortgage bonds. Short-term debt, usually the lowest cost debt available to CG&E, represents one type of unsecured indebtedness. Inasmuch as the 20% restriction contained in the Articles limits CG&E's flexibility in planning and financing its business activities, CG&E believes it ultimately will be at a competitive disadvantage if the restriction is not eliminated. The industry's new competitive options, power marketers, independent power producers, and cogenerating facilities generally are not subject to the type of financing restrictions the Articles impose on CG&E. Other utilities, with the same or similar charter restrictions, have or are soliciting the same or similar amendments from their shareholders. Even CG&E's Indiana affiliate, PSI Energy, has no comparable provision in its articles. And although CG&E s current low-cost structure has been instrumental in undercutting the ability of the other power options to lure away our large bulk power customers, we must continue to explore new ways of reducing costs and enhancing flexibility. CG&E believes that the adoption of Proposal 1 will be in the best long-term competitive interests of shareholders by enhancing its ability to meet the two objectives described below. Financial Flexibility CG&E believes that in the long run, various types of unsecured debt products will grow in importance as an option in financing its construction program and refinancing high- cost mortgage bonds. The availability and flexibility of unsecured debt is necessary to take full advantage of changing conditions in securities markets. CG&E intends to continue to rely on unsecured debt up to the 20% maximum currently allowable under the Articles. In addition, although CG&E's earnings currently are sufficient to meet the earnings coverage tests that must be satisfied before issuing additional first mortgage bonds and preferred stock, there have been periods, including virtually all of the year 1994, when, because of its inability to meet the Articles test, CG&E was unable to issue any additional preferred stock. A similar inability to issue preferred stock in the future combined with the inability to issue additional unsecured debt, would limit CG&E's financing options to either additional first mortgage bonds (assuming that earnings coverage test could be met) or additional common stock. CG&E's use of unsecured short-term debt is subject to the 20% provision contained in the Articles. CG&E believes that the prudent use of such debt is vital to effective financial management of the business. Not only is unsecured short-term debt virtually always the least expensive form of capital, it also provides flexibility in meeting seasonal fluctuations in cash requirements, acts as a bridge between issues of permanent capital, and can be used when unfavorable conditions prevail in the market for long-term capital. With these benefits in mind, CG&E this year sought and received the approval of the Public Utilities Commission of Ohio to increase the maximum amount of short-term debt it is permitted to have outstanding from $200 million to $400 million. However, because of the 20% restriction of the Articles, CG&E is estimated to be permitted to have only $150 million of short-term debt capacity available, based on capitalization estimated as of December 31, 1995. Beyond that, the amount of short-term debt available to CG&E will continue to decline as additional unsecured long-and short-term debt is issued. Lower Costs As previously mentioned, CG&E's short-term debt issuances represent the lowest-cost form of financing. The Merger has resulted in a combined company that is larger and financially stronger than either CG&E or PSI Energy would have been on a stand-alone basis. This has allowed CG&E to reassess its historically modest use of short-term debt. By increasing its use of short-term debt, CG&E may be able to lower its cost structure even further, thereby making its product more competitive, increasing earnings and reducing its business risks. But with the Articles 20% restriction in place, and as CG&E increasingly relies on unsecured debt, the availability and concomitant benefits of short-term debt diminish. And although short-term debt, by its nature, exposes the borrower to potentially more volatility in interest rates, it should be noted that the cost of short- term debt almost never exceeds the cost of permanent capital. It is for all the above reasons that CG&E's Board believes the best long-term interests of shareholders are served by, and encourages shareholders to vote FOR, the adoption of Proposal 1. Finally, Proposal 2 will be considered only if Proposal 1 is not approved. Proposal 2 is in all respects identical to Proposal 1 in financial effect and economic benefit to CG&E and its shareholders, except that it would permit the issuance of unsecured debt in excess of the Articles existing limitation for a period of ten years only. CG&E's Board urges shareholders to vote in favor of Proposal 1 instead, so that the expense of conducting another proxy solicitation and holding another meeting and vote of shareholders to further extend the authorization granted, if Proposal 2 is adopted, can be avoided. Financial and Other Information The financial statements of CG&E and related information included in its Annual Report on Form 10-K for the year ended December 31, 1994, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, and June 30, 1995, each as filed with the SEC, are hereby incorporated by reference. CG&E will provide without charge, upon the written or oral request of any person (including any beneficial owner) to whom this Proxy Statement is delivered, a copy of such information (excluding certain exhibits). Such requests for information should be directed to CG&E's principal offices at 139 East Fourth Street, Cincinnati, Ohio 45202, Attention: Corporate Secretary; telephone (513) 381-2000. Relationship with Independent Public Accountants Upon recommendation of the Audit Committee of Cinergy s board of directors, this board employed on January 25, 1995 Arthur Andersen LLP as independent public accountants for Cinergy and its subsidiaries, including CG&E, for the year 1995. Representatives of Arthur Andersen LLP are expected to be present at the Special Meeting with the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions. By Order of the Board of Directors CHERYL M. FOLEY Secretary Cincinnati, Ohio ______________, 1995 EX-99.B.3 4 DRAFT OF FORM OF PROXY Exhibit B-3 DRAFT PROXY The Cincinnati Gas & Electric Company PROXY The undersigned hereby appoints Jackson H. Randolph, James E. Rogers, and George H. Stinson, or any of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote as designated hereon and in their discretion with respect to any other business properly brought before the Special Meeting, all the shares of cumulative preferred stock of The Cincinnati Gas & Electric Company ("CG&E") which the undersigned is entitled to vote at the Special Meeting of Shareholders to be held on , 1995 or any adjournment(s) or postponement(s) thereof. This proxy is solicited on behalf of the Board of Directors. This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder(s). If no direction is made, the proxy will be voted FOR Item 1 and FOR Item 2. Indicate your vote by an (X). The Board of Directors recommends voting FOR Item 1 and FOR Item 2. Item 1. Removing from the Amended Articles of Incorporation ARTICLE FOURTH, Clause 6-A(b), limiting CG&E's ability to issue unsecured indebtedness. ( ) FOR ( ) AGAINST ( ) ABSTAIN 2. In the event Proposal 1 is not adopted, amending ARTICLE FOURTH, Clause 6-A(b), to authorize CG&E to issue or assume unsecured indebtedness in excess of 20% of CG&E's secured indebtedness, plus capital and surplus, until December 1, 2005. ( ) FOR ( ) AGAINST ( ) ABSTAIN (Continued and to be signed and dated on the reverse side and returned promptly in the enclosed envelope.) Shares represented by all properly executed proxies will be voted in accordance with instructions appearing on the proxy. IN THE ABSENCE OF SPECIFIC INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING. Please check box if you plan to attend ( ) the Special Meeting. Signature(s):_____________________________________________ Dated___________, 1995 Please sign exactly as name(s) appear on this proxy, and date this proxy. If joint account, each joint owner should sign. If signing for a corporation or partnership or as agent, attorney or fiduciary, indicate the capacity in which you are signing. EX-99.F 5 EXHIBIT F EXHIBIT F The Cincinnati Gas & Electric Company Legal Department 139 East Fourth Street Cincinnati, Ohio 45202 August 9, 1995 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Dear Sirs: Reference is made to the Form U-1 Declaration of The Cincinnati Gas & Electric Company ("CG&E") filed with the Commission concurrently herewith under the Public Utility Holding Company Act of 1935 requesting authorization for CG&E (1) to amend its Amended Articles of Incorporation (the "Articles") to eliminate or, as an alternative, to suspend through December 1, 2005 a provision therein restricting the ability of CG&E to issue unsecured debt, and (2) in connection with such proposals, to solicit proxies from the holders of its capital stock, including its outstanding series of cumulative preferred stock, par value $100 per share (the "Preferred Stock"), all as more fully described in the Declaration. I have acted as counsel to CG&E in connection with the transactions proposed in the Declaration and, having examined such records as I deemed necessary to express the opinions hereinafter set forth, hereby advise you that I am of the opinion that: (a) CG&E is a corporation duly organized and validly existing under the laws of the State of Ohio. (b) In the event that the proposed transactions are consummated in accordance with the terms of the Declaration, including any amendment thereto, and the related orders to be issued by the Commission: (1) all State laws applicable to the proposed transactions by CG&E will have been complied with; (2) the Preferred Stock will remain validly issued, fully paid and nonassessable, and the holders thereof will continue to be entitled to their relative rights and privileges as set forth in the Articles, except that CG&E will have authority to issue securities representing unsecured debt in accordance with the proposals relating thereto described in the Declaration; (3) The consummation of the proposed transactions by CG&E will not violate the legal rights of the holders of any securities issued by CG&E or any associate company thereof. I am a member of the Ohio Bar and do not hold myself out as an expert on the laws of any other state. I hereby give my consent to the filing of this opinion as an exhibit to the Declaration. Very truly yours, /s/ Jerome A. Vennemann EX-99.G 6 EXHIBIT G EXHIBIT G The Cincinnati Gas & Electric Company 70- Notice of Proposal to Amend Articles; Order Authorizing Proxy Solicitation The Cincinnati Gas & Electric Company ("CG&E"), a wholly-owned utility subsidiary of CINergy Corp. ("CINergy"), a registered holding company, has filed a declaration under Sections 6(a), 7 and 12(e) of the Act and Rules 62 and 65 thereunder. CG&E's amended articles of incorporation (the Articles") currently provide that, without the consent of the holders of not less than a majority of the total number of shares of preferred stock of all series then outstanding, CG&E shall not issue or assume any securities representing unsecured debt (other than for purposes of refunding outstanding unsecured indebtedness or redeeming or otherwise retiring outstanding shares of stock ranking prior to the preferred stock with respect to the payment of dividends or upon the dissolution, liquidation or winding up of CG&E) if, immediately after such issue or assumption, the total outstanding principal amount of all securities representing unsecured debt would exceed 20% of the aggregate of (1) the total principal amount of all then- outstanding secured debt of CG&E, and (2) the capital and surplus of CG&E, as stated on CG&E's books (the "20% Limitation"). CG&E proposes to submit to the holders of the outstanding shares of preferred stock of all series, and to CINergy, as the sole holder of all the outstanding shares of CG&E common stock, a proposal (the "Proposal") to amend the Articles to eliminate the 20% Limitation. Approval of the Proposal requires the affirmative vote of the holders of not less than two-thirds of the total number of shares of preferred stock of all four series, voting together as one class, and an affirmative two-thirds vote from CINergy as the sole common stock holder. CINergy has informed CG&E that it will vote in favor of the Proposal (and, if necessary, the alternative proposal described below). In the event the Proposal fails to receive the requisite affirmative vote, CG&E proposes to seek approval of an alternative proposal amending the Articles to authorize CG&E to issue or assume securities representing unsecured indebtedness in excess of the 20% Limitation through December 1, 2005. Approval of the alternative proposal requires the same affirmative vote as the Proposal. CG&E proposes to submit the above proposals for consideration and action at a special meeting of stockholders planned to be held on or about November 16, 1995 and, in connection therewith, to solicit proxies from the holders of its capital stock. CG&E requests that the effectiveness of its declaration with respect to the solicitation of proxies for voting by its stockholders on the above proposals be permitted to become effective forthwith pursuant to Rule 62(d). It appearing to the Commission that CG&E's declaration regarding the proposed solicitation of proxies should be permitted to become effective forthwith, pursuant to Rule 62(d): IT IS ORDERED, that the declaration regarding the proposed solicitation of proxies be, and it hereby is, permitted to become effective forthwith pursuant to Rule 62 and subject to the terms and conditions prescribed in Rule 24 under the Act. For the Commission, by the Division of Investment Management, pursuant to delegated authority. EX-99.FS.1 7 CG&E CONSOLIDATED BALANCE SHEET
Exhibit FS-1 Financial Statements Page 1 of 2 THE CINCINNATI GAS & ELECTRIC COMPANY CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995 ASSETS (dollars in thousands) UTILITY PLANT - ORIGINAL COST In service Electric $ 4,530,815 Gas 664,536 Common 184,750 ------------ 5,380,101 Accumulated depreciation 1,665,213 ------------ 3,714,888 Construction work in progress 74,400 ------------ Total utility plant 3,789,288 ------------ CURRENT ASSETS Cash and temporary cash investments 3,500 Restricted deposits 100 Accounts receivable - net 217,774 Materials, supplies and fuel -- at average cost Fuel for use in electric production 40,555 Gas stored for current use 21,187 Other materials and supplies 58,150 Property taxes applicable to subsequent year 134,729 Prepayments and other 42,206 ------------ 518,201 ------------ OTHER ASSETS Regulatory Assets Post-in-service carrying costs and deferred operating expenses 151,727 Phase-in deferred return and depreciation 105,211 Deferred demand-side management costs 14,246 Amounts due from customers -- income taxes 366,924 Deferred merger costs 12,437 Unamortized costs of reacquiring debt 36,041 Other 49,893 Other 49,969 ------------ 786,448 ------------ $ 5,093,937 ============ Pro forma adjustments are not applicable for this filing.
Exhibit FS-1 Financial Statements Page 2 of 2 THE CINCINNATI GAS & ELECTRIC COMPANY CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995 CAPITALIZATION AND LIABILITIES (dollars in thousands) COMMON STOCK EQUITY Common stock - $8.50 par value; Authorized shares - 120,000,000 Outstanding shares - 89,663,086 $ 762,136 Paid-in capital 339,135 Retained earnings 427,623 ------------ Total common stock equity 1,528,894 CUMULATIVE PREFERRED STOCK Not subject to mandatory redemption 40,000 Subject to mandatory redemption 160,000 LONG-TERM DEBT 1,774,404 ------------ Total capitalization 3,503,298 ------------ CURRENT LIABILITIES Preferred stock due within one year 90,000 Notes payable 13,500 Accounts payable 85,830 Accrued taxes 234,609 Accrued interest 30,572 Other 35,709 ------------ 490,220 ------------ OTHER LIABILITIES Deferred income taxes 744,678 Unamortized investment tax credits 132,440 Accrued pension and other postretirement benefit costs 110,947 Other 112,354 ------------ 1,100,419 ------------ $ 5,093,937 ============ Pro forma adjustments are not applicable for this filing.
EX-99.FS.2 8 CG&E CONSOLIDATED BALANCE INCOME STATEMENT
Exhibit FS-2 Financial Statements Page 1 of 1 THE CINCINNATI GAS & ELECTRIC COMPANY CONSOLIDATED STATEMENT OF INCOME TWELVE MONTHS ENDED JUNE 30, 1995 (in thousands) OPERATING REVENUES Electric $ 1,369,201 Gas 383,868 ------------ 1,753,069 ------------ OPERATING EXPENSES Fuel used in electric production 332,578 Gas purchased 192,327 Purchased and exchanged power 30,818 Other operation 333,300 Maintenance 98,987 Depreciation 158,080 Amortization of phase-in deferrals 2,273 Post-in-service deferred operating expenses -- net 3,290 Income taxes 107,022 Taxes other than income taxes 199,231 ------------ 1,457,906 ------------ OPERATING INCOME 295,163 ------------ OTHER INCOME AND EXPENSES - NET Allowance for equity funds used during construction 1,956 Phase-in deferred return 8,161 Income taxes 5,913 Other - net (6,455) ------------ 9,575 ------------ INCOME BEFORE INTEREST 304,738 ------------ INTEREST Interest on long-term debt 144,609 Other interest 3,376 Allowance for borrowed funds used during construction (3,547) ------------ 144,438 ------------ NET INCOME 160,300 PREFERRED DIVIDEND REQUIREMENT 21,449 ------------ NET INCOME APPLICABLE TO COMMON STOCK $ 138,851 ============ Pro forma adjustments are not applicable for this filing.
EX-99.FS.3 9 CG&E CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
Exhibit FS-3 Financial Statements Page 1 of 1 THE CINCINNATI GAS & ELECTRIC COMPANY CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS TWELVE MONTHS ENDED JUNE 30, 1995 Actual ------------ (dollars in thousands) Balance July 1, 1994 $ 483,564 Net income 160,300 Dividends on preferred stock (21,449) Dividends on common stock (190,521) Other (4,271) ------------ Balance June 30, 1995 $ 427,623 ============ Pro forma adjustments are not applicable for this filing.
EX-99.FS.4 10 CINERGY CONSOLIDATED BALANCE SHEET
Exhibit FS-4 Financial Statements Page 1 of 2 CINERGY CORP. CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995 ASSETS (dollars in thousands) UTILITY PLANT - ORIGINAL COST In service Electric $ 8,393,518 Gas 664,536 Common 184,750 ------------ 9,242,804 Accumulated depreciation 3,262,715 ------------ 5,980,089 Construction work in progress 241,987 ------------ Total utility plant 6,222,076 ------------ CURRENT ASSETS Cash and temporary cash investments 25,206 Restricted deposits 4,646 Accounts receivable - net 251,888 Materials, supplies and fuel, at average cost Fuel for use in electric production 160,363 Gas stored for current use 21,187 Other materials and supplies 93,722 Property taxes applicable to subsequent year 134,729 Prepayments and other 46,947 ------------ 738,688 ------------ OTHER ASSETS Regulatory Assets Post-in-service carrying costs and deferred operating expenses 188,061 Phase-in deferred return and depreciation 105,211 Deferred demand-side management costs 114,768 Amounts due from customers -- income taxes 393,859 Deferred merger costs 50,067 Unamortized costs of reacquiring debt 71,778 Other 81,665 Other 141,581 ------------ 1,146,990 ------------ $ 8,107,754 ============ Pro forma adjustments are not applicable for this filing.
Exhibit FS-4 Financial Statements Page 2 of 2 CINERGY CORP. CONSOLIDATED BALANCE SHEET AT JUNE 30, 1995 CAPITALIZATION AND LIABILITIES (dollars in thousands) COMMON STOCK EQUITY Common stock - $.01 par value; Authorized shares - 600,000,000 Outstanding shares - 156,567,331 $ 1,566 Paid-in capital 1,570,873 Retained earnings 900,094 ------------ Total common stock equity 2,472,533 CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES Not subject to mandatory redemption 227,915 Subject to mandatory redemption 160,000 LONG-TERM DEBT 2,652,382 ------------ Total capitalization 5,512,830 ------------ CURRENT LIABILITIES Long-term debt and preferred stock due within one year 150,400 Notes payable 244,000 Accounts payable 184,400 Refund due to customers 15,796 Litigation settlement 80,000 Accrued taxes 261,787 Accrued interest 56,740 Other 39,544 ------------ 1,032,667 ------------ OTHER LIABILITIES Deferred income taxes 1,074,724 Unamortized investment tax credits 190,804 Accrued pension and other postretirement benefit costs 153,753 Other 142,976 ------------ 1,562,257 ------------ $ 8,107,754 ============ Pro forma adjustments are not applicable for this filing.
EX-99.FS.5 11 CINERGY CONSOLIDATED STATEMENT OF INCOME
Exhibit FS-5 Financial Statements Page 1 of 1 CINERGY CORP. CONSOLIDATED STATEMENT OF INCOME TWELVE MONTHS ENDED JUNE 30, 1995 (in thousands, except per share amounts) OPERATING REVENUES Electric $ 2,478,494 Gas 383,868 ------------ 2,862,362 ------------ OPERATING EXPENSES Fuel used in electric production 723,749 Gas purchased 192,327 Purchased and exchanged power 31,155 Other operation 567,004 Maintenance 193,764 Depreciation 291,043 Amortization of phase-in deferrals 2,273 Post-in-service deferred operating expenses -- net (5,090) Income taxes 158,951 Taxes other than income taxes 247,216 ------------ 2,402,392 ------------ OPERATING INCOME 459,970 ------------ OTHER INCOME AND EXPENSES - NET Allowance for equity funds used during construction 3,755 Post-in-service carrying costs 8,055 Phase-in deferred return 8,161 Income taxes 9,654 Other - net (21,609) ------------ 8,016 ------------ INCOME BEFORE INTEREST AND OTHER CHARGES 467,986 ------------ INTEREST AND OTHER CHARGES Interest on long-term debt 215,748 Other interest 23,639 Allowance for borrowed funds used during construction (10,542) Preferred dividend requirements of subsidiaries 34,630 ------------ 263,475 ------------ NET INCOME $ 204,511 ============ AVERAGE COMMON SHARES OUTSTANDING 152,331 EARNINGS PER COMMON SHARE $ 1.33 DIVIDENDS DECLARED PER COMMON SHARE $ 1.60 Pro forma adjustments are not applicable for this filing.
EX-99.FS.6 12 CINERGY CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
Exhibit FS-6 Financial Statements Page 1 of 1 CINERGY CORP. CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS TWELVE MONTHS ENDED JUNE 30, 1995 (dollars in thousands) Balance July 31, 1994 $ 943,659 Net income 204,511 Dividends on common stock (243,797) Other (4,279) ------------ Balance June 30, 1995 $ 900,094 ============ Pro forma adjustments are not applicable for this filing.
EX-99.FS.7 13 FINANCIAL DATA SCHEDULE [ARTICLE] OPUR1 [LEGEND] THIS SCHEDULE IS EXHIBIT FS-7 AND CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME OF THE CINCINNATI GAS & ELECTRIC COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. [/LEGEND] [CIK] 0000899652 [NAME] CINERGY CORP. [SUBSIDIARY] [NAME] THE CINCINNATI GAS & ELECTRIC COMPANY (CONSOLIDATED) [NUMBER] 5 [MULTIPLIER] 1,000 [TEXT] [PERIOD-TYPE] YEAR [FISCAL-YEAR-END] JUN-30-1995 [PERIOD-START] JUL-01-1994 [PERIOD-END] JUN-30-1995 [BOOK-VALUE] PER-BOOK [TOTAL-NET-UTILITY-PLANT] 3,789,288 [OTHER-PROPERTY-AND-INVEST] 0 [TOTAL-CURRENT-ASSETS] 518,201 [TOTAL-DEFERRED-CHARGES] 736,479 [OTHER-ASSETS] 49,969 [TOTAL-ASSETS] 5,093,937 [COMMON] 762,136 [CAPITAL-SURPLUS-PAID-IN] 339,135 [RETAINED-EARNINGS] 427,623 [TOTAL-COMMON-STOCKHOLDERS-EQ] 1,528,894 [PREFERRED-MANDATORY] 160,000 [PREFERRED] 40,000 [LONG-TERM-DEBT-NET] 1,774,404 [SHORT-TERM-NOTES] 13,500 [LONG-TERM-NOTES-PAYABLE] 0 [COMMERCIAL-PAPER-OBLIGATIONS] 0 [LONG-TERM-DEBT-CURRENT-PORT] 0 [PREFERRED-STOCK-CURRENT] 90,000 [CAPITAL-LEASE-OBLIGATIONS] 0 [LEASES-CURRENT] 0 [OTHER-ITEMS-CAPITAL-AND-LIAB] 1,487,139 [TOT-CAPITALIZATION-AND-LIAB] 5,093,937 [GROSS-OPERATING-REVENUE] 1,753,069 [INCOME-TAX-EXPENSE] 107,022 [OTHER-OPERATING-EXPENSES] 1,350,884 [TOTAL-OPERATING-EXPENSES] 1,457,906 [OPERATING-INCOME-LOSS] 295,163 [OTHER-INCOME-NET] 9,575 [INCOME-BEFORE-INTEREST-EXPEN] 304,738 [TOTAL-INTEREST-EXPENSE] 144,438 [NET-INCOME] 160,300 [PREFERRED-STOCK-DIVIDENDS] 21,449 [EARNINGS-AVAILABLE-FOR-COMM] 138,851 [COMMON-STOCK-DIVIDENDS] 190,521 [TOTAL-INTEREST-ON-BONDS] 144,609 [CASH-FLOW-OPERATIONS] 0 [EPS-PRIMARY] 0 [EPS-DILUTED] 0
EX-99.FS.8 14 FINANCIAL DATA SCHEDULE [ARTICLE] OPUR1 [LEGEND] THIS SCHEDULE IS EXHIBIT FS-8 AND CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME OF CINERGY CORP. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. [/LEGEND] [CIK] 0000899652 [NAME] CINERGY CORP. [SUBSIDIARY] [NUMBER] 0 [NAME] CINERGY CORP. (CONSOLIDATED) [MULTIPLIER] 1,000 [TEXT] [PERIOD-TYPE] YEAR [FISCAL-YEAR-END] JUN-30-1995 [PERIOD-START] JUL-01-1994 [PERIOD-END] JUN-30-1995 [BOOK-VALUE] PER-BOOK [TOTAL-NET-UTILITY-PLANT] 6,222,076 [OTHER-PROPERTY-AND-INVEST] 0 [TOTAL-CURRENT-ASSETS] 738,688 [TOTAL-DEFERRED-CHARGES] 1,005,409 [OTHER-ASSETS] 141,581 [TOTAL-ASSETS] 8,107,754 [COMMON] 1,566 [CAPITAL-SURPLUS-PAID-IN] 1,570,873 [RETAINED-EARNINGS] 900,094 [TOTAL-COMMON-STOCKHOLDERS-EQ] 2,472,533 [PREFERRED-MANDATORY] 160,000 [PREFERRED] 227,915 [LONG-TERM-DEBT-NET] 2,652,382 [SHORT-TERM-NOTES] 244,000 [LONG-TERM-NOTES-PAYABLE] 0 [COMMERCIAL-PAPER-OBLIGATIONS] 0 [LONG-TERM-DEBT-CURRENT-PORT] 60,400 [PREFERRED-STOCK-CURRENT] 90,000 [CAPITAL-LEASE-OBLIGATIONS] 0 [LEASES-CURRENT] 0 [OTHER-ITEMS-CAPITAL-AND-LIAB] 2,200,524 [TOT-CAPITALIZATION-AND-LIAB] 8,107,754 [GROSS-OPERATING-REVENUE] 2,862,362 [INCOME-TAX-EXPENSE] 158,951 [OTHER-OPERATING-EXPENSES] 2,243,441 [TOTAL-OPERATING-EXPENSES] 2,402,392 [OPERATING-INCOME-LOSS] 459,970 [OTHER-INCOME-NET] 8,016 [INCOME-BEFORE-INTEREST-EXPEN] 467,986 [TOTAL-INTEREST-EXPENSE] 228,845 [NET-INCOME] 239,141 [PREFERRED-STOCK-DIVIDENDS] 34,630 [EARNINGS-AVAILABLE-FOR-COMM] 204,511 [COMMON-STOCK-DIVIDENDS] 243,797 [TOTAL-INTEREST-ON-BONDS] 215,748 [CASH-FLOW-OPERATIONS] 0 [EPS-PRIMARY] 1.33 [EPS-DILUTED] 1.33