-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PizUlcJlGslLi13B3tuV5WdziV8EC227jgHwAL555d1PbhbRI2KSb3ZrHf67tdHp EmFNxYixcD3apOMI8zMxUg== 0000081020-98-000007.txt : 19980626 0000081020-98-000007.hdr.sgml : 19980626 ACCESSION NUMBER: 0000081020-98-000007 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980625 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PSI ENERGY INC CENTRAL INDEX KEY: 0000081020 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 350594457 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-03543 FILM NUMBER: 98653671 BUSINESS ADDRESS: STREET 1: 1000 E MAIN ST CITY: PLAINFIELD STATE: IN ZIP: 46168 BUSINESS PHONE: 3178399611 FORMER COMPANY: FORMER CONFORMED NAME: PUBLIC SERVICE CO OF INDIANA INC DATE OF NAME CHANGE: 19900509 11-K 1 PSI EMPLOYEE'S 401(K) SAVINGS PLAN SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15 (d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1997 Commission File Number 1-11377 A. Full title of the plan: PSI ENERGY, INC. UNION EMPLOYEES' 401(k) SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Cinergy Corp. 139 East Fourth Street Cincinnati, Ohio 45202 - 4003 PSI Energy, Inc. Union Employees' 401(k) Savings Plan FINANCIAL STATEMENTS AND EXHIBITS Page No. (a) Financial Statements Report of Independent Public Accountants 3 Statement of Net Assets Available for Benefits, with Fund Information, as of December 31, 1997 4 Statement of Net Assets Available for Benefits, with Fund Information, as of December 31, 1996 5 Statement of Changes in Net Assets Available for Benefits, with Fund Information, for the Year Ended December 31, 1997 6 Notes to Financial Statements 7-10 Financial Statement Schedules (As Required By The Employee Retirement Income Security Act) Schedule I - Schedule of Assets Held for Investment Purposes- December 31, 1997 11 Schedule II - Schedule of Reportable Transactions for the year ended December 31, 1997 12 (b) Exhibit 23) Consent of Independent Public Accountants REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Plan Administrator of the PSI Energy, Inc. Employees' 401(k) Savings Plan: We have audited the accompanying statements of net assets available for benefits, with fund information, of the PSI ENERGY, INC. EMPLOYEES' 401(k) SAVINGS PLAN as of December 31, 1997 and 1996, and the related statement of changes in net assets available for benefits, with fund information, for the year ended December 31, 1997. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits, with fund information, of the Plan as of December 31, 1997 and 1996, and the changes in net assets available for benefits, with fund information, for the year ended December 31, 1997 in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules (Schedules I and II) are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Cincinnati, Ohio June 22, 1998
PSI ENERGY, INC. EMPLOYEES' 401(k) SAVINGS PLAN Statement of Net Assets Available for Benefits, with Fund Information As of December 31, 1997 Participant Directed Fidelity Fidelity Fidelity Fidelity Retirement Fidelity Equity- Asset Fidelity Diversified Fidelity Money Cinergy Magellan Income Manager U.S. Bond International Low-Priced Market Common Fund Fund Fund Index Fund Fund Stock Fund Fund Stock Fund ASSETS Investments, at fair value: Shares of registered investment companies $ 54,552,571 $61,145,074 $6,594,866 $5,840,588 $ 1,570,120 $ 4,121,952 $12,218,642 $ - Common stock - - - - - - - 95,595,584 Participant loans - - - - - - - - Total investments 54,552,571 61,145,074 6,594,866 5,840,588 1,570,120 4,121,952 12,218,642 95,595,584 Receivables: Employer's contribution - - - - - - - - Participants' contributions 17,647 10,046 4,978 932 229 539 5,608 50,047 Total receivables 17,647 10,046 4,978 932 229 539 5,608 50,047 Net assets available for benefits $ 54,570,218 $61,155,120 $6,599,844 $5,841,520 $ 1,570,349 $ 4,122,491 $12,224,250 $ 95,645,631
PSI ENERGY, INC. EMPLOYEES' 401(k) SAVINGS PLAN Statement of Net Assets Available for Benefits, with Fund Information (Continued) As of December 31, 1997 Non- Participant Participant Directed Directed Cinergy Participant Common Loan Fund Stock Fund Total ASSETS Investments, at fair value: Shares of registered investment companies $ - $ - $ 146,043,813 Common stock - 75,638,528 171,234,112 Participant loans 6,707,503 - 6,707,503 Total investments 6,707,503 75,638,528 323,985,428 Receivables: Employer's contribution - 17,437 17,437 Participants' contributions - - 90,026 Total receivables - 17,437 107,463 Net assets available for benefits $ 6,707,503 $75,655,965 $ 324,092,891 The accompanying notes are an integral part of these financial statements.
PSI ENERGY, INC. EMPLOYEES' 401(k) SAVINGS PLAN Statement of Net Assets Available for Benefits, with Fund Information As of December 31, 1996 Participant Directed Fidelity Fidelity Fidelity Retirement Fidelity Equity- Asset Fidelity Money Cinergy Magellan Income Manager U.S. Bond Market Common Participant Fund Fund Fund Index Fund Fund Stock Fund Loan Fund ASSETS Investments, at fair value: Shares of registered investment companies $ 27,839,227 $16,625,507 $4,928,175 $1,556,733 $ 8,179,162 $ - $ - Common stock - - - - - 21,172,802 - Participant loans - - - - - - 2,279,221 Total investments 27,839,227 16,625,507 4,928,175 1,556,733 8,179,162 21,172,802 2,279,221 Receivables: Employer's contribution - - - - - - - Participants' contribution 17,655 8,051 6,501 872 5,614 3,359 - Total receivables 17,655 8,051 6,501 872 5,614 3,359 - Net assets available for benefits $27,856,882 $16,633,558 $4,934,676 $1,557,605 $ 8,184,776 $ 21,176,161 $ 2,279,221
PSI ENERGY, INC. EMPLOYEES' 401(k) SAVINGS PLAN Statement of Net Assets Available for Benefits, with Fund Information (Continued) As of December 31, 1996 Non- Participant Directed Common Stock Fund Total ASSETS Investments, at fair value: Shares of registered investment companies $ - $ 59,128,804 Common stock 20,787,626 41,960,428 Participant loans - 2,279,221 Total investments 20,787,626 103,368,453 Receivables: Employer's contribution 863,809 863,809 Participants' contribution - 42,052 Total receivables 863,809 905,861 Net assets available for benefits $ 21,651,435 $ 104,274,314
PSI ENERGY, INC. EMPLOYEES' 401(k) SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information For the Year Ended December 31, 1997 Participant Directed Fidelity Fidelity Fidelity Fidelity Retirement Fidelity Equity- Asset Fidelity Fidelity Diversified Money Cinergy Magellan Income Manager U.S. Bond Low-Priced International Market Common Fund Fund Fund Index Fund Stock Fund Fund Fund Stock Fund Additions to net assets: Investment income: Net appreciation (depreciation) in fair value of investments $ 5,131,584 $ 3,946,908 $ 589,209 $ 40,462 $ (2,986) $ (40,969) $ - $ 3,548,146 Interest - - - - - - - - Dividends 2,265,998 1,261,656 566,218 121,207 54,942 23,322 451,614 1,122,018 7,397,582 5,208,564 1,155,427 161,669 51,956 (17,647) 451,614 4,670,164 Contributions: Participants' 2,890,556 1,901,171 661,555 176,395 74,448 43,175 618,442 603,547 Employer's - - - - - - 3,716 - Rollovers 74,093 97,563 30,716 28,890 15,416 22,124 20,624 28,513 2,964,649 1,998,734 692,271 205,285 89,864 65,299 642,782 632,060 Total Additions 10,362,231 7,207,298 1,847,698 366,954 141,820 47,652 1,094,396 5,302,224 Deductions from net assets: Benefits paid to participants 1,116,493 1,134,428 248,679 125,511 - - 789,650 1,012,493 Total Deductions 1,116,493 1,134,428 248,679 125,511 - - 789,650 1,012,493 Net increase/(decrease) prior to transfers 9,245,738 6,072,870 1,599,019 241,443 141,820 47,652 304,746 4,289,731 Transfer in of CG&E Plan (Note 1) 19,012,211 37,425,255 - 3,697,125 2,732,380 901,011 3,824,538 70,599,548 Interfund transfers (1,544,726) 983,329 60,535 133,663 1,249,206 622,889 (71,055) (1,237,930) Interplan transfers 113 40,108 5,614 211,684 (915) (1,203) (18,755) 818,121 Net increase (decrease) 26,713,336 44,521,562 1,665,168 4,283,915 4,122,491 1,570,349 4,039,474 74,469,470 Net assets available for benefits: Beginning of year 27,856,882 16,633,558 4,934,676 1,557,605 - - 8,184,776 21,176,161 End of year $ 54,570,218 $61,155,120 $6,599,844 $5,841,520 $ 4,122,491 $ 1,570,349 $12,224,250 $95,645,631
PSI ENERGY, INC. EMPLOYEES' 401(k) SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information(Continued) For the Year Ended December 31, 1997 Non- Participant Participant Directed Directed Cinergy Participant Common Loan Fund Stock Fund Total Additions to net assets: Investment income: Net appreciation (depreciation) in fair value of investment $ - $ 3,590,386 $ 16,802,740 Interest 206,592 - 206,592 Dividends - 1,189,567 7,056,542 206,592 4,779,953 24,065,874 Contributions: Participants' - - 6,969,289 Employer's - 2,532,295 2,536,011 Rollovers - - 317,939 - 2,532,295 9,823,239 Total Additions 206,592 7,312,248 33,889,113 Deductions from net assets: Benefits paid to participants 48,510 737,915 5,213,679 Total Deductions 48,510 737,915 5,213,679 Net increase/(decrease) prior to transfers 158,082 6,574,333 28,675,434 Transfer in of CG&E Plan (Note 1) 3,719,820 48,379,870 190,291,758 Interfund transfers 543,499 (739,410) - Interplan transfers 6,881 (210,263) 851,385 Net increase (decrease) 4,428,282 54,004,530 219,818,577 Net assets available for benefits: Beginning of year 2,279,221 21,651,435 104,274,314 End of year $ 6,707,503 $75,655,965 $ 324,092,891 The accompanying notes are an integral part of these financial statements.
PSI ENERGY, INC. EMPLOYEES' 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (1) Plan Description--The PSI Energy, Inc. Employees' 401(k) Savings Plan (Plan) is a defined contribution plan covering non-union employees of PSI Energy, Inc. (PSI)(a subsidiary of Cinergy Corp) who meet minimum age and service requirements. The Plan is administered by the CG&E and PSI Benefits Administration Committee and trusteed by the Fidelity Management Trust Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The administrative expenses of the Plan are paid by PSI. Further details of the Plan are provided in the Summary Plan Description which has been distributed to all Plan participants. Effective December 31, 1997, the assets of the CG&E Deferred Compensation and Investment Plan's assets were merged into the PSI Energy, Inc. Employees' 401(k) Savings Plan. CG&E and PSI are both subsidiaries of Cinergy Corp. Investments options previously available to the participants of the plan will remain available except that the Fidelity Intermediate Bond Fund has been replaced with the Fidelity U.S. Bond Index Fund. Effective January 1, 1998, the PSI Energy, Inc. Employees' 401(k) Savings Plan's name will be changed to the Cinergy Employees' 401(k) Savings Plan. Under the Plan, participants may contribute up to 15% of annual pretax compensation, as defined in the Plan. In addition, a participant may make optional contributions to the Plan which, when combined with salary deferrals, may not exceed 15% of base pay. Salary deferrals and optional contributions are subject to certain limitations. The salary deferrals and optional contributions are invested by the trustee, as directed by each participant, in one or more investment funds, including the Cinergy Common Stock Fund. The participant's employer contributes 60% of the first 5% of base pay, contributed by each participant. An additional incentive match of up to 40% of the first 5% of base pay that a participant contributes may be contributed at the discretion of the employer's board of directors. For those employees who do not contribute to the Plan, the employers contribute an incentive match assuming the participant contributed 2% of base pay. All employer contributions must be invested by the trustee in the Cinergy Common Stock Fund until the Participant reaches age 50 and are shown on the statement of net assets available for benefits and statement of changes in net assets available for benefits as "Non-Participant Directed" funds until the participant elects to transfer the funds to another investment option. Participants are immediately vested in all contributions and earnings thereon. Participants are generally eligible to receive distributions of assets from the Plan upon termination of employment (including retirement), death, or disability. Distributions are paid in a lump sum for vested benefits of $3,500 or less. Distributions are paid in a lump sum of five annual installments (at the election of the participant) for vested benefits greater than $3,500. Active participants are also eligible to apply to the Plan administrator for "hardship" withdrawals from their salary-deferral account in accordance with Plan provisions. Subject to certain limitations, employees may apply for loans from their salary - deferral account balances. Such loans are reflected in the Participant Loan Fund in the accompanying financial statements. The loans are secured by the balance in the participant's account and bear interest at the prime rate plus 1/2%, and are repaid within 54 months through regular payroll deductions. (2) Significant Accounting Policies--The financial statements of the Plan are prepared on an accrual basis. Investments of the Plan are stated at fair value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. Cinergy common stock is valued at its quoted market price. Participant loans are valued at cost which approximates market. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Benefits are recorded when paid. Transfers of assets between the Plan and the PSI Energy, Inc. Union Employees' 401(k) Savings Plan occur as a result of a change in employee status between the union classification and the exempt and non-exempt classification. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (3) Investments--A participant may elect or change investment funds and/or the percentages in which contributions will be allocated at any time. The fair value of individual investments that represent 5% or more the Plan's total net assets as of December 31, 1997 and 1996 are as follows: 1997 1996 Fidelity Magellan Fund $54,552,571 $27,839,227 Fidelity Equity-Income fund 61,145,074 16,625,507 Fidelity Retirement Money Market 12,218,642 8,179,162 Cinergy Corp. Common Stock 171,234,112 41,960,428 (4) Investment Options- The investment options of the Plan are as follows: Participant contributions - Upon enrollment or re-enrollment, participants shall direct that their contributions, including any rollover contributions, be invested in one or more of the following investment options: - Fidelity Magellan Fund The Fidelity Magellan Fund invests mainly in equity securities of domestic, foreign, and multinational issuers of all sizes that offer potential for growth with the principal purpose of seeking maximum appreciation in value. - Fidelity Equity-Income Fund The Fidelity Equity-Income Fund invests mainly in income producing equity securities with the principal purpose of earning reasonable income while considering the potential for capital appreciation. - Fidelity Asset Manager Fund The Fidelity Asset Manager Fund invests in equities, bonds and short-term instruments or mutual funds, both domestic and foreign with the principal purpose of seeking high total return while reducing risk over the long term. - Fidelity U.S. Bond Index Fund The Fidelity U.S. Bond Index Fund invests in securities that include obligations of the U.S. Treasury, U.S. Agencies, corporations, mortgage-backed obligations, and U.S. dollar-denominated obligations of foreign governments with the principal purpose of seeking current income consistent with the preservation of capital. - Fidelity Diversified International Fund The Fidelity Diversified International Fund invests primarily in stocks of companies located outside the U.S. that are included in the Morgan Stanley EAFE(R) index with the principal purpose of seeking out stocks that are undervalued compared to industry norms in their countries. - Fidelity Low-Priced Stock Fund The Fidelity Low-Priced Stock Fund invests primarily in the stocks of companies that the fund manager considers undervalued or out of favor with the other investors and that could offer the possibility for significant growth with the principal purpose of seeking out stocks of smaller companies with per share prices of $25 or less. - Fidelity Retirement Money Market Fund The Fidelity Retirement Money Market Fund invests in high quality money market instruments including certificates of deposit, commercial paper, short-term corporate and U.S. Government obligations and bankers' acceptances issued by major banks. The purpose of the Fund is to seek high money market yields while maintaining preservation of capital. - Cinergy Common Stock Fund The Cinergy Common Stock Fund invests in common stock of Cinergy Corp. (5) Federal Income Tax Status--The plan received a determination letter dated November 14, 1995 verifying that the Plan is designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan Administrator and the Plan's legal counsel believe the Plan is designed and being operated in compliance with the applicable requirements of the IRC. (6) Reconciliation of Financial Statements to Form 5500--The following is a reconciliation of Net Assets Available for Benefits per the financial statements to the Form 5500: December 31, 1997 1996 Net assets per financial statements $324,092,891 $104,274,314 Amounts allocated to withdrawing participants (33,857) (219,094) Net assets per Form 5500 $324,059,034 $104,055,220 The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500: Year Ended December 31, 1997 Benefits paid to participants per financial statements $5,213,679 Add: Amounts allocated to withdrawing participants at December 31, 1997 33,857 Less: Amounts allocated to withdrawing participants at December 31, 1996 (219,094) Benefits paid to participants per Form 5500 $ 5,028,442 Amounts allocated to withdrawing participants are recorded on the Form 5500 for distributions that have been processed and approved for payment prior to December 31 but not yet paid as of that date. (7) Subsequent Event--Effective January 1, 1998, the PSI Energy, Inc. (PSI) Employees' 401(k) Savings Plan changed its name to the Cinergy Employees' 401(k) Savings Plan (Cinergy Plan) and the net assets of the Cincinnati Gas & Electric Company's (CG&E) Deferred Compensation and Investment Plan were merged into the Cinergy Plan. CG&E and PSI are both subsidiaries of Cinergy Corp. All investment options previously available to the participants of the Plan will remain available under the Cinergy Plan. (8) Plan Termination--Although it has not expressed any intent to do so, the Plan sponsor has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.
SCHEDULE I PSI ENERGY, INC. EMPLOYEES' 401(K) SAVINGS PLAN ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES December 31, 1997 Identity of Issuer, Borrower, Description of Investment, Including Maturity Date, Lessor, or Similar Party Rate of Interest, Collateral, and Par or Maturity Value Cost Current Value * Cinergy Corp. Common Stock $ 94,836,040 $ 171,234,112 * Fidelity Investments Magellan Fund 46,677,264 54,552,571 * Fidelity Investments Equity-Income Fund 54,076,453 61,145,074 * Fidelity Investments Asset Manager Fund 5,744,125 6,594,866 * Fidelity Investments U.S. Bond Index Fund 5,815,689 5,840,588 * Fidelity Investments Diversified International Stock Fund 1,610,388 1,570,120 * Fidelity Investments Low-Priced Stock Fund 4,125,832 4,121,952 * Fidelity Investments Retirement Money Market Fund 12,218,642 12,218,642 * Various plan participants Participant loans (interest rates ranging from 5.25-9%) 6,707,503 6,707,503 Total assets held for investment purposes $ 231,811,936 $ 323,985,428 * Denotes a party-in-interest The accompanying notes are an integral part of these financial statements.
SCHEDULE II PSI ENERGY, INC. EMPLOYEES' 401(k) SAVINGS PLAN EIN: 35-0594457 Plan Number: 002 Item 27d - Schedule of Reportable Transactions For the Year Ended December 31, 1997 Total Total Identity of Number of Number Purchase Selling Net Gain Securities Purchases of Sales Price (A) Price (A) on Sales Cinergy Common Stock Fund 209 186 $8,164,474 $4,829,242 $1,546,260 Fidelity Magellan Fund 207 174 9,438,937 4,242,407 862,612 Fidelity Equity-Income Fund 210 164 15,888,123 2,570,146 613,606 Fidelity Retirement Money Market Fund 173 156 3,260,690 3,019,942 - (A) The current value of all assets acquired or disposed of, at the time of the acquisition or disposition, is equal to the purchase price or selling price, respectively.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. PSI ENERGY, INC. UNION EMPLOYEES' 401(k) SAVINGS PLAN (The Plan) By /s/ JERRY W. LIGGETT (Plan Administrator) June 22, 1998 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report, dated June 22, 1998 included in the Annual Report on Form 11-K for the year ended December 31, 1997 of the PSI Energy, Inc. Employees' 401(k) Savings Plan, into Cinergy Corp.'s previously filed Registration Statement File No. 33-56067. ARTHUR ANDERSEN LLP Cincinnati, Ohio June 22, 1998 -----END PRIVACY-ENHANCED MESSAGE-----