-----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, UJDUOM0avN2UDm2gCMkiIg2P3r4HiyfQNLDEmhZOb5zi+4CIVUOgRy0JWFQublfC t7K3ccV+GQXqQB+XgEIagQ== 0000899652-03-000017.txt : 20030414 0000899652-03-000017.hdr.sgml : 20030414 20030414105309 ACCESSION NUMBER: 0000899652-03-000017 CONFORMED SUBMISSION TYPE: U-13-60 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030414 EFFECTIVENESS DATE: 20030414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINERGY CORP CENTRAL INDEX KEY: 0000899652 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 311385023 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-13-60 SEC ACT: 1935 Act SEC FILE NUMBER: 049-00123 FILM NUMBER: 03648025 BUSINESS ADDRESS: STREET 1: 139 E FOURTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5132872644 MAIL ADDRESS: STREET 1: 139 E FOURTH STREET STREET 2: P.O BOX 960 CITY: CINCINATI STATE: OH ZIP: 45202 U-13-60 1 formu1360_2002.htm 2002 FORM U-13-60 Form U-13-60 2002

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM U-13-60

ANNUAL REPORT

FOR THE PERIOD

Beginning January 1, 2002 and Ending December 31, 2002

TO THE

U.S. SECURITIES AND EXCHANGE COMMISSION

OF

Cinergy Services, Inc.
(Exact Name of Reporting Company)

A Subsidiary Service Company

Date of Incorporation: February 23, 1994

State or Sovereign Power under which Incorporated or Organized: Delaware

Location of Principal Executive Offices of Reporting Company: Cincinnati, Ohio

Name, title, and address of officer to whom correspondence concerning this report should be addressed:

Bernard F. Roberts, Vice President and Comptroller,
139 East Fourth Street, Cincinnati, Ohio 45202

Name of Principal Holding Company Whose Subsidiaries are served by Reporting Company:

Cinergy Corp.

INSTRUCTIONS FOR USE OF FORM U-13-60

Time of Filing. Rule 94 provides that on or before the first day of May in each calendar year, each mutual service company and each subsidiary service company as to which the Commission shall have made a favorable finding pursuant to Rule 88, and every service company whose application for approval or declaration pursuant to Rule 88 is pending shall file with the Commission an annual report on Form U-13-60 and in accordance with the Instructions for that form.

2.	Number of Copies. Each annual report shall be filed in duplicate. The company should prepare and retain at least one extra copy for itself in case correspondence with reference to the report becomes necessary.

3.	Period Covered by Report. The first report filed by any company shall cover the period from the date the Uniform System of Accounts was required to be made effective as to that company under Rules 82 and 93 to the end of that calendar year. Subsequent reports should cover a calendar year.

4.	Report Format. Reports shall be submitted on the forms prepared by the Commission. If the space provided on any sheet of such form is inadequate, additional sheets may be inserted of the same size as a sheet of the form or folded to each size.

5.	Money Amounts Displayed. All money amounts required to be shown in financial statements may be expressed in whole dollars, in thousands of dollars or in hundred thousands of dollars, as appropriate and subject to provisions of Regulation S-X (210.3-01(b)).

6.	Deficits Displayed. Deficits and other like entries shall be indicated by the use of either brackets or a parenthesis with corresponding reference in footnotes. (Regulation S-X, 210.3-01(c)).

Major Amendments or Corrections. Any company desiring to amend or correct a major omission or error in a report after it has been filed with the Commission shall submit an amended report including only those pages, schedules, and entries that are to be amended or corrected. A cover letter shall be submitted requesting the Commission to incorporate the amended report changes and shall be signed by a duly authorized officer of the company.

Definitions. Definitions contained in Instruction 01-8 to the Uniform System of Accounts for Mutual Service Companies and Subsidiary Service Companies, Public Utility Holding Company Act of 1935, as amended February 2, 1979 shall be applicable to words or terms used specifically within this Form U-13-60.

9.	Organization Chart. The service company shall submit with each annual report a copy of its current organization chart.

10.

Methods of Allocation. The service company shall submit with each annual report a listing of the currently effective methods of allocation being used by the service company and on file with the Securities and Exchange Commission pursuant to the Public Utility Holding Company Act of 1935.

11.

Annual Statement of Compensation for Use of Capital Billed. The service company shall submit with each annual report a copy of the annual statement supplied to each associate company in support of the amount of compensation for use of capital billed during the calendar year.

ANNUAL REPORT OF CINERGY SERVICES, INC.
For the Year Ended December 31, 2002

LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS

Description of Schedules and Accounts Comparative Balance Sheets - Assets Comparative Balance Sheets - Liabilities Service Company Property Accumulated Provision for Depreciation and Amortization of Service Company Property Investments Accounts Receivable from Associate Companies Fuel Stock Expenses Undistributed Stores Expense Undistributed Miscellaneous Current and Accrued Assets Miscellaneous Deferred Debits Research, Development, or Demonstration Expenditures Proprietary Capital Long-term Debt Current and Accrued Liabilities Notes to Financial Statements Comparative Income Statements Analysis of Billing - Associate Companies Analysis of Billing - Nonassociate Companies Analysis of Charges for Service - Associate and Nonassociate Companies Schedule of Expense Distribution by Department or Service Function Departmental Analysis of Salaries Outside Services Employed Employee Pensions and Benefits General Advertising Expenses Miscellaneous General Expenses Rents Taxes Other Than Income Taxes Donations Other Deductions Notes to Statements of Income	Schedule or Account No. Schedule I Schedule I Schedule II Schedule III Schedule IV Schedule V Schedule VI Schedule VII Schedule VIII Schedule IX Schedule X Schedule XI Schedule XII Schedule XIII Schedule XIV Schedule XV Account 457 Account 458 Schedule XVI Schedule XVII Account 920 Account 923 Account 926 Account 930.1 Account 930.2 Account 931 Account 408 Account 426.1 Account 426.5 Schedule XVIII

LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
Description of Reports or Statements Organization Chart Methods of Allocation Annual Statement of Compensation for Use of Capital Billed

Annual Report of Cinergy Services, Inc.
As of December 31, 2002 and 2001

Schedule I - COMPARATIVE BALANCE SHEETS

Give balance sheet of the Company as of December 31 of the current and prior year

		REF	December
ACCOUNT	ASSETS AND OTHER DEBITS	SCHED	2002	2001
			(unaudited)
101 107 108 123 124 131 134 135 136 141 143 144 145 146 152 154 163 165 174 181 184 186 188 190	SERVICE COMPANY PROPERTY Service Company Property Construction Work in Progress Total Property Accumulated Provision for Depreciation and Amortization of Service Company Property Net Service Company Property INVESTMENTS Investments in Associate Companies Other Investments Total Investments CURRENT AND ACCRUED ASSETS Cash Special Deposits Working Funds Temporary Cash Investments Notes Receivable Accounts Receivable Accumulated Provision for Uncollectible Accounts Notes Receivable from Associate Companies (Note 3) Accounts Receivable from Associate Companies Fuel Stock Expenses Undistributed Materials and Supplies Stores Expense Undistributed Prepayments Miscellaneous Current and Accrued Assets Total Current and Accrued Assets DEFERRED DEBITS Unamortized Debt Expense Clearing Accounts Miscellaneous Deferred Debits Research, Development, or Demonstration Expenditures Accumulated Deferred Income Taxes (Note 6) Total Deferred Debits TOTAL ASSETS AND OTHER DEBITS	II II III IV IV IV V VI VII VIII IX X	$ 43,330,345 5,109,966 - ------------- 48,440,311 (29,366,318) - ------------- 19,073,993 - 11,062,286 - ------------- 11,062,286 41,806,423 - 636 - - 2,823,568 - 79,597,852 29,720,434 - - - 6,583,726 - - ------------- 160,532,639 - - 20,070,285 - 18,907,504 - ------------- 38,977,789 $229,646,707 =============	$ 33,347,395 4,657,478 - --------------- 38,004,873 (22,372,999) - --------------- 15,631,874 - 11,563,416 - --------------- 11,563,416 1,347,867 - 1,852 - - 292,405 - 69,901,076 55,133,409 - - - 8,676,217 - - --------------- 135,352,826 - - 8,756,153 - 11,755,852 - --------------- 20,512,005 $183,060,121 ===============

Annual Report of Cinergy Services, Inc.
As of December 31, 2002 and 2001

Schedule I - COMPARATIVE BALANCE SHEETS (Continued)

		REF	December
ACCOUNT	LIABILITIES AND PROPRIETARY CAPITAL	SCHED	2002	2001
			(unaudited)
201 208 211 215 216 219 223 224 225 226 231 232 233 234 235 236 237 238 241 242 228 253 255 282	PROPRIETARY CAPITAL Common Stock Issued (Note 2) Donations Received from Stockholders Miscellaneous Paid-In-Capital Appropriated Retained Earnings Unappropriated Retained Earnings Accumulated Other Comprehensive Income (Loss) (Note 7) Total Proprietary Capital LONG-TERM DEBT Advances From Associate Companies Other Long-Term Debt Unamortized Premium on Long-Term Debt Unamortized Discount on Long-Term Debt Total Long-Term Debt CURRENT AND ACCRUED LIABILITIES Notes Payable Accounts Payable Notes Payable To Associate Companies Accounts Payable to Associate Companies Customer Deposits Taxes Accrued (Note 6) Interest Accrued Dividends Declared Tax Collections Payable (Note 6) Miscellaneous Current and Accrued Liabilities Total Current and Accrued Liabilities DEFERRED CREDITS Accumulated Provisions for Pensions and Benefits (Note 5) Other Deferred Credits (Pensions and Benefits) (Note 5) Accumulated Deferred Investment Tax Credits Total Deferred Credits ACCUMULATED DEFERRED INCOME TAXES TOTAL LIABILITIES AND PROPRIETARY CAPITAL	XI XI XI XI XI XI XII XII XIII XIII XIII	$ 4 155,346 999 - - (15,968,865) - ------------- (15,812,516) - - - - - ------------- - - 25,549,475 - 2,796,053 - 1,885,473 - - 1,881,288 2,699,476 - ------------- 34,811,765 52,829,674 158,548,206 - - ------------- 211,377,880 (730,422) - ------------- $229,646,707 =============	$ 4 155,346 (5,087,606) - - - ------------- (4,932,256) - - - - ------------- - - 28,466,860 - 4,728,069 - (1,438,724) - - 1,904,318 1,746,960 ------------- 35,407,483 45,678,463 107,015,484 - ------------- 152,693,947 (109,053) ------------- $183,060,121 =============

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule II — SERVICE COMPANY PROPERTY

ACCOUNT	DESCRIPTION	BALANCE AT BEGINNING OF YEAR	ADDITIONS	RETIREMENTS OR SALES	OTHER CHANGES⁽¹⁾	BALANCE AT CLOSE OF YEAR
301 303 304 305 306 307 308 309 310 311 107	SERVICE COMPANY PROPERTY Organization Miscellaneous Intangible Plant Land and Land Rights Structures and Improvements Leasehold Improvements Equipment ⁽²⁾ Office Furniture and Equipment Automobiles, Other Vehicles and Related Garage Equipment Aircraft and Airport Equipment Other Service Company Property ⁽³⁾ Sub-Total Construction Work in Progress ⁽⁴⁾ TOTAL	$ - - - - 620,477 - 2,405,833 - - 30,321,085 - ------------ 33,347,395 4,657,478 - ------------ $38,004,873 ============	$ - - - - 4,831,978 - 35,464 - - 2,124,358 ----------- 6,991,800 7,493,122 ----------- $14,484,922 ===========	$ - - - - - - - - - - --------- - - --------- $ - =========	$ - - - - - - 2,991,150(a) - - - ------------- 2,991,150 (7,040,634)(b) ------------- $ (4,049,484) =============	$ - - - - 5,452,455 - 5,432,447 - - 32,445,443 ------------ 43,330,345 5,109,966 ------------ $ 48,440,311 ============

NOTES:
⁽¹⁾ Provide an explanation of those changes considered material:

^(a) Represents office furniture transferred from an affiliate to be used in Cinergy’s new energy trading office.
^(b) Transferred to Plant-in-Service

⁽²⁾ Subaccounts are required for each class of equipment owned. None

⁽³⁾ Describe Other Service Company Property: Computer Software $32,445,443

⁽⁴⁾ Describe Construction Work in Progress: Computer Software $5,109,966

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule III — ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF SERVICE COMPANY PROPERTY

ACCOUNT	DESCRIPTION	BALANCE AT BEGINNING OF YEAR	ADDITIONS	RETIREMENTS	OTHER CHANGES ADD (DEDUCT)⁽¹⁾	BALANCE AT CLOSE OF YEAR
301 303 304 305 306 307 308 309 310 311	SERVICE COMPANY PROPERTY Organization Miscellaneous Intangible Plant Land and Land Rights Structures and Improvements Leasehold Improvements Equipment Office Furniture and Equipment Automobiles, Other Vehicles and Related Garage Equipment Aircraft and Airport Equipment Other Service Company Property TOTAL	$ - - - - (333,764) - (1,571,356) - - (20,467,879) - --------------- $(22,372,999) ===============	$ - - - - (298,452) - (366,380) - - (5,865,586) ----------- $(6,530,418) ===========	$ - - - - - - - - - - ----------- $ - ===========	$ - - - - - - (462,901) - - - ------------- $(462,901) =============	$ - - - - (632,216) - (2,400,637) - - (26,333,465) ------------ $(29,366,318) ============

NOTES:

⁽¹⁾ Provide an explanation of those changes considered material: Reserve associated with transfer of assets from affiliate $(462,901)

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule IV —INVESTMENTS

INSTRUCTIONS: Complete the following schedule concerning investments.

Under Account 124, “Other Investments”, state each investment separately, with description, including the name of issuing company, number of shares or principal amount, etc.

Under Account 136, “Temporary Cash Investments”, list each investment separately.

DESCRIPTION	BALANCE AT BEGINNING OF YEAR	BALANCE AT CLOSE OF YEAR
Account 123 - Investments in Associate Companies	$ -	$ -

TOTAL	$ -	$ -

Account 124 - Other Investments
Rabbi Trust	$ 8,403,728	$ 7,899,383
Voluntary Employee's Beneficiary Association (VEBA)	-	3,215
Cash Surrender Value of Executive
Life Insurance Policies	3,159,688	3,159,688

TOTAL	$11,563,416	$11,062,286

Account 136 - Temporary Cash Investments	$ -	$ -

TOTAL	$ -	$ -

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule V — ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES

INSTRUCTIONS: Complete the following schedule listing accounts receivable from each associate company. Where the service company has provided accommodation or convenience payments for associate companies, a separate listing of total payments for each associate company by subaccount should be provided.

DESCRIPTION	BALANCE AT BEGINNING OF YEAR	BALANCE AT CLOSE OF YEAR
Account 146 - Accounts Receivable from Associate Companies
Cinergy Corp.	$ -	$ 3,842,022
The Cincinnati Gas & Electric Company	24,952,151	5,844,118
The Union Light, Heat and Power Company	2,259,926	1,637,774
Lawrenceburg Gas Company	95,380	67,470
KO Transmission Company	1,650	68
PSI Energy, Inc.	25,671,417	15,920,698
CinTec LLC	2,010,000	-
Cinergy Wholesale Energy, Inc.	142,885	2,408,284

TOTAL	$55,133,409	$29,720,434

Analysis Of Convenience Or Accommodation Payments:

None

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule VI — FUEL STOCK EXPENSES UNDISTRIBUTED

INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to fuel stock expenses during the year and indicate amount attributable to each associate company. Under the section headed “Summary” listed below give an overall report of the fuel functions performed by the service company.

DESCRIPTION	LABOR	EXPENSES	TOTAL
Account 152 - Fuel Stock Expenses Undistributed	$-	$-	$-

TOTAL	$-	$-	$-

Summary:

None

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule VII — STORES EXPENSE UNDISTRIBUTED

INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to stores expense during the year and indicate amount attributable to each associate company.

DESCRIPTION	LABOR	EXPENSES	TOTAL
Account 163 - Stores Expense Undistributed	$ -	$ -	$ -

TOTAL	$ -	$ -	$ -

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule VIII — MISCELLANEOUS CURRENT AND ACCRUED ASSETS

INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each group.

DESCRIPTION	BALANCE AT BEGINNING OF YEAR	BALANCE AT CLOSE OF YEAR
Account 174 - Miscellaneous Current
and Accrued Assets	$ -	$ -

TOTAL	$ -	$ -

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule IX- MISCELLANEOUS DEFERRED DEBITS

INSTRUCTIONS: Provide detail of items in this account. Items less than $10,000 may be grouped by class showing the number of items in each class.

DESCRIPTION	BALANCE AT BEGINNING OF YEAR	BALANCE AT CLOSE OF YEAR
Account 186 - Miscellaneous Deferred Debits
Intangible Asset Associated with Non-qualified Pension Plans	$ 9,002,409	$12,439,839
Intangible Asset Associated with Qualified Pension Plans	-	7,607,967
Other Miscellaneous Deferred Debits	(246,256)	22,479

TOTAL	$ 8,756,153	$20,070,285

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule X — RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES

INSTRUCTIONS: Provide a description of each material research, development, or demonstration project which incurred costs by the service corporation during the year.

	DESCRIPTION	AMOUNT
	Account 188 - Research, Development, or
	Demonstration Expenditures	$ -

	Total	$ -

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XI - PROPRIETARY CAPITAL

ACCOUNT NUMBER	CLASS OF STOCK	NUMBER OF SHARES AUTHORIZED	PAR OR STATED VALUE PER SHARE	OUTSTANDING NO. OF SHARES	CLOSE OF PERIOD TOTAL AMOUNT
201	Common Stock Issued	100	$ 0.05	70	$ 4

INSTRUCTIONS: Classify amounts in each account with brief explanation, disclosing the general nature of transactions which gave rise to the reported amounts.

	DESCRIPTION	AMOUNT
208 211 215 216 219	Donations Received from Stockholders Miscellaneous Paid-In-Capital Appropriated Retained Earnings Unappropriated Retained Earnings Accumulated Other Comprehensive Income (Loss)	$ 155,346 999 - - (15,968,865)⁽¹⁾ - ------------------ $(15,812,520) ============

⁽¹⁾ Prior to 2002, Account 219 information was classified in Account 211. These amounts were reclassified to Account 219 in 2002 in accordance with Federal Energy Regulatory Commission (FERC) reporting requirements. See Note 7 of the Notes to Financial Statements for further explanation.

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XII — LONG-TERM DEBT

INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes and advances on open account. Names of associate companies from which advances were received shall be shown under the class and series of obligation column. For Account 224 —Other Long-Term Debt, provide the name of creditor company or organization, terms of the obligation, date of maturity, interest rate, and the amount authorized and outstanding.

NAME OF CREDITOR	TERMS OF OBLIGATION CLASS & SERIES OF OBLIGATION	DATE OF MATURITY	INTEREST RATE	AMOUNT AUTHORIZED	BALANCE AT BEGINNING OF YEAR	ADDITIONS	DEDUCTIONS⁽¹⁾	BALANCE AT CLOSE OF YEAR
Account 223 - Advances from Associate Companies TOTAL Account 224 - Other Long-Term Debt TOTAL	None None			$ - - ---------------- $ - $ - - ---------------- $ -	$ - - -------------- $ - $ - - -------------- $ -	$ - - ------------- $ - $ - - -------------- $ -	$ - - -------------- $ - $ - - -------------- $ -	$ - - ------------ $ - $ - - ---------- $ -

NOTES:

⁽¹⁾ Give an explanation of deductions: None

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XIII — CURRENT AND ACCRUED LIABILITIES

INSTRUCTIONS: Provide balance of notes and accounts payable to each associate company. Give description and amount of miscellaneous current and accrued liabilities. Items less than $10,000 may be grouped, showing the numberof items in each group.

DESCRIPTION	BALANCE AT BEGINNING OF YEAR	BALANCE AT CLOSE OF YEAR
Account 233 - Notes Payable to
Associate Companies	$ - ----------	$ - ----------
Total	$ -	$ -
Account 234 - Accounts Payable to
Associate Companies
Cinergy Corp.	$ 2,107,016	$ -
Cinergy Power Generation Services, LLC	2,621,053	2,621,053
Tri-State Improvement	- ----------	175,000 ----------
Total	$ 4,728,069	$ 2,796,053
Account 242 - Miscellaneous Current and
Accrued Liabilities
Transaction Fees	$ (106,595)	$ (106,756)
Reserve for Medical/Dental Costs	1,850,588	2,805,156
Other Miscellaneous Current and Accrued Liabilities ⁽¹⁾	2,967 ----------	1,076 ----------
Total	$ 1,746,960	$ 2,699,476

⁽¹⁾

The beginning balance for the Other Miscellaneous Current and Accrued Liabilities is made up of a grouping of two items. The balance at the close of the year is made up of a grouping of four items.

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XIV — NOTES TO FINANCIAL STATEMENTS

INSTRUCTIONS: The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.

1. Summary of Significant Accounting Policies

(a) Nature of Operations

Cinergy Corp. (Cinergy), a Delaware corporation created in October 1994, owns all outstanding common stock of The Cincinnati Gas & Electric Company (CG&E) and PSI Energy, Inc. (PSI), both of which are public utility subsidiaries. As a result of this ownership, we are considered a utility holding company. Because we are a holding company with material utility subsidiaries operating in multiple states, we are registered with and are subject to regulation by the Securities and Exchange Commission (SEC) under the Public Utility Holding Company Act of 1935, as amended (PUHCA). Cinergy Services, Inc. (Services) is a wholly-owned subsidiary of Cinergy. In addition to those listed above, Cinergy’s other principal subsidiaries are Cinergy Investments, Inc., Cinergy Global Resources, Inc., and Cinergy Wholesale Energy, Inc.

Services, a Delaware corporation, is the service company for the Cinergy consolidated group, providing member companies with a variety of centralized administrative, management, and support services.

(b) Presentation

Management makes estimates and assumptions when preparing financial statements under generally accepted accounting principles (GAAP). Actual results could differ, as these estimates and assumptions involve judgment. These estimates and assumptions affect various matters, including:

• the reported amounts of assets and liabilities in the Comparative Balance Sheets at the dates of the financial statements;
• the disclosure of contingent assets and liabilities at the dates of the financial statements; and
• the reported amounts of revenues and expenses in the Comparative Income Statements during the reporting periods.

(c) Regulation

Services is subject to regulation by the SEC under the PUHCA. The accounting policies of Services conform to GAAP and follow the Uniform System of Accounts for Mutual Service Companies and Subsidiary Service Companies prescribed by the SEC pursuant to the PUHCA.

(d) Service Company Property

Services’ property includes property and equipment that is in use or under construction and is recorded at its original cost, which includes:

• materials;
• salaries;
• payroll taxes;
• fringe benefits; and
• other miscellaneous amounts.

(e) Depreciation

Provisions for depreciation are determined by using the straight-line method applied to the cost of depreciable plant in service. The effective annual depreciation rate for 2002 was 10.41% and for 2001 was 12.5%. Software is amortized over a five-year period at an annual rate of 20%.

(f) Federal and State Income Taxes

Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, requires an asset and liability approach for financial accounting and reporting of income taxes. The tax effects of differences between the financial reporting and tax basis of accounting are reported as Accumulated Deferred Income Taxes in the Comparative Balance Sheets and are based on currently enacted income tax rates.

(g) Income and Expenses

The services provided to affiliated companies are provided at cost and in accordance with the SEC regulations under the PUHCA. Services provides to the affiliated companies a variety of centralized administrative, management, and support services in accordance with agreements approved by the SEC under the PUHCA. The costs of these services are charged on a direct basis or, for general costs which cannot be directly attributed, based on predetermined allocation factors defined in the service agreements between Services and the client companies. (See Methods of Allocation.)

2. Common Stock

Services is authorized to issue 100 shares of Common Stock at a par value of five cents ($.05) per share and had 70 shares outstanding at December 31, 2002 and December 31, 2001. Cinergy holds all of Services’ outstanding common stock.

3. Notes Receivable from Associate Companies

Cinergy, Services, and Cinergy’s utility companies participate in a money pool arrangement to better manage cash and working capital requirements. Under this arrangement, the companies with surplus short-term funds provide short-term loans to affiliates (other than Cinergy) participating under this arrangement. This surplus cash may be from internal or external sources. The amounts outstanding under this money pool arrangement are shown as Notes Receivables from Associate Companies on Services Comparative Balance Sheets.

4. Leases

Cinergy and its subsidiaries, including Services, have entered into operating lease agreements for various facilities and properties, such as computer, communication and transportation equipment, and office space. Total rental payments on operating leases for each of the past two years are detailed below. This table also shows future minimum lease payments required for operating leases with remaining non-cancelable lease terms in excess of one year as of December 31, 2002 for services:

	Actual Payments		Estimated Minimum Payments
	2001	2002	2003	2004	2005	2006	2007	After 2007	Total
	(in millions)
Cinergy	$61	$64	$43	$33	$26	$22	$18	$52	$194

5. Pension and Other Postretirement Benefits

Cinergy’s qualified defined benefit pension plans, of which Services is a participant, cover substantially all of our United States (U.S.) employees meeting certain minimum age and service requirements. A final average pay formula determines plan benefits. These plan benefits are based on (1) years of participation, (2) age at retirement, and (3) the applicable average Social Security wage base or benefit amount.

Cinergy’s pension plan funding policy for our U.S. employees is to contribute at least the amount required by the Employee Retirement Income Security Act of 1974, and up to the amount deductible for income tax purposes. The pension plans’ assets consist of investments in equity and fixed income securities.

Cinergy, including Services, provides certain health care and life insurance benefits to our retired U.S. employees and their eligible dependents. These benefits are subject to minimum age and service requirements. The health care benefits include medical coverage, dental coverage, and prescription drugs and are subject to certain limitations, such as deductibles and co-payments.

In addition, Cinergy sponsors non-qualified pension plans (plans that do not meet the criteria for tax benefits) that cover officers, certain other key employees, and non-employee directors. Cinergy began funding certain of these non-qualified plans through a rabbi trust in 1999. This trust, which consists of equity and fixed income securities, is not restricted to the payment of plan benefits and therefore, not considered plan assets under Statement of Financial Accounting Standards No. 87, Employers’ Accounting for Pensions. At December 31, 2002 and 2001, trust assets were approximately $8 million and are reflected in Cinergy’s Balance Sheets as Other investments.

In 2002, Cinergy offered voluntary early retirement programs to certain individuals. In accordance with Statement of Financial Accounting Standards No. 88, Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits (Statement 88), Cinergy recognized an expense of $39.1 million in 2002.

Cinergy’s benefit plans’ costs for the past two years, as well as the actuarial assumptions used in determining these costs, included the following components:

	Qualified Pension Benefits				Non-Qualified Pension Benefits				Other Postretirement Benefits


	2002		2001		2002		2001		2002		2001
	(in millions)
Service cost	$ 27	.3	$ 27	.9	$ 2	.7	$ 2	.1	$ 3	.5	$ 3	.8
Interest cost	79	.2	77	.5	5	.1	4	.8	19	.6	17	.9
Expected return on plans' assets	(86	.3)	(81	.9)	-		-		(0	.3)	-
Amortization of transition (asset) obligation	(1	.3)	(1	.3)	0	.1	0	.1	5	.0	5	.0
Amortization of prior service cost	6	.2	4	.6	0	.9	1	.1	-		-
Recognized actuarial (gain) loss	(5	.4)	(3	.2)	0	.8	0	.6	1	.1	0	.1
Voluntary early retirement costs (Statement 88)	38	.6	-		0	.5	-		-		-
Net periodic benefit cost	$ 58	.3	$ 23	.6	$ 10	.1	$ 8	.7	$ 28	.9	$ 26	.8

The net periodic benefit cost for Services was as follows:

	Qualified Pension Benefits				Non-Qualified Pension Benefits				Other Postretirement Benefits


	2002		2001		2002		2001		2002		2001
	(in millions)
Services	$ 20	.2	$ 9	.6	$ 8	.0	$ 2	.9	$ 4	.2	$ 4	.2

The following table provides a reconciliation of the changes in the plans' benefit obligations and fair value of assets over the two-year period ended December 31, 2002, and a statement of the funded status as of December 31 of both years.

	Qualified Pension Benefits				Non-Qualified Pension Benefits				Other Postretirement Benefits


	2002		2001		2002		2001		2002		2001
	(in millions)
Change in benefit obligation
Benefit obligation at beginning of period	$ 1,083	.5	$ 1,064	.5	$ 70	.9	$ 67	.0	$ 270	.4	$ 247	.1
Service cost	27	.3	27	.9	2	.7	2	.1	3	.5	3	.8
Interest cost	79	.2	77	.5	5	.1	4	.8	19	.6	17	.9
Amendments⁽¹⁾	43	.3	18	.0	4	.5	(1	.8)	(12	.3)	-
Actuarial (gain) loss	156	.5	(43	.6)	20	.6	4	.3	80	.2	17	.9
Benefits paid	(74	.9)	(60	.8)	(6	.0)	(5	.5)	(18	.2)	(16	.3)

Benefit obligation at end of period	1,314	.9	1,083	.5	97	.8	70	.9	343	.2	270	.4

Change in plan assets
Fair value of plan assets at beginning of period	875	.4	1,043	.6	-		-		-		-
Actual return on plan assets	(48	.0)	(108	.1)	-		-		-		-
Employer contribution	4	.0	0	.7	6	.0	5	.5	18	.2	16	.3
Benefits paid	(74	.9)	(60	.8)	(6	.0)	(5	.5)	(18	.2)	(16	.3)

Fair value of plan assets at end of period	756	.5	875	.4	-		-		-		-

Funded status	(558	.4)	(208	.1)	(97	.8)	(70	.9)	(343	.2)	(270	.4)

Unrecognized prior service cost	48	.4	50	.0	13	.5	10	.2	-		-
Unrecognized net actuarial (gain) loss	196	.2	(100	.1)	37	.6	17	.7	125	.5	45	.7
Unrecognized net transition (asset) obligation	(1	.9)	(3	.2)	0	.1	0	.1	33	.5	50	.8

Benefit cost at December 31	$ (315	.7)	$ (261	.4)	$ (46	.6)	$ (42	.9)	$ (184	.2)	$ (173	.9)
Amounts recognized in balance sheets
Accrued benefit liability	$ (353	.0)	$ (261	.4)	$ (89	.0)	$ (63	.3)	$ (184	.2)	$ (173	.9)
Intangible asset	32	.6	-		13	.6	10	.3	-		-
Accumulated other comprehensive income (pre-tax)	4	.7	-		28	.8	10	.1	-		-

Net recognized at end of period	$ (315	.7)	$ (261	.4)	$ (46	.6)	$ (42	.9)	$ (184	.2)	$ (173	.9)

⁽¹⁾	For 2002, the amount of $43.3 million and $4.5 million includes $38.6 million and $0.5 million, respectively of voluntary early retirement expenses in accordance with Statement 88, as previously discussed.

The following table provides the weighted-average actuarial assumptions.

	Qualified Pension Benefits				Non-Qualified Pension Benefits				Other Postretirement Benefits


	2002		2001		2002		2001		2002		2001
Actuarial assumptions:
Discount rate	6	.75%	7	.50%	6	.75%	7	.50%	6	.75%	7	.50%
Rate of future compensation increase	4	.00	4	.50	4	.00	4	.00	N/A		N/A
Rate of return on plans' assets	9	.00	9	.25	N/A		N/A		N/A		3	.00

For measurement purposes, Cinergy assumed a seven percent annual rate of increase in the per capita cost of covered health care benefits for 2002. It was assumed that the rate would decrease gradually to five percent in 2008 and remain at that level thereafter.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	One-Percentage- Point Increase		One-Percentage-Point Decrease


	(in millions)
Effect on total of service and interest cost components	$ 3	.4	$ (2	.9)

Effect on postretirement benefit obligation	44	.3	(38	.7)

During 2002, eligible employees were offered the opportunity to make a one-time election, effective January 1, 2003, to either continue to have their pension benefit determined by the current defined benefit pension formula or to have their benefit determined using a cash balance formula. Participants in the cash balance plan may request a lump-sum cash payment based upon termination of their employment which may result in increased cash requirements from pension plan assets.

Since 85 percent of eligible employees chose to continue with the traditional pension formula, we do not believe the cash balance features will have a material effect on our financial position or results of operations.

6. Income Taxes

Services’ net deferred income tax asset at December 31, 2002, and 2001, is as follows:

	2002		2001

Deferred Income Tax Liability	$ (730,422	)	$ (109,053	)
Deferred Income Tax Asset
Accrued pension and other benefit costs	18,907,504		11,755,852

Net Deferred Income Tax Asset	$ 19,637,926		$ 11,864,905

Services will participate in the filing of a consolidated federal income tax return with Cinergy for the year ended December 31, 2002. The current tax liability is allocated among the members of the Cinergy consolidated group pursuant to a tax sharing agreement consistent with Rule 45(c) of the PUHCA.

A summary of federal and state income taxes charged (credited) to income and the allocation of such amounts is as follows:


	2002		2001
Current Income Taxes
Federal	$ 196,754		$(1,519,833	)
State	585,169		(480,517	)

Total current income taxes	781,923		(2,000,350	)
Deferred Income Taxes
Federal
Pension and other benefit costs	76,119		2,066,576
State
Pension and other benefit costs	(413,349	)	943,843

Total deferred income taxes	(337,230	)	3,010,419

Total Income Taxes	$ 444,693		$ 1,010,069

7. Comprehensive Income

The elements of Comprehensive income and their related tax effects for the years ended 2002 and 2001 are as follows:

	Comprehensive Income
	2002					2001
	Before-tax Amount		Tax (Expense) Benefit	Net-of-Tax		Before-Tax Amount		Tax (Expense) Benefit	Net-of-Tax
Net income	$ -		$ -	$ -		$ -		$ -	$ -
Other comprehensive income (loss):
Minimum pension liability adjustment	(17,610,676	)	7,156,295	(10,454,381	)	(2,571,762	)	1,033,077	(1,538,685	)
Unrealized gain (loss) on investment trusts	(709,774	)	283,895	(425,879	)	(550,588	)	274,891	(275,697	)

Total other comprehensive income (loss)	(18,320,450	)	7,440,190	(10,880,260	)	(3,122,350	)	1,307,968	(1,814,382	)

Total comprehensive income (loss)	$(18,320,450	)	$7,440,190	$(10,880,260	)	$(3,122,350	)	$1,307,968	$(1,814,382	)

The after-tax components of Accumulated other comprehensive income (loss) as of December 31, 2002 and 2001 are as follows:

	Accumulated Other Comprehensive Income (Loss) Classification

	Minimum Pension Liability Adjustment		Unrealized Gain (Loss) on Investment Trusts		Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2000	$(3,045,984	)	$(228,239	)	$(3,274,223	)
Current-period change	(1,538,685	)	(275,697	)	(1,814,382	)

Balance at December 31, 2001	$(4,584,669	)	$(503,936	)	$(5,088,605	)
Current-period change	(10,454,381	)	(425,879	)	(10,880,260	)

Balance at December 31, 2002	$(15,039,050	)	$(929,815	)	$(15,968,865	)

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XV - COMPARATIVE INCOME STATEMENTS

		December 31
ACCOUNT	DESCRIPTION	2002	2001
		(unaudited)
457 458 415 419 920 921 922 923 924 925 926 928 930.1 930.2 931 932 403, 404 408 409 410 411 411.5 421 426.1 426.5 427 430 431	INCOME Services Rendered to Associate Companies Services Rendered to Nonassociate Companies Jobbing and Contract Work Other Interest Income Total Income EXPENSE Salaries and Wages Office Supplies and Expenses Administrative Expenses Transferred - Credit Outside Services Employed Property Insurance Injuries and Damages Employee Pensions and Benefits Regulatory Commission Expense General Advertising Expenses Miscellaneous General Expenses Rents Maintenance of Structures and Equipment Depreciation and Amortization Expense Taxes Other Than Income Taxes Income Taxes Provision for Deferred Income Taxes Provision for Deferred Income Taxes - Credit Investment Tax Credit Miscellaneous (Income) or Loss Donations Other Deductions Interest on Long-term Debt Interest on Debt to Associate Companies Other Interest Expense Total Expense NET INCOME or (LOSS)	$ 472,222,568 - - 1,692,511 - ----------------- 473,915,079 254,658,308 48,203,526 193 45,717,402 262,760 41,490 43,246,117 2,204,802 - 23,847,556 33,248,508 5,445,800 6,530,617 10,351,605 781,923 (337,230) - - (288,298) - - - - - - ----------------- 473,915,079 $ - ===============	$ 483,480,030 - - 2,113,872 - --------------- 485,593,902 262,734,362 60,158,048 (1,525,842) 42,175,401 352,331 760,406 37,927,024 988,296 3,967 24,552,969 34,790,180 5,896,335 6,344,169 9,126,902 (2,000,350) 408,056 2,602,363 - - - - - 932 298,353 - --------------- 485,593,902 $ - ===============

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

ANALYSIS OF BILLING

ASSOCIATE COMPANIES - ACCOUNT 457

NAME OF ASSOCIATE COMPANY	DIRECT COSTS CHARGED 457-1	INDIRECT COSTS CHARGED 457-2		COMPENSATION FOR USE OF CAPITAL 457-3	TOTAL AMOUNT BILLED
Cinergy Corp.	$ 4,699,578	$ 1,691,834		$ -	$ 6,391,412
The Cincinnati Gas & Electric Company	55,743,073	126,115,552		-	181,858,625
The Union Light, Heat and Power Company	7,929,849	15,084,836		-	23,014,685
Tri-State Improvement Company	78,590	24,187		-	102,777
Lawrenceburg Gas Company	216,116	519,659		-	735,775
Miami Power Corporation	3,186	-		-	3,186
KO Transmission Company	7,147	(121	)	-	7,026
PSI Energy, Inc.	69,978,495	119,529,807		-	189,508,302
Cinergy Investments, Inc.	23,892	15,308		-	39,200
Cinergy Capital & Trading, Inc.	1,376,012	13,164,927		-	14,540,939
Brownsville Power I, LLC	7,235	-		-	7,235
Caledonia Power I, LLC	8,126	-		-	8,126
CinCap VII, LLC	12,858	-		-	12,858
CinCap Madison, LLC	8,064	(848	)	-	7,216
Cinergy Marketing & Trading, LLC	10,551,869	13,517,214		-	24,069,083
Oak Mountain Products, LLC	1,151	-		-	1,151
LH1, LLC	43,493	-		-	43,493
Cinergy Telecommunications Holding Company, Inc.	9,496	(848	)	-	8,648
Cinergy Engineering, Inc.	756	-		-	756
Cinergy-Centrus, Inc.	-	(485	)	-	(485	)
Cinergy Solutions Holding Company, Inc.	4,353,619	49,802		-	4,403,421
Vestar, Inc.	56,622	633,868		-	690,490
Cinergy EPCOM, LLC	290,574	-		-	290,574
Cinergy EPCOM College Park, LLC	188,777	-		-	188,777
Cinergy Solutions, Inc.	2,846,355	402,295		-	3,248,650
Cinergy Solutions of Philadelphia, LLC	80,420	-		-	80,420
CSGP of Southeast Texas, LLC	144,857	7,614		-	152,471
Lansing Grand River Utilities, LLC	-	145,984		-	145,984
Cinergy Solutions of Tuscola, Inc.	35,767	178,387		-	214,154
Cinergy Supply Network, Inc.	18,726	-		-	18,726
Cinergy Technology, Inc.	42,566	(1,091	)	-	41,475
Cinergy Global Resources, Inc.	1,348,623	640,387		-	1,989,010
Cinergy UK, Inc.	75	(121	)	-	(46	)
Cinergy Global Power, Inc.	1,675,452	(4,904	)	-	1,670,548
Cinergy Ventures, LLC	1,127,146	(4,726	)	-	1,122,420
Cinergy One, Inc.	1,697,777	1,817		-	1,699,594
Cinergy Two, Inc.	143	-		-	143
Cinergy Wholesale Energy, Inc.	48,241	-		-	48,241
Cinergy Power Generation Services, LLC	5,107	15,851,825		-	15,856,932
CinCap MVC OpCo, LLC	576	-		-	576

TOTAL	$164,660,409	$ 307,562,159		$ -	$ 472,222,568

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

ANALYSIS OF BILLING

NONASSOCIATE COMPANIES — ACCOUNT 458

Instructions: Provide a brief description of the services rendered to each nonassociate company.

NAME OF ASSOCIATE COMPANY	DIRECT COSTS CHARGED 458-1		INDIRECT COSTS CHARGED 458-2		COMPENSATION FOR USE OF CAPITAL 458-3		TOTAL COST		EXCESS OR DEFICIENCY 458-4		TOTAL AMOUNT BILLED
	$	-	$	-	$	-	$	-	$	-	$	-

TOTAL	$	-	$	-	$	-	$	-	$	-	$	-

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XVI — ANALYSIS OF CHARGES FOR SERVICE — ASSOCIATE AND NONASSOCIATE COMPANIES

INSTRUCTIONS: Total cost of service will equal for associate and nonassociate companies the total amount billed under their separate analysis of billing schedules.

Account	Description Of Items	Associate Company Charges			Nonassociate Company Charges			Total Charges for Service

		Direct Cost	Indirect Cost	Total	Direct Cost	Indirect Cost	Total	Direct Cost	Indirect Cost	Total

920 921 922 923 924 925 926 928 930.1 930.2 931 932 403 404 408 409 410 411 421 426.1 426.5 427 430 431	Salaries and Wages Office Supplies and Expenses Administrative Expense Transferred - Credit Outside Services Employed Property Insurance Injuries and Damages Employee Pensions and Benefits Regulatory Commission Expense General Advertising Expenses Miscellaneous General Expenses Rents Maintenance of Structures and Equipment Depreciation Amortization Expense Taxes Other Than Income Taxes Income Taxes Provision for Deferred Income Taxes Provision for Deferred Income Taxes - Credit Miscellaneous Income or Loss Donations Other Deductions Interest on Long-term Debt Interest on Debt to Associate Companies Other Interest Expense TOTAL EXPENSES	$104,696,745 14,132,660 193 10,791,068 262,760 9,792 16,759,290 2,204,802 - 9,431,237 3,730,263 215,547 - 7,389 2,210,124 - - - - - - - - - $164,451,870	$149,961,563 34,070,866 - 34,926,334 - 31,698 26,486,827 - - 14,416,319 29,518,245 5,230,253 659,712 5,863,516 8,141,481 781,923 (337,230) - (288,298) - - - - - $309,463,209	$254,658,308 48,203,526 193 45,717,402 262,760 41,490 43,246,117 2,204,802 - 23,847,556 33,248,508 5,445,800 659,712 5,870,905 10,351,605 781,923 (337,230) - (288,298) - - - - - $473,915,079	$ - - - - - - - - - - - - - - - - - - - - - - - - $ -	$ - - - - - - - - - - - - - - - - - - - - - - - - $ -	$ - - - - - - - - - - - - - - - - - - - - - - - - $ -	$104,696,745 14,132,660 193 10,791,068 262,760 9,792 16,759,290 2,204,802 - 9,431,237 3,730,263 215,547 - 7,389 2,210,124 - - - - - - - - - $164,451,870	$149,961,563 34,070,866 - 34,926,334 - 31,698 26,486,827 - - 14,416,319 29,518,245 5,230,253 659,712 5,863,516 8,141,481 781,923 (337,230) - (288,298) - - - - - $309,463,209	$254,658,308 48,203,526 193 45,717,402 262,760 41,490 43,246,117 2,204,802 - 23,847,556 33,248,508 5,445,800 659,712 5,870,905 10,351,605 781,923 (337,230) - (288,298) - - - - - $473,915,079

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XVII - SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Account(s))

Account	Description Of Items	DEPARTMENT OR SERVICE FUNCTION

		TOTAL AMOUNT	OVERHEAD	INFORMATION SYSTEMS	METERS AND TRANSPORTATION	ELEC. SYSTEM MAINTENANCE	INTERNAL AUDITING	ELEC. TRANS. & DISTRIBUTION	ACCOUNTING

920 921 922 923 924 925 926 928 930.1 930.2 931 932 403 404 408 409 410 411 411.5 421 426.1 426.5 427 430 431	Salaries and Wages Office Supplies and Expenses Administrative Expense Transferred - Credit Outside Services Employed Property Insurance Injuries and Damages Employee Pensions and Benefits Regulatory Commission Expense General Advertising Expense Miscellaneous General Expenses Rents Maintenance of Structures and Equipment Depreciation Amortization Expense Taxes Other Than Income Taxes Income Taxes Provision for Deferred Income Taxes Provision for Deferred Income Taxes - Credit Investment Tax Credit Miscellaneous (Income) or Loss Donations Other Deductions Interest on Long-term Debt Interest on Debt to Associate Companies Other Interest Expense Total Expenses	$254,658,308 48,203,526 193 45,717,402 262,760 41,490 43,246,117 2,204,802 - 23,847,556 33,248,508 5,445,800 659,712 5,870,905 10,351,605 781,923 (337,230) - - (288,298) - - - - - --------------- $473,915,079	$ - - - - - - - - - - - - 659,712 5,870,905 31,782 781,923 (337,230) - - (288,298) - - - - - --------------- $6,718,794	$30,847,519 13,234,510 158 18,575,997 - - 5,708,936 - - 139,740 13,737,608 3,066,552 - - 1,402,124 - - - - - - - - - - --------------- $86,713,144	$14,747,073 1,118,950 - 29,879 274,760 - 1,221,195 - - 111,160 136,921 1,086 - - 311,496 - - - - - - - - - - --------------- $17,952,520	$ 7,649,965 1,819,891 - (22,580) - - 1,344,090 - - 81,142 179,298 11,836 - - 343,761 - - - - - - - - - - --------------- $11,407,403	$ 3,864 356,187 - 1,872,549 - - 781 - - - 11,668 - - - 195 - - - - - - - - - - --------------- $2,245,244	$29,544,234 1,427,645 - 1,554,838 - - 1,034,075 - - 1,300,849 137,261 9,671 - - 310,351 - - - - - - - - - - --------------- $35,318,924	$ 6,476,749 984,178 - 3,639,068 (12,000) - 1,920,921 7,559 - 593,092 10,400,348 - - - 1,347,404 - - - - - - - - - - --------------- $25,357,319

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XVII — SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System:Uniform System of Account(s))

Account	Description Of Items	DEPARTMENT OR SERVICE FUNCTION

		HUMAN RESOURCES	MATERIALS MANAGEMENT	FACILITIES	MARKETING & CUST. RELATIONS	ENVIRONMENTAL AFFAIRS	PUBLIC AFFAIRS	POWER ENG. & CONSTRUCTION	INVESTOR RELATIONS

920 921 922 923 924 925 926 928 930.1 930.2 931 932 403 404 408 409 410 411 411.5 421 426.1 426.5 427 430 431	Salaries and Wages Office Supplies and Expenses Administrative Expense Transferred - Credit Outside Services Employed Property Insurance Injuries and Damages Employee Pensions and Benefits Regulatory Commission Expense General Advertising Expense Miscellaneous General Expenses Rents Maintenance of Structures and Equipment Depreciation Amortization Expense Taxes Other Than Income Taxes Income Taxes Provision for Deferred Income Taxes Provision for Deferred Income Taxes - Credit Investment Tax Credit Miscellaneous (Income) or Loss Donations Other Deductions Interest on Long-term Debt Interest on Debt to Associate Companies Other Interest Expense Total Expenses	$39,911,469 1,225,347 - 2,199,324 - - 1,441,652 - - 12,219,188 145,078 - - - 566,870 - - - - - - - - - - - ----------- $57,708,928	$11,501,139 2,184,194 - 476,231 - - 935,038 - - 109,495 115,472 90 - - 258,339 - - - - - - - - - - - ----------- $15,579,998	$ 3,175,441 4,615,664 - 169,178 - - 1,092,077 - - (1,816) 4,443,596 2,278,726 - - 284,313 - - - - - - - - - - - ----------- $16,057,179	$16,118,472 3,033,768 - 2,981,113 - - 4,120,883 - - 998,414 730,165 75,019 - - 1,083,909 - - - - - - - - - - - ----------- $29,141,743	$1,430,799 1,134,920 - 510,863 - - 359,906 - - 397,064 22,860 - - - 98,454 - - - - - - - - - - - ---------- $3,954,866	$3,585,587 708,783 - 254,162 - - 842,076 - - 361,184 317,549 - - - 256,203 - - - - - - - - - - - ----------- $6,325,544	$15,195,503 715,181 - 28,692 - 7,949 645,728 - - 785,410 69,552 1,805 - - 174,401 - - - - - - - - - - - ----------- $17,624,221	$ 838,460 643,516 - 550,756 - - 230,560 - - 2,798 28,061 - - - 59,340 - - - - - - - - - - - ----------- $2,353,491

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XVII —SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Account(s))

Account	Description Of Items	DEPARTMENT OR SERVICE FUNCTION

		LEGAL	RATES	FINANCE	RIGHT OF WAY	FUELS	PLANNING	EXECUTIVE	POWER PLANNING

920 921 922 923 924 925 926 928 930.1 930.2 931 932 403 404 408 409 410 411 411.5 421 426.1 426.5 427 430 431	Salaries and Wages Office Supplies and Expenses Administrative Expense Transferred - Credit Outside Services Employed Property Insurance Injuries and Damages Employee Pensions and Benefits Regulatory Commission Expense General Advertising Expense Miscellaneous General Expenses Rents Maintenance of Structures and Equipment Depreciation Amortization Expense Taxes Other Than Income Taxes Income Taxes Provision for Deferred Income Taxes Provision for Deferred Income Taxes - Credit Investment Tax Credit Miscellaneous (Income) or Loss Donations Other Deductions Interest on Long-term Debt Interest on Debt to Associate Companies Other Interest Expense Total Expenses	$ 9,026,667 1,942,737 - 5,381,042 - 797 2,116,780 14,295 - 2,144,118 228,584 - - - 667,940 - - - - - - - - - - - ----------- $21,522,960	$2,115,184 123,226 - 659,279 - - 637,261 4,405 - 14,247 46,782 - - - 159,942 - - - - - - - - - - - ----------- $3,760,326	$30,246,663 4,048,853 - 3,785,269 - 31,618 8,971,210 2,157,968 - 1,093,643 322,199 - - - 1,217,717 - - - - - - - - - - - ----------- $51,875,140	$1,051,974 28,019 - 301 - - 205,392 - - 371,560 20,427 - - - 56,624 - - - - - - - - - - - ----------- $1,734,297	$ 534,678 72,155 - 5,065 - - 578,638 - - 2,166,221 6 - - - 151,455 - - - - - - - - - - - ---------- $3,508,218	$325,132 50,571 - 136,752 - - 94,557 - - - 10,396 - - - 24,463 - - - - - - - - - - - -------- $641,871	$14,927,261 4,212,521 - 1,874,014 - 1,126 5,706,073 20,575 - 562,475 123,715 - - - 399,806 - - - - - - - - - - - ------------ $27,827,566	$15,404,475 4,522,710 35 1,055,610 - - 4,038,288 - - 397,572 2,020,962 1,015 - - 1,144,716 - - - - - - - - - - - ------------ $28,585,383

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

DEPARTMENTAL ANALYSIS OF SALARIES - ACCOUNT 920

	DEPARTMENTAL SALARY EXPENSE
NAME OF DEPARTMENT		INCLUDED IN AMOUNTS BILLED TO				NUMBER PERSONNEL
INDICATE EACH DEPARTMENT OR SERVICE FUNCTION	TOTAL AMOUNT	PARENT COMPANY	OTHER ASSOCIATES	NON- ASSOCIATES		END OF YEAR
Information Systems	$ 30,847,519	$ 87,363	$ 30,760,156	$	-	341
Meters and Transportation	14,747,073	-	14,747,073		-	182
Electric System Maintenance	7,649,965	-	7,649,965		-	104
Marketing and Customer Relations	16,118,472	-	16,118,472		-	333
Electric Transmission and Distribution
Engineering and Construction	29,544,234	-	29,544,234		-	310
Power Engineering and Construction	15,195,503	-	15,195,503		-	179
Human Resources	39,911,469	7	39,911,462		-	52
Materials Management	11,501,139	23,651	11,477,488		-	146
Facilities	3,175,441	1,911	3,173,530		-	82
Accounting	6,476,749	77,648	6,399,101		-	126
Power Planning	15,404,475	-	15,404,475		-	192
Public Affairs	3,585,587	30,564	3,555,023		-	47
Legal	9,026,667	10,084	9,016,583		-	79
Rates	2,115,184	15	2,115,169		-	27
Finance	30,246,663	111,530	30,135,133		-	149
Right of Way	1,051,974	-	1,051,974		-	14
Internal Auditing	3,864	107	3,757		-	-
Environmental Affairs	1,430,799	-	1,430,799		-	16
Fuels	534,678	-	534,678		-	23
Investor Relations	838,460	24,651	813,809		-	8
Planning	325,132	9,559	315,573		-	6
Executive	14,927,261	99,931	14,827,330		-	69

Total	$254,658,308	$477,021	$254,181,287	$	-	2,485

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

OUTSIDE SERVICES EMPLOYED — ACCOUNT 923

INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service.

FROM WHOM PURCHASED (1)	DESCRIPTION	AMOUNT
Auditing Services: Arthur Andersen LLP Deloitte & Touche LLP Legal Services: AEMS LLC Hogan & Hartson Hunton & Williams Latham & Watkins Mayer, Brown, Rowe & Maw Plews, Shadley, Racher & Braun Skadden, Arps, Slate, Meagher & Flom, LLP Special Counsel Taft, Stettinius & Hollister LLP Thompson Hine & Flory LLP Other Services: Accenture LLP Alpine Group Analysts International Corporation Balancing BEA Systems, Inc. Bell Tech.Logix, Inc. Cambridge Energy Research Cap Gemini Ernst & Young CIBER, Inc. Compaq Computer Corporation Competitive Business Association, Inc. Convergent Group Corestaff Services Craig Cooper CSC Consulting, Inc. Cyberdyne Systems, Inc. dbaDIRECT, Inc. divine, Inc. e-Acumen	Audit and Financial Consulting Services Audit and Financial Consulting Services Sub-Total Legal Services Legal Services Legal Services Legal Services Legal Services Legal Services Legal Services Legal Services Legal Services Legal Services Sub-Total Project Consulting Services for Energy Merchant Business Unit Government Relations Consulting Services Information Technology Consulting Services Human Resources Form Development Services Information Technology Consulting Services Information Technology Consulting Services Energy Market Consulting Services Information Technology Consulting Services Information Technology Consulting Services Information Technology Consulting Services Information Technology Consulting Services Information Technology Consulting Services Information Technology Consulting Services Share Saver Consulting Services Information Technology Consulting Services Information Technology Consulting Services Data Storage Support Services Information Technology Consulting Services Subscription Fees & Security Deposit Expenses	$ 1,141,498 4,057,566 - ----------- 5,199,064 239,706 769,909 406,576 139,264 600,464 343,282 1,024,337 133,648 150,340 562,518 - -------------- 4,370,044 2,009,048 255,000 110,129 101,182 163,060 896,112 197,657 865,138 653,806 169,543 739,053 1,380,114 2,687,554 119,501 1,673,044 128,686 973,805 142,638 165,550

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

OUTSIDE SERVICES EMPLOYED - ACCOUNT 923 (Continued)

FROM WHOM PURCHASED (1)	DESCRIPTION	AMOUNT
Other Services (Continued): EMC Corporation Fusion Technologies LLC G.A. Sullivan Gerald Stewart Gontero and Associates The Hennegan Company Hewitt & Associates LLC Howard Systems International ICF Resources, Inc. Lucrum, Inc. Manpower, Inc. Microsoft Corporation National Economic Research Associates, Inc. Natsource PA Consulting Group Personnel Decisions International PriceWaterhouseCoopers LLP Professional Computer Center, Inc. Professional Computer Consultants, Inc. Professional Contracting Solutions, Inc. Professional Data Resources, Inc. RHR International Company Richard F. Hohlt Richard S Consulting, Inc. Risk Capital Management Partners LLC Risk Management Alternatives Risk Management Services Scott Madden & Associates, Inc. Spencer Stuart Structure Consulting Group LLC T.C. Modeling Systems, Inc Technology & Business Integrators Technology Partners Towers Perrin, Inc. Triple Point Technology, Inc. YCA Other (2)	Data Storage Services Information Technology Consulting Services Information Technology Consulting Services Market Analysis Consulting Services Information Technology Consulting Services Creative Design Consulting Benefit Consulting and Administration Services Information Technology Consulting Services Asset Valuation Consulting Services Information Technology Consulting Services Contract Labor Services Information Technology Consulting Services Economic Consulting Services Consulting, Brokering and Legal Services Market Research Consulting Services Human Resources Consulting Services Internal Audit Services Information Technology Consulting Services Information Technology Consulting Services Information Technology Consulting Services Information Technology Consulting Services Organizational Development Consulting Services Federal Legislation Consulting Services Information Technology Consulting Services Risk Management Consulting Services Risk Management Consulting Services Risk Management Consulting Services Human Resources Consulting Services Human Resources Consulting Services Information Technology Consulting Services Information Technology Consulting Services Information Technology Consulting Services Information Technology Consulting Services Actuarial Consulting Services Information Technology Consulting Services Project Consulting Services Sub-Total Total Outside Services	212,000 290,431 107,536 125,146 105,186 231,628 426,405 182,084 196,336 164,123 109,172 651,236 612,709 106,000 118,622 419,025 2,965,436 519,147 389,791 286,200 108,051 239,575 187,477 114,742 1,084,067 1,713,664 159,254 864,400 275,732 284,698 877,060 1,396,172 1,205,898 245,498 3,532,565 429,775 1,780,833 - -------------- 36,148,294 - -------------- $45,717,402 ===========

⁽¹⁾ All companies from which Services purchased outside services were non-associated companies, unless otherwise noted.

⁽²⁾ Outside services performed that did not meet the $100,000 amount are totaled in this line item.

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

EMPLOYEE PENSIONS AND BENEFITS — ACCOUNT 926

INSTRUCTIONS: Provide a listing of each pension plan and benefit program provided by the service company. Such listing should be limited to $25,000.

DESCRIPTION		AMOUNT
Pension		$12,478,624
Post Retirement		2,825,553
Medical/Dental insurance		18,980,925
401(k) contributions		4,926,445
Life insurance		691,520
Work Life Programs		1,418,149
Wellness Programs		142,506
Employee Assistance Programs		182,041
Tuition Reimbursement		1,005,194
Long-Term Disability		262,046
Other		333,114

TOTAL		$43,246,117

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

GENERAL ADVERTISING EXPENSES — ACCOUNT 930.1

INSTRUCTIONS: Provide a listing of the amount included in Account 930.1, “General Advertising Expenses”, classifying the items according to the nature of the advertising and as defined in the account definition. If a particular class includes an amount in excess of $3,000 applicable to a single payee, show separately the name of the payee and the aggregate amount applicable thereto.

DESCRIPTION	NAME OF PAYEE	AMOUNT
	TOTAL	$ - - ------- $ - ====

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

MISCELLANEOUS GENERAL EXPENSES — ACCOUNT 930.2

INSTRUCTIONS: Provide a listing of the amount included in Account 930.2, “Miscellaneous General Expenses”, classifying such expenses according to their nature. Payments and expenses permitted by Section 321 (b)(2) of the Federal Election Campaign Act, as amended by Public Law 94-283 in 1976 (2 U.S.C. 441 (b)(2)) shall be separately classified.

DESCRIPTION		AMOUNT
	Information Systems Consulting and Services		$ 860,847
	Company Membership Fees and Dues		2,065,529
	Directors' Fees		1,756,692
	Relocation Expenses		44,658
	Miscellaneous Stores and Transportation Expenses		2,015,564
	Customer Records and Collections		480,717
	Statement 88 Expenses⁽¹⁾		12,223,807
	Other Miscellaneous Items		4,399,742

	TOTAL		$23,847,556

⁽¹⁾ In 2002, Cinergy offered voluntary early retirement programs to certain individuals. Cinergy expensed the related costs in accordance with Statement of Financial Accounting Standards No. 88, Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits (Statement 88).

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

RENTS — ACCOUNT 931

INSTRUCTIONS: Provide a listing of the amount included in Account 931, “Rents”, classifying such expenses by major groupings of property, as defined in the account definition of the Uniform System of Accounts.

		TYPE OF PROPERTY		AMOUNT
		Transportation		$ 74,919
		Facilities		16,153,015
		Telecommunication Equipment		15,275
		Office Equipment		1,048,489
		Computer Hardware and Software		15,614,959
		Other		341,851
				----------------

		TOTAL		$33,248,508
				===========

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

TAXES OTHER THAN INCOME TAXES - ACCOUNT 408

INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than Income Taxes". Separate the analysis into two groups: (1) Other than U.S. Government taxes, and (2) U.S. Government taxes. Specify each of the various kinds of taxes and show the amounts thereof. Provide a subtotal for each class of tax.

KIND OF TAX		AMOUNT

Other Than U.S. Government Taxes:

Ohio Property Tax		$ 31,782
Delaware Franchise Tax		50
Ohio Franchise Tax		(25,120	)
State Unemployment		163,324
Other Income and Deductions		4,025
General Tax		3,888
		-----------

	Sub-total	177,949
U.S. Government Taxes:

Social Security Taxes		10,051,680
Federal Unemployment		121,976
		-----------

	Sub-total	10,173,656
		-----------

	TOTAL	$ 10,351,605
		===========

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

DONATIONS — ACCOUNT 426.1

INSTRUCTIONS: Provide a listing of the amount included in Account 426.1, "Donations", classifying such expenses by its purpose. The aggregate number and amount of all items of less than $3,000 may be shown in lieu of details.

NAME OF RECIPIENT		PURPOSE OF DONATION		AMOUNT

				$ -
				------------

		TOTAL		$ -
				=======

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

OTHER DEDUCTIONS — ACCOUNT 426.5

INSTRUCTIONS: Provide a listing of the amount included in Account 426.5, “Other Deductions”, classifying such expenses according to their nature.

DESCRIPTION	NAME OF PAYEE	AMOUNT
	TOTAL	$ - - -------------- $ - =========

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

Schedule XVIII - NOTES TO STATEMENTS OF INCOME

INSTRUCTIONS: The space below is provided for important notes regarding the statement of income or any account thereof. Furnish particulars as to any significant increase in services rendered or expenses incurred during the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.

See Schedule XIV - Notes to Financial Statements.

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

ORGANIZATION CHART
|
Chairman of the Board, President, and Chief Executive Officer
- Executive
|

Executive Vice President & Chief Financial Officer	Executive Vice President, Corporate Services	Executive Vice President & Chief Administrative Officer	Executive Vice President & Chief Executive Officer, Regulated Businesses Business Unit	Executive Vice President & Chief Executive Officer, Energy Merchant Business Unit	Executive Vice President, Chief Legal Officer & Assistant Secretary
- -Accounting - -Finance - -Information Systems - -Internal Audit - -Investor Relations - -Planning	-Environmental Affairs -Planning -Public Affairs	- -Accounting - -Human Resources - -Information Systems - -Materials Management - -Planning - -Public Affairs	- -Accounting - - Electric System Maintenance - - Electric Transmission & Distribution, Engineering & Construction - -Environmental Affairs - -Facilities - -Finance - -Human Resources - -Information Systems - -Legal - -Marketing and Customer Relations - -Materials Management - -Meters and Transportation - -Planning - -Power Planning - -Public Affairs - -Rates - -Right of Way	-Accounting -Environmental Affairs -Facilities -Finance -Fuels -Human Resources -Information Systems -Legal -Materials Management -Planning -Power Engineering and Construction -Power Planning -Public Affairs	-Legal

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

METHODS OF ALLOCATION

The allocation of expenses not directly attributable to a particular Client Company are based on the following factors:

1. Sales Ratio

A ratio, based on domestic firm kilowatt-hour electric sales (and/or the equivalent cubic feet of gas sales, where applicable), excluding intra-system sales, for the immediately preceding twelve consecutive calendar months, the numerator of which is for a Client Company and the denominator of which is for all domestic utility Client Companies. This ratio will be determined annually, or at such times as may be required due to a significant change.

2. Electric Peak Load Ratio

A ratio, based on the sum of the monthly domestic firm electric maximum system demands for the immediately preceding twelve consecutive calendar months, the numerator of which is for a Client Company and the denominator of which is for all domestic utility Client Companies. This ratio will be determined annually, or at such time as may be required due to a significant change.

3. Number of Customers Ratio

A ratio, based on the sum of the firm domestic electric customers (and/or gas customers where applicable) at the end of each month for the immediately preceding twelve consecutive calendar months, the numerator of which is for a Client Company and the denominator of which is for all Client Companies. This ratio will be determined annually, or at such time as may be required due to a significant change.

4. Number of Employees Ratio

A ratio, based on the sum of the number of employees at the end of each month for the immediately preceding twelve consecutive calendar months, the numerator of which is for a Client Company or Service Company Function and the denominator of which is for all Client Companies (including Cinergy Corp.‘s non-utility and non-domestic utility affiliates, where applicable) and/or the Service Company. This ratio will be determined annually, or at such time as may be required due to a significant change.

5. Construction Expenditures Ratio

A ratio, based on construction expenditures, net of reimbursements, for the immediately preceding twelve consecutive calendar months, the numerator of which is for a Client Company and the denominator of which is for all Client Companies. Separate ratios will be computed for total construction expenditure and appropriate functional plant (i.e., production, transmission, distribution, and general) classifications. This ratio will be determined annually, or at such time as may be required due to a significant change.

6. Circuit Miles of Electric Distribution Lines Ratio

A ratio, based on installed circuit miles of domestic electric distribution lines at the end of the immediately preceding calendar year, the numerator of which is for a Client Company and the denominator of which is for all domestic utility Client Companies. This ratio will be determined annually, or at such time as may be required due to a significant change.

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

METHODS OF ALLOCATION — continued

7. Number of Central Processing Unit Seconds Ratio

A ratio, based on the sum of the number of central processing unit seconds expended to execute mainframe computer software applications for the immediately preceding twelve consecutive calendar months, the numerator of which is for a Client Company or Service Company Function, and the denominator of which is for all Client Companies, (including Cinergy Corp.‘s non-utility and non-domestic utility affiliates, where applicable) and/or the Service Company. This ratio will be determined annually, or at such time as may be required due to a significant change.

8. Revenues Ratio

A ratio based on total revenues for the immediately preceding twelve calendar months, the numerator of which is for a nonutility Client Company or Service Company Function and the denominator of which is for all Client Companies and/or the Service Company. This ratio will be determined annually or at such time as may be required due to a significant change.

9. Direct Cost Ratio

A ratio, based on the direct costs charged to the individual nonutility client companies divided by total direct costs charged to all client companies (both utility and nonutility). This ratio will be determined annually, or at such time as may be required due to a significant change.

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED

The following annual statement was supplied to each associate company in support of the amount of compensation for use of capital billed during 2002:

In accordance with Instruction 01-12 of the Securities and Exchange Commission’s Uniform System of Accounts for Mutual Service Companies and Subsidiary Service Companies, Services submits the following information on the billing of interest on borrowed funds to associated companies for the year 2002:

Amount of interest billed to associate companies is contained on page 26, Analysis of Billing.

The basis for billing of interest to the associated companies is based on the ratio of the total expenses charged to each associated company, exclusive of interest, to the total expenses charged to all associated companies, exclusive of interest during the previous year.

Annual Report of Cinergy Services, Inc.
For the Year Ended December 31, 2002

SIGNATURE CLAUSE

Pursuant to the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations of the Securities and Exchange Commission issued thereunder, the undersigned company has duly caused this report to be signed on its behalf by the undersigned officer thereunto duly authorized.

Date: April 14, 2003

                Cinergy Services, Inc.
            -------------------------------
             (Name of Reporting Company)

                By: /s/ Bernard F. Roberts
           ---------------------------------
            (Signature of Signing Officer)

Bernard F. Roberts, Vice President and Comptroller
- ------------------------------------------------------------
     (Printed Name and Title of Signing Officer)

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