0000899652-95-000067.txt : 19950815 0000899652-95-000067.hdr.sgml : 19950815 ACCESSION NUMBER: 0000899652-95-000067 CONFORMED SUBMISSION TYPE: U-1/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19950814 SROS: NYSE 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-1/A SEC ACT: 1935 Act SEC FILE NUMBER: 070-08589 FILM NUMBER: 95562792 BUSINESS ADDRESS: STREET 1: 139 E FOURTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5133812000 MAIL ADDRESS: STREET 1: 139 E FOURTH STREET CITY: CINCINATI STATE: OH ZIP: 45202 U-1/A 1 FORM U-1/A AMENDMENT NO. 2 As filed with the Securities and Exchange Commission on August 14, 1995 File No. 70-8589 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________________ AMENDMENT NO. 2 TO FORM U-1 APPLICATION-DECLARATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ____________________________________________ CINergy Corp., CINergy Investments, Inc. and CINergy Services, Inc. 139 East Fourth Street Cincinnati, Ohio 45202 (Name of companies filing this statement and addresses of principal executive offices) CINergy Corp. (Name of top registered holding company) William L. Sheafer Treasurer CINergy Corp. 139 East Fourth Street Cincinnati, Ohio 45202 (Name and address of agent for service) The Commission is requested to send copies of all notices, orders and communications in connection with this Application-Declaration to: Cheryl M. Foley Vice President, General Counsel and Corporate Secretary CINergy Corp. 139 East Fourth Street Cincinnati, Ohio 45202 M. Douglas Dunn William T. Baker, Jr. Milbank, Tweed, Hadley & McCloy Reid & Priest LLP One Chase Manhattan Plaza 40 West 57th Street New York, New York 10005 New York, New York 10019 1. Item 1 of the Application-Declaration in this file, as previously amended (as so amended, the "Application"), is hereby amended and restated in its entirety to read as follows: Item 1. Description of Proposed Transactions. A. Summary of Requested Authorizations CINergy Corp. ("CINergy"), a registered holding company under the Public Utility Holding Company Act of 1935 (the "Act"), and CINergy Investments, Inc., a wholly-owned subsidiary of CINergy ("CINergy Investments"), hereby request the Commission's authorization (1) to acquire, directly or indirectly, in one or more transactions, the securities of one or more companies ( the "New Special Purpose Subsidiaries") organized for the purpose of engaging, directly or indirectly, and exclusively, in the business of acquiring, owning and holding the securities of, and/or providing services to, one or more foreign utility companies ("FUCOs") and/or exempt wholesale generators ("EWGs"), as defined in Sections 33(a) and 32(a) of the Act, respectively; (2) to make nonexempt direct and indirect investments in New Special Purpose Subsidiaries and additional nonexempt direct and indirect investments in certain existing special purpose subsidiaries of CINergy (the "Existing Special Purpose Subsidiaries"),/1/ by means of equity and debt investments and guarantees and other forms of credit support in respect of debt securities of Special Purpose Subsidiaries, in an aggregate amount at any one time outstanding not to exceed $115 million; and (3) to retain (and for the Commission to release jurisdiction over) certain of the Existing Special Purpose Subsidiaries/2/ as to which the Commission reserved jurisdiction in its October 21, 1994 order in File No. 70-8427, Rel. No. 35-26146 (the "Merger Order")./3/ Authorization is also sought (4) for the Special Purpose Subsidiaries to issue to nonassociates nonexempt equity securities for the purpose of financing investments by such Special Purpose Subsidiaries in EWGs and FUCOs; (5) for the Special Purpose Subsidiaries to provide services to their subsidiaries and to other Special Purpose Subsidiaries and their subsidiaries; and (6) to the extent, if any, not previously authorized by the Commission in the Merger Order, for CINergy Services, Inc., CINergy's service company subsidiary ("CINergy Services"), to provide services to the Special Purpose Subsidiaries and their subsidiaries. Finally, CINergy requests authority to apply proceeds from securities issued or to be issued by it pursuant to outstanding Commission orders in File Nos. 70-8477 and 70-8521 for purposes of the proposed investments described herein. CINergy and CINergy Investments propose that the authorizations requested in clauses (1), (2) and (4) above remain effective until the earlier of May 31, 1998 or the effective date of any rule(s) adopted by the Commission exempting any such transactions from the approval requirements of the Act. Applicants propose that no time limitation apply to the authorizations requested in clauses (3), (5) and (6). B. Background CINergy system companies have from time to time invested in or considered potential opportunities to acquire or construct electric generation, transmission and/or distribution facilities outside the United States. CINergy expects to investigate other such opportunities in the future. In most cases, it is expected that such facilities will qualify as facilities that a FUCO or EWG may own or operate./4/ The authorization sought herein is intended to facilitate investments in such FUCOs and EWGs. A number of legal and business reasons exist for the use of special purpose subsidiaries in connection with such investments. Among other things, the formation and acquisition of special purpose subsidiaries is often necessary or desirable to facilitate the acquisition and ownership of a FUCO or EWG. For example, laws of some foreign countries may require that the bidder in a privatization program be a domestic company in that country. In such cases, it would be necessary for CINergy to form a foreign subsidiary (either as a foreign corporation or foreign counterpart thereto) as the entity submitting the bid or other proposal. In addition, the interposition of one or more special purpose subsidiaries may allow CINergy to defer the repatriation of foreign source income, or otherwise to secure favorable U.S. income tax treatment that would not otherwise be available. Special purpose subsidiaries are also useful in cases in which CINergy may bid as part of a consortium, since each member of the consortium will typically want to have at least one consolidated subsidiary in the final ownership structure for tax and accounting purposes. Special purpose subsidiaries also serve to isolate business risks and facilitate subsequent adjustments to or sales of interests among or by members of the ownership group. C. Existing Special Purpose Subsidiaries PSI Argentina, Costasnera and Energy Argentina are all Indiana corporations established in connection with the privatization of electric generation and distribution assets in Argentina. PSI Argentina is a wholly-owned subsidiary of CINergy Investments and in turn has two wholly-owned subsidiaries: Costanera, incorporated in Indiana in 1992; and EDEGEL, incorporated in Delaware in 1994. The latter was formed to acquire, own and hold, directly or indirectly, interests in foreign EWGs, but has not made any such investments to date./5/ Through PSI Argentina, Costanera and Energy Argentina, CINergy is a member of two consortia holding interests in, respectively, Central Costanera S.A., an Argentine electric generating company that owns a 1260 megawatt facility, and Distrilec Inversora S.A., which owns 51% of the stock of Edesur S.A., an electric distribution system serving the southern half of Buenos Aires. As noted above, PSI Argentina, Costanera and EDEGEL have been certified by the FERC as EWGs, and Energy Argentina is a FUCO. T&D, a wholly-owned subsidiary of CINergy Investments, and its wholly-owned subsidiary, Yacyreta, were incorporated in Indiana in 1994 to acquire, own and hold, directly or indirectly, interests in FUCOs. Neither T&D nor Yacyreta has made any investments to date in FUCOs. CGE ECK, a subsidiary of CINergy Investments, was incorporated in Delaware in 1994 and holds a 3% interest in ECK s.r.o., a Czech limited liability company which operates and owns a generating facility in the Czech Republic. Power Development, Power Operations, PSI International and Sunnyside, all Indiana corporations and direct subsidiaries of CINergy Investments, were organized to invest in power projects. Power Development and Power Operations were incorporated in 1990 and 1989, respectively, to develop, operate and maintain independent power production/cogeneration projects. PSI International and Sunnyside were incorporated in 1991 and 1990, respectively, to develop, construct, operate and own cogenerating or power production facilities. At present, none of the four companies holds any assets or is engaged in any business. All four companies will be used hereafter solely for purposes of engaging, directly or indirectly, and exclusively, in the businesses of acquiring, owning and holding the securities of one or more FUCOs and EWGs and such other businesses as the Commission may authorize. D. New Special Purpose Subsidiaries A New Special Purpose Subsidiary may be organized at the time of, and in order to facilitate, the making of bids or proposals to acquire an interest in any EWG or FUCO; after the award of a bid proposal, in order to facilitate closing on the purchase or financing of any such EWG or FUCO; or at any time subsequent to the consummation of an acquisition of an interest in an EWG or FUCO in order, among other things, to effect an adjustment in the respective ownership interests in any EWG or FUCO held by CINergy and unaffiliated co-investors, to facilitate a partial sale of an interest in any such EWG or FUCO, to comply with applicable laws of foreign jurisdictions limiting or otherwise relating to the ownership of domestic companies by foreign nationals; as a part of tax planning in order to limit CINergy's exposure to U.S. and foreign taxes; or for other lawful purposes. E. Investments in Special Purpose Subsidiaries As of December 31, 1994, CINergy's aggregate outstanding investment in FUCOs and EWGs through Existing Special Purpose Subsidiaries, net of amounts written off or received from dispositions of such investments, was approximately $20 million. Under the authority requested herein, the aggregate net investment of CINergy and CINergy Investments outstanding at any one time in New Special Purpose Subsidiaries and Existing Special Purpose Subsidiaries will not exceed $115 million. In addition, (1) any direct or indirect investment by CINergy or CINergy Investments in any Special Purpose Subsidiary would be consummated only if, at the time thereof, and after giving effect thereto, CINergy's "aggregate investment," determined in accordance with Rule 53(a)(1)(i), in all FUCOs, EWGs and Special Purpose Subsidiaries shall not exceed 50% of CINergy's "consolidated retained earnings," as defined in Rule 53(a)(1)(ii); and (2) CINergy and CINergy Investments will limit their direct and indirect investment in any particular New Special Purpose Subsidiary to an amount which is no greater than the amount reasonably required in connection with making the underlying investment in any EWG or FUCO with respect to which such New Special Purpose Subsidiary was organized or formed, taking into account development expenditures, working capital needs, cash reserves required to be maintained in accordance with financing documents and other relevant factors. CINergy and its subsidiaries will also comply with all other applicable rules under the Act, including such additional rules as may be promulgated pursuant to Sections 32 and 33. Investments by CINergy and CINergy Investments in Special Purpose Subsidiaries pursuant to the authorization herein requested will consist of the following: (1) purchases of common or preferred stock or debt securities in connection with the formation of New Special Purpose Subsidiaries; (2) purchases of partnership interests, trust certificates and other nonexempt equity securities; (3) open-account advances or loans evidenced by promissory notes (the proposed form of which is included as Exhibit 1); and (4) guaranties, letters of credit or other credit support (collectively, "Guaranties") issued or arranged by CINergy and/or CINergy Investments in respect of debt securities of Special Purpose Subsidiaries issued to nonassociates. Any such investment in the capital stock or other equity securities of a Special Purpose Subsidiary having a stated par value will be in an amount equal to or greater than such par value. Any such open-account advance will bear interest at a rate per annum not to exceed the prime rate at a bank to be designated by CINergy and will be repayable within one year. Any promissory note issued by a Special Purpose Subsidiary to CINergy or CINergy Investments pursuant to the authorization herein requested, and any promissory note, bond or other evidence of indebtedness issued by a Special Purpose Subsidiary to a nonassociate with respect to which CINergy or CINergy Investments may issue a Guaranty pursuant to the authorization herein requested (each such debt security issued to a nonassociate, a "Recourse Debt Security"), will mature not later than 30 years after the date of issuance thereof, and will bear interest at a rate (x) in the case of any note issued to CINergy or CINergy Investments, not to exceed the prime rate at a bank to be designated by CINergy; and (y) in the case of any Recourse Debt Security, not to exceed the following: (i) if such Recourse Debt Security is denominated in U.S. dollars, at a fixed rate not to exceed 6.5% over the yield to maturity on an actively-traded, noncallable U.S.Treasury obligation having a maturity approximating the average life of such Recourse Debt Security (the "Applicable Treasury Rate"), or at a floating rate not to exceed 6.5% over the then- applicable prime rate at a U.S. money center bank to be designated by CINergy (the "Applicable Prime Rate"); and (ii) if such Recourse Debt Security is denominated in a currency of a country other than the United States, at a fixed or floating rate which, when adjusted for the prevailing rate of inflation in such country, as reported in official indices published by such country, would be equivalent to a rate on a U.S. dollar-denominated borrowing of the same approximate average life that does not exceed 10% over the Applicable Treasury Rate (interpolated, if necessary) or Applicable Prime Rate, as the case may be. F. Financing of Investments in Special Purpose Subsidiaries CINergy hereby requests the Commission's authorization to apply available proceeds from (1) sales of CINergy common stock authorized by the Commission in its November 18, 1994 order in File No. 70-8477 (Rel. No. 35-26159),and (2) CINergy bank borrowings and commercial paper sales authorized by the Commission in its January 11, 1995 order in File No. 70-8521 (Rel. No. 35-26215) to direct and indirect investments by CINergy and CINergy Investments in Special Purpose Subsidiaries, EWGs and FUCOs as described herein. In connection with investments consisting of Guaranties, CINergy further requests authorization to utilize letters of credit obtained by it pursuant to the January 1995 order. Except as set forth herein and in the other files referred to above, CINergy is not requesting authority to issue any additional securities for the purpose of financing investments in any Special Purpose Subsidiaries. If CINergy ultimately determines that any Special Purpose Subsidiary is no longer useable for EWG or FUCO investment purposes (whether due to termination of a proposed project acquisition, loss of a bid, change in law, or otherwise), CINergy will (to the extent it is possible to do so at reasonable cost) liquidate, dissolve or sell such Special Purpose Subsidiary within 180 days, unless, within that time, CINergy determines that such Special Purpose Subsidiary could be used to acquire an interest in a different FUCO or EWG or other investment authorized by the Commission. To the extent necessary, CINergy requests authority to liquidate, dissolve or sell any Special Purpose Subsidiary under such circumstances. G. External Financing by Special Purpose Subsidiaries Approval is also requested for each Special Purpose Subsidiary to issue to nonassociates, including banks, insurance companies and other financial institutions, nonexempt equity securities exclusively for the purpose of financing (including any refinncing of) investments in EWGs and FUCOs. Nonexempt equity securities issued to nonassociates will consist of partnership interests, trust certificates and other forms of equity securities. No such equity security having a stated par value will be issued or sold for a consideration less than such par value. Additional specific terms of such equity securities would be negotiated on a case-by-case basis, taking into account differences from project to project in optimum debt-equity ratios, projections of earnings and cash flows, depreciable lives, and other similar financial and performance characteristics of each project. Applicants propose that they be granted the flexibility to negotiate such additional specific terms and conditions without further authorization from the Commission. H. Services Pursuant to the Merger Order, CINergy Services is authorized to provide administrative, management and support services to utility and nonutility associate companies, including those that are EWGs or FUCOs. Under that order, CINergy Services is authorized to provide services to the domestic nonutility subsidiaries of CINergy at cost, determined in accordance with Rule 90 under the Act, and at fair market value for services rendered to certain foreign nonutility subsidiaries of CINergy, pursuant to Rule 83 under the Act. To the extent (if any) further authorization is required, CINergy Services hereby requests such authorization to provide to the Special Purpose Subsidiaries and their subsidiaries such services as may be necessary or desirable for the development, acquisition, establishment and operation of the Special Purpose Subsidiaries and the investments and properties held, directly or indirectly, by such companies. To provide further operational flexibility, it is also proposed that the Special Purpose Subsidiaries have authority to provide their subsidiaries, and other Special Purpose Subsidiaries and their subsidiaries, with all services necessary or desirable for their operations, including, without limitation, management, administrative, employment, tax, accounting, engineering, consulting, utility performance, and electronic data processing services, and software development and support services in connection therewith. The Special Purpose Subsidiaries will not provide services to any subsidiary company of CINergy other than their subsidiaries and/or other Special Purpose Subsidiaries and their subsidiaries. It is anticipated that such Special Purpose Subsidiaries and their subsidiaries will meet (or, in the case of the Existing Special Purpose Subsidiaries and their subsidiaries, will continue to meet) the requirements of Rule 83(a) under the Act; accordingly, it is proposed that services provided to the Special Purpose Subsidiaries and their subsidiaries be exempt from the standards of Section 13(b) of the Act and the rules and regulations promulgated thereunder. I. Statement Pursuant to Rule 53 Under Rule 53, in determining whether to approve the issue and sale of a security by a registered holding company for purposes of financing the acquisition of an EWG or the guarantee of a security of an EWG by a registered holding company, the Commission shall not make a finding that such security is not reasonably adapted to the earning power of such company or to the security structure of such company or companies in the same holding company system, or that the circumstances are such as to constitute the making of such guarantee an improper risk for such company if, as here, the conditions set forth in Rule 53 are met. All applicable conditions set forth in Rule 53(a) are and, assuming consummation of the transactions proposed herein, will be satisfied, and none of the conditions set forth in Rule 53(b) exists or, as a result thereof, will exist. The following discussion assumes the CINergy system's existence for the dates and periods in question. Four CINergy companies are EWGs or FUCOs: PSI Argentina, Costanera and EDEGEL, which are EWGs, and Energy Argentina, which is a FUCO. Rule 53(a)(1): The average of CINergy's pro forma consolidated retained earnings for the four consecutive quarters ended December 31, 1994 was $929 million, and CINergy's aggregate investment in EWGs and FUCOs at December 31, 1994 was approximately $20 million, or approximately 2% of consolidated retained earnings. Rule 53(a)(2): CINergy maintains books and records enabling it to identify investments in and earnings from each EWG and FUCO in which it directly or indirectly holds an interest. At present, CINergy does not hold any interest in a domestic EWG; Rule 53(a)(2)(i) is therefore inapplicable. In accordance with Rule 53(a)(2)(ii), the books and records and financial statements of each foreign EWG and FUCO which is a "majority-owned subsidiary company" of CINergy are kept in conformity with and prepared according to U.S. generally accepted accounting principles ("GAAP"). CINergy will provide the Commission access to such books and records and financial statements, or copies thereof, in English, as the Commission may request. In accordance with Rule 53(a)(2)(iii), for each foreign EWG and FUCO in which CINergy directly or indirectly owns 50% or less of the voting securities, CINergy will proceed in good faith, to the extent reasonable under the circumstances, to cause each such entity's books and records to be kept in conformity with, and the financial statements of each such entity to be prepared according to, GAAP. If such books and records are maintained, or such financial statements are prepared, according to a comprehensive body of accounting principles other than GAAP, CINergy will, upon request of the Commission, describe and quantify each material variation from GAAP in the accounting principles, practices and methods used to maintain such books and records and each material variation from GAAP in the balance sheet line items and net income reported in such financial statements, as the case may be. In addition, CINergy will proceed in good faith, to the extent reasonable under the circumstances, to cause access by the Commission to such books and records and financial statements, or copies thereof, in English, as the Commission may request, and in any event will make available to the Commission any such books and records that are available to CINergy. Rule 53(a)(3): At any one time, a maximum of approximately 25 CINergy system employees have rendered services to Costanera, PSI Argentina and Energy Argentina. Based on current staffing levels, this represents less than 0.3% of the approximately 8,650 full-time employees of CINergy's domestic operating utility subsidiaries. Such services have heretofore been rendered, in part, by employees of PSI Energy, Inc. in accordance with the Commission's order in PSI Resources, Inc., et al., Rel. No. 35-25674, 52 SEC Docket 2533, 2534-35 (Nov. 13, 1992), and by employees of The Cincinnati Gas & Electric Company ("CG&E") in accordance with business practices established prior to the merger of CG&E and PSI Energy into the CINergy system and the registration of CINergy as a holding company under the Act. As noted above, pursuant to the Merger Order, CINergy Services is authorized to provide administrative, management and other support services to utility and nonutility associate companies, including those that are EWGs or FUCOs. In addition, under the authorizations herein requested, employees of CINergy Services may provide services to New Special Purpose Subsidiaries and their subsidiaries, and Special Purpose Subsidiaries may provide services to their subsidiaries, and to other Special Purpose Subsidiaries and their subsidiaries. Rule 53(a)(4): CINergy is concurrently submitting a copy of this Application-Declaration, and will submit copies of any Rule 24 certificates required hereunder, as well as a copy of Item 9 of CINergy's Form U5S and Exhibits H and I thereto, to each of the public service commissions having jurisdiction over the retail rates of CINergy's operating utility subsidiaries at the time such documents are filed with the Commission. Rule 53(b): The provisions of Rule 53(a) are not made inapplicable to the authorizations herein requested by reason of the provisions of Rule 53(b). Rule 53(b)(1): Neither CINergy nor any subsidiary thereof is the subject of any pending bankruptcy or similar proceeding. Rule 53(b)(2): CINergy's total capital invested in utility operations as of December 31, 1994 totaled approximately $5.9 billion, consisting of approximately $2.8 billion in long-term and $208 million in short-term debt of CG&E, PSI Energy and the utility subsidiaries of CG&E, $478 million in preferred stock of CG&E and PSI Energy, and $2.4 billion in common equity of CG&E, PSI Energy and the utility subsidiaries of CG&E. CINergy's aggregate present investment in EWGs and FUCOs (approximately $20 million) represents less than 0.4% of CINergy's capital invested in utility operations. Based on the investment authority proposed herein, CINergy's aggregate investment in EWGs and FUCOs ($115 million) will represent less than 2% of CINergy's total capital invested in utility operations. Average consolidated earnings for the four quarters ended December 31, 1994 equaled $929 million, versus $1,053 million for the four quarters ended December 31, 1993, a difference of approximately $124 million or 12%. Rule 53(b)(3): For the twelve months ended December 31, 1994, CINergy had net income of approximately $175,000 attributable to its direct and indirect investments in EWGs and FUCOs. Rule 53(c): Inasmuch as Rule 53(c) applies only if an applicant is unable to satisfy the requirements of Rule 53(a) and (b), it is inapplicable here. 2. Item 3 of the Application ("Applicable Statutory Provisions") is hereby amended by restating the penultimate paragraph thereof to read in its entirety as follows: The transactions proposed herein will be carried out in accordance with the procedures specified in Rule 23. CINergy proposes to comply with the procedures specified in Rule 24 by filing certificates with the Commission, within 45 days after the end of each calendar quarter, notifying the Commission of each investment made by CINergy, directly or indirectly, in any Special Purpose Subsidiary, indicating the amount and type of each such investment, and generally identifying the facility with respect to which such subsidiary was organized. Such certificate will also describe in reasonable detail the amount, type and terms of any equity securities or Recourse Debt Securities issued by any such subsidiary to nonassociates. 3. Item 4 of the Application is hereby amended and restated in its entirety to read as follows: Item 4. Regulatory Approval. The direct or indirect acquisition by CINergy of Special Purpose Subsidiary securities and the issuance of such securities by any such subsidiary are not subject to the jurisdiction of any state commission or any federal commission other than the Commission. As set forth in the Stipulation and Recommendation approved by the Public Utilities Commission of Ohio ("PUCO") in Case No. 91-410-EL-AIR (the "Stipulation"), "[t]he financial policies and guidelines of CG&E and its Affiliates shall reflect the following cross-subsidization principles: a. CG&E's utility customers shall not subsidize the activities of CG&E's Non-Utility Affiliates or CG&E's Utility Affiliates. b. Neither CG&E's Non-Utility Affiliates nor CG&E's Utility Affiliates shall subsidize the public utility activities of CG&E. c. CG&E's costs for jurisdictional rate purposes shall reflect only those costs attributable to its jurisdictional customers. d. These cross-subsidization principles and such financial policies and guidelines shall be applied in such a manner as to avoid unreasonable utility costs being left unallocated or stranded between various regulatory jurisdictions, resulting in the failure of timely recovery of such costs by CG&E and/or its Utility Affiliates; provided, however, that no more than one hundred percent (100%) of such costs shall be allocated on an aggregate basis to the various regulatory jurisdictions. e. These cross-subsidization principles and such financial policies and guidelines are not intended to, and shall not be interpreted to, alter, modify or change in any way the law in the State of Ohio with respect to the affect of the filing of a consolidated income tax return on CG&E's income tax expense allocable to jurisdictional customers. f. CG&E shall maintain and utilize accounting systems and records which are sufficient to identify and appropriately allocate costs between CG&E and its Affiliates, consistent with these cross-subsidization principles and such financial policies and guidelines." The Stipulation further provides that "[i]n any pending proceeding before the PUCO: CG&E and its prospective holding company, CINergy agree to make available to the PUCO and the [Office of Consumers' Counsel, State of Ohio ("OCC")], at reasonable times and places, all books and records and employees of CINergy, CG&E and any Affiliate or Subsidiary of CINergy or CG&E, as determined relevant by the PUCO under [Ohio Revised Code] Section 4903.082 and the administrative rules of the PUCO; provided, however, CG&E and CINergy shall have the right to seek a protective order or to require by the OCC (and request of the PUCO) the execution of a confidentiality agreement to protect and safeguard confidential and/or proprietary information. For purposes of this Paragraph F, 'Affiliate' or 'Subsidiary' means any corporation 50% or more of whose voting capital stock is controlled by another entity. 'Affiliate or Subsidiary of CINergy or CG&E' means those corporations in which CINergy or CG&E owns directly or indirectly (or in combination with their other 'Affiliates' or 'Subsidiaries') 50% or more of such corporation s voting capital stock." Item 6. Exhibits and Financial Statements. 1. Form of promissory note to be issued by Special Purpose Subsidiaries to CINergy and/or CINergy Investments. (Previously filed.) 2. Proposed form of notice. (Previously filed.) 3. Financial statements per books and pro forma of CINergy, CINergy nvestments and CINergy Services. (Filed herewith.) 4.1 Revised preliminary opinion of counsel. (Filed herewith.) 27 Financial data schedules (included with electronic submission only) SIGNATURE Pursuant to the requirements of the Act, the undersigned companies have duly caused this statement to be signed on their behalf by the undersigned thereunto duly authorized. Dated: August 14, 1995 CINERGY CORP. By: /s/ William L. Sheafer Treasurer CINERGY INVESTMENTS, INC. By: /s/ William L. Sheafer Treasurer CINERGY SERVICES INC. By: /s/ William L. Sheafer Treasurer ENDNOTES /1/ Costanera Power Corp. ("Costanera"), PSI Argentina, Inc. ("PSI Argentina"), PSI Energy Argentina, Inc. ("Energy Argentina"), E P EDEGEL, Inc. ("EDEGEL"), PSI T&D International, Inc. ("T&D"), PSI Yacyreta, Inc. ("Yacyreta"), CGE ECK, Inc. ("CGE ECK"), PSI Power Resource Development, Inc. ("Power Development"), PSI Power Operations, Inc. ("Power Operations"), PSI International, Inc. ("PSI International"), and PSI Sunnyside, Inc. ("Sunnyside"). The Existing Special Purpose Subsidiaries and the New Special Purpose Subsidiaries are sometimes referred to collectively as the "Special Purpose Subsidiaries". /2/ Specifically, T&D, Yacyreta, CGE ECK, Power Development, Power Operations, PSI International and Sunnyside. /3/ Three other Existing Special Purpose Subsidiaries -- Costanera, PSI Argentina and EDEGEL -- have been determined by the Federal Energy Regulatory Commission ("FERC") to be EWGs. See Costanera Power Corporation, 61 FERC Para. 61,335 (1992); PSI Argentina, Inc., 68 FERC Para. 61,286 (1994); E P EDEGEL, Inc., 68 FERC Para. 61,265 (1994). Another Existing Special Purpose Subsidiary -- Energy Argentina -- is a FUCO and has filed a Notification on Form U-57 with the Commission. Accordingly, under Sections 32 and 33 of the Act, Costanera, PSI Argentina, EDEGEL and Energy Argentina are retainable without further action by the Commission. /4/ A foreign utility facility may also qualify as an "eligible facility" as defined in Section 32(a)(2) of the Act. In the event that such an investment opportunity is pursued as an EWG rather than a FUCO, appropriate filings will be made with the FERC. /5/ A third wholly-owned subsidiary of PSI Argentina -- Energy Services Inc. of Buenos Aires -- was dissolved in January, 1995. EX-99.3 2 EXHIBIT 3 - FINANCIAL STATEMENTS Exhibit 3 FINANCIAL STATEMENTS SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM U-1 FILE NO. 70-8589 CINERGY CORP. CONSOLIDATED AS OF DECEMBER 31, 1994 (Unaudited) Pages 1 through 6 CINERGY CORP. PRO FORMA CONSOLIDATED STATEMENT OF INCOME TWELVE MONTHS ENDED DECEMBER 31, 1994 Pro Forma Actual Adjustments Pro Forma (in thousands, except per share amounts) OPERATING REVENUES Electric $2 481 779 $ $2 481 779 Gas 442 398 442 398 2 924 177 2 924 177 OPERATING EXPENSES Fuel used in electric production 725 985 725 985 Gas purchased 248 293 248 293 Purchased and exchanged power 62 332 62 332 Other operation 563 650 563 650 Maintenance 200 959 200 959 Depreciation 294 395 294 395 Post-in-service deferred operating expenses - net (5 998) (5 998) Phase-in deferred depreciation (2 161) (2 161) Income taxes 152 181 ( 3 325) 148 856 Taxes other than income taxes 244 051 244 051 2 483 687 ( 3 325) 2 480 362 OPERATING INCOME 440 490 3 325 443 815 OTHER INCOME AND EXPENSES - NET Allowance for equity funds used during construction 6 201 6 201 Post-in-service carrying costs 9 780 9 780 Phase-in deferred return 15 351 15 351 Income taxes 10 609 10 609 Other - net (28 444) (28 444) 13 497 13 497 INCOME BEFORE INTEREST AND OTHER CHARGES 453 987 3 325 457 312 INTEREST AND OTHER CHARGES Interest on long-term debt 219 248 9 500 228 748 Other interest 20 370 20 370 Allowance for borrowed funds used during construction (12 332) (12 332) Preferred dividend requirements of subsidiaries 35 559 35 559 262 845 9 500 272 345 NET INCOME $ 191 142 $( 6 175) $ 184 967 AVERAGE COMMON SHARES OUTSTANDING 147 426 147 426 EARNINGS PER COMMON SHARE $1.30 $1.25 DIVIDENDS DECLARED PER COMMON SHARE $1.50 CINERGY CORP. PRO FORMA CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1994 ASSETS Pro Forma Actual Adjustments Pro Forma (in thousands) UTILITY PLANT - ORIGINAL COST In service Electric $8 292 625 $ $8 292 625 Gas 645 602 645 602 Common 185 718 185 718 9 123 945 9 123 945 Accumulated depreciation 3 163 802 3 163 802 5 960 143 5 960 143 Construction work in progress 238 750 238 750 Total utility plant 6 198 893 6 198 893 CURRENT ASSETS Cash and temporary cash investments 71 880 88 825 160 705 Restricted deposits 11 288 11 288 Accounts receivable less accumulated provision of $9,716,000 for doubtful accounts 299 509 299 509 Materials, supplies, and fuel - at average cost Fuel for use in electric production 156 028 156 028 Gas stored for current use 31 284 31 284 Other materials and supplies 92 880 92 880 Property taxes applicable to subsequent year 112 420 112 420 Prepayments and other 36 416 36 416 811 705 88 825 900 530 OTHER ASSETS Regulatory assets Post-in-service carrying costs and deferred operating expenses 185 280 185 280 Phase-in deferred return and depreciation 100 943 100 943 Deferred demand-side management costs 104 127 104 127 Amounts due from customers - income taxes 408 514 408 514 Deferred merger costs 49 658 49 658 Unamortized costs of reacquiring debt 70 424 70 424 Other 86 017 86 017 Other 134 281 134 281 1 139 244 1 139 244 $8 149 842 $ 88 825 $8 238 667 CINERGY CORP. PRO FORMA CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1994 CAPITALIZATION AND LIABILITIES Pro Forma Actual Adjustments Pro Forma (in thousands) COMMON STOCK EQUITY Common stock - $.01 par value; authorized shares - 600,000,000; outstanding shares - 155,198,038 $ 1 552 $ $ 1 552 Paid-in capital 1 535 658 1 535 658 Retained earnings 877 061 ( 6 175) 870 886 Total common stock equity 2 414 271 ( 6 175) 2 408 096 CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES Not subject to mandatory redemption 267 929 267 929 Subject to mandatory redemption 210 000 210 000 LONG-TERM DEBT 2 715 269 95 000 2 810 269 Total capitalization 5 607 469 88 825 5 696 294 CURRENT LIABILITIES Long-term debt due within one year 60 400 60 400 Notes payable 228 900 228 900 Accounts payable 266 467 266 467 Refund due to customers 15 482 15 482 Litigation settlement 80 000 80 000 Accrued taxes 258 041 258 041 Accrued interest 58 504 58 504 Other 36 610 36 610 1 004 404 1 004 404 OTHER LIABILITIES Deferred income taxes 1 071 104 1 071 104 Unamortized investment tax credits 195 878 195 878 Accrued pension and other postretirement benefit costs 133 578 133 578 Other 137 409 137 409 1 537 969 1 537 969 $8 149 842 $ 88 825 $8 238 667 CINERGY CORP. PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS TWELVE MONTHS ENDED DECEMBER 31, 1994 Pro Forma Actual Adjustments Pro Forma (in thousands) BALANCE DECEMBER 31, 1993 . . $ 907 802 $ $ 907 802 Net income . . . . . . . . 191 142 ( 6 175) 184 967 Dividends on common stock . (221 362) (221 362) Other . . . . . . . . . . . (521) (521) BALANCE DECEMBER 31, 1994 $ 877 061 $ ( 6 175) $ 870 886 CINERGY CORP. Pro Forma Consolidated Journal Entries to Give Effect to the Issuance of $95 million of Long-term Debt Entry No. 1 Cash and temporary cash investments. . . $95,000,000 Long-term debt. . . . . . . . . . . . . . . . . . . $95,000,000 To record the issuance of $95,000,000 of long-term debt. Entry No. 2 Interest on long-term debt . . . . . . . $9,500,000 Cash and temporary cash investments . . . . . . . . $9,500,000 To record interest on $95,000,000 of long-term debt payable at 10%. Entry No. 3 Cash and temporary cash investments . . $3,325,000 Income taxes . . . . . . . . . . . . . . . . . . . $3,325,000 To record the reduction in income taxes due to increased interest on long-term debt ($9,500,000 at an assumed tax rate of 35%). FINANCIAL STATEMENTS SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM U-1 FILE NO. 70-8589 CINERGY CORP. AS OF DECEMBER 31, 1994 (Unaudited) Pages 1 through 5 CINERGY CORP. PRO FORMA STATEMENT OF INCOME TWELVE MONTHS ENDED DECEMBER 31, 1994 Pro Forma Actual Adjustments Pro Forma (in thousands) OPERATING EXPENSES Other operation $ 643 $ $ 643 Income taxes (925) (925) Taxes other than income taxes (10) (10) (292) (292) OPERATING INCOME 292 292 OTHER INCOME AND EXPENSES - NET Equity in earnings of subsidiaries 196 300 196 300 Income taxes 2 219 2 219 Other - net (5 100) 9 500 4 400 193 419 9 500 202 919 INCOME BEFORE INTEREST 193 711 9 500 203 211 INTEREST 2 569 9 500 12 069 NET INCOME $191 142 $ $191 142 CINERGY CORP. PRO FORMA BALANCE SHEET AT DECEMBER 31, 1994 ASSETS Pro Forma Actual Adjustments Pro Forma (dollars in thousands) CURRENT ASSETS Cash and temporary cash investments $ 11 430 $(9 500) $ 1 930 Accounts receivable 55 145 55 145 66 575 (9 500) 57 075 OTHER ASSETS Investment in subsidiaries 2 424 196 2 424 196 Intercompany notes receivable 104 500 104 500 Other 160 160 2 424 356 104 500 2 528 856 $2 490 931 $ 95 000 $2 585 931 CAPITALIZATION AND LIABILITIES COMMON STOCK EQUITY Common stock - $.01 par value; authorized shares - 600,000,000; outstanding shares - 155,198,038 $ 1 552 $ $ 1 552 Paid-in capital 1 535 658 1 535 658 Retained earnings 877 061 877 061 Total common stock equity 2 414 271 2 414 271 LONG-TERM DEBT 95 000 95 000 Total Capitalization 2 414 271 95 000 2 509 271 CURRENT LIABILITIES Notes payable 75 000 75 000 Accounts payable 1 000 1 000 Accrued interest 917 917 76 917 76 917 OTHER LIABILITIES Deferred income taxes (258) (258) Other 1 1 (257) (257) $2 490 931 $95 000 $2 585 931 CINERGY CORP. PRO FORMA STATEMENT OF CHANGES IN RETAINED EARNINGS TWELVE MONTHS ENDED DECEMBER 31, 1994 Pro Forma Actual Adjustments Pro Forma (in thousands) BALANCE DECEMBER 31, 1993 $ 907 802 $ $ 907 802 Net income 191 142 191 142 Dividends on common stock (221 362) (221 362) Other (521) (521) BALANCE DECEMBER 31, 1994 $ 877 061 $ $ 877 061 CINERGY CORP. Pro Forma Journal Entries to Give Effect to the Issuance of $95 Million of Long-term Debt Entry No. 1 Cash and temporary cash investments. . . $95,000,000 Long-term debt. . . . . . . . . . . . . . . . . . . $95,000,000 To record the issuance of $95,000,000 of long-term debt. Entry No. 2 Interest on long-term debt . . . . . . . $9,500,000 Cash and temporary cash investments . . . . . . . . $9,500,000 To record interest on $95,000,000 of long-term debt payable at 10%. Entry No. 3 Intercompany notes receivable . . . . . $95,000,000 Cash and temporary cash investments . . . . . . . . $95,000,000 To record a $95,000,000 loan to CINergy Investments. Entry No. 4 Intercompany notes receivable . . . . . . $9,500,000 Interest income . . . . . . . . . . . . . . . . . . $9,500,000 To record interest at 10% per annum on intercompany loan to CINergy Investments. FINANCIAL STATEMENTS SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM U-1 FILE NO. 70-8589 CINERGY INVESTMENTS, INC. CONSOLIDATED AS OF DECEMBER 31, 1994 (Unaudited) Pages 1 through 5 CINERGY INVESTMENTS, INC. PRO FORMA CONSOLIDATED STATEMENT OF LOSS TWELVE MONTHS ENDED DECEMBER 31, 1994 Pro Forma Actual Adjustments Pro Forma (in thousands) OPERATING REVENUES $ 8 221 $ $ 8 221 OPERATING EXPENSES Other operation 12 396 12 396 Income taxes (1 388) (1 388) Taxes other than income taxes 309 309 11 317 11 317 OPERATING LOSS (3 096) (3 096) OTHER INCOME AND EXPENSES - NET Income taxes 3 083 3 325 6 408 Other - net (7 514) (7 514) (4 431) 3 325 (1 106) INCOME (LOSS) BEFORE INTEREST (7 527) 3 325 (4 202) INTEREST 889 9 500 10 389 NET LOSS $(8 416) $(6 175) $(14 591) CINERGY INVESTMENTS, INC. PRO FORMA CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 1994 Pro Forma Actual Adjustments Pro Forma (dollars in thousands) ASSETS CURRENT ASSETS Cash $ 1 593 $98 325 $ 99 918 Accounts receivable less accumulated provision of $276,798 for doubtful accounts 1 923 1 923 Other materials and supplies 5 653 5 653 Prepayments 331 331 9 500 98 325 107 825 OTHER ASSETS 12 091 12 091 $ 21 591 $98 325 $119 916 CAPITALIZATION AND LIABILITIES COMMON STOCK EQUITY Common stock - $.01 par value; authorized shares - 100; outstanding shares - 100 $ $ $ Paid-in capital 24 418 24 418 Retained deficit (13 108) (6 175) (19 283) Total common stock equity 11 310 (6 175) 5 135 CURRENT LIABILITIES Notes payable 104 500 104 500 Accounts payable 679 679 Accounts payable to associated companies - net 8 564 8 564 Accrued taxes (394) (394) Other 750 750 9 599 104 500 114 099 OTHER LIABILITIES Deferred income taxes 59 59 Other 623 623 682 682 $ 21 591 $ 98 325 $119 916 CINERGY INVESTMENTS, INC. PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED DEFICIT TWELVE MONTHS ENDED DECEMBER 31, 1994 Pro Forma Actual Adjustments Pro Forma (in thousands) BALANCE DECEMBER 31, 1993 $ (4 692) $ $ (4 692) Net loss (8 416) (6 175) (14 591) BALANCE DECEMBER 31, 1994 $(13 108) $(6 175) $(19 283) CINERGY INVESTMENTS, INC. Pro Forma Consolidated Journal Entries to Give Effect to the Borrowing of Up to $95 Million from CINergy Corp. Entry No. 1 Cash . . . . . . . . . . . . . . . . . . $95,000,000 Intercompany Notes Payable . . . . . . . . . . . . $95,000,000 To record the issuance of intercompany notes payable of $95,000,000. Entry No. 2 Interest expense . . . . . . . . . . . . $9,500,000 Intercompany notes payable . . . . . . . . . . . . $9,500,000 To record interest on $95,000,000 of intercompany notes payable at 10%. Entry No. 3 Cash . . . . . . . . . . . . . . . . . . $3,325,000 Income taxes . . . . . . . . . . . . . . . . . . . $3,325,000 To record the reduction in income taxes due to increased interest costs ($9,500,000 at an assumed tax rate of 35%). FINANCIAL STATEMENTS SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM U-1 FILE NO. 70-8589 CINERGY SERVICES, INC. AS OF DECEMBER 31, 1994 Pro forma adjustments are not applicable for this company in this filing. Pages 1 through 3 CINERGY SERVICES, INC. STATEMENT OF INCOME TWELVE MONTHS ENDED DECEMBER 31, 1994 (in thousands) OPERATING REVENUES $1 724 OPERATING EXPENSES Other operation 1 688 Taxes other than income taxes 36 1 724 OPERATING INCOME 0 NET INCOME $ 0 CINERGY SERVICES, INC. BALANCE SHEET AT DECEMBER 31, 1994 (in thousands) ASSETS CURRENT ASSETS Accounts receivable from associated companies $749 OTHER ASSETS 1 $750 CAPITALIZATION AND LIABILITIES CURRENT LIABILITIES Accounts payable 131 Accounts payable to associated companies 619 750 $750 EX-99.4.1 3 EXHIBIT 4.1 - DRAFT OF NOTICE OF SPECIAL MEETING Exhibit 4.1 Milbank, Tweed, Hadley & McCloy 1 Chase Manhattan Plaza New York, NY 10005 August 14, 1995 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Form U-1 Application-Declaration of CINergy Corp., CINergy Investments, Inc. and CINergy Services, Inc. -- File No. 70-8589 Dear Sirs: We refer to the Form U-1 Application-Declaration in File No. 70-8589 and amendments Nos. 1 and 2 thereto (as so amended, the "Application-Declaration"), filed by CINergy Corp. ("CINergy"), a Delaware corporation and a registered public utility holding company under the Public Utility Holding Company Act of 1935, as amended (the "Act"), CINergy Investments, Inc. ("CINergy Investments"), a Delaware corporation and a wholly- owned subsidiary of CINergy, and CINergy Services, Inc. ("CINergy Services"), a Delaware corporation and a wholly owned subsidiary service company of CINergy. Capitalized terms not defined herein shall have the meanings ascribed to such terms in the Application-Declaration. In the Application-Declaration, approval and authorization are requested: (1) for CINergy and CINergy Investments to acquire, directly or indirectly, in one or more transactions, common or preferred stock or debt securities in connection with the formation of one or more companies (the "New Special Purpose Subsidiaries") to be organized for the purpose of engaging, directly or indirectly, and exclusively, in the business of acquiring, owning and holding the securities of, and/or providing services to, one or more foreign utility companies ("FUCOs") and/or exempt wholesale generators ("EWGs"), as defined in Sections 33(a) and 32(a) of the Act; (2) for CINergy and CINergy Investments to make non-exempt direct and indirect investments in certain existing special purpose subsidiaries of CINergy (the "Existing Special Purpose Subsidiaries"), by means of non-exempt equity investments (in the form of partnership interests, trust certificates and other non-exempt equity securities), non-exempt debt investments (in the form of open-account advances or loans evidenced by promissory notes), and guarantees, letters of credit and other credit support issued or arranged by CINergy and/or CINergy Investments in respect of debt securities of Special Purpose Subsidiaries; (3) for CINergy and CINergy Investments to retain (and for the Commission to release jurisdiction over) certain of the Existing Special Purpose Subsidiaries as to which the Commission reserved jurisdiction in its October 21, 1994 order in File No. 70-8427, Release No. 35-26146 (the "Merger Order"); (4) for the Special Purpose Subsidiaries to issue to nonassociate companies non-exempt equity securities (in the form of partnership interests, trust certificates and other forms of equity securities) for the purpose of financing investments by such Special Purpose Subsidiaries in EWGs and FUCOs; (5) for the Special Purpose Subsidiaries to provide services to their subsidiaries and to other Special Purpose Subsidiaries and their subsidiaries; (6) to the extent, if any, not previously authorized by the Commission in the Merger Order, for CINergy Services to provide services to the Special Purpose Subsidiaries and their subsidiaries; and (7) for CINergy to apply proceeds from securities issued or to be issued by it pursuant to outstanding Commission orders in File Nos. 70-8477 and 70-8521 for purposes of the proposed investments described in the Application-Declaration, all as more fully described in the Application-Declaration (collectively, the "Transactions"). We have acted as special counsel for CINergy, CINergy Investments and CINergy Services in connection with the Transactions and, as such counsel, we are familiar with the corporate proceedings taken and to be taken by CINergy, CINergy Investments and CINergy Services in connection with the Transactions as described in the Application-Declaration. We have examined originals, or copies certified to our satisfaction, of such corporate records of CINergy, CINergy Investments, CINergy Services and the Existing Special Purpose Subsidiaries, certificates of public officials, certificates of officers and representatives of CINergy, CINergy Investments, CINergy Services and the Existing Special Purpose Subsidiaries and other documents as we have deemed it necessary to require as a basis for the opinions hereinafter expressed. In such examination we have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies. As to various questions of fact material to such opinions we have, when relevant facts were not independently established, relied upon certificates by officers of CINergy, CINergy Investments, CINergy Services and the Existing Special Purpose Subsidiaries and other appropriate persons and statements contained in the Application-Declaration. The opinions expressed below in respect of the Transactions described in the Application-Declaration are subject to the following assumptions or conditions: a. The Transactions shall have been duly authorized and approved to the extent required by applicable state and foreign law by the Boards of Directors and shareholders of CINergy, CINergy Investments, the Special Purpose Subsidiaries and CINergy Services. b. All required approvals, authorizations, consents, certificates, and orders of, and all filings and registrations with, all applicable federal, state and foreign commissions and regulatory authorities with respect to the Transactions (including the approval and authorization of the Commission under the Act) shall have been obtained or made, as the case may be, and remain in effect; the Commission shall have duly entered an appropriate order or orders granting and permitting the Application-Declaration to become effective with respect to the Transactions as described in the Application- Declaration; and the Transactions shall have been accomplished in accordance with all such approvals, authorizations, consents, certificates, orders, filings and registrations. In addition, the Transactions shall comply with any and all applicable rules or regulations hereafter adopted by the Commission regarding the scope or interpretation of Section 33 of the Act. c. For each New Special Purpose Subsidiary, all required organizational documents, in proper form, shall have been duly and validly adopted and shall have been filed with (and the filing thereof accepted by) the Secretary of State or other appropriate official of such New Special Purpose Subsidiary's jurisdiction of organization, and all other corporate and other formalities as are required by the laws of such jurisdiction for the valid organization and due existence of such New Special Purpose Subsidiary shall have been taken. As to each company referred to in opining paragraph 2 below, no action or proceeding for the dissolution or liquidation of such company or threatening the existence of such company shall have been taken or commenced. d. The notes proposed to be issued by the Special Purpose Subsidiaries to CINergy and CINergy Investments shall be substantially in the form set forth in Exhibit 1 to the Application-Declaration and shall have been properly completed and executed and, where required, countersigned, and the rate of interest on such notes shall not exceed the interest rate permitted by applicable law. e. Borrowings by any Special Purpose Subsidiary will not exceed those levels permitted from time to time by the borrowing Special Purpose Subsidiary's articles or certificate of incorporation or other governing documents, debt instruments and agreements to which the borrowing Special Purpose Subsidiary is a party or by which its property is bound, and applicable laws and orders of governmental and regulatory authorities with jurisdiction over such Special Purpose Subsidiary. f. The purchase or subscription price or other consideration to be paid or given for the shares of stock issued by any Special Purpose Subsidiary shall have been paid and shall be not less than the par value of such shares or such other amount as may be required by applicable law, resolutions and governing corporate documents in order for such shares to be fully paid and non-assessable; certificates representing such shares (or the functional equivalent thereof under applicable foreign law) shall have been duly executed, countersigned and registered by the applicable transfer agent and registrar (if any); and all other acts and formalities required by the laws of such Special Purpose Subsidiary's jurisdiction of organization for such shares to be validly issued shall have been taken. g. No act or event other than as described herein shall have occurred subsequent to the date hereof which would change the opinions expressed above. h. The consummation of the Transactions shall be conducted under our supervision, and all legal matters incident thereto shall be satisfactory to us, including the receipt in satisfactory form of such opinions of other counsel, qualified to practice in jurisdictions pertaining to such transactions in which we are not admitted to practice, as we may deem appropriate. Based on the foregoing, and having regard to legal considerations which we deem relevant, we are of the opinion that, in the event that the proposed Transactions are consummated in accordance with the Application-Declaration, and subject to the assumptions and conditions set forth above: 1. All state laws applicable to the proposed Transactions will have been complied with. 2. CINergy and CINergy Investments are validly organized and duly existing under the laws of the State of Delaware; each Existing Special Purpose Subsidiary is validly organized and duly existing under the laws of its jurisdiction of organization; and each New Special Purpose Subsidiary will be validly organized and duly existing under the laws of its jurisdiction of organization. 3. The shares of New Special Purpose Subsidiary stock issued in the Transactions will be validly issued, fully paid and non-assessable, and the holders thereof will be entitled to the rights and privileges appertaining thereto set forth in the charter or other organizational documents of such New Special Purpose Subsidiary. The Special Purpose Subsidiary debt securities issued in the Transactions will be valid and binding obligations of such Special Purpose Subsidiary, and the Special Purpose Subsidiary debt securities guaranteed by CINergy or CINergy Investments will be valid and binding obligations of the issuer thereof and of CINergy or CINergy Investments, as the case may be, in each case enforceable in accordance with the terms of such securities or guarantee, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 4. Each of CINergy and CINergy Investments will legally acquire the Special Purpose Subsidiary equity and debt securities issued to it in the Transactions. 5. The consummation of the proposed Transactions will not violate the legal rights of the holders of any securities issued by CINergy or CINergy Investments or any associate company thereof. We hereby consent to the use of this opinion as an exhibit to the Application-Declaration. The opinions set forth herein are issued and expressed as of the date hereof. We do not assume or undertake any responsibility to advise you of changes in either fact or law which may come to our attention after the date hereof. Very truly yours, /s/ Milbank, Tweed, Hadley & McCloy MDD/RBW/RJH EX-27.0 4
OPUR1 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEETS AND STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000899652 CINERGY CORP. 0 CINERGY CORP. (CONSOLIDATED) 1,000 YEAR 12-MOS DEC-31-1994 DEC-31-1994 JAN-01-1994 JAN-01-1994 DEC-31-1994 DEC-31-1994 PER-BOOK PRO-FORMA 6,198,893 6,198,893 0 0 811,705 900,530 1,004,963 1,004,963 134,281 134,281 8,149,842 8,238,667 1,552 1,552 1,535,658 1,535,658 877,061 870,886 2,414,271 2,408,096 210,000 210,000 267,929 267,929 2,715,269 2,810,269 228,900 228,900 0 0 0 0 60,400 60,400 0 0 0 0 0 0 2,253,073 2,253,073 8,149,842 8,238,667 2,924,177 2,924,177 152,181 148,856 2,331,506 2,331,506 2,483,687 2,480,362 440,490 443,815 13,497 13,497 453,987 457,312 227,286 236,786 226,701 220,526 35,559 35,559 191,142 184,967 0 0 219,248 228,748 0 0 1.30 1.25 1.30 1.25 EX-27.1 5
OPUR1 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEETS AND STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000899652 CINERGY CORP. 1 CINERGY CORP. 1,000 YEAR 12-MOS DEC-31-1994 DEC-31-1994 JAN-01-1994 JAN-01-1994 DEC-31-1994 DEC-31-1994 PER-BOOK PRO-FORMA 0 0 2,424,196 2,424,196 66,575 57,075 0 0 160 104,660 2,490,931 2,585,931 1,552 1,552 1,535,658 1,535,658 877,061 877,061 2,414,271 2,414,271 0 0 0 0 0 95,000 75,000 75,000 0 0 0 0 0 0 0 0 0 0 0 0 1,660 1,660 2,490,931 2,585,931 0 0 (925) (925) 633 633 (292) (292) 292 292 193,419 202,919 193,711 203,211 2,569 12,069 191,142 191,142 0 0 191,142 191,142 0 0 0 0 0 0 0.00 0.00 0.00 0.00 EX-27.2 6
OPUR1 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEETS AND STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000899652 CINERGY CORP. 2 CINERGY SERVICES, INC. 1,000 YEAR DEC-31-1994 JAN-01-1994 DEC-31-1994 PER-BOOK 0 0 749 0 1 750 0 0 0 0 0 0 0 0 0 0 0 0 0 0 750 750 1,724 36 1,688 1,724 0 0 0 0 0 0 0 0 0 0 0.00 0.00 EX-27.13 7
OPUR1 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEETS AND STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 0000899652 CINERGY CORP. 13 CINERGY INVESTMENTS, INC. (CONSOLIDATED) 1,000 YEAR 12-MOS DEC-31-1994 DEC-31-1994 JAN-01-1994 JAN-01-1994 DEC-31-1994 DEC-31-1994 PER-BOOK PRO-FORMA 0 0 0 0 9,500 107,825 0 0 12,091 12,091 21,591 119,916 0 0 24,418 24,418 (13,108) (19,283) 11,310 5,135 0 0 0 0 0 0 0 104,500 0 0 0 0 0 0 0 0 0 0 0 0 10,281 10,281 21,591 119,916 8,221 8,221 (1,388) (1,388) 12,705 12,705 11,317 11,317 (3,096) (3,096) (4,431) (1,106) (7,527) (4,202) 889 10,389 (8,416) (14,591) 0 0 (8,416) (14,591) 0 0 0 0 0 0 0.00 0.00 0.00 0.00