-----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, G3UakkBHCgY3iXeTetbm6pzdg8S90jc0OozvnZsBhUgLPxV1c/WHOWdp+lEP+CSm bHYwagDJHjYTrMTVgjV+TA== 0000899652-99-000086.txt : 19990629 0000899652-99-000086.hdr.sgml : 19990629 ACCESSION NUMBER: 0000899652-99-000086 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990628 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: 11-K SEC ACT: SEC FILE NUMBER: 001-11377 FILM NUMBER: 99653563 BUSINESS ADDRESS: STREET 1: 139 E FOURTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5134219500 MAIL ADDRESS: STREET 1: 139 E FOURTH STREET CITY: CINCINATI STATE: OH ZIP: 45202 11-K 1 CINERGY UNION EMPLOYEES' 401(K) PLAN CINERGY UNION EMPLOYEES' 401(K) PLAN FINANCIAL STATEMENTS AND SCHEDULES AS OF DECEMBER 31, 1998 AND 1997 TOGETHER WITH AUDITORS' REPORT Cinergy Union Employees' 401(k) Plan Financial Statements and Exhibits Page No. (a) Financial Statements Report of Independent Public Accountants 3 Statement of Net Assets Available for Benefits, with 4-5 Fund Information, as of December 31, 1998 Statement of Net Assets Available for Benefits, with 6 Fund Information, as of December 31, 1997 Statement of Changes in Net Assets Available for Benefits, 7-8 with Fund Information, for the Year Ended December 31, 1998 Notes to Financial Statements 9-13 Financial Statement Schedules (As Required By The Employee Retirement Income Security Act): 14 Schedule I - Schedule of Assets Held for Investment Purposes - December 31, 1998 Schedule II - Schedule of Reportable Transactions for the year ended December 31, 1998 15 (b) Exhibit 23 - Consent of Independent Public Accountants Report of Independent Public Accountants To the Plan Administrator of the Cinergy Union Employees' 401(k) Plan: We have audited the accompanying statements of net assets available for benefits, with fund information, of the CINERGY UNION EMPLOYEES' 401(k) PLAN (formerly the PSI Energy, Inc. Union Employees' 401(k) Savings Plan) as of December 31, 1998 and 1997, and the related statement of changes in net assets available for benefits, with fund information, for the year ended December 31, 1998. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits, with fund information, of the Plan as of December 31, 1998 and 1997, and the changes in net assets available for benefits, with fund information, for the year ended December 31, 1998 in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules (Schedules I and II) are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits and the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Cincinnati, Ohio June 24, 1999
Cinergy Union Employees' 401(k) Plan Statement of Net Assets Available for Benefits, with Fund Information As of December 31, 1998 (Page 1 of 2) Participant Directed Fidelity Fidelity Fidelity Fidelity U.S. Low Fidelity Fidelity Equity- Asset Bond Priced Diversified Freedom Fidelity Magellan Income Manager Index Stock International Income Freedom Fund Fund Fund Fund Fund Fund Fund 2000 Fund ASSETS Investments, at fair value: Shares of registered investment companies $20,834,043 $12,994,357 $ - $843,597 $751,137 $382,234 $141,272 $245,123 Common stock - - - - - - - - Participant loans - - - - - - - - Total investments 20,834,043 12,994,357 - 843,597 751,137 382,234 141,272 245,123 Receivables: Employer's contribution - - - - - - - - Total receivables - - - - - - - - Net assets available for benefits $20,834,043 $12,994,357 $ - $843,597 $751,137 $382,234 141,272 $245,123 The accompanying notes are an integral part of these financial statements.
Cinergy Union Employees' 401(k) Plan Statement of Net Assets Available for Benefits, with Fund Information (continued) As of December 31, 1998 (Page 2 of 2) Non- Participant Participant Directed Directed Fidelity Fidelity Fidelity Fidelity Retirement Freedom Freedom Freedom Money Cinergy Cinergy 2010 2020 2030 Market Common Participant Common Fund Fund Fund Fund Stock Fund Loan Fund Stock Fund Total ASSETS Investments, at fair value: Shares of registered investment companies $831,334 $108,379 $130,274 $5,220,732 $ - $ - $ - $42,482,482 Common stock - - - - 13,320,985 - 17,670,925 30,991,910 Participant loans - - - - - 2,802,643 - 2,802,643 Total investments 831,334 108,379 130,274 5,220,732 13,320,985 2,802,643 17,670,925 76,277,035 Receivables: Employer's contribution - - - - - - 820,135 820,135 Total receivables - - - - - - 820,135 820,135 Net assets available for benefits $831,334 $108,379 $130,274 $5,220,732 $13,320,985 $2,802,643 $18,491,060 $77,097,170 The accompanying notes are an integral part of these financial statements.
Cinergy Union Employees' 401(k) Plan Statement of Net Assets Available for Benefits, with Fund Information As of December 31, 1997 Participant Directed Fidelity Fidelity Fidelity Fidelity Retirement Fidelity Equity- Asset Fidelity Fidelity Diversified Money Magellan Income Manager U.S. Bond Low-Priced International Market Fund Fund Fund Index Fund Stock Fund Fund Fund ASSETS Investments, at fair value: Shares of registered investment companies $13,562,482 $8,262,065 $3,364,616 $550,494 $375,042 $205,951 $4,774,242 Common stock - - - - - - - Participant loans - - - - - - - Total investments 13,562,482 8,262,065 3,364,616 550,494 375,042 205,951 4,774,242 Receivables: Employer's contribution - - - - - - - Participants' contributions 71,400 42,024 17,923 3,953 5,001 2,141 22,832 Total receivables 71,400 42,024 17,923 3,953 5,001 2,141 22,832 Net assets available for benefits $13,633,882 $8,304,089 $3,382,539 $554,447 $380,043 $208,092 $4,797,074
Cinergy Union Employees' 401(k) Plan Statement of Net Assets Available for Benefits, with Fund Information (continued) As of December 31, 1997 Non- Participant Participant Directed Directed Cinergy Cinergy Common Participant Common Stock Fund Loan Fund Stock Fund Total ASSETS Investments, at fair value: Shares of registered investment companies $ - $ - $ - $31,094,892 Common stock 14,534,109 - 17,147,871 31,681,980 Participant loans - 2,490,292 - 2,490,292 Total investments 14,534,109 2,490,292 17,147,871 65,267,164 Receivables: Employer's contribution - - 62,736 62,736 Participants' contributions 213,208 - - 378,482 Total receivables 213,208 - 62,736 441,218 Net assets available for benefits $14,747,317 $2,490,292 $17,210,607 $65,708,382 The accompanying notes are an integral part of these financial statements.
Cinergy Union Employees' 401(k) Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information For the Year Ended December 31, 1998 (Page 1 of 2) Participant Directed Fidelity Fidelity Fidelity Low- Fidelity Fidelity Equity- Fidelity U.S. Bond Priced Diversified Freedom Fidelity Magellan Income Asset Index Stock International Income Freedom Fund Fund Manager Fund Fund Fund Fund 2000 Fund Additions to net assets: Investment income: Net appreciation (depreciation) in fair value of investments $ 4,079,527 $ 405,771 $ 246,257 $ 12,629 $(69,401) $ 12,217 $ 3,676 $ 7,667 Interest - - - - - - - - Dividends 923,866 671,099 26,266 42,670 61,013 14,422 3,099 9,861 5,003,393 1,076,870 272,523 55,299 (8,388) 26,639 6,775 17,528 Contributions: Participants' 2,065,214 1,489,721 118,201 114,475 178,355 74,126 1,167 24,969 Employer's - - - - - - - - Rollovers 1,667 - - - - - 1,667 - 2,066,881 1,489,721 118,201 114,475 178,355 74,126 2,834 24,969 Total additions 7,070,274 2,566,591 390,724 169,774 169,967 100,765 9,609 42,497 Deductions from net assets: Benefits paid to participants 136,297 203,374 14,772 1,465 3,357 1,348 - - Total deductions 136,297 203,374 14,772 1,465 3,357 1,348 - - Net increase/(decrease) prior to transfers 6,933,977 2,363,217 375,952 168,309 166,610 99,417 9,609 42,497 Interfund transfers 204,658 2,346,406 (3,758,491) 120,869 243,845 78,625 131,663 202,626 Interplan transfers 61,526 (19,355) - (28) (39,361) (3,900) - - Net increase (decrease) 7,200,161 4,690,268 (3,382,539) 289,150 371,094 174,142 141,272 245,123 Net assets available for benefits: Beginning of year 13,633,882 8,304,089 3,382,539 554,447 380,043 208,092 - - End of year $20,834,043 $12,994,357 $ - $843,597 $751,137 $382,234 $141,272 $245,123 The accompanying notes are an integral part of these financial statements.
Cinergy Union Employees' 401(k) Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information (continued) For the Year Ended December 31, 1998 (Page 2 of 2) Non- Participant Participant Directed Directed Fidelity Retirement Fidelity Fidelity Fidelity Money Cinergy Cinergy Freedom Freedom Freedom Market Common Participant Common 2010 Fund 2020 Fund 2030 Fund Fund Stock Fund Loan Fund Stock Fund Total Additions to net assets: Investment income: Net appreciation (depreciation) in fair value of investments $ 29,210 $ 6,343 $ 11,690 $ - $(1,674,959) $ - $(1,446,346) $ 1,624,281 Interest - - - - - 237,426 - 237,426 Dividends 32,807 3,073 4,133 245,149 711,475 - 817,107 3,566,040 62,017 9,416 15,823 245,149 (963,484) 237,426 (629,239) 5,427,747 Contributions: Participants' 47,020 16,866 9,940 622,938 432,813 - - 5,195,805 Employer's - - - - - - 2,468,036 2,468,036 Rollovers - - - - 2,222 - - 5,556 47,020 16,866 9,940 622,938 435,035 - 2,468,036 7,669,397 Total additions 109,037 26,282 25,763 868,087 (528,449) 237,426 1,838,797 13,097,144 Deductions from net assets: Benefits paid to participants - - - 391,806 600,051 79,809 321,127 1,753,406 Total deductions - - - 391,806 600,051 79,809 321,127 1,753,406 Net increase/(decrease) prior to transfers 109,037 26,282 25,763 476,281 (1,128,500) 157,617 1,517,670 11,343,738 Interfund transfers 722,297 82,097 104,511 (52,526) (546,296) 119,716 - - Interplan transfers - - - (97) 248,464 35,018 (237,217) 45,050 Net increase (decrease) 831,334 108,379 130,274 423,658 (1,426,332) 312,351 1,280,453 11,388,788 Net assets available for benefits: Beginning of year - - - 4,797,074 14,747,317 2,490,292 17,210,607 65,708,382 End of year $831,334 $108,379 $130,274 $5,220,732 $13,320,985 $2,802,643 $18,491,060 $77,097,170 The accompanying notes are an integral part of these financial statements.
Cinergy Union Employees' 401(k) Plan Notes to Financial Statements (1) Plan Description- (a) General--The Cinergy Union Employees' 401(k) Plan (the Plan) is a defined contribution plan covering union employees of Cinergy Corp.'s subsidiaries (collectively "the Company") represented by the International Brotherhood of Electrical Workers, Local 1593. The Plan is administered by the Cinergy Benefits Committee and trusteed by the Fidelity Management Trust Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The administrative expenses of the Plan are paid by the Company. Reference should be made to the Plan document for a more complete description of the Plan's provisions. Effective January 1, 1998, the Plan's name was changed from the PSI Energy, Inc. Union Employees' 401(k) Savings Plan to the Cinergy Union Employees' 401(k) Plan. (b) Contributions--Under the Plan, participants may contribute up to 15% of annual pretax compensation, as defined in the Plan. In addition, a participant may make optional contributions to the Plan which, when combined with salary deferrals, may not exceed 15% of base pay. Salary deferrals and optional contributions are subject to certain limitations. The salary deferrals and optional contributions are invested by the trustee, as directed by each participant, in one or more investment funds, including the Cinergy Common Stock Fund. The Company matches 60% of the first 5% of base pay, contributed by each participant. An additional incentive match of up to 40% of the first 5% of base pay that a participant contributes may be contributed at the discretion of the Company's board of directors. For those employees who do not contribute to the Plan, the Company contributes an incentive match assuming the employee contributed 1% of base pay. All employer contributions are invested by the trustee in the Cinergy Common Stock Fund. The employer contributions must remain in the Cinergy Common Stock Fund until the participant reaches age 50 and are shown in the accompanying financial statements as "Non-Participant Directed" funds until the employee elects to transfer the funds to another investment option. Participants are immediately vested in all contributions and earnings thereon. (c) Payment of Benefits--Participants are generally eligible to receive distributions of assets from the Plan upon termination of employment (including retirement), death, or disability. Distributions are paid in a lump sum for vested benefits of $3,500 or less. Distributions are paid in a lump sum or up to ten annual installments (at the election of the participant) for vested benefits greater than $3,500. Active participants are also eligible to apply to the Plan administrator for "hardship withdrawals from their salary deferral account in accordance with Plan provisions. (d) Participant Loans--Subject to certain limitations, participants may apply for loans from their salary deferral account balances. Such loans are reflected in the Participant Loan Fund in the accompanying financial statements. Interest on the loans is set at the prime rate plus1/2% at the time of borrowing and are secured by the balance in the participant's account. Loans are to be repaid within 54 months through regular payroll deductions. (2) Significant Accounting Policies- (a) Basis of Accounting--The financial statements of the Plan are prepared under the accrual method of accounting. (b) Investment Valuation and Income Recognition--Investments are stated at fair value. Shares of registered investment companies are valued at quoted redemption prices which represent the net asset value of shares held by the Plan at year-end. Cinergy common stock is valued at its quoted market price. Participant loans are valued at cost, which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Transfers of assets between the Plan and the Cinergy Employees' 401(k) Plan occur as a result of changes in employee status between the union classification and the exempt and non-exempt classifications. Such transfers are reflected as interplan transfers on the statement of changes in net assets available for benefits. A participant may elect or change investment funds and/or the contribution allocation percentages among funds at any time. The following investments exceed 5% of total net assets available for benefits at December 31, 1998 and 1997: 1998 1997 Fidelity Magellan Fund $20,834,043 $13,562,482 Fidelity Equity-Income Fund 12,994,357 8,262,065 Fidelity Asset Manager Fund - * 3,364,616 Fidelity Retirement Money Market Fund 5,220,732 4,774,242 Cinergy Common Stock 30,991,910 31,681,980 * represents less than 5% of total net assets (c) Use of Estimates--The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (d) Payments of Benefits-- Benefits are recorded when paid. (3) Investment Options- Upon enrollment or re-enrollment, participants direct that their contributions, including any rollover contributions (i.e., non-Company match contributions), be invested in one or more of the following investment options: * Fidelity Magellan Fund The Fidelity Magellan Fund invests mainly in equity securities of domestic and foreign issuers that offer potential for growth with the principal purpose of seeking maximum appreciation in value. * Fidelity Equity-Income Fund The Fidelity Equity-Income Fund invests mainly in income producing equity securities with the principal purpose of earning reasonable income while considering the potential for capital appreciation. * Fidelity U.S. Bond Index Fund The Fidelity U.S. Bond Index Fund invests in securities that include obligations of the U.S. Treasury, U.S. Agencies, corporations, mortgage-backed obligations, and U.S. dollar-denominated obligations of foreign governments with the principal purpose of seeking current income consistent with the preservation of capital. * Fidelity Diversified International Fund The Fidelity Diversified International Fund invests primarily in stocks of foreign issuers with the principal purpose of seeking out stocks that are undervalued compared to industry norms in their countries. * Fidelity Low-Priced Stock Fund The Fidelity Low-Priced Stock Fund invests primarily in the stocks of companies that the fund manager considers undervalued or out of favor with other investors and that could offer the possibility for significant growth with the principal purpose of seeking out stocks of smaller companies with per share prices of $35 or less. * Fidelity Freedom Income Fund The Fidelity Income Fund's goal is to seek high current income and, as a secondary objective, capital appreciation through a combination of investing in equity, fixed-income and money market funds managed by Fidelity Investments. * Fidelity Freedom 2000, 2010, 2020, and 2030 Funds Each of the Fidelity Freedom 2000, 2010, 2020 and 2030 Funds seek high total return. Each fund seeks to achieve this goal by investing in a combination of equity, fixed-income and money market funds managed by Fidelity Investments. These funds are targeted to investors expected to retire near the date specified in the fund name. * Fidelity Retirement Money Market Fund The Fidelity Retirement Money Market Fund invests in high quality money market instruments including certificates of deposit, commercial paper, short-term corporate and U.S. Government obligations and bankers' acceptances issued by major banks. The purpose of the Fund is to seek high money market yields while maintaining preservation of capital. * Cinergy Common Stock Fund The Cinergy Common Stock Fund invests in common stock of Cinergy Corp. Previously, participants could direct their contributions to the Fidelity Asset Manager Fund. During 1998, the Plan administrator eliminated this fund as an investment option. Participants invested in this fund were able to redirect their investment elections to any one or more of the above investment options. (4) Federal Income Tax Status- The Internal Revenue Service has determined and informed the Plan by letter dated November 14, 1995, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's legal counsel believe the Plan is designed and is being operated in compliance with the applicable provisions of the IRC. (5) Plan Termination- Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. (6) Related Party Transactions- Certain Plan investments are shares of mutual funds managed by Fidelity Investments. Fidelity Investments is the Trustee as defined by the Plan and therefore, these transactions qualify as party-in-interest transactions. The Cinergy Corp. Common Stock Fund holds common stock of the plan administrator as defined by the Plan and therefore, these transactions qualify as party-in-interest transactions. Finally, the Participant Loan Fund hold loans from participants in the Plan and therefore, these transactions qualify as party-in-interest transactions.
Schedule I Cinergy Union Employees' 401(k) Plan EIN: 35-0594457 Plan Number: 101 Item 27a--Schedule of Assets Held for Investment Purposes December 31, 1998 Description of Investment, Including Identity of Issuer, Borrower, Maturity Date, Rate of Interest, Lessor, or Similar Party Collateral and Par or Maturity Value Cost Value * Cinergy Corp. Common Stock $23,137,898 $30,991,910 * Fidelity Investments Magellan Fund 14,466,557 20,834,043 * Fidelity Investments Equity Income Fund 10,590,651 12,994,357 * Fidelity Investments U.S. Bond Index Fund 824,145 843,597 * Fidelity Investments Low-Priced Stock Fund 825,419 751,137 * Fidelity Investments Diversified International Stock Fund 376,146 382,234 * Fidelity Investments Freedom Income Fund 137,595 141,272 * Fidelity Investments Freedom 2000 Fund 237,453 245,123 * Fidelity Investments Freedom 2010 Fund 801,922 831,334 * Fidelity Investments Freedom 2020 Fund 101,905 108,379 * Fidelity Investments Freedom 2030 Fund 117,814 130,274 * Fidelity Investments Retirement Money Market Fund 5,220,732 5,220,732 * Various plan participants Participant loans (interest rates ranging Total assets held for investment from 5.25-9%) 2,802,643 2,802,643 purposes $59,640,880 $76,277,035 * Denotes a party-in-interest The accompanying notes are an integral part of these financial statements.
Schedule II Cinergy Union Employees' 401(k) Plan EIN: 35-0594457 Plan Number: 101 Item 27d - Schedule of Reportable Transactions For the Year Ended December 31, 1998 Expenses Identity of Incurred Party Identity of Purchase Sales With Cost of Involved Securities Price (A) Price (A) Transaction Assets Net Gain Cinergy Cinergy $5,002,421 $2,571,186 $ - $1,889,514 $681,672 Corp. Common Stock Fund Fidelity Fidelity 4,678,962 1,486,928 - 1,227,613 259,315 Investments Magellan Fund Fidelity Fidelity 6,089,978 1,763,457 - 1,542,687 220,770 Investments Equity-Income Fund Fidelity Fidelity Asset 219,045 3,829,918 - 3,169,679 660,239 Investments Manager Fund Fidelity Fidelity 1,977,032 1,530,542 - 1,530,542 - Investments Retirement Money Market Fund (A) The current value of all assets acquired or disposed of, at the time of the acquisition or disposition, is equal to the purchase price or selling price, respectively.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. CINERGY UNION EMPLOYEES' 401(K) PLAN By/s/RICHARD L. BOND Richard L. Bond Plan Administrator June 28, 1999 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated June 24, 1999 included in the Annual Report on Form 11-K for the year ended December 31, 1998 of the Cinergy Union Employees' 401(k) Plan, into Cinergy Corp.'s previously filed Registration Statement File No. 33-56067. ARTHUR ANDERSEN LLP Cincinnati, Ohio June 24, 1999 -----END PRIVACY-ENHANCED MESSAGE-----