-----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, UJ871/VJnoPKaHEDv2dO+GVCbiO8mSDmICLkyyheQnNsonmbjGVQGHarOmDpXAzP vu1/ZsihilDEppA8Lb3GTQ== 0000020290-98-000011.txt : 19980626 0000020290-98-000011.hdr.sgml : 19980626 ACCESSION NUMBER: 0000020290-98-000011 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980625 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINCINNATI GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000020290 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 310240030 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-01232 FILM NUMBER: 98653669 BUSINESS ADDRESS: STREET 1: 139 E FOURTH ST ROOM 362-ANNEX CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5133812000 11-K 1 CG&E SAVINGS INCENTIVE PLAN SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1997 Commission File Number 1-11377 A. Full title of the Plan: THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN B. Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office: Cinergy Corp. 139 East Fourth Street Cincinnati, Ohio 45202 - 4003 THE CG&E COMPANY SAVINGS INCENTIVE PLAN FINANCIAL STATEMENTS AND EXHIBITS Page No. (a) Financial Statements Report of Independent Public Accountants 3 Statement of Net Assets Available for Benefits, with Fund Information, as of December 31, 1997 4 Statement of Net Assets Available for Benefits, with Fund Information, as of December 31, 1996 5 Statement of Changes in Net Assets Available for Benefits, with Fund Information, for the Year Ended December 31, 1997 6 Notes to Financial Statements 7-10 Financial Statement Schedules (As Required By The Employee Retirement Income Security Act) Schedule I - Schedule of Assets Held for Investment Purposes-December 31, 1997 11 Schedule II - Schedule of Reportable Transactions for the year ended December 31, 1997 12 (b) Exhibit 23) Consent of Independent Public Accountants Report of Independent Public Accountants To the Plan Administrator of The Cincinnati Gas & Electric Company Savings Incentive Plan: We have audited the accompanying statements of net assets available for benefits, with fund information, of THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN as of December 31, 1997 and 1996, and the related statement of changes in net assets available for benefits, with fund information, for the year ended December 31, 1997. These financial statements and the schedules referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits, with fund information, of the Plan as of December 31, 1997 and 1996, and the changes in net assets available for benefits, with fund information, for the year ended December 31, 1997 in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules (Schedules I and II) are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Cincinnati, Ohio, June 22, 1998
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN Statement of Net Assets Available for Benefits, with Fund Information As of December 31, 1997 Participant Directed Fidelity Fidelity Fidelity Low- Fidelity Retirement Fidelity Equity- Fidelity Priced Diversified Money Cinergy Magellan Income Intermediate Stock International Market Common Fund Fund Bond Fund Fund Fund Fund Stock Fund ASSETS Investments, at fair value: Shares of registered investment companies $ 8,344,841 $16,571,031 $1,643,579 $1,384,880 $ 405,471 $3,080,090 $ - Common Stock - - - - - - 99,868,069 Participant Loans - - - - - - - Total Investments 8,344,841 16,571,031 1,643,579 1,384,880 405,471 3,080,090 99,868,069 Receivables: Employer's Contribution - - - - - - - Participants' Contribution 34,370 40,040 5,541 6,955 2,338 14,069 431,927 Total receivables 34,370 40,040 5,541 6,955 2,338 14,069 431,927 Net assets available for benefits $ 8,379,211 $16,611,071 $1,649,120 $1,391,835 $ 407,809 $3,094,159 $100,299,996
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN Statement of Net Assets Available for Benefits, with Fund Information (Continued) As of December 31, 1997 Non- Participant Participant Directed Directed Cinergy Participant Common Loan Fund Stock Fund Total ASSETS Investments, at fair value: Shares of registered investment companies $ - $ - $ 31,429,892 Common Stock - 51,579,542 151,447,611 Participant Loans 7,312,212 - 7,312,212 Total Investments 7,312,212 51,579,542 190,189,715 Receivables: Employer's Contribution - 96,050 96,050 Participants' Contribution - - 535,240 Total receivables - 96,050 631,290 Net assets available for benefits $7,312,212 $51,675,592 $190,821,005 The accompanying notes are an integral part of these financial statements.
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN Statement of Net Assets Available for Benefits, with Fund Information As of December 31, 1996 Non- Participant Participant Directed Directed Fidelity Fidelity Retirement Fidelity Equity- Fidelity Money Cinergy Cinergy Magellan Income Intermediate Market Common Participant Common Fund Fund Bond Fund Fund Stock Fund Loan Fund Stock Fund ASSETS Investments, at fair value: Shares of registered investment companies $ 4,198,665 $11,395,092 $1,428,486 $5,874,739 $ - $ - $ - Common Stock - - - - 100,039,222 - 45,212,499 Participant Loans - - - - - 6,244,939 - Total Investments 4,198,665 11,395,092 1,428,486 5,874,739 100,039,222 6,244,939 45,212,499 Receivables: Employer's Contribution - - - - - - 1,059,033 Participants' Contribution 13,166 16,301 2,848 8,675 108,368 - - Total receivables 13,166 16,301 2,848 8,675 108,368 - 1,059,033 Net assets available for benefits $ 4,211,831 $11,411,393 $1,431,334 $5,883,414 $100,147,590 $6,244,939 $ 46,271,532
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN Statement of Net Assets Available for Benefits, with Fund Information (Continued) As of December 31, 1996 Total ASSETS Investments, at fair value: Shares of registered investment companies $ 22,896,982 Common Stock 145,251,721 Participant Loans 6,244,939 Total Investments 174,393,642 Receivables: Employer's Contribution 1,059,033 Participants' Contribution 149,358 Total receivables 1,208,391 Net assets available for benefits $175,602,033 The accompanying notes are an integral part of these financial statements.
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information For the Year Ended December 31, 1997 Participant Directed Fidelity Fidelity Fidelity Low- Fidelity Retirement Fidelity Equity- Fidelity Priced Diversified Money Cinergy Magellan Income Intermediate Stock International Market Common Fund Fund Bond Fund Fund Fund Fund Stock Fund Additions to net assets: Investments income: Net appreciation (depreceition) in fair value of investments $ 784,511 $ 2,720,315 $ 14,847 $ (25,312) $ (17,952) $ - $ 14,290,256 Interest - - - - - - - Dividends 449,813 846,366 86,292 42,150 12,545 162,698 4,763,214 1,234,324 3,566,681 101,139 16,838 (5,407) 162,698 19,053,470 Contributions: Participants' 749,792 952,609 142,235 50,378 20,261 422,114 5,790,234 Employer's - - - - - - - 749,792 952,609 142,235 50,378 20,261 422,114 5,790,234 Total Additions 1,984,116 4,519,290 243,374 67,216 14,854 584,812 24,843,704 Deductions from net assets: Benefits paid to participants 760,186 1,737,446 214,551 - - 9,012,087 15,047,441 Total Deductions 760,186 1,737,446 214,551 - - 9,012,087 15,047,441 Net increase/(decrease) prior to transfers 1,223,930 2,781,844 28,823 67,216 14,854 (8,427,275) 9,796,263 Interfund transfers 2,367,520 1,779,118 151,021 1,277,147 386,025 5,580,862 (10,687,274) Interplan transfers 575,930 638,716 37,942 47,472 6,930 57,158 1,043,417 Net increase (decrease) 4,167,380 5,199,678 217,786 1,391,835 407,809 (2,789,255) 152,406 Net assets available for benefits: Beginning of year 4,211,831 11,411,393 1,431,334 - - 5,883,414 100,147,590 End of year $ 8,379,211 $16,611,071 $1,649,120 $1,391,835 $ 407,809 $ 3,094,159 $100,299,996
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN Statement of Changes in Net Assets Available for Benefits, with Fund Information For the Year Ended December 31, 1997 Non- Participant Participant Directed Cinergy Participant Common Loan Fund Stock Fund Total Additions to net assets: Investments income: Net appreciation (depreceition) in fair value of investments $ - $ 7,214,609 $ 24,981,274 Interest 514,732 - 514,732 Dividends - 2,304,790 8,667,868 514,732 9,519,399 34,163,874 Contributions: Participants' - - 8,127,623 Employer's - 2,763,528 2,763,528 - 2,763,528 10,891,151 Total Additions 514,732 12,282,927 45,055,025 Deductions from net assets: Benefits paid to participants 415,881 5,724,706 32,912,298 Total Deductions 415,881 5,724,706 32,912,298 Net increase/(decrease) prior to transfers 98,851 6,558,221 12,142,727 Interfund transfers 958,149 (1,812,568) - Interplan transfers 10,273 658,407 3,076,245 Net increase (decrease) 1,067,273 5,404,060 15,218,972 Net assets available for benefits: Beginning of year 6,244,939 46,271,532 175,602,033 End of year $ 7,312,212 $51,675,592 $190,821,005 The accompanying notes are an integral part of these financial statements.
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN NOTES TO FINANCIAL STATEMENTS (1) Description of The Cincinnati Gas & Electric Company Savings Incentive Plan (SIP or the Plan) - The following is a brief description of the Plan. Participants should refer to the Plan Document and the related Trust Agreement, including the defined terms, for more complete information of the Plan's provisions. The Plan is a defined contribution plan covering all weekly or hourly paid employees of The Cincinnati Gas & Electric Company (CG&E), a subsidiary of Cinergy Corp., the employees of Union Light, Heat and Power Company, and Lawrenceburg Gas Company. The Plan is administered by the CG&E Benefits Committee and trusteed by Fidelity Management Trust Company. The administrative expenses are paid by CG&E. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Under the Plan, participants may contribute up to 15% of annual pretax compensation, as defined in the Plan. In addition, a participant may make optional contributions to the Plan which, when combined with salary deferrals, may not exceed 15% of base pay. Salary deferrals and optional contributions are subject to certain limitations. The salary deferrals and optional contributions are invested by the trustee, as directed by each participant, in one or more investment funds, including the Cinergy Common Stock Fund. The participant's employer contributes 60% of the first 5% of base pay contributed by each participant. An additional incentive match of up to 40% of the first 5% of base pay that a participant contributes may be contributed at the discretion of the employer's board of directors. For those employees who do not contribute to the Plan, the employers contribute an incentive match assuming the participant contributed 1% of base pay. All employer contributions must be 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 on the statement of net assets available for benefits 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. 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. Subject to certain limitations, employees may apply for loans from their salary deferral account balances. Such loans are reflected in the Participant Loan Fund in the accompanying financial statements. Interest on the loans is set at the prime rate plus 1/2% at the time of borrowing and are secured by the balance in the participant's account. Loans are repaid within 54 months through regular payroll deductions. (2) Significant Accounting Policies - The financial statements of the Plan are prepared under the accrual method of accounting. Investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. Cinergy common stock is valued at its quoted market price. Participant loans are valued at cost, which approximates market. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex- dividend date. Benefits are recorded when paid. Transfers of assets between the SIP and the CG&E Deferred Compensation and Investment Plan occur as a result of changes in employee status between the weekly and hourly paid classification and the executive, supervisory, administrative, and professional classification. Such transfers are reflected as interplan transfers in the statement of changes in net assets available for benefits. The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan Committee to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (3) Investment Options The investment options of the Plan are as follows: Participant contributions - Upon enrollment or re-enrollment, participants direct that their contributions, including any rollover contributions, be invested in one or more of the following investment options: * Fidelity Magellan Fund The Fidelity Magellan Fund invests mainly in equity securities of domestic, foreign, and multinational issuers of all sizes that offer potential for growth with the principal purpose of seeking maximum appreciation in value. * Fidelity Equity-Income Fund The Fidelity Equity-Income Fund invests mainly in income producing equity securities with the principal purpose of earning reasonable income while considering the potential for capital appreciation. * Fidelity Intermediate Bond Fund The Fidelity Intermediate Bond Fund invests mainly in income producing equity securities with the principal purpose of a moderate risk level and yield potential. * 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 $25 or less. * Fidelity Diversified International Fund The Fidelity Diversified International Fund invests primarily in stocks of companies located outside the U.S. that are included in the Morgan Stanley EAFE(R) index with the principal purpose of seeking out stocks that are undervalued compared to industry norms in their countries. * Fidelity 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' acceptance 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. (4) Federal Income Tax Status - The Internal Revenue Service has determined and informed the Plan by letter dated January 1995, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's legal counsel believe that the Plan is designed and is currently being operated in compliance with the applicable provisions of the IRC. (5) Investments - A participant may elect or change investment funds and/or the percentages in which contributions will be allocated at any time. The following investments exceed 5% of total net assets available for benefits at December 31, 1997 and 1996: 1997 1996 Cinergy Common Stock Fund $151,447,611 $145,251,721 Fidelity Equity-Income Fund 16,571,031 11,395,092 (6) Reconciliation of Financial Statements to Form 5500--The following is a reconciliation of Net Assets Available for Benefits per the financial statements to the Form 5500: December 31, 1997 1996 Net Assets per financial statements $190,821,005 $175,602,033 Amounts allocated to withdrawing participants (315,945) (6,474) Net assets per Form 5500 $190,505,060 $175,595,559 The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500: Year Ended December 31, 1997 Benefits paid to participants per financial statements $32,912,298 Add: Amounts allocated to withdrawing participants at December 31, 1997 315,945 Less: Amounts allocated to withdrawing participants at December 31, 1996 (6,474) Benefits paid to participants per Form 5500 $ 33,221,769 Amounts allocated to withdrawing participants are recorded on the Form 5500 for distributions that have been processed and approved for payment prior to December 31 but not yet paid as of that date (7) Plan Termination - Although it has not expressed any intent to do so, CG&E has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.
SCHEDULE I THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES December 31, 1997 Identity of Issuer, Borrower, Description of Investment, Including Maturity Date, Lessor, or Similar Party Rate of Interest, Collateral, and Par or Maturity Value Cost Current Value * Cinergy Corp. Common Stock $ 83,204,574 $151,447,611 * Fidelity Investments Magellan Fund 7,524,375 8,344,841 * Fidelity Investments Equity Income Fund 12,690,962 16,571,031 * Fidelity Investments Intermediate Bond Fund 1,654,960 1,643,579 * Fidelity Investments Low-Priced Stock Fund 1,411,152 1,384,880 * Fidelity Investments Diversified International Stock Fund 423,667 405,471 * Fidelity Investments Retirement Money Market Fund 3,080,090 3,080,090 * Various plan participants Participant loans (interest rates ranging from 5.25-9%) 7,312,212 7,312,212 Total assets held for investment purposes $117,301,992 $190,189,715 * Denotes a party-in-interest
SCHEDULE II THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN Sponsor EIN: 31-0240030 Administration EIN: 31-1070386 Plan Number: 002 Item 27d - Schedule of Reportable Transactions For the Year Ended December 31, 1997 Total Total Number of Number of Purchase Selling Price Net Gain Identity of Securities Purchases Sales Price (A) (A) on Sales Cinergy Corp. Common 253 249 $23,898,826 $39,199,099 $16,421,165 Stock Fund Fidelity Equity-Income Fund 227 176 6,276,448 3,820,825 730,278 Fidelity Retirement Money Market Fund 187 172 9,768,940 12,563,590 - (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. THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE PLAN (Name of Plan) By /s/JERRY W. LIGGETT Jerry W. Liggett Plan Administrator June 22, 1998 Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated June 22, 1998 included in the Annual Report on Form 11-K for the year ended December 31, 1997 of The Cincinnati Gas & Electric Company Savings Incentive Plan, into Cinergy Corp.'s previously filed Registration Statement File No. 33-55293. ARTHUR ANDERSEN LLP Cincinnati, Ohio June 22, 1998 -----END PRIVACY-ENHANCED MESSAGE-----