UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------------------------
FORM 11-K
(Mark One)
[X] Annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 2005
OR
[ ] Transition report pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the transition period from _____ to _____
Commission File Number 1-11377
CINERGY CORP. NON-UNION EMPLOYEES' 401(k) PLAN./
CINERGY CORP. NON-UNION EMPLOYEES'
401(k) PLAN
139 East Fourth Street
Cincinnati, Ohio 45202
(Full title of the Plan and the address of the Plan,
if different from that of the issuer named below)
CINERGY CORP.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name of issuer of the common stock issued pursuant to the
Plan and the address of its principal executive office)
CINERGY CORP.
NON-UNION EMPLOYEES' 401(k) Plan
TABLE OF CONTENTS
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Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of
December 31, 2005 and 2004 2
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 2005 and 2004 3
Notes to Financial Statements 4-9
SUPPLEMENTAL SCHEDULE-- 10
Form 5500, Schedule H, Part IV, Line 4i--Schedule of Assets
(Held at End of Year) as of December 31, 2005 11
NOTE: All other schedules required by Section 2520.103-10 of the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974
have been omitted because they are not applicable.
SIGNATURE S-1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM E-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Benefits Committee of Cinergy Corp.
Cincinnati, Ohio
We have audited the accompanying statements of net assets available for benefits
of the Cinergy Corp. Non-Union Employees' 401(k) Plan (the "Plan") as of
December 31, 2005 and 2004, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2005 and 2004, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2005 is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is 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. This schedule is the responsibility of
the Plan's management. Such schedule has been subjected to the auditing
procedures applied in our audit of the basic 2005 financial statements and, in
our opinion, is fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
Cincinnati, Ohio
June 23, 2006
CINERGY CORP.
NON-UNION EMPLOYEES' 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004
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ASSETS 2005 2004
CURRENT ASSETS:
Investments--at fair value (see Notes 3 and 4):
Plan interest in Cinergy Corp.
Common Stock--Master Trust $ 215,588,648 $ 198,406,071
Mutual funds 282,332,080 256,619,485
Interest-bearing cash 21,449,071 25,355,579
Common/collective trust 14,458,875 10,437,800
Loans to participants 8,942,197 9,002,793
----------- -----------
Total investments 542,770,871 499,821,728
Employer's contribution receivable 3,729,863 2,060,628
--------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $ 546,500,734 $ 501,882,356
================ ===============
See notes to financial statements.
CINERGY CORP.
NON-UNION EMPLOYEES' 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2005 AND 2004
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2005 2004
ADDITIONS--
Additions to net assets attributed to:
Investment income:
Plan interest in Cinergy Corp. Common Stock
Master Trust (see Note 4) $ 14,140,073 $ 22,881,831
Net appreciation in fair value of
investments 9,438,938 18,557,006
Interest and dividends 12,479,189 7,813,135
Participant loan interest income 520,807 461,851
------------ -----------
Net investment income 36,579,007 49,713,823
------------ ----------
Contributions:
Participant 22,057,105 20,224,831
Employer 13,022,275 10,914,229
Rollover 508,951 1,074,121
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Total contributions 35,588,331 32,213,181
----------- -----------
Total additions 72,167,338 81,927,004
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DEDUCTIONS:
Deductions from net assets attributed to:
Benefits paid to participants (29,928,010) (27,085,348)
Deemed distribution of loans to participants (168,970) (29,743)
Dividends paid in cash (460,828) (484,116)
Administrative fees (40,229) (44,009)
----------- -----------
Total deductions (30,598,037) (27,643,216)
Net increase prior to transfers 41,569,301 54,283,788
Interplan transfers (see Note 2) 3,049,077 2,969,557
----------- -----------
44,618,378 57,253,345
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 501,882,356 444,629,011
----------- -----------
End of year $ 546,500,734 $ 501,882,356
================ ===============
See notes to financial statements.
CINERGY CORP.
NON-UNION EMPLOYEES' 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
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1. PLAN DESCRIPTION
The following description of the Cinergy Corp. Non-Union Employees' 401(k)
Plan (the "Plan") provides only general information. Participants should
refer to the Plan Document for a more complete description of the Plan's
provisions.
General--The Plan is a defined contribution plan covering non-union
employees of Cinergy Corp. and subsidiaries (collectively, the "Company")
who meet minimum age requirements. The Plan is administered by the Cinergy
Corp. Benefits Committee and trusteed by the Fidelity Management Trust
Company ("Fidelity") and U.S. Trust Company of California N.A. ("US
Trust"). The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA"), as amended. A portion of
administrative expenses of the Plan are paid by the Company.
Contributions--The Company automatically enrolls new full time employees
eligible for the Plan at a 3% deferral rate. The contributions made to the
Plan on the employee's behalf will be invested in one or more funds
selected in accordance with procedures established by the Plan
administrator. If an employee chooses not to participate, Fidelity, the
recordkeeper must be contacted by the employee to change the deferral rate
to 0%.
Under the Plan, the pre-tax contribution limit is 50% of annual base
compensation up to the Internal Revenue Service ("IRS") maximum each year.
In addition, a participant may make after-tax contributions up to 15% of
annual base compensation. Pre-tax and after-tax contributions are subject
to certain limitations. The pre-tax and after-tax contributions are
invested by the trustee, as directed by each participant, in one or more
investment funds, including the Cinergy Corp. Common Stock Master Trust.
The Company matches 100% of the first 3% of pre-tax contributions from
base pay plus 50% of the next 2% of pre-tax contributions from base pay.
An additional incentive match will be a maximum of 1% of base pay based
upon meeting corporate goals. Only employees making pre-tax contributions
will receive the incentive match. All employer contributions are initially
invested by the trustee in the Cinergy Corp. Common Stock Master Trust.
The Company, at its discretion can make a profit sharing contribution for
eligible employees to the Plan for the plan year in an amount determined
by the Company. In 2005 and 2004, the amount of the Deferred Profit
Sharing contribution was $2,052,729 and $1,015,036, respectively.
Participants who are age 50 or older by the end of the year, may
contribute an additional pre-tax amount over and above the IRS limits each
year. For 2005 and 2004, the IRS allowed participants over the age of 50
to contribute up to an additional $4,000 and $3,000 over and above the
$14,000 and $13,000 pre-tax limit, respectively. Cinergy will not provide
a base company match or incentive match on these additional contributions.
Vesting--Participants are immediately vested in all contributions and
earnings thereon, with the exception of Deferred Profit Sharing
Contributions made by the Company which are vested after three years of
service. However, the dividends on the Cinergy Corp. common stock on
Deferred Profit Sharing contributions are vested immediately.
Participant Accounts--Each participant's account is credited with the
participant's contribution and allocation of the Company's contribution
and plan earnings. Allocations are based on the participant's account
balance or contribution percentage as defined in the Plan Document. The
benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
A participant may elect or change investment funds and/or the contribution
allocation percentage among funds at any time.
Payments 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 $1,000 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 $1,000. Active participants
are also eligible to apply to the Plan administrator for "hardship"
withdrawals from their pre-tax account in accordance with Plan provisions.
Participant Loans--Subject to certain limitations, participants may apply
for loans from their pre-tax account balances. Interest on the loan is set
at the prime rate plus 1% at the time of borrowing, and the loans 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
Basis of Accounting--The accompanying financial statements of the Plan are
prepared on an accrual basis.
Investment Valuation and Income Recognition--Investments of the Plan 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. Company 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, the Cinergy Corp. Union Employees'
401(k) Plan, and the Cinergy Corp. Union Employee's Savings Incentive Plan
occur as a result of a change in employee status between the union
classification and the exempt and non-exempt classification. Such
transfers are reflected as interplan transfers in the statement of changes
in net assets available for benefits.
Use of Estimates--The preparation of financial statements in conformity
with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and changes therein, and
disclosure of contingent assets and liabilities at the date of the
financial statements. Actual results could differ from those estimates.
Payments of Benefits--Benefit payments are recorded when paid.
3. NON-PARTICIPANT DIRECTED INVESTMENTS
Effective October 1, 2005, the Plan was amended to allow participants to
transfer funds from the Cinergy Common Stock Master Trust to other
investments options at any time. Therefore, all investments became
participant directed. Information about the net assets and the significant
components of the changes in net assets relating to the non-participant
directed investments in 2004 is as follows:
December 31,
2004
Net assets--Cinergy Corp. Common Stock Master Trust $140,657,551
============
Year Ended
December 31,
2004
Changes in net assets:
Employer contributions $ 10,856,973
Dividends 6,096,613
Net appreciation 9,570,682
Benefits paid to participants (5,738,665)
Transfers to participant directed investments (7,874,981)
Interplan transfers 737,275
--------------
$ 13,647,897
4. INVESTMENTS
The Plan invests in Cinergy Corp. Common Stock Master Trust established
by the Company for certain of the Plans' sponsor's defined contribution
401(k) plans. Cinergy Corp. also sponsors the following plans, whose
investments are held in the Master Trust described above:
The Cinergy Corp. Union Employees' 401(k) Plan, which covers union
employees of Cinergy Corp.'s subsidiaries represented by the
International Brotherhood of Electrical Workers, Local 1393.
The Cinergy Corp. Union Employees' Savings Incentive Plan, which
covers union employees of Cinergy Corp. and subsidiaries represented
by The Utility Workers Union, Local 600, The International
Brotherhood of Electrical Workers, Local 1347, The United
Steelworkers of America, Local 12049 and Local 14214, The Paper,
Allied-Industrial, Chemical and Energy Workers, Local 4-1, The
Employees' Representation Association, the Unite, Local 2024, and
Unite, Local 1093.
The Plan has an undivided interest in the Master Trust.
Fidelity Management Trust Company in the name of US Trust Company of
California N.A. as Trustee holds the Plan interest in Cinergy Corp. Common
Stock Master Trust. A summary of the net assets of the Master Trust as of
December 31, 2005 and 2004 is as follows:
2005 2004
Cash and cash equivalents $ 3,421,124 $ 4,823,702
Cinergy Corp. common stock 462,775,838 428,963,584
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Total investments 466,196,962 433,787,286
2005 2004
Receivables:
Accrued interest 11,810 6,532
Securities sold 1,705,296 41,713
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Total assets 467,914,068 433,835,531
Liabilities--securities purchased (109,812) (64,030)
------------ ----------
Net assets of Cinergy Corp.
Common Stock Master Trust $467,804,256 $433,771,501
============== =============
Allocations of the Plan interest in Cinergy Corp. Common Stock Master
Trust to participating plans as of December 31 are as follows:
2005 2004
Amount Percent Amount Percent
Cinergy Corp. Union Employees'
401(k) Plan $59,234,427 13% $ 56,024,465 13%
Cinergy Corp. Non-Union Employees'
401(k) Plan 215,588,648 46 198,406,071 46
Cinergy Corp. Union Employees'
Savings Incentive
Plan 192,981,181 41 179,340,965 41
------------- ------------
$467,804,256 100% $433,771,501 100%
============= ==============
A summary of income of the Cinergy Corp. Common Stock Master Trust as of
December 31 is as follows:
2005 2004
Cinergy Corp. Common Stock Master Trust:
Interest and dividends $20,468,016 $19,381,810
Net appreciation in fair value of 10,401,289 30,212,573
investments ------------ ------------
Net Trust investment income $30,869,305 $49,594,383
============ ============
The Plan's investments (excluding the Cinergy Corp. Common Stock Master
Trust, which is detailed above), which includes gains and losses on
investments bought and sold, as well as held during the year, appreciated
in value during the year as follows:
2005 2004
Mutual funds 8,914,887 $17,897,349
Common/collective trust 524,051 659,657
---------- ------------
Net appreciation in fair value
of investments $9,438,938 $18,557,006
========== =============
Allocations of income in Cinergy Corp. Common Stock Master Trust to
participating plans as of December 31 are as follows:
2005 2004
Amount Percent Amount Percent
Cinergy Corp.
Union Employees' $3,983,898 13% $ 6,427,198 13%
401(k) Plan
Cinergy Corp.
Non-Union Employees'
401(k) Plan 14,140,073 46 22,881,831 46
Cinergy Corp.
Union Employees'
Savings Incentive
Plan 12,745,334 41 20,285,354 41
------------ ------------
$30,869,305 100% $49,594,383 100%
============ =============
The fair value of individual investments that represent 5% or more of the
Plan's net assets available for benefits as of December 31 are as
follows:
2005 2004
*Plan interest in Cinergy Corp. Common Stock
Master Trust $215,588,648 $198,406,071
JP Morgan Prime Money Market Instrument 25,355,579
*Fidelity Magellan Fund 62,546,414 68,328,909
*Fidelity Equity Income Fund 66,421,170 64,467,467
*Fidelity Low-Priced Stock Fund 37,563,886 34,368,566
*Fidelity Diversified International
Stock Fund 31,537,241
*Denotes a party-in-interest.
5. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Plan by
letter dated December 9, 2002, 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 believes the Plan is designed and
being operated in compliance with the applicable requirements of the IRC.
Therefore, no provision for income taxes has been recorded in the
accompanying financial statements.
6. 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. Any unvested
amounts in the participant's account may be forfeited upon termination of
the Plan.
7. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Fidelity.
Fidelity is the Trustee for all Plan investments, except for the Plan's
interest in Cinergy Corp. Common Stock Master Trust, as defined by the
Plan and therefore, these transactions qualify as party-in-interest
transactions. US Trust is the Trustee for the Plan's interest in the
Cinergy Corp. Common Stock Master Trust, which holds common stock of the
Company as defined by the Plan and therefore, these transactions qualify
as party-in-interest transactions.
8. INVESTMENT RISK
Investment securities, in general, are exposed to various risks, such as
interest rate, credit and overall market volatility risks. Further, due to
the level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect
the amounts reported in the accompanying statements of net assets
available for benefits.
9. PLAN CHANGES
Effective January 1, 2005, the Plan was amended as follows:
Clarified that an Eligible Employee did not include nonresident
aliens with no United States source income,
Provided that individuals who were terminated in connection with the
transition of certain information technology-related responsibilities
from the Company will be entitled to receive a profit-sharing
contribution for 2004 even if they are not employed by the Company
and its affiliates on December 31, 2004,
Clarified the Plan's disability provisions,
Reduced the amount to which an involuntary cash-out applies from
$5,000 to $1,000 and provided that such determination shall
be made after taking into account rollover contributions, and
Clarified the Plan's ERISA Section 404(c) provisions.
Effective October 1, 2005, the Plan was amended to allow employees to
transfer funds out of the Cinergy Corp. Common Stock Master Trust to other
investment options at any time.
The Plan was also amended to clarify that it will no longer be a 401(k)
safe harbor plan for plan years beginning after December 31, 2005.
10. SUBSEQUENT EVENT
On April 3, 2006, the merger of Cinergy Corp. and Duke Energy was
finalized. Shares of Cinergy common stock within the Plan were exchanged
for shares of Duke Energy common stock. Effective April 3, 2006, the
Cinergy Stock Fund was renamed the Duke Stock Fund.
******
SUPPLEMENTAL SCHEDULE
CINERGY CORP.
NON-UNION EMPLOYEES' 401(k) PLAN
EIN: 31-1385023
PLAN NUMBER: 102
SCHEDULE H, PART IV, LINE 4i--SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2005
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Identity of Issuer, Description of Investment, Including
Borrower, Lessor, Maturity Date, Rate of Interest, Current
or Similar Party Collateral, and Par or Maturity Value Value
*Fidelity Investments Magellan Fund $62,546,415
*Fidelity Investments Equity Income Fund 66,421,170
*Fidelity Investments U.S. Bond Index Fund 21,215,601
*Fidelity Investments Diversified International Stock Fund 31,537,241
*Fidelity Investments Low-Priced Stock Fund 37,563,886
*Fidelity Investments Freedom Income Fund 1,487,380
*Fidelity Investments Freedom 2000 Fund 1,495,954
*Fidelity Investments Freedom 2010 Fund 6,840,133
*Fidelity Investments Freedom 2020 Fund 6,770,625
*Fidelity Investments Freedom 2030 Fund 3,720,143
*Fidelity Investments Freedom 2040 Fund 1,099,609
*Fidelity Investments Blue Chip Fund 13,290,686
TCW Asset Management TCW Galileo Value Opportunity Fund 2,318,204
Rainier Investments Rainier Small/Midcap I 26,025,033
----------
Total investments in mutual funds 282,332,080
-----------
*Cinergy Corp. Common
Stock Master Trust Plan interest in Master Trust 215,588,648
JP Morgan Investments JP Morgan Prime Money Market Instrument 21,499,071
*Fidelity Investments Fidelity Managed Income Portfolio 2,535,742
*Fidelity Investments US Equity Index Pool 11,923,133
*Various Plan Participants Participant Loans (interest rates
ranging from 6.25% to 7.75% and
maturities through July 2, 2010) 8,942,197
*Denotes a party-in-interest.
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 CORP. NON-UNION EMPLOYEES'
401(K) PLAN
By /s/ Darlene Glesenkamp
Plan Administrator
EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No.
333-72898 on Form S-8 of our report dated June 23, 2006, relating to the
financial statements of the Cinergy Corp. Non-Union Employees' 401(k) Plan
appearing in this Annual Report on Form 11-K of the Cinergy Corp. Non-Union
Employees' 401(k) Plan for the year ended December 31, 2005.
Cincinnati, Ohio
June 27, 2006