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 (FEE REQUIRED) for the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED) for the transition period from
____________________ to ____________________
COMMISSION FILE NUMBER 1-11377
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
(Full title of the plan)
CINERGY CORP.
(Name of issuer of the securities held pursuant to the plan)
139 East Fourth Street
Cincinnati, OH 45202
(Address of principal executive offices)
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Report of Independent Public Accountants
Statement of Financial Condition as of
December 31, 1994
Statement of Financial Condition as of
December 31, 1993
Statement of Income and Other Changes in Plan Equity
for the Year Ended December 31, 1994
Notes to Financial Statements
Financial Statement Schedules (As Required By The Employee
Retirement Income Security Act)
Schedule I - Schedule of Assets Held For Investment
Purposes - December 31, 1994
Schedule II - Schedule of Reportable Transactions
for the year ended December 31, 1994
(b) Exhibits
1) Consent of Independent Public Accountants
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of
the PSI Energy, Inc. Union
Employees' 401(k) Savings Plan:
We have audited the accompanying statements of financial condition of the PSI
ENERGY, INC. UNION EMPLOYEES' 401(k) SAVINGS PLAN as of December 31, 1994 and
1993, and the statement of income and other changes in plan equity for the
year ended December 31, 1994. These financial statements and the schedules
referred to below are the responsibility of the Plan Administrator. 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 the Plan Administrator, 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 financial position of the Plan as of December 31,
1994 and 1993, and the results of its operations and changes in plan equity
for the year ended December 31, 1994, 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. 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. These supplemental
schedules 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
Indianapolis, Indiana,
June 2, 1995.
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1994
Participant Directed
Aggressive Money
Equity Conservative Balanced Bond Market Participant
Fund Equity Fund Fund Fund Fund Stock Fund Loan Fund
ASSETS
Investments
(Schedule I) $5,005,390 $2,705,679 $1,653,250 $335,860 $4,112,304 $ 9,159,536 $ 697,594
Contributions
receivable (Note E):
Participants 45,088 21,642 16,490 3,221 26,538 15,845 -
PSI Energy, Inc. - - - - - - -
45,088 21,642 16,490 3,221 26,538 15,845 -
NET ASSETS $5,050,478 $2,727,321 $1,669,740 $339,081 $4,138,842 $9,175,381 $ 697,594
PLAN EQUITY $5,050,478 $2,727,321 $1,669,740 $339,081 $4,138,842 $9,175,381 $ 697,594
<FN>
The accompanying notes are an integral part of these financial statements.
Page 1 of 2
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1994
Non-Participant
Directed
Total
Stock Fund Funds
ASSETS
Investments
(Schedule I) $5,440,693 $29,110,306
Contributions
receivable (Note E):
Participants - 128,824
PSI Energy, Inc. 672,588 672,588
672,588 801,412
NET ASSETS $6,113,281 $29,911,718
PLAN EQUITY $6,113,281 $29,911,718
<FN>
The accompanying notes are an integral part of these financial statements.
Page 2 of 2
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1993
Participant Directed
Aggressive Money
Equity Conservative Balanced Bond Market Participant
Fund Equity Fund Fund Fund Fund Stock Fund Loan Fund
ASSETS
Investments
(Schedule I) $3,883,202 $2,196,279 $1,186,517 $297,309 $3,692,771 $9,362,484 $596,482
Contributions
receivable (Note E):
Participants 35,108 19,091 10,836 3,147 27,450 13,788 -
PSI Energy, Inc. - - - - - - -
35,108 19,091 10,836 3,147 27,450 13,788 -
NET ASSETS $3,918,310 $2,215,370 $1,197,353 $300,456 $3,720,221 $9,376,272 $596,482
PLAN EQUITY $3,918,310 $2,215,370 $1,197,353 $300,456 $3,720,221 $9,376,272 $596,482
<FN>
The accompanying notes are an integral part of these financial statements.
Page 1 of 2
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
STATEMENT OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1993
Non-Participant
Directed
Total
Stock Fund Funds
ASSETS
Investments
(Schedule I) $3,562,705 $24,777,749
Contributions
receivable (Note E):
Participants - 109,420
PSI Energy, Inc. 531,579 531,579
531,579 640,999
NET ASSETS $4,094,284 $25,418,748
PLAN EQUITY $4,094,284 $25,418,748
<FN>
The accompanying notes are an integral part of these financial statements.
Page 2 of 2
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
STATEMENT OF INCOME AND OTHER CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1994
Participant Directed
Aggressive Money
Equity Conservative Balanced Bond Market
Fund Equity Fund Fund Fund Fund
Investment income
Interest $ - $ - $ - $ - $ -
Dividends 166,331 243,236 61,237 22,901 153,050
Net realized and unrealized
depreciation of
assets (252,438) (243,886) (166,997) (31,914) -
(86,107) (650) (105,760) (9,013) 153,050
Contributions
(Notes D and E)
Participants 1,128,368 562,425 416,718 84,464 704,042
PSI Energy, Inc. - - - - -
Rollovers 12 - 6 - -
Transfers (to)/from
Employees' 401(k)
Savings Plan, net (502) 4,379 (144) 149 2,694
Withdrawals (44,898) (38,540) (53,993) (5,497) (93,633)
1,082,980 528,264 362,587 79,116 613,103
Transfers between
funds 135,295 (15,663) 215,560 (31,478) (347,532)
Income and other changes
in Plan equity for
the year 1,132,168 511,951 472,387 38,625 418,621
Plan equity at beginning
of the year 3,918,310 2,215,370 1,197,353 300,456 3,720,221
Plan equity at end of
the year $5,050,478 $2,727,321 $1,669,740 $339,081 $4,138,842
<FN>
The accompanying notes are an integral part of these financial statements.
Page 1 of 2
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
STATEMENT OF INCOME AND OTHER CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1994
Non-Participant
Participant Directed Directed
Participant Total
Stock Fund Loan Fund Stock Fund Funds
Investment income
Interest $ - $ 38,719 $ - $ 38,719
Dividends 443,012 - 221,777 1,311,544
Net realized and unrealized
depreciation of
assets (828,526) - (219,866) (1,743,627)
(385,514) 38,719 1,911 (393,364)
Contributions
(Notes D and E)
Participants 406,056 - - 3,302,073
PSI Energy, Inc. - - 2,074,513 2,074,513
Rollovers 6 - - 24
Transfers (to)/from
Employees' 401(k)
Savings Plan, net 2,782 - 3,558 12,916
Withdrawals (204,993) (11,623) (50,015) (503,192)
203,851 (11,623) 2,028,056 4,886,334
Transfers between
funds (19,228) 74,016 (10,970) -
Income and other changes
in Plan equity for
the year (200,891) 101,112 2,018,997 4,492,970
Plan equity at beginning
of the year 9,376,272 596,482 4,094,284 25,418,748
Plan equity at end of
the year $9,175,381 $697,594 $ 6,113,281 $29,911,718
<FN>
The accompanying notes are an integral part of these financial statements.
Page 2 of 2
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Note A - Plan Description:
The PSI Energy, Inc. Union Employees' 401(k) Savings Plan (Plan) is a
defined contribution plan covering union employees of PSI Energy,
Inc. (Energy) who meet minimum age and service requirements. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974. The administrative expenses of the Plan are
paid by Energy. Further details of the Plan are provided in
the Summary Plan Description which has been distributed to all Plan
participants.
The Trustee of the Plan is U.S. Trust Company of California, N.A.
Note B - Accounting Principles:
The accounts of the Plan are maintained on an accrual basis. Assets
of the Plan are valued at current market value. Requests for
withdrawal received but not yet processed by the Plan have not been
reflected in the financial statements and total $2,600 for 1994 and
$16,983 for 1993.
The 1993 financial statements have been restated to conform to the
presentation of the 1994 financial statements.
Note C - Income Tax Status:
On November 30, 1994 Energy filed with the Internal Revenue Service
an initial request for determination that the Plan is a qualified
plan under Section 401(a) and the trust is exempt from Federal income
tax under Section 501(a) of the Internal Revenue Code of 1986 (Code).
Energy believes the Plan is currently operating as a qualified plan
under Section 401(a), and Energy intends to make any additional
amendments to the Plan which may be required by the Internal Revenue
Service as a condition to the issuance of such a determination
letter. The discussion of Federal income tax effect to participants
that follows assumes a favorable determination by the Internal
Revenue Service regarding qualification of the Plan.
Federal Income Tax Effect to Participants
a. General
Qualification of the Plan under Section 401(a) of the Code
means that a participant is not subject to Federal income taxes on
amounts contributed to the participant's Deferred Compensation
Account (pre-tax participant contributions), Company Matching Account
(Energy contributions) and Incentive Matching Account (Energy
contributions based on meeting certain corporate goals), or earnings
thereon, until such amounts are distributed to the participant or to
a beneficiary in the event of the participant's death. Contributions
to the participant's Deferred Compensation Account are subject to
Federal employment (FICA) taxes and may be subject to certain state
and local income taxes.
b. Contributions to Participants' Accounts
Contributions to a participant's Deferred Compensation
Account reduce the amount of compensation subject to Federal income
tax to the extent of the contributions. The Code limits the average
of the percentages of annual compensation deferred under the Plan by
"highly compensated employees" to a certain multiple of the average
of the percentages of annual compensation deferred by eligible
employees who are not "highly compensated employees." The total of a
participant's Deferred Compensation Contributions under the Plan
plus, in the case of a participant who during the year was also
employed by an organization other than Energy, all similar
contributions made by or for the participant under a comparable plan
maintained by such other employer cannot exceed $7,000, as adjusted
under Code Section 415(g)(5) beginning January 1, 1988 (the
applicable amount for 1994 is $9,240). The Plan also permits
participants to make After-Tax Contributions to the Plan. The sum
of all contributions (including contributions to a participant's
Deferred Compensation Account, Company Matching Account, Incentive
Matching Account and After-Tax Contribution Account under the Plan)
to all qualified defined contribution plans and qualified defined
benefit plans maintained by Energy cannot exceed the lesser of (i)
25% of the participant's earnings for the plan year or (ii) $30,000
or, if greater, one-fourth of the dollar limitation then in effect
pursuant to Code Section 415(d) or allowable under Code Section
415(c)(6).
c. Penalty Tax on Distributions Before Age 59 1/2
If, prior to age 59 1/2, a distribution is received from
the participant's Deferred Compensation Account, Company Matching
Account or Incentive Matching Account, such distribution is taxed as
ordinary income and may be subject to an additional 10% penalty tax
unless one of the statutory exceptions to such penalty tax applies.
Similarly, distributions prior to age 59 1/2 from a participant's
After-Tax Contribution Account must include a prorated portion of
earnings. Such earnings are taxed as ordinary income and may be
subject to the 10% penalty tax unless one of the statutory exceptions
to the penalty tax applies. Distributions made after age 59 1/2 from
a participant's Deferred Compensation Account, Company Matching
Account or Incentive Matching Account are taxed as ordinary income.
Distributions made after age 59 1/2 from a participant's After-Tax
Contribution Account must include a prorated portion of earnings and
such earnings are taxed as ordinary income.
d. Distribution Upon Disability or Termination of
Employment
The Plan provides that distribution upon disability,
retirement, death, or termination of employment may be made in a lump
sum or in a series of equal annual installments over a period not to
exceed the lesser of 10 years, the participant's life expectancy, or
the joint life expectancy of the participant and the participant's
beneficiary. If the distribution is made in a lump sum, the entire
amount distributed from a participant's Deferred Compensation
Account, Company Matching Account or Incentive Matching Account, or
the amount of earnings distributed from the After-Tax Contribution
Account, may qualify for special rules applicable to lump sum
distributions. Otherwise, such amount is taxed as ordinary income.
The qualifying amount of the lump sum distribution may be eligible in
certain circumstances for 5-year or 10-year averaging. If a lump sum
distribution from the Plan includes shares of CINergy Corp. (CINergy)
common stock, taxation of such distribution is deferred until the
recipient makes a taxable disposition of the shares.
If the distribution of a participant's Deferred
Compensation Account, Company Matching Account or Incentive Matching
Account is made in installments, then each payment is taxed as
ordinary income. If the distribution of a participant's After-Tax
Contribution Account is made in installments, then the portion of
each payment representing earnings is taxed as ordinary income. If
an installment payment includes shares of CINergy common stock,
taxation of such distribution is deferred until the recipient makes a
taxable disposition of the shares.
e. Rollover of a Distribution
If a distribution is made in a lump sum, the participant
may, under certain circumstances, roll over to a qualified employee
benefit trust described in Section 401(a) of the Code or an
individual retirement account described in Section 408 of the Code
the entire amount distributed from his Deferred Compensation Account,
Company Matching Account or Incentive Matching Account, or the amount
of earnings distributed from his After-Tax Contribution Account. If
a participant's spouse receives a lump sum distribution as a result
of the participant's death, the spouse may defer taxation of the
entire amount distributed from the participant's Deferred
Compensation Account, Company Matching Account or Incentive Matching
Account, or the amount of earnings distributed from the participant's
After-Tax Contribution Account, to the extent that such amount is
contributed to an individual retirement account in accordance with
applicable law.
Note D - Investment Programs:
The investment programs of the Plan are as follows:
Participant contributions - Upon enrollment or re-enrollment,
participants shall direct that their contributions, including any
rollover contributions, be invested in one or more of the following
investment options:
- Aggressive Equity Fund
The Aggressive Equity Fund invests in equities, bonds,
governmental notes or instruments, or mutual funds or pooled
funds investing in such securities, as determined by Energy, with
the principal purpose of seeking maximum appreciation in value.
- Conservative Equity Fund
The Conservative Equity Fund invests in equities, bonds,
governmental notes or instruments, or mutual funds or pooled
funds investing in such securities, as determined by Energy, with
the principal purpose of matching or exceeding the performance of
a recognized index of stocks or securities.
- Balanced Fund
The Balanced Fund invests in equities, bonds and short-term
instruments, as determined by Energy, with the principal purpose
of reducing risk over the long term by diversifying holdings
among the three asset groups and within the groups.
- Bond Fund
The Bond 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.
- Stock Fund
The Stock Fund invests primarily in common stock of CINergy
Corp., the parent company of Energy. (See Note H)
- Money Market Fund
The 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.
Energy contributions - Energy provides a discretionary matching
contribution as determined by Energy's Board of Directors. The
matching percentage and the maximum percentage of compensation to be
used in the calculation of the matching contributions will be
determined by Energy's Board of Directors with respect to each plan
year. Matching contributions are vested immediately. All Energy
contributions are invested in the Stock Fund; however, participants
may elect to transfer funds from the Stock Fund into another fund as
described above, if the Stock Fund investments were contributed prior
to January 1, 1992. On January 1, 1992, Energy's Board of Directors
approved an increase in the matching contribution and also approved
an incentive matching contribution if Energy meets certain goals
established by the Board. The matching and incentive matching funds
contributed after January 1, 1992 must remain in the Stock Fund until
the participant reaches age 55 and are shown on the Statement of
Financial Condition and Statement of Income and Other Changes in
Plan Equity as "Non-Participant Directed" funds.
The number of Plan participants invested in each fund was as follows:
December 31,
1994 1993
Aggressive Equity Fund 969 885
Conservative Equity Fund 649 623
Balanced Fund 387 302
Bond Fund 155 161
Money Market Fund 735 774
Stock Fund 1601 1,512
Note E - Contributions Receivable:
Amounts include investments made in the month subsequent to the date
of the financial statements of $185,346 and $159,326 for 1994 and
1993, respectively, and the incentive matching contribution of
$616,066 and $481,673 for 1994 and 1993, respectively.
Note F - Party-in-Interest and Reportable Transactions:
Transactions in CINergy stock qualify as party-in-interest
transactions, since CINergy Corp. is the employer of employees
covered by the Plan. In addition, all transactions involving the
mutual funds are party-in-interest transactions, since Fidelity
Investments manages the funds and is the recordkeeper for the Plan.
See Schedule II for a Summary of Reportable Transactions.
Note G - Participant Loan Fund:
The Plan permits participants to borrow from their Deferred
Compensation Account and ESOP rollover account subject to Department
of Labor regulations. A participant may have up to three loans
outstanding at any one time. Participants select the repayment
period, not to exceed 54 months. The annual interest rate is
determined using comparable factors applied by commercial banks in
making loan decisions. The maximum amount available for a loan is
fifty percent (50%) of the eligible account balances to a maximum of
$50,000. The amount used to secure a loan is 50% of the eligible
account balances.
Note H - Reorganization of Plan Sponsor's Parent:
In October 1994, PSI Resources, Inc. (Resources), parent company of
Energy, and The Cincinnati Gas & Electric Company effected a
corporate reorganization which resulted in a newly formed corporation
named CINergy Corp. (CINergy). CINergy is a registered holding
company under the Public Utility Holding Company Act of 1935. Energy
is an operating subsidiary of CINergy. Pursuant to the
reorganization, each outstanding share of common stock of Resources
in the Stock Fund was exchanged for 1.023 shares of CINergy common
stock, $.01 par value.
Note I - Reconciliation of Financial Statements to Form 5500:
The following is a reconciliation of Plan equity per the financial
statements to net assets per the Form 5500:
December 31, 1994
Plan equity per financial statements $29,911,718
Amounts allocated to withdrawing
participants (2,600)
Net assets per Form 5500 $29,909,118
The following is a reconciliation of benefits paid to participants
per the financial statements to the Form 5500:
Year ended
December 31, 1994
Withdrawals per financial statements $ 503,192
Add: Amounts allocated to withdrawing
participants at December 31, 1994 2,600
Benefits paid to participants per Form 5500 $ 505,792
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.
Schedule I
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
EIN 35-0594457
PLAN 101
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1994
Approximate
Market Value
Investment Shares Cost Amount %
Aggressive Equity Fund
*Fidelity Magellan Fund 74,930.982 $ 4,972,133 $ 5,005,390 17.2
Conservative Equity Fund
*Fidelity Equity-
Income Fund 88,132.880 2,603,665 2,705,679 9.3
Balanced Fund
*Fidelity Asset Manager
Fund 119,540.845 1,745,089 1,653,250 5.7
Bond Fund
*Fidelity U.S. Bond
Index Fund 33,687.069 364,004 335,860 1.1
Money Market Fund
*Fidelity Retirement
Money Market - 4,112,304 4,112,304 14.1
Stock Fund
*CINergy Corp.
Common Stock,
$.01 Par Value
- Participant Directed 389,767.462 6,816,670 9,159,536 31.5
- Non-Participant Directed 231,518.870 4,860,617 5,440,693 18.7
Participant Loan Fund
Interest 5.35%-6.95% - 697,594 697,594 2.4
TOTAL INVESTMENTS $26,172,076 $29,110,306 100.0
*Denotes a party-in-interest transaction
Schedule II
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
EIN 35-0594457
PLAN 101
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
Current Value Net
Number of Purchase Selling Book Value of Asset on Realized
Transactions Price Price of Asset Sold Transaction Date Gain/(Loss)
Purchases
CINergy Stock Fund 15 $14,655,721 $ - $ - $14,655,721 $ -
PSI Stock Fund 51 1,097,867 - - 1,097,867 -
Fidelity Magellan Fund 94 1,374,723 - - 1,374,723 -
Fidelity Retirement Money
Market Fund 88 1,073,886 - - 1,073,886 -
Sales
CINergy Stock Fund 8 - 55,492 50,486 55,492 5,006
PSI Stock Fund 39 - 14,023,056 14,130,567 14,023,056 (107,511)
Fidelity Magellan Fund 39 - 252,535 242,782 252,535 9,753
Fidelity Retirement Money
Market Fund 83 - 654,353 654,353 654,353 -
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act
on 1934, the Plan Committee has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
PSI ENERGY, INC. UNION EMPLOYEES' 401(k)
Date: June 28, 1995 SAVINGS PLAN
(The Plan)
Jerry W. Liggett
(Jerry W. Liggett,
Plan Administrator)
EXHIBIT 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K into CINergy Corp.'s
previously filed Registration Statement File No. 33-56067.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
June 28, 1995.