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, 1995
A. Full title of the Plan:
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT 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
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Members of the Deferred Compensation and Investment Plan Committee have
duly caused this annual report to be signed by the undersigned hereunto duly
authorized.
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
(Name of Plan)
By /s/GEORGE H. STINSON
Chairman, Deferred Compensation and
Investment Plan Committee
June 27, 1996
<PAGE
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION WITH FUND INFORMATION
DECEMBER 31, 1995
Participant Directed
Cinergy Fidelity Fidelity
Common Magellan Equity-Income
Total Stock Fund Fund* Fund
INVESTMENTS, at market
Common Stock of Cinergy Corp. -
(Notes 3 and 9)
shares: 3,621,288 $110,901,946 $71,531,755 $ - $ -
Fidelity Magellan Fund* -
shares:115,691 9,947,118 - 9,947,118 -
Fidelity Equity-Income Fund -
shares: 541,029 20,521,238 - - 20,521,238
Fidelity Intermediate Bond Fund -
shares: 324,441 3,377,431 - - -
PNC Money Market Fund - 2,496,883 - - -
147,244,616 71,531,755 9,947,118 20,521,238
OTHER ASSETS
Cash 360,106 232,268 - -
Contribution Receivable 1,201,839 122,198 54,247 46,400
Dividend Receivable 131,847 - - 131,847
Realized Gain Receivable 593,311 - - 593,311
Accrued Income 708 457 - -
Loans Receivable from Participants 3,226,771 - - -
PARTICIPANTS' EQUITY $152,759,198 $71,886,678 $10,001,365 $21,292,796
<FN>
The accompanying notes are an integral part of this statement.
* Fidelity Magellan Fund is a growth fund seeking long-term
capital appreciation by investing primarily in common stock
and securities convertible into common stock. As of March
31, 1996, the Fund had over $56 billion in net assets,
consisting of the following classes: common stock and
preferred stock, 70.7%; corporate bonds, 19.2%; other
securities, 10.1%.
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION WITH FUND INFORMATION
DECEMBER 31, 1995
(CONTINUED)
Non-Participant
Participant Directed Directed
Fidelity PNC Money Cinergy
Intermediate Market Loan Common
Bond Fund Fund Fund Stock Fund
INVESTMENTS, at market
Common Stock of Cinergy Corp. -
(Notes 3 and 9)
shares: 3,621,288 $ - $ - $ - $39,370,191
Fidelity Magellan Fund* -
shares:115,691 - - - -
Fidelity Equity-Income Fund -
shares: 541,029 - - - -
Fidelity Intermediate Bond Fund -
shares: 324,441 3,377,431 - - -
PNC Money Market Fund - - 2,496,883 - -
3,377,431 2,496,883 - 39,370,191
OTHER ASSETS
Cash - - - 127,838
Contribution Receivable 10,488 8,942 - 959,564
Dividend Receivable - - - -
Realized Gain Receivable - - - -
Accrued Income - - - 251
Loans Receivable from Participants - - 3,226,771 -
PARTICIPANTS' EQUITY $3,387,919 $2,505,825 $3,226,771 $40,457,844
<FN>
The accompanying notes are an integral part of this statement.
* Fidelity Magellan Fund is a growth fund seeking long-term
capital appreciation by investing primarily in common stock
and securities convertible into common stock. As of March
31, 1996, the Fund had over $56 billion in net assets,
consisting of the following classes: common stock and
preferred stock, 70.7%; corporate bonds, 19.2%; other
securities, 10.1%.
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION WITH FUND INFORMATION
DECEMBER 31, 1994
Participant Directed
Cinergy Fidelity Fidelity
Common Magellan Equity-Income
Total Stock Fund Fund* Fund
INVESTMENTS, at market
Common Stock of Cinergy Corp. -
(Notes 3 and 9)
shares: 3,493,066 $82,087,051 $54,846,378 $ - $ -
Fidelity Magellan Fund* -
shares:98,298 6,566,321 - 6,566,321 -
Fidelity Equity-Income Fund -
shares: 542,150 16,644,016 - - 16,644,016
Fidelity Intermediate Bond Fund -
shares: 301,353 2,962,298 - - -
PNC Money Market Fund - 1,820,544 - - -
110,080,230 54,846,378 6,566,321 16,644,016
OTHER ASSETS
Cash 190,366 127,545 - -
Contribution Receivable 277,077 115,404 47,204 41,637
Accrued Income 863 578 - -
Loans Receivable from Participants 2,865,296 - - -
PARTICIPANTS' EQUITY $113,413,832 $55,089,905 $6,613,525 $16,685,653
<FN>
The accompanying notes are an integral part of this statement.
* Fidelity Magellan Fund is a growth fund seeking long-term
capital appreciation by investing primarily in common stock
and securities convertible into common stock. As of March
31, 1995, the Fund had over $39 billion in net assets,
consisting of the following classes: common stock and
preferred stock, 96.8%;convertible preferred stocks and
bonds, .2%; corporate bonds, .6%; other securities, 2.4%.
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION WITH FUND INFORMATION
DECEMBER 31, 1994
(CONTINUED)
Non-Participant
Participant Directed Directed
Fidelity PNC Money Cinergy
Intermediate Market Loan Common
Bond Fund Fund Fund Stock Fund
INVESTMENTS, at market
Common Stock of Cinergy Corp. -
(Notes 3 and 9)
shares: 3,493,066 $ - $ - $ - $27,240,673
Fidelity Magellan Fund* -
shares:98,298 - - - -
Fidelity Equity-Income Fund -
shares: 542,150 - - - -
Fidelity Intermediate Bond Fund -
shares: 301,353 2,962,298 - - -
PNC Money Market Fund - - 1,820,544 - -
2,962,298 1,820,544 - 27,240,673
OTHER ASSETS
Cash - - - 62,821
Contribution Receivable 9,454 6,537 - 56,841
Accrued Income - - - 285
Loans Receivable from Participants - - 2,865,296 -
PARTICIPANTS' EQUITY $2,971,752 $1,827,081 $2,865,296 $27,360,620
<FN>
The accompanying notes are an integral part of this statement.
* Fidelity Magellan Fund is a growth fund seeking long-term
capital appreciation by investing primarily in common stock
and securities convertible into common stock. As of March
31, 1995, the Fund had over $39 billion in net assets,
consisting of the following classes: common stock and
preferred stock, 96.8%;convertible preferred stocks and
bonds, .2%; corporate bonds, .6%; other securities, 2.4%.
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
Participant Directed
Cinergy Fidelity Fidelity
Common Magellan Equity-Income
Total Stock Fund Fund* Fund
PARTICIPANTS' EQUITY
beginning of year $113,413,832 $55,089,905 $6,613,525 $16,685,653
CHANGES DURING PERIOD
Assets transferred between plans (Note 2) 343,279 127,641 29,522 51,383
Contributions (Note 5) 8,709,853 2,862,921 1,325,344 1,137,903
Dividend Income 6,938,877 3,910,713 63,550 519,498
Interest Income 216,020 135,836 24,361 37,644
Distributions to Participants (Notes 6,7, and 8) (9,836,401) (5,242,941) (572,425) (1,299,566)
Net realized and unrealized appreciation/
(depreciation) in market value of investments 32,999,760 15,484,708 2,497,380 4,658,777
Investment Transfers (Note 3) - (446,584) 58,284 (294,220)
Loans granted to Participants, net of repayments (26,022) (35,521) (38,176) (204,276)
Net change during period 39,345,366 16,796,773 3,387,840 4,607,143
PARTICIPANTS' EQUITY
end of year $152,759,198 $71,886,678 $10,001,365 $21,292,796
UNITS OF PARTICIPATION
December 31, 1995 (including units to be
distributed to Participants)
Number of units
Number of shares (Notes 3 and 9) 2,335,731 115,691 541,029
Value per unit, at market
Market price per share
(New York Stock Exchange - Composite) $30.63 $85.98 $37.93
NUMBER OF EMPLOYEES PARTICIPATING
December 31, 1995 1,495 598 832
<FN>
The accompanying notes are an integral part of this statement.
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
(CONTINUED)
Non-Participant
Participant Directed Directed
Fidelity PNC Money Cinergy
Intermediate Market Loan Common
Bond Fund Fund Fund Stock Fund
PARTICIPANTS' EQUITY
beginning of year $2,971,752 $1,827,081 $2,865,296 $27,360,620
CHANGES DURING PERIOD
Assets transferred between plans (Note 2) 2,163 209 29,240 103,121
Contributions (Note 5) 277,336 239,557 - 2,866,792
Dividend Income 201,953 118,825 - 2,124,338
Interest Income 8,532 9,647 - -
Distributions to Participants (Notes 6,7, and 8) (141,462) (291,658) (115,532) (2,172,817)
Net realized and unrealized appreciation/
(depreciation) in market value of investments 183,105 - - 10,175,790
Investment Transfers (Note 3) 2,701 679,819 - -
Loans granted to Participants, net of repayments (118,161) (77,655) 447,767 -
Net change during period 416,167 678,744 361,475 13,097,224
PARTICIPANTS' EQUITY
end of year $3,387,919 $2,505,825 $3,226,771 $40,457,844
UNITS OF PARTICIPATION
December 31, 1995 (including units to be
distributed to Participants)
Number of units 2,496,883 3,226,771
Number of shares (Notes 3 and 9) 324,441 1,285,557
Value per unit, at market $1.00 $1.00
Market price per share
(New York Stock Exchange - Composite) $10.41 $30.63
NUMBER OF EMPLOYEES PARTICIPATING
December 31, 1995 376 321 354 1,495
<FN>
The accompanying notes are an integral part of this statement.
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 and 1994
(1) Description of The Cincinnati Gas & Electric Company Deferred
Compensation and Investment Plan (DCIP or the Plan) - The following
is a brief description of the Plan. Reference is made to the Plan
and the related Trust Agreement, including the defined terms, for
complete information.
All executive, supervisory, administrative, and professional
employees of The Cincinnati Gas & Electric Company (CG&E), The Union
Light, Heat and Power Company, and Lawrenceburg Gas Company are
eligible to participate in the Plan upon completion of one year of
service (effective January 1, 1996, employees are eligible to
participate in the Plan upon employment). Under the Plan,
participants may defer, pursuant to Section 401(k) of the Internal
Revenue Code (Code), up to 15% of base pay with a maximum of $9,240
for the year 1995. 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 may be further limited for certain highly
compensated employees by the requirements of Code Sections 401(k),
401(m), and 415. The salary deferrals and optional contributions
are invested by the trustee, as directed by each participant, in one
or more investment funds, including a Cinergy Common Stock Fund.
The participant's employer makes a matching contribution of 55% (50%
prior to July 1, 1994) of the amount, not exceeding 5% of base pay,
contributed by each participant. In 1995, the Plan was amended to
provide for incentive matching contributions. These incentive
matching contributions range from $.10 to $.30 per dollar
contributed by the participant up to 4% of base pay, depending on
incentive goals attained by Cinergy Corp., CG&E's parent company.
For those employees who do not contribute to the Plan, the employers
contribute an incentive match assuming the participant contributed
1% of base pay. The accompanying financial statements reflect
accrued incentive matching contributions of $878,000 for 1995. All
employer matching contributions must be invested by the trustee in
the Cinergy Common Stock Fund. Participants are immediately vested
in their salary deferrals and optional contributions. Participants
are vested in the employer matching contributions after five years
of vesting service, or upon death or disability. Effective January
1, 1996, the Plan was amended to provide that participants would be
immediately vested in the employer matching contributions.
Participants are generally eligible to receive distributions of
vested 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 five 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 Loan Fund in the accompanying financial statements. Loans bear
interest at the prime rate of the trustee plus 1/2%, and are repaid
within five years through regular payroll deductions.
The Plan is administered by the Deferred Compensation and Investment
Plan Committee and trusteed by PNC Bank, Ohio, N.A. Effective
February 1, 1996, Fidelity Management Trust Company became the
Trustee. Generally, administrative expenses of the Plan are paid by
the employer and are not included in the accompanying financial
statements.
The Plan is generally subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). In particular, the
Plan is subject to the reporting, disclosure, participation,
vesting, fiduciary responsibility, administration, and enforcement
provisions of Title I and the termination and liability provisions
of Title IV of ERISA.
The funding provisions of Title I and the provisions relating to the
Pension Benefit Guaranty Corporation of Title IV are not applicable
to this type of defined contribution plan.
CG&E expects to continue the Plan indefinitely, but its Board of
Directors reserves the right to amend or terminate the Plan at any
time. No amendment shall reduce retroactively the rights of
participants or permit the return to the employer of any part of the
Common Stock or other securities, obligations, deposits, or cash
held by the trustee, or permit their use or diversion for any
purpose other than the exclusive benefit of the participants or
their beneficiaries. Forfeitures of participants' non-vested
account balances are used to reduce CG&E's matching contributions in
accordance with Plan provisions.
(2) Significant Accounting Policies - Investments are stated at market
value as determined by the trustee by reference to published market
data at December 31, 1995 and 1994. The market value of the Plan's
investments are subject to price fluctuations in the applicable
investment markets. Unrealized valuation gains and losses are
reflected in the Statement of Changes in Participants' Equity. The
statements are prepared on the accrual basis of accounting.
Transfers of assets between the CG&E Savings Incentive Plan (SIP)
and DCIP occur as a result of changes in employee status between the
weekly and hourly paid classification and the executive,
supervisory, administrative, and professional classification.
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
participants' equity at the date of the financial statements, and
the reported amounts of changes in participants' equity during the
reporting period. Actual results could differ from those estimates.
(3) Investments - All contributions are paid to the trustee under the
Plan. A participant may elect or change investment funds and/or the
percentages in which contributions will be allocated once each
quarter.
All employer matching contributions are invested in the Cinergy
Common Stock Fund. Participant contributions and employer matching
contributions are made each pay period and immediately invested in
the designated fund.
See Note (9) for the discussion of the conversion of CG&E common
stock held by the Plan to Cinergy Corp. common stock pursuant to
CG&E's merger with PSI Resources, Inc.
The following investments exceed 5% of total net assets available
for benefits at December 31, 1995 and 1994:
1995 1994
Cinergy Common Stock Fund $110,901,946 $82,087,051
Fidelity Equity Income Fund 20,521,238 16,644,016
Fidelity Magellan Fund 9,947,118 6,566,321
(4) Federal Income Tax Status - The Plan obtained its most recent
determination letter in January 1995, in which the Internal Revenue
Service (IRS) stated that the Plan, as designed, was in compliance
with the applicable requirements of the Internal Revenue Code. The
determination letter covers the amendments made to the Plan for
purposes of complying with the requirements of the Tax Reform Act of
1986. Participating employees are not subject to tax on Plan income
or amounts contributed by the employer until such time as such
amounts are distributed to them.
(5) Contributions - Contributions made by participants and amounts
contributed by the employers during the years ended December 31,
1995 and 1994 are as follows:
1995 1994
Participants $ 349,304 $ 384,244
Employers 8,360,549 7,397,283
$8,709,853 $7,781,527
Participant contributions include optional contributions, while
employer contributions include salary deferrals and employer
matching contributions.
(6) Participant Withdrawals - Distributions which had been requested by
participants and approved but not yet paid as of December 31, 1994,
are as follows:
1994
Cinergy Common Stock Fund $1,046,902
Fidelity Magellan Fund 79,527
Fidelity Equity-Income Fund 274,437
Fidelity Intermediate Bond Fund 80,866
Money Market Fund 41,357
Cash 9,964
Total $1,533,053
These amounts are classified in the accompanying Statements of
Financial Condition as of December 31, 1994, as a component of
Participants' Equity. There were no outstanding distributions as of
December 31, 1995.
(7) Voluntary Early Retirement Program - During 1994, CG&E & its
subsidiaries approved a Voluntary Early Retirement Program (the
Program). Distributions to participants in the Statement of Changes
in Participants' Equity for the year ended December 31, 1994 includes
approximately $10,809,000 in distributions to participants who
elected to retire under the Program.
(8) 1996 Voluntary Workforce Reduction Program - In January 1996, Cinergy
announced a voluntary workforce reduction program which provides
retirement and/or severance benefits to eligible employees. Although
these benefits will not be paid from Plan assets, this matter may
impact the level of distributions to participants in 1996 as
participants elect to terminate their employment.
(9) Merger - On October 24, 1994, PSI Resources, Inc. was merged with and
into Cinergy Corp., and a subsidiary of Cinergy Corp. was merged with
and into CG&E. Each outstanding share of CG&E common stock held by
the Plan at October 24, 1994, was exchanged for one share of Cinergy
common stock.
Report of Independent Public Accountants
To The Deferred Compensation and Investment Plan Committee of
The Cincinnati Gas & Electric Company:
We have audited the accompanying statements of financial condition, with
fund information, of THE CINCINNATI GAS & ELECTRIC COMPANY DEFERRED
COMPENSATION AND INVESTMENT PLAN (the Plan) as of December 31, 1995 and 1994,
and the related statement of changes in participants' equity, with fund
information, for the year ended December 31, 1995. These financial statements
and the schedules referred to below are the responsibility of the Deferred
Compensation and Investment Plan Committee. 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 financial condition, with fund information, of
the Plan as of December 31, 1995 and 1994, and the changes in participants'
equity, with fund information, for the year ended December 31, 1995, 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
(Exhibits I and II) are presented for purposes 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 financial condition and the
statement of changes in participants' equity is presented for purposes of
additional analysis rather than to present the financial condition and changes
in participants' equity 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 11, 1996
EXHIBIT I
The Cincinnti Gas & Electric Company
Deferred Compensation and Investment Plan
Sponsor EIN: 31-0240030
Administrator EIN: 31-1070386
Plan Number: 004
Part I, Schedule G (Form 5500, Item 27a)
Schedule of Assets Held for Investment Purposes at December 31, 1995
--------------------------------------------------------------------
(a) (b) (c) (d) (e)
Description of
investment
including maturity
date, rate of
Identity of issue, interest,
borrower, lessor, collateral, par or Current
or similar party maturity value Cost value
- --- ------------------ ------------------ ---- -------
* Cinergy Common 3,621,288 shares; $61,755,530 $110,901,946
Stock Fund $0.01 par value;
$30.625 market
price per share
@ 12/31/95
Fidelity Magellan Mutual fund, 8,663,250 9,947,118
Fund primarily common
stock; 115,691
shares; $85.98 net
asset value
@ 12/31/95
Fidelity Mutual fund, 17,836,058 20,521,238
Equity-Income Fund primarily equity
securities; 541,029
shares; $37.93
net asset value
@ 12/31/95
Fidelity Mutual fund, 3,377,542 3,377,431
Intermediate primarily
Bond Fund fixed-income
obligations;
324,441 shares;
$10.41 net asset
value @ 12/31/95
** PNC Money Market Mutual fund, money 2,496,883 2,496,883
Fund market instruments;
2,496,883 units;
$1.00 net asset
value @ 12/31/95
Participant loans 8.25% - 9.50% 0 3,226,771
* The Cincinnati Gas & Electric Company, as employer having employees covered
by the plan, is a party-in-interest.
** PNC, as Trustee, is a party-in-interest.
Exhibit II
The Cincinnati Gas & Electric Company
Deferred Compensation and Investment Plan
Sponsor EIN: 31-0240030
Administrator EIN: 31-1070386
Plan Number: 004
Part V, Schedule G (Form 5500, Item 27d)
Schedule of Reportable Transactions
For the Year Ended December 31, 1995
------------------------------------
Total Total Total Dollar Total Dollar
Identity of Number of Number Value of Value of Net Gain
Securities Purchases of Sales Purchases Sales on Sales
- ----------- --------- -------- ------------ ------------ --------
* Cinergy Corp.
Common Stock
Fund 150 152 $ 7,459,301 $10,459,763 $1,176,348
* Denotes a party-in-interest.
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report dated June 11, 1996 included in this Annual Report
on Form 11-K for the year ended December 31, 1995 of The Cincinnati Gas &
Electric Company Deferred Compensation and Investment Plan, into its previously
filed Registration Statement No. 33-55291.
ARTHUR ANDERSEN LLP
Cincinnati, Ohio,
June 11, 1996