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, 1996
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
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)
<PAGE
PSI Energy, Inc.
Union Employees' 401(k) Savings Plan
FINANCIAL STATEMENTS AND EXHIBIT
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, 1996 4
Statement of Net Assets Available for Benefits with Fund
Information as of December 31, 1995 5
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1996 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, 1996 11
Schedule II - Schedule of Reportable Transactions
for the year ended December 31, 1996 12
(b) Exhibit
23) 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 net assets available for
benefits of the PSI ENERGY, INC. UNION EMPLOYEES' 401(k) SAVINGS PLAN as of
December 31, 1996 and 1995, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1996. 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 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 of the Plan as of
December 31, 1996 and 1995, and the changes in net assets available for
benefits for the year ended December 31, 1996, 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 the 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 23, 1997
PSI Energy, Inc. Union Employees' 401(k) Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1996
Participant Directed
Fidelity
Fidelity Fidelity Fidelity US Bond
Magellan Equity-Income Asset Manager Index
Fund Fund Fund Fund
ASSETS
Investments, at fair value:
Shares of registered investment
companies $9,893,011 $5,550,284 $2,486,637 $411,730
Common Stock - - - -
Participant Loans - - - -
9,893,011 5,550,284 2,486,637 411,730
Receivables:
Employer's Contribution - - - -
Participants' Contribution 65,642 33,864 17,889 3,854
Total receivables 65,642 33,864 17,889 3,854
Net assets available for
benefits $9,958,653 $5,584,148 $2,504,526 $415,584
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc. Union Employees' 401(k) Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1996
Non-Participant
Participant Directed Directed
Fidelity
Retirement Cinergy Participant Cinergy
Money Market Common Loan Common
Fund Stock Fund Fund Stock Fund Total
ASSETS
Investments, at fair value:
Shares of registered investment
companies $4,575,631 - - - $22,917,293
Common Stock - $12,197,142 - $12,851,674 25,048,816
Participant Loans - - $1,819,836 -___ 1,819,836
4,575,631 12,197,142 1,819,836 12,851,674 9,785,945
Receivables:
Employer's Contribution - - - 638,714 638,714
Participants' Contribution 20,435 23,617 - - 165,301
Total receivables 20,435 23,617 - 638,714 804,015
Net assets available for
benefits $4,596,066 $12,220,759 $1,819,836 $13,490,388 $50,589,960
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc. Union Employees' 401(k) Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1995
Participant Directed
Fidelity
Fidelity Fidelity Fidelity US Bond
Magellan Equity-Income Asset Manager Index
Fund Fund Fund Fund
ASSETS
Investments, at fair value:
Shares of registered investment
companies $8,135,395 $4,430,746 $2,262,179 $391,416
Common Stock - - -
Participant Loans - - - -
8,135,395 4,430,746 2,262,179 391,416
Receivables:
Employer's Contribution - - - -
Participants' Contribution 55,660 27,193 17,957 3,745
Total receivables 55,660 27,193 17,957 3,745
Net assets available for
benefits $8,191,055 $4,457,939 $2,280,136 $395,161
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc. Union Employees' 401(k) Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1995
Non-Participant
Participant Directed Directed
Fidelity
Retirement Cinergy Participant Cinergy
Money Market Common Loan Common
Fund Stock Fund Fund Stock Fund Total
ASSETS
Investments, at fair value:
Shares of registered investment
companies $4,712,320 - - - $19,932,056
Common Stock - $12,728,121 - $10,150,350 22,878,471
Participant Loans - - $ 795,727 - 795,727
4,712,320 12,728,121 795,727 10,150,350 43,606,254
Receivables:
Employer's Contribution - - - 772,872 772,872
Participants' Contribution 28,489 21,905 - - 154,949
Total receivables 28,489 21,905 - 772,872 927,821
Net assets available for
benefits $4,740,809 $12,750,026 $ 795,727 $10,923,222 $44,534,075
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc.
Union Employees' 401(k) Savings Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
For the Year Ended December 31, 1996
Participant Directed
Fidelity
Fidelity Fidelity Fidelity US Bond
Magellan Equity-Income Asset Manager Index
Fund Fund Fund Fund
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ (368,939) $ 626,316 $ 91,432 $ (14,284)
Interest - - - -
Dividends 1,407,284 354,817 204,645 28,318
1,038,345 981,133 296,077 14,034
Contributions:
Participants' 1,601,648 796,454 474,606 99,554
Employer's - - - -
Rollovers - 914 - -
1,601,648 797,368 474,606 99,554
Total Additions 2,639,993 1,778,501 770,683 113,588
Deductions from net assets attributed to:
Benefits paid to participants 605,645 758,030 428,599 74,694
Total Deductions 605,645 758,030 428,599 74,694
Net increase/(decrease) prior to
transfers 2,034,348 1,020,471 342,084 38,894
Interfund transfers (204,483) 123,805 (15,636) (12,798)
Interplan transfers (62,267) (18,067) (102,058) (5,673)
Net increase (decrease) 1,767,598 1,126,209 224,390 20,423
Net assets available for benefits:
Beginning of year 8,191,055 4,457,939 2,280,136 395,161
End of year $9,958,653 $5,584,148 $2,504,526 $ 415,584
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc.
Union Employees' 401(k) Savings Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
For the Year Ended December 31, 1996
Non-Participant
Participant Directed Directed
Fidelity
Retirement Cinergy Participant Cinergy
Money Market Common Loan Common
Fund Stock Fund Fund Stock Fund Total
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ - $ 1,057,501 $ - $ 1,118,596 $ 2,510,622
Interest - - 89,055 - 89,055
Dividends 248,325 712,060 - 648,412 3,603,861
248,325 1,769,561 89,055 1,767,008 6,203,538
Contributions:
Participants' 724,012 598,148 - - 4,294,422
Employer's - - - 2,211,590 2,211,590
Rollovers - - - - 914
724,012 598,148 - 2,211,590 6,506,926
Total Additions 972,337 2,367,709 89,055 3,978,598 12,710,464
Deductions from net assets attributed to:
Benefits paid to participants 1,168,820 2,179,211 62,802 1,063,962 6,341,763
Total Deductions 1,168,820 2,179,211 62,802 1,063,962 6,341,763
Net increase/(decrease) prior to
transfers (196,483) 188,498 26,253 2,914,636 6,368,701
Interfund transfers 80,712 (673,491) 1,004,545 (302,654) -
Interplan transfers (28,972) (44,274) (6,689) (44,816) (312,816)
Net increase (decrease) (144,743) (529,267) 1,024,109 2,567,166 6,055,885
Net assets available for benefits:
Beginning of year 4,740,809 12,750,026 795,727 10,923,222 44,534,075
End of year $4,596,066 $12,220,759 $1,819,836 $13,490,388 $50,589,960
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI ENERGY, INC.
UNION EMPLOYEES' 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Note A - Plan Description:
General - The PSI Energy, Inc. Union Employees' 401(k) Savings Plan
(Plan) is a defined contribution plan covering union employees of PSI
Energy, Inc. (PSI)(a subsidiary of Cinergy Corp) who meet minimum age
and service requirements. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
Reference should be made to the Plan document for a more complete
description of the plan's provisions.
Participants are immediately vested in all contributions plus actual
earnings thereon. The administrative expenses of the Plan are paid
by PSI.
Contributions - Each year, participants may contribute up to 15% of
annual compensation, as defined in the Plan. Participants may also
contribute amounts representing distributions from other qualified
plans. PSI contributes 70% of the first 4 percent of base
compensation that a participant contributes to the Plan (matching
funds). Additional amounts of up to 30% of the first 4 percent of
base compensation that a participant contributes may be contributed
at the option of PSI's board of directors (incentive matching funds).
All employer contributions are invested in the Cinergy Stock Fund.
The matching and incentive matching funds must remain in the Stock
Fund until the participant reaches age 50 and are shown on the
statement of net assets available for benefits and statement of
changes in net assets available for benefits as "Non-Participant
Directed" funds. Contributions are subject to certain limitations.
The Trustee of the Plan for 1995 was U.S. Trust Company of
California, N.A. (U.S. Trust). Effective April 1, 1996, two trustees
are used by the Plan. U.S. Trust serves as trustee of Cinergy Corp.
(Cinergy) common stock, and Fidelity Management Trust Company
(Fidelity) serves as trustee of the remaining assets of the Plan.
Note B - Summary of Significant Accounting Principles:
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 as 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 Plan and the PSI Energy, Inc.
Employees' 401(k) Savings Plan occur as a result of a change in
employee status between the union classification and the exempt and
non-exempt classification.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates
Note C - Income Tax Status:
PSI received a determination letter dated November 14, 1995 verifying
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 the Plan is designed and being
operated in compliance with the applicable requirements of the IRC.
Note D - Investment Options:
The investment options 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:
- - 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 Asset Manager Fund
The Fidelity Asset Manager Fund invests in equities, bonds and
short-term instruments or mutual funds, both domestic and foreign
with the principal purpose of seeking high total return while
reducing risk.
- - Fidelity U.S. Bond Index Fund
The Fidelity U.S. Bond Index Fund invests in securities that
include obligations of the U.S. Treasury, U.S. Agencies,
corporations, mortgage-backed obligations, and U.S. dollar-
denominated obligations of foreign governments with the principal
purpose of seeking current income consistent with the preservation
of capital.
- - Fidelity Retirement Money Market Fund
The Fidelity Retirement Money Market Fund invests in high quality
money market instruments including certificates of deposit,
commercial paper, short-term corporate and U.S. Government
obligations and bankers' acceptances issued by major banks. The
purpose of the Fund is to seek high money market yields while
maintaining preservation of capital.
- - Cinergy Common Stock Fund
The Cinergy Common Stock Fund invests primarily in common stock of
Cinergy Corp.
Note E - Investments:
The fair value of individual investments that represent 5% or more of
the Plan's total net assets as of December 31, 1996 and 1995, are as
follows:
1996 1995
Fidelity Magellan Fund $9,893,011 $8,135,395
Fidelity Equity-Income Fund 5,550,284 4,430,746
Fidelity Asset Manager Fund 2,262,179
Fidelity Retirement Money Market 4,575,631 4,712,320
Fund
Cinergy Corp. Common Stock
- Participant Directed 12,197,142 12,728,121
- Non-Participant Directed 12,851,674 10,150,350
Note F - Related Party Transactions:
Certain Plan investments are shares of mutual funds managed by
Fidelity. Fidelity is the trustee as defined by the Plan and,
therefore, these transactions qualify as party-in-interest.
Note G - Participant Loan Fund:
Participants can borrow from their fund accounts up to a maximum
equal to the lesser of $50,000 or 50% of their account balance. Loan
transactions are treated as a transfer to (from) the investment fund
from (to) the Participant Loan Fund. Participants can select the
repayment period however the term cannot exceed 54 months. The loans
are secured by the balance in the participants account and bear
interest at a rate commensurate with local prevailing rates as
determined by the plan administrator (currently prime + 1/2%).
Principal and interest is paid ratably through payroll deductions.
Note H - 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, 1996
Net Assets Available for Benefits per
financial statements $50,589,960
Amounts allocated to withdrawing
participants (65,075)
Net assets per Form 5500 $50,524,885
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
Year ended
December 31, 1996
Withdrawals per financial statements $6,341,763
Add: Amounts allocated to withdrawing
participants at December 31, 1996 65,075
Less: Amounts allocated to withdrawing
participants at December 31, 1995 (16,102)
Benefits paid to participants per Form 5500 $6,390,736
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.
Note I - Plan Termination:
Although it has not expressed any intent to do so, PSI has the right
under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
Note J - 1996 Voluntary Workforce Reduction Program:
The 1996 Voluntary Workforce Reduction Program (1996 VWRP) which
provided retirement and/or severance benefits to eligible employees
who elected to retire or resign under the program. Although benefits
of the 1996 VWRP were not paid from Plan assets, withdrawals from the
Plan due to 1996 VWRP participants taking distributions were
$5,742,476 for the year ended December 31, 1996.
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, 1996
Investment Shares Cost Market
*Fidelity Magellan Fund 122,666 $ 8,925,444 $ 9,893,011
*Fidelity Equity-
Income Fund 129,589 4,379,661 5,550,284
*Fidelity Asset Manager
Fund 150,980 2,305,918 2,486,637
*Fidelity U.S. Bond
Index Fund 38,990 414,832 411,730
*Fidelity Retirement
Money Market Fund - 4,575,631 4,575,631
*Cinergy Corp.
Common Stock,
$.01 Par Value
- Participant Directed 365,457 6,166,552 12,197,142
- Non-Participant
Directed 385,069 10,531,983 12,851,674
*Participant Loans,
Interest rates ranging
from 6.95%-8.75% - 1,819,836 1,819,836
TOTAL INVESTMENTS 39,119,857 $49,785,945
*Denotes a party-in-interest
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, 1996
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 156 $4,588,423 $ - $ - $27,709,517 $ -
* Fidelity Magellan Fund 172 3,710,340 - - 3,710,340 -
* Fidelity Retirement Money
Market Fund 151 1,720,858 - - 1,720,858 -
* Fidelity Equity-Income Fund 153 1,691,165 1,691,165
Sales
* Cinergy Stock Fund 133 - 4,594,573 3,073,176 4,594,573 1,521,397
* Fidelity Magellan Fund 134 - 1,583,785 1,464,874 1,583,785 118,911
* Fidelity Retirement Money
Market Fund 128 - 1,857,548 1,857,548 1,857,548 -
* Fidelity Equity-Income Fund 112 1,197,943 941,824 1,197,943 256,119
<FN>
* Denotes a party-in-interest.
</FN>
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.
PSI ENERGY, INC. UNION EMPLOYEES' 401(k)
Date: June 23, 1997 SAVINGS PLAN
(The Plan)
Jerry W. Liggett
(Jerry W. Liggett,
Plan Administrator)
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our report, dated June 23, 1997 included in the
Annual Report on Form 11-K for the year ended December 31, 1996 of the PSI
Energy, Inc. Union Employees' 401(k) Savings Plan, into Cinergy Corp.'s
previously filed Registration Statement File No. 33-56067.
ARTHUR ANDERSEN LLP
Cincinnati, Ohio,
June 23, 1997