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, 1996
Commission File Number 1-11377
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
THE CG&E COMPANY DEFERRED COMPENSATION AND INVESTMENT PLAN
FINANCIAL STATEMENTS AND EXHIBIT
Page No.
(a) Financial Statements
Report of Independent Public Accountants
Statement of Net Assets Available for Benefits with
Fund Information as of December 31, 1996
Statement of Net Assets Available for Benefits with
Fund Information as of December 31, 1995
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1996
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, 1996
Schedule II - Schedule of Reportable Transactions
for the year ended December 31, 1996
(b) Exhibit
23) Consent of Independent Public Accountants
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of The Cincinnati Gas & Electric Company Deferred
Compensation and Investment Plan :
We have audited the accompanying statements of net assets
available for benefits of THE CINCINNATI GAS & ELECTRIC COMPANY DEFERRED
COMPENSATION AND INVESTMENT 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 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
THE CINCINNATI GAS & ELECTRIC COMPANY DEFERRED COMPENSATION AND INVESTMENT PLAN
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1996
Participant Directed
Fidelity
Fidelity Fidelity Fidelity Retirement
Magellan Equity-Income Intermediate Money Market
Fund Fund Bond Fund Fund
ASSETS
Investments, at fair value:
Shares of registered investment
companies $13,661,637 $26,658,992 $3,838,436 $6,329,964
Common Stock - - - -
Participant Loans - - - -
13,661,637 26,658,992 3,838,436 6,329,964
Receivables:
Employer's Contribution - - - -
Total receivables - - - -
Net assets available for benefits $13,661,637 $26,658,992 $3,838,436 $6,329,964
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
THE CINCINNATI GAS & ELECTRIC COMPANY DEFERRED COMPENSATION AND INVESTMENT PLAN
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1996
Non-Participant
Participant Directed Directed
Cinergy Participant Cinergy
Common Loan Common
Stock Fund Fund Stock Fund Total
ASSETS
Investments, at fair value:
Shares of registered investment
companies - - - $50,489,029
Common Stock 69,235,696 - $42,728,740 111,964,436
Participant Loans - 3,665,320 - 3,665,320
69,235,696 3,665,320 42,728,740 166,118,785
Receivables:
Employer's Contribution - - 749,139 749,139
Total receivables - - 749,139 749,139
Net assets available for benefits $69,235,696 3,665,320 $43,477,879 $166,867,924
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
THE CINCINNATI GAS & ELECTRIC COMPANY DEFERRED COMPENSATION AND INVESTMENT PLAN
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1995
Participant Directed
Fidelity Fidelity Fidelity PNC
Magellan Equity-Income Intermediate Money Market
Fund Fund Bond Fund Fund
ASSETS
Investments, at fair value:
Shares of registered investment
companies $9,947,118 $20,521,238 $3,377,431 $2,496,883
Common Stock - - - -
Participant Loans - - - -
Cash - - - -
9,947,118 20,521,238 3,377,431 2,496,883
Receivables:
Employer's Contribution - - - -
Participants' Contribution 54,247 46,400 10,488 8,942
Dividend Receivable - 131,847 - -
Realized Gain - 593,311 - -
Accrued Income - - - -
Total receivables 54,247 771,558 10,488 8,942
Net assets available for
benefits $10,001,365 $21,292,796 $3,387,919 $2,505,825
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
THE CINCINNATI GAS & ELECTRIC COMPANY DEFERRED COMPENSATION AND INVESTMENT PLAN
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1995
Non-Participant
Participant Directed Directed
Cinergy Participant Cinergy
Common Loan Common
Stock Fund Fund Stock Fund Total
ASSETS
Investments, at fair value:
Shares of registered investment
companies - - - $ 36,342,670
Common Stock $71,531,755 - $39,370,191 110,901,946
Participant Loans - $3,226,771 - 3,226,771
Cash 232,268 - 127,838 360,106
71,764,023 3,226,771 39,498,029 150,831,493
Receivables:
Employer's Contribution - - 959,564 959,564
Participants' Contribution 122,198 - - 242,275
Dividend Receivable - - - 131,847
Realized Gain - - - 593,311
Accrued Income 457 - 251 708
Total receivables 122,655 - 959,815 1,927,705
Net assets available for
benefits $71,886,678 $3,226,771 $40,457,844 $152,759,198
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
THE CINCINNATI GAS & ELECTRIC COMPANY DEFERRED COMPENSATION AND INVESTMENT 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 Retirement
Magellan Equity-Income Intermediate Money Market
Fund Fund Bond Fund Fund
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $ (473,440) $2,859,727 $(111,977) $ 11,807
Interest - - - -
Dividends 1,798,901 1,669,601 260,491 187,224
1,325,461 4,529,328 148,514 199,031
Contributions:
Participants' 1,454,294 1,300,689 271,256 245,401
Employer's - - - -
1,454,294 1,300,689 271,256 245,401
Total Additions 2,779,755 5,830,017 419,770 444,432
Deductions from net assets attributed to:
Benefits paid to participants 1,315,779 2,534,639 288,297 3,806,481
Total Deductions 1,315,779 2,534,639 288,297 3,806,481
Net increase/(decrease) prior to transfers 1,463,976 3,295,378 131,473 (3,362,049)
Interfund transfers 2,156,444 2,015,524 313,033 7,181,808
Interplan transfers 39,852 55,294 6,011 4,380
Net increase (decrease) 3,660,272 5,366,196 450,517 3,824,139
Net assets available for benefits:
Beginning of year 10,001,365 $21,292,796 3,387,919 2,505,825
End of year $13,661,637 $26,658,992 $3,838,436 $6,329,964
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
THE CINCINNATI GAS & ELECTRIC COMPANY DEFERRED COMPENSATION AND INVESTMENT 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
Cinergy Participant Cinergy
Common Loan Common
Stock Fund Fund Stock Fund Total
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments $6,084,683 $ - $ 3,749,271 $12,120,071
Interest - 269,397 - 269,397
Dividends 3,910,560 - 2,251,506 10,078,283
9,995,243 269,397 6,000,777 22,467,751
Contributions:
Participants' 2,804,261 - - 6,075,901
Employer's - - 2,725,338 2,725,338
2,804,261 - 2,725,338 8,801,239
Total Additions 12,799,504 269,397 8,726,115 31,268,990
Deductions from net assets attributed to:
Benefits paid to participants 6,721,989 32,942 3,024,998 17,725,125
Total Deductions 6,721,989 32,942 3,024,998 17,725,125
Net increase/(decrease) prior to transfers 6,077,515 236,455 5,701,117 13,543,865
Interfund transfers (8,999,561) 153,725 (2,820,973) -
Interplan transfers 271,064 48,369 139,891 564,861
Net increase (decrease) (2,650,982) 438,549 3,020,035 14,108,726
Net assets available for benefits:
Beginning of year 71,886,678 3,226,771 40,457,844 152,759,198
End of year $69,235,696 $3,665,320 $43,477,879 $166,867,924
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(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. Participants
should refer to the Plan Document and the related Trust Agreement,
including the defined terms, for complete information of the Plan's
provisions.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
All executive, supervisory, administrative, and professional
employees of The Cincinnati Gas & Electric Company (CG&E) a
subsidiary of Cinergy Corp., The Union Light, Heat and Power
Company, and Lawrenceburg Gas Company are eligible to participate in
the Plan upon employment. Under the Plan, participants may
contribute up to 15% of annual pretax compensation, as defined in
the Plan. In addition, a participant may make optional
contributions to the Plan which, when combined with salary
deferrals, may not exceed 15% of base pay. Salary deferrals and
optional contributions are subject to certain limitations. The
salary deferrals and optional contributions are invested by the
trustee, as directed by each participant, in one or more investment
funds, including the Cinergy Common Stock Fund.
The participant's employer contributes 55% of the first 5% of base
pay, contributed by each participant. An additional incentive match
of up to 30% of the first 4% of base pay that a participant
contributes may be contributed at the discretion of the employer's
board of directors. For those employees who do not contribute to
the Plan, the employers contribute an incentive match assuming the
participant contributed 1% of base pay. All employer contributions
must be invested by the trustee in the Cinergy Common Stock Fund.
The employer contributions must remain in the Cinergy Common Stock
Fund until the Participant reaches age 50 and are shown on the
statement of net assets available for benefits and statement of
changes in net assets available for benefits as "Non-Participant
Directed" funds. Participants are immediately vested in all
contributions and earnings thereon.
Participants are generally eligible to receive distributions of
assets from the Plan upon termination of employment (including
retirement), death, or disability. Distributions are paid in a lump
sum for vested benefits of $3,500 or less. Distributions are paid
in a lump sum of 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. The loans
are secured by the balance in the participant's account and bear
interest at the prime rate plus 1/2%, and are repaid within five
years (54 months effective January 1, 1996) through regular payroll
deductions.
The Plan is administered by the CG&E DCIP Committee (the Plan
Committee) and trusteed by Fidelity Management Trust Company
(Fidelity). Prior to February 1, 1996, PNC Bank, Ohio, N.A. was the
Trustee. Administrative expenses of the Plan are paid by the
employer.
(2) Significant Accounting Policies - The financial
statements of the Plan are prepared under
the accrual method of accounting.
Investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year-
end. Cinergy common stock is valued at its quoted market price.
Participant loans are valued at cost, which approximates market.
Purchases and sales of securities are recorded on
a trade-date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date. Benefits
are recorded when paid.
Transfers of assets between the 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 assets
and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(3) Investments - A participant may elect or change
investment funds and/or the percentages in which contributions will
be allocated at any time.
The following investments exceed 5% of total net assets available
for benefits at December 31, 1996 and 1995:
1996 1995
Cinergy Common Stock Fund:
Participant Directed $69,235,696 $71,531,755
Non Participant Directed 42,728,740 39,370,191
Fidelity Equity-Income Fund 26,658,992 20,521,238
Fidelity Magellan Fund 13,661,637 9,947,118
(4) Federal Income Tax Status - The Plan received a
determination letter dated January 1995, in which the Internal
Revenue Service (IRS) determined and informed the Plan Administrator
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 Committee and
the Plan's legal counsel believe that the Plan is designed and
currently being operated in compliance with the applicable
requirements of the IRC.
(5) 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:
n Fidelity Magellan Fund
The Fidelity Magellan Fund invests mainly in equity securities of
domestic foreign and multinational issues of all sizes that offer
potential for growth with the principal purpose of seeking
maximum appreciation in value.
n 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.
n Fidelity Intermediate Bond Fund
The Fidelity Intermediate Bond Fund
invests in domestic and foreign investment-grade securities with
the principal purpose of a moderate risk level and yield
potential.
n 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.
n Cinergy Common Stock Fund
The Cinergy Common Stock Fund invests primarily in common stock
of Cinergy Corp.
(6) 1996 Voluntary Workforce Reduction Program - During
1996, CG&E and its
subsidiaries implemented a Voluntary Workforce Reduction Program
(VWRP). Benefits paid to participants in the statement of changes
in net assets available for benefits for the year ended December
31, 1996 includes approximately $12.4 million in distributions to
participants who elected to terminate or retire under the VWRP.
(7) 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
the financial statements $166,867,924
Amounts allocated to withdrawing participants (13,000)
Net assets available for benefits
per the Form 5500 $166,854,924
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
December 31, 1996
Benefits paid to participants per the
financial statements $17,725,125
Add: Amounts allocated to withdrawing
participants at December 31, 1996 13,000
Benefits paid to participants per the Form 5500 $17,738,125
Amounts allocated to withdrawing participants are
recorded on the Form 5500 for benefit claims that have been
processed and approved prior to December 31, but not yet paid as of
that date.
(8) 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.
(9) Plan Termination - Although it has not expressed any
intent to do so, CG&E has the
right under the Plan to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of ERISA.
SCHEDULE I
The Cincinnati Gas & Electric Company
Deferred Compensation and Investment Plan
Sponsor EIN: 31-0240030
Administrator EIN: 31-1070386
Plan Number: 004
Item 27a - Schedule of Assets Held for Investment Purposes at
December 31, 1996
(a) (b) (c) (d) (e)
Description of
investment
including maturity
date, rate of
Identity of issue interest,
borrower, lessor, collateral, par or Historical Current
or similar party maturity value Cost Value
* Cinergy Common
Stock Fund 3,354,740 shares; $61,436,853 $111,964,436
$0.01 par value;
$33.375 market
price per share
@ 12/31/96
* Fidelity
Magellan Fund Mutual fund, 12,861,412 13,661,637
primarily common
stock; 169,394
shares; $80.65 net
asset value
@ 12/31/96
* Fidelity Mutual fund, 21,746,890 26,658,992
Equity-Income primarily equity
Fund securities; 622,437
shares; $42.83
net asset value
@ 12/31/96
* Fidelity Mutual fund, 3,934,000 3,838,436
Intermediate primarily
Bond Fund fixed-income
obligations;
380,797 shares;
10.08 net asset
value @ 12/31/96
* Fidelity Mutual fund, money 6,329,964 6,329,964
Retirement Money market instruments;
Market Fund 6,329,964 units;
$1.00 net asset
value @ 12/31/96
* Participant
loans Interest rates ranging
from 8.25 - 9.50% 3,665,320 3,665,320
*Denotes a party-in-interest.
Schedule II
The Cincinnati Gas & Electric Company
Deferred Compensation and Investment Plan
Sponsor EIN: 31-0240030
Administrator EIN: 31-1070386
Plan Number: 004
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1996
Total Total
Identity of Number of Number Purchase Selling Net Gain
Securities Purchases of Sales Price(A) Price(A) on Sales
*Cinergy Corp.
Common Stock
Fund 201 177 $16,009,408 $26,699,004 $10,233,074
*Fidelity Magellan
Fund 171 115 7,766,358 3,563,440 11,765
*Fidelity Equity
Income Fund 172 120 8,647,018 5,356,792 631,175
*Fidelity Retirement
Money Market
Fund 137 91 11,598,845 7,777,572 -
*Denotes a party-in-interest
(A) The current value of all assets acquired or disposed of, at the time of
the acquisition or disposition, is equal to the purchase price or selling
price, respectively
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Committee has duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
THE CINCINNATI GAS & ELECTRIC COMPANY
DEFERRED COMPENSATION AND INVESTMENT PLAN
(Name of Plan)
By /s/JERRY W. LIGGETT
Plan Administrator
June 27, 1997
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 this
Annual Report on Form 11-K for the year ended December 31, 1996 of The
Cincinnati Gas & Electric Company Deferred Compensation and Investment Plan,
into Cinergy Corp.'s previously filed Registration Statement File No. 33-
55291.
ARTHUR ANDERSEN LLP
Cincinnati, Ohio
June 23, 1997