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.
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)
PSI ENERGY, INC. 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. Employees' 401(k) Savings
Plan:
We have audited the accompanying statements of net assets available for
benefits of the PSI ENERGY, INC. 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. 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 $27,839,227 $16,625,507 $4,928,175 $1,556,733
Common Stock - - - -
Participant Loans - - - -
27,839,227 16,625,507 4,928,175 1,556,733
Receivables:
Employer's Contribution - - - -
Participants' Contribution 17,655 8,051 6,501 872
Total receivables 17,655 8,051 6,501 872
Net assets available for benefits $27,856,882 $16,633,558 $4,934,676 $1,557,605
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc. Employees' 401(k) Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1996
(Continued)
Non-Participant
Participant Directed Directed
Fidelity 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 $8,179,162 - - - $59,128,804
Common Stock - $21,172,802 - $20,787,626 41,960,428
Participant Loans - - $2,279,221 - 2,279,221
8,179,162 21,172,802 2,279,221 20,787,626 103,368,453
Receivables:
Employer's Contribution - - - 863,809 863,809
Participants' Contribution 5,614 3,359 - - 42,052
Total receivables 5,614 3,359 - 863,809 905,861
Net assets available for benefits $8,184,776 $21,176,161 $2,279,221 $21,651,435 $104,274,314
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc. 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 $26,305,054 $12,849,809 $4,137,037 $1,387,077
Common Stock - - -
Participant Loans - - - -
26,305,054 12,849,809 4,137,037 1,387,077
Receivables:
Employer's Contribution - - - -
Participants' Contribution 17,007 7,589 5,525 1,012
Total receivables 17,007 7,589 5,525 1,012
Net assets available for benefits $26,322,061 $12,857,398 $4,142,562 $1,388,089
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc. Employees' 401(k) Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1995
(Continued)
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 $8,521,496 - - - $53,200,473
Common Stock - $21,470,962 - $17,068,788 38,539,750
Participant Loans - - $1,721,353 - 1,721,353
8,521,496 21,470,962 1,721,353 17,068,788 93,461,576
Receivables:
Employer's Contribution - - - 1,075,559 1,075,559
Participants' Contribution 6,327 3,455 - - 40,915
Total receivables 6,327 3,455 - 1,075,559 1,116,474
Net assets available for benefits $8,527,823 $21,474,417 $1,721,353 $18,144,347 $94,578,050
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc.
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 $(1,395,684) $1,741,578 $ 158,146 $ (51,550)
Interest - - - -
Dividends 4,312,671 1,029,383 368,897 98,730
2,916,987 2,770,961 527,043 47,180
Contributions:
Participants' 2,780,919 1,538,263 607,284 177,828
Employer's - - - -
Rollovers 11,241 6,922 6,254 -
2,792,160 1,545,185 613,538 177,828
Total Additions 5,709,147 4,316,146 1,140,581 225,008
Deductions from net assets attributed to:
Benefits paid to participants 2,922,666 1,848,225 668,576 170,887
Total Deductions 2,922,666 1,848,225 668,576 170,887
Net increase/(decrease) prior to transfers 2,786,481 2,467,921 472,005 54,121
Interfund transfers (1,309,598) 1,301,473 218,051 109,722
Interplan transfers 57,938 6,766 102,058 5,673
Net increase (decrease) 1,534,821 3,776,160 792,114 169,516
Net assets available for benefits:
Beginning of year 26,322,061 12,857,398 4,142,562 1,388,089
End of year $27,856,882 $16,633,558 $4,934,676 $1,557,605
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI Energy, Inc.
Employees' 401(k) Savings Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
For the Year Ended December 31, 1996
(Continued)
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 $ - $1,729,149 $ - $1,735,732 $3,917,371
Interest - - 138,054 - 138,054
Dividends 424,932 1,163,770 - 1,030,815 8,429,198
424,932 2,892,919 138,054 2,766,547 12,484,623
Contributions:
Participants' 678,588 494,254 - - 6,277,136
Employer's - - - 3,289,805 3,289,805
Rollovers - 782 - - 25,199
678,588 495,036 - 3,289,805 9,592,140
Total Additions 1,103,520 3,387,955 138,054 6,056,352 22,076,763
Deductions from net assets attributed to:
Benefits paid to participants 2,605,605 2,456,998 142,667 1,877,691 12,693,315
Total Deductions 2,605,605 2,456,998 142,667 1,877,691 12,693,315
Net increase/(decrease) prior to transfers (1,502,085) 930,957 (4,613) 4,178,661 9,383,448
Interfund transfers 1,109,109 (1,272,634) 555,792 (711,915) -
Interplan transfers 49,929 43,421 6,689 40,342 312,816
Net increase (decrease) (343,047) (298,256) 557,868 3,507,088 9,696,264
Net assets available for benefits:
Beginning of year 8,527,823 21,474,417 1,721,353 18,144,347 94,578,050
End of year $8,184,776 $21,176,161 $2,279,221 $21,651,435 $104,274,314
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
PSI ENERGY, INC.
EMPLOYEES' 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Note A - Plan Description:
General - The PSI Energy, Inc. Employees' 401(k) Savings Plan (Plan)
is a defined contribution plan for PSI Energy, Inc. (PSI) (a
subsidiary of Cinergy Corp.)non-union employees 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 rollover 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 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. 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 (FMTC)
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.
The Plan's 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 Stock is valued at its quoted market price.
Participant loans are valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
Transfers of assets between the Plan and the PSI Energy, Inc. Union
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.
Benefits are recorded when paid.
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
currently being operated in compliance with the applicable
requirements of the IRC.
Note D - Investment Options:
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:
- - 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 over the long term.
- - 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 $27,839,227 $26,305,054
Fidelity Equity-Income Fund 16,625,507 12,849,809
Fidelity Retirement Money Market 8,179,162 8,521,496
Cinergy Corp. Common Stock
- Participant Directed 21,172,802 21,470,962
- Non-Participant Directed 20,787,626 17,068,788
Note F- Related Party Transactions:
Certain Plan investments are shares of mutual funds managed by
Fidelity. Fidelity is a trustee as defined by the Plan and,
therefore, these transactions qualify as party-in-interest.
Note G - Participant Loan Fund:
Participants may borrow from their fund accounts up to a maximum
equal to the lesser of $50,000 or 50 percent of their account
balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the Participant. Participants can select
the repayment period, not to exceed 54 months. The loans are secured
by the balance in the participant's account and bear interest at a
rate commensurate with local prevailing rates as determined by the
Plan administrator (currently prime plus 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 plan benefits $104,274,314
Amounts allocated to withdrawing
participants (219,094)
Net assets per Form 5500 $104,055,220
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 financial statements $12,693,315
Add: Amounts allocated to withdrawing
participants at December 31, 1996 219,094
Less: Amounts allocated to withdrawing
participants at December 31, 1995 (61,099)
Benefits paid to participants per Form 5500 $12,851,310
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 these
benefits were not paid from Plan assets, withdrawals from the Plan
due to 1996 VWRP participants taking distributions were $10,167,843
for the year ended December 31, 1996.
Schedule I
PSI ENERGY, INC.
EMPLOYEES' 401(k) SAVINGS PLAN
EIN 35-0594457
PLAN 102
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Market
Investment Shares Cost Amount
*Fidelity Magellan Fund 345,186 $24,232,906 $27,839,227
*Fidelity Equity-
Income Fund 388,174 12,890,193 16,625,507
*Fidelity Asset Manager
Fund 299,221 4,558,833 4,928,175
*Fidelity U.S. Bond
Index Fund 147,418 1,565,486 1,556,733
*Fidelity Retirement
Money Market - 8,179,162 8,179,162
*Cinergy Corp.
Common Stock,
$.01 Par Value
- Participant Directed 634,391 12,194,507 21,172,802
- Non-Participant
Directed 622,850 15,100,534 20,787,626
*Participant Loans, Interest
rates ranging from
6.95% - 8.75% - 2,279,221 2,279,221
TOTAL INVESTMENTS $81,000,842 $103,368,453
*Denotes a party-in-interest
Schedule II
PSI ENERGY, INC.
EMPLOYEES' 401(k) SAVINGS PLAN
EIN 35-0594457
PLAN 102
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 * 174 $ 6,880,658 $ - $ - $45,445,077 $ -
Fidelity Magellan Fund * 201 $ 8,496,455 - - 8,496,455 -
Fidelity Equity-
Income Fund * 198 5,241,798 - - 5,241,798 -
Fidelity Retirement Money
Market Fund * 178 4,052,403 - - 4,052,403 -
Sales
Cinergy Stock Fund * 155 - 6,924,860 4,736,387 6,924,860 2,188,473
Fidelity Magellan Fund * 179 - 5,566,598 5,101,986 5,566,598 464,612
Fidelity Equity
Income Fund * 153 - 3,207,677 2,572,789 3,207,677 634,888
Fidelity Retirement Money
Market Fund * 137 - 4,394,737 4,394,737 4,394,737 -
<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. 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 11K for the year ended December 31,1996 of the PSI Energy, Inc.
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