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
SAVINGS INCENTIVE 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 CINCINNATI GAS & ELECTRIC COMPANY SAVINGS
INCENTIVE 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 Savings Incentive Plan:
We have audited the accompanying statements of
net assets available for benefits of THE CINCINNATI
GAS & ELECTRIC COMPANY SAVINGS INCENTIVE 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
GAS & ELECTRIC COMPANY SAVINGS INCENTIVE 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 $ 4,198,665 $11,395,092 $1,428,486 $5,874,739
Common Stock - - - -
Participant Loans - - - -
4,198,665 11,395,092 1,428,486 5,874,739
Receivables:
Employer's Contribution - - - -
Participants' Contribution 13,166 16,301 2,848 8,675
Total receivables 13,166 16,301 2,848 8,675
Net assets available for benefits $ 4,211,831 $11,411,393 $1,431,334 $5,883,414
GAS & ELECTRIC COMPANY SAVINGS INCENTIVE 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 - - $22,896,982
Common Stock 100,039,222 $45,212,499 145,251,721
Participant Loans 6,244,939 - 6,244,939
100,039,222 6,244,939 45,212,499 174,393,642
Receivables:
Employer's Contribution 1,059,033 1,059,033
Participants' Contribution 108,368 - - 149,358
Total receivables 108,368 - 1,059,033 1,208,391
Net assets available for benefits $100,147,590 $6,244,939 $46,271,532 $175,602,033
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE 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 $2,974,415 $ 7,792,161 $1,232,925 $1,265,780
Common Stock - - - -
Participant Loans - - - -
Cash - - - -
2,974,415 7,792,161 1,232,925 1,265,780
Receivables:
Employer's Contribution - - - -
Participants' Contribution 20,070 23,743 4,992 11,190
Dividend Receivable - 49,345 - -
Realized Gain - 222,053 - -
Accrued Income - - - -
Total receivables 20,070 295,141 4,992 11,190
Net assets available for benefits $ 2,994,485 $ 8,087,302 $1,237,917 $1,276,970
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE 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 - - - $ 13,265,281
Common Stock $90,506,792 - $37,731,936 128,238,728
Participant Loans - $4,558,730 - 4,558,730
Cash 185,558 - 77,347 262,905
90,692,350 4,558,730 37,809,283 146,325,644
Receivables:
Employer's Contribution - - 1,213,309 1,213,309
Participants' Contribution 191,692 - - 251,687
Dividend Receivable - - - 49,345
Realized Gain - - - 222,053
Accrued Income 457 - 191 648
Total receivables 192,149 - 1,213,500 1,737,042
Net assets available for benefits $90,884,499 $4,558,730 $39,022,783 $148,062,686
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
THE CINCINNATI GAS & ELECTRIC COMPANY SAVINGS INCENTIVE 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 $ (153,962) $1,079,713 $ (39,146) $ 5,983
Interest - - - -
Dividends 589,684 695,880 94,187 87,206
435,722 1,775,593 55,041 93,189
Contributions:
Participants' 596,943 703,069 134,664 337,846
Employer's - - - -
596,943 703,069 134,664 337,846
Total Additions 1,032,665 2,478,662 189,705 431,035
Deductions from net assets attributed to:
Benefits paid to participants 44,634 199,477 26,150 235,184
Total Deductions 44,634 199,477 26,150 235,184
Net increase/(decrease) prior to transfers 988,031 2,279,185 163,555 195,851
Interfund transfers 269,167 1,100,200 35,873 4,414,973
Interplan transfers (39,852) (55,294) (6,011) (4,380)
Net increase 1,217,346 3,324,091 193,417 4,606,444
Net assets available for benefits:
Beginning of year 2,994,485 8,087,302 1,237,917 1,276,970
End of year $ 4,211,831 $11,411,393 $1,431,334 $5,883,414
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 $8,094,967 $ - $ 3,612,218 $12,599,773
Interest - 410,142 - 410,142
Dividends 5,198,389 - 2,251,040 8,916,386
13,293,356 410,142 5,863,258 21,926,301
Contributions:
Participant 5,171,599 - - 6,944,121
Employer's - - 3,588,037 3,588,037
5,171,599 - 3,588,037 10,532,158
Total Additions 18,464,955 410,142 9,451,295 32,458,459
Deductions from net assets attributed to:
Benefits paid to participants 2,884,533 78,788 885,485 4,354,251
Total Deductions 2,884,533 78,788 885,485 4,354,251
Net increase/(decrease) prior to transfers 15,580,422 331,354 8,565,810 28,104,208
Interfund transfers (6,047,040) 1,403,224 (1,176,397) -
Interplan transfers (270,291) (48,369) (140,664) (564,861)
Net increase 9,263,091 1,686,209 7,248,749 27,539,347
Net assets available for benefits:
Beginning of year 90,884,499 4,558,730 39,022,783 148,062,686
End of year $100,147,590 $6,244,939 $46,271,532 $175,602,033
<FN>
The accompanying notes are an integral part of these financial statements
</FN>
<PAGE
THE CINCINNATI GAS & ELECTRIC COMPANY
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(1) Description of The Cincinnati Gas & Electric Company Savings Incentive
Plan (SIP 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 more 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 weekly or hourly paid 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 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 SIP 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 SIP and the CG&E Deferred
Compensation and Investment Plan 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 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.
(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 $100,039,222 $ 90,506,792
Non-Participant Directed 45,212,499 37,731,936
Fidelity Equity Income Fund 11,395,092 7,792,161
(4) Federal Income Tax Status - The Plan received a determination
letter dated January 1995, in which the Internal Revenue Service
determined and informed the Plan Committee 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 operating 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 issuers 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' acceptance 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). Distributions to participants in the statement of
changes in net assets available for benefits for the year ended
December 31, 1996 includes approximately $637,000 in distributions to
participants who elected to terminate or retire under the VWRP.
Additional distributions to participants will be processed in 1997, for
those participants who elected to retire under the VWRP on 12/31/96.
(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 $175,602,033
Amounts allocated to withdrawing participants (6,474)
Net assets available for benefits
per the Form 5500 $175,595,559
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 $4,354,251
Add: Amounts allocated to withdrawing
participants at December 31, 1996 6,474
Benefits paid to participants per the Form 5500 $4,360,725
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 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
Savings Incentive Plan
Sponsor EIN: 31-0240030
Administrator EIN: 31-1070386
Plan Number: 002
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 4,352,112 shares; $82,083,682 $145,251,721
Stock $0.01 par value;
$33.375 market
price per unit
@ 12/31/96
* Fidelity Magellan Fund Mutual fund, 4,005,542 4,198,665
primarily common
stock; 52,060
shares; $80.65 net
asset value
@ 12/31/96
* Fidelity Mutual fund, 9,505,060 11,395,092
Equity-Income Fund primarily equity
securities; 266,054
shares; $42.83
net asset value
@ 12/31/96
* Fidelity Mutual fund, 1,426,941 1,428,486
Intermediate primarily
Bond Fund fixed-income
obligations;
141,715 shares;
10.08 net asset
value @ 12/31/96
* Fidelity Mutual fund, money 5,874,739 5,874,739
Retirement Money market instruments;
Market Fund $5,874,739 units;
$1.00 net asset
value @ 12/31/96
Interest rates
ranging from
* Participant loans 6.95-8.75% 6,244,939 6,244,939
<FN>
* Denotes a party-in-interest.
</FN>
SCHEDULE II
The Cincinnati Gas & Electric Company
Savings Incentive Plan
Sponsor EIN: 31-0240030
Administrator EIN: 31-1070386
Plan Number: 002
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 216 207 $18,190,535 $14,946,749 $5,537,383
*Fidelity Retirement
Money Market Fund 152 116 6,964,866 2,359,266 -
<FN>
*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.
</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.
THE CINCINNATI GAS & ELECTRIC COMPANY
SAVINGS INCENTIVE 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 the Annual Report
on Form 11-K for the year ended December 31, 1996 of The Cincinnati Gas &
Electric Company Savings Incentive Plan, into Cinergy Corp.'s previously filed
Registration Statement File No. 33-55293.
ARTHUR ANDERSEN LLP
Cincinnati, Ohio
June 23, 1997