ML20052D875
| ML20052D875 | |
| Person / Time | |
|---|---|
| Site: | Zimmer |
| Issue date: | 01/27/1982 |
| From: | Dickhoner W, Yeager B CINCINNATI GAS & ELECTRIC CO. |
| To: | |
| Shared Package | |
| ML20052D873 | List: |
| References | |
| NUDOCS 8205070277 | |
| Download: ML20052D875 (35) | |
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The Cincinnati Gas O Electric Company Shareholders' Public hu'untanis:
139 East Fourih Street, Cincinnati, Ohio 45202 Telephone 513-3812000 Inquiries I5Ya "[
Gncinnad.ohki 45202 Communications regarding Trustee for ik>nds and Interest stock transfer requirements Paying Agent:
- or lost certificates may be iningTrus O>mpny directed to either Stock one mil streci, New Yos k, N.Y.10015 Annual Report 1981 Transfer Agent. All com- .j municalions regarding a Preferred Slures listed on: ;
This annual report and the fi- Shareholder's account,div- 7c['$';*,'ug,ciungy, nancial statements contained idends and changes of ad-isi
, herein are submitred to the dress should be directed to con n 0ty 5,u espnn >njwc,,
shareholders of the Company The Cincinnati Gas & Elec- and Pacific simk Exchanges for their generalinformation tric Company, Attention: Transfer Agents and Registrars for ,
and not in connection with any Corporate Department, comrnon stures:
sale, or offer to sell, or solici- P.O. Ikm <X>0, Cincinnati, The rirst Nationat 15ank of tation of an offer to huy any Cincinnati, P.o. Ikix 2058, Ohio 45201. Cincinruti, Ohio 45201 mnufAturers llantwerTrust Company The annual meeting of share. Four New York Plan,
. New York, NY 10015.
holders ofIhe Company will be held at ihe office of the Transfer Agents for Preferred Shares:
. . , The First Natk>nalllankof Company in Cincinnati, Ohio ancinnan, Pn 15 >x 2058, on April 28,1982,at 11 A.51. ancinnad, ohio 45201
- ""I*'"'""
PROXIES for the annual meet- Four New York""""",
Plan T* C"'"P"Y ing will be requested from New York,Nr 100:5 shareholders when notice of Regiurars for Preferred slures:
. meeting, proxy staternent and ihe Central Trust O>mpany, NA form of proxy are mailed on or Fsfth and Win streets, andnmd,ohhm202 alx>ut 51 arch 26,1982.
3 Morgan Guarant) Trust Company of New York,30 Wet Ilroadway, New York, NY 10015 Administrator of Dividend Reimestment and Stock Contents SEC Form 10-K ""'D",',"fTrug Company NA ,
SummaO- ' *I to be Available corrorate Trusi. P.o i*,x i198 Oncinnad.ohki 45201
!.ctter to Shareholders .2 A copy of CG&E's annual report on SEC Form 10 K Year in Review , . .. 4 will be available,without Electric Sales . 4 charge, on or about April 1, Gas Sales . . .. . 4 1982 to each holder of Ibte Slatters , , . .. 4 common shares upon writ-ten request to C. Robert Electrie Prtxhiction . . . 5 Everman, Treasurer, -
Electric Operations . 7 P.O. Ikn 960, Cincinnati, laid Slanagement . . 7
! Gas Operations . . ... 8 Ohio 45201.
Construction and Financing . . . . . ..9 1.itigation .. .......11 Shareholders Survey . .12
.\tanagement's Discussion .13 East 13end Generating I ..inancial Statements . . . . 14 Station, the newest elec-Consolidated Statistics tricgenerating unit in the 1971 1981 ... . .... 30 ~ . CG&E system, was placed in service in 1981. It is Directors and Off,ic"rs . . . 32 located along the Ohio Service Area Slap . . .(Inside River in Iloone County, 115ack Cowr) . Kentucky.
Summary 1981 1980 % Increase (Decrease)
Earnings on Common Shares (000 omitted) . $ 77,825 $ 69,183 12.5 Average Number of Osmmon Shares Outstanding (000 omitted) . 33,830 30,765 10.0 l Earnings per Common Share . . $ 2.30 $ 2.25 2.2 Year End Annual Dividend Rate $ 2.10 $ 2.04 2.9 Number of Iloiders of Common Shares 76,000 75,000 1.3 Electric Sales (million Kwh)
Residential . 5,117 5,277 (3.0)
Commercial . 3,407 3,333 2.2 Industrial . . . 4,666 4,493 3.9 Other Retail . . . . . 1,233 1,242 (.7)
Ti>tal Retail . 14,423 14,345 .5 Other Utilities . 363 174 108.9 Total . . . 14,786 14,519 1.8 Gas Sales (million cu. ft.)
Residential . 43,714 45,746 (4A)
Commercial . . 20,764 21,071 (1.5)
Industrial . . 36,341 32,390 12.2 Other 3,916 4,403 (11.1)
Total 104,735 103,610 1.1 Electric Net System Peak Inad (thousand Kw) 3,140 3,154 (.4)
Construction Expenditures (000 omitted) $ 273,602 $ 296,957 (7.9)
Gross Plant-Year End (000 omitted) $2,757,122 $2,499,083 10.3 Source of Revenue 1981 Total electric and gas revenue for 1981 was $1,081 million.
Earnings and Dividends other U Per Common Share Industrial ]
Earnings l'er sture h Commercial [
lhvklends Dect.tred l'er sture E Residential 3# li HW fi(mdlions) 2 11 %
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Ij ac r j Electric Gas
To Our Shareholders:
This Itts been an eventful,and an unusual, year for CG&li. sions must wurk. The regulatory climate in the states ofour w hile there werc a series ofdifficult sluirt-term problems, service area has improved significantly in recent years.
there was also substantial progress in areas which will be iIowever, the controlling laws were not written fi>r an beneficial in the future. inflationary economy.
The major task before us now is to obtain an operating on the positive side of the 1981 ledger: license for the Zimmer Nuclear Station, place it into com-mercial operation, and get its total cost into our rate base.
O liarnings and dividends per conunon share m. creased h n dMas mecomplished,our most difficult finan-during 1981.
cial period will be behind us.
O We made significant movement toward our goal of achieving adequate rate relief, alttu> ugh much n April,we dedicated the first coal-burninggenerating additional impnwement is necessarv. unit at the new thist ik nd Station in Kentucky.The sta-tion is jointly owned with The Dayton Power and I.ight O A new coal burning electric generating unit was placed Company. Intst Ik nd reflects our continuing conunit ment into conunercial operation and has perfi>rmed with to provide adequate and dependable power fi>r our service high availability. area. In remarks at the dedication ceremony, Kentucky,s O A federaliest on emergency preparedness and coordi- GovernorJohn Y. Ilrown noted the need fi>r such power to nation, demonstrating our ability to protect the public support economic development. Ile also applauded our in the event of an accident at the Wm. II. Zimmer installation of the unit's pollution control systems. This Nuclear Power Station ( Zimmer Nuclear Station), was equipment required an investment of $125 million, w hich completed, thereby taking a major step toward final is about one third of the unit's total construction cost.
l approval of an eperating license.
significant milestone toward the licensing of the On the other side of the ledger:
O The economic downturn and relatively mild weather A Zimmer Nuclear Station w in the test of the nuclear emergency plans. While during ihe second half of the year adversely af fected the final reports are not yet in, it appears Ihat both the NRC earnings and the l'ederal timergency Management Agency,which re-viewed our performance and that of State and County C The staff ofIhe Nuclear Regulatory Commission ( NRC) emergency service agencies,li>und that the test went well.
proposed a fine ti>r inadequate supervision of After t he station is in operation, similar exercises annually the contractor's quality assurance program at the will test the emergeng procedures.
Zimmer Nuclear Station. The Atomic Safety and I.icensing floard's hearings on the O We faced continuing unfavorable public reaction operating license fbr Zimmer Nuclear Station resumed in toward higher customer bdis. late January,1982. This phase of the hearings concems emergency planning and radiological monitoring, the remaining contentions from intervenors not yet heard by this lloard.
O urthe billion dollar mark for the first time, and our revenues reached an all-timc 1981 earnings of $230 per common share were high,CGME In November surpassing received a Notice ofViolation from
$.05 above 1980's earnings per share of $2.25. The quarterly the Office of Inspection and Enforcement of the NRC that a cash dn idend per conunon share was ir, creased from 51( fine of $200,000 was being proposed because of.ailure to io 52Me during 1981. exercise adequate oversight and control ofIhe cont ractor's quality assurance program at the Zimmer Nuclear Station.
We have taken steps to improve our perfi>rmance in this T he past year has been especially troublesome ihr most of the nation's utilities due to the capital inten-sive nature of their business, and CG&E has tren no area. At the same time, we are preparing a response to the Notice of Violation in which we will attempt to persuade the esception. Infl.uion and high interest rates have a profound NRC that the proposed fine should not be imposed.
effect when regulated rates are not adiusted in a timely In order to further strengthen our nuclear operations, manner.This is frequently not the fault of the regulators, but we have added to the Company organization a vice-of the outnuled laws under which regulatory commis- president of Nuclear Oper;uions who has extensive nuclear 2
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N wHHam H. Dkkhoner H. John Yeager rw+ inn.nl ( iuum.m ot itw no.o d
( twf t m ut,w ( >flur management experience. I lis new organization luts taken meet forecasts of red uced electric demand, without careful l over, from t he cont n.ctor, cont rol of the quality assurance monitoring, could endanger tomorrow's power supplies.
program, under the supervision of an experienced nuclear The financial health of the utility industry is clearly in the quality assurance manages. national interest, and regulatory barriers to needed rate in-when ihe Zimmer Nuclea: e,tation goes into commercial creases today could spell social and economic troubles for operation, ou r ownership share will provide alx >ut 8% of our society in the future. Additionally, the time required to our total generating capability and will play an important license and construct generating facilities must be short-role in maintainingihe reliability ofour electric system. h ened,and costly and unnecessarygovernment rules and will also provide power to ihe customers ofits other two regulations must be eliminated. As participants in a capital co owners, The Dayton Power and 1.ight Company and intensive, regulated utilit y, all of us - managers, employees, Columbus and Southern Ohio lilectric Company. and shareholders alike - must communicate to our elected here is a growing public awareness of the erucial role gownnwnt mpumade dw urgencyWwoNenn T et y. The price and supplyofenergy ofenergy in all facets ofour modern industrial soci-ne of our cannot greatest st rengt behs astreated the loval, highlv skilled, and motivated people a Company lies in as a problem apart from other problems, such as inflation, who work here.'A great majorit v of them plav a the environment, economic growth, and the creation of '
multiple role as shareholders, customers, and employees of jobs for an expanding work fi>rce.
the Company. Thanks to them, we have achieved our goals The increased public understanding of the difficult cir- n the past; because of them, we h x >k to the futu re with cumstances under which gas and electric services are confidence.
supplied has nurtured a somewhat more reasonable at-We are deepiv appreciative of our loyal employees who titude toward necessary rate increases. This b not to say Ihat continue to demonst rate pride in their task of providing high bills are no longer a serious problem. I lowever, this reliable gas and electric . service to our customers. We small improvement in public understanding of the utility are grateful to our shareholders and investors whose sup-indest ry's problems emphasizes the importance of com-port during a difficult period contributes greatly to the municating wit h our customers. persistently and clearly. We stability and continued success of the Company. We are will continue to put into sharp focus the basic fact that our confident as we face the future.
costomers are best served by a financially healthy ut ility.
CGME will continue its effi>rts to communicate factually Sincerely, with its customers and shareholders. Itising prices for gas - '
and electricit v have made it mere important fi>r us to keep our customers infi>rmed of our effi>rts to control costs while we continue to provide reliable service.
M//h j We have used a variet y of meilnh to reach ou r custom- William i1. Dickhoner IL John Yeager ers, including bill inserts, nuss media ads, news briefings, Pmsident and I (Arinnan ofde Board meetings with h> cal editors, meetings with h> cal govern- Chi (f Eversaire OB7cer ment oHicials, and seminars for industrial and commercial customers.
We has e at tempted to relay the facts as we know them January 27,1982.
about energy supply and prices. We have also tried to help l
our customers with useful iips on conservation and billing '
assistance. In 1982, we expect to continue with a broad-based, but conservative, communications program to further increase awareness of the issues confronting the Company and its customers.
he long term economic heahh of this country is an T out adequate and reliable energy supplies. The can-at tainable goal, but will be impossible to reach with-cellation and deferral of new electric generating units to 3 . _ __ _ - _. _-
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tice conservation. Since 1973, when ~
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customers have reduced their average j [, f' M use ofgas for spacc heating by approxi-f g mately 25%
Nak Purdin, sr. iud-Un m Td"ku"A"r "" *w- Rate Matters CG&E and its sub-I"iMC"jf""""
sidiaries continue to seek rate increases regularly to offset inflation and rising i construction and financing costs.
CGME's earnings on common shares In $1 arch,1981, The Public Utilities Year In Review in 1981 totalled $77.8 million compared Commission of Ohio (PUCO) author- l with 1980 earnings of $69.2 million.The ized an annual elect ric rate increase of ;
Company experienced relatively flat $50.5 million for CG&E. CG&E filed a ;
sales of gas and electricity caused by petition for rehearing contending that +
stagnant economic conditions and mild theordercontainedanerrorinthede- I weather in the second half of the year. termination of the authorized increase.
Following the rehearing, the PUCO Electric Sales Total kilowatt-hour injune,1981, authorized an additional l (kwh) sales were up 1.8% in 1981. Indus- increase of $5.2 million annually. .
trial sales were up 3.9% over 1980; In April,1981, the PUCO issued commercial sales were up 2.2% in spite an orderauthorizingCGME to recover of a cooler summer than the year before, approximately $ 12 million in unrecov-which meant a considerable loss in air- ered gas costs. These unrecovered costs conditioning sales; and residential sales resulted from the implementation of were down 3.0% from 1980 because the new gas cost recovery rule which of the cooler summer and customer changed the manner in which CG&E conservation. applies the purchased gas adjustment ;
CG&E's electric power system cus- clause.
tomarily experiences its peak demand Onjanuary 27,1982,the PUCO issued ;
during the summer, which it did in 1981 an order authorizing CG&E an an-( on July 13. The peak was 3,140 mega- nual increase in electric revenues of wat ts.11ecause of the cooler summer in !
$85.4 million and an annual increase in 1981 than in 1980,this peak was down gas revenues of $ 19.4 million.The new 0.4% from 1980's peak. I lowever, the av- rates are expected to become effective crage compound growth rate, when in early February,1982. The increases comparing 1981's peak to 1979's peak,is approved bythe PUCO represented 63%
2.7% per year. ofCG&E's $135 million electric rate re-Our forecast indicates that electric quest and 92% ofCG&E's $21 million gas sales and peak demands are expected to rate request. The PUCO found ihat a rate grow on the average at a rate of approx- of ret urn of 11.80% was fair and reason-imately 3% per year throughout the able, which included a return of 16.84%
remainder of this decade. on common equity. The electric rate re-quest was necessary,in part,to recover Gas Sales Totalgassalesin 1981 were the fixed charges of the East Bend Sta- '
104.7 million mcf,1.1% greater than tion which became operational in sales in 1980. The primary reason for the 51 arch,1981, to allow the recovery of increase in total gas sales was a 12.2% in- that portion of the cost of fuel used to crease in industrial sales, partially offset generate electricity which cannot be re-by decreases in residential sales of 4.4% covered under the new PUCO fuel ad-and in commercial sales of 1.5% justment clause, and to recover a portion Our customers are continuing to prac- of the financing costs associated with the >
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, CGNii w ith an increase in electric res e-
- V nues i)t 59.1 million annlullv. CGNifs
, ()riginal regliest it )r ,10 ;lll!Hlal incre,tse g, of $ 10 9 inilhon was placed into ef fet t
,. b w - on lune 25,1981 The dit terence be-
, K 6 tween the originally requested rates
- ^ # and the approved final r nes lus been W
Ym- ref unded to I ~nion 1.ight, and n ill he M . .,
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refunded io l'nion I.iuht's customers
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, in at cordance with a refund plan ap-
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pros ed inJanuary,1982 by the Kentucky y .- - Public 'sen ice Conunission ( KP5C ).
In ()ctober.1981, l'nion 1.ight filed ,
w ith the KP5C an applicati< In for a l 56.5 million annual increase in its gas I rates. If approsed, the new rates I wiiuld take ellect in the second l quarter of 1982.
Electric Production The first 600 meg,iwatt unit at the I{ast llend )
Sution in th >one County. Kentuck),
went into service earlier this vear.
- 4 A second unit of the s.une si/c is inunn note si w eu"'e scheduled for completion in 1988.
si a lanist i In tr n ( );er anne I kpu nnet it ,
g , g. ,
g Xinuucr Nuclear 5ution The Pl u )al. electricity occurred late in I)cccmher, lowed 50"o of our investment in the 1980 After approxinutely three months i 7.lmnler Nticlea! 5l ltit in ,ts t )I.\l.trch 31. (if pre-operati()n;ll testillg, the linit he-198I m the rate iuse ( Ohio's rate base came available for commercial service 1 tw pernuts Ihe Pl ( (),at its dist retton, on \ larch 2 6.1981. After a few problems to int lude in t he r ne luse construction w ere soh ed during April and .\ lay, the ,
w ork in pr ogr ess on project s ,it le.ist ;"o una lud a renurkably good recold O iluplcletl, htli ()tlly it) an ;tggregJte ()I availahility ft)r the ren13inder I an tt lunt up tt ) 20"o t )Ithe renlainder t )! ()I the ) ear. l l
lhe rate base I 'I he last gas rate increase Ct inst rlictit )ll of t he seO )fld linit at I{ast I i was granted in 10% That request w,is llend 'statit in lus begun.14 eundations in l hased on 1976 cosis t he hoiler and turbine area, along wit h l
The i ederal linergv Regulatory installation of the circulating water pipe,
- Conunission issued an order in luse been completed. ,
l Nosember appr os ing CG&lfs requt ,t The Killen Generating Station in j to incre.ise rates for electricity sold Adams County, Ohio, is scheduled for w holesale to our Kentucky subsidun. conunercial operation in October,1982.
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- 1. New York $123 91 /
- 2. Ilosion i13A3 ' * '
- 3. Phil.uiciphia 92.57 .
- 4. llaltimore
- 5. Washington HH 62 H53)6
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- 6. .\lilwaukee 8626 ) -
'. Chicago '
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- 9. Ilut falo 76.85
- 10. Clevel.uul 76.17 \ ?
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- 12. Atlanta 73.87 4
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- 13. Pittsburgh 72.75 */ p ,9 W
li Minneapolis -*2.53 ' i -
- 15. Cincinnatl 72.22 ' - "* ""
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- 16. Kansas City 67.83 cums icm . ucier w AVliRAGli $H3 52 "dh"" A*'O l """"x ocpamnent l'igures reflect the aser- facilities and resources. l!!cct ric meters Twu wind-powered generators, in-
"luipped with microprocessor-lused, ciuding a unit lunded by the ti.S. De-age price paid lw residen-solid state elect ronie registers are being partment of linergv and the National tial customers !br 500 kilo-watt hours of electricity instaHed at our customers option to Aeronautics and Space Administration, and 10,000 cubic feet op implement a load management rate have been placed in service by custom-available to commercial and industrial ers on t he Company's elect rie dist ribu-gas in November 1981, lor customers. The electronic register can tion system. The 1.8 kw and 6 kw nujor metropohtan areas be programmed Ihr five years to distin- generators will provide valuable data on w ithin 750 miles of Cin.
cinnati. (11S. Department guish between the customers use of the feasibility of using these generators luwer and energy based on the time of in ou r service area, as well as t heir effect of 1. abor, ilureau oflabor ilm day, the day ofilm wwk and holidays. on the operation ofour electric system.
Statistics - November 1981. )
CG&li continues efforts to aid non- A third wind-powered generator projec t residential customers in load manage- is under construction.
ment techniques. A series of 21 one-day The Company continues to monitor seminars for small commercial firms t he development ofcogeneration by in-were held throughout the service ter- dustrial users. At this time,CG&lidoes r tory to train these users on energv not believe it can purchase power in suf-audits, demand control, energy man- ficient quantities from cogenerators to agement plans, and eflicient use of offset the need for future capacity.
electricity. The free seminars were
~
attended by more than 400 non. Gas Operations ourgassupplyis residential customers. continuing to improve. Columbia Gas A CG&li customer panicipating in a System, Inc., our principal supplier, will load nunagement course, which we be able to furnish us our requirements conducted Ihr large users, won a na- during the next ten years, including the tional award for its energy management necessary amount for winters as much as efforts. Ikdinghaus ilusiness l'orms 10% colder than normal. In April,1981, won the second highest award in the Na- the PUCO authorized CG&li to supply tional lilectrification Council'.s National gas to new boiler loads in excess of Achievement Award Program, which 300,000 cubic feet per dayon a lowest is open to organizations completing priority fully interruptible basis. Injune, an energy mangement course. In 1981, 1981, the KPSC authorized Union 1.ight 25 of our customers completed Ihe to accept similar huds on a similar basis.
education program. We installed 68 miles of new gas 8 _
y, l h l l
l {-
in Purt hmed Gn Cost
- Projet ted 4, Per Md Q ,
"" 5 '
ss dist ribution mains and added 3,600 gas ] , :
customers to our lines in 1981. We 5? y
( ,u", , "' anticipate an average annual increase , &
of I A% in our gas sales over the next ,.
five years.
The price we must pay for gas will
{_ ..
,m a continue to increase. Our suppliers -
om forecast that our cost ofgas in 1990 will (4
be almost five times higher than the 1981 level. CG&li opposes the accelerated -
deregulation of natural gas prices. We -N believe it will result in higher prices .
p ~
immediately without a commen- ' '
,g (g
I;
, g 2m (surate beneht to supply.
The Residential Conservation Service RCS) program was initiated in CG&II's
/ y im g service area in August,1981. During g < {
the following months, approximately 7 7 ; 7 ,
400,000 initial program announcements I E I I E were mailed to Ohio gas and electric customers. This program was mandated by the National Energy Conservation Policy Act of 1978. The response to the Ohio program announcements has U-been disappointing. Only 1.7% ofIhose J Eugene Kissel. Amcute receiving the announcements have F""'"'""""""'
made requests for the energy audits.
The KPSC has not announcell a staning 1981 expenditures were $252 million date for the RCS program in that state. for electric facilities, $19 million for The Company completed in 1981 gas facilities, and $3 million for com-a planned prog' ram of modernization mon facilities used in both gas and of its Gas Control Center. The Center, elen ic operations.
located in the lleadquarters Building, Construction expenditures for 1982 ranstruoion npeninture, manages the gas supply of the entire are expected to be $240 million. Over 3"" s s inn %na the next five years (1982-1986), con-j service area. The 24-hour staffed P""" struction expenditures are expected to Center arranges for the daily suppiv
,y, of gas and controls the flow of the' total $1,178 million, primarily for gas throughout the system.
electric generating, transmission, Five outiving stations have been mod. and distribution facilities. An estimated
. . ernized over a live-year period. I' sing $119 million will be spent for gas computerized remote control units, facilities.
these stations control gas flow, change InJanuary,1981, CG&E sold through pressure settings, and calculate the in. underwriters 300,000 shares of 12.52%
I iy, stantaneous gas tlow at various h > cations series $100 par value Cumulative Pre-l in t he system. The Cont rol Center inte.
ferred Stock and an additional 2 million grates t he entire system into a composite shares of common stock at a price of center for controlling the functions of $15.25 per share. In May, $100 million the gas system.
~
of 10-year First Mortgage Bonds bearing interest at a rate of 16% were sold
. Construction and Financing through underwriters. The proceeds During 1981, CG&E and its subsidiaries from these sales were used to repay invested $274 million for both new facil- short-term indebtedness incurred in
. e + e ities and the replacement and upgrad- connec' ion with our construction pro-
-bi1$6 ing of existing facilities. Included in the gram and for additional construction.
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l-t Gas operatmg Departrnent In July, as a result of the 1980 x realignment of the ownership interest t-in the East Bend Station, CGME ob-tained from The Dayton Power and 1.ight Company $12.7 million of the pro-ceeds from pollution control revenue bonds issued in 1979. The bonds have an average life of approximately 25 years and an annual cost of money .-
to CG&E of 8.24%. - y- .f I?nion 1.ight issued in December, through a private placement, $10 mil- [6,E .
.2
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lion of First Mortgage ik nds having an g -i average life of 8% years and bearing
'- )) ;;.'d{-. -
interest at a rate of 15%%. The proceed 3 . # ~-C 4'1 I- ~
wue used to repay 1 nion 1.ight's short- zero for the purpose of determining tax-term indebtedness incurred in connec- able gain when shares are sold. The gain tion with its construction program and from such a sale will quahfy for long-the retirement at maturity of $1 A mil- term capital gain treatment if the shares lion of 3%% First Mortgage ik>nds. are held for more than one year from the Additional equity capital of dividend payment date on which they
$15 million mts provided by the were purclused. l lowever, if any shares issuance of 991,939 shaces of CG&E of CG&E's common stock (regardless of common stock through the Dividend how a cquired) would be sold within one Reinvestment and Stock Purchase Plan, year from the date when shares were the Employee incentive Thrift Plan, and acquired through the reinvestment of the Employee Stock Ownership Plan. dividends, the entire net proceeds from Congressional approval of President shares sold ( up to the number of shares Reagan's tax package may be helpful to so acquired) would be treated as ordi-CGME shareholders. The Economic nary income.
Recovery Tax Act of 1981 allows indi- CGME's Plan was amended effective viduals participating in one or more January 5,1982, for the purpose of revis-qualifying plans (including CGME's ing the section relating to federal in-Dividend Reinvestment and Stock Pur- come taxes to reiket the new tax provi-cluse Plan)to defer federal income sions. The Plan was also amended to taxes on up to $750 per year ($1,500 provide for participation by holders of for a joint return)of the dividends preferred stock; to provide for the rein-reinvested. vestment of dividends from less than The tax basis of shares purclused the total number of shares held in one from the reinvested dividends would be account, since many shareholders wish 10
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Shareholders SurveyIna com- (19%). The next largest occupational prehensive survey last year, CG&E's group is llomemaker (13%). shareholders expressed their opinions Store than a third ofour shareholders about Company operations and policies. live in our home state of Ohio (36%). la Approximately 30% ofour slureholders fact, 43% of our shareholders live in answered our questionnaire. Ohio, Kentucky, and Indiana - parts of Atanagement was pleased bythe high which comprise our service area. With rate of participation in the su rvey, and the high percentage of retirees among learned a lot about the owners of the our shareholders, it is not surprising tha' Company. The information will be use- a significant number reside in Florida ful in planning for improved communi- (10%) and California (6%). catr. ,with our shareholders and in the The majority of our representative formulation of new investor programs. group of shareholders (68%) own 250 We believe that mutual understanding of or fewersharesofstock,and 70% rely the issues and opportunities facing our on their investments for living ex-clunging industry is helpful to share. penses, either wholly or in part. Three-holders and managers alike. Lurths of them own between 50 and Alanyof the questionsweredesigned 500 shares; 12.5% own 50 shares or less, to collect the usual demographic infor- and 12.3% own more than 500 shares. mation about our shareholders. In addi. Alore than half (60%) have annual tion, we learned tlut our owners are household incomes of 530,000 or iess, overwhelminglyin favorofCG&E man. and 19% have incomes of $15,000 or less. agement voicing its opinion on govern. Our typical shareholder is a mature, re-ment actions that affect our business. tired professional in modest circum-51 ore than 98% of the shareholders stances, wl.o depends on investments to responding urged us to speak up on meet daily living expenses. government-industry issues. Current income from dividendswas We learned, too, that 85% of the the most frequently mentioned primary shareholders responding believe the reason for holding CG&E stock (56%). United States should increase its reliance A combination of income and long-term on nuclear power. It is good to know that growth was second (37%). A typical they support our plans to use this CG&E shareholder has owned CG&E proven technology in order to assure a stock for approximately 5% years. Store dependable supply of electricity for our than one-fourth (26%)luve owned their customers. shares for moretlun 10 years,and 28% It is always interesting to find out are newcomers to CG&E ownership, more about shareholders, where they owning their stock 2 years or less. live and what theydo fora living.The Shareholders who have owned their survey shows that CG&E investors are shares for more than 20 years represent mature: 55% are 65 years of age or over, 11% of our shareholders. and 20%are 75 and over. Atost of them Our shareholders are independent-are retired (53%), and the largest single minded investors. Store than 40% cited category of occupation is Professional their own judgment as the primary in-iluence in their decision to buy stock in our Company. Advice from brokers accounted for 31% of the decisions to buy CG&E stock. CG&E ownerskeepthemselveswell informed on matters ofbusiness and in-vestments. Almost 84% are daily readers of the business sections of their local newspapers, and 42% regularly read the Wall Street Journal. 12
1 1 Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The increase in earnings per common share fi>r 1981 compared to 1980 was due to several factors including increases in electric rates and increases in total electric and gas sales volumes. The effect of these increases was partially offset by depreciation and other costs associated with the first unit at the I!ast liend lilectric Generating Station, which began commercial operation in March 1981 and are not fully reflected in rates charged to CG&li's customers; higher interest charges and preferred dividends due to the issuance of additional securities; general inflation which caused increases in lat ur and material costs; and a larger number of shares outstanding. For further discussion of the effects ofinflation, see Note 1 i to the Consolidated 17inancial Statements. Increases in operating revenues in 1980 and 1981 were primarily due to the operation of fuel adjustment clauses re-l i flecting changes ia the cost of fuel used fi>r electric production, to the operation of escalation clauses reflecting changes in the cost of gas purchased, to increases in total electric . sales volumes during 1980 and 1981, to an increase in total gas sales volumes in 1981, and to rate increases granted by regulatory bodies. increases in gas purchased expense resulted from increases in average cost per Mcf purchased in 1980 and 1981. Increases in fuel used in electric production resulted from increased fuel prices in 1980 and 1981 and from increased electric generation in 1981. The increase in other operation expense in 1980 was due to a number of fiictors including significant purchases of elect ricity, wage increases anJ the general el fects of inflation. The increases in maintenance costs during 1980 largely were attributable to increased maintenance on electric generating units. I)epreciation expense increased in 1981 primarily as a resuh of an increase in depreciable plant in service. Taxes other than income taxes increased in 1981 primarily as a result of higher public utilities gross receipts taxes resulting from increased revenues and increased rates. I'or discussion of Ihe fluctuations in income taxes, see Note I to the Consolidated l'inancial 5tatements. The allowance fiir funds used during construction increased primarily due to the application of the allowance fi>r funds rate to higher levels of const ruction work in progress and to an increase, effectivejanuary 1,1980, in the al-lowance for funds rate from an annual pre tax rate of 8%% to a net of-tax rate of 8WL compounded semi-annually. Interest on long-term debt and preferred dividends increased due to the issuance of additional securities to finance a iurtion of the construction program. Iteference is made to "Itate Matters" herein with respect to electric and gas rate matters. I.iquidity and Capital Resources The construction expenditures fi>r CGMii and its subsidiaries for 1982 are expected to be $240 million. Over the next live y ears ( 1982 198M construction expenditures are expected to be $1,178 million. CG&li contemplates continuing debt and equity financings in the capital markets. The amount of these financings is subject to the amount and timing of rate increases, sales volumes, changes in construction plans, and market conditions. Shor:-term indebtedness u ill be used to supplement internal sources of funds li>r the interim financing of the con-struction program. CG&li and us subsidiaries presently have authorized a maximum amount of short-term indebted-ness of $140 million and $51 million of short term borrowings were out. standing at I)ecember.31,1981. For further discussion of financing, see " Construction and l'inancing" herein. We Hrveniac Doll.ar 19MI
*tirreittu mes1 om . 4 here it G ics sV a a 550 sO lI] slIl( [4 % lt Tlt in b 3< ( Mlwr g 1( Remwsted in the Husmess
( hhCT ()}M' Tat ti O Jnd Malntriung e lM _( . M Depas sation
, __ 3N (,as g; 7 Inter;st clurges-net
- Dnidends IJsC% I@
O
Consolidated Statement of Inc me 7h> cincinnaticas Elecidc company Jr'</ su/w,/ wit coni /=mA5 for th years enaed Det ernier 31. (Thousands of Dollars) 1981 1980 1979 OPEllATING 1(EVENUES Electric . $ 683,090 $599,142 $$18,916 ! Gas 398,383 355,893 306,910 Total operating revenues 1,081,473 955,035 825,826 OPERATING EXPENSES Gas purchased 314,076 280,168 232,055 Fuel used in electric production 263,469 234,938 216,279 Other operation 107,711 109,877 83,673
.\laintenance 70,581 65,131 50,337 l'rovision fiir depreciation 62,589 52,740 49,711 Taxes other than income taxes (Schedule on page 21) 82,603 65,512 59,911 locome taxes (Sthedule on page 21) 47,814 36,942 21,442 Total operating expenses 948,843 815,338 713.438 OPEl(ATING INCO.\lE 132,630 109,697 112,388 OTilER INCO.\lE AND DEDi'CTIONS Allowance fi>r other funds used during construction (Note 1) 33,538 31,051 19,218 Income taxes-credit (Schedule on page 21 and Note 1) 12,363 10,261 (442)
Ot her- net 1,822 2,187 1,056 Total other income and deductions 47,723 43,502 19,832 INCO51E IIEFORE INTEREST CllARGES . 180,353 153,199 132,220 INTEREST CilARGES Intere.st on long term debt 89,103 73,184 61,052 Other interest 4,785 3,529 2,977 Amortization of debt discount, premium and expense 193 59 20 Allowance for borrowed funds used during construction -credit ( Note 1 ) (16,187) (13,85i) (17,577) Not interest charges 77,894 63,218 46,472 NET INCO.\ll: 102,459 89,981 85,7i8 Preferred dividends 24,634 20,798 15,921 EARNINGS ON CO.\l\10N SilARES $ 77,825 $ 69,183 $ 69,824 AVERAGE NI'\lilER OF CO.\l.\lON SilARES OliTSTANDING (000 omitted) 33,830 30,765 26,961 EARNINGS PER CO.\l.\10N Sl!ARE $ 2.30 $ 2.25 $ 2.59 DIVil)ENIX DECI.ARED PER CO.\l.\lON SilARE $ 2.08% $ 2.0-i $ 1.96 Ihe .kmnyunpng notes at e .in integral gurt of the hnandd statements and x hedules 14
Consolidated Statement ofSources of Funds for Construction Expenditures for tlw icars cruk d Dec emler 31 (Thousands of Dollars) 1981 1980 1979 SOURCliS OF FUNDS Operations Net income $102,459 5 89.981 5 85,748 Non-cash provisions deducted in arriving at net income Deferred electrie fuel costs-net (3,022) - - Deferred gas costs-net (14,190) (2,820) - Depreciation . 62,589 52,740 49,711 Deferred income taxes-net 21,310 3,904 150 Investment tax credits-net 17,454 20,438 24,719 Total allowance for funds used during construction (49,725) (44,905) (36,795) Funds provided by operations 136,875 119,338 123,533 Irss-Dividends declared on common shares 71,129 63,583 52,964 Dividends declared on preferred shares 24,634 20,798 15,924 Net Funds provided by operations . 41,112 34,957 54,615 Financing Common shares Public offering 30,500 54,825 - Dividend Reinvestment and Stock Purchase Plan 3,596 3,359 2,210 limployee incentive Thrift Plan 5,571 4,667 3.885 limployee Stock Owner. ship Plan 5,862 5,895 2,859 Cumulati\ e preferred shares . 30,000 50,000 - First mortgage bonds 110,500 100,000 100,000 Other long-term debt 12,826 5,149 48,109 Repayment of long-term debt (2,013) (611) (5,545) increase (decrease) in short-term debt-net (17,390) (8.073) 53,705 Funds provided by financing 179,452 215.211 205.223 Other Sources of Funds-net Decrease (increase) in net current a.ssets (excluding short-term debt and temimrary investments) . 8,713 (141) (43.389) Decrease (increase) in temporary investi. ents (150) 300 2,666 Refunds from gas suppliers received (distributed)-net 4,406 (6,493) 12,100 Ot her- net (9,656) 8.218 1,258 Funds prosided from other sources 3,313 1,884 (27,365) Total l'unds for Construction from above Sources . 223,877 252,052 232,503 Total Allowance for Funds used during Construction 49,725 4i.905 36,795 CONSTRl'CTION liNPliNDITI'Ri!S $273,602 $296,957 $269.298 lie accomgun3:ng notes are an integr.il part of the financial statements and .ctrdules 15
Consolidated Balonce Sheet lic CincinnatiGm& Ekttric Cinnymy Dnemler 31, J')M1 and 19H0 Aru/ su/nidu,y 6,nyunv3 (Thousands of Dollars) 1981 1980 ASSETS PitOPERIY,-PIANT AND EQUIPA!ENT, at original cost (Notes 2,7 and 8) In service-Electric , , , $1,801,183 $1,457,684 Gas . . 245,230 229,511 Common 39,726 38,125 l l 2,086,139 1,725,320 ) 1.ess-Accumulated provisions fi>r depreciation . 579,429 529,209 Net property, plant and equipment in service , 1,506,710 1,196,111 Construction work in progress . 670,983 773,763 2,177,693 1,969,874 OTilEll PilOPEKlY AND INVESTA1ENTS 10,424 9,502 CUltitENT ASSETS Cash (Note 6) . 4,832 5,698 Construction funds (pollution control) held in escrow - 2,514 Accounts receivable, less accumulated provision of $3,286,000 in 1981 and $2,810,0(X) in 1980 lbr doubtful accounts 120,278 99,502 51aterials, supplies and fuel, at average cost-Fuel for use in electric production 53,505 74,785 Other 37,045 31,081 Taws applicable to subsequent year 36,013 33,479 Preluyments . 34,341 26,595 Othel 619 337 286,633 273,991 OTIIElf ASSETS Deferred gas costs 16,162 2,808 Other 10,595 6,093 26,757 8,901
$2,501,507 $2,262,268 Re auumpanung notes arv an integral past of tir finant tal statements and st!.nfules.
16
l
)
l Consolidated Balance Sheet necincinnatic;amaccine annymy j ik'semtwr31,I9Hlandt9Ho Arki \rdniduary Comt<ersies ('Ihousands of Dollars) 19h1 1980 LIAHII.ITIES AND SIIAREllOLDERS* EQUITY cal >lTAI.I7ATION (Schedules on pages 19 and 20) Common shareholders' equity . . $ 678,400 $ 628,138 Cumulative preferred shares (Note 4)- Not subject to mandatory redemption . . 200,000 200,000 Subject to mandatory redemption , 80,000 50,000 Inng term debt (Note 2) . 1,049,646 948,864 2,008,046 1,827,002 Cl?ltitliNT 1.IAllli.lTiliS Current ponion oflx>nds . 20,050 1,450 Notes payable (Note 6)-bank . - 22,800
-commercial paper 51,102 45,790
-other 580 518 Accounts payable 94,801 85,565 Dividends payable on common shares 18,099 16,055 Dividends pavabk .>n preferred shares . 6,195 5,256 Accrued taxes 65,930 60,846 Accrued interest on debt 17,293 14,295 Other current and accrued liabilities . 18,486 17,582 292,536 270,157 Diilliititi!D Citi!DITS AND OTillill Deferred income taxes . 57,275 38,190 Investment tax credits 124,149 106,695 Other liabilities and deferred credits 19,501 20,224 200,925 165,109
$2,501,507 $2.262,268 l
l l l 1 l I Tiw xcomium ing n wcs are an integral part of Ilw finarwul statenwnts ana x trduk s l 17
Consolidated Staternent of Changes in Shareholders' Equity for tir years eruled inet emler 31, (Thousands of Dollars) 1981 1980 1979 CO.\l.\10N SIIAltES Italance, beginning of year . $267,533 $231,48-i $227,392
$8.50 par value of 2,991,939,4,241,124 and 181,403 shares sold in 1981,1980 and 1979, respectively . 25,432 36.019 4,092 Italance, end of year , ,
.$292,965 $267,533 $231,441 PitEAlllIA1 ON CO51.\10N SIIAltES Italance, beginning of year $177,627 $114,930 $140,068 Premium on sale of common shares , 20,097 32,697 4,862 Italance, end of year , $197,724 $177,627 $144,930 ItETAINED EAltNINGS Italance, beginning of year $196,530 $190,930 $174,070 Net income . 102,459 89,981 85,748 Casti dividends declared on capital s' .ces-Cumulative preferred (See page 19 for rates) (24,634) (20,798) (15,924)
Common (See page 11 for rates) . (71,129) (63,583) (52,96 0
!!alance, end of year $203,226 $196,530 $190,930 CAPITAL. STOCK ENPENSE Italance, beginning of year $ 13,552 $ 10,840 $ 10,715 Common stock expense , 1,386 2,050 125 Preferred stock expense 577 662 -
Itilance, end of year . $ 15,515 $ 13,552 $ 10,810 Cl! Nil!! ATIVE PitEllititED SilARES Itilance, beginning of year $250,000 $200,000 $200,000 Sale of 300JXX) and 500.(xx) shares in 1981 and 1980, respectively 30,000 50,000 - lLilance, end of year $280,000 $250,000 $200,000 Tte auumpanyng sues are an integral part of tir finans tal statements and whedules. l 1^]
l Schedule afSh::reholders' Equity 1he Cincinnati Gas & Ekttric C<nnfxiny l tm emtwr$s,s+1andlwun ^'ut subrutwy compmies l l (Thousands of Dollars) 1981 1980 h$.\l.\lON 511ARIsllOI. dells' liQUITY j Common shares, par value $8.50 per share (Note 3)- 1 Authorized-60,000,000 and 40,000,000 shares, respectively outstanding-34,466,462 and 31,474,523 shares, respectively $292,965 $267,533 Premium on common shares . 197,724 177,627 l<ctained earnings 203,226 196,530 Capital stock expense . (15,315) (13,552) Total common shareholders' c(luity $678,400 $628,138 CI'.\ll'I.ATIVli PRi!FERRiiD SIIARES, par value $100 per share (Note 4)- Authorized-6,000,fM)0 and 3,000,000 shares, respectively Outstanding-not subject to mandatory redemption
.rt series-270,fXX) shares (redeemable, upon call, at $108) $ 27,000 $ 27,000 4M"6 series- 130,0(X) shares (redeemable, upon call, at $101) 13,000 13,000 9 30% series-350,fXX) shares ( redeemable, upon cill, prior to.luly 1,1985 at $105; reduced amounts thereafter) . 35,000 35,000 7.44% series-400,000 shares (redeemable, upon call, prior to April 1,1982 at $105; reduced amounts thereafter) . 40,000 40,000 9.28% sesles-400,000 shares (redeemable, upon call, prior to.luly 1,1984 at $106; reduced amounts thereafter) , 40,000 40,000 9.52% series-450,txN) shares (redeemable, upon call, prior to lanuary 1,1996 at $106; reduced amounts thereafter) . 45,000 45,000 200,000 200,000 Outstanding-subic(t to mandatory redemption 10 20% serie.s- 500,000 shares (redeemable, u[xm call, piior to.lanuary 1,1985 at $110.20; reduced amount.s thereafter) 50,000 50,000 12.52% series-300,(XX) shares (redeemable, upon call, prior to.lanuary 1,1986 at $112.52; reduced amoa..ts thereafter) 30,000 -
80,000 50,000 Total cumulative preferred shares $280,000 $250,000 The accomgi.tn3 ing ruites are .tii integral gxirt of the fin.iricul gatenients and whedules. 19 .
Schedule cf Long-Term Debt ne cincimunicase r/cctdcoungmv ihernher 31,19H1 and 19HO Aru/Sidis4//g Com/=mies ('Ihousands of Dollars) 1981 1980 The Cincinnati Gas & Electric Company First mortgage bond 3-3% % series due 1982 $ 20,000 $ 20,000 3M % series due 1983 20,000 20,000 4% % series due 1987 25,000 25,000 5 % series due 1990 30,000 30,000 16 % series due 1991 100,000 - 4% % series due 1992 25,000 25,000 5% % series due 1997 30,000 30,000 7% % series due 1999 50,000 50,000 8% % series due 2000 . 60,000 60,000 i 7% % series due 2001 60,000 60,000 8% % series due 2003 60,000 60,000 9.15% series due 2004 60,000 60,000 9 85% series due 2005 60,000 60,000 8.55% series due 2006 . 75,000 75,000 9% % series due 2008 75,000 75,000 10 % series due 2009 100,000 100,000 12 % series due 2010 100,000 100,000 950,000 850,000 I.ess 3%% series due 1982 20,000 - 930,000 850,000 Note 3 payable-4% due through 1984. 1,461 1,890 6%10% due through 1984 137 76 Other long term debt-6.70% due 1997 through 2006 10,000 10,000 7.10% due 2001 10,500 10,500 7.20% due 2005 through 2009 37,500 37,500 t;h % due 2000 5,000 5,000 7% 3, and 7M% due 1999 through 2009 12,721 - 1,007,319 914,966 The t'nion I.ight, IIcat and Power Company First mortgage bond 3-3% % series due 1981 - 1,400 3% % series due 1984 1,500 1,500 5 % series due 1989 6,100 6,100 15%% series due 1988 through 1991 10,000 - 4% % series due 1993 . 6,500 6,500 8 % series due 2003 10,000 10,000 9% % series due 2008 10,000 10,000 44,100 35,500 I. css 3%% series due 1981 - 1,400 44,100 34,100 Other Subsidiary Companies' Debt 863 468 t:namonized premium and discount (net) (2,636) (670) Total long term debt $1,049,646 $948,864 The .euungunying tw des are an integral part of the financul statements and whedulet 20
Schedule cf Taxes Th' Cincinnati Gas & Electric Com]xmy fi>r the years entk-d Decemter 31, And stahsidiary Com/unics (Thousands of Dollars) 1981 1980 1979 TAXES OTilER TIIAN INCOME TAXES Propeny , $ 34,424 $ 32,304 $ 28,396 Public Utility Gross Receipts , 40,627 27,010 25,904 l>ayroll 5,616 4,356 3,850 Other . . 1,936 1,872 1,791
$ 82,603 $ 65,542 5 59,941 INCOME TAXES Included in operating expenses-Currently payable . $ 8,099 $ 9,231 $ (6,708)
Deferred-net Accelerated amonization (463) (462) (563) 1.iberalized depreciation 8,995 4,109 1,061 Contingent gas revenues 3,036 (3,036) - Gas costs . 6,660 1,294 8 Other 3,082 1,999 (356) Investment tax credits-net 18,405 23,807 28,000 Total 47,814 36,942 21,442 Included in other income and deductions-Currently payable (12,317) (10,218) 489 Deferred- net (46) (46) (47) Total (12,363) (10,264) ~ 442 Total provision $ 35,451 5 26,678 5 21,884 Analysis of provision Federal income taxes $ 35,132 5 26,023 $ 21,269 State income taxes 319 655 615
$ 35,451 $ 26,6_78 5 21,884 COMPlffATION OF FEDERAL. INCOME TAX PROVISION Pre tax income $137,591 $116,004 $107,017 Tax at statutory Federal income tax rate applied to pre-tax income . $ 63,292 $ 53,362 5 49,228 Reductions in Federal income taxes resulting from-Allowance for funds used during construction which does not constitute taxable income (22,874) (20,657) (16,926)
Excess of tax depreciation over book depreciation (1,035) (3,244) (5,885) Cost of removal for property retired (1,17f) (1,061) (1,190) Amortization of investment tax credits (2,105) (1,777) (1,503) Other- net . (971) (600) (2,455) Federal income tax provision $ 35,132 $ 26,023 5 21,269 i l The accompanying notes are an integral part of the financial surements and schedules 21 l
. Notes to ConsoHdated Financial Statements 7le Cincinnati Gas & E/cctric Com/x ny Amtwinauer ampmies (1) Summary of Significant Accounting Policies: , 1 I CGME and its subsidiaries follow the Uniform Systems of Accounts prescribed by the Federal Energy Regulatory Com-mission (FERC). The more significant accounting policies are summarizal below: Princip/cs ofConsolidation. All subsidiaries of CG&E are included in the consolidated statements. Intercompany items - and transactions have been eliminated. I//ility Pkint. Property, plant and equipment is stated at the original cost of construction, which includes payroll and re-lated costs such as taxes, pensions and other fringe benefits, general and administrative costs, and an allowance for funds E used during construction.
#et ennes and Fuel. Revenues are includal in income as billed to customers on a cycle basis. CG&E charged to expense the cost of gas as it was purchased and the cost of fuel used to generate electricity as it was consumed prior tojanuary 1980 andJuly 1981, respectively. Effective inJanuary 1980, The Public Utilities Commission of Ohio (PUCO) imple-mented a rule which changed the manner in which CGME applies the purchased gas adjustment clause. Effectivejuly 1981, the PUCO implemented a rule which allows changes to be made in the electric fuel adjustment charge every six montits, following hearings by the PUCO. In conjunction with these changes, CG&E began expensing purchased gas costs and the cost of fuel used in electric production as recovered through revenues and began deferring the portion of these costs recoverah!c or refundable in future periods.
Ikpariation and.11aintenance. The companies determine their provision for depreciation using the straight-line method and by the application of rates to various classes of property, plant and aluipment. The rates are based on perialic studies of the estimated service lives of the properties.The percentages of the annual provisions for de-preciation to the weighted average of depreciable property during the three years ended December 31,1981, w ere equimlent to: 1981 1980 1979 Eintric . 3.4 3.3 3.4 Gas . 2.9 2.9 2.9 Common 2.3 2.3 2.2 All expenditures for maintenance and repairs of units of property, including renewals of minor items, are charged to the appropriate maintenance expense accounts. A betterment or replacement of a unit of property is accounted for as an addition and retirement of property, plant and equipment. At the time of such a retirement, the accumulated provi-sion for depreciation is charged with the original cost of the property retired and also for the net cost of removal. Income Tmes. For income tax purposes, CGME and its subsidiaries use liberalized depreciation methods including ADR depreciation and cost of remomi deductions. For property placed in service after 1980, CGM E and its subsidiaries utilize the Accelerated Cost Recoveg System (ACRS) provided for by the Economic Recoverv Tax Act of 1981. In February 1980, pursuant to a PUCO rate order, CGME began providing for income tax deferrals resulting from the use ofliberalized tax depreciation Ihr property additions from October 1978 fonvard. CG&E does not provide for income tax deferrals re-3ulting from the use of hberalized depreciation methods for property additions prior to October 1978 in accordance with an order of the PUCO. Based on a decision of the Supreme Court of Ohio, CG&E will be allowed to collect through future rates the income taxes payable in the future as a re.sult of currently using liberalized depreciation methods for pre-October 1978 property additions. CGME and its subsidiaries provide for deferred taxes arising from the use of liberalized depreciation for operations regulated by utility commissions other than the PUCO. InJanuary 1980, pursuant to a PUCO rate order, CG&E began alk)cating the tax benefits associated with borrowed funds used during construction to other income and deductions rather than as a reduction in income taxes included in operating expenses.- Invest ment tax cralits are deferred and amortired over the estimated useful lives of the applicable properties. CG&E estimates that it has an unused investment tax credit carryforward of approximately $5 million which can be used to reduce its future Federal income tax liability. 22
Retirement /ncome Ibn. CG&li and its subsidiaries have a trusteed non-contributory retirement income plan covering substantially all regular employees. The total accrued pension expense, including administrative expense, for 1981,1980 and 1979 was $4,380,000, $6,300,000 and $5,310,000, respectively, which includes anu>rtization of the unfunded actuarial liability over periods ranging from 15 to 40 years. The pension expense fiar 1981 reflects an increase in benefits fi>r re-tired participants and beneficiaries and changes in actuarial assumptions (principally assumptions fi)r future wage levels, assunal rate of return on investments, and rates fi>r projecting Social Security benefits). The net elTect of these changes was to reduce pension expense fi>r the year by approximately $2.8 million. The companies make annual contributions to the plan equal to the amounts accrued ihr pension expense (exclusive of admimstrative expenses which are paid directly by the companies). Accumulated plan benefits and plan net assets at the da:e of the most recent actuarial eval-uation are as fbilows: January 1,1981 (Thousands) Aouarial present value of accumulated plan benefits Oiased on salary rates and p ars of service at present time and does not include the additional actuarial liabihty for future service and salary increases} Vested $ 89,000 Nonvested 5,000
$ 94 000 Net assets at nurket value available for benefits $161000 The assumed rate of return used in determining the actuarial present value of accumulated plan benefits as of January 1,1981 was 7.5%.
A/kmvincefor Funds Used Dming Cemstmction. The applicable regulatory unifbrm systems of accounts define " allowance ihr funds used during construction" ( AFC) as including "the net cost for the period of construction of lx>rrowed funds used for construction purposes and a reasonable rate on other funds when so used." This amount of AFC constitutes an actual cost ofconstruction and, under established regulainry rate practices, a return on and recovery of suc h costs heretofore has tren permitted in determining the rates charged for utility services. AFC was accrued at an annual pre tax rate of 8H% for 1979,and at a net-of tax rate of 8%% compounded semi annually for 1980 and 1981. (2) I.ong Term Debt: t ?nder the terms of the respective mortgage indentures securing first mortgage bonds issued by CGME and its sub-sidiaries, substantially all property is subject to a direct first mortgage lien, except that a portion of CG&E's headquarters property is pledged as collateral fbr a purchase-money 4% note payable in installments through 1984. Improvement and sinking fund provisions contained in the indentures applicable to the First Mortgage Ilonds of CGMli and Union I.ight, except CG&E's 12% Series due 2010 and 16% Series due 1991 and Union 1.ight's 15%% Series due 1991, require deposit 3 with the Trustee, on or belbre April 30 of each year, of amounts in cash and/or principal amounts oflxinds equal to 1% ($7,6 61,000) of the principal amount of bonds of the applicable series originally out-standing less certain designated retirements. In lieu of such cash deposits or delivery of lxmds and as permitted under the terms of the indentures, the companies have been Ibilowing and plan to continue the practice of pledging unfunded property additions to the extent of 166M% of the annual sinking fund requirements. The amount of maturities of Notes Payable during the next five years will be approximately $580,000 in 1982,
$570,000 in 1983, and $1,010,000 in 1984. First Mortgage lionds of either CG&E or (!nion 1.ight will mature as follows: $20 million in 1982; $20 million in 1983;and $1.5 million in 1984. The annual sinking fund requirements with respect to the First Mortgage lionds oflawrenceburg Gas Company range from $50,000 to $100 000 in 1982 through 1986. The amounts due during the 12 months after the balance sheet date are reflected in Current 1.iabilities in the accompanying llalance Sheet.
23
(3) Common Stock: CG&E issued authorized but previously unissued shares of Common Stock pursuant to three plans as follows: Shares Reserved Shares issued for issuance at 1981 1980 December 31,1981 Unidend Reinvestment and Simk Purduse Plan 235,541 208,510 1,300.244 Emphnee In(endre Thrift Plan . 365,242 286.225 1,337,416 Emphqee Stock Ownership Plan 391,156 346.389 295.878 991,939 84 L124 2.933.538 Reference is made to " Construction and Financing" herein for information concerning the proposed sale of additional common stock on or about February 10,1982. (4) Cumulative Preferred Stock - Subject to Mandatory Redemption (Redeemable Preferred Stock): The Cumulative Preferred Stock,10.20% Series and 12.52Lseries are subject to mandatory redemption in an amount sufficient to retire on eachJanuary 1, beginning in 1985 and 1987, respectively,15,000 shares and 9,000 shares, respec-tively, at $100 per . share plus accrued dividends, and CG&E will have the noncumulative option to redeem up to a like amount of additional shares in each year. CGME will have the option to satisfy the mandatory redemption requirement in w hole or in part by crediting shares of the applicable series acquired by CGME. To the extent CG&E does not satisfy its mandatory sinking fund obligation in any year such obligation must be satisfied in the succeeding year or years. If CGME is in arrears in the redemption of either series pursuant to the mandatory sinking fund requirements, CG&E shall not purchase or otherwise acquire for value, or pay dividends on, Common Stock. Under a restriction imposed by CG&E's Articles ofIncorporation which requires consolidated income (as defined) to be at least I h times the sum of annual inteiest charges on consolidated debt and annual dividend requirements on preferred stock, CGM E would have been able to issue approximately 140,000 additional shares of preferred stock on December 31,1981. (5) Hates: Reference is made to"I6te Matters" herein with respect to electric and gas rate matters. (6) Compensating Hank Halances and Notes Payable: Substantially all of the cash balances of CGME and its subsidiaries are maintained to compensate the respective banks for banking services and to obtain lines of credit; however, no siwcific amounts have been designated as compensating bal-ances and CG&E and its subsidiaries have the right of withdrawal of such funds. Unused lines of credit under agree-ments in effect at December 31,1981, totaled $65 million.The maximum amount ofout3tanding short-term notes pay-able, including commercial paper, authorized by CG&E's ik>ard of Directors and approved by the PUCO to be incurred at any time in 1982 is $125 million and, in addition, FERC authorized Union Light to issue a maximum of $15 million of shon-term notes payable through December 31,1982. 24
(7) Comnmn Ownership c f Electric Utility Plant: CG&E, Columbus and Southern Ohio Electric Company, and The Dayton Power and Light Company have constructed or have made commitments for the construction of electric generating units and related transmission facilities on vary-ing common ownership bases as set forth below: CGAE's share at December 31,1981
% Property, Plant Accumulated Construction owned by and Equipment, Provisions for Work in CGAE in service (a) Depreciation Progress (b)
(Thousands of Dollars) Pnidaction Stiami Fort Generating Station (I'mts 7 and H) 64 $166,596 $27,870 $ 7,674 W.C. Ikskjord Generating Station (Unit 6) . 37h $ 29,030 $ 9,468 $ 346 J.NI. Stuart Generating Station . 39 $192.901 $39,196 $ 2,625 Conesville Generating Station (Unit 4) 40 $ 53.290 $15,787 $ 1,014 Wm. fl. Zimmer Nuclear Power Station (l' nit I) 40 $ -
$422.820 (c)
East Iknd Generating 5tation (t' nit 1) . 75 $ -
$ - $ 9,550 (l' nit 2) . 69 $282,054 $ 7,711 5 311 Killen Generating Station (d) 33 $ 8,085 $ - $154,1H1 Transmission . various $ 56018 $ 9,455 $ 735 ,
(a ) The Conv >lidated Statement of locome relksts CG& E's portion of all operating costs associated w ith the commonly owned facilities. (b) Each participant must provide funds for its share of the construction project. (c) Excludes cost of nuclear fuel (d) Reference is made to " Electric Production" herein with respect to the cancelkd second t
- nit.
(C) Commitments and Litigation: The companies estimate that their construction programs will require expenditures of approximately $1.2 billion dur-ing the period 1982 through 1986. Reference is made to Note 7 alxwe and " Electric Production" herein for further information. CG&E owns 9% of the common stock of Ohio Valley Electric Corporation (OVEC) which has a long-term contract to supply power to the Department of Energy (DOE). The proceeds from the sales of power by OVEC are to be sufficient to meet all ofits costs. CGME and other sponsoring utilities are entitled to receive, and are obligated to pay for the right to receive, any available power from OVEC's facilities not required by DOE; CG&E's portion of available OVEC capacity is9%. Reference is made to " Litigation" herein with respect to lawsuits against Union Light. 25 _ _ _ _ _ _ _ _
(9) Quarterly Financial Data (Thousands): Average Number of Total Earnings on Common Earnings per Operating Operating Net Common Shares Common Quarter Ended Revenues Income Income Shares outstanding Share Alarth 31,19HO . $ 304.210 $ 36,246 $ 33,221 528,192 29,583 $.95 June 30,19HO 205,610 22348 17,590 12334 30,839 ,40 j September 30,1980 208,948 30J))! 24.071 18,815 31.219 .60 i ihrember 31,19H0 236,267 21,012 15fy>9 9,842 31,41H 31
$ 955,035 $109,697 $ 89,981 $69.183 (a) 51arth 31,1981 $ 353."62 $ 47,295 $ 41,723 $35.674 32,916 $1.08 June 30,1981 234,417 24.44e 17,153 10.958 33,825 32 Nrpiember 30,1981 235,902 33,063 24,625 18,430 34,175 .54 Ihvemher 31,19HI 27'392 27,868 18,958 12,763 34,403 37
$ 1 J)MI,4'3, $132.630 $102,459 $7',M25 (a)
(a) Total sloes not et ut annual earnings per sture due to dunge in shares outstanding. , (10) Financial Inforrnation By Business Segments (Thousands of Dollars): Operating Operating Income Provision for Constructkin Revenues Income 'thxes Depreciation Expenditures (a) Year I:ndet! I)ctrmher 31,1979 lilectrie $ 518,916 $ 95,258 $14319 $43,358 5256,7'1 G.h . 306,910 17,130 ',123 6353 12,731 Total $ 825.826 $112388 $21,442 $19,711 $269,502 Year Entkd I)ewmher 31,1980 Ekstric $ 599,142 $ 95,735 $31.283 $46,019 $276,655 Gas . 355,893 13,% 2 5,659 6,721 19,834 Total . $ 955,035 $109.697 $36,942 552,740 $296,489 Year Ended I)etrmher 31,1981 1:lettric $ 6H3 090 $118,623 $43,629 $55,742 $253,495 Gas 39H,383 14,007 4,IH5 6.847 19,206 Tot.d . _$ 1 J)81,4'3 _$ 132,630 $ 67.814 $62.589 $2'2.701 ( a) Exdudes construction expenditures for non utihty plant of $( 201D00) in 19'9,5 e6810) in 19H0, and $9J1,000 in 1981. Years Ended December 31 1981 1980 19 9 Proprrty, Plant and I:quipment, net - 1lectrk- $2,004,948 $1,H08,530 $1,580,54 i G.o . 172,745 161344 14H302 2,177,693 1,%9.H'4 1,'28.843 Gher Ca >rpim.ite Assen 323,814 29239e 251,992 Total Awts $2,501,507 $2,262.294 $1,980,835 ( t 1) Supplemental Information Concerning the Effects ofInflation (Unaudited): l The e.stinutes of the effects of inflation on the operations of CGNE and its subsidiaries, as set forth below, were pre-i pared on the basis prescribed by the Financial Accounting Standards Board (FASB) Statement No. 33," Financial Report-l ing and Changing Prices': This Statement rquires adjustments to historical costno estimate the effects that general infla-tnon," Constant 1)ollar," and clunge.s in s[rcific prices," Current Cost," have had on the Company's results of operations,
'This data is not intended as a substitute for earnings reported on a historical cost basis. It offers some perspective of the appre ' mate effects ofinflation rather than a precise measurement of these effects.
26
Statement cf Income Adjusted for Changing Prices For the Year Ended December 31,1981 Constant Dollar Current Cost Conventional Average Average IIIstorical Cost 1981 Dollars 1981 Dollars (Thousands of Dollars) Total operating rewnues $1,081,473 $ 1.081,473 $1,081,473 Gas purclused 314,076 314,0~6 314,076 l'uct used in electric produt1 ion 263,469 263,469 263,469 Provision for depreciation 62,589 123.860 138,713 Other operating expenses 260,895 260.895 260,895 locome taxes 47,814 47,814 47,814 Total other income and deductions (47,723) (47,723) (47,723) Net interest (harges . - 7,894 r,894 ~7,894 979,014 1.MO,285 1,055.138 Net income 102,459 41,188 26,335 Preferred dividends . 24,634 24,634 24.634 lyrnings on common shares $ '7,825 $ 16.554 (a ) $ 1,701 increase in specific prices (current cost) of property, plant and eqmpment held during the year (b) . $ 440,388 Ikdudion to net recmerable cost . $ (116,547) (194,996) Effect of increase in general price level (347,086) Eurss of increase in general price level over increase in specific prices, after reduction to net recoverable cost (101,694) G.un from dechne in purchasing power of net amounts owed . 121,856 121,856 Net . $ 5,309 $ 20,162 t a) Im luding the reduction to net recoverable cost, the earnings on mmmon shares on a conmat dollar basis would luw been $4 99,993,0n0) for 1981. (b) At December 31,1981, current cost of property, plant and equipment, net of accumulated depreciation, was $ ij71,112,0no wlule historical cost was $2,l'7,693,000. Five-Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices Years Ended December 31 1981 1980 1979 1978 19~7 (Thousands of Average 1981 Dollars, Except as Specified) Total operatmg revenues A tual . $1,081,473 $ 955.035 $ 825.826 $ U2,676 $ 689,866 Adi usted to average 1981 dollars $1,081,473 $1,054 099 $ 1,034,752 $ 1,07',159 $1,035,369 Constant dollar information F.arnings on common shares . $ 16,554 $ 14,131 $ 32,082 lurnings per (ommon share . $ .49 $ .45 $ 1.19 Mt assets at year end at net recoserable cost $ 656,470 $ 661,402 5 660,243 Current cost information IMrnings on common shares . $ 1,701 $ 4,175 $ 15,844 I armngs per common slure . $ .05 $ 13 $ .59 INcew of increaw in general price level over increase in spaific prices, alter redudion to net recoverable cost . $ 101,694 $ 168,982 $ 179.850 Net aswts at year end at net recoverable cost $ 656,470 $ 661,402 5 660.243 General Information Gain from dechne in punhasing power of net amount.s owed $ 121,856 5 164,123 $ 166,9H Cash dnidends declared per common share Attual . $ 2.085 $ 2.04 $ 1.96 $ 1.90 $ 1.79 Adiusted to aserage 1981 dollars $ 2.085 $ 2.25 $ 245 $ 2.65 $ 2 68
.\l.uket price per common sture at > var end Actual . $ 15.750 $ 15250 $ 16 625 $ 20.000 $ 23.125 Adi usted to average 1981 dollars $ 15,241 5 16 0'6 $ 19 608 $ 26.851 $ 33m9 Average consumer price index . 272.4 2 46.8 217,4 195.4 181.5 27_ I
l'roperty, l'huit and/s/uipment(l'/ ant) Estimated plant primarily consisting of plant in service and construction work in progress, was determined in constant dollars by applying the Consumer Price Index for All L?rban Consumers to the his-torical cost of plant. The current cost estimates were determined by applying the Ilandy-Whitman Index of Public Utility Construction Costs to plant accounts. Current cost is an estimate of the cost of currently replacing existing plart. The resulting adjusted data for plant under either of the above methods is not indicative of the Company's future capital re-ouirements because the actual replacement of existing plant will take place over many years and is not likely to be a repn aduction of presently existing plant. The difference between current cost and the constant dollar data results from specific prices of plant increasing at a rate different from the rate of general inflation. Accumulated /Apreciation. The accumulated provisions for depreciation under both of the methods described above were developed by applying the same percentage relationship that existed between gross plant and accumulated provi-sion for depreciation on a historical cost basis to the respective adjusted plant data. lApn>ciation /npense. Depreciation expense for both methods was determined by applying the Company's deprecia-tion rates to the respective indexed plant amounts. Writedoten ofI'roperty, I'lant and /kimpment to Net Recosembh> Cost. The regulatory process Iimits the Company to ihe recovery ofIhe historical cost of plant in its rates. Therefore, ariy excess of the value ofplant stated in constant dollars or current cost must be reduced to the net recoverable cost, which is historical cost. The amount of this excess that oc-curred in the current year is retlected as a writedown of plant to net recoverable cost. Gainjh>m tiv Decline in l'urclusing I'otver ofNet Amounts Otred. The Company, by holding assets such as cash, re-ceivables, and inventory, loses purclutsing power during periods ofinflation because the amount of cash received in the fut ure for these items will purchase less. Conversely, by holding monetary liabilities, primarily long-term debt, the Com-pany benefits because the payment in the future will be made with dollars having less purcittsing power. The Company h.ts significant amounts oflong-term debt outstanding which will be paid back in dollars having less purchasing power and therefore, for purposes of these calculations, has a net " gain" from holding monetary liabilities in excess of mone-tary assets. Otler /tems As permitted by 1%SB Statement No. 33, items in the income statement, other than depreciation expense, were not adjusted. The cost of fuel used in electric production and gas purchased were not adjusted because the effect on earnings on common shares was not material due to the relatively short turnover period. The regulatory process limits the amount of depreciation expense included in the Company's revenue allowance and the amount of plant in rate b.tse to the original cost investment. Such amounts produce cash flows which are inadequate to replace such property in the future or preserve the purchasing power of common equity capital previously invested. While this effect is mitigated by the benefit derived from holding long-term debt and preferred stock, the Company's common shareholders experienced a reduction in reported historical earnings as a result ofinflation which can only be overcome by obtaining adequate rate relief. Ilowever, the Company expects that it will be able to establish rates which will cover the increased costs of new plant. 28
Auditors' Report To the Slureholders of The Cincinnati Gas & Electric Company: We have examined the consolidated balance sheet and schedules of shareholders' equity and long-term debt of Tile '
- CINCINNATI GAS & 11ECTRIC COMPANY (an Ohio corporation) and its subsidiary companies as of December 31,1980, and December 31,1981, and the related consolidated statements of income, changes in shareholders' equity, and sources of funds for construction expenditures and schedule of taxes for each of the three years in the period ended December 31,1981. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the accompanying consolidated financial statements and schedules referred to above present fairly the i financial position of The Cincinnati Gas & Electric Company and its subsidiary companies as of December 31,1980, and December 31,1981, and the results ofIheir operations and their sources of funds for construction expenditures for each
; of the three years in the period ended December 31,1981, in conformity with generally accepted accounting principles applied on a consistent basis.
t ) Arthur Andersen & Co. Cincinnati, Ohio, January 25,1982. I 1 4 1 i t 4 i i rirst ' second Third routth i Quarter Quarter Quarter Quarter Sale ihrs of CG&F.'s Common Stak (stock Symtol-CIN) 1980-lhgh 17 % 19 4 - 19% . 18 %
-inw. 14 % ISM 15 4 14 1981 -l hgh . , 17h -16 4 16 4 16 %
-Inw, , , , 14 % 14' 14 % 14 % )
- Dnidends twlared ,
pr rummon Share in l 1980 ., .. . . $ 51 S.51 $.51 : $.51 1981 , . . . , $ 51 ' $.52% $ 52h ' $ 52% - I
- 29. -. . .-. . . . -. -
)
Consolidated Statistics: 1971-1981 1981 1980 GENERAL Earnings on common shares ($000 omitted) . 77,825 69,183 Average num!wr of common shares outstanding (000 omitted) 33,830 30,765 Earnings per common share ($) . 2.30 2.25 Cash dividends declared per common share (5) . 2.08% 2.04 l Pay out ratto (%) . 90.7 90.7 Total assets ($000 omitted) 2,501,507 2,262.268 Construction expenditures ( $000 omitted) . 273,602 296,957 Plant retirements ($000 cmitted) 14,662 10,943 Inng term debt and redeemable preferred stock ($000 omitted) 1,129,646 998,864 Electric revenues ($000 omitted) ELECTRIC Residential 245,198 222,952 DEPARTMENT Commercial . 180,584 157,551 Industrial 185,188 159,051 All other . 72,120 59,588 Total revenue 683,090 599,142 Elearic sales (million kwh) Residential 5,117 5,277 Commercial . 3,407 3,333 Industrial 4,666 4,493 All other . 1,596 1,416 Total sales _ 14,786 14,519 Number of customers December 31. 596,849 591,459 Average annual sales per residential customer (kwh) . 9,592 9,994 Electricity generated-net (million kwh) . 15,583 14,664 Electricity pur hased and interchanged-net (million kwh) 215 942 Total available (million kwh) . 15,798 15,606 KW capability at 12/31-net (thousand kw) 4,266 3.867 System peak load-net (thousand kw) . 3,140 3,154 Fuel cost per kw h generated (cents) 1.715 1.602 litu per kwh sendout 10,441 10,364 1.oad factor-ekctric 56.6 56.2 Gas revenues ($(xx) omitted) GAS Residential 174,944 166,271 DEPARTMENT Commercial 78,931 72,462 Industrial 127,335 100,383 All other . 17,173 16,777 Total revenue 398,383 355,893 Gas sales (million cu. ft.) Residential 43,714 45,746 Commercial 20,764 21,071 Industrial 36,341 32,390 All ocher . 3,916 4.403 Total sales 104,735 103,610 Annual degree dap-billing . 5,481 5.686 Number of customers ikcember 31. 366,725 365.313 Acrage annual sales per residential customer (thousand cu. ft.) 133 140 Gas purchased (million cu. ft.) 106,111 106,541 Gas produced (million cu. ft.) . 92 12 Total avai'able (million cu. ft.) . . 106,203 106,553 Sprem maximum day sendout (million cu. ft.) 784 736 Average cost per Mcf purchased (cents) . 296.0 263.0 Mean temperature on maximum day (*F) . 6 10 1.oad factor-gas . 37.1 39.5 O src Note lo to the Ginsolnlatul l'nunt ut sutenwnts for .kidit si uul Inunaal inforntition N Nisiness sc>cinents. N
1 Tic CincinnatiGas & Electric Compmy And.wbskwry compmws 1979 1978 1977 1976 1975 1974 1973 1972 1971 69.821 61,808 60,191 38,639 38,097 35,736 42,241 40,108 32,771 26,96i 2 i,253 21.450 21,000 20.233 18,700 18,700 17,000 16,001 2.59 2.S i 2.80 1.84 1.88 1.91 2.25 235 2.01 1.96 1.90 1.79 1.6s 1Ivi 1.64 1.64 1.58 1.56 75.7 74.8 63.9 89.1 87.2 85.9 72.9 67.2 76.5 1,980,835 1,719,273 1,537,614 1,442,918 1.301,551 1,191,566 1,061,279 973,598 877,686 269.298 206,876 15s.231 133,828 142,294 136,578 126,004 113,500 141,710 13,802 8,371 20,0i2 26,632 14,825 11,806 17,953 10,139 15,496 8-i6.652 698,974 618,876 664,333 560,753 501,936 487,793 416,746 417.212 186,216 180ce76 161,531 132,093 125,887 100,899 89,097 81,155 74,976 135,'05 129,402 120399 91,534 83.786 69,758 61,109 53,981 47,824 166c190 136,903 123,721 91,748 83,188 73,151 59,8'O 53,788 47,988 50,505 46,542 41,531 3 i,0i a 31.619 29,707 21,439 19,174 17,208 518.916 493.323 450,I82 352,419 324,510 273,515 231,515 208,098 187,996 4.822 4,728 4,569 4f)68 3,969 3,5' i 3,510 3.228 3,042 3,182 3,069 3,057 2,873 2,755 2,(vi4 2,632 2398 2,209 4,57 4,517 4,487 4.295 3,938 4334 4,373 4,118 3,926 1327 1,251 1,312 1,193 1,178 1319 1,059 %1 910 14,088 13,568 13.425 12,429 11.840 11,871 11,574 10,705 10.087 583,197 3 0,536 560,551 553,915 541,494 533.079 521,833 510324 499,797 9303 9.328 9,149 8.251 8,183 7,551 7,574 7,117 6,836 14,8~9 14,I$X> 13.818 13.267 12.352 11,886 11,830 10,936 9,899 2:0 332 586 189 476 899 684 685 1,001 15,i19 , I i,528 14.43j 13,436 12,828 12,785 12,514 11,621 10,900 3,880 3,800 3ci80 3ci92 3,739 3,482 3,254 2,934 2,461 2,9~8 2,835 2.8 61 2,598 2,511 2ce0' ) 439 2,093
, 2.243 1.456 1.383 1.172 1.03 4 .94 4 761 d44 411 382 10,609 10,555 10,500 10,252 10,183 10.262 10,024 10,178 10308 578 58.I 57.8 584 58.1 59.3 58.2 58.8 59 3 113,657 137ci40 123.082 96.775 76,038 63.567 54,745 57,736 51,528 61,166 58,010 50 105 #0,381 32322 27 cit 8 23.256 23,783 20,481 89.250 72,';6 56,856 49,321 37,369 40.161 30,716 27,805 25,734 12,83' i 1,1 l' 9,6 i1 10.237 9,629 11365 8.989 8,613 8,633 300,910 2 9353 239,686 194,714 155358 142,571 117,706 117,937 106376 48.213 50,312 48,'69 50,I56 48,527 50.201 50,137 55,182 53,044 21,837 22,589 21.238 22,902 22.356 24,114 21,072 26.047 24,463 35,929 32,0ai 27,665 33,823 31,433 4'.687 47ci74 47,945 47,641 6.10s 3 ' n' 3c18 6 5,536 6.150 12.353 11,138 10,912 13,587 110,083 108.652 100,956 112cil? 108,466 134355 132.821 110,086 138,735 5,6h9 6,1 45 5.' 69 5360 4,712 5.034 4,'25 4,928 5.362 361,I90 ja),988 363,275 366.288 36',427 369,329 370,441 366.2'7 361 661 149 155 149 152 14' 151 152 169 165 I i 1,890 109,'53 100352 115,'23 110,216 131,685 134350 142,026 13',907 28 36 1,353 - ,N 135 540 661 1)),918 109,'89 101,705 115.800 110.216 134,505 134.485 142,566 138.568
' i' 803 832 ~70 '20 ~6. ,81 900 884 201 4 181 6 16'.8 121.5 1061 71.1 56 2 53.2 49.9 13 1 - l' 6 16 20 16 -5 6 41 0 37.4 33.5 41.1 41.9 18 0 4 ~.2 43 3 43.0 31
Executive Officers Board cfDirectors William i1. Dickhoner Paul W. Ilerking Neil A. Armstrong(2)(5) William N. Liggett (3)(4) President and Vice. President Chairman, Chairman of the tk>ard and Chief Executhe Officer Ga Operations Cardwell International Ltd., Chief Executive Officer, First Idunon, Ohio National Cincinnati Corporation ILJohn Yeager . WilliamJ. Storan *"d i Chairnun of theikurd General Counsel Elmer R Best (2)(3) g """ I[r N'i$ 1 Earl A. Ik>rgmann Jackson II. Randolph Bank of Cincinnati n i "d tra" 'm l Insur nce Q)mpany, Cincinnati Donald I. Lowry(1)(5) l and r r ad 3rporate Affairs Electric Production W 11 am L Sheafer Oliver W. Birckhead (3)(4) pp','[i'j'jlhcQ>mpany, "d Arthur R Ehrnschwender Controller IL Ralph Sylvia ['u Of6 The Central Bancorporation. Inc. Ci"Ci""d'i llenry E. Pogue,IV(5) n is i tr e r i es Vice President and Chairman of the Ikurd and Real Estate Counselor and Donald R HIurn Nuclear Operations Chief Executive Officer, Developer.
"*Y The Central Trust Company, NA, President, Pogue Inc. and 5tilton L Van Schoik Cincinnati Ft. Thomas Enterprises Inc.,
C. Robert Everman Vice. President Ft. Romas, Kentucky Tremurer Corporate Planning and Robert E. Boni, Ph.D. (4) Infonn iion Savices GroupVice President, Jane L Rees, Ph.D. (4) R Gregory Graham ^""C" I"C' "'"*" " N" "" " # Vice President Robert E Wiwi Depanment oWome Econmnics Customer Relations Vice-President Sanford 31. Brooks (1)(5) a" " Electric Operations Chairman >f the rd and D F $ die Cente, WamhveMy, Cincinnati Oxford, Ohio William iL Dickhoner (1)(3)(6) W liiam S. Rowe (t)(3) President and Chief Executive Chairman of the Ikurd, Officer,CG&E Fifth Wird Bancorp and James E Ilerring(4) The Fifth Third Bank, Cincinnati Retired Chairman of the Ikiard, Richard E. Wagner (5)
%e Kroger Co., Oncmnati Former President,and George C.Juilfs (2)(4) Consultant, Pepsi. Cola ik>ttling President and Chief Executive Q)mpany of Cincinnati of0cer. Senco Products, Inc.,
"'*""I' B hn Yeg-@
Chairman of the Ikurd, CGME (1) Member of Executive (4) Member of Management Committee Compensation Committee (2) Member of Committee on (5) Member of Nominating Audit Committee (3) Member of Finance (6) Exmf0cio member of all Committee standing committees Organizational Changes Arthur R Ehrnschwender, formerly Vice-President - Ad-ministrative Services, was elected Senior Vice-President. At the Annual Steeting of Shareholders, held on April 22, Stilton L Van Schoik,w ho had formerly served as CG&E s 1981, l lenry E. Pogue, IV, was elected to ihe Board of Direc-olkWMmed Vice-President - Corporate Plan-tors. Str. Pogue, a real estate counselor and developer in ning and Information Services. William L Sheafer, formerly Northern Kentucky, succeeded William Beckett who an Assistant Controller, was appointed Controller. James R retired after 25 years of valuable service. 51osley was elected Assistant Treasurer, andJamesJ. 5fayer Robert E. Ik>nt, Ph.D., was elected to the ik>ard of Directors was appointed Assistant General Counsel. In October,1981. Dr. lk >ni, Group Vice President in charge Effective September 1,1981, B. Ralph Sylvia was elected of steel activines at Armco Inc.,was elected to fill the unex-V -President - Nuclear Operations. 51r. Sylvia joined pired term ofl iarry I loliday,Jr., who resigned after nine CG&E after 19 years with the Virginia Electric and Power years of valuable service because of other business Company (VEPCO) where he served as manager of nuclear commitments. operations and maintenance. In that capacity, he was re- [ On Alarch 19,1981, Jackson I L Handolph was appointed sponsible for the daily operation of VEPCC's four nuclear Vice President - Finance and Corporate Affairs. Str. power units. Str. Sylvia brings to CG&E an extensive back-l Rmdolph formerlyservalasVice President - Ratesand ground in nuclear power plant management, including Economic Research. At the April 22 organization meeting start-up and operations, and experience on various licens- . of the ik >ard of Directors, following the Annual 51ecting of ing and regulatory matters before the Nuclear Regulatory Shareholders, fim management changes were approved. Commission. 32 .
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r _ The Cinc annssa Gasa Electric Company
- Bulk Rate.
- 139 East Fourth Street, Cincinnati, Ohio 45202 U.S. POSTAGE Telephone 513-3812000 s
, PAID
' Cincinnati, Ohio Permit No. 874 ;
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