UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31,June 30, 2001
--------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission Registrant, State of Incorporation, IRS Employer
File Number Address, and Telephone Number Identification No.
- ----------- ----------------------------- ------------------
2-26720 LOUISVILLE GAS AND ELECTRIC COMPANY 61-0264150
(A Kentucky Corporation)
220 West Main Street
P.O. Box 32010
Louisville, Ky. 40232
(502) 627-2000
1-3464 KENTUCKY UTILITIES COMPANYCommission Registrant, State of Incorporation, IRS Employer
File Number Address, and Telephone Number Identification No.
2-26720 Louisville Gas and Electric Company 61-0264150
(A Kentucky Corporation)
220 West Main Street
P.O. Box 32010
Louisville, Ky. 40232
(502) 627-2000
1-3464 Kentucky Utilities Company 61-0247570
(A Kentucky and Virginia Corporation)
One Quality Street
Lexington, Kentucky 40507-1428
(859) 255-2100
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
Louisville Gas and Electric Company
-----------------------------------
21,294,223 shares, without par value, as of April 30,July 31, 2001,
all held by LG&E Energy Corp.
Kentucky Utilities Company
--------------------------
37,817,878 shares, without par value, as of April 30,July 31, 2001,
all held by LG&E Energy Corp.
This combined Form 10-Q is separately filed by Louisville Gas and Electric
Company and Kentucky Utilities Company. Information contained herein
related to any individual registrant is filed by such registrant on its own
behalf. Each registrant makes no representation as to information relating
to the other registrants.
TABLE OF CONTENTS
PART I
Item 1 Financial Statements
Louisville Gas and Electric Company and Subsidiary
Statements of Income................................................................ 1
Balance Sheets...................................................................... 2
Statements of Cash Flows............................................................ 4
Statements of Retained Earnings..................................................... 5
Statements of Comprehensive Income.................................................. 6
Kentucky Utilities Company and Subsidiary
Statements of Income................................................................ 7
Balance Sheets...................................................................... 8
Statements of Cash Flows............................................................ 10
Statements of Retained Earnings..................................................... 11
Statements of Comprehensive Income.................................................. 12
Notes to Financial Statements........................................................... 13
Item 2 Management's Discussion and Analysis of Results of
Operations and Financial Condition...................................................... 17
Item 3 Quantitative and Qualitative Disclosures About
Market Risk............................................................................. 21
PART II
Item 1 Legal Proceedings........................................................................... 22
Item 6 Exhibits and Reports on Form 8-K............................................................ 22
Signatures ............................................................................... 23
Item 1 Financial Statements
Louisville Gas and Electric Company and Subsidiary
Statements of Income 1
Balance Sheets 2
Statements of Cash Flows 4
Statements of Retained Earnings 5
Statements of Comprehensive Income 6
Kentucky Utilities Company and Subsidiary
Statements of Income 7
Balance Sheets 8
Statements of Cash Flows 10
Statements of Retained Earnings 11
Statements of Comprehensive Income 12
Notes to Financial Statements 13
Item 2 Management's Discussion and Analysis of Results of
Operations and Financial Condition 19
Item 3 Quantitative and Qualitative Disclosures About
Market Risk 26
PART II
Item 1 Legal Proceedings 27
Item 6 Exhibits and Reports on Form 8-K 27
Signatures 28
Part I. Financial Information - Item 1. Financial Statements
LOUISVILLE GAS AND ELECTRIC COMPANY AND SUBSIDIARYLouisville Gas and Electric Company and Subsidiary
Consolidated Statements of Income
(Unaudited)
(Thousands of $)
Three Months
Ended
Mar. 31,
2001 2000
---- ----
OPERATING REVENUES:
Electric (Note 8)....................................................................... $155,374 $161,326
Gas (Note 8)......................................................................... 157,897 88,316
-------- --------
Total operating revenues............................................................. 313,271 249,642
-------- --------
OPERATING EXPENSES:
Fuel for electric generation............................................................ 38,484 39,926
Power purchased......................................................................... 11,341 21,753
Gas supply expenses..................................................................... 125,237 63,394
Non-recurring charges (Note 4).......................................................... 144,385 8,141
Other operation expenses................................................................ 35,283 36,975
Maintenance............................................................................. 10,555 13,881
Depreciation and amortization........................................................... 25,267 24,149
Federal and state
income taxes......................................................................... (38,011) 9,668
Property and other taxes................................................................ 4,462 5,163
-------- --------
Total operating expenses............................................................. 357,003 223,050
-------- --------
NET OPERATING (LOSS) INCOME............................................................. (43,732) 26,592
Other income - net...................................................................... 996 1,519
Interest charges........................................................................ 11,379 10,690
-------- --------
NET (LOSS) INCOME....................................................................... (54,115) 17,421
Preferred stock dividends............................................................... 1,299 1,165
-------- --------
NET (LOSS) INCOME AVAILABLE
FOR COMMON STOCK..................................................................... $(55,414) $ 16,256
======== ========
Three Months Six Months
Ended June 30, Ended June 30,
2001 2000 2001 2000
OPERATING REVENUES:
Electric (Note 8) $196,290 $179,752 $351,664 $341,079
Gas(Note 8) 32,551 29,979 190,448 118,295
Total operating revenues 228,841 209,731 542,112 459,374
OPERATING EXPENSES:
Fuel for electric generation 41,749 38,650 80,233 78,576
Power purchased 32,744 24,346 44,085 46,100
Gas supply expenses 18,822 18,688 144,058 82,082
Non-recurring charges (Note 4) - - 144,385 8,141
Other operation expenses 36,398 30,547 71,681 67,522
Maintenance 13,683 17,442 24,238 31,323
Depreciation and amortization 25,572 23,901 50,840 48,050
Federal and state
income taxes 17,828 14,397 (20,183) 24,066
Property and other taxes 4,421 4,475 8,883 9,637
Total operating expenses 191,217 172,446 548,220 395,497
NET OPERATING INCOME (LOSS) 37,624 37,285 (6,108) 63,877
Other income - net 363 1,850 1,358 3,369
Interest charges (Note 5) 9,520 11,126 20,898 21,816
NET INCOME (LOSS) 28,467 28,009 (25,648) 45,430
Preferred stock dividends 1,220 1,317 2,518 2,482
NET INCOME (LOSS) AVAILABLE
FOR COMMON STOCK $ 27,247 $ 26,692 $ (28,166) $ 42,948
The accompanying notes are an integral part of these financial statements.
1-1-
LOUISVILLE GAS AND ELECTRIC COMPANY AND SUBSIDIARYLouisville Gas and Electric Company and Subsidiary
Consolidated Balance Sheets
(Thousands of $)
ASSETS
(Unaudited)
Mar. 31, Dec. 31,
2001 2000
---- ----
UTILITY PLANT:
At original cost........................................................................ $3,246,026 $3,186,325
Less: reserve for depreciation......................................................... 1,315,833 1,296,865
---------- ----------
Net utility plant.................................................................... 1,930,193 1,889,460
---------- ----------
OTHER PROPERTY AND INVESTMENTS -
less reserve......................................................................... 1,188 1,357
---------- ----------
CURRENT ASSETS:
Cash ................................................................................. 6,995 2,495
Marketable securities................................................................... - 4,056
Accounts receivable - less reserve (Note 6)............................................. 89,724 170,852
Materials and supplies - at average cost:
Fuel (predominantly coal)............................................................ 16,860 9,325
Gas stored underground............................................................... 20,980 54,441
Other................................................................................ 30,823 31,685
Prepayments and other................................................................... 4,942 1,317
---------- ----------
Total current assets................................................................. 170,324 274,171
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS:
Unamortized debt expense................................................................ 5,709 5,784
Regulatory assets....................................................................... 34,849 36,808
Other ................................................................................. 48,792 18,504
---------- ----------
Total deferred debits and other assets............................................... 89,350 61,096
---------- ----------
Total assets............................................................................ $2,191,055(Unaudited)
June 30 Dec. 31,
2001 2000
UTILITY PLANT:
At original cost $3,273,972 $3,186,325
Less: reserve for depreciation 1,340,414 1,296,865
Net utility plant 1,933,558 1,889,460
OTHER PROPERTY AND INVESTMENTS -
less reserve 1,062 1,357
CURRENT ASSETS:
Cash 7,632 2,495
Marketable securities - 4,056
Accounts receivable - less reserve (Note 6) 87,030 170,852
Materials and supplies - at average cost:
Fuel (predominantly coal) 14,659 9,325
Gas stored underground 20,935 54,441
Other 29,718 31,685
Prepayments and other 4,393 1,317
Total current assets 164,367 274,171
DEFERRED DEBITS AND OTHER ASSETS:
Unamortized debt expense 5,635 5,784
Regulatory assets (Note 9) 80,219 54,439
Other 1,924 873
Total deferred debits and other assets 87,778 61,096
Total assets $2,186,765 $2,226,084
========== ==========
The accompanying notes are an integral part of these financial statements.
2-2-
LOUISVILLE GAS AND ELECTRIC COMPANY AND SUBSIDIARYLouisville Gas and Electric Company and Subsidiary
Consolidated Balance Sheets (cont.)
(Thousands of $)
CAPITALIZATION AND LIABILITIES
(Unaudited)
Mar. 31, Dec. 31,
2001 2000
---- ----
CAPITALIZATION:
Common stock, without par value -
Outstanding 21,294,223 shares........................................................ $ 425,170 $ 425,170
Additional paid-in capital.............................................................. 40,000 40,000
Retained earnings....................................................................... 259,180 314,594
Other ................................................................................. (5,655) (836)
---------- ----------
Total common equity.................................................................. 718,695 778,928
Cumulative preferred stock.............................................................. 95,140 95,140
Long-term debt.......................................................................... 360,600 360,600
---------- ----------
Total capitalization................................................................. 1,174,435 1,234,668
---------- ----------
CURRENT LIABILITIES:
Current portion of long-term debt....................................................... 246,200 246,200
Notes payable........................................................................... 91,453 114,589
Accounts payable........................................................................ 106,214 136,892
Dividends declared...................................................................... 1,299 1,367
Accrued taxes........................................................................... 22,430 8,073
Accrued interest........................................................................ 4,720 6,350
Other ................................................................................. 16,235 15,826
---------- ----------
Total current liabilities............................................................ 488,551 529,297
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
Accumulated deferred income
taxes................................................................................ 241,667 289,232
Investment tax credit, in
process of amortization.............................................................. 61,912 62,979
Accumulated provision for pensions
and related benefits (Note 4)........................................................ 127,894 31,257
Customer advances for construction...................................................... 9,489 9,578
Regulatory liabilities.................................................................. 52,359 55,152
Other ................................................................................. 34,748 13,921
---------- ----------
Total deferred credits and other liabilities......................................... 528,069 462,119
---------- ----------
Total capital and liabilities........................................................... $2,191,055(Unaudited)
June 30 Dec. 31,
2001 2000
CAPITALIZATION:
Common stock, without par value -
Outstanding 21,294,223 shares $ 425,170 $ 425,170
Additional paid-in capital 40,000 40,000
Retained earnings 286,428 314,594
Other (5,070) (836)
Total common equity 746,528 778,928
Cumulative preferred stock 95,140 95,140
Long-term debt 360,600 360,600
Total capitalization 1,202,268 1,234,668
CURRENT LIABILITIES:
Current portion of long-term debt 246,200 246,200
Notes payable to parent 60,753 114,589
Accounts payable 104,955 136,892
Dividends declared 1,220 1,367
Accrued taxes 15,440 8,073
Accrued interest 6,399 6,350
Other 15,904 15,826
Total current liabilities 450,871 529,297
DEFERRED CREDITS AND OTHER LIABILITIES:
Accumulated deferred income
taxes 251,249 289,232
Investment tax credit, in
process of amortization 60,846 62,979
Accumulated provision for pensions
and related benefits (Note 4) 127,894 31,257
Customer advances for construction 9,600 9,578
Regulatory liabilities (Note 9) 69,251 61,013
Other 14,786 8,060
Total deferred credits and other liabilities 533,626 462,119
Total capital and liabilities $2,186,765 $2,226,084
========== ==========
The accompanying notes are an integral part of these financial statements.
3-3-
LOUISVILLE GAS AND ELECTRIC COMPANY AND SUBSIDIARYLouisville Gas and Electric Company and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
(Thousands of $)
Three Months
Ended
Mar. 31,
2001 2000
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income....................................................................... $(54,115) $ 17,421
Items not requiring cash currently:
Depreciation and amortization........................................................ 25,267 24,149
Deferred income taxes - net.......................................................... (50,358) (3,498)
Investment tax credit - net.......................................................... (1,067) (1,071)
Other................................................................................ 5,074 1,677
Changes in net current assets and liabilities........................................... 86,749 5,399
Other ................................................................................. 79,455 4,156
--------- ---------
Net cash flows from operating activities............................................. 91,005 48,233
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities................................................................. - (124)
Proceeds from sales of securities....................................................... 4,225 -
Construction expenditures............................................................... (66,227) (21,269)
--------- ---------
Net cash flows from investing activities............................................. (62,002) (21,393)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings................................................................... (23,136) 11,694
Retirement of first mortgage bonds...................................................... - (20,000)
Payment of dividends.................................................................... (1,367) (24,236)
-------- ---------
Net cash flows from financing activities............................................. (24,503) (32,542)
--------- ---------
CHANGE IN CASH AND TEMPORARY
CASH INVESTMENTS..................................................................... 4,500 (5,702)
CASH AND TEMPORARY CASH INVESTMENTS AT
BEGINNING OF PERIOD.................................................................. 2,495 54,761
-------- ---------
CASH AND TEMPORARY CASH INVESTMENTS AT
END OF PERIOD........................................................................ $ 6,995 $ 49,059
======== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid (received) during the period for:
Income taxes....................................................................... $ (4,226) $ 3,184
Interest on borrowed money......................................................... 9,963 8,743Six Months
Ended
June 30,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (25,648) $ 45,430
Items not requiring cash currently:
Depreciation and amortization 50,840 48,050
Deferred income taxes - net (41,833) 246
Investment tax credit - net (2,133) (2,142)
Non-recurring charges (Note 4) 113,645 -
Other 7,466 4,264
Changes in current assets and liabilities 16,670 8,036
Sale of accounts receivable (Note 6) 52,900 -
Other (18,568) (4,508)
Net cash flows from operating activities 153,339 99,376
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities - (194)
Proceeds from sales of securities 4,350 1,520
Construction expenditures (96,050) (64,560)
Net cash flows from investing activities (91,700) (63,234)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of pollution control bonds - 25,000
Retirement of first mortgage and
pollution control bonds - (46,083)
Short-term borrowings 35,763 1,432,256
Repayment of short-term borrowings (89,600)(1,420,596)
Payment of dividends (2,665) (41,901)
Net cash flows from financing activities (56,502) (51,324)
CHANGE IN CASH AND TEMPORARY
CASH INVESTMENTS 5,137 (15,182)
CASH AND TEMPORARY CASH INVESTMENTS AT
BEGINNING OF PERIOD 2,495 54,761
CASH AND TEMPORARY CASH INVESTMENTS AT
END OF PERIOD $ 7,632 $ 39,579
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Income taxes $ 15,882 $ 4,396
Interest on borrowed money 16,090 17,876
For the purposes of these statements, all temporary cash investments
purchased with a maturity of three months or less are considered cash
equivalents.
The accompanying notes are an integral part of these financial statements.
4-4-
LOUISVILLE GAS AND ELECTRIC COMPANY AND SUBSIDIARYLouisville Gas and Electric Company and Subsidiary
Consolidated Statements of Retained Earnings
(Unaudited)
(Thousands of $)
Three Months
Ended
Mar. 31,
2001 2000
---- ----
Balance at beginning
of period............................................................................ $314,594 $259,231
Net (loss) income....................................................................... (54,115) 17,421
-------- --------
Subtotal............................................................................. 260,479 276,652
-------- --------
Cash dividends declared on stock:
5% cumulative preferred................................................................. 269 269
Auction rate cumulative
preferred............................................................................ 663 529
$5.875 cumulative preferred............................................................. 367 367
Common ................................................................................. - 16,500
-------- --------
Subtotal............................................................................. 1,299 17,665
-------- --------
Balance at end of period................................................................ $259,180 $258,987
======== ========
Three Months Six Months
Ended June 30, Ended June 30,
2001 2000 2001 2000
Balance at beginning
of period $259,181 $258,987 $314,594 $259,231
Net income (loss) 28,467 28,009 (25,648) 45,430
Subtotal 287,648 286,996 288,946 304,661
Cash dividends declared on stock:
5% cumulative preferred 269 269 538 538
Auction rate cumulative
preferred 584 681 1,246 1,210
$5.875 cumulative preferred 367 367 734 734
Common - 16,500 - 33,000
Subtotal 1,220 17,817 2,518 35,482
Balance at end of period $286,428 $269,179 $286,428 $269,179
The accompanying notes are an integral part of these financial statements.
5-5-
LOUISVILLE GAS AND ELECTRIC COMPANY AND SUBSIDIARYLouisville Gas and Electric Company and Subsidiary
Consolidated Statements of Comprehensive Income
(Unaudited)
(Thousands of $)
Three Months
Ended
Mar. 31,
2001 2000
---- ----
Net (loss) income available for common stock............................................ $(55,414) $16,256
Cumulative effect of change in accounting principle -
Accounting for Derivative Instruments and
Hedging Activities (Note 5).......................................................... (5,998) -
(Losses) on Derivative Instruments and Hedging Activities
(Note 5)............................................................................... (2,035) -
Unrealized holding (losses) on
available-for-sale securities arising
during the period.................................................................... - (159)
-------- -------
Other comprehensive (loss),
before tax........................................................................... (8,033) (159)
Income tax benefit related to items
of other comprehensive (loss)........................................................ 3,213 64
-------- -------
Comprehensive (loss) income............................................................. $(60,234) $16,161
======== =======
Three Months Six Months
Ended June 30, Ended June 30,
2001 2000 2001 2000
Net income (loss) $28,467 $28,009 $(25,648) $45,430
Cumulative effect of change in
accounting principle-Accounting for
Derivative Instruments and Hedging
Activities (Note 5) - - (5,998) -
Gains (losses) on derivative instruments
and hedging activities 977 - (1,058) -
Unrealized holding (losses) on
available-for-sale securities
arising during the period - (107) - (266)
Other comprehensive income (loss),
before tax 977 (107) (7,056) (266)
Income tax (expense) benefit related
to items of other comprehensive
income (loss) (391) 43 2,822 107
Comprehensive income (loss) $29,053 $27,945 $(29,882) $45,271
The accompanying notes are an integral part of these financial statements.
6-6-
KENTUCKY UTILITIES COMPANY AND SUBSIDIARYKentucky Utilities Company and Subsidiary
Consolidated Statements of Income
(Unaudited)
(Thousands of $)
Three Months
Ended
Mar. 31,
2001 2000
---- ----
OPERATING REVENUES (Note 8)............................................................. $211,793 $217,778
-------- --------
OPERATING EXPENSES:
Fuel for electric generation............................................................ 55,928 55,615
Power purchased......................................................................... 32,885 38,845
Non-recurring charges (Note 4).......................................................... 63,788 11,030
Other operation expenses................................................................ 26,618 28,848
Maintenance............................................................................. 11,970 14,150
Depreciation and amortization........................................................... 23,828 24,331
Federal and state
income taxes......................................................................... (6,450) 11,366
Property and other taxes................................................................ 4,155 4,840
-------- --------
Total operating expenses............................................................. 212,722 189,025
-------- --------
NET OPERATING (LOSS) INCOME............................................................. (929) 28,753
Other income - net...................................................................... 1,793 1,325
Interest charges........................................................................ 8,117 9,904
-------- --------
NET (LOSS) INCOME before Cumulative Effect of Accounting
Change............................................................................... (7,253) 20,174
Cumulative Effect of Change in Accounting for Derivative
Instruments and Hedging Activities, net of tax (Note 5).............................. 136 -
-------- --------
NET (LOSS) INCOME....................................................................... (7,117) 20,174
Preferred stock dividends............................................................... 564 564
-------- --------
NET (LOSS) INCOME AVAILABLE
FOR COMMON STOCK..................................................................... $ (7,681) $ 19,610
======== ========
Three Months Six Months
Ended Ended
June 30, June 30,
2001 2000 2001 2000
OPERATING REVENUES (Note 8) $219,360 $205,324 $431,153 $423,102
OPERATING EXPENSES:
Fuel for electric generation 55,523 51,466 111,451 107,081
Power purchased 52,023 43,464 84,908 82,308
Non-recurring charges (Note 4) - - 63,788 11,030
Other operation expenses 27,343 24,167 53,961 53,015
Maintenance 15,549 17,078 27,519 31,228
Depreciation and amortization 23,818 24,493 47,646 48,825
Federal and state
income taxes 11,821 11,368 5,371 22,734
Property and other taxes 4,277 4,376 8,432 9,216
Total operating expenses 190,354 176,412 403,076 365,437
NET OPERATING INCOME 29,006 28,912 28,077 57,665
Other income - net 2,621 2,654 4,414 3,979
Interest charges (Note 5) 10,425 10,034 18,542 19,938
NET INCOME before Cumulative
Effect of Accounting Change 21,202 21,532 13,949 41,706
Cumulative Effect of Change in
Accounting for Derivative
Instruments and Hedging
Activities, net of tax
(Note 5) - - 136 -
NET INCOME 21,202 21,532 14,085 41,706
Preferred stock dividends 564 564 1,128 1,128
NET INCOME AVAILABLE
FOR COMMON STOCK $ 20,638 $ 20,968 $ 12,957 $ 40,578
The accompanying notes are an integral part of these financial statements.
7-7-
KENTUCKY UTILITIES COMPANY AND SUBSIDIARYKentucky Utilities Company and Subsidiary
Consolidated Balance Sheets
(Thousands of $)
ASSETS
(Unaudited)
Mar. 31, Dec. 31,
2001 2000
---- ----
UTILITY PLANT:
At original cost........................................................................ $2,989,937 $2,932,763
Less: reserve for depreciation......................................................... 1,399,851 1,378,283
---------- ----------
Net utility plant.................................................................... 1,590,086 1,554,480
---------- ----------
OTHER PROPERTY AND INVESTMENTS -
less reserve......................................................................... 12,731 14,538
---------- ----------
CURRENT ASSETS:
Cash and temporary cash investments..................................................... 4,180 314
Accounts receivable - less reserve (Note 6)............................................. 52,485 90,419
Materials and supplies - at average cost:
Fuel (predominantly coal)............................................................ 27,022 12,495
Other................................................................................ 25,995 25,812
Prepayments and other................................................................... 6,190 1,899
---------- ----------
Total current assets................................................................. 115,872 130,939
---------- ----------
DEFERRED DEBITS AND OTHER ASSETS:
Unamortized debt expense................................................................ 4,576 4,651
Regulatory assets....................................................................... 24,243 26,441
Other ................................................................................. 16,930 8,469
---------- ----------
Total deferred debits and other assets............................................... 45,749 39,561
---------- ----------
Total assets............................................................................ $1,764,438(Unaudited)
June 30, Dec. 31,
2001 2000
UTILITY PLANT:
At original cost $3,012,157 $2,932,763
Less: reserve for depreciation 1,419,880 1,378,283
Net utility plant 1,592,277 1,554,480
OTHER PROPERTY AND INVESTMENTS -
less reserve 10,017 14,538
CURRENT ASSETS:
Cash 184 314
Accounts receivable - less reserve (Note 6) 72,352 90,419
Materials and supplies - at average cost:
Fuel (predominantly coal) 38,503 12,495
Other 25,866 25,812
Prepayments and other 4,528 1,899
Total current assets 141,433 130,939
DEFERRED DEBITS AND OTHER ASSETS:
Unamortized debt expense 4,492 4,651
Regulatory assets (Note 9) 22,055 26,441
Other 15,522 8,469
Total deferred debits and other assets 42,069 39,561
Total assets $1,785,796 $1,739,518
========== ==========
The accompanying notes are an integral part of these financial statements.
8-8-
KENTUCKY UTILITIES COMPANY AND SUBSIDIARYKentucky Utilities Company and Subsidiary
Consolidated Balance Sheets (cont.)
(Thousands of $)
CAPITALIZATION AND LIABILITIES
(Unaudited)
Mar. 31, Dec. 31,
2001 2000
---- ----
CAPITALIZATION:
Common stock, without par value -
Outstanding 37,817,878 shares........................................................ $ 308,140 $ 308,140
Additional paid-in capital.............................................................. 15,000 15,000
Retained earnings....................................................................... 339,557 347,238
Other ................................................................................. 994 (595)
---------- ----------
Total common equity.................................................................. 663,691 669,783
Cumulative preferred stock.............................................................. 40,000 40,000
Long-term debt.......................................................................... 432,496 430,830
---------- ----------
Total capitalization................................................................. 1,136,187 1,140,613
---------- ----------
CURRENT LIABILITIES:
Current portion of long-term debt....................................................... 54,000 54,000
Notes payable........................................................................... 46,190 61,239
Accounts payable........................................................................ 87,294 76,339
Dividends declared...................................................................... 188 188
Accrued taxes........................................................................... 38,534 19,622
Accrued interest........................................................................ 6,874 6,373
Other ................................................................................. 17,776 18,579
---------- ----------
Total current liabilities............................................................ 250,856 236,340
---------- ----------
DEFERRED CREDITS AND OTHER LIABILITIES:
Accumulated deferred income
taxes................................................................................ 219,888 246,680
Investment tax credit, in
process of amortization.............................................................. 14,039 14,901
Accumulated provision for pensions
and related benefits (Note 4)........................................................ 87,862 47,495
Customers' advances for construction.................................................... 1,517 1,540
Regulatory liabilities.................................................................. 37,033 38,392
Other ................................................................................. 17,056 13,557
---------- ----------
Total deferred credits and other liabilities......................................... 377,395 362,565
---------- ----------
Total capital and liabilities........................................................... $1,764,438(Unaudited)
June 30, Dec. 31,
2001 2000
CAPITALIZATION:
Common stock, without par value -
Outstanding 37,817,878 shares $ 308,140 $ 308,140
Additional paid-in capital 15,000 15,000
Retained earnings 360,195 347,238
Other 994 (595)
Total common equity 684,329 669,783
Cumulative preferred stock 40,000 40,000
Long-term debt 431,938 430,830
Total capitalization 1,156,267 1,140,613
CURRENT LIABILITIES:
Current portion of long-term debt 54,000 54,000
Notes payable to parent 39,790 61,239
Accounts payable 110,640 76,339
Dividends declared 188 188
Accrued taxes 22,625 19,622
Accrued interest 6,144 6,373
Other 18,118 18,579
Total current liabilities 251,505 236,340
DEFERRED CREDITS AND OTHER LIABILITIES:
Accumulated deferred income
taxes 221,368 246,680
Investment tax credit, in
process of amortization 13,178 14,901
Accumulated provision for pensions
and related benefits (Note 4) 88,173 47,495
Customer advances for construction 1,643 1,540
Regulatory liabilities (Note 9) 35,679 38,392
Other 17,983 13,557
Total deferred credits and other liabilities 378,024 362,565
Total capital and liabilities $1,785,796 $1,739,518
========== ==========
The accompanying notes are an integral part of these financial statements.
9-9-
KENTUCKY UTILITIES COMPANY AND SUBSIDIARYKentucky Utilities Company and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
(Thousands of $)
Three Months
Ended
Mar. 31,
2001 2000
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income....................................................................... $ (7,117) $ 20,174
Items not requiring cash currently:
Depreciation and amortization........................................................ 23,828 24,331
Deferred income taxes - net.......................................................... (28,166) (4,602)
Investment tax credit - net.......................................................... (862) (919)
Other................................................................................ 1,654 (911)
Changes in net current assets and liabilities........................................... 48,498 2,222
Other ................................................................................. 41,947 (2,804)
-------- ---------
Net cash flows from operating activities............................................. 79,782 37,491
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures............................................................... (60,302) (23,530)
-------- --------
Net cash flows from investing activities............................................. (60,302) (23,530)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings................................................................... 99,325 -
Repayment of short-term borrowings...................................................... (114,375) -
Payment of dividends.................................................................... (564) (19,564)
-------- --------
Net cash flows from financing activities............................................. (15,614) (19,564)
-------- --------
CHANGE IN CASH AND TEMPORARY
CASH INVESTMENTS..................................................................... 3,866 (5,603)
CASH AND TEMPORARY CASH INVESTMENTS AT
BEGINNING OF PERIOD.................................................................. 314 6,793
-------- --------
CASH AND TEMPORARY CASH INVESTMENTS AT
END OF PERIOD........................................................................ $ 4,180 $ 1,190
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid (received) during the period for:
Income taxes....................................................................... $ 3,894 $ (9,260)
Interest on borrowed money......................................................... 7,116 6,560Six Months
Ended
June 30,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 14,085 $ 41,706
Items not requiring cash currently:
Depreciation and amortization 47,646 48,825
Deferred income taxes - net (28,061) (7,478)
Investment tax credit - net (1,723) (1,837)
Non-recurring charges (Note 4) 50,078 -
Other 5,169 (910)
Changes in current assets and liabilities (23,032) 38,445
Sale of accounts receivable (Note 6) 40,000 -
Other (1,545) (139)
Net cash flows from operating activities 102,617 118,612
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction expenditures (80,170) (48,403)
Net cash flows from investing activities (80,170) (48,403)
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings 229,094 69,773
Repayment of short-term borrowings (250,543) (39,842)
Issuance of pollution control bonds - 12,900
Retirement of pollution control bonds - (74,785)
Payment of dividends (1,128) (44,564)
Net cash flows from financing activities (22,577) (76,518)
CHANGE IN CASH AND TEMPORARY
CASH INVESTMENTS (130) (6,309)
CASH AND TEMPORARY CASH INVESTMENTS AT
BEGINNING OF PERIOD 314 6,793
CASH AND TEMPORARY CASH INVESTMENTS AT
END OF PERIOD $ 184 $ 484
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Income taxes $ 34,994 $ 19,949
Interest on borrowed money 16,735 18,654
For the purposes of these statements, all temporary cash investments
purchased with a maturity of three months or less are considered cash
equivalents.
The accompanying notes are an integral part of these financial statements.
10-10-
KENTUCKY UTILITIES COMPANY AND SUBSIDIARYKentucky Utilities Company and Subsidiary
Consolidated Statements of Retained Earnings
(Unaudited)
(Thousands of $)
Three Months
Ended
Mar. 31,
2001 2000
---- ----
Balance at beginning
of period............................................................................ $347,238 $329,470
Net (loss) income....................................................................... (7,117) 20,174
-------- --------
Subtotal............................................................................. 340,121 349,644
-------- --------
Cash dividends declared on stock:
4.75% preferred......................................................................... 237 237
6.53% preferred......................................................................... 327 327
Common ................................................................................. - 25,000
-------- --------
Subtotal............................................................................. 564 25,564
-------- --------
Balance at end of period................................................................ $339,557 $324,080
======== ========
Three Months Six Months
Ended Ended
June 30, June 30,
2001 2000 2001 2000
Balance at beginning
of period $339,557 $324,080 $347,238 $329,470
Net income 21,202 21,532 14,085 41,706
Subtotal 360,759 345,612 361,323 371,176
Cash dividends declared on stock:
4.75% preferred 237 237 475 475
6.53% preferred 327 327 653 653
Common - 25,000 - 50,000
Subtotal 564 25,564 1,128 51,128
Balance at end of period $360,195 $320,048 $360,195 $320,048
The accompanying notes are an integral part of these financial statements.
11-11-
KENTUCKY UTILITIES COMPANY AND SUBSIDIARYKentucky Utilities Company and Subsidiary
Consolidated Statements of Comprehensive Income
(Unaudited)
(Thousands of $)
Three Months
Ended
Mar. 31,
2001 2000
---- ----
Net (loss) income available for common stock............................................ $(7,681) $19,610
Cumulative effect of change in accounting principle -
Accounting for Derivative Instruments and
Hedging Activities (Note 5).......................................................... 2,647 -
------- ------
Other comprehensive income,
before tax........................................................................... 2,647 -
Income tax (expense) related to items
of other comprehensive income........................................................ (1,059) -
-------- ------
Comprehensive (loss) income............................................................. $(6,093) $19,610
======== =======
Three Months Six Months
Ended Ended
June 30, June 30,
2001 2000 2001 2000
Net income $21,202 $21,532 $14,085 $41,706
Cumulative effect of change in
accounting principle-Accounting
for Derivative Instruments and
Hedging activities (Note 5) - - 2,647 -
Other comprehensive income, before tax - - 2,647 -
Income tax (expense) related to items
of other comprehensive income - - (1,059) -
Comprehensive income $21,202 $21,532 $15,673 $41,706
The accompanying notes are an integral part of these financial statements.
12-12-
LOUISVILLE GAS AND ELECTRIC COMPANY AND SUBSIDIARY
KENTUCKY UTILITIES COMPANY AND SUBSIDIARYLouisville Gas and Electric Company and Subsidiary
Kentucky Utilities Company and Subsidiary
Notes to Financial Statements
(Unaudited)
1. The unaudited consolidated financial statements include the accounts of
Louisville Gas and Electric Company and Subsidiary and Kentucky
Utilities Company and Subsidiary ("LG&E" and "KU" or the Companies)"Companies").
The common stock of each of LG&E and KU areis wholly owned subsidiaries ofby LG&E Energy
CorpCorp. ("LG&E Energy"). In the opinion of management, all adjustments,
including those of a normal recurring nature, have been made to present
fairly the consolidated financial position, results of operations,
comprehensive income and cash flows for the periods indicated. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to SEC rules and
regulations, although the Companies respectively believe that the
disclosures are adequate to make the information presented not
misleading.
See LG&E's and KU's Reports on Form 10-K for 2000 for information
relevant to the accompanying financial statements, including
information as to the significant accounting policies of the Companies.
2. Effective December 11, 2000, LG&E Energy was acquired by Powergen plc
("Powergen"). LG&E Energy had announced on February 28, 2000 that its
Board of Directors accepted the offer
to be acquired by Powergen for cash of approximately $3.2 billion or
$24.85 per share and the assumption of all of LG&E Energy's debt.
Pursuant to the acquisition agreement, among other things, LG&E Energy
became a wholly owned subsidiary of Powergen and, as a result, LG&E and
KU became indirect subsidiaries of Powergen. The utility operations
(LG&E and KU) of LG&E Energy have continued their separate identities
and continue to serve customers in Kentucky and Virginia under their
existing names. The preferred stock and debt securities of the utility
operations were not affected by this transaction and the utilities
continue to file SEC reports. Following the acquisition, Powergen
became a registered holding company under Public Utility Holding
Company Act of 1935 ("PUHCA"), and LG&E and KU, as subsidiaries of a
registered holding company, became subject to additional regulation
under PUHCA.
As a result of the Powergen acquisition and in order to comply with
PUHCA, LG&E Energy Services Inc. ("LG&E Services") was formed and
became operational on January 1, 2001. LG&E Services provides certain
services to affiliated entities, including LG&E and KU, at cost, as
required under PUHCA. On January 1, 2001, approximately 1,000
employees, mainly from LG&E Energy, LG&E and KU, were moved to LG&E
Services.
3. On April 9, 2001, Germany's largesta German power company, E.ON AG ("E.ON"), announced a
pre-conditional cash offer of (pound)5.1 billion pounds sterling ($7.3 billion)
for Powergen. The offer is subject to a number of conditions, including the
receipt of certain European and United States regulatory approvals. On
August 6, 2001,the Kentucky Public Service Commission approved the
acquisition of Powergen and LG&E Energy by E.ON. The parties expect to
obtain the necessaryremaining regulatory approvals by early 2002 and they expect to
complete the transaction in the spring of 2002. See Powergen's schedule
14D-9 and associated schedules to such filing, filed with the Securities
and Exchange Commission on April 9, 2001.
4. During the first quarter 2001, the Companies took a $124.1 million
after tax charge (LG&E $86.1 million, and KU $38 million) for a
workforce reduction program. Primary components of the charges were
separation benefits, enhanced early retirement benefits, and health
care benefits. The result of this workforce reduction was the
elimination of approximately 9501,000 positions most of which were taken by employeeswas
accomplished through the Companies' voluntary enhanced severance
program. During the first quarter 2000,
13
the Companies' took an $11.4
million after-tax charge for the continued integration of the
operations of LG&E and KU including their customer service centers and
-13-
their retail electric and gas operations. The result of this
consolidation was the elimination of approximately 400 positions most
of which were taken by employeeswas accomplished through the Companies' voluntary enhanced
severance program.
On June 1, 2001, LG&E and KU filed an application with the Kentucky
Commission to create regulatory assets totaling $144 million (pretax)
for LG&E ($114.5 million and $29.5 million attributable to electric and
gas businesses, respectively) and $56 million (pretax) for KU relating
to these first quarter 2001 charges. The application seeks to amortize
these costs over a four-year period. If the application were granted,
the allowed portion of the non-recurring charges would be reversed
through the income statement to create the regulatory assets. To date
no procedural schedule has been established by the Kentucky Commission
in this matter.
5. SFAS No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES,Accounting for Derivative Instruments and Hedging
Activities, establishes accounting and reporting standards requiring that
every derivative instrument (including certain derivative instruments
embedded in other contracts) be recorded on the balance sheet as either an
asset or a liability measured at its fair value. SFAS No. 133 requires
that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and
requires that LG&E and KU must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting. SFAS No. 133
could increase the volatility in earnings and other comprehensive income.
SFAS No. 137, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIESAccounting for Derivative Instruments and Hedging Activities
-- DEFERRAL OF THE EFFECTIVE DATE OFDeferral of the Effective Date of SFAS NO.No. 133, deferred the effective
date of SFAS No. 133 until January 1, 2001. LG&E and KU adopted SFAS
No. 133 on January 1, 2001. The effect of this statement was a charge to
LG&E of $3.6 million and a credit to KU of $1.6 million to cumulative
effect of change in accounting principle (net of tax) in other
comprehensive income.
The companiesCompanies use interest rate swaps to hedge exposure to market
fluctuations in certain of its debt instruments. Pursuant to companyCompany
policy, use of these financial instruments is intended to mitigate risk
and earnings volatility and areis not speculative in nature. Management
has designated all of the companies'Companies' interest rate swaps as hedge
instruments. Financial instruments designated as cash flow hedges have
resulting gains and losses recorded within other comprehensive income
and stockholders' equity. To the extent a financial instrument or the
underlying item being hedged is prematurely terminated or the hedge
becomes ineffective, the resulting gains or losses are reclassified
from other comprehensive income to net income. Financial instruments
designated as fair value hedges are periodically marked-to-market with
the resulting gains and losses recorded directly into net income to
correspond with income or expense recognized from changes in market
value of the items being hedged.
As of March 31,June 30, 2001, LG&E had fixed rate swaps covering $217,335,000 in
notional amounts of variable rate debt and with fixed rates ranging
from 3.560% to 5.495%. The average variable rate on the debt during
the quarter was 4.44%3.85%. The swaps have been designated as cash flow
hedges and expire on various dates from September 2001 through November
2020. During
the quarter ended March 31, 2001, theThe hedges were deemed to be fully effective resulting in pretax
chargesincome for the quarter ended June 30, 2001 of $2,035,000$977,000, and a pretax
loss of $1,058,000 for the six months ended June 30, 2001, recorded in
other
comprehensive income.Other Comprehensive Income. Upon expiration of these hedges, the amount
recorded in Other Comprehensive Income will be reclassified into
earnings.
As of March 31,June 30, 2001, KU had variable rate swaps covering
$153,000,000 in notional amounts of fixed rate debt. The average
variable rate on these swaps during the quarter was 5.61%5.05%. The
underlying debt has fixed rates ranging from 5.873% to 7.920%. The
swaps have been designated as fair value hedges and expire on various
dates from May 2007 through June 2025. During the quarter ended March 31,June
30, 2001, the effect of marking these financial instruments and the
underlying debt to market resulted in pretax gainslosses of $1,463,000$1,242,000
recorded as an increase in interest expense. The effect for the six
-14-
months was a pretax gain of $221,000 recorded as a reduction in
interest expense.
6. SFAS No. 140, ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS
AND EXTINGUISHMENTS OF LIABILITIES,Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, revises the standards for
accounting for securitizations and other transfers of financial assets
and collateral and requires certain disclosures, and provides
accounting and reporting standards for transfers and servicing of
financial assets and extinguishments of liabilities. The Companies
adopted SFAS No. 14
140 in the first quarter of 2001, when LG&E and KU
entered into an accounts receivable securitization transaction.
On February 6, 2001, LG&E and KU each sold accounts receivables to two
wholly-owned subsidiaries, LG&E Receivables LLC (LGE-R)("LGE-R") and KU
Receivables LLC (KU-R)("KU-R"), respectively. Simultaneously, LGE-R and KU-R
entered into two separate three-year accounts receivables
securitization facilities with two financial institutions and their
affiliates whereby LGE-R and KU-R can sell, on a revolving basis, an
undivided interest in certain of their receivables and receive up to
$75 million and $50 million, respectively, from an unrelated third
party purchaser at a cost of funds linked to commercial paper rates
plus a charge for administrative and credit support services.
Furthermore, LG&E and KU retain the servicing rights of the sold
receivables through two separate servicing agreements between the third
party purchaser and each utility. Under these agreements, LG&E and KU
receive a fee for servicing the sold receivables on behalf of the third
party purchaser. As of March 31,June 30, 2001, LG&E's outstanding program
balance was $75$52.9 million and KU's balance was $50$40.0 million.
The allowance for doubtful accounts associated with the eligible
securitized receivables was $1$.8 million for LG&E and $.4 million for KU
at March 31,June 30, 2001. Charge offs were immaterial for LG&E and KU. The
risk of uncollectibility associated with the sold receivables is
minimal. Through March 31,June 30, approximately .15%, or $698,000, of total
receivables for LG&E and KU were uncollectible. Moreover, each
securitization facility contains a fully funded reserve for
uncollectible receivables.
7. In October 2000, LG&E and KU each filed an application with the
Kentucky Public Service Commission ("Kentucky Commission") to amend itstheir respective Environmental Compliance
PlanPlans to reflect the addition of Nitrogen Oxide (NOx)("NOx") reduction
technology projects and to amend itstheir respective Environmental Cost
Recovery Tariff (ECR)Tariffs ("ECR") to include an overall rate of return on
capital investments. The NOx reduction technology willis anticipated to
allow LG&E and KU to meet new Environmental Protection Agency NOx
requirements that take effect in 2003-2004. The Kentucky Commission
issued an order on April 18, 2001, that approved the amended
environmental compliance plan and the use of an overall rate of return,
including an 11.5% return on equity, effective May 1, 2001. Costs
associated with the amended compliance plan may be recovered by the
Companies as incurred, subject to review and approval by the Kentucky
Commission in periodic regulatory reviews.
8. External and intersegment revenues (related parties transactions
between LG&E and KU) and income from continuing operations by business segment for the three
months ended March 31,June 30, 2001, follow:
Net
(Loss)
Inter- Avail.
External segment For
Revenues Revenues Common
LG&E electric $148,361 $ 7,013 $ (44,443)
LG&E gas 157,897 - (10,971)
-------- -------- --------
Total $306,258 $ 7,013 $(55,414)
======== ======== ========
KU electric $206,111 $ 5,682 $ (7,681)
======== ======== ========
follow (in thousands of $):
-15-
Net
Income/
(Loss)
Inter- Avail.
External segment For
Revenues Revenues Common
LG&E electric $187,472 $ 8,818 $ 27,867
LG&E gas 32,551 - (620)
Total $220,023 $ 8,818 $ 27,247
KU electric $209,507 $ 9,853 $ 20,638
External and intersegment revenues (related parties transactions
between LG&E and KU) and income from continuing operationsby business segment for the six months
ended June 30, 2001, follow (in thousands of $):
Net
Income/
(Loss)
Inter- Avail.
External segment For
Revenues Revenues Common
LG&E electric $335,833 $ 15,831 $ (16,575)
LG&E gas 190,448 - (11,591)
Total $526,281 $ 15,831 $ (28,166)
KU electric $415,618 $ 15,535 $ 12,957
External and intersegment revenues (related parties transactions
between LG&E and KU) and income by business segment for the three
months ended MarchJune 30, 2000, follow (in thousands of $):
Net
Income/
(Loss)
Inter- Avail.
External segment For
Revenues Revenues Common
LG&E electric $175,420 $ 4,332 $ 26,772
LG&E gas 29,979 - (80)
Total $205,399 $ 4,332 $ 26,692
KU electric $201,186 $ 4,138 $ 20,968
External and intersegment revenues (related parties transactions
between LG&E and KU) and income by business segment for the six months
ended June 30, 2000, follow (in thousands of $):
-16-
Net
Income/
(Loss)
Inter- Avail.
External segment For
Revenues Revenues Common
LG&E electric $330,539 $ 10,540 $ 43,077
LG&E gas 118,295 - (129)
Total $448,834 $ 10,540 $ 42,948
KU electric $411,957 $ 11,145 $ 40,578
9. The following regulatory assets and liabilities were included in the
balance sheet of LG&E and KU as of June 30, 2001 and December 31, 2000 follow:
15(in
thousands of $):
Louisville Gas and Electric
(Unaudited)
June 30, Dec. 31,
2001 2000
REGULATORY ASSETS:
Unamortized loss on bonds $ 18,469 $ 19,036
Gas supply adjustments due from customers 39,258 12,324
Merger costs 7,259 9,073
One utility costs 4,987 6,331
Manufactured gas sites 2,215 2,368
Other 8,031 5,307
Total 80,219 54,439
REGULATORY LIABILITIES:
Deferred income taxes - net 50,743 54,593
Gas supply adjustments due to customers 14,289 2,029
Other 4,219 4,391
Total $ 69,251 $ 61,013
Kentucky Utilities
(Unaudited)
June 30, Dec. 31,
2001 2000
REGULATORY ASSETS:
Unamortized loss on bonds $ 6,577 $ 7,011
Merger costs 8,185 10,232
One utility costs 6,434 8,273
Other 858 925
Total 22,054 26,441
REGULATORY LIABILITIES:
Deferred income taxes - net 34,734 37,484
Other 945 908
Total $ 35,679 $ 38,392
10.Statements of Financial Accounting Standards ("SFAS") No. 141, Business
Combinations and No. 142, Goodwill and Other Intangible Assets were
issued in the second quarter of 2001. SFAS No. 141 requires all
business combinations initiated after June 30, 2001, to be accounted
-17-
Net
Income/
(Loss)
Inter- Avail.
External segment For
Revenues Revenues Common
LG&E electric $155,119 $ 6,207 $ 16,305
LG&E gas 88,316 - (49)
-------- -------- --------
Total $243,435 $ 6,207 $ 16,256
======== ======== ========
KU electric $210,771 $ 7,007 $ 19,610
======== ======== ========--
9. Referencefor using the purchase method. SFAS No. 142 requires goodwill to be
recorded, but not amortized. Further, goodwill will now be subject to a
periodic assessment for impairment. LG&E and KU have no recorded
goodwill and have no merger or acquisitions in progress. Therefore, the
provisions of these new pronouncements were effective July 1, 2001, for
LG&E and KU. Management does not expect adoption of these standards to
have a material impact on the results of operations or financial
position of LG&E or KU.
11.Reference is made to Part II, Legal Proceedings, below and Part I, Item
3, Legal Proceedings, of LG&E's and KU's Annual Reports on Form 10-K
for the year ended December 31, 2000.
16-18-
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition.
GENERALGeneral
The following discussion and analysis by management focuses on those
factors that had a material effect on LG&E's and KU's financial results of
operations and financial condition during the three and six months periods
described during 2001 and should be read in connection with the financial
statements and notes thereto.
Some of the following discussion may contain forward-looking statements
that are subject to certain risks, uncertainties and assumptions. Such
forward-looking statements are intended to be identified in this document
by the words "anticipate," "expect," "estimate," "objective," "possible,"
"potential" and similar expressions. Actual results may vary materially.
Factors that could cause actual results to differ materially include:
general economic conditions; business and competitive conditions in the
energy industry; changes in federal or state legislation; unusual weather;
actions by state or federal regulatory agencies; and other factors
described from time to time in LG&E's and KU's reports to the Securities
and Exchange Commission, including Exhibit No. 99.01 to the report on Form
10-K for year ended December 31, 2000.
RESULTS OF OPERATIONSResults of Operations
The results of operations for LG&E and KU operations are affected by seasonal
fluctuations in temperature and other weather-related factors. Because of
these and other factors, the results of one interim period are not
necessarily indicative of results or trends to be expected for the full
year.
THREE MONTHS ENDED MARCH 31,Three Months Ended June 30, 2001, COMPARED TO
THREE MONTHS ENDED MARCH 31,Compared to
Three Months Ended June 30, 2000
LG&E RESULTS:Results:
LG&E's net income decreased $71.5increased $.5 million (2%) for the quarter ended March 31,June 30,
2001, as compared to the quarter ended March 31, 2000, primarily because of a $86.1
million net of tax one-time charge for LG&E's workforce reduction program. These
expenses were partially offset by a $4.8 million net of tax one-time charge
incurred in the first quarter of 2000 for LG&E's One-Utility Program. See Note 4
of Notes to Financial Statements. Excluding these one-time charges, LG&E's net
income would have increased $9.8 million primarily due to increased gas sales to
retail consumers and lower operations and maintenance expenses.June 30, 2000.
A comparison of LG&E's revenues for the quarter ended March 31,June 30, 2001, with
the quarter ended March 31,June 30, 2000, (excluding the reversal in the second
quarter of 2000 of a Fuel Adjustment Clause ("FAC")(FAC) refund of $1.1 million which was offset by an additional accrual
for performance-based ratemaking of $.3 million in 2000),$1 million)
reflects increases and (decreases)decreases which have been segregated by the
following principal causes (thousands(in thousands of $):
17-19-
Electric Gas
Cause Revenues Revenues
- ----- -------- ---------
Retail sales:
Fuel and gas supply adjustments...................................................... $ 1,939 $64,815
Merger surcredit..................................................................... (834) -
Performance based rate............................................................... 1,179 -
Environmental cost recovery surcharge................................................ (58) -
Gas rate increase.................................................................... - 7,609
Weather normalization................................................................ - (2,194)
Electric rate reduction.............................................................. (3,671) -
Variation in sales volume, etc....................................................... 5,031 6,815
------- -------
Total retail sales................................................................... 3,586 77,045
Wholesale sales......................................................................... (9,073) (7,406)
Gas transportation - net................................................................ - (395)
Other ................................................................................. 378 337
------- -------
Total ................................................................................. $(5,109) $69,581
======= =======
Electric Gas
Cause Revenues Revenues
Retail sales:
Fuel and gas supply adjustments $ (676) $ 20,488
Earnings sharing mechanism (119) -
Performance based rate 1,096 -
Merger surcredit (803) -
Gas rate increase - 4,179
Weather normalization - (134)
Variation in sales volume, etc. (1,330) (19,296)
Total retail sales (1,832) 5,237
Wholesale sales 19,872 (2,976)
Gas transportation - net - 57
Other (502) 254
Total $ 17,538 $ 2,572
Electric revenues increased primarily due to increased kWh sales and higher
priced sales to wholesale customers.
Fuel for electric generation and gas supply expenses comprise a large
componentsegment of LG&E's total operating expenses. LG&E's electric and gas rates
contain a fuel adjustment clause and a gas supply clause, respectively,
whereby increases or decreases in the cost of fuel and gas supply may be
reflected in retail rates, subject to the approval of the Kentucky
Commission. Fuel for electric generation decreased $1.4increased $3.1 million (4%(8%) for
the quarter because of a decreasean increase in volume of generation ($2.45 million),
partially offset by a higherlower cost of coal burned ($11.9 million). Gas supply
expenses increased $61.8$.1 million (98%(1%) due to increasesan increase in net gas supply
cost ($58.54.7 million) and increasespartially offset by a decrease in the volume of gas
delivered to the distribution system ($3.34.6 million).
Power Purchased decreased $10.4purchased increased $8.4 million (48%(35%) primarily because of increased
purchases to support sales to other utilities ($8.1 million).
Other operations expenses increased $5.9 million (19%) in 2001, as compared
to 2000, primarily due to decreased
brokered sales activityas a result of increased outside services and pension
expense ($7 million) partially offset by decreases in the wholesale electric market.
The increasevarious operating
expenses ($1.1 million). Outside services increased in non-recurring charges of $136.2 million, $81.2 million after
tax, ispart due to the
costs associatedformation of LG&E Services, as required by the Securities and Exchange
Commission to comply with LG&E's workforce reduction initiatives.
See Note 4 of Notes to Financial Statements.
Other operation expenses decreased $1.7 million (5%) as compared to 2000. This
decrease resulted from decreased steam power production expenses ($2.3 million),
partially offset by increased administrative and general expenses, ($.6
million).PUHCA.
Maintenance expenses decreased $3.3$3.7 million (24%(22%) in 2001 primarilymainly due to
decreases in steam production maintenance of ($1.5 million), and software and communication equipment maintenance ($1.62.3
million). and scheduled outages at the Mill Creek and Cane Run generating
stations ($1.9 million) partially offset by other increases in maintenance
expense.
Depreciation and amortization increased $1.1$1.7 million (5%(7%) due to an
increase in depreciable plant in service and higher depreciation rates. A
depreciation study was completed in late 2000 with new depreciation rates
going into effect in the first quarter 2001. The new rates, as compared to rates in effect
for 2000, are expected to increase LG&E's annual depreciation expense by
about $.9 million in 2001.
Property and other taxes decreased $.7 million (14%) in 2001 primarily due to
decreases in
18
payroll taxes as a result of lower employee head count in conjunction with
LG&E's workforce reductions.
Variations in income tax expense are largely attributable to changes in pretax
income.
Other income - net,and deductions decreased $.5$1.5 million (34%(80%) in 2001 primarily
due to decreases in the gain on sale of non-utility property and lower
interest income.
Variations in income tax expense are largely attributable to changes in pre-
tax income.
Interest charges increased $.7decreased $1.6 million (6%(15%) in 2001 primarily due to increasedlower interest expenserates
on variable rate debt ($.6 million) and the retirement of short-term
borrowings ($2.1 million) partially offset by an increase in interest on
-20-
debt to parent company ($.8 million) and the increase in interest
associated with LG&E's accounts receivable securitization program ($1.6 million), partially offset by a decrease in interest on notes
payable ($1.1.3
million).
KU RESULTS:Results:
KU's net income decreased $27.3$.3 million for the quarter ended March 31,June 30, 2001,
as compared to the quarter ended March 31,June 30, 2000. The decrease was mainly due to a
non-recurring charge of $38 million, net of tax, made in the first quarter of
2001 for costs associated with the KU workforce reduction program. These
expenses were partially offset by a $6.6 million non-recurring net of tax charge
in the same period in 2000 for KU's One Utility Program. See Note 4 of Notes to
Financial Statements. Excluding these one-time charges, net income increased
$4.1 million, due largely to decreased operations and maintenance expense.
A comparison of KU's revenues for the quarter ended March 31,June 30, 2001, with the
quarter ended March 31,June 30, 2000, reflects increases and (decreases) which have
been segregated by the following principal causes (thousands of $):
Sales to ultimate consumers:
Fuel clause adjustments.............................................................. $ 2,404
Environmental cost recovery surcharge................................................ (729)
Performance based rate .............................................................. 893
Merger surcredit..................................................................... (1,089)
Electric rate reduction.............................................................. (5,395)
Variation in sales volume, etc....................................................... 6,513
------
Total retail sales................................................................... 2,597
Wholesale sales......................................................................... (9,082)
Other ................................................................................. 500
---------
Total ................................................................................. $ (5,985)
==========
Retail sales:
Fuel supply adjustments $ 4,116
Environmental cost recovery surcharge 104
Performance based rate 839
Merger surcredit (950)
Variation in sales volume, etc. (3,747)
Total retail sales 362
Wholesale sales 13,630
Other 44
Total $ 14,036
Electric revenues increased primarily due to increased kWh sales and higher
priced sales to wholesale customers.
Fuel for electric generation comprises a large segment of KU's total
operating expenses. KU's electric rates contain a FAC, whereby increases
or decreases in the cost of fuel are reflected in retail rates, subject to
the approval of the Kentucky Commission, the Virginia State Corporation
Commission, and the Federal Energy Regulatory Commission. Fuel for electric
generation increased $.3$4.1 million (8%) for the firstsecond quarter of 2001 as
compared to the second quarter of 2000, due to a $3.1 million increase in
the cost of coal burned and a $1 million increase in volume burned.
Power purchased increased $8.6 million (20%) in 2001 primarily due to
increased sales for resale activities in the wholesale electric market.
Other operating expenses increased $3.2 million (13%) due to increased
outside services and pension expense. Outside services increased in part
due to the formation of LG&E Services, as required by the Securities and
Exchange Commission to comply with PUHCA.
Maintenance expenses decreased $1.5 million (9%) primarily due to decreases
in steam expenses, $2.5 million, partially offset by increased transmission
maintenance, $.7 million. The decrease in steam expense is due to repairs
during a scheduled outage at the Ghent steam plant during the second
quarter 2000.
Depreciation and amortization decreased $.7 million (3%) due to a decrease
in depreciation rates, partially offset by an increase in plant in service.
A depreciation study was completed in late 2000 with new depreciation rates
going into effect in 2001. The new rates, as compared to rates in effect
for 2000, are expected to decrease KU's annual depreciation expense by
about $6 million in 2001.
Variations in income tax expense are largely attributable to changes in
pretax income.
Interest charges increased $.4 million (4%) for the second quarter 2001 as
compared to second quarter 2000 due to implementation of SFAS 133,
Accounting for Derivative Instruments and Hedging Activities. See Note 5 of
Notes to Financial Statements.
-21-
Six Months Ended June 30, 2001, Compared to
Six Months Ended June 30, 2000
LG&E Results:
LG&E's net income decreased $71.1 million for the first six months of 2001,
as compared to the first six months of 2000, primarily because of a $86.1
million net of tax one-time charge for LG&E's workforce reduction program.
These expenses were partially offset by a $4.8 million net of tax one-time
charge incurred in the first quarter of 2000 for LG&E's One-Utility
Program. See Note 4 of Notes to Financial Statements. Excluding these one-
time charges, LG&E's net income would have increased $10.2 million
primarily due to increased gas sales to retail consumers, increased
electric wholesale sales, and lower maintenance expenses.
A comparison of LG&E's revenues for the six months ended June 30, 2001,
with the six months ended June 30, 2000, excluding the reversal of
provisions for certain rate refunds of $1.8 million, reflects increases and
decreases which have been segregated by the following principal causes (in
thousands of $):
Electric Gas
Cause Revenues Revenues
Retail sales:
Fuel and gas supply adjustments $ 1,263 $ 85,304
Earnings sharing mechanism (119) -
Environmental cost recovery surcharge (66) -
Performance based rate 2,275 -
Electric rate reduction (3,671) -
Merger surcredit (1,636) -
Gas rate increase - 11,788
Weather normalization - (2,329)
Variation in sales volume, etc. 3,708 (12,480)
Total retail sales 1,754 82,283
Wholesale sales 10,799 (10,382)
Gas transportation - net - (337)
Other (124) 589
Total $ 12,429 $ 72,153
Electric revenues increased due to higher priced wholesale sales in 2001.
The electric rate reduction resulted from the Kentucky Commission's January
2000 PBR order reducing LG&E's base electric rates.
Gas revenues increased primarily as a $2.1result of higher gas supply costs
billed to customers through the gas supply clause and the gas rate increase
ordered by the Kentucky Commission in September 2000, partially offset by
decreased wholesale sales.
Fuel for electric generation increased $1.7 million (2%) for the six months
because of an increase in generation ($2.4 million) partially offset by
lower cost of coal burned ($.7 million).
Gas supply expenses increased $62 million (76%) due to an increase in net
gas purchase prices.
-22-
Power purchased decreased $2 million (4%) primarily because of a decrease
in brokered sales activities ($8.1 million), partially offset by increased
sales to other utilities ($6.1 million).
The increase in non-recurring charges of $136.2 million, $81.2 million
after tax, is due to the costs associated with LG&E's workforce reduction
program. See Note 4 of Notes to Financial Statements.
Other operation expenses increased $4.2 million (6%) primarily as a result
of increased outside services and pension expense ($8.3 million) partially
offset by a decrease in steam production costs ($2.7 million) and electric
distribution expenses ($1 million). Outside services increased in part due
to the formation of LG&E Services, as required by the Securities and
Exchange Commission to comply with PUHCA.
Maintenance expenses for the first six months of 2001 decreased $7.1
million (23%) primarily due to decreases in scheduled outages at the Mill
Creek and the Cane Run generating stations ($3.5 million), and software
maintenance costs ($4 million).
Depreciation and amortization increased $2.8 million (6%) due to an
increase in depreciable plant in service and higher depreciation rates.
Other income and deductions increased $2 million (60%) primarily due to
decreases in the gain on sale of non-utility property and lower interest
income.
Variations in income tax expense are largely attributable to changes in pre-
tax income.
KU Results:
KU's net income decreased $27.6 million for the six months ended June 30,
2001, as compared to the six months ended June 30, 2000. Excluding the non-
recurring charges (described in Note 4 of the Notes to Financial
Statements), net income increased approximately $4 million, due largely to
decreased maintenance, depreciation and interest expenses.
A comparison of KU's revenues for the six months ended June 30, 2001, with
the six months ended June 30, 2000, reflects increases and (decreases)
which have been segregated by the following principal causes (thousands of
$):
-23-
Retail sales:
Fuel supply adjustments $ 4,158
Environmental cost recovery surcharge (491)
Performance based rate 1,732
Merger surcredit (2,038)
Electric rate reduction (5,395)
Variation in sales volume, etc. 4,993
Total retail sales 2,959
Wholesale sales 4,548
Other 544
Total $ 8,051
Electric revenues increased mainly due to higher priced wholesale sales in
2001, partially offset by the electric rate reduction order by the Kentucky
Commission in January 2000.
Fuel for electric generation increased $4.4 (4%) million for the six months
ended June 30, 2001 as compared to the comparable period of 2000, due to a
$5.3 million increase due to
higherin the cost of coal burned partially offset by a $1.8$.9
million decrease in volume burned.
Power purchased decreased $6increased $2.6 million (15%(3%) in 2001 primarily due to
decreased
brokeredincreased sales for resale activities in the wholesale electric market.
Non-recurring charges increased $52.8 million, $31.4 million after tax.
These costs are due to KU's workforce reduction program. See Note 4 of
Notes to Financial Statements.
19
Other operating expenses decreased by $2.2 million (8%).increased $.9 million. The decrease wasincrease is attributed
primarily attributable to decreased customer accounting and service and
marketing expense ($3.4 million) and steam, transmission and distribution ($.2
million) partially offset by an increase inincreased administrative and general expenses
($1.4 million).expenses.
Maintenance expenses decreased by $2.2$3.7 million (15%(12%) due to decreased
maintenancedecreases in steam
expenses, primarily resulting from repairs during a scheduled outage at the
Ghent steam generating plants ($.9 million), the distribution
system ($.6 million), and the general plant ($.6 million).during 2000.
Depreciation and amortization decreased $.5$1.2 million (2%(3%) due to a decrease
in depreciation rates. A depreciation study was completedrates partially offset by increased plant in late 2000 with new
depreciation rates going into effect in the first quarter 2001. The new rates,
as compared to rates in effect for 2000, are expected to decrease KU's
depreciation expense by about $6 million in 2001.service.
Property and other taxes decreased $.7$.8 million (14%(9%) in 2001 primarily due
to decreases in payroll taxes as a result of KU's workforce reductions.
Variations in income tax expense are largely attributable to changes in
pretax income.
Other income- net, increased $.5 million in 2001 due to a decrease in other
income expenses.
Interest charges decreased $1.8$1.4 million (18%(7%) for the first quartersix months 2001
as compared to first quartersix months 2000 due to lower interest rates on
variable rate debt, interest rate swaps in effect for 2001, and
implementation of SFAS 133, Accounting for Derivative Instruments and
Hedging Activities. See Note 5 of Notes to Financial Statements.
LIQUIDITY AND CAPITAL RESOURCESLiquidity and Capital Resources
LG&E's and KU's need for capital funds are largely related to the
construction of plant and equipment necessary to meet the needs of electric
and gas utility customers. Lines of credit and commercial paper programs
are maintained to fund temporaryshort-term capital requirements.
Construction expenditures for the threesix months ended March 31,June 30, 2001, of $66.3$96
million for LG&E and $60.3$80 million for KU, primarily for the purchase of two
jointly owned combustion turbines, were financed with internally generated
funds and the accounts receivable securitization program. See Note 6 of
Notes to Financial Statements concerning accounts receivable
securitization.
-24-
LG&E's and KU's combined cash and temporary cash investment balance
increased $8.4$5 million (LG&E $4.5$5.1 million, KU $3.9$(.1) million) during the threesix
months ended March 31,June 30, 2001. The increase reflects cash flows from
operations and sale of accounts receivables, partially offset by
construction expenditures and debt repayments.
Variations in accounts receivable, accounts payable and materials and
supplies are generally not significant indicators of LG&E's and KU's
liquidity. Such variations are primarily attributable to fluctuations in
weather, which have a direct effect on sales of electricity and natural
gas. The decreases in accounts receivable resulted mainly from seasonal
fluctuations and the accounts receivable securitization program started at
LG&E and KU. See Note 6 of Notes to Financial Statements. The increase in
fuel resulted from seasonal fluctuations at LG&E and KU, and the decrease
in LG&E's gas stored underground resulted from seasonal fluctuations.
At March 31,June 30, 2001, unused capacity under LG&E's lines of credit totaled $200
million. KU had no committed lines of credit at March 31,June 30, 2001.
LG&E's debt ratings as of April 9,June 30, 2001, were:
20
MOODY'S S&P FITCH
------- --- -----
Moody's S&P Fitch
First mortgage bonds A1 A- A+
Unsecured debt A2 BBB A
Preferred stock a2 BBB- A-
Commercial paper P-1 A-2 F-1
KU's debt ratings as of April 9,June 30, 2001, were:
MOODY'S S&P FITCH
------- --- -----
Moody's S&P Fitch
First mortgage bonds A1 A- A+
Preferred stock a2 BBB- A-
Commercial paper P-1 A-2 F-1
The Moody's and S&P's ratings of LG&E's and KU's debt securities are on
Credit Watch for upgrade as the result of the E.ON bid. Fitch has placed
LG&E and KU on credit watch evolving following the E.ON bid. These ratings
reflect the views of Moody's, S&P and Fitch. A security rating is not a
recommendation to buy, sell or hold securities and is subject to revision
or withdrawal at any time by the rating agency.
LG&E's capitalization ratios at March 31,June 30, 2001, and December 31, 2000,
follow:
Mar. 31, Dec. 31,
2001 2000
---- ----
Long-term debt (including current portion) 40.1% 38.0%
Notes payable 6.0 7.2
Preferred stock 6.3 6.0
Common equity 47.6 48.8
----- -----
Total 100.0% 100.0%
===== =====
June 30, Dec. 31,
2001 2000
Long-term debt (including current portion) 40.2% 38.0%
Notes payable 4.0 7.2
Preferred stock 6.3 6.0
Common equity 49.5 48.8
Total 100.0% 100.0%
-25-
KU's capitalization ratios at March 31,June 30, 2001, and December 31, 2000, follow:
Mar. 31, Dec. 31,
2001 2000
---- ----
Long-term debt (including current portion) 39.4% 38.6%
Notes payable 3.7 4.9
Preferred stock 3.2 3.2
Common equity 53.7June 30, Dec. 31,
2001 2000
Long-term debt (including current portion) 38.9% 38.6%
Notes payable 3.2 4.9
Preferred stock 3.2 3.2
Common equity 54.7 53.3
----- -----
Total 100.0% 100.0%
===== =====
For a description of significant contingencies that may affect LG&E and KU,
reference is made to Part I, Item 3, Legal Proceedings of LG&E's and KU's
Annual Reports on form 10-K
For the year ended December 31, 2000 and to Part II herein - - Item 1, Legal
Proceedings.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
LG&E and KU are exposed to market risks. Both operations are exposed to
market risks from changes in interest rates and commodity prices. To
mitigate changes in cash flows attributable
21
to these exposures, the
Companies have entered into various derivative instruments. Derivative
positions are monitored using techniques that include market value and
sensitivity analysis.
The potential change in interest expense resulting from changes in base
interest rates of the Companies' unswapped debt did not change materially
in the first
quarter of 2001. The potential changes in the fair values of the Company's
interest-rate swaps resulting from changes in interest rates and the yield
curve also did not change materially in the first quarter of 2001. The Company's exposure to
market risks from changes in commodity prices remained immaterial in the first quarter of 2001.
-26-
Part II. Other Information
Item 1. Legal Proceedings.
For a description of the significant legal proceedings involving LG&E and
KU, reference is made to the information under the following items and
captions of LG&E's and KU's respective combined Annual Report on Form 10-K
for the year ended December 31, 2000: Item 1, Business; Item 3, Legal
Proceedings; Item 7, Management's Discussion and Analysis of Results of
Operations and Financial Condition; Notes 3 and 12 of LG&E's Notes to
Financial Statements under Item 8 and Notes 3 and 11 of KU's Notes to
Financial Statements under Item 8. Except as described herein, to date,
the proceedings reported in LG&E's and KU's respective combined Annual
Report on Form 10-K have not changed materially.
E.ONE.On - POWERGEN TRANSACTIONPowergen Transaction
On April 9, 2001, E.On AG announced a conditional offer to purchase all the
common shares of Powergen plc, the indirect corporate parent of LG&E and
KU. The transaction is subject to a number of conditions precedent,
including the receipt of regulatory approvals from European and United
States governmental bodies, in form satisfactory to the parties. Among the
primary United States regulatory approvals are: the Kentucky Public Service
Commission, the Virginia State Corporation Commission, the Securities and
Exchange Commission, and the Federal Energy Regulatory Commission. The
parties anticipate that these approvals may be received by early 2002 to
permit completion of the transaction in early spring 2002. However, there
can be no assurance that such approvals will be obtained in form or timing
sufficient for such dates.
On August 6, 2001 the Kentucky Commission issued an order approving the
application of E.ON, Powergen and the Companies to proceed with the
transaction. The approval order included certain business and operational
conditions regarding E.ON, Powergen, LG&E Energy, and the Companies, which
conditions are under consideration for acceptance by the applicants.
Item 6(a). Exhibits.
None.
Item 6(b). Reports on Form 8-K.
On April 30, 2001, LG&E and KU filed a Current Report on Form 8-K announcing a
change in the companies certifying accountants.
22None.
-27-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Louisville Gas and Electric Company
- -----------------------------------
Registrant
Date: May 15,August 14, 2001 /s/ S. Bradford Rives
---------------------
S. Bradford Rives
Senior Vice President - Finance and
Controller
(On behalf of the registrant in his
capacity as Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Kentucky Utilities Company
- --------------------------
Registrant
Date: May 15,August 14, 2001 /s/ S. Bradford Rives
---------------------
S. Bradford Rives
Senior Vice President - Finance and
Controller
(On behalf of the registrant in his
capacity as Principal Accounting Officer)
23-28-