SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-10944 KU Energy Corporation (Exact name of registrant as specified in its charter) Kentucky 61-1141273 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Quality Street, Lexington, Kentucky 40507 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 606-255-2100 Not Applicable Former name, former address and former fiscal year, if changed since last report 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 . Number of shares of Common Stock outstanding at August 9, 1995: 37,817,878 shares. -1- PART I. FINANCIAL INFORMATION KU ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands except for per share amounts) For the Three Months Ended June 30, 1995 1994 Operating Revenues (See Note 2) $154,749 $154,020 Operating Expenses: Fuel, principally coal, used in generation (See Note 2) 40,679 43,372 Electric power purchased 17,631 16,356 Other operating expenses 30,661 27,962 Maintenance 19,495 18,895 Depreciation 18,832 16,151 Federal and state income taxes 5,378 7,781 Other taxes 4,180 3,692 Total Operating Expenses 136,856 134,209 Net Operating Income 17,893 19,811 Other Income and Deductions: Interest and dividend income 1,127 1,238 Other income and deductions - net 1,868 2,003 Total Other Income and Deductions 2,995 3,241 Income Before Interest and Other Charges 20,888 23,052 Interest and Other Charges 10,466 8,767 Net Income $ 10,422 $ 14,285 Average Common Shares Outstanding 37,818 37,818 Earnings Per Common Share $ .27 $ .38 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. -2- KU ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands except for per share amounts) For the Six Months Ended June 30, 1995 1994 Operating Revenues (See Note 2) $321,889 $320,543 Operating Expenses: Fuel, principally coal, used in generation (See Note 2) 86,385 87,231 Electric power purchased 33,408 32,239 Other operating expenses 61,867 55,066 Maintenance 34,353 33,434 Depreciation 37,580 32,339 Federal and state income taxes 15,869 22,339 Other taxes 8,523 7,760 Total Operating Expenses 277,985 270,408 Net Operating Income 43,904 50,135 Other Income and Deductions: Interest and dividend income 2,104 3,393 Other income and deductions - net 3,999 3,380 Total Other Income and Deductions 6,103 6,773 Income Before Interest and Other Charges 50,007 56,908 Interest and Other Charges 20,778 17,604 Net Income $ 29,229 $ 39,304 Average Common Shares Outstanding 37,818 37,818 Earnings Per Common Share $ .77 $ 1.04 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. -3- KU ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of dollars) For the Six Months Ended June 30, 1995 1994 Cash Flows from Operating Activities: Net Income $ 29,229 $ 39,304 Items not requiring (providing) cash currently: Depreciation 37,580 32,339 Deferred income taxes and investment tax credit (392) (3,423) Changes in current assets and liabilities: Change in fuel inventory (2,199) 179 Change in accounts receivable 3,253 2,101 Change in accounts payable (10,411) (3,225) Change in accrued taxes 4,575 3,004 Change in accrued utility revenues (628) 1,865 Other--net (648) (3,081) Net Cash Provided by Operating Activities 60,359 69,063 Cash Flows from Investing Activities: Construction expenditures - utility (54,480) (89,468) Purchase of long-term investments - (379) Proceeds from leveraged lease investments 236 197 Investment in independent power projects (2,595) (1,259) Other 201 163 Net Cash Used by Investing Activities (56,638) (90,746) Cash Flows from Financing Activities: Short-term borrowings - net (31,300) 47,900 Issuance of long-term debt 50,000 - Funds deposited with trustee - net 8,600 18,393 Retirement of long-term debt (21) (21) Retirement of preferred stock, incl. premium - (20,302) Payment of common stock dividends (31,767) (31,010) Net Cash Provided (Used) by Financing Activities (4,488) 14,960 Net Decrease in Cash and Cash Equivalents (767) (6,723) Cash and Cash Equivalents Beginning of Period 28,927 32,500 Cash and Cash Equivalents End of Period $ 28,160 $ 25,777 Supplemental Disclosures Cash paid for: Interest on short and long-term debt $ 18,622 $ 15,378 Federal and state income taxes $ 12,554 $ 25,527 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. -4- KU ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of dollars) As of As of June 30, Dec. 31, ASSETS 1995 1994 Utility Plant: Plant in service, at cost $2,286,014 $2,238,926 Less: Accumulated depreciation 970,974 933,394 1,315,040 1,305,532 Construction work in progress 112,268 104,385 1,427,308 1,409,917 Current Assets: Cash and cash equivalents 28,160 28,927 Escrow funds - coal contract litigation 6,594 6,911 Construction funds held by trustee 10,108 18,553 Accounts receivable 38,331 41,584 Accrued utility revenues 24,855 24,227 Fuel, principally coal, at average cost 37,851 35,652 Materials and supplies, at average cost 22,123 20,081 Other 13,818 10,619 181,840 186,554 Investments, Deferred Charges and Other Assets: Investment in leveraged leases 20,057 18,675 Unamortized loss on reacquired debt 11,814 12,324 Other 44,496 41,824 76,367 72,823 Total Assets $1,685,515 $1,669,294 CAPITALIZATION AND LIABILITIES Capitalization: Common stock equity $ 613,554 $ 616,092 Preferred stock of Subsidiary 40,000 40,000 Long-term debt of Subsidiary 545,984 496,012 1,199,538 1,152,104 Current Liabilities: Long-term debt due within one year 21 21 Short-term borrowings 45,000 76,300 Accounts payable 38,298 48,709 Accrued interest 7,499 7,328 Accrued taxes 13,763 9,188 Customers' deposits 6,535 6,423 Accrued payroll and vacations 9,202 8,222 Liab. to ratepayers - coal contract litigation 6,595 6,909 Other 6,450 6,471 133,363 169,571 Deferred Credits and Other Liabilities: Accumulated deferred income taxes 218,171 215,466 Accumulated deferred investment tax credits 36,227 38,275 Regulatory tax liability 59,482 60,788 Other 38,734 33,090 352,614 347,619 Total Capitalization and Liabilities $1,685,515 $1,669,294 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. -5- KU ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. PRESENTATION OF CONDENSED INFORMATION Pursuant to the rules and regulations of the Securities and Exchange Commission, certain information has been condensed and certain footnote disclosures have been omitted, which are normally included in financial statements prepared in accordance with generally accepted accounting principles. These financial statements should be read in conjunction with the financial statements and notes thereto in the KU Energy Corporation (KU Energy or the Company) Annual Report on Form 10-K for the year ended December 31, 1994 (1994 10K). In the opinion of management, the information furnished herein reflects all adjustments which are necessary to present fairly the results of the periods shown and the disclosures which have been made are adequate to make the information not misleading. Results of interim periods are not necessarily indicative of results for any twelve-month period due to the seasonal nature of the business of the Company's principal subsidiary, Kentucky Utilities Company (KU). 2. OPERATING REVENUES AND FUEL COSTS Pursuant to regulatory orders, KU has been refunding fuel cost savings related to the resolution of a coal contract dispute. Refunds to Kentucky retail customers commenced in July 1994. Refunds were made to Virginia retail customers during the period August 1993 through June 1994. Refunds were made to wholesale customers under the jurisdiction of the Federal Energy Regulatory Commission in lump sum payments in September 1993. -6- KU ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Operating revenues for the three-month and six-month periods ended June 30, 1994 were reduced by $.4 million and $.9 million, respectively, resulting from the above-mentioned refund. The refund also resulted in a reduction of fuel expense for the three-month and six-month periods ended June 30, 1994 of $.4 million and $3.4 million, respectively. The difference between the reduction in operating revenues and the reduction in fuel expense is attributed to incurred litigation costs and fuel costs savings related to off-system sales. These amounts were allowed to be retained by KU pursuant to regulatory orders. 3. FINANCING In June 1995, KU issued $50 million of Series R First Mortgage Bonds which will mature June 1, 2025 and bear interest at 7.55%. The proceeds were used primarily to refinance short- term indebtedness incurred to finance ongoing construction expenditures and general corporate requirements. 4. ENVIRONMENTAL COST RECOVERY In July 1994, the Kentucky Public Service Commission (PSC) approved KU's January 1994 application to implement an environmental surcharge. The surcharge, authorized by a Kentucky statute enacted in 1992, is designed to recover certain operating and capital costs related to compliance with federal, state or local environmental requirements associated with the production of energy from coal, including the 1990 Clean Air Act Amendments. KU's environmental surcharge was implemented in August 1994 and is described in Item 1 of the Kentucky Utilities Company Annual -7- KU ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Report on Form 10-K for the year ended December 31, 1994. The initial six-month review and hearing process was completed in June of 1995, and KU is awaiting an order from the PSC. The typical customer's monthly bill during the six-month review period increased by about 2% as a result of the surcharge. The constitutionality of the surcharge was challenged in the Franklin County (Kentucky) Circuit Court (Circuit Court) in an action brought against KU and the PSC by the Attorney General of Kentucky and representatives of customer groups. In July 1995, the Circuit Court entered judgment upholding the constitutionality of the surcharge but vacating that part of the PSC order allowing KU to recover costs associated with environmental expenditures incurred before January 1, 1993, the effective date of the surcharge statute, and remanding to the PSC for determination in accordance with the judgment. On August 7, 1995, KU filed a motion requesting the Circuit Court to amend its judgment and sustain the PSC order in its entirety. If this judgment is ultimately upheld as entered, KU estimates the amount it would be required to refund for surcharge collections through June 1995 would be approximately $4 million. At this time, KU cannot predict the outcome of this proceeding. -8- KU ENERGY CORPORATION AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS KU Energy is a holding company organized under the laws of Kentucky. KU Energy has two wholly owned subsidiaries, KU, an electric utility, and KU Capital Corporation (KU Capital), a nonutility subsidiary. KU is KU Energy's principal subsidiary. Material changes in the consolidated financial condition and operating results of KU Energy are based primarily upon the operations of KU. LIQUIDITY & RESOURCES KU's construction expenditures decreased approximately $35 million during the six-month period ending June 30, 1995 compared to the same period of 1994. The decrease is attributable primarily to planned reductions in expenditures for combustion turbine peaking units and for compliance with the 1990 Clean Air Act Amendments. Refer to Note 3 of the Notes to Consolidated Financial Statements for a discussion of KU's financing activities. RESULTS OF OPERATIONS Quarter ended June 30, 1995, compared to the Quarter ended June 30, 1994 Earnings per share for the three-month period ended June 30, 1995 were $.27 compared to $.38 for the corresponding period of 1994. The decrease reflects milder weather and a decline in off- system sales during the second quarter of 1995 compared to 1994 as well as increases in interest, depreciation and other operating expenses as further discussed below. -9- KU ENERGY CORPORATION AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Increase (Decrease) From Prior Year Three Months Ended June 30, 1995 kWh Revenues (%) (000's) Residential (2) $ 639 Commercial 1 1,376 Industrial 5 2,209 Mine Power & Public Authorities (1) 580 Total Retail Sales 1 4,804 Other Electric Utilities (25) (5,007) Miscellaneous Revenues & Other - 567 Total Before Refund (5) 364 Provision for Refund - Litigation Settlement - 365 Total (5) $ 729 Operating revenues, before the impact of the refunds to customers during 1994, increased $.4 million. (Refer to Note 2 of the Notes to Consolidated Financial Statements, "Operating Revenues and Fuel Costs," for a discussion of the refunds to customers resulting from the resolution of a coal contract dispute and the impact on 1994 operating results.) A 5% decrease in kilowatt-hour sales was offset by $4.3 million recovered under the environmental surcharge. (Refer to Note 4 of the Notes to Consolidated Financial Statements, Environmental Cost Recovery, for an update of environmental surcharge legal proceedings.) The decrease in kilowatt-hour sales is attributable to a decline in residential and off-system sales, partially offset by an increase in industrial sales. The increase in industrial sales reflects continued economic growth in the manufacturing sector of KU's service area. About 35% of the industrial sales increase was due to greater sales to Toyota Motor Manufacturing U.S.A., Inc. -10- KU ENERGY CORPORATION AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (TMM), KU's largest customer. The decrease in off-system sales is attributable to a decrease in demand for power at neighboring utilities. The decline in residential sales reflects milder weather during the second quarter of 1995 compared to 1994. However, KU set an all-time peak demand for electricity on July 14, 1995 of 3,250 megawatts. Fuel expense, excluding the effect of the refunds to customers, decreased $3.1 million (7%). This decrease reflects a 3% decrease in tons of coal consumed as well as a 4% decrease in the average price per ton of coal consumed. Purchased power expense increased $1.3 million (8%) due to increases in demand ($1 million) and energy costs ($.3 million). A 6% decline in kilowatt-hour purchases, resulting from the previously mentioned decline in kilowatt-hour sales, was offset by less favorable pricing. Other operating expenses increased by $2.7 million (10%) due to increased generating plant operations expenses (primarily attributable to costs associated with environmental compliance), advertising and marketing program expenses and timing of administrative and general expenditures. Depreciation expense increased $2.7 million (17%) resulting from the Ghent Unit 1 scrubber and two combustion turbine peaking units being placed into service late in 1994 and early 1995. Interest and other charges increased $1.7 million (19%) reflecting the issuance of $54 million of long-term debt in the fourth quarter of 1994 and an increase in the average amount of -11- KU ENERGY CORPORATION AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS short-term debt outstanding compared to the corresponding quarter of 1994. Federal and state operating income taxes decreased $2.4 million (31%), primarily due to lower pre-tax income. Six Months ended June 30, 1995, compared to the Six Months ended June 30, 1994 Earnings per share for the six-month period ended June 30, 1995 were $.77 as compared to $1.04 for the corresponding period of 1994. The decrease reflects milder weather and a decline in off-system sales during the six-month period ending June 30, 1995 as compared to the same period in 1994 as well as increases in interest, depreciation and other operating expenses as further discussed below. Earnings for the first quarter of 1994 included a one-time recovery of about $.05 per share from the resolution of a coal contract dispute. For additional information concerning the refunds resulting from resolution of the dispute and the impact on 1994 operating results, refer to Note 2 of the Notes to Consolidated Financial Statements, "Operating Revenues and Fuel Costs." -12- KU ENERGY CORPORATION AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Increase (Decrease) From Prior Year Six Months Ended June 30, 1995 kWh Revenues (%) (000's) Residential (4) $ (616) Commercial - 2,436 Industrial 5 4,508 Mine Power & Public Authorities (2) 1,246 Total Retail Sales (1) 7,574 Other Electric Utilities (23) (7,484) Miscellaneous Revenues & Other - 354 Total Before Refund (5) 444 Provision for Refund - Litigation Settlement - 902 Total (5) $ 1,346 Operating revenues, before the impact of the refunds to customers, increased $.4 million. A 5% decrease in kilowatt-hour sales was offset by $8.1 million recovered under the environmental surcharge. (Refer to Note 4 of the Notes to Consolidated Financial Statements, Environmental Cost Recovery, for an update of environmental surcharge legal proceedings.) The decrease in kilowatt-hour sales is attributable to a decline in residential and off-system sales, partially offset by an increase in industrial sales. The increase in industrial sales reflects continued economic growth in the manufacturing sector of KU's service area. About 33% of the industrial sales increase is due to greater sales to TMM. The decrease in off-system sales is attributable to a decrease in demand for power at neighboring utilities. The decline in residential sales reflects milder weather during the six-month period ended June 30, 1995 as compared to the same period of 1994. -13- KU ENERGY CORPORATION AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Fuel expense, excluding the effect of the refunds to customers, decreased $4.2 million (5%). This decrease primarily reflects a 4% decrease in tons of coal consumed. Purchased power expense increased $1.2 million (4%) due to an increase in demand costs ($2.2 million) partially offset by a decrease in kilowatt- hour purchases ($1.0 million). The decrease in kilowatt-hour purchases is due to the previously mentioned decline in kilowatt- hour sales. Other operating expenses increased $6.8 million (12%) due to increased generating plant operations expenses (primarily attributable to costs associated with environmental compliance), advertising and marketing program expenses and timing of administrative and general expenditures. Maintenance expense increased $.9 million (3%) due to an increase in production maintenance resulting from the timing of scheduled maintenance at KU's generating stations. This increase was substantially offset by a decrease in distribution maintenance in 1995. Extensive ice storm damage in the first quarter of 1994 increased distribution maintenance in that period. Depreciation expense increased $5.2 million (16%) resulting from the Ghent Unit 1 scrubber and two combustion turbine peaking units being placed into service late in 1994 and early 1995. Interest and other charges increased $3.2 million (18%) reflecting the issuance of $54 million of long-term debt in the fourth quarter of 1994 and an increase in the average amount of -14- KU ENERGY CORPORATION AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS short-term debt outstanding. Federal and state operating income taxes decreased $6.5 million (29%), primarily due to lower pre-tax income. CAPACITY REQUIREMENTS In May 1995, a 110-megawatt (MW) combustion turbine generating unit, which was placed in commercial operation during the first quarter of 1995, was taken out of service due to a turbine blade problem. In addition to this unit, KU has decided not to operate another similar combustion turbine unit placed in commercial operation in 1994 and has temporarily discontinued testing of a third similar unit scheduled for commercial operation later in 1995 until the turbine blade problem can be identified and corrected. KU is currently analyzing the situation in cooperation with the vendor of the three 110 MW generating units. Although KU cannot predict the outcome of this matter, KU does not believe this will have a significant impact on its results of operations or its ability to meet customer requirements. UTILITY ISSUES - COMPETITION In March 1995, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) by which the FERC will require public utilities that own or control facilities used for the transmission of electric energy in interstate commerce to offer "open access" transmission service on a nondiscriminatory basis. The FERC also proposes to allow, in certain circumstances, the collection of charges for the recovery -15- KU ENERGY CORPORATION AND SUBSIDIARIES MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS of stranded costs when customers change power suppliers. The FERC expects to issue final rules by February 1996. KU filed a Transmission Services (TS) Tariff and Power Services (PS) Tariff on September 30, 1994 (refer to Management's Discussion and Analysis in the 1994 Annual Report on Form 10-K under the heading "Utility Issues - Competition" for a discussion of the TS Tariff and PS Tariff filed by KU). The FERC accepted the TS Tariff, subject to refund, effective December 1, 1994, but did not approve the PS Tariff. KU revised the TS Tariff in a filing made on March 31, 1995 with the FERC in order to meet certain provisions of the NOPR and reaffirmed its request for the market-based PS Tariff. On May 31, 1995, the FERC issued an order which approved the revised TS Tariff, subject to refund, and approved the PS Tariff subject to KU making a compliance filing which addressed certain aspects of the TS and PS Tariffs. On June 30, 1995, KU made the compliance filing with the FERC and the PS Tariff became effective on that date. Although KU does not expect either of these new tariffs to have a material impact on its 1995 revenues or income, they are indicative of the increasingly competitive environment in which KU and other utilities operate. -16- PART II. OTHER INFORMATION KU ENERGY CORPORATION AND SUBSIDIARIES ITEM 1. LEGAL PROCEEDINGS ENVIRONMENTAL COST RECOVERY See Note 4 of the Notes to Consolidated Financial Statements, Environmental Cost Recovery, for an update of environmental surcharge legal proceedings. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the April 25, 1995 Annual Meeting of Shareholders, the following proposal was acted upon and approved. (1) To elect three Directors to the Board of Directors of the Company Votes Votes for Withheld William B. Bechanan 31,466,676 400,458 Harry M. Hoe 31,440,348 400,458 Michael R. Whitley 31,518,680 400,458 ITEM 5. OTHER INFORMATION NON-UTILITY MATTERS KU Capital Corporation (a subsidiary of KU Energy), through its subsidiary KUCC Frederickson, is a limited partner in Tenaska Washington Partners II, L.P., a Washington Limited Partnership (TWP II). KU Capital has made an equity commitment to TWP II of less than $8 million. The equity commitment is secured by a letter of credit. In April 1994, TWP II entered into a Purchased Power Agreement (PPA) with the Bonneville Power Administration (BPA). Based on that contract, TWP II entered into various other -17- contracts to construct, finance and operate a 248 MW gas-fired electrical generation plant (the Project) located in Frederickson, Washington, to provide power to the BPA pursuant to the PPA. In April 1995, the BPA advised TWP II that the BPA would not perform its obligations under the PPA. Construction of the Project has been suspended with approximately 70% of the costs expended or committed. On June 14, 1995, TWP II filed a claim against the United States of America acting by and through the BPA in the United States Court of Federal Claims for recovery of damages TWP II will incur resulting from the BPA's statements that it will not fulfill its obligations under the PPA. TWP II's claim includes all damages arising from suspension of the Project, loss of profits from the Project and claims of third parties who entered into supporting contracts with TWP II to finance, construct and operate the Project. The BPA claims that changes in the energy markets have undermined the purpose of the contract. TWP II intends to vigorously pursue its claim against the BPA. KU Energy believes the possibility of loss of equity commitment resulting from this event is remote. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. The following exhibit is filed as part of this report: Exhibit Number Description 27 Financial Data Schedule (required for electronic filing only in accordance with Item 601(c)(1) of Regulation S-K.) (b) Reports on Form 8-K. None. -18- KU ENERGY CORPORATION AND SUBSIDIARIES 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. KU ENERGY CORPORATION (Registrant) Date August 9, 1995 /s/ Michael R. Whitley Michael R. Whitley Chairman of the Board and Chief Executive Officer Date August 9, 1995 /s/ Michael D. Robinson Michael D. Robinson Controller -19-