SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
-----------------
or
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File No. 1-10568 (LG&E Energy Corp.)
A. Full Title of the Plan:
401(K) SAVINGS PLAN FOR EMPLOYEES OF
LOUISVILLE GAS AND ELECTRIC COMPANY
WHO ARE REPRESENTED BY LOCAL 2100 OF IBEW
B. Name of issuer of the securities help pursuant to the Plan
and the address of its principal executive office:
LG&E ENERGY CORP.
220 West Main Street
P. O. Box 32030
Louisville, Kentucky 40232
401(k) SAVINGS PLAN FOR EMPLOYEES OF
LOUISVILLE GAS AND ELECTRIC COMPANY WHO
ARE REPRESENTED BY LOCAL 2100 OF I.B.E.W.
FINANCIAL STATEMENTS AND SCHEDULE
AS OF DECEMBER 31, 1999 AND 1998
TOGETHER WITH AUDITORS' REPORT
401(k) SAVINGS PLAN FOR EMPLOYEES OF
LOUISVILLE GAS AND ELECTRIC COMPANY WHO
ARE REPRESENTED BY LOCAL 2100 OF I.B.E.W.
Financial Statements and Schedule
As of December 31, 1999 and 1998
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INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
REFERENCE
Report of Independent Public Accountants Page 1
Statement of Net Assets Available for Benefits as of December 31, 1999 and 1998 Page 2
Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 1999 Page 2
Notes to Financial Statements and Schedule as of December 31, 1999 and 1998 Page 3 - 8
Schedule I - Item 4(i) - Schedule of Assets Held for Investment Purposes
As of December 31,1999 Page 9
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustees of the
401(k) Savings Plan For Employees
Of Louisville Gas and Electric Company Who Are Represented By
Local 2100 Of I.B.E.W.:
We have audited the accompanying statement of net assets available for
benefits of the 401(k) Savings Plan for Employees Of Louisville Gas &
Electric Company Who Are Represented By Local 2100 Of I.B.E.W. (the Plan) as
of December 31, 1999 and 1998, and the related statement of changes in net
assets available for benefits for the year ended December 31, 1999. These
financial statements are the responsibility of the Plan's administrator. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as
of December 31, 1999 and 1998, and the changes in its net assets available
for benefits for the year ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes as of December 31, 1999 is presented for
purposes of additional analysis and are not a required part of the basic
financial statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The supplemental
schedule has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in
all material respects in relation to the basic financial statements taken as
a whole.
/s/ Arthur Andersen LLP
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Arthur Andersen LLP
Louisville, Kentucky
June 28, 2000
401(k) SAVINGS PLAN FOR EMPLOYEES
OF LOUISVILLE GAS AND ELECTRIC COMPANY WHO
ARE REPRESENTED BY LOCAL 2100 OF I.B.E.W.
Statement of Net Assets Available for Benefits
As of December 31, 1999 and 1998
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PARTICIPANT DIRECTED
------------------------------------------
1999 1998
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ASSETS
Investments - at Fair Value (Notes 1, 2 and 4) $ 66,603,237 $ 65,604,572
Contributions receivable
Employee 49,229 -
Employer 18,127 -
------------------- -------------------
Net assets available for benefits $ 66,670,593 $ 65,604,572
=================== ===================
Statement of Changes in Net Assets Available for Benefits
For the year ended December 31, 1999
- -------------------------------------------------------------------------------
PARTICIPANT
DIRECTED
-------------------
Net assets available for benefits, beginning of year: $ 65,604,572
-------------------
Additions:
Employee contributions 3,716,252
Employer contributions 2,236,831
Interest and dividend income 4,346,933
Realized loss (498,145)
Unrealized loss (5,435,477)
-------------------
Total additions 4,366,394
-------------------
Deductions:
Distributions/Withdrawals 3,300,373
-------------------
Net assets available for benefits, end of year: $ 66,670,593
===================
The accompanying notes to financial statements and schedule are an integral part
of these statements.
2
401(k) SAVINGS PLAN FOR EMPLOYEES
OF LOUISVILLE GAS AND ELECTRIC COMPANY WHO
ARE REPRESENTED BY LOCAL 2100 OF I.B.E.W.
Notes to Financial Statements and Schedule
December 31, 1999 and 1998
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(1) DESCRIPTION OF PLAN-
The following description of the Louisville Gas and Electric Company
(the "Company") 401(k) Savings Plan for Employees Who Are Represented by
Local 2100 of I.B.E.W. ("Plan") provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
(a) GENERAL--The Plan was established January 1, 1993. All employees
that are represented by Local 2100 of I.B.E.W. are eligible to
participate in the Plan on the first of the month on or following
six months of continuous employment. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
(b) PLAN MERGER--On September 3, 1997, the Board of Directors approved
the merger of the Louisville Gas and Electric Company Employees'
Stock Ownership Plan for union employees into the Plan, thereby,
establishing the LG&E Energy Corp. Common Stock Fund, effective
January 1, 1998.
(c) CONTRIBUTIONS AND VESTING--Employees choosing to participate may
elect to contribute an amount equal to an integral percentage from
one percent (1%) to sixteen percent (16%) of base pay and
incentive compensation. The Company in turn will match fifty
percent (50%) of the employees' contribution on the first six
percent (6%) of eligible compensation. Employee and Company
contributions, plus actual earnings thereon, are vested
immediately. Such contributions are allocated to the specific
participant's investment fund accounts based upon the participants
election.
(d) PARTICIPANT ACCOUNTS--Each participant's account is credited with
the participant's contribution, the Company's contribution and
Plan earnings. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested
account.
(e) INVESTMENT OPTIONS--Participants may choose from the following
eleven mutual fund investment options or a company stock fund in
1% increments:
- FIDELITY RETIREMENT GOVERNMENT MONEY MARKET PORTFOLIO
Invests in obligation issued or guaranteed as to
timely payment of principal and interest by the U.S.
government, its agencies or instrumentalities.
- FIDELITY GINNIE MAE PORTFOLIO At least 65% of the
portfolio's total assets will be invested in Ginnie
Mae under normal market conditions. The portfolio
also invests in other obligations backed by the full
faith and credit of the U.S. government, including
U.S. Treasury bonds, notes and bills, and in
repurchase agreements involving those obligations.
This fund was frozen as of October 1, Participants
may transfer money out of this fund into one of the
other investment options at any time, however, no
"new" money will be invested in this investment
option.
3
- FIDELITY PURITAN FUND Diversifies investments among a
variety of companies, industries and types of
securities.
- SPARTAN U.S. EQUITY INDEX PORTFOLIO Attempts to
duplicate the composition and total return of the
Standard & Poor's 500 Index.
- FIDELITY MAGELLAN FUND Invests in common stocks, and
securities convertible to common stock, issued by
companies operating in the U.S. and/or abroad as well
as foreign companies. Investments are made in large
corporations as well as smaller, less well-known
companies. The Fund also diversifies investments
among a variety of industries and sectors within the
market.
- FIDELITY INTERMEDIATE BOND FUND Invests in all types
of medium to high quality U.S. and foreign bonds,
including corporate or U.S. government issues.
- FIDELITY EQUITY INCOME II FUND Invests in stocks of
domestic and foreign companies with potential for
capital growth.
- FIDELITY CONTRAFUND Invests in common stocks believed
to be undervalued and in companies that are currently
out of public favor but show potential for capital
growth.
- WARBURG PINCUS EMERGING GROWTH FUND Invests primarily
in common stocks of rapidly growing small and medium
sized companies which generally will benefit from new
products or services, technology, or changes in
management. The stocks are diversified among a
variety of industries.
- TEMPLETON FOREIGN FUND I Invests primarily in common
stocks and it can purchase securities in any foreign
country, developed or developing.
4
- LG&E ENERGY CORP. COMMON STOCK FUND, EFFECTIVE
JANUARY 1, 1998
Invests primarily in the stock of LG&E Energy Corp.
as well as short term investments.
- JANUS WORDWIDE FUND, EFFECTIVE AUGUST 1, 1998
Invests primarily in common stocks of foreign and
domestic companies. The fund normally invests in
issuers from at least five different countries,
including the US; however the fund may at times
may invest in fewer than five countries or even a
single country.
(f) PARTICIPANT LOANS--Effective January 1, 1996, participants may
borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50 percent of their
account balance. Loan transactions are treated as a transfer to
(from) the investment fund from (to) the Participant Loans fund.
Loan terms are for a period not exceeding five years. A
participant can have up to four (4) loans. The loans are secured
by the balance in the participant's account and bear interest at
an agreed upon rate commensurate with local prevailing rates.
Interest rates range from 6 percent to 10 percent. Principal and
interest is paid ratably through payroll deductions. Those
participants that elect to take a loan are charged a minimal
one-time loan-processing fee.
(g) PAYMENT OF BENEFITS--On termination of service due to death,
disability or retirement, a participant may elect to receive a
lump-sum amount equal to the value of the participant's vested
interest in his or her account, periodic installments over a ten
year period, or any combination of lump-sum and periodic
installments. For termination of service due to other reasons, a
participant may receive the value of the vested interest in his or
her account as a lump-sum distribution, periodic installments over
a ten year period, or any combination of lump-sum and periodic
installments.
(h) ESOP DIVIDENDS--Effective January 1, 1998, Plan participants who
have dividends paid on LG&E Energy Corp. Common Stock were given a
salary redirection in an amount equal to distributed Common Stock
dividends. Deferrals made under this program may offset the
Participant's elected salary deferral percentage.
(2) SUMMARY OF ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING--The financial statements of the Plan are
prepared under the accrual method of accounting in accordance with
generally accepted accounting principles.
5
(b) USE OF ESTIMATES--The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of changes in net assets
during the reporting period. Actual results could differ from
those estimates.
(c) INVESTMENT VALUATION AND INCOME RECOGNITION--The Plan's
investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices in an
active market which represent the net asset value of shares held
by the Plan at year end. Participant loans are valued at cost
which approximates fair value.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis.
(d) PAYMENT OF BENEFITS--Benefits are recorded when paid.
(3) INVESTMENTS-
Investments representing 5% or more of the plan's net assets are as
follows:
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------ ------------------
Fidelity Magellan Fund $ 22,523,635 $ 16,588,651
Spartan U.S. Equity Index Fund 9,644,729 7,725,926
LG&E Energy Corp. Common Stock Fund 15,542,870 25,350,815
Fidelity Puritan Fund 6,866,897 6,574,410
(4) ACCOUNTING PRONOUNCEMENT-
The Accounting Standards Executive Committee issued Statement of Position
99-3, "Accounting for and Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters" (SOP 99-3), which eliminates
the requirement for a defined contribution plan to disclose
participant-directed investment programs. As required by SOP 99-3, the
Plan adopted SOP 99-3 for the 1999 financial statements and reclassified
certain amounts in the 1998 financial statements to eliminate the
participant-directed fund investment program disclosures.
6
(5) RELATED PARTY TRANSACTIONS-
Certain Plan investments are shares of mutual funds managed by
subsidiaries of Fidelity Management Research Corp. Fidelity Management
Trust Company (a subsidiary of Fidelity Management Research Corp.) is the
trustee as defined by the Plan, and therefore, these transactions qualify
as party-in-interest.
(6) PLAN TERMINATION-
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
(7) ADMINISTRATIVE COSTS-
Certain expenses incurred for the administration of this Plan as well as
the Company's various other plans are paid by the Company.
(8) RECONCILIATION TO FORM 5500
Interest and dividends shown on the accompanying financial statements
include $4,346,933 of interest and dividends from registered investment
companies. This amount, together with the net realized and unrealized
losses of $5,933,622, is shown as net investment gain from registered
investment companies on the Plan's 5500.
(9) TAX STATUS-
The Internal Revenue Service has determined and informed the Company by a
letter dated January 20, 2000, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). The Plan has been amended since receiving the determination
letter. However, management believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements
of the IRC.
7
(10) SUBSEQUENT EVENT-
On February 28, 2000, LG&E Energy Corp. announced that its Board of
Directors accepted an offer to be acquired by PowerGen for cash of
approximately $3.2 billion or $24.85 per share and the assumption of $2.2
billion of LG&E Energy Corp.'s debt. Louisville Gas and Electric Company,
the plan sponsor, is a subsidiary of LG&E Energy Corp. This acquisition
is subject to SEC and other regulatory approvals. The currently
anticipated effect of this transaction on the plan would be to liquidate
the LG&E Energy Corp. common stock fund and apply the proceeds to the
other mutual fund options, based on participants election. Although
various options remain under consideration by the Plan and the ultimate
outcome or decision with respect to this transaction is not known at
this time.
8
SCHEDULE I
401(k) SAVINGS PLAN FOR EMPLOYEES OF
LOUISVILLE GAS AND ELECTRIC COMPANY WHO
ARE REPRESENTED BY LOCAL 2100 OF I.B.E.W.
PLAN SPONSOR: LOUISVILLE GAS AND ELECTRIC COMPANY
EIN 610264150
PLAN NO. 006
Item 4(i) - Schedule of Assets Held for Investment Purposes
As of December 31, 1999
- -------------------------------------------------------------------------------
IDENTITY OF ISSUE DESCRIPTION OF ASSET COST FAIR VALUE
- ------------------------------ -------------------------------------------------- ------------------ -------------------
*Fidelity Fidelity Magellan Fund $ 15,557,196 $ 22,523,635
*Fidelity Fidelity Equity Income II Fund 913,714 882,781
*Fidelity Fidelity Contrafund 2,027,809 2,231,268
*Fidelity Spartan U.S. Equity Index Fund 5,487,577 9,644,729
Warburg Pincus Warburg Pincus Emerging Growth Fund 298,615 381,217
*LG&E Energy Corp. LG&E Energy Corp. Common Stock Fund 11,761,768 15,542,870
*Fidelity Fidelity Puritan Fund 6,489,460 6,866,897
*Fidelity Fidelity Ret. Gov't Money Market Portfolio 2,490,620 2,490,620
Templeton Templeton Foreign Fund A 196,571 220,342
Janus Janus Worldwide 333,488 459,179
*Fidelity Fidelity Intermediate Bond Fund 1,087,437 1,051,914
*Fidelity Fidelity Ginnie Mae Portfolio 1,138,239 1,107,264
*Participants Participant Loans ** 3,200,521 3,200,521
--------- ---------
Total $ 50,983,015 $ 66,603,237
=============== =============
* Party-in-interest
** Rate of interest = range from 6.0% to 10.0%
The accompanying notes to financial statements and schedule are an integral
part of these statements.
9
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, all
members of the Committee having responsibility for the administration of 401(k)
Savings Plan for Employees of Louisville Gas and Electric Company Who Are
Represented By Local 2100 Of IBEW.
401(k) SAVINGS PLAN FOR EMPLOYEES
OF LOUISVILLE GAS AND ELECTRIC COMPANY
WHO ARE REPRESENTED BY LOCAL 2100 OF IBEW
- -----------------------------------------
Name of Plan
June 28, 2000 /s/ Victor A. Staffieri
-----------------------
Victor A. Staffieri
/s/ Charles A. Markel
-----------------------
Charles A. Markel
/s/ S. Bradford Rives
-----------------------
S. Bradford Rives
/s/ Frederick J. Newton III
-----------------------
Frederick J. Newton III
/s/ R. Foster Duncan
-----------------------
R. Foster Duncan
/s/ Robert M. Hewett
-----------------------
Robert M. Hewett