SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the fiscal year ended December 31, 1993
TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period from to
Commission file numbers: 1-3464 (Kentucky Utilities Co.)
1-10944 (KU Energy Corp.)
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
B. Name of issuer of the securities held pursuant
to the plan and the address of its principal
executive office:
KU ENERGY CORPORATION
KENTUCKY UTILITIES COMPANY
ONE QUALITY STREET
LEXINGTON, KENTUCKY 40507
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<PAGE>
KENTUCKY UTILITIES COMPANY
FORM 11-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
FOR THE YEAR ENDED DECEMBER 31, 1993
TABLE OF CONTENTS
Page
Report of Independent Public Accountants . . . . . . . . . . 3
Statement of Financial Position - December 31, 1993 . . . . . 4
Statement of Financial Position - December 31, 1992 . . . . . 5
Statement of Changes in Participants' Equity for the year ended
December 31, 1993 . . . . . . . . . . . . . . . . . . . . 6
Statement of Changes in Participants' Equity for the year ended
December 31, 1992 . . . . . . . . . . . . . . . . . . . . 7
Statement of Changes in Participants' Equity for the year ended
December 31, 1991 . . . . . . . . . . . . . . . . . . . . 8
Notes to Financial Statements . . . . . . . . . . . . . . . 9-15
Signature Page . . . . . . . . . . . . . . . . . . . . . . . 16
Exhibit "A" Consent of Independent Public Accountants . . . . 17
Schedule I, Schedule II and Schedule III have been omitted because
the required information is shown in the financial statements
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Kentucky Utilities Company
Employee Savings Plan Committee:
We have audited the accompanying statements of financial position
of Kentucky Utilities Company Employee Savings Plan (the "Plan") as of
December 31, 1993 and 1992, and the related statements of changes in
participants' equity for each of the three years in the period ended
December 31, 1993. These financial statements are the responsibility of
the Plan Administrator. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Plan as
of December 31, 1993 and 1992, and the changes in participants' equity
for each of the three years in the period ended December 31, 1993, in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Chicago, Illinois
June 9, 1994
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<TABLE>
<CAPTION>
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 1993
Protected S&P 500 Equity Company Common Participant
Assets Total Income Fund Index Fund Stock Fund Loans
Government Obligations (3,406,100 units of NCC
<S> <C> <C> <C> <C> <C>
Funds) at cost of $1.00 per unit
(approximates market value)................ $ 3,406,100 $3,141,701 $ 23,980 $ 23,509 $ 216,910
Equity Investments (183,457 units of Vanguard
Index Trust-500 Portfolio) at an average
market value of $43.830 per unit (aggregate
cost of $7,338,050)........................ 8,040,901 - 8,040,901 - -
Investment in Common Stock of KU Energy
Corporation (528,289 shares) at quoted
market price of $29.000 (aggregate cost
of $12,971,978)............................ 15,320,381 - - 15,320,381 -
Notes Receivable from Participants .......... 1,010,995 - - - 1,010,995
Other Investment ............................ 146 - 146 - -
Accounts Receivable:
Employee Contributions .................... 249,555 27,225 80,120 142,210 -
Employer Contributions .................... 101,396 11,153 32,065 58,178 -
Dividends and Interest .................... 94,522 7,256 86,400 415 451
Total Accounts Receivable ................... 445,473 45,634 198,585 200,803 451
Total Assets ................................ $28,223,996 $3,187,335 $8,263,612 $15,544,693 $1,228,356
Liabilities and Participants' Equity
Participants' Equity ........................ $28,223,996 $3,187,335 $8,263,612 $15,544,693 $1,228,356
Total Liabilities and Participants' Equity .. $28,223,996 $3,187,335 $8,263,612 $15,544,693 $1,228,356
The accompanying Notes to Financial Statements are an integral part of these statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 1992
Protected S&P 500 Equity Company Common Participant
Assets Total Income Fund Index Fund Stock Fund Loans
<S> <C> <C> <C> <C> <C>
Government Obligations (3,148,120 units of The
Thoroughbred Group) at cost of $1.00 per unit
(approximates market value) ............... $ 3,148,120 $2,740,368 $ 118,583 $ 179,496 $109,673
Equity Investments (148,180 units of Vanguard
Index Trust-500 Portfolio) at an average
market value of $40.970 per unit (aggregate
cost of $5,827,985) ....................... 6,070,932 - 6,070,932 - -
Investment in Common Stock of KU Energy
Corporation (409,431 shares) at quoted
market price of $28.125 (aggregate cost
of $9,085,522) ............................ 11,515,247 - - 11,515,247 -
Notes Receivable from Participants .......... 512,494 - - - 512,494
Accounts Receivable:
Employee Contributions .................... 199,188 26,978 67,722 104,488 -
Employer Contributions .................... 53,357 7,214 17,884 28,259 -
Dividends and Interest .................... 21,604 6,020 14,962 411 211
Total Accounts Receivable ................... 274,149 40,212 100,568 133,158 211
Total Assets ................................ $21,520,942 $2,780,580 $6,290,083 $11,827,901 $622,378
Liabilities and Participants' Equity
Participants' Equity ........................ $21,520,942 $2,780,580 $6,290,083 $11,827,901 $622,378
Total Liabilities and Participants' Equity .. $21,520,942 $2,780,580 $6,290,083 $11,827,901 $622,378
The accompanying Notes to Financial Statements are an integral part of these statements.
</TABLE>
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<TABLE>
<CAPTION>
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
YEAR ENDED DECEMBER 31, 1993
Protected S&P 500 Equity Company Common Participant
Total Income Fund Index Fund Stock Fund Loans
<S> <C> <C> <C> <C> <C>
Participants' Equity Beginning of Year ...... $21,520,942 $2,780,580 $6,290,083 $11,827,901 $ 622,378
Increases (Decreases) During the Year:
Employee Contributions .................... 4,125,057 487,490 1,350,642 2,286,925 -
Employer Contributions .................... 1,693,596 202,135 547,611 943,850 -
Dividend Income ........................... 998,571 - 265,786 732,785 -
Interest Income ........................... 141,094 79,511 3,088 6,588 51,907
Participant Loans ......................... - (134,683) (314,094) (396,024) 844,801
Distributions to Terminated Participants .. (894,535) (252,047) (214,493) (423,963) (4,032)
Interfund Transfers ....................... - 24,349 (125,747) 388,096 (286,698)
Realized Gains (Losses) on Investments .... 252,184 - 781 251,403 -
Unrealized Gains (Losses) on Investments .. 387,087 - 459,955 (72,868) -
Total Increases (Decreases) During the Year . 6,703,054 406,755 1,973,529 3,716,792 605,978
Participants' Equity End of Year ............ $28,223,996 $3,187,335 $8,263,612 $15,544,693 $1,228,356
The accompanying Notes to Financial Statements are an integral part of these statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
YEAR ENDED DECEMBER 31, 1992
Protected S&P 500 Equity Company Common Participant
Total Income Fund Index Fund Stock Fund Loans
<S> <C> <C> <C> <C> <C>
Participants' Equity Beginning of Year ...... $16,565,179 $2,339,807 $4,818,630 $ 9,128,341 $ 278,401
Increases (Decreases) During the Year:
Employee Contributions .................... 3,623,231 528,681 1,263,992 1,830,558 -
Employer Contributions .................... 762,218 111,053 267,856 383,309 -
Dividend Income ........................... 675,759 - 103,244 572,515 -
Interest Income ........................... 114,208 80,033 2,122 3,522 28,531
Participant Loans ......................... - (70,808) (186,165) (201,766) 458,739
Distributions to Terminated Participants .. (726,127) (183,779) (208,929) (323,684) (9,735)
Participant Withdrawals ................... (22,150) (19,750) (1,200) (1,200) -
Interfund Transfers ....................... - (4,657) (4,815) 143,030 (133,558)
Realized Gains (Losses) on Investments .... 175,132 - 30,946 144,186 -
Unrealized Gains (Losses) on Investments .. 353,492 - 204,402 149,090 -
Total Increases (Decreases) During the Year . 4,955,763 440,773 1,471,453 2,699,560 343,977
Participants' Equity End of Year ............ $21,520,942 $2,780,580 $6,290,083 $11,827,901 $ 622,378
The accompanying Notes to Financial Statements are an integral part of these statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
YEAR ENDED DECEMBER 31, 1991
Protected Equity Company Common Participant
Total Income Fund Fund Stock Fund Loans
<S> <C> <C> <C> <C> <C>
Participants' Equity Beginning of Year ...... $ 9,790,743 $1,587,213 $3,039,691 $5,017,541 $146,298
Increases (Decreases) During the Year:
Employee Contributions .................... 3,143,084 526,097 1,121,385 1,495,602 -
Employer Contributions .................... 662,320 110,768 240,929 310,623 -
Dividend Income ........................... 584,365 - 161,633 422,732 -
Interest Income ........................... 137,948 103,897 12,840 4,053 17,158
Participant Loans ......................... - (43,449) (86,881) (65,081) 195,411
Distributions to Terminated Participants .. (407,704) (44,519) (57,309) (298,570) (7,306)
Participant Withdrawals ................... (1,424) (1,424) - - -
Other Charges ............................. (517) - (517) - -
Interfund Transfers ....................... - 101,224 (256,992) 228,928 (73,160)
Realized Gains (Losses) on Investments .... (265,998) - (320,559) 54,561 -
Unrealized Gains (Losses) on Investments .. 2,922,362 - 964,410 1,957,952 -
Total Increases (Decreases) During the Year . 6,774,436 752,594 1,778,939 4,110,800 132,103
Participants' Equity End of Year ............ $16,565,179 $2,339,807 $4,818,630 $9,128,341 $278,401
The accompanying Notes to Financial Statements are an integral part of these statements.
</TABLE>
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KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
I. DESCRIPTION OF THE PLAN
The following description of the Kentucky Utilities Company
Employee Savings Plan (the "Plan") is provided for general
information purposes. Participants should refer to the Plan
document for a more complete description of the Plan's
provisions.
A. General
The Plan is a defined contribution plan that was established
effective January 1, 1988, to provide eligible employees of
Kentucky Utilities Company, its former wholly owned
subsidiary, Old Dominion Power Company, and effective July 28,
1992, its parent holding company, KU Energy Corporation
(collectively, the "Employer"), as well as any Affiliated
Employer to which the Plan has been extended by the Board of
Directors and which adopts the Plan, a systematic means by
which they may adopt a regular savings program and to provide
Federal income tax benefits resulting from participation in
the Plan. In addition, the Employer makes certain matching
contributions to the account of each participating employee
(the "Participant"). The Plan provides for the investment of
employee and Employer contributions in certain funds and
securities. A committee (the "Committee") appointed by the
Board of Directors of Kentucky Utilities Company administers
the Plan.
In March 1993, the Plan Trustee changed its name from First
Kentucky Trust to National City Bank, Kentucky, and all of The
Thoroughbred Group holdings were merged with NCC Funds, an
open-end diversified management investment company affiliated
with National City Bank; National City Bank, Columbus and
National City Bank, Kentucky. Consequently, the Trust's
holding in the U. S. Government Obligations Portfolio of The
Thoroughbred Group was converted to a holding in the
Government Portfolio of NCC Funds. The investment strategy of
the Government Portfolio of NCC Funds is similar to the
investment strategy previously used by the U. S. Government
Obligations Portfolio of The Thoroughbred Group.
B. Summary of Accounting Policies
The Plan's financial statements are presented on the accrual
basis. Investments in each of the various Investment Funds
are reported at fair market value. All costs and expenses
incurred in operating and administering the Plan may be paid
by the Employer and any costs and expenses not paid by the
Employer are paid from the assets of the Investment Funds.
All transaction fees of an Investment Fund (including
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KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
brokerage commissions) are paid from the assets of that
Investment Fund.
C. Eligibility and Vesting
Each employee of the Employer who is receiving regular salary
or wages and has completed a twelve-consecutive month period
of at least 1,000 hours of employment is eligible to become a
Participant.
The amounts in a Participant's account are fully vested at all
times.
D. Contributions
The Plan permits a Participant to authorize the Employer to
make contributions to the Plan through payroll reductions of
1% to 16%, in whole percentages only, of the Participant's
compensation from the Employer. In addition, the Employer
makes matching contributions, for each payroll period, in an
amount equal to 50% (25% in years prior to 1993) of the amount
contributed by each Participant for such payroll period. No
Employer matching contribution is made with respect to
Participant contributions in excess of 6% of the Participant's
compensation in such payroll period. For purposes of the
Plan, compensation is base pay, excluding overtime pay, shift
differentials, commissions, pay-in-lieu of vacations, bonuses,
performance incentive compensation, other special payments,
and amounts in excess of $235,840, to be reduced to $150,000
effective with Plan Year 1994 (as adjusted in accordance with
the Internal Revenue Code of 1986, as amended (the "Code")).
The maximum amount that a Participant could contribute for
calendar year 1993 was $8,994. This maximum may be adjusted
for increases in the cost of living in accordance with the
Code.
Contributions made under the Plan are transferred to a trustee
within thirty days after the payroll period for which they are
made. The amount paid to the trustee is credited to a
separate account maintained for each Participant and is
invested in one or more of the Investment Funds as directed by
the Participant.
The Participant's account is adjusted as of each valuation
date (each June 30 and December 31 of each Plan Year) to
receive its proportionate share of the net increase or
decrease in the value of each Fund's assets during the six-
month period ending on such valuation date (see Subsequent
Events).
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<PAGE>
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
E. Distribution of Benefits
Upon termination of employment with the Employer for any
reason, a Participant (or a Participant's beneficiary if
termination is a result of the Participant's death) will be
entitled to receive distribution of the Participant's account.
Distribution will be made in a lump sum cash payment except
that a Participant (or beneficiary) may request that all of
the Participant's account invested in Common Stock in Fund C
be distributed in whole shares of Common Stock with the value
of any fractional shares and the amount not invested in Common
Stock being paid in cash.
No withdrawals from a Participant's account are permitted
while the Participant continues to be employed by the Employer
except in cases of financial hardship. A withdrawal will be
deemed to be on account of financial hardship only if the
withdrawal is necessary in light of immediate and heavy
financial needs of the Participant for the reasons specified
in the Plan. The Committee will determine the existence of
financial hardship and the amount required to be distributed
to meet the need created by the hardship.
As of December 31, amounts withdrawn by Participants but not
yet paid by the Plan were included in net assets available for
plan benefits as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Protected Income Fund . . . . . . . . . . $ 75,641 $226,596 $ 79,821
S & P 500 Equity Index Fund . . . . . . . 37,020 135,776 34,026
Company Common Stock Fund . . . . . . . . 48,711 242,370 75,844
Total $161,372 $604,742 $189,691
</TABLE>
II. INVESTMENTS
The Plan provides the following Investment Funds:
Fund A - Protected Income Fund
Investments in Fund A are made primarily in the Government
Portfolio of the NCC Funds, an open-end diversified management
investment company affiliated with National City Bank; National
City Bank, Columbus and National City Bank, Kentucky. The
Government Portfolio invests in obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities and
repurchase agreements relating to such obligations. The
investment objective of the Government Portfolio is to seek as
high a level of current income as is consistent with liquidity
and stability of principal.
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<PAGE>
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Fund B - Standard & Poor's 500 Equity Index Fund
The Plan was amended effective January 1, 1992 so that Investment
Fund B would be known as the "Standard & Poor's 500 Equity Index
Fund." All amounts credited to Participants' accounts on the
effective date were transferred to, and subsequent contributions
to Fund B were invested in, the Vanguard Index Trust -- 500
Portfolio (the "Vanguard Index Trust").
The investment objective of the Vanguard Index Trust is to match
the investment performance of the Standard & Poor's 500 Composite
Stock Price Index (the "Equity Index"), an index which emphasizes
large-capitalization companies. The Vanguard Index Trust invests
in all 500 stocks in the Equity Index in approximately the same
proportions as they are represented in the Equity Index, and uses
a "passive" or "indexing" investment approach in an attempt to
duplicate the investment performance of the Equity Index through
statistical procedures.
Prior to January 1, 1992, investments in Fund B were made
primarily in a well-diversified portfolio of equity issues in
companies having outstanding shares of stock with a market value
of $200 million or more selected by an investment manager chosen
by the Company.
Fund C - Company Common Stock Fund
Investments in Fund C are made in shares of KU Energy Corporation
Common Stock purchased from time to time in the open market.
Fund D - Participant Loans
Upon the application of a Participant, the Committee may, within
certain limitations, direct the Trustee to make a loan to the
Participant upon such terms as the Committee shall specify. In
making loans, the Committee may consider only those factors which
would be considered in a normal commercial setting by an entity
in the business of making similar types of loans. Interest rates
applicable to loans outstanding during 1993 ranged from 5% to
11.5%. Applications for loans must specify the Investment
Fund(s), other than Fund D, against which the loan is to be
charged. The amount of a Participant's outstanding loan is
subtracted from his designated Investment Fund(s) and added to
Fund D. Amounts received by the Trustee as a repayment of a loan
and interest thereon are held in Fund D and invested in short-
term investments until allocated, as of the following valuation
date, to Investment Funds A, B or C in accordance with the
Participant's investment election then in effect.
Moneys in each of the Investment Funds may be held in cash or
invested in short-term cash equivalents pending further
investment or other disposition. All earnings attributable to an
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KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
Investment Fund are reinvested in that Investment Fund.
Each Participant must file a written election ("investment
election") with the Committee directing that contributions to the
Participant's account be invested in any one or more of Funds A,
B or C (in integral multiples of 10% of each contribution).
Effective as of January 1 and July 1 of each year, a Participant
may change investment elections among Funds A, B or C (in
integral multiples of 10%) for amounts already contributed to
and held in the Participant's account and/or future contributions
(see Subsequent Events).
The number of Participants in each of the Investment Funds as of
December 31 was as follows (Participants may have participated in
more than one of the funds):
<TABLE>
1993 1992 1991
<S> <C> <C> <C>
Fund A . . . . . . . . . . . . . . . 471 539 570
Fund B . . . . . . . . . . . . . . . 1,001 1,006 1,376
Fund C . . . . . . . . . . . . . . . 1,505 1,395 1,240
</TABLE>
Realized gains (losses) on investments based on cost determined
on an average cost basis were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
S & P 500 Equity Index Fund:
<S> <C> <C> <C>
Proceeds from Dispositions $2,152,957 $6,288,980 $6,373,841
Cost 2,152,176 6,258,034 6,694,400
Net Gain (Loss) $ 781 $ 30,946 $ (320,559)
Company Common Stock Fund:
Proceeds from Dispositions $5,571,744 $3,246,107 $2,283,700
Cost 5,320,341 3,101,921 2,229,139
Net Gain (Loss) $ 251,403 $ 144,186 $ 54,561
</TABLE>
Unrealized gains (losses) on investments, computed as the change
in the difference between cost and market value, at the end of
each period were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
S & P 500 Equity Index Fund:
<S> <C> <C> <C>
December 31 $ 702,902 $ 242,947 $ 38,545
January 1 242,947 38,545 (925,865)
Increase (Decrease) $ 459,955 $ 204,402 $ 964,410
Company Common Stock Fund:
December 31 $2,356,856 $2,429,725 $2,280,635
January 1 2,429,725 2,280,635 322,683
Increase (Decrease) $ (72,869) $ 149,090 $1,957,952
</TABLE>
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<PAGE>
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
III. PLAN TERMINATION
No expiration date is provided in the Plan. The Board of
Directors of Kentucky Utilities Company may at any time
terminate, amend or modify the Plan, subject to certain rights of
the Participants under the Plan. Upon termination of the Plan in
its entirety, each Participant is entitled to receive, in
accordance with the terms of the Plan, the entire balance in the
Participant's account.
IV. FEDERAL INCOME TAX ASPECTS OF THE PLAN
The Plan is intended to operate as a qualified plan under
Sections 401(a) and 401(k) of the Code. Qualification of the
Plan means that a Participant will not be subject to Federal
income taxes on amounts contributed to the Participant's account,
or the earnings or appreciation thereon, until such amounts
either are withdrawn by the Participant or are distributed to the
Participant or to a beneficiary in the event of the Participant's
death.
The Unemployment Compensation Amendments of 1992, amended the
Code with respect to eligible rollover distributions made after
December 31, 1992. The Code now requires the Plan to withhold
20% Federal income taxes from eligible rollover distributions,
but not to exceed the amount taken in cash, that are not directly
rolled over to an individual retirement arrangement (IRA) or to
certain other qualified employer plans. The taxable portion of
distri-butions made from the Plan, prior to December 31, 1992,
was subject to Federal income tax withholding unless the
Participant elected otherwise. However, the maximum amount
withheld did not exceed the amount of cash distributed.
The tax consequences explained above are based on the assumption
that the Plan is a qualified Plan under Sections 401(a) and
401(k) of the Code. The Plan obtained its latest determination
letter dated July 7, 1989, in which the Internal Revenue Service
stated that the Plan, as amended through October 19, 1988, was in
compliance with the applicable requirements of the Internal
Revenue Code. The Plan has been amended since receiving the
determination letter. However, Kentucky Utilities Company
believes that the Plan is currently designed and being operated
in compliance with the applicable requirements of the Internal
Revenue Code. Therefore, Kentucky Utilities Company believes
that the Plan was qualified and the related trust was tax exempt
as of the financial statement date.
The foregoing is not intended to cover all tax aspects of Plan
participation and is based upon current Federal tax laws and
regula-tions. Since tax laws and regulations change from time to
time, each Participant or beneficiary should consult with a tax
advisor concerning specific tax consequences, including the
application of state tax laws which may differ from Federal tax
treatment.
V. SUBSEQUENT EVENTS
The Plan was amended, effective January 1, 1994, to redefine the
term "Valuation Date" such that the term shall mean each June 30
and December 31 of each Plan Year, except that after July 1,
1994, "Valuation Date" shall mean the last day of each calendar
quarter ending thereafter. Each Participant's account in each of
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<PAGE>
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
the Investment Funds shall be adjusted, and accounting procedures
as described in the Plan shall be performed, as of each Valuation
Date as defined above.
Effective July 1, 1994, two additional investment funds, referred
to as Investment Funds E and F, shall be available to
Participants. Prior to July 1, 1994, each Participant may file a
written election with the Committee directing that contributions
to the Participant's account be invested in any one or more of
Funds A, B, C, E or F (in integral multiples of 10% of each
contribution).
Effective as of January 1 and July 1 of each year (or, effective
on and after July 1, 1994, as of any January 1, April 1, July 1
or October 1) a Participant may change investment elections among
Funds A, B, C, E or F (in integral multiples of 10%) for amounts
already contributed to and held in the Participant's account
and/or future contributions.
Investments in Funds E and F shall be managed in accordance with
the following general purposes:
Fund E - Balanced Fund
Investments in Fund E shall be known as the Balanced Fund and
shall be invested primarily in a combination of government and
corporate bonds and common stocks of the Vanguard Wellesley
Income Fund.
Fund F - Aggressive Growth Fund
Investments in Fund F shall be known as the Aggressive Growth
Fund and shall be made in the American Capital Emerging Growth
Fund which invests primarily in stocks of small and medium-sized
companies that are expected to grow significantly.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Committee has duly caused this annual report to be signed on behalf of
the undersigned hereunto duly authorized.
KENTUCKY UTILITIES COMPANY
EMPLOYEE SAVINGS PLAN
Date: June 24, 1994 By: /s/ James M. Allison
James M. Allison
Chairman of the Employee Savings
Plan Committee
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EXHIBIT A
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in the Company's previously filed Form S-8
Registration Statement of KU Energy Corporation and Kentucky Utilities
Company (File No. 33-44234) of our report dated June 9, 1994, included in
KU Energy Corporation and Kentucky Utilities Company's Form 11-K for the
year ended December 31, 1993.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Chicago, Illinois
June 24, 1994
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