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 1-3464
Kentucky Utilities Company
(Exact name of registrant as specified in its charter)
Kentucky and Virginia 61-0247570
(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 (owned by the parent-KU Energy Corporation).
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PART I. FINANCIAL INFORMATION
KENTUCKY UTILITIES COMPANY
STATEMENTS OF INCOME
(Unaudited)
(in thousands of dollars)
For the Three
Months Ended
June 30,
1995 1994
Operating Revenues (See Note 2) $154,757 $154,026
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 30,127 27,645
Maintenance 19,493 18,893
Depreciation 18,785 16,151
Federal and state income taxes 5,634 7,933
Other taxes 4,125 3,642
Total Operating Expenses 136,474 133,992
Net Operating Income 18,283 20,034
Other Income and Deductions:
Interest and dividend income 803 766
Other income and deductions - net 1,376 1,875
Total Other Income and Deductions 2,179 2,641
Income Before Interest Charges 20,462 22,675
Interest Charges 9,901 8,202
Net Income 10,561 14,473
Preferred Stock Dividend Requirements 564 564
Net Income Applicable to Common Stock $ 9,997 $ 13,909
The accompanying Notes to Financial Statements are an integral
part of these statements.
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KENTUCKY UTILITIES COMPANY
STATEMENTS OF INCOME
(Unaudited)
(in thousands of dollars)
For the Six
Months Ended
June 30,
1995 1994
Operating Revenues (See Note 2) $321,905 $320,554
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 60,725 54,332
Maintenance 34,349 33,431
Depreciation 37,486 32,338
Federal and state income taxes 16,268 22,664
Other taxes 8,439 7,705
Total Operating Expenses 277,060 269,940
Net Operating Income 44,845 50,614
Other Income and Deductions:
Interest and dividend income 1,436 2,502
Other income and deductions - net 2,856 3,048
Total Other Income and Deductions 4,292 5,550
Income Before Interest Charges 49,137 56,164
Interest Charges 19,648 16,347
Net Income 29,489 39,817
Preferred Stock Dividend Requirements 1,128 1,256
Net Income Applicable to Common Stock $ 28,361 $ 38,561
The accompanying Notes to Financial Statements are an integral
part of these statements.
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KENTUCKY UTILITIES COMPANY
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 $ 29,489 $ 39,817
Items not requiring (providing) cash currently:
Depreciation 37,486 32,338
Deferred income taxes and investment tax credit (1,097) (3,342)
Changes in current assets and liabilities:
Change in fuel inventory (2,199) 179
Change in accounts receivable 2,957 2,059
Change in accounts payable (11,075) (3,195)
Change in accrued taxes 4,737 2,998
Change in accrued utility revenues (628) 1,865
Other--net 1,201 (2,393)
Net Cash Provided by Operating Activities 60,871 70,326
Cash Flows from Investing Activities:
Construction expenditures - utility (54,480) (89,468)
Other 17 170
Cash Used by Investing Activities (54,463) (89,298)
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, including premium - (20,302)
Payment of dividends (32,706) (32,139)
Net Cash Provided (Used) by Financing Activities (5,427) 13,831
Net Increase (Decrease) in Cash and Cash Equivalents 981 (5,141)
Cash and Cash Equivalents Beginning of Period 3,111 8,832
Cash and Cash Equivalents End of Period $ 4,092 $ 3,691
Supplemental Disclosures
Cash paid for:
Interest on short and long-term debt $ 18,622 $ 15,378
Federal and state income taxes $ 12,826 $ 25,378
The accompanying Notes to Financial Statements are an integral
part of these statements.
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KENTUCKY UTILITIES COMPANY
BALANCE SHEETS
(Unaudited)
(in thousands of dollars)
As of As of
June 30, Dec. 31,
1995 1994
ASSETS
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 4,092 3,111
Escrow funds - coal contract litigation 6,594 6,911
Construction funds held by trustee 10,108 18,553
Accounts receivable 38,755 41,712
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 10,616
158,196 160,863
Investments, Deferred Charges and Other Assets:
Unamortized loss on reacquired debt 11,814 12,324
Other 35,006 34,996
46,820 47,320
Total Assets $1,632,324 $1,618,100
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock equity $ 561,984 $ 565,201
Preferred stock 40,000 40,000
Long-term debt 545,984 496,012
1,147,968 1,101,213
Current Liabilities:
Long-term debt due within one year 21 21
Short-term borrowings 45,000 76,300
Accounts payable 38,442 49,517
Accrued interest 7,499 7,328
Accrued taxes 14,159 9,422
Customers' deposits 6,535 6,423
Accrued payroll and vacations 9,194 8,207
Liab. to ratepayers - coal contract litigation 6,595 6,909
Other 6,317 6,275
133,762 170,402
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 216,893 214,892
Accumulated deferred investment tax credits 36,227 38,275
Regulatory tax liability 59,482 60,788
Other 37,992 32,530
350,594 346,485
Total Capitalization and Liabilities $1,632,324 $1,618,100
The accompanying Notes to Financial Statements are an integral
part of these statements.
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KENTUCKY UTILITIES COMPANY
NOTES TO 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 normal-
ly 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 Kentucky
Utilities Company (KU) 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 mislead-
ing. Results of interim periods are not necessarily indicative
of results for any twelve-month period due to the seasonal nature
of KU's business.
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.
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KENTUCKY UTILITIES COMPANY
NOTES TO 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 1994 10K. The initial six-month
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KENTUCKY UTILITIES COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
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 the
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.
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KENTUCKY UTILITIES COMPANY
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 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
Net Income applicable to common stock for the three-month
period ended June 30, 1995 was $10 million compared to
$13.9 million 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.
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KENTUCKY UTILITIES COMPANY
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 - 569
Total Before Refund (5) 366
Provision for Refund -
Litigation Settlement - 365
Total (5) $ 731
Operating revenues, before the impact of the refunds to
customers during 1994, increased $.4 million. (Refer to Note 2 of
the Notes to 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 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
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KENTUCKY UTILITIES COMPANY
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
U.S.A., Inc. (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 $2.5 million (9%) 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 $2.6 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 charges increased $1.7 million (21%) reflecting the
issuance of $54 million of long-term debt in the fourth quarter
of 1994 and an increase in the average amount of short-term debt
outstanding compared to the corresponding quarter of 1994.
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KENTUCKY UTILITIES COMPANY
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Federal and state operating income taxes decreased
$2.3 million (29%), primarily due to lower pre-tax income.
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KENTUCKY UTILITIES COMPANY
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months ended June 30, 1995, compared
to the Six Months ended June 30, 1994
Net income applicable to common stock for the six-month
period ended June 30, 1995 was $28.4 million as compared to
$38.6 million 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. Net income
applicable to common stock for the first quarter of 1994 included
a one-time recovery of about $1.9 million 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
Financial Statements, "Operating Revenues and Fuel Costs."
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 - 359
Total Before Refund (5) 449
Provision for Refund -
Litigation Settlement - 902
Total (5) $ 1,351
Operating revenues, before the impact of the refunds to
customers, increased $.4 million. A 5% decrease in kilowatt-hour
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KENTUCKY UTILITIES COMPANY
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
sales was offset by $8.1 million recovered under the
environmental surcharge. (Refer to Note 4 of the Notes to
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.
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 $6.4 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.
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KENTUCKY UTILITIES COMPANY
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 $5.1 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 charges increased $3.3 million (20%) reflecting the
issuance of $54 million of long-term debt in the fourth quarter
of 1994 and an increase in the average amount of short-term debt
outstanding.
Federal and state operating income taxes decreased
$6.4 million (28%), 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
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KENTUCKY UTILITIES COMPANY
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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.
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KENTUCKY UTILITIES COMPANY
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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
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
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KENTUCKY UTILITIES COMPANY
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
indicative of the increasingly competitive environment in which
KU and other utilities operate.
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PART II. OTHER INFORMATION
KENTUCKY UTILITIES COMPANY
ITEM 1. LEGAL PROCEEDINGS
ENVIRONMENTAL COST RECOVERY
See Note 4 of the Notes to 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
Kentucky Utilities Company.
Votes
Votes for Withheld
William B. Bechanan 37,817,878 0
Harry M. Hoe 37,817,878 0
Michael R. Whitley 37,817,878 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The following exhibits are filed as part of this report:
Exhibit
Number Description
4 Supplemental Indenture dated June 1, 1995 between
Kentucky Utilities Company and Bank of America
Illinois and Robert J. Donahue, as Trustees,
providing for First Mortgage Bonds Series R of
Kentucky Utilities Company.
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.
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KENTUCKY UTILITIES COMPANY
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.
KENTUCKY UTILITIES COMPANY
(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
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SUPPLEMENTAL INDENTURE
Dated June 1, 1995
______________
KENTUCKY UTILITIES COMPANY
TO
BANK OF AMERICA ILLINOIS
AND ROBERT J. DONAHUE,
AS TRUSTEES
______________
(SUPPLEMENTAL TO THE INDENTURE OF MORTGAGE OR DEED OF TRUST
DATED MAY 1, 1947, AS AMENDED, HERETOFORE EXECUTED BY
KENTUCKY UTILITIES COMPANY TO CONTINENTAL ILLINOIS NATIONAL
BANK AND TRUST COMPANY OF CHICAGO
AND EDMOND B. STOFFT, AS TRUSTEES.)
_____________
(PROVIDING FOR FIRST MORTGAGE BONDS,
SERIES R, DUE JUNE 1, 2025)
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THIS SUPPLEMENTAL INDENTURE, dated June 1, 1995 made and
entered into by and between KENTUCKY UTILITIES COMPANY, a
corporation organized and existing under the laws of the Common-
wealths of Kentucky and Virginia (hereinafter commonly referred
to as the "Company"), and BANK OF AMERICA ILLINOIS, an Illinois
banking corporation having its office or place of business in the
City of Chicago, Cook County, State of Illinois, formerly named
Continental Bank, National Association and Continental Illinois
National Bank and Trust Company of Chicago (hereinafter commonly
referred to as the "Trustee"), and ROBERT J. DONAHUE (successor
Co-Trustee), of the City of Chicago, Cook County, State of
Illinois, as Trustees under the Indenture of Mortgage or Deed of
Trust dated May 1, 1947, as modified and amended by the several
indentures supplemental thereto heretofore executed by and
between the Company and the Trustees from time to time under said
Indenture of Mortgage or Deed of Trust; said Indenture of
Mortgage or Deed of Trust, as so modified and amended, being
hereinafter commonly referred to as the "Indenture"; and said
Trustees under the Indenture being hereinafter commonly referred
to as the "Trustees" or the "Trustees under the Indenture";
Witnesseth:
WHEREAS, the Company, by resolution of its Board of
Directors and the Pricing Committee thereof duly adopted, has
determined to issue forthwith an additional series of its bonds
to be secured by the Indenture, as hereby modified and amended,
such bonds to be known and designated as First Mortgage Bonds,
Series R (hereinafter sometimes referred to as the "bonds of
Series R or the "bonds of said Series"), and to be authorized,
authenticated and issued only as registered bonds without
coupons; and
WHEREAS, the Company desires, in accordance with the provi-
sions of Article I, as hereby amended, Section 6(e) of Article II
and Article XVI of the Indenture, to execute this supplemental
indenture for the purpose of creating and authorizing the bonds
of Series R and modifying or amending certain provisions of the
Indenture in the particulars and to the extent hereinafter in
this supplemental indenture specifically provided; and
WHEREAS, the execution and delivery by the Company of this
supplemental indenture have been duly authorized by the Board of
Directors of the Company and the Pricing Committee thereof; and
the Company has requested, and hereby requests, the Trustees to
enter into and join with the Company in the execution and
delivery of this supplemental indenture; and
WHEREAS, the bonds of Series R are to be authorized,
authenticated and issued only in the form of registered bonds
without coupons, and each of such bonds and the certificate of
the Trustee thereon shall be substantially in the following form,
to wit:
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(Form of bond of Series R)
No. . . . . . $. . . . . . .
Kentucky Utilities Company
First Mortgage Bond, Series R
Original
Issue Dated Maturity
Date Date Date CUSIP
June 1, 1995 June 1, 2025 491674AVG
Initial
Interest Optional
Interest Payment Record Redemption
Rate Dates Dates Date
7.55% June 1 May 15 June 1, 2005
December 1 November 15
REGISTERED OWNER _______________________________________
PRINCIPAL AMOUNT _______________________________________ DOLLARS
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for registration
of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the Registered Owner hereof, Cede & Co., has
an interest herein.
Kentucky Utilities Company, a Kentucky and Virginia corpora-
tion (hereinafter referred to as the "Company"), for value
received, hereby promises to pay to the Registered Owner
specified above or registered assigns, the Principal Amount
specified above on the Maturity Date specified above, and to pay
to the Registered Owner interest on said sum from the Dated Date
specified above, at the Interest Rate specified above, payable
half-yearly on the Interest Payment Dates specified above, until
said principal sum is paid. The interest so payable on any
Interest Payment Dates will be paid, subject to certain
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exceptions provided in the Supplemental Indenture dated June 1,
1995, hereinafter referred to, to the Registered Owner at the
close of business of the Trustee on the immediately preceding
Record Date. Both the principal of and the interest on this bond
shall be payable at the office or agency of the Company in the
City of Chicago, State of Illinois, in any coin or currency of
the United States of America which at the time of payment is
legal tender for public and private debts, or, at the option of
the Registered Owner, in like coin or currency, at the office or
agency of the Company in the Borough of Manhattan, City of New
York, State of New York. At the option of the Company, interest
on this bond shall be payable by check mailed on the Interest
Payment Date to the Registered Owner hereof.
EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, THIS GLOBAL BOND MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY, ANOTHER NOMINEE OF THE DEPOSITARY, A SUCCESSOR OF THE
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR.
This bond is one of the bonds of the Company issued and to
be issued from time to time under and in accordance with and all
secured by the indenture of mortgage or deed of trust dated May
1, 1947, executed and delivered by the Company to Bank of America
Illinois (formerly named Continental Bank, National Association
and Continental Illinois National Bank and Trust Company of
Chicago) (hereinafter referred to as the "Trustee") and Edmond B.
Stofft, as Trustees, and the various indentures supplemental
thereto each executed and delivered by the Company to the
Trustees (including Successor Co-Trustees) under said indenture
of mortgage (said indenture of mortgage and said supplemental
indentures being hereinafter referred to, collectively, as the
"Indenture"). Reference to the Indenture and to all supplemental
indentures, if any, hereafter executed pursuant to the Indenture
is hereby made for a description of the property mortgaged and
pledged, the nature and extent of the security and the rights of
the holders and Registered Owners of said bonds and of the
Trustees and of the Company in respect of such security. By the
terms of the Indenture the bonds to be secured thereby are
issuable in series which may vary as to date, amount, date of
maturity, rate of interest, redemption provisions, medium of
payment and in other respects as in the Indenture provided. At
the option of the Company and upon 30 days' notice by first-class
mail and with the effect provided in Article V of the Indenture,
bonds of Series R, of which this is one, may be redeemed on and
after the Initial Optional Redemption Date specified above, as a
whole at any time, or in part from time to time, at the
redemption price, expressed as a percentage of the principal
amount of the bonds hereinafter stated under "Redemption Price,"
in effect at the date fixed for redemption, together with accrued
interest to such date on the bonds to be redeemed:
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If redeemed If redeemed
during the during the
12 months 12 months
beginning Redemption beginning Redemption
June 1 Price June 1 Price
2005 103.775% 2015 100.000%
2006 103.398% 2016 100.000%
2007 103.020% 2017 100.000%
2008 102.643% 2018 100.000%
2009 102.265% 2019 100.000%
2010 101.888% 2020 100.000%
2011 101.510% 2021 100.000%
2012 101.133% 2022 100.000%
2013 100.755% 2023 100.000%
2014 100.378% 2024 100.000%
In case of certain events of default specified in the
Indenture, the principal of this bond may be declared or may
become due and payable in the manner and with the effect provided
in the Indenture. No recourse shall be had for the payment of
the principal of or interest on this bond, or for any claim based
hereon, or otherwise in respect hereof or of the Indenture or any
indenture supplemental thereto, to or against any incorporator,
stockholder, officer or director, past, present or future, of the
Company, or of any predecessor or successor corporation, either
directly or through the Company or such predecessor or successor
corporation, under any constitution or statute or rule of law, or
by the enforcement of any assessment or penalty, or otherwise,
all such liability of incorporators, stockholders, directors and
officers being waived and released by the Registered Owner hereof
by the acceptance of this bond and being likewise waived and
released by the terms of the Indenture. This bond is
transferable by the Registered Owner hereof, in person or by
attorney duly authorized, at the principal office or place of
business of the Trustee under the Indenture, upon the surrender
and cancellation of this bond and the payment of any stamp tax or
other governmental charge, and upon any such transfer a new
registered bond or bonds without coupons, of the same series and
for the same aggregate principal amount, will be issued to the
transferee in exchange herefor; provided, that the Company shall
not be required (a) to issue, register, transfer or exchange any
bonds of Series R during a period beginning at the opening of
business on the tenth business day next preceding any selection
of said bonds to be redeemed and ending at the close of business
on the day on which the applicable notice of redemption is given,
(b) to register, transfer or exchange any bonds of Series R
selected, called or being called for redemption in whole or in
part or (c) to transfer, exchange or register bonds of Series R
during the 10 days next preceding an Interest Payment Date.
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This bond shall not be valid or become obligatory for any
purpose unless and until it shall have been authenticated by the
execution by the Trustee or its successor in trust under the
Indenture of the Trustee's Certificate endorsed hereon.
IN WITNESS WHEREOF, Kentucky Utilities Company has caused
this bond to be executed in its name by the manual or facsimile
signature of its President or one of its Vice Presidents, and its
corporate seal or a facsimile thereof to be hereto affixed or
imprinted hereon and attested by the manual or facsimile
signature of its Secretary or one of its Assistant Secretaries.
KENTUCKY UTILITIES COMPANY
By ___________________________
President
ATTEST:
_________________________
Secretary
This bond is one of the bonds of the series designated
therein, described in the within mentioned Indenture.
BANK OF AMERICA ILLINOIS
as Trustee
By _______________________________
Authorized Officer
(End of form of bond of Series R)
NOW, THEREFORE, in consideration of the premises and of the
sum of One Dollar ($1.00) duly paid by the Trustee to the
Company, and of other good and valuable considerations, the
receipt whereof is hereby acknowledged, and for the purpose of
further assuring to the Trustees under the Indenture their title
to, or lien upon, the property hereinafter described, under and
pursuant to the terms of the Indenture and for the purpose of
further securing the due and punctual payment of the principal of
and interest and the premium, if any, on all bonds which have
been heretofore or shall be hereafter issued under the Indenture
and indentures supplemental thereto and which shall be at any
time outstanding thereunder and secured thereby, and for the
purpose of securing the faithful performance and observance of
all the covenants and conditions set forth in the Indenture
and/or in any indenture supplemental thereto, the Company has
given, granted, bargained, sold, transferred, assigned, pledged,
mortgaged, warranted the title to and conveyed, and by these
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presents does give, grant, bargain, sell, transfer, assign,
pledge, mortgage, warrant the title to and convey unto BANK OF
AMERICA ILLINOIS and ROBERT J. DONAHUE, as Trustees under the
Indenture as therein provided, and the successors in the trusts
thereby created, and to their assigns, all the right, title and
interest of the Company in and to any and all premises, plants,
property, leases and leaseholds, franchises, permits, rights and
powers, of every kind and description, real and personal (1)
which have been acquired by the Company through construction,
purchase, consolidation or merger, or otherwise, and which at the
date hereof are owned by the Company, and (2) which shall be
acquired by the Company, through construction, purchase,
consolidation, merger, or otherwise, on or subsequent to the date
hereof, together, in each case, with the rents, issues, products
and profits therefrom, excepting, however, and there is hereby
expressly reserved and excluded from the lien and effect of the
Indenture and of this supplemental indenture, all right, title
and interest of the Company, now owned, or hereinafter acquired,
in and to (a) all cash, bonds, shares of stock, obligations and
other securities not deposited with the Trustee or Trustees under
the Indenture, and (b) all accounts and bills receivable,
judgments (other than for the recovery of real property or
establishing a lien or charge thereon or right therein) and
chooses in action not specifically assigned to and pledged with
the Trustee or Trustees under the Indenture, and (c) all lamps
and supplies, machinery, appliances, goods, wares, merchandise,
commodities, equipment, apparatus, materials and/or supplies
acquired or held by the Company for sale, lease, rental or
consumption in the ordinary course of business, and (d) the last
day of each of the demised terms created by any lease of property
leased to the Company and under each and every renewal of any
such lease, the last day of each and every such demised term
being hereby expressly reserved to and by the Company, and (e)
all gas, oil, ore, copper and other minerals now or hereafter
existing upon, within or under any real estate of the Company
subject to, or hereby subjected to, the lien of the Indenture.
Without in any way limiting or restricting the generality of
the foregoing description or the foregoing exceptions and
reservations, the Company hereby expressly gives, grants,
bargains, sells, transfers, assigns, pledges, mortgages, warrants
the title to and conveys unto said BANK OF AMERICA ILLINOIS and
ROBERT J. DONAHUE, as Trustees under the Indenture, and unto
their successor or successors in trust, and their assigns, under
the trusts and for the purposes of the Indenture, as hereby
amended, the properties described in Section 5 of Article III of
this supplemental indenture (said description being incorporated
herein by reference with the same force and effect as if set
forth at length herein), and which properties have been acquired
by the Company, through construction, purchase, consolidation or
merger, or otherwise, and which are owned by the Company at the
date of the execution hereof together with the tenements,
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hereditaments and appurtenances thereunto belonging or
appertaining.
TO HAVE AND TO HOLD all said property, rights and interests
hereinabove described or referred to and conveyed, assigned,
pledged or mortgaged, or intended to be conveyed, assigned,
pledged or mortgaged, together with the rents, issues, products
and profits therefrom unto said BANK OF AMERICA ILLINOIS and
ROBERT J. DONAHUE, as Trustees under the Indenture, as hereby
modified and amended, and unto their successor or successors in
trust forever, BUT IN TRUST, NEVERTHELESS, upon the trusts, for
the purposes and subject to all the terms, conditions, provisions
and restrictions of the Indenture, as hereby modified and
amended.
And upon the considerations and for the purposes aforesaid,
and in order to provide, pursuant to the terms of the Indenture,
for the issuance under the Indenture, as hereby modified and
amended, of bonds of Series R and to fix the terms, provisions
and characteristics of the bonds of said Series, and to modify
and amend the Indenture in the particulars and to the extent
hereinafter in this supplemental indenture specifically provided,
the Company hereby covenants and agrees with the Trustees as
follows:
ARTICLE I
Section 1. A series of bonds issuable under the Indenture,
as hereby modified and amended, and to be known and designated as
"First Mortgage Bonds, Series R" (hereinafter in this Article
sometimes referred to as the "bonds of Series R" or as the "bonds
of said Series"), and which shall be executed, authenticated and
issued only in the form of registered bonds without coupons, is
hereby created and authorized. The bonds of said Series shall be
substantially in the form thereof hereinbefore recited. If so
directed by the Company, the bonds of Series R shall be issued as
a single global security for each maturity thereof and registered
in the name of The Depository Trust Company or its nominee or
successor under a "book-entry-only" system pursuant to a letter
of representation between the Company and the Trustee and said
depository. Each bond of said Series shall be dated as of the
Interest Payment Date thereof to which interest was paid next
preceding the date of issue, unless (a) issued on an Interest
Payment Date thereof to which interest was paid, in which event
it shall be dated as of the date of issue, or (b) issued prior to
the occurrence of the first Interest Payment Date thereof to
which interest was paid, in which event it shall be dated the
Original Issue Date; and the bonds of said Series shall be due
and payable on the Maturity Date hereinabove specified in the
form of bond, shall bear interest from the date thereof at the
Interest Rate per annum specified in the form of bond, payable
half-yearly on the Interest Payment Dates specified in the form
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of bond in each year to the Registered Owners as specified on the
registry books of the Trustee on the close of business on the
applicable Record Date as hereinafter provided; shall be payable
both as to principal and interest, at the office or agency of the
Company in the City of Chicago, State of Illinois, in any coin or
currency of the United States of America which at the time of
payment is legal tender for public and private debts, or at the
option of the Registered Owner, in like coin or currency, at the
office or agency of the Company in the Borough of Manhattan, City
of New York, State of New York; and, at the option of the
Company, shall be payable as to interest by check mailed on the
Interest Payment Date to the Registered Owner thereof. So long
as any "book-entry-only" system is in effect, the bonds of said
Series shall be paid as provided in the letter of representation
referred to above.
Anything contained in Section 14 of Article I of the
Indenture (or elsewhere in the Indenture) to the contrary
notwithstanding, only the person in whose name any of the bonds
of Series R is registered (the "Registered Owner") at the close
of business on any Record Date (as hereinafter defined) with
respect to any Interest Payment Date shall be entitled to receive
the interest payable on such Interest Payment Date
notwithstanding the cancellation of such bonds upon any transfer
or exchange subsequent to the Record Date and prior to such
Interest Payment Date; provided, however, that if and to the
extent the Company shall default in the payment of the interest
due on such Interest Payment Date, such defaulted interest shall
be paid to the persons in whose names outstanding bonds of said
Series are registered on the record date to be established by the
Trustees for payment of such defaulted interest.
The term "Record Date" as used in this Article I with
respect to any Interest Payment Date applicable to the bonds of
said Series (other than an Interest Payment Date for the payment
of defaulted interest) shall mean the applicable Record Date
specified in the form of bond next preceding such Interest
Payment Date, or, if such Record Date shall be a legal holiday or
a day on which banking institutions in the City of Chicago,
Illinois, or the Borough of Manhattan, City of New York, State of
New York, are authorized by law to close, then the next preceding
day which shall not be a legal holiday or a day on which such
institutions are so authorized to close.
At the option of the Company and upon the notice and in the
manner and with the effect provided in Article V of the
Indenture, except as to notice as hereinafter provided, bonds of
Series R may be redeemed on and after the Initial Optional
Redemption Date specified in the form of bond as a whole at any
time, or in part from time to time, at the redemption price,
expressed as a percentage of the principal amount of the bonds,
stated in the form of bond in effect at the date fixed for
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<PAGE>
redemption, together with accrued interest to such date on the
bonds to be redeemed as set forth in the form of bond. Notice of
redemption of any bonds of Series R shall be given as provided in
Article V of the Indenture; provided, however, such notice need
be given only by first-class mail and no publication of notice of
redemption shall be required and, provided further, that failure
to mail such notice to any Registered Owner or any imperfection
or defect therein shall not affect the validity of any
proceedings for redemption for redemption with respect to bonds
of Series R for which notice was properly given.
Section 2. The bonds of said Series shall, from time to
time, be executed on behalf of the Company and sealed with the
corporate seal of the Company, all in the manner provided in or
permitted by Section 6 of Article I of the Indenture, as follows:
(a) bonds of said Series executed on behalf of the Company
by its President or a Vice President and by its Secretary or an
Assistance Secretary may be so executed by the manual or
facsimile signature of such President or Vice President and of
such Secretary or Assistant Secretary, as the case may be, of the
Company, or of any person or persons who shall have been such
officer or officers, as the case may be, of the Company on or
subsequent to the date of this supplemental indenture,
notwithstanding that he or they may have ceased to be such
officer or officers of the Company at the time of the actual
execution, authentication, issuance or delivery of any of such
bonds of said Series, and any such manual or facsimile signature
or signatures of such officer or officers of the Company as above
provided, on any such bonds shall constitute execution of such
bonds on behalf of the Company by such officer or officers of the
Company for the purposes of the Indenture, as hereby modified and
amended, and shall be valid and effective for all purposes
provided that all bonds of said Series shall always be executed
on behalf of the Company by the manual or facsimile signature of
its President or a Vice President and of its Secretary or an
Assistant Secretary, as above provided, and provided, further,
that none of such bonds shall be executed on behalf of the
Company by the manual or facsimile signature of the same officer
or person acting in more than one capacity; and
(b) such corporate seal of the Company may be facsimile, and
any bonds of said Series on which such facsimile seal of the
Company shall be affixed, impressed, imprinted or reproduced
shall be deemed to be sealed with the corporate seal of the
Company for the purpose of the Indenture, as hereby modified and
amended, and such facsimile seal shall be valid and effective for
all purposes.
The Company shall not be required (a) to issue, register,
transfer or exchange any bonds of said Series during a period
beginning at the opening of business on the tenth business day
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next preceding any selection of bonds of said Series to be
redeemed and ending at the close of business on the day on which
the applicable notice of redemption is given, (b) to register,
transfer or exchange any bonds of said Series selected, called or
being called for redemption in whole or in part or (c) to
transfer, exchange or register bonds of said Series during the 10
days next preceding an Interest Payment Date.
Section 3. (a) Except as provided in subsections (c)
and (g) below, the holder of all of the bonds of Series R shall
be The Depository Trust Company ("DTC") and the bonds of said
Series shall be registered in the name of Cede & Co., as nominee
for DTC.
(b) The bonds of Series R shall be initially issued in
the form of a separate single authenticated fully registered
certificate in the name of Cede & Co. and in the principal amount
of the bonds of Series R (a "Global Bond"). Upon initial
issuance, the ownership of such bonds of said Series shall be
registered in the bond register kept by the Trustee in the name
of Cede & Co., as nominee of DTC. So long as the bonds of said
Series are evidenced by a Global Bond, the Trustee and the
Company may treat DTC (or its nominee) as the sole and exclusive
holder of the bonds of Series R registered in its name for the
purposes of payment of the principal of, premium, if any, and
interest on the bonds of said Series or portion thereof to be
redeemed, and of giving any notice permitted or required to be
given to holders under the Indenture and neither the Trustee nor
the Company shall be affected by any notice to the contrary.
Neither the Trustee nor the Company shall have any responsibility
or obligation to any of DTC's participants (each, a
"Participant"), any person claiming a beneficial ownership in the
bonds of Series R under or through DTC or any Participant (each,
a "Beneficial Owner"), or any other person which is not shown on
the bond register maintained by the Trustee as being a holder,
with respect to the accuracy of any records maintained by DTC or
any Participant, the payment of DTC or any Participant of any
amount in respect of the principal of, premium, if any, or
interest on the bonds of said Series; any notice which is
permitted or required to be given to holders under the Indenture
of bonds of Series R; the selection by DTC or any Participant of
any person to receive payment in the event of a partial
redemption of the Bonds of Series R; or any consent given or
other action taken by DTC as bondholder. The Trustee shall pay
all principal of, premium, if any, and interest on the bonds of
Series R registered in the name of Cede & Co. only to or "upon
the order of" DTC (as that term is used in the Uniform Commercial
Code as adopted in Illinois and New York), and all such payments
shall be valid and effective to fully satisfy and discharge the
Company's obligations with respect to the principal of, premium,
if any, and interest on such bonds of said Series to the extent
of the sum or sums so paid. Except as otherwise provided in
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Section 3(c) and (g) below, no person other than DTC shall
receive authenticated bond certificates evidencing the obligation
of the Company to make payments of principal of, premium, if any,
and interest on the bonds of said Series. Upon delivery by DTC
to the Trustee of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co.,
and subject to the provision of the Indenture with respect to
transfers of bonds, the word "Cede & Co." in this supplemental
indenture shall refer to such new nominee of DTC.
(c) Any Global Bond shall be exchangeable for bonds of
Series R in certificated form registered in the names of
Participants and/or Beneficial Owners if, but only if, (i) DTC
notifies the Company that it is unwilling or unable to continue
as Depository for bonds of said Series or at any time ceases to
be a clearing agency registered as such under the Securities
Exchange Act of 1934, as amended, (ii) the Company instructs the
Trustee that such Global Bond shall be exchangeable or
(iii) there shall have occurred and be continuing an event of
default or an event that with notice or passage of time, or both,
would constitute an event of default. In any such event, the
Trustee shall issue, transfer and exchange bond certificates as
requested by DTC in appropriate amounts pursuant to Article I of
the Indenture and Section 1 of Article I of this supplemental
indenture. The Company shall pay all costs in connection with
the production, execution and delivery of such bond certificates.
If bond certificates are issued, the provisions of the Indenture
shall apply to, among other things, the transfer and exchange of
such certificates and the method of payment and principal of,
premium, if any, and interest on such certificates.
(d) Notwithstanding any other provision of this
supplemental indenture to the contrary, so long as any bonds of
Series R are evidenced by a Global Bond, registered in the name
of Cede & Co., as nominee of DTC, all payments with respect to
the principal of, premium, if any, and interest on the bonds of
said Series and all notices with respect to the bonds of said
Series shall be made and given, respectively, to DTC as provided
in the representation letter relating to the bonds of said Series
among DTC, the Trustee and the Company. The Trustee is hereby
authorized and directed to comply with all terms of the
representation letter.
(e) In connection with any notice or other
communication to be provided pursuant to the Indenture for the
bonds of Series R by the Company or the Trustee with respect to
any consent or other action to be taken by the holders of the
bonds of said Series, the Company or the Trustee, as the case may
be, shall seek to establish a record date to the extent permitted
by the Indenture for such consent or other action and give DTC
notice of such record date not less than fifteen (15) calendar
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days in advance of such record date to the extent possible. Such
notice to DTC shall be given only when DTC is the sole holder.
(f) NEITHER THE COMPANY NOR THE TRUSTEE WILL HAVE ANY
RESPONSIBILITY OR OBLIGATIONS TO THE PARTICIPANTS OR THE
BENEFICIAL OWNERS WITH RESPECT TO (i) THE ACCURACY OF ANY RECORDS
MAINTAINED BY DTC OR ANY PARTICIPANT; (ii) THE PAYMENT BY DTC OR
ANY PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN
RESPECT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE
BONDS OF SERIES R; (iii) THE DELIVERY BY DTC OR ANY PARTICIPANT
OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR
PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO
HOLDERS; (iv) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE
PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS OF
SAID SERIES R; OR (v) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY
DTC AS A HOLDER.
SO LONG AS CEDE & CO. IS THE REGISTERED HOLDER OF THE
BONDS OF SERIES R AS NOMINEE OF DTC, REFERENCES HEREIN TO THE
BONDS OF SAID SERIES OR REGISTERED HOLDERS OF THE BONDS OF SAID
SERIES SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL
OWNERS OF THE BONDS OF SAID SERIES NOR DTC PARTICIPANTS.
(g) No Global Bond may be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC or by DTC or any such nominee to a
successor of DTC or a nominee of such successor.
(h) Upon the termination of the services of DTC with
respect to the bonds of Series R pursuant to subsection (c) of
this Section 3 after which no substitute book-entry depository is
appointed, the bonds of said Series shall be registered in
whatever name or names holders transferring or exchanging bonds
of said Series shall designate in accordance with the provisions
of the Indenture.
ARTICLE II
Section 1. Section 10 of Article III and Section 1 of
Article VII of the Indenture are each hereby amended to provide
that the Company covenants and agrees to observe and comply with
the provisions of said sections as so amended hereby so long as
the bonds of Series R are outstanding. The bonds outstanding on
the date hereof to which said Section 10 applies are Series K,
Nos. 7, 8, Series P, Nos. 1B, 2B, 3B and 4B, Series Q, Nos. 9 and
10. The bonds outstanding on the date hereof to which said
Section 1 applies are Series K, P and Q.
ARTICLE III
Section 1. The provisions of this supplemental indenture
shall be effective from and after the execution hereof; and the
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Indenture, as hereby modified and amended, shall remain in full
force and effect.
Section 2. Each holder or registered owner of a bond of any
series not now outstanding which shall be authenticated by the
Trustee and issued by the Company under the Indenture (as hereby
amended) subsequent to the execution of this supplemental
indenture and of any coupon pertaining to any such bond, by the
acquisition, holding or ownership of such bond and coupon,
thereby consents and agrees to, and shall be bound by, the
provisions of this supplemental indenture.
Section 3. Each reference in the Indenture, or in this
supplemental indenture, to any article, section, term or
provision of the Indenture shall mean and be deemed to refer to
such article, section, term or provision of the Indenture, as
hereby modified and amended, except where the context otherwise
indicates.
Section 4. All the covenants, provisions, stipulations and
agreements in this supplemental indenture contained are and shall
be for the sole and exclusive benefit of the parties hereto,
their successors and assigns, and of the holders and registered
owners from time to time of the bonds and of the coupons issued
and outstanding from time to time under and secured by the
Indenture, as hereby modified and amended.
This supplemental indenture has been executed in a number of
identical counterparts, each of which so executed shall be deemed
to be an original.
At the time of the execution of this supplemental indenture,
the aggregate principal amount of all indebtedness outstanding,
or to be presently outstanding, under and secured by the
Indenture, as hereby modified and amended, is $536,130,000,
consisting of and represented by First Mortgage Bonds of the
Company of the following series:
Interest Maturity Principal
Series Rate Date Amount
K 7 3/8 December 1, 2002 $35,500,000
No. 7 7 3/8 May 1, 2010 4,000,000
7.60 May 1, 2020 8,900,000
No. 8 7.45 September 15, 2016 96,000,000
P 7.92 May 15, 2007 53,000,000
8.55 May 15, 2027 33,000,000
No. 1B 6 1/4 February 1, 2018 20,930,000
No. 2B 6 1/4 February 1, 2018 2,400,000
No. 3B 6 1/4 February 1, 2018 7,200,000
No. 4B 6 1/4 February 1, 2018 7,400,000
Q 5.95 June 15, 2000 61,500,000
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6.32 June 15, 2003 62,000,000
No. 9 5 3/4 December 1, 2023 50,000,000
No. 10 Variable November 1, 2024 44,300,000(a)
R (b) June 1, 2025 50,000,000(c)
_________
(a) An additional $9,700,000 remains authorized to be issued.
(b) At the Interest Rate specified in the form of bond.
(c) To be presently issued by the Company under the Indenture,
as hereby modified and amended.
All of said bonds of Series K, Series P and Series Q,
respectively, were sold by the Company to, and upon the issue
thereof were owned and held by, the corporations and partnerships
whose names and residences are stated in the Supplemental
Indentures dated December 1, 1972, May 15, 1992 and June 15,
1993, respectively, executed by the Company to the Trustees under
said Indenture as heretofore modified and amended.
All of said bonds of Series No. 7 and Series No. 8 were
heretofore issued, and upon the issuance thereof were held by,
First Security National Bank and Trust Company, One First
Security Plaza, Lexington, Fayette County, Kentucky 40507, as
trustee (now succeeded by Bank One, Lexington, N.A.).
All of said bonds of Series No. 1B through 4B inclusive,
Series No. 9 and Series No. 10 were heretofore issued and
delivered by the Company to, and upon the issuance thereof were
held by, Bank One, Lexington, N.A., 201 East Main Street,
Lexington, Fayette County, Kentucky 40507, as trustee.
The Fifty Million Dollars ($50,000,000) in principal amount
of bonds of Series R proposed to be presently issued by the
Company under the Indenture, as hereby modified and amended, are
to be issued and delivered by the Company to, and upon the
issuance thereof will be owned by, Goldman, Sachs & Co., 85 Broad
Street, New York, New York and J.J.B. Hilliard, W.L. Lyons, Inc.,
501 South Fourth Avenue, Louisville, Kentucky.
Section 5. The Company hereby gives, grants, bargains,
sells, transfers, assigns, pledges, mortgages, warrants the title
to and conveys unto the Trustee under the Indenture, upon the
trusts and for the purposes of the Indenture, as hereby modified,
the following described properties:
FIRST. The following described real estate of the Company
situated in Carroll County, Kentucky:
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<PAGE>
Beginning at a point in the north easterly right of way line
of Black Rock Road, said point being at the most southerly
corner of a tract as conveyed to Elizabeth O'Neal by the
will of T. W. O'Neal, appearing of record in Will Book 9
Page 52 in the aforementioned County Clerks Office, and said
point having coordinate values of South 2640.318'; West
5344.034' as related to the Control System for Kentucky
Utilities Ghent Generating Station, thence with the north
easterly right of way line of Black Rock Road the following
courses and distances South 81 deg 04 min 36 sec East 78.07
feet to a point; thence South 56 deg 41 min 30 sec East
53.66 feet to a point; thence South 46 deg 43 min 48 sec
East 614.20 feet to a point; thence South 38 deg 52 min 05
sec East 188.78 feet to a point; thence South 46 deg 43 min
16 sec East 301.55 feet to a point; thence South 57 deg 16
min 16 sec East 138.38 feet to a point; thence South 37 deg
31 min 02 sec East 453.26 feet to a point; thence South 36
deg 20 min 00 sec East 338.52 feet to a point; thence South
48 deg 01 min 45 sec East 109.96 feet to an iron pin set on
the road side of a wooden corner fence post, said pin being
at the most westerly corner of a tract as conveyed to
Russell and Mary Dees by deed dated 11 March, 1986 and of
record in Deed Book 101 Page 128 in the aforementioned
County Clerk's Office; thence leaving the right of way line
of Black Rock Road and with a fence line, the northwest line
of Dees North 40 deg 43 min 40 sec East 763.78 feet to a
wooden fence post; thence with a fence line, the north line
of Dees and the north line of two tracts, one conveyed to
Bernard B. Owen by deed dated 15 September, 1989 and of
record in Deed Book 107 Page 467 and one to Jack and
Geraldine Schirmer by deed dated 12 April, 1988 and of
record in Deed Book 104 Page 731 in the aforementioned
County Clerk's Office North 76 deg 15 min 18 sec East
1134.68 feet to a wooden fence post, thence North 77 deg 06
min 35 sec East 1206.32 feet to a wooden fence post; thence
North 76 deg 31 min 26 sec East 1224.60 feet to a wooden
fence post in the westerly line of a tract as conveyed to
Jacob Seiler by deed dated 3 September, 1943 and of record
in Deed Book 45 Page 601 in the aforementioned County
Clerk's Office, said post being South 50 deg 30 min 00 sec E
3.2 feet from the center of a 40 inch Oak tree; thence with
a fence line, the westerly line of Seiler North 33 deg 33
min 04 sec West 508.33 feet to a wooden fence post; thence
North 30 deg 22 min 55 sec West 646.80 feet to a wooden
fence post; thence North 12 deg 16 min 28 sec West 370.02
feet to a point in the center of Smith's Branch and the
westerly line of a tract as conveyed to Louis and Arlene
Ward by deed dated 15 March, 1967 and of record in Deed Book
65 page 569 in the aforementioned County Clerk's Office;
thence with the meanders of Smith's Branch and the westerly
line of Ward North 5 deg 48 min 03 sec West 86.97 feet to a
point; thence North 38 deg 42 min 42 sec West 124.35 feet to
-36-
<PAGE>
a point; thence North 41 deg 34 min 34 sec West 391.74 feet
to a point; thence North 56 deg 45 min 13 sec West 107.09
feet to a point; thence North 12 deg 56 min 37 sec West
122.13 feet to a point; thence North 33 deg 12 min 10 sec
West 230.73 feet to a point; thence North 37 deg 08 min 46
sec West 258.67 feet to a point, thence North 20 deg 59 min
47 sec West 160.46 feet to a point; thence North 42 deg 27
min 31 sec West 125.66 feet to a point; thence North 68 deg
28 min 32 sec West 213.34 feet to a point; thence North 31
deg 41 min 37 sec West 45.76 feet to a point at the
southeast corner of a tract conveyed to Froman Brothers by
deed dated 2 January, 1976 and of record in Deed Book 82
Page 69 and also deed dated 20 November, 1981 and of record
in Deed Book 93 Page 496 in the aforementioned County
Clerk's Office; thence leaving the center of Smith's Branch
and the westerly line of Ward and with a fence, the south
line of Froman Brothers South 77 deg 10 min 11 sec West
458.70 feet to a wooden corner fence post at the southwest
corner of Froman Brothers; thence with a fence, the westerly
line of Froman Brothers North 23 deg 51 min 25 sec West
542.98 feet to a 8" tree; thence North 22 deg 48 min 16 sec
West 877.17 feet to a wooden fence post; thence North 24 deg
27 min 24 sec West 1296.65 feet to a wooden fence post;
thence north 24 deg 32 min 52 sec West 1104.04 feet to an
iron pin at the southeast corner of the Kentucky Utilities
Company tract; thence leaving the line of Froman Brothers
with a fence line, the south line of Kentucky Utilities
Company South 67 deg 47 min 06 sec West 1106.76 feet to a
point at the northeast corner of tract #1 as conveyed to
Melvin and Irene Snow by deed dated 24 December, 1946 of
record in deed Book 48 Page 301 and also by deed dated 23
January 1961 of record in Deed Book 58 Page 549 in the
aforementioned County Clerk's Office; thence leaving the
line of Kentucky Utilities Company and with a fence, the
east line of tract #1 of Snow South 21 deg 11 min 52 sec
East 2024.50 feet to a fence post at the southeast corner of
Snow; thence with a fence and the south line of Snow South
65 deg 17 min 23 sec West 435.58 feet to a fence post;
thence South 80 deg 45 min 36 sec West 387.01 feet to a
fence post; thence South 66 deg 47 min 38 sec West 122.32
feet to a fence post; thence North 71 deg 37 min 54 sec West
68.18 feet to a fence post; thence South 79 deg 15 min 54
sec West 111.53 feet to a fence post; thence South 70 deg 40
min 21 sec West 704.83 feet to a wooden fence post; thence
North 24 deg 19 min 03 sec West 441.59 feet to a corner
fence post at the southeast corner of Tract No. 2 of the
aforementioned Snow tract; thence continuing with the south
line of Snow and a fence South 79 deg 46 min 29 sec West
760.53 feet to a fence post; thence South 81 deg 24 min 34
sec West 263.05 feet to a corner fence post; thence South 18
deg 57 min 54 sec West 233.77 feet to a point; thence South
65 deg 27 min 56 sec West 610.52 feet to a fence post;
-37-
<PAGE>
thence South 63 deg 23 min 46 sec West 570.34 feet to a
point at the southwest corner of tract No. 2 of Snow, said
point being in the easterly line of a tract as conveyed to
Harold Swango and recorded in Deed Book 98 Page 25 in the
aforementioned County Clerks Office; thence leaving the line
of Snow and with a severance line thru the Diuguid tract
South 67 deg 11 min 00 sec East 3078.36 feet to a point;
thence North 68 deg 40 min 13 sec East 318.25 feet to a
point; thence South 15 deg 57 min 51 sec East 338.52 feet to
a fence post; thence North 81 deg 27 min 22 sec East 68.48
feet to a fence post; thence South 21 deg 03 min 22 sec East
334.72 feet to a point; thence South 13 deg 28 min 10 sec
East 189.77 feet to a point in the center of a gravel road;
thence with the center of a gravel road South 67 deg 54 min
26 sec West 139.30 feet to a point; thence South 46 deg 08
min 42 sec West 147.10 feet to a point; thence South 41 deg
11 min 52 sec West 228.45 feet to a point; thence South 47
deg 48 min 22 sec West 151.01 feet to a point; thence South
54 deg 00 min 43 sec West 354.28 feet to a point; thence
South 37 deg 40 min 18 sec West 115.67 feet to the point of
beginning and containing 539.310 acres, and being the
description set forth in that Property Line Map of Fuller,
Mossbarger, Scott and May, dated April 2, 1992, and being
the property acquired by the Company by deed dated December
13, 1994 and recorded in Deed Book 122, Page 516, Carroll
County Court Clerk's office.
SECOND. The following described real estate of the Company
situated in Fayette County, Kentucky:
Tract 1 (Fee Simple)
Being all of Tract 1, containing 6.13 acres, as shown on the
Final Record Plat of the Madden property of record in Plat
Cabinet J, Slide 551, in the Fayette County Court Clerk's
Office.
Tract 2 (Easement)
Beginning at an iron pin in the west right of way of Man O'
War Boulevard, said pin also being the northeast corner of
Tract 1; thence with the line of Tract 1 north 81 degrees 56
minutes 26 seconds west, 2257.03 feet to a P. K. nail in the
centerline of Liberty Road; thence with said centerline
north 36 degrees 22 minutes 18 seconds west, 35.01 feet to a
point; thence leaving Liberty Road and continuing 25 feet
north of and parallel with the north line of Tract 1, south
81 degrees 56 minutes 26 seconds east, 2279.66 feet to a
point in the west right of way of Man O' War Boulevard;
thence with said right of way, south 03 degrees 44 minutes
31 seconds west, 25.07 feet to the point of beginning and
containing 1.30 acres, this being a description prepared by
-38-
<PAGE>
Wesley B. Witt, L.S. Number 2187 on August 5, 1994, and is
the 25' KU Easement shown on that Final Record Plat of the
Madden property in Plat Cabinet J, Slide 551, in the Fayette
County Court Clerk's office, and being the property acquired
by the Company by deed dated December 28, 1994 and recorded
in Deed Book 1767, Page 179, Fayette County Court Clerk's
office.
THIRD. The following described real estate of the Company
situated in Gallatin County, Kentucky:
Beginning in the North right-of-way of U. S. No. 42 and
property line of Dollar General (d.b. 64, pg. 340) and being
original property line of Tract 6-1-D; thence leaving the
North side of 40 foot right-of-way of U. S. No. 42 and along
the original property line of Tract 6-1-D and Dollar
General, North twenty degrees twelve minutes fifty one
seconds West (N 20 deg 12'51" W) a distance of two hundred
seventy eight and 19/100 (278.19) feet to an Iron Pin and
original property corner of Dollar General and the South
side of 40 foot right-of-way of Roberta Drive and Being the
True Point of Beginning of Tract 6-1-D-1 to be conveyed by
American Racing Equipment, Inc. to Kentucky Utilities;
thence leaving the property corner of Dollar General and
along line of Tract 6-1-D-1 also crossing the end of Roberta
Drive being the true end of said Roberta Drive as recorded
on plat of High School Court, north twenty degrees twelve
minutes fifty one seconds West (N 20 deg 12'51" W) a distance
of forty-one and 60/100 (41.60') feet to an Iron Pin by a
Railroad tie post and being the North end of 40 foot
right-of-way of Roberta Drive and property corner of Floyd
Seaver Lot No. 29 (deed book no. 36, pg. 530); thence
leaving the North side of 40 foot right of way of Roberta
Drive and along property line of Seavers North twenty
degrees twelve minutes fifty one seconds West (N 20 deg 12'51"
W) a distance of one hundred thirty three and 19/100
(133.19) feet to an Iron Pin set and being the Southwest
corner of Sewer easement to the City of Warsaw; thence
leaving the original property line of Tract 6-1-D and
Seavers and along new division line of Tract 6-1-D, North
fifty nine degrees twenty minutes thirty eight seconds East
(N 59 deg 20'38" E) a distance of seventy two and 16/100 (72.16)
feet to an Iron Pin set; thence with another new division
line of Tract 6-1-D South eighty four degrees twenty minutes
zero seconds East (S 84 deg 20'00" E) a distance of one hundred
ninety six and 40/100 (196.40) feet to an Iron Pin set;
thence with another new division line of Tract 6-1-D, South
five degrees forty minutes zero seconds West (S 05 deg 40'00" W)
a distance of two hundred (200.00) feet to an Iron Pin set;
thence with another new division line of Tract 6-1-D North
eighty four degrees twenty minutes zero seconds West (N
84 deg 20'00" W) a distance of one hundred seventy eight and
-39-
<PAGE>
24/100 (178.24) feet to an Iron Pin and South side of 40
foot right-of-way of Roberta Drive and the true point of
beginning; and containing one and 24/10,000 (1.0024) acres,
or forty three thousand six hundred sixty six and 57/100
(43666.56757) square feet, being subject to legal
right-of-ways and legal easements on record and/or in
existence.
Subject to all covenants, restrictions, easements and
rights-of-ways of record, and being the property acquired by
the Company by deed dated April 20, 1995 and recorded in
Deed Book 68, Page 22, Gallatin County Court Clerk's office.
FOURTH. The following described real estate of the Company
situated in Hardin County, Kentucky:
Being Lot 28 of Section 7 of the Hughes Center for Commerce,
as recorded in Plat Cabinet 1, Sheet 1516, of record in the
Office of the Hardin County Court Clerk, and being the
property acquired by the Company by deed dated December 5,
1994 and recorded in Deed Book 803, page 8, Hardin County
Court Clerk's office.
FIFTH. The following described real estate of the Company
situated in Hopkins County, Kentucky:
TRACT 1
Beginning at a point located South 72 deg 34' 13" East
281.23 feet and North 17 deg 25' 47" East 50.00 feet from
the intersection of the North right-of-way of the Connector
Road and the East right-of-way of U. S. Highway 41A, thence
with a new division line North 17 deg 25' 47" East 546.50
feet; thence South 72 deg 07' 23" East 799.93 feet; thence
South 17 deg 25' 47" West 546.50 feet to a point located 50
feet North on the North right-of-way of the Connector Road,
thence with a curve to the left, located 50 feet North of
and parallel with the North right-of-way of the Connector
Road, having a radius of 5879.58 feet, an arc of 270.99
feet; and a chord of North 71 deg 15' 00" West 270.97 feet;
thence North 72 deg 34' 13" West 529.01 feet to the
beginning, containing 10.00 acres as per survey by
Associated Engineers, Inc. dated June 7, 1994, and being the
property acquired by the Company by deed dated October 4,
1994 and recorded in Deed Book 532, page 607, Hopkins County
Court Clerk's office.
SIXTH. The following described real estate of the Company
situated in Lyon County, Kentucky:
Lot Nos. Eighteen (18), Nineteen (19) and Twenty (20) in the
Sarah's Lane Subdivision, and being as shown by plat of
-40-
<PAGE>
record in Plat Cabinet 1, slide 88, (formerly Plat Book 4,
page 23) Lyon County Court Clerk's Office, and being the
same property acquired by the Company by deed dated October
17, 1994 and recorded in Deed Book 108, page 628, Lyon
County Court Clerk's office.
SEVENTH. The following described real estate of the Company
situated in Scott County, Kentucky:
Being all of Tract #1 containing 9.72 acres as shown by the
Minor Subdivision Plat of Ed Sams of records in Plat Slot
1386 in the Scott County Clerk's Office, and being the same
property acquired by the Company by deed dated October 14,
1994, and recorded in Deed Book 208, Page 357, Scott County
Court Clerk's office.
EIGHTH. The following described real estate of the Company
situated in Union County, Kentucky:
Beginning on the North corner of the lot and in line of
Court Street; thence with Court Street 50 feet in southwest
direction to corner of D. C. Donan lot; thence with a line
of his said lot southeast direction 98 feet to a stake;
thence northeast direction 50 feet and along the line of the
lot formerly owned by T. R. Cartwright where blacksmith shop
stood, to a stake in northeast line of said lot; thence with
a line of same running northwest 98 feet to the place of
beginning. And also a right of passway over a strip of
ground 3 1/2 feet wide and the right to lay water mains and
sewer and across the southwest side of the lot formerly
owned by T. R. Cartwright and said strip of land running
along the line of the D. C. Donan apartment house lot and
running from the lot herein conveyed to the line of Morgan
Street.
And there is excepted from this conveyance approximately two
(2) feet fronting on Court Street and extending back the
length of the lot conveyed and which is included in the
driveway between the lot herein conveyed and the D. C. Donan
apartment house lot, and the second parties herein are given
the right of passway over said two (2) feet of ground and
also a strip approximately five (5) feet fronting on Court
Street on the said apartment house lot and extending back
the full length of said lot and which said seven (7) feet is
now used for a passway for both of said properties, and
being the property acquired by the Company by deed dated
December 14, 1994, and recorded in Deed Book 278, Page 761,
Union County Court Clerk's office.
-41-
<PAGE>
IN WITNESS WHEREOF, said Kentucky Utilities Company has
caused this instrument to be executed in its corporate name by
its President or a Vice President and its corporate seal to be
hereunto affixed and to be attested and countersigned by its
Secretary or an Assistant Secretary, and said Bank of America
Illinois, for the purpose of entering into and joining with the
Company in the execution of this supplemental indenture, has
caused this instrument to be executed in its corporate name by
one of its Vice Presidents and its corporate seal to be hereunto
affixed and to be attested by one of its Vice Presidents,
Assistant Vice Presidents or Trust Officers, and said Robert J.
Donahue, for the purpose of entering into and joining with the
Company in the execution of this supplemental indenture, has
signed and sealed this instrument; all as of the day and year
first above written.
KENTUCKY UTILITIES COMPANY
By /s/O. M. Goodlett
O. M. Goodlett
Senior Vice President
Attest: /s/George S. Brooks II
George S. Brooks II
General Counsel
and Secretary (Corporate Seal)
BANK OF AMERICA ILLINOIS
By /s/David S. Vick
David S. Vick
Vice President
Attest: /s/Michele Gallo
Michele Gallo
Assistant Vice President (Corporate Seal)
/s/ROBERT J. DONAHUE
ROBERT J. DONAHUE
(Seal)
-42-
<PAGE>
Commonwealth of Kentucky )
) ss:
County of Fayette )
I, Rella M. Evans, a Notary Public in and for said County in
the Commonwealth aforesaid, do hereby certify that O. M.
Goodlett, Senior Vice President of Kentucky Utilities Company, a
Kentucky and Virginia corporation, and George S. Brooks II,
General Counsel and Secretary of said corporation, who are both
personally known to me to be the same persons whose names are
subscribed to the foregoing instrument as such officers of said
corporation, and who are both personally known to me to be such
officers, appeared before me this day in person and severally
acknowledged before me that they signed, sealed and delivered
said instrument as their free and voluntary act as such officers,
and as the free and voluntary act and deed of said corporation,
for the uses and purposes therein set forth; and said O. M.
Goodlett, upon oath, acknowledged himself to be Senior Vice
President of said corporation and that, as such officer, being
authorized so to do, he executed said instrument for the purposes
therein contained, by signing the name of said corporation
thereto by himself as such officer.
Given under my hand and official seal this 14th day of
June, 1995.
/s/Rella M. Evans
Rella M. Evans
Notary Public
(Notarial Seal)
My commission expires: November 20,
1995
-43-
<PAGE>
State of Illinois )
) ss:
County of Cook )
I, Debra Swire, a Notary Public in and for said
County in the State aforesaid, do hereby certify that:
(a) David S. Vick, a Vice President of Bank of America
Illinois, an Illinois banking corporation, and Michele Gallo, an
Assistant Vice President of said bank, who are both personally
known to me to be the same persons whose names are subscribed to
the foregoing instrument as such Vice President and Assistant
Vice President, respectively, of said bank, and who are both
personally known to me to be such officers, appeared before me
this day in person and severally acknowledged before me that they
signed, sealed and delivered said instrument as their free and
voluntary act as such officers, and as the free and voluntary act
and deed of said bank, for the uses and purposes therein set
forth; and said David S. Vick upon oath, acknowledged himself to
be a Vice President of said bank and that, as such officer, being
authorized so to do, she executed said instrument for the
purposes therein contained, by signing the name of said bank
thereto by himself as such officer; and
(b) Robert J. Donahue, personally known to me to be the
same person described in, and whose name is subscribed to, the
foregoing instrument, appeared before me this day in person and
acknowledged before me that he executed, signed, sealed and
delivered said instrument as his free and voluntary act and deed,
for the uses and purposes therein set forth.
Given under my hand and official seal this 9th day of
June, 1995.
/s/Debra Swire
Debra Swire
Notary Public
(Notarial Seal)
This instrument was prepared by George S. Brooks II, Esq.,
One Quality Street, Lexington, Kentucky 40507.
/s/George S. Brooks II
George S. Brooks II
-44-
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF JUNE 30, 1995 AND THE INCOME STATEMENT FOR THE PERIOD ENDED JUNE 30,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q QUARTERLY
REPORT.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,427,308
<OTHER-PROPERTY-AND-INVEST> 11,730
<TOTAL-CURRENT-ASSETS> 158,196
<TOTAL-DEFERRED-CHARGES> 35,090
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,632,324
<COMMON> 308,140
<CAPITAL-SURPLUS-PAID-IN> (594)
<RETAINED-EARNINGS> 254,438
<TOTAL-COMMON-STOCKHOLDERS-EQ> 561,984
0
40,000
<LONG-TERM-DEBT-NET> 545,984
<SHORT-TERM-NOTES> 45,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 21
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 439,335
<TOT-CAPITALIZATION-AND-LIAB> 1,632,324
<GROSS-OPERATING-REVENUE> 321,905
<INCOME-TAX-EXPENSE> 16,268
<OTHER-OPERATING-EXPENSES> 260,792
<TOTAL-OPERATING-EXPENSES> 277,060
<OPERATING-INCOME-LOSS> 44,845
<OTHER-INCOME-NET> 4,292
<INCOME-BEFORE-INTEREST-EXPEN> 49,137
<TOTAL-INTEREST-EXPENSE> 19,648
<NET-INCOME> 29,489
1,128
<EARNINGS-AVAILABLE-FOR-COMM> 28,361
<COMMON-STOCK-DIVIDENDS> 31,578
<TOTAL-INTEREST-ON-BONDS> 17,150
<CASH-FLOW-OPERATIONS> 60,871
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>ALL OUTSTANDING COMMON STOCK OF KENTUCKY UTILITIES COMPANY IS HELD BY ITS
PARENT COMPANY, KU ENERGY CORPORATION. THEREFORE, EARNINGS PER SHARE IS NOT
APPLICABLE.
</FN>
</TABLE>
