SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-10944
KU Energy Corporation
(Exact name of registrant as specified in its charter)
Kentucky 61-1141273
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Quality Street, Lexington, Kentucky 40507
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 606-255-2100
Not Applicable
Former name, former address and former fiscal year, if changed since
last report
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No .
Number of shares of Common Stock outstanding at August 9, 1995:
37,817,878 shares.
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<PAGE>
PART I. FINANCIAL INFORMATION
KU ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands except for per share amounts)
For the Three
Months Ended
June 30,
1995 1994
Operating Revenues (See Note 2) $154,749 $154,020
Operating Expenses:
Fuel, principally coal, used in
generation (See Note 2) 40,679 43,372
Electric power purchased 17,631 16,356
Other operating expenses 30,661 27,962
Maintenance 19,495 18,895
Depreciation 18,832 16,151
Federal and state income taxes 5,378 7,781
Other taxes 4,180 3,692
Total Operating Expenses 136,856 134,209
Net Operating Income 17,893 19,811
Other Income and Deductions:
Interest and dividend income 1,127 1,238
Other income and deductions - net 1,868 2,003
Total Other Income and Deductions 2,995 3,241
Income Before Interest and Other Charges 20,888 23,052
Interest and Other Charges 10,466 8,767
Net Income $ 10,422 $ 14,285
Average Common Shares Outstanding 37,818 37,818
Earnings Per Common Share $ .27 $ .38
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
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KU ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands except for per share amounts)
For the Six
Months Ended
June 30,
1995 1994
Operating Revenues (See Note 2) $321,889 $320,543
Operating Expenses:
Fuel, principally coal, used in
generation (See Note 2) 86,385 87,231
Electric power purchased 33,408 32,239
Other operating expenses 61,867 55,066
Maintenance 34,353 33,434
Depreciation 37,580 32,339
Federal and state income taxes 15,869 22,339
Other taxes 8,523 7,760
Total Operating Expenses 277,985 270,408
Net Operating Income 43,904 50,135
Other Income and Deductions:
Interest and dividend income 2,104 3,393
Other income and deductions - net 3,999 3,380
Total Other Income and Deductions 6,103 6,773
Income Before Interest and Other Charges 50,007 56,908
Interest and Other Charges 20,778 17,604
Net Income $ 29,229 $ 39,304
Average Common Shares Outstanding 37,818 37,818
Earnings Per Common Share $ .77 $ 1.04
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
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KU ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands of dollars)
For the Six Months
Ended June 30,
1995 1994
Cash Flows from Operating Activities:
Net Income $ 29,229 $ 39,304
Items not requiring (providing) cash currently:
Depreciation 37,580 32,339
Deferred income taxes and investment tax credit (392) (3,423)
Changes in current assets and liabilities:
Change in fuel inventory (2,199) 179
Change in accounts receivable 3,253 2,101
Change in accounts payable (10,411) (3,225)
Change in accrued taxes 4,575 3,004
Change in accrued utility revenues (628) 1,865
Other--net (648) (3,081)
Net Cash Provided by Operating Activities 60,359 69,063
Cash Flows from Investing Activities:
Construction expenditures - utility (54,480) (89,468)
Purchase of long-term investments - (379)
Proceeds from leveraged lease investments 236 197
Investment in independent power projects (2,595) (1,259)
Other 201 163
Net Cash Used by Investing Activities (56,638) (90,746)
Cash Flows from Financing Activities:
Short-term borrowings - net (31,300) 47,900
Issuance of long-term debt 50,000 -
Funds deposited with trustee - net 8,600 18,393
Retirement of long-term debt (21) (21)
Retirement of preferred stock, incl. premium - (20,302)
Payment of common stock dividends (31,767) (31,010)
Net Cash Provided (Used) by Financing Activities (4,488) 14,960
Net Decrease in Cash and Cash Equivalents (767) (6,723)
Cash and Cash Equivalents Beginning of Period 28,927 32,500
Cash and Cash Equivalents End of Period $ 28,160 $ 25,777
Supplemental Disclosures
Cash paid for:
Interest on short and long-term debt $ 18,622 $ 15,378
Federal and state income taxes $ 12,554 $ 25,527
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
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KU ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of dollars)
As of As of
June 30, Dec. 31,
ASSETS 1995 1994
Utility Plant:
Plant in service, at cost $2,286,014 $2,238,926
Less: Accumulated depreciation 970,974 933,394
1,315,040 1,305,532
Construction work in progress 112,268 104,385
1,427,308 1,409,917
Current Assets:
Cash and cash equivalents 28,160 28,927
Escrow funds - coal contract litigation 6,594 6,911
Construction funds held by trustee 10,108 18,553
Accounts receivable 38,331 41,584
Accrued utility revenues 24,855 24,227
Fuel, principally coal, at average cost 37,851 35,652
Materials and supplies, at average cost 22,123 20,081
Other 13,818 10,619
181,840 186,554
Investments, Deferred Charges and Other Assets:
Investment in leveraged leases 20,057 18,675
Unamortized loss on reacquired debt 11,814 12,324
Other 44,496 41,824
76,367 72,823
Total Assets $1,685,515 $1,669,294
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock equity $ 613,554 $ 616,092
Preferred stock of Subsidiary 40,000 40,000
Long-term debt of Subsidiary 545,984 496,012
1,199,538 1,152,104
Current Liabilities:
Long-term debt due within one year 21 21
Short-term borrowings 45,000 76,300
Accounts payable 38,298 48,709
Accrued interest 7,499 7,328
Accrued taxes 13,763 9,188
Customers' deposits 6,535 6,423
Accrued payroll and vacations 9,202 8,222
Liab. to ratepayers - coal contract litigation 6,595 6,909
Other 6,450 6,471
133,363 169,571
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 218,171 215,466
Accumulated deferred investment tax credits 36,227 38,275
Regulatory tax liability 59,482 60,788
Other 38,734 33,090
352,614 347,619
Total Capitalization and Liabilities $1,685,515 $1,669,294
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
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KU ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. PRESENTATION OF CONDENSED INFORMATION
Pursuant to the rules and regulations of the Securities and
Exchange Commission, certain information has been condensed and
certain footnote disclosures have been omitted, which are
normally included in financial statements prepared in accordance
with generally accepted accounting principles.
These financial statements should be read in conjunction
with the financial statements and notes thereto in the KU Energy
Corporation (KU Energy or the Company) Annual Report on Form 10-K
for the year ended December 31, 1994 (1994 10K).
In the opinion of management, the information furnished
herein reflects all adjustments which are necessary to present
fairly the results of the periods shown and the disclosures which
have been made are adequate to make the information not
misleading. Results of interim periods are not necessarily
indicative of results for any twelve-month period due to the
seasonal nature of the business of the Company's principal
subsidiary, Kentucky Utilities Company (KU).
2. OPERATING REVENUES AND FUEL COSTS
Pursuant to regulatory orders, KU has been refunding fuel
cost savings related to the resolution of a coal contract
dispute. Refunds to Kentucky retail customers commenced in July
1994. Refunds were made to Virginia retail customers during the
period August 1993 through June 1994. Refunds were made to
wholesale customers under the jurisdiction of the Federal Energy
Regulatory Commission in lump sum payments in September 1993.
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KU ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Operating revenues for the three-month and six-month periods
ended June 30, 1994 were reduced by $.4 million and $.9 million,
respectively, resulting from the above-mentioned refund. The
refund also resulted in a reduction of fuel expense for the
three-month and six-month periods ended June 30, 1994 of
$.4 million and $3.4 million, respectively. The difference
between the reduction in operating revenues and the reduction in
fuel expense is attributed to incurred litigation costs and fuel
costs savings related to off-system sales. These amounts were
allowed to be retained by KU pursuant to regulatory orders.
3. FINANCING
In June 1995, KU issued $50 million of Series R First
Mortgage Bonds which will mature June 1, 2025 and bear interest
at 7.55%. The proceeds were used primarily to refinance short-
term indebtedness incurred to finance ongoing construction
expenditures and general corporate requirements.
4. ENVIRONMENTAL COST RECOVERY
In July 1994, the Kentucky Public Service Commission (PSC)
approved KU's January 1994 application to implement an
environmental surcharge. The surcharge, authorized by a Kentucky
statute enacted in 1992, is designed to recover certain operating
and capital costs related to compliance with federal, state or
local environmental requirements associated with the production
of energy from coal, including the 1990 Clean Air Act Amendments.
KU's environmental surcharge was implemented in August 1994 and
is described in Item 1 of the Kentucky Utilities Company Annual
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<PAGE>
KU ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Report on Form 10-K for the year ended December 31, 1994. The
initial six-month review and hearing process was completed in
June of 1995, and KU is awaiting an order from the PSC. The
typical customer's monthly bill during the six-month review
period increased by about 2% as a result of the surcharge.
The constitutionality of the surcharge was challenged in the
Franklin County (Kentucky) Circuit Court (Circuit Court) in an
action brought against KU and the PSC by the Attorney General of
Kentucky and representatives of customer groups. In July 1995,
the Circuit Court entered judgment upholding the
constitutionality of the surcharge but vacating that part of the
PSC order allowing KU to recover costs associated with
environmental expenditures incurred before January 1, 1993, the
effective date of the surcharge statute, and remanding to the PSC
for determination in accordance with the judgment. On August 7,
1995, KU filed a motion requesting the Circuit Court to amend its
judgment and sustain the PSC order in its entirety. If this
judgment is ultimately upheld as entered, KU estimates the amount
it would be required to refund for surcharge collections through
June 1995 would be approximately $4 million. At this time, KU
cannot predict the outcome of this proceeding.
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KU ENERGY CORPORATION AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
KU Energy is a holding company organized under the laws of
Kentucky. KU Energy has two wholly owned subsidiaries, KU, an
electric utility, and KU Capital Corporation (KU Capital), a
nonutility subsidiary. KU is KU Energy's principal subsidiary.
Material changes in the consolidated financial condition and
operating results of KU Energy are based primarily upon the
operations of KU.
LIQUIDITY & RESOURCES
KU's construction expenditures decreased approximately
$35 million during the six-month period ending June 30, 1995
compared to the same period of 1994. The decrease is
attributable primarily to planned reductions in expenditures for
combustion turbine peaking units and for compliance with the 1990
Clean Air Act Amendments.
Refer to Note 3 of the Notes to Consolidated Financial
Statements for a discussion of KU's financing activities.
RESULTS OF OPERATIONS
Quarter ended June 30, 1995, compared
to the Quarter ended June 30, 1994
Earnings per share for the three-month period ended June 30,
1995 were $.27 compared to $.38 for the corresponding period of
1994. The decrease reflects milder weather and a decline in off-
system sales during the second quarter of 1995 compared to 1994
as well as increases in interest, depreciation and other
operating expenses as further discussed below.
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KU ENERGY CORPORATION AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Increase (Decrease)
From Prior Year
Three Months
Ended June 30, 1995
kWh Revenues
(%) (000's)
Residential (2) $ 639
Commercial 1 1,376
Industrial 5 2,209
Mine Power & Public Authorities (1) 580
Total Retail Sales 1 4,804
Other Electric Utilities (25) (5,007)
Miscellaneous Revenues & Other - 567
Total Before Refund (5) 364
Provision for Refund -
Litigation Settlement - 365
Total (5) $ 729
Operating revenues, before the impact of the refunds to
customers during 1994, increased $.4 million. (Refer to Note 2
of the Notes to Consolidated Financial Statements, "Operating
Revenues and Fuel Costs," for a discussion of the refunds to
customers resulting from the resolution of a coal contract
dispute and the impact on 1994 operating results.) A 5% decrease
in kilowatt-hour sales was offset by $4.3 million recovered under
the environmental surcharge. (Refer to Note 4 of the Notes to
Consolidated Financial Statements, Environmental Cost Recovery,
for an update of environmental surcharge legal proceedings.) The
decrease in kilowatt-hour sales is attributable to a decline in
residential and off-system sales, partially offset by an increase
in industrial sales. The increase in industrial sales reflects
continued economic growth in the manufacturing sector of KU's
service area. About 35% of the industrial sales increase was due
to greater sales to Toyota Motor Manufacturing U.S.A., Inc.
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<PAGE>
KU ENERGY CORPORATION AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(TMM), KU's largest customer. The decrease in off-system sales
is attributable to a decrease in demand for power at neighboring
utilities. The decline in residential sales reflects milder
weather during the second quarter of 1995 compared to 1994.
However, KU set an all-time peak demand for electricity on
July 14, 1995 of 3,250 megawatts.
Fuel expense, excluding the effect of the refunds to
customers, decreased $3.1 million (7%). This decrease reflects a
3% decrease in tons of coal consumed as well as a 4% decrease in
the average price per ton of coal consumed. Purchased power
expense increased $1.3 million (8%) due to increases in demand
($1 million) and energy costs ($.3 million). A 6% decline in
kilowatt-hour purchases, resulting from the previously mentioned
decline in kilowatt-hour sales, was offset by less favorable
pricing.
Other operating expenses increased by $2.7 million (10%) due
to increased generating plant operations expenses (primarily
attributable to costs associated with environmental compliance),
advertising and marketing program expenses and timing of
administrative and general expenditures.
Depreciation expense increased $2.7 million (17%) resulting
from the Ghent Unit 1 scrubber and two combustion turbine peaking
units being placed into service late in 1994 and early 1995.
Interest and other charges increased $1.7 million (19%)
reflecting the issuance of $54 million of long-term debt in the
fourth quarter of 1994 and an increase in the average amount of
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<PAGE>
KU ENERGY CORPORATION AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
short-term debt outstanding compared to the corresponding quarter
of 1994.
Federal and state operating income taxes decreased
$2.4 million (31%), primarily due to lower pre-tax income.
Six Months ended June 30, 1995, compared
to the Six Months ended June 30, 1994
Earnings per share for the six-month period ended June 30,
1995 were $.77 as compared to $1.04 for the corresponding period
of 1994. The decrease reflects milder weather and a decline in
off-system sales during the six-month period ending June 30, 1995
as compared to the same period in 1994 as well as increases in
interest, depreciation and other operating expenses as further
discussed below. Earnings for the first quarter of 1994 included
a one-time recovery of about $.05 per share from the resolution
of a coal contract dispute. For additional information
concerning the refunds resulting from resolution of the dispute
and the impact on 1994 operating results, refer to Note 2 of the
Notes to Consolidated Financial Statements, "Operating Revenues
and Fuel Costs."
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<PAGE>
KU ENERGY CORPORATION AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Increase (Decrease)
From Prior Year
Six Months
Ended June 30, 1995
kWh Revenues
(%) (000's)
Residential (4) $ (616)
Commercial - 2,436
Industrial 5 4,508
Mine Power & Public Authorities (2) 1,246
Total Retail Sales (1) 7,574
Other Electric Utilities (23) (7,484)
Miscellaneous Revenues & Other - 354
Total Before Refund (5) 444
Provision for Refund -
Litigation Settlement - 902
Total (5) $ 1,346
Operating revenues, before the impact of the refunds to
customers, increased $.4 million. A 5% decrease in kilowatt-hour
sales was offset by $8.1 million recovered under the
environmental surcharge. (Refer to Note 4 of the Notes to
Consolidated Financial Statements, Environmental Cost Recovery,
for an update of environmental surcharge legal proceedings.) The
decrease in kilowatt-hour sales is attributable to a decline in
residential and off-system sales, partially offset by an increase
in industrial sales. The increase in industrial sales reflects
continued economic growth in the manufacturing sector of KU's
service area. About 33% of the industrial sales increase is due
to greater sales to TMM. The decrease in off-system sales is
attributable to a decrease in demand for power at neighboring
utilities. The decline in residential sales reflects milder
weather during the six-month period ended June 30, 1995 as
compared to the same period of 1994.
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<PAGE>
KU ENERGY CORPORATION AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fuel expense, excluding the effect of the refunds to
customers, decreased $4.2 million (5%). This decrease primarily
reflects a 4% decrease in tons of coal consumed. Purchased power
expense increased $1.2 million (4%) due to an increase in demand
costs ($2.2 million) partially offset by a decrease in kilowatt-
hour purchases ($1.0 million). The decrease in kilowatt-hour
purchases is due to the previously mentioned decline in kilowatt-
hour sales.
Other operating expenses increased $6.8 million (12%) due to
increased generating plant operations expenses (primarily
attributable to costs associated with environmental compliance),
advertising and marketing program expenses and timing of
administrative and general expenditures.
Maintenance expense increased $.9 million (3%) due to an
increase in production maintenance resulting from the timing of
scheduled maintenance at KU's generating stations. This increase
was substantially offset by a decrease in distribution
maintenance in 1995. Extensive ice storm damage in the first
quarter of 1994 increased distribution maintenance in that
period.
Depreciation expense increased $5.2 million (16%) resulting
from the Ghent Unit 1 scrubber and two combustion turbine peaking
units being placed into service late in 1994 and early 1995.
Interest and other charges increased $3.2 million (18%)
reflecting the issuance of $54 million of long-term debt in the
fourth quarter of 1994 and an increase in the average amount of
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<PAGE>
KU ENERGY CORPORATION AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
short-term debt outstanding.
Federal and state operating income taxes decreased
$6.5 million (29%), primarily due to lower pre-tax income.
CAPACITY REQUIREMENTS
In May 1995, a 110-megawatt (MW) combustion turbine
generating unit, which was placed in commercial operation during
the first quarter of 1995, was taken out of service due to a
turbine blade problem. In addition to this unit, KU has decided
not to operate another similar combustion turbine unit placed in
commercial operation in 1994 and has temporarily discontinued
testing of a third similar unit scheduled for commercial
operation later in 1995 until the turbine blade problem can be
identified and corrected. KU is currently analyzing the
situation in cooperation with the vendor of the three 110 MW
generating units. Although KU cannot predict the outcome of this
matter, KU does not believe this will have a significant impact
on its results of operations or its ability to meet customer
requirements.
UTILITY ISSUES - COMPETITION
In March 1995, the Federal Energy Regulatory Commission
(FERC) issued a Notice of Proposed Rulemaking (NOPR) by which the
FERC will require public utilities that own or control facilities
used for the transmission of electric energy in interstate
commerce to offer "open access" transmission service on a
nondiscriminatory basis. The FERC also proposes to allow, in
certain circumstances, the collection of charges for the recovery
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<PAGE>
KU ENERGY CORPORATION AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
of stranded costs when customers change power suppliers. The
FERC expects to issue final rules by February 1996.
KU filed a Transmission Services (TS) Tariff and Power
Services (PS) Tariff on September 30, 1994 (refer to Management's
Discussion and Analysis in the 1994 Annual Report on Form 10-K
under the heading "Utility Issues - Competition" for a discussion
of the TS Tariff and PS Tariff filed by KU). The FERC accepted
the TS Tariff, subject to refund, effective December 1, 1994, but
did not approve the PS Tariff. KU revised the TS Tariff in a
filing made on March 31, 1995 with the FERC in order to meet
certain provisions of the NOPR and reaffirmed its request for the
market-based PS Tariff. On May 31, 1995, the FERC issued an
order which approved the revised TS Tariff, subject to refund,
and approved the PS Tariff subject to KU making a compliance
filing which addressed certain aspects of the TS and PS Tariffs.
On June 30, 1995, KU made the compliance filing with the FERC and
the PS Tariff became effective on that date.
Although KU does not expect either of these new tariffs to
have a material impact on its 1995 revenues or income, they are
indicative of the increasingly competitive environment in which
KU and other utilities operate.
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<PAGE>
PART II. OTHER INFORMATION
KU ENERGY CORPORATION AND SUBSIDIARIES
ITEM 1. LEGAL PROCEEDINGS
ENVIRONMENTAL COST RECOVERY
See Note 4 of the Notes to Consolidated Financial Statements,
Environmental Cost Recovery, for an update of environmental
surcharge legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the April 25, 1995 Annual Meeting of Shareholders, the
following proposal was acted upon and approved.
(1) To elect three Directors to the Board of Directors of the
Company
Votes
Votes for Withheld
William B. Bechanan 31,466,676 400,458
Harry M. Hoe 31,440,348 400,458
Michael R. Whitley 31,518,680 400,458
ITEM 5. OTHER INFORMATION
NON-UTILITY MATTERS
KU Capital Corporation (a subsidiary of KU Energy), through
its subsidiary KUCC Frederickson, is a limited partner in Tenaska
Washington Partners II, L.P., a Washington Limited Partnership
(TWP II). KU Capital has made an equity commitment to TWP II of
less than $8 million. The equity commitment is secured by a
letter of credit. In April 1994, TWP II entered into a Purchased
Power Agreement (PPA) with the Bonneville Power Administration
(BPA). Based on that contract, TWP II entered into various other
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<PAGE>
contracts to construct, finance and operate a 248 MW gas-fired
electrical generation plant (the Project) located in
Frederickson, Washington, to provide power to the BPA pursuant to
the PPA. In April 1995, the BPA advised TWP II that the BPA
would not perform its obligations under the PPA. Construction of
the Project has been suspended with approximately 70% of the
costs expended or committed. On June 14, 1995, TWP II filed a
claim against the United States of America acting by and through
the BPA in the United States Court of Federal Claims for recovery
of damages TWP II will incur resulting from the BPA's statements
that it will not fulfill its obligations under the PPA. TWP II's
claim includes all damages arising from suspension of the
Project, loss of profits from the Project and claims of third
parties who entered into supporting contracts with TWP II to
finance, construct and operate the Project. The BPA claims that
changes in the energy markets have undermined the purpose of the
contract. TWP II intends to vigorously pursue its claim against
the BPA. KU Energy believes the possibility of loss of equity
commitment resulting from this event is remote.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The following exhibit is filed as part of this report:
Exhibit
Number Description
27 Financial Data Schedule (required for
electronic filing only in accordance with
Item 601(c)(1) of Regulation S-K.)
(b) Reports on Form 8-K.
None.
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<PAGE>
KU ENERGY CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
KU ENERGY CORPORATION
(Registrant)
Date August 9, 1995 /s/ Michael R. Whitley
Michael R. Whitley
Chairman of the Board and
Chief Executive Officer
Date August 9, 1995 /s/ Michael D. Robinson
Michael D. Robinson
Controller
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<TABLE> <S> <C>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1995 AND THE CONSOLIDATED INCOME
STATEMENT FOR THE PERIOD ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q QUARTERLY REPORT.
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<INCOME-TAX-EXPENSE> 15,869
<OTHER-OPERATING-EXPENSES> 262,116
<TOTAL-OPERATING-EXPENSES> 277,985
<OPERATING-INCOME-LOSS> 43,904
<OTHER-INCOME-NET> 6,103
<INCOME-BEFORE-INTEREST-EXPEN> 50,007
<TOTAL-INTEREST-EXPENSE> 20,778
<NET-INCOME> 29,229
0
<EARNINGS-AVAILABLE-FOR-COMM> 29,229
<COMMON-STOCK-DIVIDENDS> 31,767
<TOTAL-INTEREST-ON-BONDS> 17,150
<CASH-FLOW-OPERATIONS> 60,359
<EPS-PRIMARY> .77
<EPS-DILUTED> .77
</TABLE>
