<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File No. 1-10568 (LG&E Energy Corp.)
A. Full Title of the Plan:
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
LG&E ENERGY CORP.
220 West Main Street
P. O. Box 32030
Louisville, Kentucky 40232
<PAGE>
WKE CORP.
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS AND SCHEDULES REFERENCE
- ---------------------------------- ---------
<S> <C>
Report of Independent Public Accountants . . . . . . . . . . . . . . Page 1
Statements of Net Assets Available for
Benefits with Fund Information as of December 31, 1998 . . . . . . Page 2
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Period from Inception
(July 17, 1998) to December 31, 1998 . . . . . . . . . . . . . . . Page 3
Notes to Financial Statements and Schedules for the Year
Ended December 31, 1998 . . . . . . . . . . . . . . . . . . . . . Page 4-7
Item 27a - Schedule I - Schedule of Assets Held for
Investment Purposes As of December 31,1998 . . . . . . . . . . . . Page 8
Item 27d - Schedule II - Schedule of Reportable Transactions
for the Year Ended December 31, 1998 . . . . . . . . . . . . . . . Page 9
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustees of the
WKE Corp. Bargaining Employees' Savings Plan:
We have audited the accompanying statements of net assets available for
benefits of the WKE Corp. Bargaining Employees' Savings Plan (the Plan) as of
December 31, 1998, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1998. These financial
statements and the supplemental schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and supplemental schedules based on our
audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of
the Plan as of December 31, 1998, and the changes in its net assets
available for benefits for the year ended December 31, 1998, in conformity
with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes as of December 31, 1998 and reportable
transactions for the year ended December 31, 1998 are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The fund
information in the statements of net assets available for benefits as of
December 31, 1998 and the statement of changes in net assets
available for benefits for the year ended December 31, 1998 is presented for
purposes of additional analysis rather than to present the net assets
available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Louisville, Kentucky
June 18, 1999
Page 1
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WKE CORP.
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSETS 1998
- ------ ----
<S> <C>
Investments - at Fair Value (Notes 1 and 2)
Fidelity Magellan Fund $ 166,951
Fidelity Equity Income II Fund 153,126
Fidelity Contrafund 79,486
Spartan U.S. Equity Index Fund 71,915
Warburg Pincus Emerging Growth Fund 41,969
LG&E Energy Cor. Common Stock Fund 26,549
Fidelity Puritan Fund 25,508
Fidelity Ret. Gov't Money Market Portfolio 23,887
Templeton Foreign Fund A 16,861
Fidelity Intermediate Bond Fund 10,545
Participant Loans 1,100
----------
Total Investments $ 617,897
----------
----------
</TABLE>
The accompanying notes to financial statements and schedules
Are an integral part of these statements
Page 2
<PAGE>
WKE CORP.
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE PERIOD FROM INCEPTION (JULY 17, 1998) TO DECEMBER 31, 1998
<TABLE>
<CAPTION>
LG&E ENERGY
FIDELITY FIDELITY SPARTAN WARBURG PINCUS COMMON
MAGELLAN EQUITY INCOME II FIDELITY U.S. EQUITY INDEX EMERGING GROWTH STOCK
FUND FUND CONTRAFUND PORTFOLIO FUND FUND
---- ---- ---------- --------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Employer $37,967 $31,568 $14,609 $13,665 $8,573 $6,638
Participant 107,597 106,484 54,602 51,258 26,103 19,446
----------- ------------ ---------- ------------- ------------ -----------
145,564 138,052 69,211 64,923 34,676 26,084
Interest and dividends 3,217 8,806 5,776 145 38
Net realized and unrealized
gains (loss) 20,870 4,846 4,908 6,528 6,411 954
----------- ------------ ---------- ------------- ------------ -----------
TOTAL ADDITIONS 169,651 151,704 79,895 71,596 41,087 27,076
DEDUCTIONS:
Benefit payments 403
----------- ------------ ---------- ------------- ------------ -----------
Net increase(decrease)
prior to interfund
transfers 169,248 151,704 79,895 71,596 41,087 27,076
Net interfund transfers to (from)
investment options
including participants
loan transactions (2,297) 1,422 (409) 319 882 ($527)
----------- ------------ ---------- ------------- ------------ -----------
Net Increase 166,951 153,126 79,486 71,915 41,969 26,549
Net assets at beginning
of year - - - - - -
----------- ------------ ---------- ------------- ------------ -----------
Net assets at end
of year $166,951 $153,126 $79,486 $71,915 $41,969 $26,549
----------- ------------ ---------- ------------- ------------ -----------
----------- ------------ ---------- ------------- ------------ -----------
FIDELITY FIDELITY
FIDELITY RET.GOV'T TEMPLETON NTERMEDIATE
PURITAN MONEY MKT. FOREIGN BOND PARTICIPANT
FUND PORTFOLIO FUND A FUND LOANS TOTAL
---- --------- ------ ---- ----- -----
ADDITIONS:
Contributions:
Employer $5,936 $6,052 $4,139 $3,180 $132,327
Participant 16,821 18,153 12,589 7,776 420,829
---------- ----------- ---------- ----------- --------- ------------
22,757 24,205 16,728 10,956 0 553,156
Interest and dividends 333 170 413 97 18,995
Net realized and unrealized
gains (loss) 1,390 266 (24) 46,149
---------- ----------- ---------- ----------- --------- ------------
TOTAL ADDITIONS 24,480 24,375 17,407 11,029 0 618,300
DEDUCTIONS:
Benefit payments 403
---------- ----------- ---------- ----------- --------- ------------
Net increase(decrease)
prior to interfund
transfers 24,480 24,375 17,407 11,029 0 617,897
Net interfund transfers to (from)
investment options
including participants
loan transactions 1,028 (488) (546) (484) 1,100 -
---------- ----------- ---------- ----------- --------- ------------
Net Increase 25,508 23,887 16,861 10,545 1,100 617,897
Net assets at beginning
of year - - - - - -
---------- ----------- ---------- ----------- --------- ------------
Net assets at end
of year $25,508 $23,887 $16,861 $10,545 $1,100 $617,897
----------- ------------ ---------- ----------- --------- -----------
----------- ------------ ---------- ----------- --------- -----------
</TABLE>
The accompanying notes to financial statements and schedules
are an integral part of this statement
PAGE 3
<PAGE>
WKE CORP.
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
(1) DESCRIPTION OF PLAN
-------------------
The following description of the WKE Corp. Bargaining Employees' Savings Plan
("Plan") provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan's provisions.
A. GENERAL
The Plan was established on July 17, 1998. All Bargaining
unit employees of WKE Corp., Western Kentucky Energy Corp. and
WKE Station Two Inc., are eligible to participate in the Plan
on the first of the month on or following twelve months of
continuous employment. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
B. CONTRIBUTIONS AND VESTING
Employees choosing to participate may elect to
contribute an amount equal to an integral percentage from one
percent (1%) to fifteen percent (15%) of base pay on a pre-tax
or after-tax basis. The Company in turn will match fifty
percent (50%) of the employees' contribution on the first six
percent (6%) of eligible compensation. Employee contributions,
plus actual earnings thereon, are vested immediately. Company
contributions are 20% vested for each year of service with 100%
vesting after five years.
C. PARTICIPANT ACCOUNTS
Each participant's account is credited with the
participant's contribution and allocations of (a) the Company's
contribution and, (b) Plan earnings, and charged with an
allocation of certain administrative expenses. Allocations are
based on participant earnings or account balances, as defined.
The benefit to which a participant is entitled is the benefit
that can be provided from the participant's vested account.
Page 4
<PAGE>
D. INVESTMENT OPTIONS
Participants direct the investment of all contributions
(employee and employer). The Plan offers ten mutual fund
investment options, detailed below., or a Company stock fund.
An employee may invest in one or more of ten investment options
in 1% increments.
Participants may choose from the following ten mutual
fund investment options or a company stock fund:
- Fidelity Retirement Government Money Market Portfolio
Invests in obligation issued or guaranteed as to
timely payment of principal and interest by the U.S.
government, it agencies or instrumentalities.
- Fidelity Puritan Fund
Diversifies investments among a variety of companies,
industries and types of securities.
- Spartan U.S. Equity Index Portfolio
Attempts to duplicate the composition and total
return of the Standard & Poor's 500 Index.
- Fidelity Magellan Fund
Invests in common stocks, and securities convertible
to common stock, issued by companies operating in the
U.S. and/or abroad as well as foreign companies.
Investments are made in large corporations as well as
smaller, less well-known companies. The Fund also
diversifies investments among a variety of industries
and sectors within the market.
- Fidelity Intermediate Bond Fund
Invests in all types of medium to high quality U.S.
and foreign bonds, including corporate or U.S.
government issues.
- Fidelity Equity Income II Fund
Invests in stocks of domestic and foreign companies
with potential for capital growth.
- Fidelity Contrafund
Invests in common stocks believed to be undervalued
and in companies that are currently out of public
favor but show potential for capital growth.
- Warburg Pincus Emerging Growth Fund
Invests primarily in common stocks of rapidly growing
small and medium sized companies which generally will
benefit from new products or services, technology, or
changes in management. The stocks are diversified
among a variety of industries.
Page 5
<PAGE>
D. INVESTMENT OPTIONS (CONTINUED)
- Templeton Foreign Fund A
Invests primarily in common stocks and it can
purchase securities in any foreign country, developed
or developing.
- Janus Worldwide Fund, effective August 1, 1998
Invests primarily in common stocks of foreign and
domestic companies. The fund normally invests in
issuers from at least five different countries,
including the US; however the fund may at times may
invest in fewer than five countries or even a single
country
- LG&E Energy Corp. Common Stock Fund
Invests primarily in the common stock of LG&E Energy
Corp., as well as short-term investments
F. PARTICIPANTS LOANS
Participants may borrow from their fund accounts a
minimum of $1,000 up to a maximum equal to the lesser of
$50,000 or 50 percent of their account balance. Loan
transactions are treated as a transfer to (from) the investment
fund from (to) the Participant Loans fund. Loans to purchase a
home can not exceed 15 years and all other loans are for a
period not exceeding five years. A participant can have up to
two(2) loans. The loans are secured by the balance in the
participant's account and bear interest at an agreed upon rate
commensurate with local prevailing rates. Interest rates range
from 6 percent to 9 percent. Principal and interest is paid
ratably through monthly payroll deductions.
G. PAYMENT OF BENEFITS
On termination of service due to death, disability or
retirement, a participant may elect to receive a lump-sum
amount equal to the value of the participant's vested interest
in his or her account, periodic installments over a fifteen
year period, or any combination of lump-sum and periodic
installments. For termination of service due to other reasons,
a participant may receive the value of the vested interest in
his or her account as a lump-sum distribution, periodic
installments over a fifteen year period, or any combination of
lump-sum and periodic installments.
(2) SUMMARY OF ACCOUNTING POLICIES
------------------------------
A. BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under
the accrual method of accounting in accordance with generally
accepted accounting principles.
B. USE OF ESTIMATES
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of changes in net assets
during the reporting period. Actual results could differ from
those estimates.
Page 6
<PAGE>
(2) SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
------------------------------------------
C. INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares
of registered investment companies are valued at quoted market
prices which represent the net asset value of shares held by
the Plan at year end. Participant loans receivable are valued
at cost which approximates fair value.
Purchases and sales of securities are recorded on a
trade-date basis. Interest income is recorded on the accrual
basis.
D. PAYMENT OF BENEFITS
Benefits are recorded when paid.
(3) RELATED PARTY TRANSACTIONS
--------------------------
Certain Plan investments are shares of mutual funds managed by subsidiaries
of Fidelity Management Research Corp. Fidelity Management Trust Company (a
subsidiary of Fidelity Management Research Corp.) is the trustee as defined
by the Plan, and therefore, these transactions qualify as party-in-interest.
(4) PLAN TERMINATION
----------------
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA.
(5) CERTIFIED INFORMATION
---------------------
The Plan's funds are maintained by the trustee, Fidelity Management Trust
Company. The Plan administrator has instructed the independent public
accountants not to examine the information certified as complete and accurate
by the trustee/custodian. The trustee/custodian's certification applies to
all Plan assets and transactions for the dates presented on the financial
statements and schedules listed on the accompanying index.
(6) ADMINISTRATIVE COSTS
--------------------
Certain expenses incurred for the administration of the Plan are paid by the
Company.
(7) RECONCILIATION TO FORM 5500
---------------------------
Interest and dividends shown on the accompanying financial statements include
$18,995 of interest and dividends from registered investment companies. This
amount, together with the net realized and unrealized gains of $46,149, is
shown as net investment gain from registered investment companies on the
Plan's 5500.
(8) TAX STATUS
----------
On September 15, 1999, the plan Administrator requested a determination
letter from the Internal Revenue Service. The Plan Sponsor and legal counsel
believe that the Plan was designed and is currently being operated in
compliance with applicable requirements of the Internal Revenue Code.
Page 7
<PAGE>
WKE CORP.
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Identity of Issue Description of Asset Cost Fair Value
- ----------------- -------------------- ---- ----------
<S> <C> <C> <C>
* Fidelity Fidelity Magellan Fund $ 146,413 $ 166,951
* Fidelity Fidelity Equity Income II Fund 148,286 153,126
* Fidelity Fidelity Contrafund 74,686 79,486
* Fidelity Spartan U.S. Equity Index Fund 65,393 71,915
Warburg Pincus Warburg Pincus Emerging Growth Fund 35,559 41,969
* LG&E Energy Corp. LG&E Energy Corp. Common Stock Fund 25,616 26,549
* Fidelity Fidelity Puritan Fund 24,122 25,508
* Fidelity Fidelity Ret. Gov't MM Portfilio 23,887 23,887
Templeton Templeton Foreign Fund A 16,589 16,861
* Fidelity Fidelity Intermediate Bond Fund 10,565 10,545
Participants Participant Loans ** 1,100 1,100
----------- -------------
Total $ 572,216 $ 617,897
----------- -------------
----------- -------------
</TABLE>
* - Party-in-interest
** - Rate of interest = 8.5%
The accompanying notes to financial statements and schedules
are an integral part of these statements
Page 8
<PAGE>
WKE CORP.
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
SCHEDULE I I
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Fair Value
Identity of Party Purchase Selling Cost of of Asset on Net Gain
Involved Description of Asset Price Price Asset Transaction Date or (Loss)
- -------------------- ----------------------------------- --------- -------- --------- ---------------- ----------
<S> <C> <C> <C> <C> <C> <C>
* Fidelity Magellan Fund $150,980 $ 4,900 $155,880 $ 156,212 $ 332
Spartan U.S. Equity Index Fund 65,446 59 65,506 65,512 7
* Fidelity Puritan Fund 24,175 57 24,232 24,236 4
* Fidelity Ret. Gov't MM Portfolio 27,465 3,578 31,043 31,043 -
Templeton Foreign Fund A 17,141 546 17,686 17,692 6
Warburg Pincus Emerging Growth Fund 35,559 - 35,559 35,559 -
* Fidelity Contrafund 76,034 1,456 77,490 77,599 109
* Fidelity Intermediate Bond Fund 11,052 484 11,536 11,533 (4)
* Fidelity Equity Income II Fund 148,399 118 148,517 148,522 5
Other LG&E Energy Corp. Common Stock Fund 26,122 527 26,649 26,671 21
</TABLE>
* - Party-in-Interest
The accompanying notes to financial statements and schedules
are an integral part of this schedule
Page 9
<PAGE>
EXHIBIT INDEX
WKE CORP. BARGAINING EMPLOYEES' SAVINGS PLAN
(PLAN)
LG&E ENERGY CORP.
(Issuer)
Annual Report on Form 11-K
For Fiscal Year Ended December 31, 1998
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
23 Consent of Independent Public Accountants
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, all
members of the Committee having responsibility for the administration of the
WKE Corp. Bargaining Employees' Savings Plan have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
<TABLE>
<CAPTION>
WKE Corp. Bargaining Employees' Savings Plan
- --------------------------------------------
<S> <C>
Name of Plan
October 8, 1999 /s/ Victor A. Staffieri
----------------------------
Victor A. Staffieri
/s/ Charles A. Markel
----------------------------
Charles A. Markel
/s/ S. Bradford Rives
----------------------------
S. Bradford Rives
/s/ Frederick J. Newton III
----------------------------
Frederick J. Newton III
/s/ R. Foster Duncan
----------------------------
R. Foster Duncan
/s/ Robert M. Hewett
----------------------------
Robert M. Hewett
</TABLE>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 18, 1999, included in this Annual
Report on Form 11-K of the WKE Corp. Bargaining Employees' Savings Plan (the
"Plan") for the year ended December 31, 1998 in the concurrently filed Form
S-8 Registration Statement of LG&E Energy Corp. concerning the Plan.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Louisville, Kentucky
October 7, 1999
