**EXHIBIT 12**

 

KENTUCKYUTILITIES COMPANY

COMPUTATIONOF RATIO OF EARNINGS TO FIXED CHARGES

(Thousandsof $)

 
| ** **                                             | ** **                                                                                                          | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** | **2001** | ** ** | **2000** | ** ** |
|--------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|----------|------------|----------|------------|----------|------------|----------|------------|----------|------------|
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Earnings:                                              |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Net Income                                             |                                                                                                                | $        | 133,471    |     | $          | 91,402   |       | $        | 93,384     |     | $          | 96,278 |   | $ | 95,524 |   |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Add:                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Federal income taxes - current                         |                                                                                                                | 39,291   |       | 29,118   |       | 37,839   |       | 57,389   |       | 45,276   |       |
| State income taxes - current                           |                                                                                                                | 17,698   |       | 11,322   |       | 10,299   |       | 13,197   |       | 9,400    |       |
| Deferred Federal income taxes - net                    |                                                                                                                | 21,988   |       | 11,378   |       | 3,482    |       | (12,117  | )          | (3,376   | )          |
| Deferred State income taxes - net                      |                                                                                                                | (503     | )          | 904      |       | 1,459    |       | (1,118   | )          | 927      |       |
| Investment tax credit - net                            |                                                                                                                | (2,054   | )          | (2,641   | )          | (2,955   | )          | (3,446   | )          | (3,674   | )          |
| Undistributed income of Electric Energy,  Inc.         |                                                                                                                | 2,559    |       | (3,644   | )          | (6,967   | )          | 258      |       | 70       |       |
| Fixed charges                                          |                                                                                                                | 26,425   |       | 25,980   |       | 26,717   |       | 35,215   |       | 40,834   |       |
| Earnings                                               |                                                                                                                | 238,875  |       | 163,819  |       | 163,258  |       | 185,656  |       | 184,981  |       |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Fixed Charges:                                         |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Interest Charges per statements of income              |                                                                                                                | 25,501   |       | 25,249   |       | 25,688   |       | 34,043   |       | 39,484   |       |
| Add:                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| One-third of rentals charged to operating  expense (1) |                                                                                                                | 924      |       | 731      |       | 1,029    |       | 1,172    |       | 1,350    |       |
| Fixed charges                                          |                                                                                                                | $        | 26,425     |     | $          | 25,980   |       | $        | 26,717     |     | $          | 35,215 |   | $ | 40,834 |   |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Ratio of Earnings to Fixed Charges                     |                                                                                                                | 9.04     |       | 6.31     |       | 6.11     |       | 5.27     |       | 4.53     |       |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
|                                                        |
| NOTE:                                                  |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| (1)                                                    | In the  Company’s opinion, one-third of rentals represents a reasonable approximation  of the interest factor. |     |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |   |
|                                                   | Rents                                                                                                               |     | 2,773      |     | 2,193      |     | 3,087      |     | 3,517      |     | 4,051      |   |
|                                                   |                                                                                                                |     | 924        |     | 731        |     | 1,029      |     | 1,172      |     | 1,350      |   |

 

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LOUISVILLEGAS AND ELECTRIC COMPANY

COMPUTATIONOF RATIO OF EARNINGS TO FIXED CHARGES

(Thousandsof $)

 
| ** **                                             | ** **                                                                                                          | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** | **2001** | ** ** | **2000** | ** ** |
|--------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|----------|------------|----------|------------|----------|------------|----------|------------|----------|------------|
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Earnings:                                              |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Net Income                                             |                                                                                                                | $        | 95,618     |     | $          | 90,839   |       | $        | 88,929     |     | $          | 106,781 |   | $ | 110,573 |   |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Add:                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Federal income taxes - current                         |                                                                                                                | 33,850   |       | 25,768   |       | 24,564   |       | 41,127   |       | 30,425   |       |
| State income taxes - current                           |                                                                                                                | 13,008   |       | 10,003   |       | 7,653    |       | 8,185    |       | 4,450    |       |
| Deferred Federal income taxes - net                    |                                                                                                                | 11,384   |       | 16,793   |       | 20,258   |       | 12,595   |       | 24,233   |       |
| Deferred State income taxes - net                      |                                                                                                                | (795     | )          | 1,716    |       | 4,357    |       | 3,840    |       | 6,787    |       |
| Investment tax credit - net                            |                                                                                                                | (4,153   | )          | (4,207   | )          | (4,153   | )          | (4,290   | )          | (4,274   | )          |
| Fixed charges                                          |                                                                                                                | 33,732   |       | 31,378   |       | 30,551   |       | 38,755   |       | 46,438   |       |
| Earnings                                               |                                                                                                                | 182,644  |       | 172,290  |       | 172,159  |       | 206,993  |       | 218,632  |       |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Fixed Charges:                                         |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Interest Charges per statements of income              |                                                                                                                | 32,787   |       | 30,647   |       | 29,805   |       | 37,922   |       | 43,218   |       |
| Add:                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| One-third of rentals charged to operating  expense (1) |                                                                                                                | 945      |       | 731      |       | 746      |       | 833      |       | 3,220    |       |
| Fixed charges                                          |                                                                                                                | $        | 33,732     |     | $          | 31,378   |       | $        | 30,551     |     | $          | 38,755 |   | $ | 46,438 |   |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
| Ratio of Earnings to Fixed Charges                     |                                                                                                                | 5.41     |       | 5.49     |       | 5.64     |       | 5.34     |       | 4.71     |       |
|                                                   |                                                                                                                |     |       |     |       |     |       |     |       |     |       |
|                                                        |
| NOTE:                                                  |
|                                                   |
| (1)                                                    | In the  Company’s opinion, one-third of rentals represents a reasonable approximation  of the interest factor. |
|                                                   |
|                                                   | Rents                                                                                                               |     | 2,834      |     | 2,192      |     | 2,237      |     | 2,500      |     | 9,660      |   |
|                                                   |                                                                                                                |     | 945        |     | 731        |     | 746        |     | 833        |     | 3,220      |   |

 

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