ML20033F200

Annual Financial Rept for 1989. W/900312

ML20033F200
Person / Time
Site:	Callaway
Issue date:	12/31/1989
From:	Schnell D UNION ELECTRIC CO.
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
ULNRC-2175, NUDOCS 9003160465
Download: ML20033F200 (42)

Text

{{#Wiki_filter:; i ,'/\\ l901 Gratiot Srreet. Post Wface Box M9 ~. L:: %: Vi St, lows. Masouri63136 {. 314 554 2650 - ) (' !. + b jy 0 .M'. Donaldf,5chnelli ~ ^ Senior Vice hesident p,. n C nusea,. p 'dd.. March 12,.1990 ^ L U.'.S. Nuclear.; Regulatory Commission f 4 t I ' Attn: ' Document. Control' Desk ~ ' Mail Station P1-137 Washington,.D.C. 20555 Gentlemen: ULNRC-2175 ' DOCKET NUMBER-50-483 CALLAWAY PLANT ANNUAL FINANCIAL REPORT Transmitted herewith are twenty-five..(25) copies of;the Union Electric' Company 1989. Annual Report. This:information is submitted =-in accordance with. [ .10CFR 50.71(b). Very truly yours, l Donald F. Schnell -JMC/kac Enclosures 1 1 / 3, ( l s p0 l \\\\d bR O 83 'R: PDC 1., y J, u

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s%' +. U i cc: ' Gerald Charnoff,.Esq. _ Shaw, Pittman, Potts & Trowbridge -2300'N. Street, N.W. Washington, D.C. 20037 .Dr."J. O. Cermak CFA, Inc. 4 Professional Drive (Suite 110) Gaithersburg, MD 20879 t R. C. Knop-Chief, Reactor Project Branch 1 -U.S. Nuclear Regulatory Commission ( Region'III 799 Roosevelt Road Glen Ellyn,-Illinois 60137 Bruce Little Callaway Resident Office U.S. Nuclear Regulatory Commission RR#1 Steedman, Missouri 65077 S. V,.Athavale (2) Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission 1 White Flint, North, Mail Stop 13E21 11555 Rockville Pike Rockville, MD'20852 Manager, Electric Department Missouri Public Service Commission P.O. Box 360 Jefferson City, MO.65102 t I w

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l( ^ i) LJsslasssAeriew muss s = wecamps.y Ily 4 ,j y lp p: -) li a i K q + u } Highlights ' Annual Change q h 10-Year. Year Ended ' Current ~ l Rate of i December 31,1989-- ' Year : Growth j 0 Earnings per Average Conunon Share ; -$2.61 2.0% 4.2% ^ . Dividends per Common Share J .$2.02 - 4.1 3.4 Common Stock Price-Year End $28 % 18.7 - 9.1 ~ ' Book Value per Common Share l $19.14 ' 3.1 - -1.9 it () Property and Plant (gross) 87,309,963,000-- 2.6 7.2 - J Total Operating Revenues $2,010,306,000 J(.9) ' 7.8 ' .t ? 30,145,951,000 .4 - 2.4 /r mr Total Kilowatt Hour Sales. - Residential Kilowatt-Hour Sales 9,723,850,000 -(2.3) 2.6 : a Comraercial Kilowatt-Hour Sales - 10,142,002,000' ~1.3-4.6 't 1 Industrial Kilowatt Hour Sales ' 8,604,546,000 < 2.2 ' .9 0 1 lw. c+ ^

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To OurStockholders: Common stock earnings for 1989 were S2.61 per 1990s and beyond. Competition will come from share compared with S2.56 for 1988 despite slight-four sources: utilities with excess generating ly lower operating revenues and a 10-cent per capacity, selling power at any price they can get share charge against earnings attributable to non-above their incremental production cost; rural recurring items in the first quatter of 1989, electric coops, competing for both industrial and res-including the write-off of the canceled second unit idential customers; industrial customerwith cogen-of our Callaway Plant. eration potential; and independent power producers. Summer temperatures were very mild following Most of these competitors are unregulated, and an abnormally hot summer in 1988. As a result, some are subsidized by taxpayers. So, obviously, residential sales were down 2.3 percent and com-they have an advantage. Just as obviously, our mercial sales grew only 1.3 percent. Sales to our customers aren't influenced by regulatory or industrial customers, which are not so weather other differences. They simply want the best sensitive, were up a strong 2.2 percent, price, best quality and best service available. We intend to be our customers' energy company of Our peak demand for the summer of 1989 was choice through across-the-board leadership in 7.21 million kilowatts, compared to the a4 time price, quality and service. record peak demand of 7.34 million kilowatts set in 1988. Our December demand for power set a Acid Rain legislation new winter record of 6.38 million kilowatts, or 15 Another issue - acid rain legislation - now pere ?nt above the winter peak the previous year. appears close to resolution. Let me be clear. Union Electric actively supports clean air. We We continued to meet our goal of reducing costs have virtually eliminated the ash that used through improved productivity. For example, our to come from our stacks, and we have reduced production cost per kilowatt-hour was down three sulfur dioxide emissions by one third since the percent from 1988. This followed a decrease of mid-1970s. six percent in production costs a year earlier. While we support further reductions in sulfur Increased Dividend dioxide emissions, legislation drafted by the in the fourth quarter, we increased the quarterly Environmental Protection Agency and introduced common stock dividend two cents per share, in Congress distorts the principles of fairness and resulting in an annual dividend rate of $2.08 per flexibility that were said by President Bush to be share. We have increased the dividend rate in the cornerstone of his environmental policy. four of the last five years. As I testified on behalf of the industry last year looking to the future, we are confident that we before the U.S. Senate, if this legislation passes, can continue to improve earnings performance the national cost to utility customers wil' be at through productivity increases and cost control. le st $5.5 billion annually. That will increase to Two primary forces will enable us to continue to about S7 billion in the year 2000 when the second improve performance. First is a management phase of proposed emission caps would take style that encourages individual iaitiative and a effect. While we agree that cleaner air is impor-commitment to quality in everything we do. tant, so too is the strength of our economy and Second is utilization of the latest technology, such the ability to compete in world markets. as the new distribution monitoring system we are installing that will be one of the most sophisticat-Discourages Coal Use ed in the U.S. Aside from its enormous cost, the acid rain legis-I tion proposed by the Administration also will We feel a sense of urgency in achieving additional have a profound effeet on our nation's future ener-operating efficiencies. This urgency stems from gy supply. It will discourage the use of coal. our our belief that competition will increase in the country's most abundant energy resource. The 2 _ = - - - - _ _ _

l l l l l /% g._N g g~ f, _ -. only alternatives are gas and oil-which cost far S . N. - more than coal and mean increased dependence h,

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rent political climate and the need for substantial i - 1; [i M changes in the way nuclear plants are beensed, it Achieving Goals at less Cost E-.;. i T h will be years before additional nuclear plants j . ;4 come on lme.

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.I '~ The fact is, we can achieve responsible - even 3 aggressive - environmental goals at far less cost ,e p"? than required by this legislation and still pre- 'a-..^ .i serve the option of using coal. Our research has indicated, for example, that we could achieve a 70 k"

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_^, ~ ~ l percent reduction in sulfur dioxide emissions at 7 about half the cost of the 78 percent reduction f,. .}1~,. t ' ~ \\' required by legislation now before Congress. 6' That difference would amount to $150 million in l ' -AC/N-c annual savings for Union Electric customers. Applied nationally, the savings would be several ggg, 3,, billion dollars each year. 1 We are confident that the U.S. public doesn't real-ize the tremendous costs and far-reaching conse. Clearly, Union Electric and our sister electric quences of the proposed legislation. We will companies long ago made good on Edison's pre-continue to argue for a rational and cost-effective diction. Our electrical system is a critical part of resolution of this issue. our infrastructure and our quality of life, but it's also so dependable and affordable that people Board of Directors take it for granted. At the 1989 Stockholders' Meeting, Thomas A. l Hays, president of The May Department Stores This achievement doesn't mean we can relax. Company, a nationwide retailing organization, We are responsible to our customers, owners, was elected a director of Union Electric. In July, employees, and others to continue to improve the I Stewart W. Smith, Jr., vice chairman, retired as goality of our service and its cost. an employee of the Company. He continues to This Annual Report is the story of how the 7,100 serve as a member of the Company's Board of men and women of Union Electric pursue this Directors. In January 1990, we were saddened shared commitment - each day. For while our by the death of Neal J. Farrell, retired president performance has led customers to take our prod-and chief operating officer of Mercantile uct and service for granted, we do not. Bancorporation, Inc., and a director of Union Electric since 1987. Our Commitment More than a century has passed since Thomas Edison invented the incandescent lamp. But William E. Cornelius even in those early days of electricity, the inven. Chairman and Chief Executive Officer tor's vision was far-reaching. Edison predicted, "We will make electricity so cheap that only the February 5,1990 rich will be able to burn candles." St. Louis, Missouri 3

FossilfuelPower l g Coal is Union Electric's primary fuel. In 1989, we i ' ' 12 i7- ' ~ ~ ~ 'Y age of almost 30,000 tons each day, to generate [k burned more than 10 million tons of coal, an aver. pgh more than 70 percent of our total output. Coal l I comes direct from mines to our generating plants. ~ is # Pulverized to talcum powder consistency, coal is .i s g' fed into boilers up to 16 stories tall. Burning at Wj temperatures of 2800' E, the coal converts water A1 to steam. Steam pressure up to 2400 pounds per 3 j;. ' j .3 . d,([' ~ '~' square inch drives turbines which spin a genera-4 tor, producing electricity, i^ ' l ' 4 ,por ~. G - w ' ' ' ' 'L, & >> J Why use coal over natural gas or oil? In our terri- .M..~V' 1 - tig'j l tory, coal costs about one half as much. So we j.. j..; _.

1. f 1....._. _.._ _. 1.. I only use oil or natural gas-fired turbines, similar A Aheadastu.S.coalprorMes to jet engines, to provide power for a few peak more than 78pment sf untaa houn in a typical year.

8888 #8 8 " N '1888''8'8 exceeded $350million formore Coal is less expensive than other fuels because inan famunen mas. wap the same amount ofpower with it's more plentiful. 'Ihe U.S. has an estimated 300 ,,mr,f,,,,f ou,,,g,,,t,, years' supply at current rates of use. However, least twice as much as coal. pending acid rain legislation jeopardizes the most ef ficient use of coal and, there-fore, economical electric rates. Proposed legislation would force us to install chemical treatment s a Y-scrubbers and switch to more expensive coal supplies by the year 2000. The cost to add scrub-bers is estimated at up to $1.5 bil-lion in current dollars. That would increase our rates up to 20 percent. Our research has demonstrated that almost the same result can be achieved for less than half that annual cost by blending low-sulfur coal with the high sulfur coal currently used. We will continue to press for this more rational and eco-nomical course. ,9.- y 1 e ~ %g v .memanume 7 sumummesr7, ---L_---. 1 _ w ===W -m g Incoming Coal 4 r

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MaclearPower Our second largest source of generating power is E ~~i l ' yyy L nuclear energy. While coal-fired plants produce '.. '. N. 47-S ,.... >y g ~ more electricity in total, s. single, highly produc-g,, , w. .. ' ] g 3, [1.*n.'~ y (y 6 tive nuclear facility - the Callaway Plant - gen-l( '.MIy o-gh'J k 1/ # 4. erated 26 percent of all our output in 1989. "" * ( y L '.' a ~' Indeed, Callaway's 1989 production would have 4 met the needs of our entire system 30 years ago. [4- ~ [ %(

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..,, M ]g 4( 5 As in a coal-fired plant, Callaway uses steam to %[7 - ,$ y '] 7.' -{j[ produce electricity. Ilut instead of a furnace, Callaway has a nuclear reactor containing a core x- / of nuclear fuel. Controlled splitting of uranium .f (# b j', b*p,k " M atoms - nuclear fission - produces energy in 7/} the form of heat. llecause there is ao combus-tion, there are no emissions of the kind produced a catiswayssay-to-ssyoperation by burning fossil fuels. is monitoredsy resident mucie,r Regelstery Commission inspec. Callaway has set performance tors. The plant rants in the top 10 records since it went into opera-3,7 overalt NRC performance ratings. x tion m late 1984. It has become T one of the leaders in Nuclear Regulatory Commission perfor- - o mance ratings. In 1989, Callaway 3 achieved new records for power } production. It was the national l leader for production by a single unit in its first five years of operation. r With 40.8 billion kilowatt hours of generation, 1 7 7 Callaway led all U.S. nuclear units for production h r.r. i from 1985 to 1989. Also, compared with more [ than 400 nuclear plants worldwide, Callaway was f. the only U.S. plant to rank among the top 10 in ~ a power production. W There are many reasons for the excellent perfor-P' ~ ) mance at Callaway. Two important factors are the ability to manage refueling operations and our success in reducing unplanned service outages. q I The unit has averaged 57 days for refuehng com-s l i pared to an industry average of more than 100 i l 2 l l days for comparable reactors. And Callaway per-t [n sonnel reduced unplanned service outages to only t .m.,. l one percent of total operating time last year, com- . 5[GVWE ' pared to an industry median of 4.5 percent. ,c Coollng Tower * '%^ 6 Nj J

^ .f e t "^ yp#* j - Y 9 Trainingl>rallCallowsypeople is continuous. About 1gpercent W; Y ' 'y of employees' work time is devol- .[.. y :. w'.}jV.c ' inming uw onn. l 4.- +~ ' s. 2 ed toperfecting esisting stills and l x. 3)%.r k ~.. ; ' Q.. ; - \\ y

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1< Wansmission andOlstribution llehind a customer's wall switch, there is a S2.1 .;- ' g. -c ' oya ' %. st? e billion distribution network monitored every [x: minute of every day by highly-trained people. h~,k, -mg r f,g,},. I g 4 fu. t The diverse network serving our 24,000 square- ?. (y- ', # mile territory includes literally milliot._ of parts, 6*' y e 9,. ' C, ?;.M..y

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In 1975, we installed our present monitoring <l 1 l l l system, one of the most sophisti-l cated in the U.S. at that time. We will maintain that leadership with Load 0lspatchinp atrice a new state-of the-art monitoring 5 l system that will be fully operational in 1992. tj lloused in an earthquake-resistant hub, this new 'g I system will allow our dispatchers to remotely monitor and operate a substation when an outage Power Plants occurs. This system, coupled with enhanced radio communications, will increase the use of 2 l l existing facilities and defer the need for additional .y y capital investment. MA D'::::=== } From the customer's point of view, a distribution / y / ,4 v=- system is effect.ive only when electncity is avad.- iQ[. /' 'g / able. We couldn't agree more. In 1989, the aver- </ age customer's service was available 99.98 >/. 7 l percent of the time. 3 J - - ---==m e-mune Interconnections with Other Utilities Transmiss.'on Tower - 10

j i ' b l$hN; f fijifj W - ki?. ^%.. ,~. ' i > Our$1.1 billion distrhullon nel- ^ wed le constantly maintained and 900taded. Here,240feetabove l W u ^>- -' me Afisedssippi Alver, worters 5 y-, 1 reptcq sn aircrstt warning beston A. i 3 On a tower supporting a 345,000

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Serving Our Customers o Our service objective is simple to express, but dif-ficult to attain. We want - consistently - to exceed customers' expectations. In 1989, monthly surveys conducted by an outside firm indicated that customers' perceptions of our Company improved during the year. For example, customers' perceptions of their contacts with ~f..- (j v smice tacindes showina cus-our people trended up in terms of tomers how to use energy wisely employees, courtesy, competence, and etticiently. In f ase, the and helpiulness. Also, research company conducted s pilotpro- '* '" ""* * " " *" #"Y' "'- showed that customers viewed the ~ customers received cash rebelss Company more favorably in 1989 ,n,n tn,y,,ren,,,a nign.,ftf. In four areas: fairness of rates; our clency air conditioners and heat concern for customers; our partnership efforts with customers to hold down their energy costs; oursmice ma. and management competence. .p g . I 14.. 4 i s We don't lack opportunities to serve our cua- ...Af . "f*i" tomers. Each business day, we receive an aver-1?[-gg - I'.' M'hdN'L4 ' i < '- 7 -"* age of 8,400 customer calls, for a total of 1.7 I;* *~1mc o+ 3 nullion telephone calls each year. Our obj.ect,ive is N,a:. g," g" ^ ^ to satisfy each caller in that initial contact. To this end, we are installing a sophisticated electronic Q:i telephone system that will be operational in 1990. - i.. j )i.. g Also, in 1989 Braille billing was introduced for Ndib k, [ ! k i g {i. r: yi blind customers, and we promoted our teletype +' [ ? / ' communications option to better serve customers with hearing difficulties. EnergyPlus programs, f s meluding weatherizing senior citizens homes and Dollar More energy assistance for needy cus-tomers, continued in 1989, benefiting an estimat ed 15,tK)0 hou.,eholds. For some commercial and industrial customers, tne quality of service has become an issue. The problem isn't a change in the electricity we pro-vide. The problem is increased use of microelec-y tronic devices that use so little power they can be ((][ y m i j n sensitive to minute, temporary changes. We are (,;, l addressing this issue on two fronts. First, we pro- .l q. .s, m. . mc vide engineers and equipment to diagnose and p ,3 g solve customer problems. Second, with other util-y Q( ities, we are working with the electronics industry to solve the problem through product design. ggg jM &r

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Afanagement's Olscussion and Analysis y Results of Operations Operating Expenses Earnings and earnings per share fluctuated due t Fuel and Purchamed Power - Variation from Prior Year many conditions, the primary ones being: the (Millions of Dottars) 1989 1988 1987 effect of weather variations, the timing and Fuel: amounts of rate changes, growth in customers' variation in generation 6(11.9) 8 52.5 s (3.0) use of electricity, fluctuating operating costs, the Price (27.7) (19.7) (1.2) ^" " "i effect of costs disallowed by regulatory authori-li n nt a 11.0 n6 ties and reduced preferred stock dividend Generation efficiencies (1.7) (10.5) 6.1 requirements. Net interchange sales and purchased power variation 20.2 (30.3) 20.9 The impacts of the more significant items affect-8(18.5) s 3.0 8 67.4 ing revenues, costs, and earnings during the past several years are analyzed and discussed below. The decrease in total fuel and purchased power costs in 1989 reflects reduced generation due to Electric Operating Revenues the Callaway refueling outage in 1989 and lower variation from Prior Year prices, offset in part by increased purchased (Millions of Dollarsi 1989 1988 1987 power costs. ne increase in total fuel and pur-Rate variatione 8 (6.4) s 23.7 8 82.7 chased power costs in 1988 reflects greater gener-Fffect of weather variations (64.8) 43.5 (19.5) g Growth and other 62.8 1.6 83.6 dasses d cusems aM m CaHaway reMng s (8.4) 8 68.8 8146.8 outage in 1988, offset by greater interchange The decrease in 1989 electric revenues applicable sales and lower fuel prices. The increase in total to rate variations primarily reflects decreases in fuel and purchased power costs in 1987 primarily wholesale electric rates. The reflects decreased amortization of increases in 1988 and 1987 electric uranium litigation settlement pro-revenues applicable to rate varia-ceeds and increased sales of elec-tions reflect a series of rate tricity to all classes of customers. increases under the regulatory 4) Other variations in operating g pq gd5 fM expenses during the years 1987 approved Callaway rate phase-in h"^ P"" through 1989 generally reflected recurring conditions such as he effect of weather variations on 1989 electric revenues reflects the growth, inflation, and wage abnormally cool 1989 summer as increases. In 1989, operations compared to an abnormally hot 1988 summer. expenses, other than fuel and purchased power The effect of weather on 1988 electric revenues costs, increased $19 million, due primarily to a reflects the abnormally hot 1988 summer as com. S16 million increase in wages, pensions and other pared to 1987. The effect of weather variations on employee benefit expenses and a $3 million 1987 electric revenues primarily reflects the increase in Callaway plant expenses. In 1988, increased sales of electricity due to extremely operations expenses, other than fuel and warm weather in the second and third quarters of purchased power costs, increased S7 million, due 1986. primarily to a $6 million increase in wages and other employet benefit expenses and a S3 million increase in natural gas purchased for resale, par-tially offset by a S2 million decrease in Callaway plant expenses. 14

In 1989, maintenance expenses decreased $7 mil-income and the decreased amortization of certain lion, reflecting a S14 million decrease in mainte-Callaway-related accumulated deferred income nance expenses at generating plants other than taxes (see Callaway Rate Phase-In Plans in Notes Callaway, offset by a $7 million increase in mainte. I and 2 under Notes to Financial Statements). nance expenses at Callaway plant, attributable to income taxes from operations increased in 1988 the plant's third refueling in early 1989. In 1988, due principally to decreased amortization of cer-maintenance expenses increased tain Callaway-related accumulated $4 million, primarily reflecting deferred income taxes, offset in increased maintenance expenses part by a decrease in pre-tax at all major coal generating plants, income. Income taxes in 1987 offset by an $11 million reduction mereased in response to higher '7 in Callaway plant maintenance pre-tax income, partially offset expenses reflecting the plant's by increased amortization of second refueling in late 1987. In 9 _ g ,g Callaway related accumulated 1987, operations expenses, other deferred income taxes. than fuel and purchased power in 1989, the $1 million increase in costs decreased $6 million pri-other taxes charged to operating marily due to an $8 million decrease in natural gas expenses is primarily due to increased real estate purchased for resale, offset by a $2 million taxes. The 1988 increase in other taxes charged increase in other operations costs. Maintenance to operating expenses is due to a $4 million expenses in 1987 increased $11 million, reflecting increase in license and franchise taxes resulting Callaway plant's second refueling in late 1987 and from increased revenues. The 1987 increase in increased maintenance at all major coal generat-other taxes charged to operating expenses is due mg plants except the labadie plant. to a $6 million increase in license and franchise Depreciation expense increased $19 million in taxes resulting from increased revenues, and a S2 1988 primarily due to the effect of the 1987 million increase in reat estate taxes. Callaway refueling outage and the change in 1988 Interest from the unit of-production method to the The 1989 decrease in interest expense reflects the straight-line method of computing Callaway plant favorable resolution of several tax matters in the depreciation in accordance witl' first quarter of 1989 (see Note 2 regulatory commission orders. under Notes to Financial Amortization of phase-in plans Statements). The 1988 and 1987 deferred costs for 1989 decreased decreases in interest primarily $5 million reficcting the conclu-reflect the refinancing of high-cost sion of the Illinois and wholesale debt with lower-cost issues and customer phase-in plans. Amorti-9 2 reduced total outstanding debt. zation of phase-in plans deferred i Callaway Rate Phase-In Plans costs increased $35 mihion in and Costs Disallowed 1988 primarily reflecting amortiza-See Notes 1 and 11 under Notes to tion of the Missouri portion of accumulated F nancial Statements for information relative to Callaway-related deferred costs which began in Callaway ra" phase-in plans and the Callaway January 1988. Unit No. 2 costs disallowed. Income taxes from operations increased 89 mil-lion in 1989 principally due to higher pre-tax 15

Miscellaneous Other income and enacted by the Tax Reform Act of 1986 to also Deductions, Net apply to the ITC carryforwards generated by The 1989 increase of $18 million in Miscel-plant placed in service before 1986. In 1988, laneous, net primarily reflects $15 million net of while total provisions for federal income taxes tax charged to expense in 1988 related to obtain-were reduced as a result of the reduced tax rate ing long-term power supply contracts with certain provided by the Tax Reform Act of 1986, the wholesale customers (see Note 11 under Notes to amount of income taxes currently payable Financial Statements). increased principally as a result of the reduction f IT" carryforwards. Contingencies See Note 10 under Notes to Financial Statements See Income Taxes in Note 1 under Notes to for situations existing at December 31,1989, that Financial Statements regarding the Company's could affect the Company. adoption of Statement of Financial Accounting Standards No. 96, " Accounting for Income Taxes". Liquidity and Capital Resources Construction expenditures averaging approxi-Effects of Inflation and Changing Prices mately $230 million are anticipated during each The Company's financial statements reflect the of the years 1990 through 1994. The Company historical cost of events and transactions occur-completed the construction of its Calk.way plant ring at times when the purchasing power of the in late 1984. Additional electric generation capaci-dollar was different from the present. The effects ty is not anticipated before the late 1990s. For of inflation and changing prices on the Company's funds required in addition to financial statements are most sig-construction expenditures, see nificant in the areas of deprecia-Notes 3,4, and 5 under Notes to tion and property, plant, and Fmancial Statements. equipment. A nuclear fuel lease provides for The current replacement cost of the financing of up to $200 million the Company's utility plant sub-of the Company's nuclear fuel stantially exceeds its recorded requirements. At December 31, historical cost. However, the regu-1989, S173 million of nuclear fuel latory process limits the Company was financed under the lease. to the recovery of the historical cost of utility plant through depreciation. While The Company plans to continue utilizing short. term debt as support for normal operations and the regulatory process does not reflect the cur-other temporary requirements (see Note 7 under rent cost of replacing utility plant, past practice Notes to Financial Statements). Union Electric is indicates the Company will be allowed to earn on and to recover the increased cost of its net invest-authorized by the Federal Energy Regulatory Commission (FERC) to have outstanding at any ment after facilities are replaced, one time up to S600 million of short. term unse-The Company, by having assets such as receiv-cured debt instruments. ables, fuel and materials inventory, and deferred charges, incurs a loss of purchasing power during Tax Matters The Technical and Miscellaneous Revenue Act of periods of inflation because after conversion, the 1988 (I'AMRA) contained several provisions that cash received for these items will purchase less. affect the Company. The most significant provi. More than of fsetting such assets, however, are sion was the substantive law change contained in significant amounts of long term debt, deferred income taxes, and current liabilities which will be the Technical Corrections sections of the Act which retroactively extended the 35% reduction in paid with dollars of reduced purchasing power. investment tax credit (lTC) carryforwards as 16

St8t0R8GRt Of1800R80 ' Iklon Eketric Ceapany < l (Thousands of Dollars Except Shares and Per Share Arnounts)1 Year 1989 Year 1988 - ' Year 1987 - Operating Revenues (*): 4 Electric _ $ 1,929,884 $1,938,296 $1,869,477 Gas = 76,840-87,263 73,518' Other i3,582- - 3,548 3,416 Total operating revenues 2,010,306 2,029,107 1,946,411-- . Operating Epees: L -- Operations f Fuel and purchased power. 403,840 422,297: 419,272 4 -Other' 1354,215-335,073 ~ 327,949 : l 7 758,055 757,370-747,221 l 1 Maintenance 156,220-162,977 ' 158,908 ] Depreciation and nuclear decommissioning 195,908-195,684 176,703 ' q Amortization of phase-in plans deferred costs 34,397 39,703 4,337-income taxes 203,441 194,211 - 180,514-Other taxes (*) 195,817 195,008 ' 190,274 Total operating expenses-1,543,838 1,544,953' 1,457,957 Operating income 466,468-484,154' 488,454

)

~ Other Income and Deductions: Callaway rate phase-in plans 227 - 2,408- - 92,791 ' Callaway Unit No. 2 costs disallowed (50,351) Income tax benefits related to U Callaway Unit No.2 costs disallowed 20,155 Deferred costs disallowed (23,169) Allowance for equity funds used during construction 2,656 2,002 5,994 i Miscellaneous, net 7,769 (10,648) (15,714)- _1 _ Total other income and deductions, net - (19,544) (6,238) 59,902 - Income Before Interest Charges 446.924 477,916 548,356- 'l

Interest Charges

• Interest 176,571 199,241 228,961 Allowance for borrowed funds used during construction (15,252)

(12,883) (14,483) Net interest charges 161,319 186,358 - 214,478 ~ j Net Income 285,605 291,558 '333,878 Preferred Stock Dividends. 19,134 30,425 36,522 1 Earnings on Common Stock S 266,471 $ 261,133 $ 297,356 -(*) Includes license and franchise taxes of $95,276,000 S95/iO8,000, and $91,490.000 for the years 1989,1988, and 1987, respectively. Earnings per Share of Common Stock (based on average sharesoutstanding) $2.61 $2.56 $2.91 Dividends per Share of Common Stock S2,02 $1.94 $1.92 Average Number of Common Shares Outstanding 102,123,834 102,123,834 102,123,834 See Notes to Financial Statements on pages 25 through 30. 17

e' p i bN $W

(Thousands of Dollars)

Assets December 31,1989 December 31,1988 Property and Plant, at criginal cost: Electric -- $7,013,217 $6,773,814 Gas 113,190 106,110 Other 14,755 15,0091 7,141,162 6,894,933 ' i less accumulated depreciation and amortization 2,192,221 1,974,391 4,948,941 4,920,542 Construction work in progress: Nuclear fuelin process 115,333 173,870 - ' Other 53,468 57,452 Total property and plant, net 5,117,742 5,151,864 L.-

Deferred Charges and Other Aseets: -

Callaway Unit No. 2 construction abandonment 4,330 58,283 Callaway rate phase-in plans ' 99,200 133,290

Unamortized debt expense 23,623-

= 27,611 Nuclear decommissioning trust fund 17,816-13,223-Other - 16,613-15,906 a

Total deferred charges and other assets

161,582 248,313 :

Current Assets: -l 4 Cash and special deposits 3,480. 3,565' l L ' Accounts receivable - trade Gess allowance - r for doubtful accounts of $5,713 and $5,123, .j at respective dates)- 150,088'- 151,765 'l ~ Unbilled revenue ' 113,193-l 96,768 ' Other accounts and notes receivable '23,912 11,053 -f Materials and supplies, at average cost - ~ Fossilfuel 86,897 65,376: Construction and maintenance 89,782' 87,619 - Other 13,646 10,923 Total current aseets 480,998 -427,069 Total Assets 85,760,322 $5,827,246

See Notes to Financial Statements on pages 25 through 30.

18:

'/.. e T i Qapital and Habilides December 31,1989 December 31,1988 Capitalisation: Common stock, $5 par value, authorized 150,000,000 shares - outstanding 102,123,834 shares (excluding 42,990 shares at par value in treasury) S 510,610 $ 510,619 . Other paid-in capital, principally premium on conunon stock (see accompanying statement) 716,957 716,071 Retained earnings (see accompanying statement) 726,905 668,670 ~ Total common stockholders' equity 1,954,481 1,895,360 t Preference stock, $1 par value, authorized 7,500,000 shares - none outstanding Preferred stock not subject to mandatory redemption (see accompanying statement) 227,582 279,784. Preferred stock subject to mandatory redemption (see accompanying statement) 806 60,832 long-term debt (see accompanying statement) 2,114,039 2,196,129 Unamortized discount and premium on debt (7,263) (7,515) Total capitalization 4,289,645 4,424,590 Accumulated Deferred Taxes on Income 704,148 657,965 Accumulated Deferred Investment Tax Credits 207,951 214,964 Accumulated Provision for Nuclear Decommissioning - 18,686 14,093-Construction Commitments and Contingencies (Notes 9,10, and 11) Current Liabilities: Current maturity oflong-term debt 129,003 66,870 Accounts payable 150,420 157,490 Wages payable 33,825 33,'425 Bankloans 41,000 38,500 Commercial paper 20,000 Income taxes accrued 39,917 40,082 Other taxes accrued 20,622 18,365 Interest accrued 40,665 70,136 Dividends declared 3,698 6,155 Other 80,742 64,611 Total current liabilities 539,892 515,634 \\ Total Capital and Dabilides 85,760,322 $5,827,246 i 19

1,08poh M

1. AsAos Bootr8e Cosquer (Thousands of Dohrs) ;

December 31,1989 December 31,1988 Mrst Mortgage Bonda-note (a) ._ 4 %% Series due 1990 S 50,000 4%% Series due 1991 30,000 30,000 5% Series due 1991 2,000 2,000 5%% Series due 1991 3,500 3,500 4%% Series due 1992 0,000 6,000 4%% Series due 1993 30,000 _ 30,000 10%% Series due 1994-note (b) 2,380 2,800 4%% Series due 1995 35,000 35,000 - 4%% Series due 1995 3,000 3,000 5%% Series due 1996 30,000 30,000-5%% Series due 1996 - 5,000 5,000' 8%% Series due 1996 !10,000 10,000 8 7/s%. . Series due 1996 100,000 100,000 5%% Series due 1997 40,000- - 40,000 5%%_ Series due 1997' 5,000-5,000: 7% Series due 1998 50,000 ' 50,0001 7.95% . Series due 1998 - 4,000 4,000 7%%- ' Series due 1999 '35,000 35,000. 8%- Series due 1999 - .5,000 5,000 8%% - Series due 1999 40,000 40,0001 - 9.95% Series due 1999-note (b) 64,300_ 71,440. 9% , Series due 2000 60,000 60,000 77/s% Series due 2001 50,000 50,000-7%% Series'due 2001 50,000 50,000 8%% Series due 2001 60,000 60,000-9%% Series due 2001-note (b) 3,300 3,600 9%% Series due 2001-note (b) 1,912 2,086 9%% Series due 2001-note (b) 6,600 7,200. 8%% Series due 2002-note (b) 3,600-3,900 7%%- Series due 2003 7,000 7,000 8%% Series due 2004 70,000 70,000 10 % Series due 2004 - note (b) 7,000 7,500 10 %% Series due 2005 70,000 70,000 5.80 % Series due 1992 to 2005-note (c) 27,085 27,085 87/s% Series due 2006 70,000 70,000 8%% Series due 2007 60,000 60,000 9.35% Series due 2008-note (b) 49,500 52,250 9.25-9.625 % Series due 2000 to 2010-note (c) 60,000 60,000 9%% Series due 2016 100,000 100,000 20 l I

~ December 31,1989 December 31,1988 y Unnecured'Ioane - $ 150,000 - Foreign credit agreement, due 1991 - note (d) - Domestic credit agreement,' due 1991 - note (e) 100,000 275,000 Commercialpaper-note (f) 300,000 Unnecured Notes - 6% Due to 1992 1,295 1,400 Missouri Em4ronmental Improvement - _ Revenue bonds,5,70-6.20% Series due to 2004 16,000

16,250 '

1984 Series A due 2014-note (g) '80,000 80,000 1984 Series B due 2014-note (h) 80,000 80,0001 1984 Series C due 2014-note (i) 147,500 .47,500 ' 1985 Series A due 2015-note (J) - 70,000 70,000 1985 Series B due 2015-note (j) 56,500 -56,500' Nuclear Fuel Imase-note (k) - 106,567 101,118. - Img-Term Debt - $2,114.039 $2,196,129 (a) At December 31,1989, substantially all of the property and plant was mortgaged under, and subject to tiens of, the respective - indentures pursuant to which the bonds were issued. (b) To be retired by sinking fund - 10 %% Series to 1993; 9.95% Series to 1998; 9 %% Series and each 9 %% Series to 2000; 8 %% Series to 2001; 10% Series to 2003; and 9.35% Series to 2007. (c) EnvironmentalImprovementSeries. (d) During 1989, th<. Company repaid and canceled the credit agreement. (e) During 1989, the Con pany amended the credit agreement reducing the maximum amount wh'ech could be borrowed from $275 million to $150 million. Interest rates will vary depending on market conditions and the Company's selection of various options y under the agreement. At December 31,1989, such borrowings were outstanding at an average interest rate of 8.701, based on competitive bid rates. (0 On Au~ust 15,1989, the Company entered into a four. year $300 million bank credit agreement which is utilized to support commercial paper borrowings on a long term basis. At December 31,1989, the outstanding commercial paper was at an average annualized Interest rate of 8.62%. (g) Adjustable fixed rate, interest rate at 6.70E per annum through May 31,1990; thereafter, interest rates will depend on market conditions and the Company's selection of an adjusted rate for each annual period or a fixed rate until maturity. (h) Adjuntable fixed rate, interest rate at 6.65% per annum through May 31,1990; thereafter, interest rates will depend on market conditions and the Company's selection of an adjusted rate for each annual period or a fixed rate until maturity. (i) Adjustable. fixed rate, interest rate at 7.15% per annum through February 28,1990; thereafter, interest rates will depend on market conditions and the Company's selection of an adjusted rate for each annual period or a fixed rate until maturity. (j) Interest rates, and the periods during which such rates apply, vary depending on the Company's selection of certain defined rate modes. 'Ihe average interest rate at December 31,1989, for such Series A and Series B bonds was 6.101 (k) At December 31,1989 and 1988, $66 million and $54 million, respectively, are included under current maturity of long term debt. See Notes to Financial Statements on pages 25 through 30, 21

4 MM MII88drft Cogser . (Thousands of Dohars) December 31,1989 December 31,1938 Preferred Stock Not Subject to Mandatory Redemption: Preferred stock outstanding without par value (entitled to cumulative dividends)- note (a) Stated value of $100 per share- $7.44 Series - 427,977 and 550,000 shares at respective dates - note (b) S 42,798 $ 55,000 S6.40 Series - 300,000 shares 30,000 30,000 - $5.50 Series A-14,000 shares 1.400 1,400 $5.50 Series B-3,000 shares 300 300 $4,75 Series - 20,000 shares 2,000 2,000 ' $4.56 Series - 200,000 shares 20,000 20,000 $4.50 Series - 213,595 shares 21,359 21,359 $4.30 Series - 40,000 shares 4,000 4,000 S4.00 Series - 150,000 shares 13,000 15,000 $3.70 Series - 40,000 shares 4,000 4,000 S3.50 Series - 130,000 shares 13,000 13,000 Stated value of $97,50 per share-88.00 Series of 1971 - 425,000 shares 41,437 41,437 Stated value of $92.25 per share- $800 Series-350,000 shares 32,288 32,288 Stated value of $25 per share-40,000 $2.125 Series - 1,600,000 shares - note (c) Total Preferred Stock Not Subject to Mandatory Redemption $227,582 $279,784 - Preferred Stock Subject to Mandatory Redemption: Deserred stock outstanding without par value (entitlea to cumulative dMdends)- note (a) Stated value of $100 per share- $6.30 Series - 8,000 and 8,320 shares at respective dates, due to 2020- note (d) S806 $ 832 Stated value of $50 per share- $4.60 Series - 1,200,000 shares, due to 2004 - note (e) 04,000 Total Preferred Stock Subject to Mandatory Redemption $800 860,832 (a) Authorized Union Dectric Company total preferred stock - 25.000,000 shares. (b) In 1989. the Company retired 122,023 shares of the 87.44 Series. (c) In 1989, the Company redeemed the S2.125 Series at $25.75 per share. (d) The Company is required to retire 260 shares at $100 per share on June 1 of each year. (c) In 1989. the Corapany retired 75.000 shares at $50 per share and completed early redemption of the remaining 1,125.000 shares at $52.50 per share. See Notes to Financial Statements on pages 25 through 30. 22 -

p StateneetofRetainedEnnings menautoceapear (Thousanos of Dohars) Year 1989 Year 1988 Year 1987 Balance at Beginning of Pedod $668,670 $610,466 S515,312 Add: Net income 285,605 291,558 333,878 9S4.275 902,024 849,190 ) Deduct: Preferred stock dividends

• 18,066 29,264 34,679 Common stock cash dividends - $2.02, $1.94, and $1.92 per share,respectively 206,290 198,120 196,078

.) l, Premium paid on preferred stock reacquired 3,014 5,970 - 7,967 227,370 233,354 238,724 j (Under mortgage indentures as amended, free and unrestricted retained earnings at [ December 31,1989 amounted to $669,790) [ Balance at Clone of Period 8720,905 $668,670 - $610,466

• Preferred stock dMdends include dMdends declared, applicable to submuent gerlods.

I } Statenwatof OtherPaldin Capital (Thousands of Dollars) Year 1989 Year 1988 Year 1987 Balance at Beginning of Pedod $716,071 8716.071 8717,258 (1,171) Premium paid on preferred stock reacquired (999) Excess of stated value over purchase price of 122,023 shares $7.44 Series prefet red stock retired 1,885 (16) Other Balance at Close of Period $ 716,957 $716.071 S716.071 See Notes to Financial Statements on pages 25 through 30, 23

hOf M h amies aseMe esgeny - (Thouennesof Douars) Year 1989 Year 1988 Year 1987 Cash Mows From Operadons: = Netincome 6 285,605 S 291,558 $ 333,878 Items not requhing cash-Depreciation and amortization 223390 ??4M6 158,988 Callaway Unit No. 2 costs disallowed 50,351 Amortization of nuclear fuel 59,691 68,656 47,142 Allowance for funds used <turing construction (17,908) (14,885) (20,477) lieferred taxes on income, net 46,183 36,514 69,072 Deferred investment tax credits, net (7,013) 26,987 51,758 Callaway rate phase-in plans (227) (2,408) (92,791) Deferred costs disallowed 23,169 Contract acquisition expense 28,845 Changesin assets and liabilities: Receivables, net (27,607) (10,707) (28,410) Materials and supplies (23,684) 26,191 18,732 Accounts and wages payable (6,670) (309) 18,077 Taxes accrued 2,092 6,300 (16,631) Interest and dividends accrued or declared (31,928) (10,645) - (6,601) Other, net 19,300 9,404 14,895 Net cash provided by operations 571,475 679,897 570,801 Cash Rows Fmm Invendng: C<mstruction expenditures (192,853) (174,903) (150,698) Allowance for funds used during construction 17,908 14,885 20,477 Nuclear fuelexpenditures (20.446) (29,588) (35,406) Net cash used in investing metMties (195,391) (189,606) (165,627) Cash Rows From Hnancing: Dividends on preferred and common stock (224,356) (227,384) (230,757) Redemptions-Nuclear fuellease (59,374) (108,753) (137,802) Short-term debt (17,500) long term debt (337,539) (253,368) (514,902) Preferred stock (114,356) (84,746) (109,914) Issuances - Nuclear fuellease 76,956 116,003 160,604 l Short term debt 25,500 3,000 Long-term debt 300,000 40,000 425,000 Net cash used in financing activities (376,169) (492,748) (404,771) Net Change in Cash and Cash Equivalents (85) (2,457) 403 Cash and Cash Equivalents at beginning of year 3,565 6,022 5,619 Cash and Cash Equivalents at end of year 3,480 3,565 $ 6,022 See Notes to Financial Statements on pages 25 through 30. 1 24 I i l

1 NetseDMnencialStataannis mansucmecampany i i Note 1 - Summary of Accounting Policies accounting and reporting for income taxes. Under current The Company is regulated by the Missouri Public Service accounting standards the Company is permitted and intends - C:mmission, Illinois Commerce Commission, Iowa State to adopt SFAS 96 in 1992. De adoption of SFAS 96 is not j Utilities Board, and the Federal Energy Regulatory expected to have a material effect on the Company's Commission. %e accounting policies of the Company are financial position or results of operations. in accordance with the rate-making practices of the AHaance for Funds Uwd Mg Contruedon i regulatory authorities having jurisdiction and, as such, Allowance for funds used during constructwn (AFC) is a + conform to generally accepted accounting principles as utility industry accounting practice whereby the cost of applied to regulated public utilities. A description of the borrowed funds and the cost of equity funds (preferred and Company's significaet accounting pohcies follows. common stockholders' equity) applicable to the Company's Property and Plant construction program are capitalized as a cost of construc-The cost of additions to and betterments of units of tion. This accounting practice is intended to offset the e property and plant is capitalized. Cost includes labor, effect on earnings of the cost of financing current material, applicable taxes, and overheads, plus an allowance construction, r.nd results in treating such financing costs in for funds used during construction Maintenance the same manner as construction charges for labor and expenditures and the renewal of items not considered units materials. of property are charged to income as incurred. When units Under accepted rate-making practice, cash recovery of of depreciable property are retired, the original cost and AFC, as well as other construction costs, occurs when removal cost, less salvage, are charged to accumulated completed projects are placed in service and reflected in depreciation. customer rates. DePtyclation AFC rates are established by the Company consistent with Depreciation is provided over the estimated lives of the the methodology prescribed by the Federal Energy various classes of depreciable property by applying Regulatory Commission. Average annual AFC rates were composite rates on a straightline basis. %e provision for 9.7% in 1989,8.7% in 1988, and 10.3% in 1987. depreciatwn in 1989 is equivalent to approximately 3.0% of the average depreciable cost (3.0% in 1988 and 2.8% in Callaway Rate Phase-In Plans 1987), (As permitted for rate-making purposes, Callaway The Callaway rate phase in plans effective in 1985 as a plant depreciation was computed on a unit-of-production result of regulatory commission orders provide for (1) basis through March 1988, and on a straight line basis partial deferral of a cash recovery of costs related to the thereafter.) Callaway plant during the early years of the plans with recovery of such deferrals in the later years of the plans, ( reetea anm zad n f ceda n aHaway ated e e st o nuclear fuel is amortized to fuel expense on a accunm aw efured inemne taxes, and (3) twogear I unit of-production basis. A provision for spent fuel disposal anm d zad n cedain pr cee s kom th Company a costs is charged to expense based on kilowatt hours settlement of uranium litigation with Westinghouse. See generated. Note 11 regarding an order issued by the Missouri Public I Income Taxes Service Commission in December 1987, i j Deferred income taxes are provided for timing differences he amount of costs for which cash recovery is deferred I between book and taxable income as permitted for rate' under the plans is recognized as income currently in the making purposes. Investment tax credits utilized are Statement of locome. Such noncash income, net of taxes, deferred and amortired over the usefullives of the amounted to 26% of earnings on common stock for 1987 but properties to which they relate, was not significant in 1988 nor in 1989. In December 1987, the Financial Accounting Standards Unbilled Revenue Iloard issued Statement of Financial Accounting Standards ne Company accrues on its books estimated, but unbilled, l No. 96, Accounting for income Taxes (SFAS 96). SFAS 96 revenue and also a liability for the related taxes. requires an asset and liability approach for financial 25 l

i Nefas D Maascial Sistaments <continu.o) meeasemeanspeer Note 2 - Income Taxes Deferred income taxes are provided for differences between Total inmme tax expense for 1989 resulted in an effective tax book and taxable income to the extent permitted for rate-rate of 39% on earnings before income taxes (38% in 1988 and making purposes. At December 31,1989, the cumulative net 37% in 1987). The principal reasons such rates differ from amount of income tax timing differences for which deferred the statutory Federal rate are as follows: Income taxes have not been provided was $1 billion. 1989 1988 1987 in the first quarter of 1989, the Company favorably resolved mautory rederalincome ins rate 34s Td' E several tax matters. 'Ihe resolution of these matters reduced lacr=a (Ik'er*ama) from: 1989 interest expense by $27 million and increased 1989 net 6 6 n)ans-income and earnings on common stock by $20 million i ey te p Other income 3 3 (5) ($.20 per share). Arnortization of prioryearv Note 3 Preferrect Stock Mis $c 1 du b) net 4) 2 During the three years ended December 31,1989, preferred stock, w,thout par value, was retired or redeemed as follows: i h Fderat inemne tax mee an E in 1989, the Company redeemed 1,600,000 shares, $2.125 Series and 1,125,000 shares, S4.60 Series; in 1988, the income tax expense components for the years shown are as Company redeemed 3,000,000 shares, $2.98 Series; and, in follows (in thousands): 1987, the Company redeemed 880,000 shares, $2.72 Series 1989 1988 1987 and 3,000,000 shares, $4,00 Series of 1982. The Company Tanc. currently payable retired 75,000 shares, $4.60 Series and 260 shares, $6.30 (principally Federal): Series in each of the years 1989,1988, and 1987. In 1989, the included in ogerating expenses 8160,o95 $128,139 8 91,585 Included in other income - Company retired 122,023 shares, $7.44 Series. Miscellaneous, net (8,983) (7,840) (9.149) Preferred Stock Eventual Deferred tance Ndemption Prices Current Minimum (principally Federal): QVr Share)~ OYr Share) Included in operating expenses - $7.44 Series $101.00 $101.00 IJberalized depreciation 73,543 65.845 77,078 $6.40 Series 101.50 101.50 - Repair allowance 1,886 3.204 4.927 M30 Series A 110.00 110.00 Allowance for borrowed funds M30 knes B 1m30 10330 used during construction 3,14H 3,036 5.493 4.75 Series 102.176 102.1M - Unbilled revenue (9,o89) (10,655) (12,648) Other (primarily capitalized costs) 170 137 2.764 $436 Sedes 102A7 102A7 Callaway ratc phanc4n plans $430 Series 110.00 110.00 (a) amortization of pdor years. $4.30 Series 105.00 105.00 deferrals (3,527) (34,337) $4.00 Series 105.625 105.625 (' Provisions deferred in prior years (15,338) (18,204) (5,148) 83.70 Series IN.75 104.75 Other (4,561) (7,269) (8,679) 63.50 Series 110.00 110.00 Included in other income - 88.00 Series of 1971 9830 9850 l Callaway rate phasein plans 15E13 $8.00 Series 93.25 93.25 Callaway Unit No.2 costs $6.30 Series (b) 100.00 100.00 disallowed (20,155) C<mtract aquisition expense (13,912) (a) In the event of voluntary liquidation, $105.50. LJberalized depreciation 7,490 7,2N 9,440 (b) The Company is required to retire 260 shares at $100 per share on I ikderred investment tax credits, net June 1 of each year. l Included in operating expenses (7,013) 33,505 57,479 Totalincome tax expense 6181,793 $179.663 $196.338 l l 26

] Note 4 - Preferred Stock Mandatory Redemption the related lease obligation. During the years 1989,1988, Prwisions and 1987, the total interest charges under the lease were i During each of the five years 1990 through 1994, the $17.6 million, $17.0 million, and $15.3 million (based on Company will be required to redeem $26,000 of the average interest rates of 10% 8.2% and 7.6% respectively) of preferred stock outstanding at December 31,1989. which S8.3 million, $7.9 million, and $9.4 million, Note 5 - Debt Retirement Provisions respectively,were capitalized. During the five years from December 31,1989, the amounts Note 7 - Short Term Borrowings cf debt maturities totaling $656,084,000 are: $129,003,000 in Short-term borrowings of the Company consist of bank 1990; $148,289,000 in 1991t $20,684,000 in 1992; loans (maturities generally on an overnight basis) and S'143,574,000 in 1993; and $14,534,000 in 1994. Amounts for commercial paper (maturities generally within 10-45 days), years subsequent to 1990 do not include nuclear fuel lease Information relative to short term borrowings is as follows payments since the amounts of such payments are not (In thousands except rates): currently determinable. 1989 1988 1987 Debt retirement provisions contained in most mortgage smok ion .tye.r end. bond indentures of the Company require, subject to certain Amount outstanding 8 41,000 8 38.Mc $33Joo citernatives, the redemption annually of 1% of the principal cominsite interest rate 9.1% 10.4% 7.6s amount (as defined) of each series of bonds. In substantially all instances, as permitted by the indentures, C*""[$7db"~ * ~ 3 6 20Ao the Company has been following the practice of pledging comimite interest rate 9a property additions in lieu of such redemptions. Note 6 - Nuclear Fuel lease Maximum aggrenste short term horrowings at any month end The Company has a lease agreement which provides for the during the year $204,500 St42A0 SMAO financing of the costs of up to $200 million of the Company's nuclear fuel. Pursuant to the terms of the lease. Average daily short term borrowings the Company has assigned to the lessor certain contracts ""ydl"", d""8, 'h"" ~ y, g 33,g23 g gg,3 g,7g for purchase of nuclear fuel. The lessor obtains, through Weighted composite interest rate 9.6% 7A 6.9% the issuance of commercial paper or from direct loans under a committed revolving credit agreement from commercial banks, the necessary funds to purchase the The above weighted composite interest rates were fuel and make interest payments when due, calculated by dividing the applicable interest expense for the year by the average daily short-term borrowings shown The Company is obligated to reimburse the lessor for all

above, expenditures for nuclear fuel, interest, and related costs' i

Obligations under this lease become due as the nuclear fuel At December 31,1989, the Company had bank lines of credit aggregating $205 million ($164 million of which were is utilized at the Company's Callaway nuclear plant. During 1989, the Company reimbursed the lessor $68.3 million. unused at such date) which make available interim L Durmg 1988, the Company reimbursed the lessor $67.9 financing at various rates of interest, not to exceed prime, milhon and $50 milhon for fuel repurchased from lessor. based on the Ixmdon Interbank Offered Rate (llBOR), the-D irmg 1987, the Company reimbursed the lessor $58.6 bank certificate of deposit rate, or other options, and in l milhon and $85 million for fuel repurchased from lessor. support of which the Company has both written and unwritten agreements with its lending banks to pay annual l The Company has capitalized the cost, including certain fees of 0.125%. These lines of credit are renewable annually l interest costs, of the leased nuclear fuel and has recordert at various dates throughout the year. L l \\ r Y 1 l l-1 27 [ u

Neiss O Masselal #fstemesis (continuca) wasascenic camps r Note 8 - Retirement Mans and Reinted liene6ts For determining the actuarial present value of the projected Th? Company has non-contributory, defined benefit benefit obligation in 1989,1988, and 1987, the weighted retirement plans covering substantially all of its employees. average discount rates were 8.75%,9%, and 8%, respectively. Benefits are based on years of service and the employees' he rate of increase in future compensation was 6% and the compensation during years of employment. ne Company's expected long-term rate of return on plan assets was 8.5% in funding policy is to contribute annually at least the 1989 and 7.5% in 1988 and 1987, respectively, minimum amount required by government funding in addition to providing pension benefits, the Company standards, but not more than that which can be provides certain health cr.re and life insurance benefits for deducted for Federal income tax purposes. Plan assets retired employees. Substantially all of the Company's consist principally of common stocks and fixed income employees may become eligible for those benefits if they securities (includmg $8 milh,on of Company securities at reach retirement age while working for the Company. The December 31,1989), costs of retiree health care and life insurance benefits are Pension costs for the years 1989,1988, and 1987 were recognized on the basis of claims paid. Such costs totaled $19 million, $15 million, and $15 million, respectively, of $9 million, $7 million, and $6 million for 1989,1988,and which approximately 17% in each year was charged to 1987, respectively. construction accounts

• Note 9 - Construction Commitments

%e plans' funded status follows (in millions): ne Company is engaged in a construction program under which expenditures averaging approximately $230 million At Decemtwr 31. are anticipated during each of the next five years. 3939 3933 39p Actuadal present value of tenent obligationn: Note 10 - Contingencies Vested tenent obligation 6(377) $(329) S(324) he Company's insurance coverage for its Callaway plant is as follows: Accumulated benent obligation 8(404) $(353) $(359) y nsurance cmap o@ mEon p Projected tenefit obligation for service vided by American Nuclear Insurers (ANI) and rendered to date 6(538) $(420) $(445) Plan annet at fair value 534 503 448 Mutual Atomic Energy Liability Underwriters (penciency) r.xce of plan. ete ver.u. (MAELU). projected benent obliantion (4) 83 3 Unrec wnhed net (gain) or lo== (77) (91) (11) Excess property insurance of $975 m.dlion pro-Prior nenice co : not yet recognised in net vided by Nuclear Electric insurance Limited pedodic pennion cat too 28 26 (NEIL), a mutual insurer established by the Unrecognised net annets at transition (Id) (15) (16) utility industry. Under this policy, the Company Prepaid pension cost 8 5$ 5$ 2 could be subject to a maximum retrospective premium assessment of $7.4 million in any one Effective January 1,1989, the Company amended its policy year if NEIL's property losses exceed principal retirement plan to change the benefit formula to available funds. r flect final average pay. This amendment increased the Excess property,msurance of $560 million pro-tecumulated benefit obligation and the projected benefit vided by ANI and MAELU. obligation by $18 million and $62 million, respectively, A Master Worker Policy issued by ANI and Pension costs include the following components MAELU with an aggregate limit of $200 milhon (in m.lh.ons): i for the nuclear industry as a whole to cover claims M woders as a resuh of radaqn Senice not - benents carned dudng the pedod $ 15 $ 13 $ 14 exposure on or after January 1,1988. Under this Interest coat on projected benent obligation 43 35 31 Actual return on pian anneta (43) (66) (21) Net amorthation and deferral 4 33 (9) { Pension coat 6 to $ 15 $ 15 0 28

F' t b policy, the Company could be subject to a and operating costs that, in turn, could require the maximum retrospective premium assessment of Company to request substantial rate increases. S3A milHon. As of December 31,1989, the Company was designated a Accidental outage replacement power cost potentially responsible party (PRP) by federal and state insurance provided by NEIL Thereunder, the environmental protection agencies for three hazardous Company is insured for up to $1.7 million per waste sites. Other parties have also been designated a PRP week for the first year, commencing 21 weeks for these sites but the extent of their participation has i after initiation of the outage; up to $1.2 million not been determined. Other hazardous waste sites have per week for the second year; and for up to been identified for which the Company may be responsible $0.6 million per week for the third year. Under but has not been designated a PRP. The Company is this policy, the Company could be subject to a presently investigating the remedial costs that will be maximum annual retrospective premium assess-required for all of these sites. However, such costs are ment of S2.6 million. not expected to have a material adverse effect on the The Atomic Energy Act, as revised August 1988 by the Company's financial position. Price Anderson amendments, covers liability to third The Company is involved in legal and administrative i parties for a nuclear incident and currently limits such proceedings before various courts and agencies with liability to approximately S7.4 billion for each nuclear respect to matters arising in the ordinary course of incident. Coverage of the first $200 million of liability is business, some of which involve substantial amounts. provided by ANI and MAELU. %e balance is provided by Management is of the opinion that the final disposition of utility industry retrospective assessments. De Company's these proceedings will not have a material adverse effect on maximum potential assessment under this plan would be the Company's financial position. $63 million per incident payable in annual installments of Note 11 - Callaway Nuclear Plant not more than $10 million. Additional 1y, if the sum of all in early 1985, the Missouri Public Service Commission public liability cla,ms and legal costs an,smg from a nuclear i (MoPSC) authorized a $455 million increase in annual incident exceeds the amount of primary and excess electric revenues for costs related to Callaway Unit No.1. coverage in force, the Company can be assessed an additional $3 million. nat increase was to be phased in over a six-year period. (In early 1987, the MoPSC reduced the final four annual rate To the extent that any losses arising from a nuclear incident increases, from 7.3% to 4.6%, to reflect expected income tax at Callaway plant exceed the limits of, or are not subject to, expense reductions from the Tax Reform Act of 1986.) He insurance, or to the extent such insurance becomes first year increase, effective April 1985, was $149 million unavailable in the future, the Company may retain the risk (15%); the increase in the second year, effective April 1986, of loss as a selfinsurer. Although the Company has no was $112 million (10%); the increase in the third year, reason to anticipate a serious nuclear incident at Callaway effective April 1987, was $57 million (4.6%); to be followed plant, if such an incident did occur, it could have a material by annual increases of 4.6% in each of the next three years, but presently undeterminable adverse effect on the totaling $189 million. Company's financial position. In April 1987, the Staff of the MoPSC and the Office of Irgislative proposals are pending in the US. Congress that Public Counsel of the State of Missouri filed complaints expressly seek to control acid deposition in the eastern against the Company with the MoPSC alleging that the portion of the United States. If any of these proposals Company's return on its investment had become excessive, become law, significant reductions in the emissions from On December 21,1987, after conducting hearings, the the Company's various fossil-fuel generating plants could be MoPSC issued an order in response to the complaints. He required. These reductions could entail substantial capital order eliminated the S189 million of scheduled revenue increases and instead authorized a single revenue increase 29

1 3 Estas D Maascial Stefassets (continueo adsane* cmyser j of $5.6 million effective December 31,1987 In addition, the Callaway plant decommissioning costs are estimated to be order effectively prevents the recovery of $23 million of $170 million in current year dollars. Electric rates charged deferred costs accumulated under the Missouri rate phase-to customers provide for recovery of decommissioning in plan, As a result, the Company charged $23 million costs over the life of the Callaway plant. Amounts so ($.23 per share) to expense in 1987, ('Ihe order provides collected from customers are deposited in a trust fund i that the remaining $159 million deferred cost balance at which has been established to provide for decommissioning ( December 31,1987, applicable to Missouri be recovered in costs. At December 31,1989, $18 million was on deposit in rates over the five years 1988 through 1992.) the decommissioning trust fund. Effective during 1985, the Illinois Commerce Commission, Note 12 - Supplementary Information the Iowa State Utilities Board, and the Federal Energy chousands ot Dollars) 1989 1988 1987 R:gulatory Commission authorized rate phase-in plans e comparable to those ordered by the MoPSC in 1985. Mainienance d n,p.ir., chared During 1988, the Company obtained long term power ,tfeb expenses $156,220 $162,977 $158.908 supply contracts with certain of its wholesale customers. Other accounts (a) 10.863 10.749 9,674 As a condition of such contracts, the Company will not s167.osa s173.726 sis 8.sB2 ( recover $29 million ($15 million net of tax) of phase in plan o,pr,ci ison, depiction and deferred costs applicable to these customers. As a result, amortisselon or aned and incansible the Company charged $15 million net of tax (S.15 per anects, charyd directly tot i Operating expenses 6223,290 $224,396 8158.988 share) to expense in 1988. Other accounts (a) 4.508 4.148 3,746 In 1981, the Company canceled construction of Unit No. 2 8227,798 8228.544 81s2,734 at its Callaway plant. In March 1989, the Missouri Supreme Tanea, other than parruu and Court refused to hear an appeal of a MoPSC order that lacam'88

• charrd d a'e#rt" Uj,,ji,',,[dYnionalproperty 7*

6 79,889 6 79.098 $ 79,306 denied recovery of Callaway Unit No,2 costs applicable to the Missouri Junsdiction. As a result, in the first quarter ucense and franchi* 95,270 95.608 91,490 of 1989, the Company wrote off $50 million ($30 million Miseenancous i,743 2.21s 2.409 net of tax or $.30 per share) of the recorded asset related to 176,908 176.919 173.205 I the portion of Callaway Unit No. 2 applicable to the other account. 4,117 3.es0 3.394 MI:souri jurisdiction. Recovery of Callaway Unit No. 2 $181,025 $180,769 $176.599 costs applicable to other regulatory jurisdictions ($4 million at December 31,1989) is presently reflected in rates. (a) A substantial portion of a nounts charged to other accounts is Under the Nuclear Waste Policy Act of 1982, the U. S. (b) t f T 1taxe i the yem1989 and 1987 were Department of Energy (DOE) is responsible for the 618,909,000,818.089.000. and 817.069.ooo. respectively. permanent storage and disposal of spent nuclear fuel. DOE (c) lhe amounts of royalties and advertising costs were not material. currently charges one mill per kilowatt-hour generated for (d) Total Interest paid (net of amount capitalized) in 1989,1988, and 1987 = was s177 mnHon, $179 mHHon, and S202 mHHonJesgu*ely. future disposal of spent fuel. Electric rates charged to (e) Totalincome taxes paid in 1989.1988, and 1987 were $148 million, customers provide for recovery of such costs. $104 million, and $87 million, respectively. i ( 'Ihis report and the financial statements contained herein are submitted for the information of the stockholders of the Company and are not intended to induce, or for use in connection with, any sale or purchase of any securities of the Company. 30

r 3 L Responsibility for Flanacial Statements De management of Union Electric Company is responsible for the information and representations contained in the financial statements and in other sections of this Annual Report. The financial 5-statements have been prepared in conformity with generally accepted accounting principles. Other [ information included in this report is consistent, where applicable, with the financial statements. De Company maintains a system of internal accounting controls designed to provide reasonable assurance as to the integrity of the financial records and the protection of assets. Qualified personnel are selected and an organization structure is maintained that provides for appropriate functional responsibility. Written policies and procedures have been developed and are revised as necessary. De Company maintains and supports an extensive program of internal audits with appropriate management follow up. De Board of Directors, through its Auditing Committee comprised of outside directors,is responsible for ensuring that 1oth management and the independent accountants fulfill their respective responsibilities relative to the financial statements. Moreover, the independent accountants have full and free access to meet with the Auditing Committee, with or without management present, to discuss auditing or financial reporting matters. i 1 Report ofIndependent Accountants One Boatmen's Plaza Telephone 314 425 0530 St Loms.MO 63101 Price iIhierhouse To the Stockholders and Board February 5,1990 [ of Directors of Union Electric Company in our opinion, the accompanying balance sheet and the related statements ofincome,long-term debt, preferred stock, retained earnings, other paid in capital, and cash flows present fairly, in all material l respects, the financial position of Union Electric Company at December 31,1989 and 1988, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1989, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obta.'n 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 fimancial statements, assessing the accounting principles used and significant estimates made by i management, and evaluating the overall financial statement presentation. We believe that our audits f provide a reasonable basis for the opinion expressed above. n w' arch 31

i SelecteUlanncialIntennetlen nuesamoucampani j (Thousands of Donars Except Shares and Per Share Amounts and Ratios) ) 1989 1988 1987 1986 C Results of Operations Operating revenues $2,010,306 $2,029,107 $1,946,411 $1,807,182 Operating expenses 1,543,830 1,544,953 1,457,957 1,287,572 Operatingincome 466,468 484,154 488,454 $19,610 Callaway rate phasein plans 227 2,408 92,791 59,861 (23,169) Deferred costs disallowed 1 Callaway Unit No.1 costs disallowed, net loss on cancellation of Callaway Unit No. 2, net (30,196) Allowance for allfunds used during construction 17,908 14,885 20,477 15,812 Miscellaneous, net 7,769 (10,648) (15,714) 3,947 Interest 176,571 199,241 228,961 247,409 Netincome 285,605 291,558 333,878 351,821 Preferred stock dividends. 19,134 30,425 36,522 49,245 Earnings on common stock 266,471 261,133 297,356 302,576 Average common shares outstanding 102,123,834 102,123,834 102,123,834 102,123,834 Assets, Obligstions, and Equity Capital 0' ear End) Total assets $5,760,322 $5,827,246 $5,957,811 $5,895,211 Long-term debt obligations 2,106,776 2,188,614 2,357,615 2,436,092 IYeferred stock subject to mandatory redemption 806 60,832 64,608 165,384 Preferred stock not subject to mandatory redemption 227,582 279,784 354,784 354,784 Conunon equity 1,954,481 1,895,360 1,837,156 1,743,189 Financial Indices Earnings per share of common stock (based on average shares outstanding) S2.61 $2.56 $2.91 $2.96 Cash dividends per share of common stock $2.02 $1.94 $1.92 $1.86 Return on average common stock equity 14.03% 14.08% 16.79% 18.16% Ratio of ecrt.ings to fixed charges (a) 3.63 3.35 3.30 2.79 Book value per common share S19.14 $18.56 $17.99 $17.07 Capitalization Ratios O' ear End) Common equity 45.6% 42.8% 39.8% 37.1% Preferred stock not subject to mandatory redemption 5.3 6.3 7.7 7.6 Preferred stock subject to mandatory redemption 1.4 1.4 3.5 / long-term debt 49.1 49.5 51.1 51.8 100.0% 100.0% 100.0% 100.0% (a) Earnings used in computing the ratio of earnings to fixed charges consist of net income plus fixed charges (interest and an appropriate amount of rentals charged to operating expenses) and income taxes. 32 i

h h t I 1985 1984 1983 1982 1981 1980 1979 i $1,591,763 $1,412,414 $1,401,086 $1,217,705 $1,105,536 $1,077,876 $946,797 1,173,187 1,172,128 1,160,816 1,013,054 922,647 886,720 780,331 418,576 240,286 240,270 204,651 182,889 191,156 166,466 74,631 (234,780) 1 (28,469) .p 106,754 329,669 - 251,307 198,093 155,625 92,055 58,093 (1,709) 1,619 2,509 2,364 (787) 3,638 879 254,320 247,308 - 218,530 200,554 180,312 131,725 106,995 109,152 324,266 275,556' 204,554 128,946 155,124 118,443 49,836 50,185 46,118 40,344 29,863 30.082 27,336 59,316 274,081 229,438 164,210 99,083 125,042 91,107 100,403,016 96,574,699 86,744,282 76,251,024 67,179,275 59,675,995 ~ 52,577,432 $5,738,620 $5,819,996 $5,146,666 $4,573,783 $3,992,742 $3,552,104 $3,168,998 2,454,687-2,457,381 2,108,047 2,000,405 1,719,927 1,479,229 1,307,990 173,160 178,936 180,962 182,988 110,014 112,040 114,066 354,784 354,784 354,784 279,784 279,784 279,784 279,784 1,630,466 1,695,239 1,52S 188 1,299,814 1,135,826 1,045,120 931,946 $0.59 $2.84 $2.64 $2.15 $1.47 $2.10 $1.73 $1.78 $1.72 $1.66 $1.58 $1.52 $1.48 $1.44 3.81% 17.23% 16.79% 14.17% 9.46% 13.11% 10.71% 1.14 2.88 2.89 2.49 2.00 2.85 2.62 $15.97 $17.10 $16.12 $15.40 $15.19 $15.81 $15.85 l l 35.3% 36.2% 36.6% 34.5% 35.0% 35.8% 35.4% 7.7 7.6 8.5 7,4 8.6 9.6 10.6 3.8 3.8 4.3 4.9 3.4 3.9 4.3 53.2 52.4 50.6 53.2 53.0 50.7 49.7 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 33

e SelectedQuarterlyInformation neeuwe caemy Ghousands of Dollars Except Per Share Amounts) ( Earnings Earnings on Per Share j Operating Operating Net Common of Stock Revenues income Income Stock Outstanding Quarter Endedt March 31,1989 6449,390 S 78,808 S 36,058 8 30,328 S.30 March 31,1988 463,737 95,712 48,330 39,853 .39 June 30,1989 490,312 111,731 65,571 60,265 .59 June 30,1988 486,357 118,938 74,798 66,321 .65 September 30,1989 618,775 185,716 137,952 133,412 1.31 September 30,1988 656,780 194,230 146,336 139,020 1.36 December 31,1989 451,829 90,213 46,024 42,466 .41 December 31,1988 _ 422.233 75,274 22,094 15,939 .16 The writeoff of the recorded asset related to the portion of Callaway Unit No. 2 applicable to the Missouri jurisdiction decreased net income and earnings on common stock by $30 million (S.30 per share) in the first quarter of 198tt The favorable resolution of several tax matters increased net income and earnings on common stock by S20 ndtlion (S.20 per share) in the first quarter of 1989. Expenses related to the acquisition oflorg-term power supply contracts decreased net income and earnings on common stock by $4 million (S.04 per share) in the third quarter of 1988, and by $11 million ($.11 ger share) in the fourth quarter of 1988. Conunen Stock Prices andOlvidendsm 1 1989 Price Range 1989 1988 Price Range 1988 liigh low Dividendsm Quarter Ended liigh low Dividends P r Share: 824 W S23 500 March 31 $25 $213/s 480 26 W 23 3/4 50 June 30 243/s 213/4 48 27 3/4 26 % 50 September 30 237/s 21 1/2 48 28 % 26 52 December 31 25 233/s 50 (1) At December 31,1989, Uniou Ekttric Company common stockholders totaled 133,638. (New York Stock Exchange symbot UEP.) ( (2) At December 31,1989, retained earnings totaled $726,905,000; under the Company's amended mortgage indentures, $57,115,000 ") - of total retained earnings was restricted against payment of common dividends - except those payable in common stock. W i 34

OperatingStatistics swenancmesnarenv 1989 1988 1987 1986 1985 Electric Operating Revenues (000): Residential 8 757,139 $ 778,121 $ 749,786 $ 681,002 S 572,423 Commercial 668,796 659,075 628,067 580,323 501,913 Industrial 411,614 403,837 393,597 373,196 335,576 Other electric utilities 64,262 70,133 71,160 63,428 56,078 Miscellaneous 28,073 27,130 26,867 24,731 2't,267 Total Electric Operating Revenues 81,929,884 S1,938,296 $1,869,477 $1,722,680 $1,489,257 Kilowatt Hour Sales (000,000): Residential 9,724 9,957 9,585 9,283 8,844 Commercial 10,142 10,009 9,581 9,306 8,823 Industrial 8,605 8,417 8,217 8,073 8,038 Other electric utilities 1,534 1,501 1,487 1,450 1,430 Miscellaneous 141 139 138 145 160 Total Kilowatt Hour Sales 30,146 30,023 29,008 28,257 27,295 Electric Customers (End of year): Residential 951,154 941,673 929,776 916,261 901,777 Commercial 119,307 117,333 114,858 111,322 109,099 Industrial 6,714 6,576 6,569 6,595 6,333 Electric utilities 21 21 21 21 23 Other 1,588 1,569 1,548 1,498 1,410 Total Electric Customers 1,078,784 1,067,172 1,052,772 1,035,697 1,018,642 Residential Customer Data (Average): Kilowatt hours used 10,289 10,615 10,390 10,227 9,901 Annual electric bill $801.14 $831,91 $812.73 $750.24 - $641.02 Revenue per kilowatt hour 7,79c 7.820 7.820-7.340 6.470 Gross Instantaneous Peak Demand (Kilowatts) 7,210,000 7,340,000 7,255,000 6,810,000 6,335,000 Capability at Time of Peak, including Net Purchases (Kilowatts) 8,255,000 8,028,000 8,236,000 7,955,000 8,231,000 Generating Capability at Time of Peak (Kilowatts) 7,837,000 7,791,000 8,040,000 8,031,000 8,097,000 Coal Burned (Tons) 10,711,000 10.876,000 10,245,000 9,961,000 10,126,000 Price per Ton of Coal 833,12 S35.25 837.31 S37.01 S34.79 35 l

ONicersandDirectors i Of6cers Board of Directors William E. Cornelius James J. Heisman 'J. A. Haer il Cha!rman and Vice President-Customer Service Management-Business Consultant. Chief Executive Officer Former Chairman and Chief Executive o Donald W. Capone Officer-Stix. Baer & Fuller. Earl K. Dille Vice President-Engineering and President Construction

• Marguedte Ross Barnett
• Chancellor, University of Missouri -

Donald E. Brandt William J. Carr St. louis. Senior Vice President-Vice President-RegionalWest Finance and Accounting Sam H. Cook G. J. Haven Chairman-Central Bancompany and Charles A. Hremer Vice President-Research and its subsidiary, Central Bank, which Senior Vice President-Development conducts a general banking business. Technical Services.

• William E. Cornelius William E. Juudes Charles W. Mueller Vice President and General Counsel Chairman and Chief Executive Officer Senior Vice President-Administrative Services R. Alan Kelley
• Earl K. Dille Vice President -Energy Supply President Robert O. Piening Senior Vice President-Herbert W. loch -
• Charles J. Dougherty Power Operation 8 Vice President-Human Resources Former Chairman and Chief Executive Officer Ikmaid F. Schnell H. G. Meyer Senior Vice President-Vice President - Information Services

'!homas A. Hays Nuclear President-The May Michael J. Montana Department Stores Company. Charles J. Schukal Vice President - Industrial Relations a nationwide retailing organir.ation. Senior Vice President-Customer Services William A. Sanford ' John Peters MacCarthy Vice President-Supply Service Chairman and Chief Executive Officer-Boatmen's Trust Company,. . hich conducts a general trust Robert J. Schukal w Vice President-Power Plants business. William C. Shores

• Harvey Saligman Vice President-Regional East Chairman of the Board-INTERCO INCORPORATED, Jerrel D. Smith a manufacturer and retailer of footwear Vice President-Environmental and furniture.

Services

• Stewart W. Smith, Jr.

II. E. Wuertenbaccher, Jr.

• Former Vice Chairman Vice President - Public Relations Ronald C. Zdeltar I

Vice President-Transmission and Isaac H. Grainger Distribution Former President-Chemical Bank. Joseph M. Pfeifer i Controller i

• Member of Executive Committee James C. ~ thompson
• Member of Auditing Committee Se retary L A. Esswein Treasurer 36 d

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