ML20083P858

1983 Annual Rept

ML20083P858
Person / Time
Site:	Wolf Creek
Issue date:	12/31/1983
From:	KANSAS CITY POWER & LIGHT CO.
To:
Shared Package
ML20083P838	List: ML20083P837 ML20083P849 ML20083P858
References
NUDOCS 8404200221
Download: ML20083P858 (34)

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Supplementary financial Information 27,28 Stockholder Information 29 Eleven year Summaries of l'inancial and Selected Statistical Data 30,31 lloard of Directors and Officers 32

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1

=INANCIAL AND STATISTICAL HIGHLIGHTS Percent increase 1983 1982 (Decrease) hal operating revenue (000s) $ 562,543 $ 485,629 15.8 Eamings available for common (000s) $ 104,911 $ 62,748 67.2 hverage number of shares 25,278,388 22,510,368 12.3 hr common share:

Earnings f 4.15 $ 2.79 48.7 Dividends $ 2.17 $ 2.01 8.0

llookvalue $ 23.53 $ 21.96 7.1 Net AFDC* $ 3.03 $ 2.50 21.2 Dividend payout (%) 52 72 (27.8) nstruction expenditures (000s) $ 182,547 $ 153,160 19.2

' xal utility plant in service (000s) $ 1,362,537 $ 1,321,085 3.1 nstrudion work in progress (000s) $ 959,423 $ 709,963 35.1 Retum on year end common equity (%) 15.7 11.7 34.2 Capitalization (% total)

Common equity 39.5 36.0 9.7 j Preferred and preferencestock 12.7 14.7 (13.6) inng term debt 47.8 49.3 (3.0)

Selected Statistics Kihnvatt hour sales (000s) 8,736,379 8,072,030 8.2 Peak krad-summer (kw) 2.324,000 2,167,000 7.2 Peak had-winter (kw) 1,435,000 1,315,000 9.1 l Fuel mix (%)

Coal 97.2 96.0 1.3 Oil .7 .7 -

Natural gas 2.1 3.3 (36.4) l Averaj$ fuel cost ($/million Bru) $ 1.535 $ 1.389 10.5 l Numberofemphyyees 2,939 2.957 ( .6)

Number of stockholders 53,445 50,018 6.8 kAlknvance for funds used during construdion net of associated deferred income taxes.

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' 1983 OBRIEF

• Earnings increase 49% to $4.15

. Industrial comeback and temperature extremes txxist kwh sales 8.2%

' . Three.for two common stock split implemented

! . Wolf Creek passes 92% completion mark

. Inng range plan modifications refled new krad forecast and generating reserve margins

! . Electric rates increase 12% in Kansas and 7.5%

in Missouri

. . Steam sales expeded to triple under contrad with CPC Intemational

. . Generating unit availability and performance

, impmves, maintenance expenses decrease

TO 00R SHAREH0LDERS ror our Company 1983 was a year of record but we still expect to complete its construdion for operating results, customer usage and peak kuds. commercial operation in the spring of 1985. Ifow.

For Kansas City, mid year 1983 marked the begin- even in view of the numerous and diverse problems ning of a long awaited economic reemery and a currently impacting nuclear units, no assurance can promising future of urban revitalization and com- tw given that Wolf Creek will be immune from fur.

mercial gmwth. ther delay in its construdion, licensing and operatici KCPL's per share camings were $4.15, based on 1here are se eral pwitive factors favorable to 25.3 million average shares outstanding, up from Wolf Creek. Its standardized SN1'PPS design tus pro-

$2.79 on 2.8 million fewer average shares in 1982. vided important economies in engineering, pur.

Respective contributions from net AFDC were $3.03 chasing and construdion; its presently estimated and $2.50. In August, the 1kurd increased the com- installed cost of about $2,300 per kilowutt to KCit mon dividend to $.L24 per share on an annual lxwis is lower, and its exgwwed cip,ht year ain .rnrtion It was the 24th increase in 26 years. These camings period is signincantly less, than current industry and dividends reded the three for two split of the experience on average. After intensive world-wide Company's common stock in October 1983 e uluations of safety, reliability and economy, our 1btal kiknvatt hour sales, flat till mid year, surged SNUPPS design was selected by the l'nited King-to a record 8.7 billion for the yeat up 8.2% Resi. dom's Central Electric Generating Ikurd for its pro.

dential sales climbal 14.3% responding to high posed Sizewell unit in SulTolk, England, its first residential construdion and prolonged temperature pressurized water nuclear reactot extremes in August and Decembet Commercial sales Wolf Creek will diversify KCPI's current fuel mix nwe 4 8% and a tumaround in industrial production, of 97% coal, 2% gas and 1% oil. Our dependence kxl by increased steel manufacturing and automo- on coal will be reduced to about 70% as Mblf Creek bile and truck assembly, was responsible for a 4.1% initially provides some 27% of our annual energy l gain in industrial sales. needs. Ihat diversi0 cation would have been a bless.

In August, our system met a new peak demand ing during the la3t 16 days of 1983, the coldest l of 2,32 4 mw, up 7.2% over the 1982 peak hud and December in the recorded history of our area, when 5.7% over the prior record summer peak in 1980. prolonged sub zero temperatures froze coal piles, Also, a new winter peak of 1,435 mw was established transportation and handling eqcipment, and unit in Decembec up 9% above the prior record winter trains on broken tracks. This critical situation nearly peak in 1979 stran< kxl KCPL and other neighboring uulities Since the lhree. Mile Island accider t in 1979, derwndent upon Powder River liasin coal. With out.

there has been a gnnving omcern alx>ut the con- standing ax)peration from other businesses and a strudion and operation of nuclear eledrie generat- dedicated effort by all our emphiyees, including ing units. In reccnt months that concem has been transmission and distribution personnel who loined kindkd by rep >rts of cancellations of nuclear units with pwver plant emphryces in the successful Oght lxxh planned and under construction, assessment to keep our pnver plants operating, we were able to of Ones by the Nuclear Regulatory Commission for keep Christmas wurm and bright for our customers failures to adhere to strid construdion and operating and fumish emergency electric energy to other regulations and procedures, delays and a denial sp,tems threatened with curtailment to their cus.

of operating licenses of nearly completed units. tomers. Also, we h)ok forward to the completion of Financial distress of utilities because of construdion Wolf Creek which, in the future, will offer our cus-and licensing delays lus resulted in increased com- tomers a degree of proteolon from cscalating coal pletion awts and attendant " rate shock" to cus- mine and transportation c wts and from the potential tomers. There also have been adverse legislative owtly effects of acid rain legislation now pending responses to these and other industry problems. All before the Congress.

of these fadors have evoked and fostered a more in Missouri and Kansas, state law lus prohibited hostile anti nuclear attitude throughout the nation. rate base inclusion of our Wolf Creek construdion We estinute tlut our Wolf Creek nuclear unit work in progress. KCPils 47% ownership slure of at !!urlington, Kansas, is about 92% complete. In Wolf Creek, or $41 mw, is now estimated to cost Novembec its estimated a>st was raised to $2.67 bil- $1.25 billion, including alx>ut $399 million of Al1)C, lion (including AmC) tused on targeted comple- lused on February 1985 completiott As commercial tion and commercial operation in February 1985. operation of Wolf Creek nears, its potential for a sub-This is a very tight schedule. A unit milestone fus stantial rate increase-about 50%-has drawn pub-been met with successful completion of the primary lic amcem. In February, KCPils ikurd appmved a cold hydro test -which was some six weeks late, " phase in" of the rate increase required upon com-2 indicating that such schedule may not be achievable, pletion of Wolf Creek to help minimize customer

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fhe recendy testered a s Q m folly Theatre sad

rate shock." We will propose to the Missouri and ,. i me new vists latersetlesel sas Commissions in rate filings later this year , N "

1. etet W4 Owstme an attemative to the full amount of the increase t 'g ,,, j $

lequired, an initial increase of about one half of the N tecterW sssets. TAe fesg.

btal, with the balance, including carqing charges on w raspe pIse ewisless he deferred portions, to be made etTettive in three earschis: Dewstews's y

1. sence cesace cenert nnual automatic steps. """# ### #"

l With completion of Wolf Creek, KCPL will enjoy p respite from decades of maior construction work

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Arther J. Oeyfe n progress. During 1983, our Company planners and .  !

lur 17 member Citizens Advisoy Planning Group g estudied our long range system requirements . . ,

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hrough 2002 and recommended modifications . _

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n our KCPIAN adopted in 1981. h( ')

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Our new KCPIAN 83 was approved Ivf the Ikurd ' ,_ . ._

n February 193L lt confirms the strategy of the -

CCPIAN and demonstrates its inherent flexibility by

'esponding to a reduction in an unmanaged average mnual peak load gnmth from 2.8% to 2.1% during f

T . M he forecast period through 2002. [ ,4 ^

As adopted, KCPIAN 83: M

. further reduces, through kud management, average peak hud growth from 2.1% to 1.5%;

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. cancels a 325 mw share of new, coal fired

• generating capacity originally scheduled for i 1994 and defers a similar 325 mw share from 1998 to 2001;

. reduces ccpital requirements by approximately executive director of the Urban Icague of Kansas

$1 billion from a conventional system expan City, and Linda I k>od Talbott, executive director of i the' Clearinghouse for Midcontinent Foundations.

. n em had fador from a current 46.2% to 59% in 2002, with an achievable 1%

I" ddition to our improved kiknvatt-hour sales, ther .indicators point to Kansas City's economic re-redudion in electric rates for each one per-ang e ama's unemploynwm rate in Deamba centage point impnnement in hud factor was 6%, well beknv the nanonal average and an KCPIAN 83 delays implementation of, but con- impnnement from 8.2% in 1982.The rate ofinilation tinues to emphiy, hud management techniques, sea- measured by the December 1982-1983 increase in sonal diversity interchange arrangements and exist- the Kansas City Consumer Price Index was 4.3%, the ing unit rc habilitations, all to assure reliable electric knvest year to-year increase since 1972.

service to our customers on a least-cost basis. The lhe Kansas City metropolitan area is in the midst flexibility of our KCPIAN and i:s biannual updnting of the greatest concentration of commercial devel will assure continued response of KCPI's system opment in its history, including a massive revitaliza-expansion to economic, social and regulatory tion of its downtown district. Iargely financed by ch.:cges. private capital, the array of projects to be completed 1he Company's cash a>nstruction program, through 1985 and on drawing b(urds for the future, excluding nuclear fuel, is estimated at $225 million by some reports exceeds $1.5 billion. A review of for 1941, as Wolf Creek constru tion is brought to an these a(thities is contained in the special report, end. Thereafter it will dwindle d<nvn from an esti. "A Kansas City Renaissance," on the folknving pages. .

mated $85 million in 1985 to $60 million in 1988.

At the annual meeting in April, shareholders March 1,1981 ,

amended the Articles of Consolklation to permit the For the ikurd of Directors size of the ikurd to be changed pursuant to the Ily- i

' laws, without specific shareholder action. The ikurd {"

was enlarged frn't nine to 11 members and two new  %

directors along with nine inIumbents were elected. ( J New members are William iI. Clark, president and Chairnun of the Ikurd and President 3 l

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a i y y']m , 1 M A KANSAS CITYRENAISSANCE

4"k71 y@ny j Kansas City's modern skyline began taking

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shape in the 1930s.

There were other times

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win u i. r- ,. j of exciting gnmth in r- ~ ?."'"' *i w-the late sixues and early I

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seventies. Ilut, these

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l periods were no match h

' .*.ZZZ J for the unprecedented r l commercial expansion [m .Zpi

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aia and growth now taking place. Call it a rebirth.

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Iletter yet, call it a j~ w.

renaissance for this city 7,]g with multistate focus  ! W.g r

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in ,wn,,j serving a metropolitan .L3 ggi ' g g*

population of 1.3 3lC , g-11 t gnming list of my .

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major projects recentiv 7] ' h;W j ajMJ .

completed, underway or targeted fi>r the near - ~

future now exceeds an Much of the visionary town area provides both llancshares' $25 million estimated $1.5 billion. core area devehpment worl, space and suitable bank building and a About one third of this work fulfills guidelines living accommodations. proposed future tmver investment will strength. of"thmntown 2000," a Thc most ambitious expansion: Twelve en the ihmutown area. long range blueprint fi>r projet: is a $155 million Wyandotte Plaza, a $34 Other projects are urban revitalization by region d headquarters million development j spread across the the the Kansas City Rede- and retail complex now of Executive flills, Inc.; ,

midtown corridor, the vehpment Authority being built by American an $11.2 million con-nationally recognized and Ihmntown Coun- likphone & Tele- version of the fi>rmer Country Club Plaza, and cil, adopted in May 1983 g aph Company. The 1.2 Ilotel Continental by omce park environ. after twu years of stu ly nullion sq ft. project's Mark 'lwain llancshares; ments of the south This Concept Plan centerpiece is a bhick and a $ 40 million,19-suburbs. buikts upon existing x ure,38 story omce story omce tower, retail l Ihmutown strength as buikling, and six story arcade and parking I an employment place retail center n>tunda complex by Commerce for 100,(XX) peopic, pro with access atriums and llank, with skymdk i; ' -

jecting devehrment of pedestrian bridges to links to the bank's two I

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new and refurbished existing retail areas. A other major Ihmutown 5 fadlities for financial, nine story,2,200 car properties.

.a commercial office, parking garage will 'lhere are several

/$  %. retail, cultural and vis- be constructed on an Ihmutown targets fi>r 9 itor activities. 'this plan adjacent bhick.

• restoration. An urban, identifies underutilized Also underway are eclectic neighborhomi

! 1 -[ clusters of paperties. It the Vista International of townhomes, apart-I J- establishes priorities fi>r lhitel, scheduled for ments and professional g **gV redevehyment into productive assets. It completion in 1985, and four important Ih>wn omces is planned fi>r

~g Quality Ilill on the west calls attention to reha- own office buildings side. Several " loft" bilitation opportunities with combined space buildings in the fi>rmer in mature neighbor of almost 1.7 rnillion garment district are hoods. It recognizes spure feet. These in under reconstruction or that a thriving down. clude United Missouri being considered fi>r 4

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, , w .g5 f large, open apartments center and hotel utive Ilills, Inc. and the Financial Plaza. Three

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. with combined living' development.

j working quarters. Kan- Beyond this, the other hotel devek>p- P

, sas City's original com- litany of projects ments including the [ . ~ e-

mercial distria, now becomes a blut in the $30 million,404-room e 4 -~+

Ntarriott and $17 million a j called the N1arket Area wo(xled, rolling hills of &

l and h>cated between the Alissouri and Kansas Granada Royale, will

the freeway h>op and metropolitan suburbs to bring the south suburbs

the Stissouri River to the south, contempor. hotel total to six.

i the north, otters prime ary office parks domi. 51easured by millions

redevelopment oppor- nate with elegant work of square feet of con-tunity As a focal noint, space and carebily struction or dollars of

the 51itchell, a retired planned emironments investment, corporate i steam-powered paddle Some are huge. With commitment or com-j wheel riverboat, is the completion of two mercial vitality, these l being converted into a more buildings in 1984, unparalleled metropoh- -

river museum and din. Corporate hxis will tan deveh>pments, con- y

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' ing facility have finished 20 of 29 sidered altogether; are  :

Alajor projects in the planned structures. The pnwiding an acceler- " "

south perimeter include first phase of the 600- ated boost to Kansas

a proposed 22-acre, acre Renaissance Office City's economic recov' lenges and sales poten-

$130 million Central Complex is now under- ery. For KCPI, the tial. Some 10% of the Square office campus, way There are major impressive scenario additions will have dis-parking and hotel. The developments by Exec- means senice chal- trlct steam sen-ice and 85-acre Cmwn Center . _ ... ,,r m.3 more than half will have 4

complex of Ifallmark d all-electric designs. The

, Cards, Inc. is about half I bottom line is more 4

finished and the next elTicient year-round project includes two usage of the electric connected office towers system, enabling the i which will double

• gnmth to benefit all

! office space to 1.3 mil- ~m " "M KCPL customers.

! lion square feet. I'nder W .y. ,

1 mi i construction nearby is a 4

the $37 million,365.000 --

Em l 1 sq. ft. Pershing Grand  :;;;;;;; i ledwise.Irem top E ""' left: ATaT 0#lse Associates lluilding by m aneum l

1. # I'- ##8' 8'# I*N Slutual llenefit Life Insurance Company.

V f Nummeim semplex. 'sdedeled Ier complettes le 1986: Os/ led htore than 1.5 million a acecz misseers sed-first 5 paese. 250.000.sg. fr. of square feet of otTice m:asamu , ,

88d additions have been Eng[ , ,p,, pl,"g; i announced for the se % ez commerce sed seIM-

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' Country Club Plaza, ll is,_ Jg.sierpt 378.000-

' mainly concentrated in en r ,, El If It i u sg.11. rell/s##se semples serierter ersede i

two, four phase pra leds. The initial expan-sion is underway for the M

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flare-350.000-sg. #

Kansas City Ik>ard of II [I] 18- e#fses and 50.#.

'Itade, with plans for Q Eg serfem accedeled te three more buihlings. E! y 8P88 '8 i -

Work has also begun on D r One Alain Plaza, a $140 .

million, three office

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j-j FINANCIAL AND CORPORATEREVIEW ,

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> i,'$ $ 1 ,, t. [ , Earnmgs n r m erage - j m k ;.?A,- j- ;; ,,PS . J. -t t onunon share were

'*~ .' $ e 15. up f rom $2 '9 in

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- - 1982 ()peraung resenues

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o 7 y -3 ; g. q , . int reased 15 81 to $502 5 .- -

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- , ' ' (if an H 2% int rease m kw h sales and rate miicAses 7 C

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4 . ,4 ()perating expenses rose _. m

- ' $5n i nulhon, or 12 4" C i I 1 ,

in lOHi, and to itJled $ iSH l nHlhi >n May >r < iin nh -

uting tadors were a $10 8 nulhon int rease n fuel _

expense, a nd decrease iit $22 3 nulhcin m mter - - - - -

g-t hange %eles. and a $2 4 i nulhi >n mi rease in tax I expense largely related tii higher ini ome 'these

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j increases werc < >ttset hs a $u 1 nulhc in det hne in I ' *

• maintenant e expense 1 Net AFI x ' tiitaled $'6 5 nulhiin. iir $i nii rr 7

share. as ( ompared tii $50 $ nulhiin. < >r $2 50 per 7

share h er 1982. reflectmg an ini rease in ( onstruction ,

work m pr >gress tir the Elf ( reek not lear pn occt --

( < >nstrth ti iii 4 xl>cndit uit s exi tinhiig \1 I x and -

nui ie.u tuel. ti,ialed $lxo nulhiin m 19x 4 'l he tn e .

vear (i nnstria in in luidget i >f $;11 inillii,ti ith Itales -

.uunul i spendit ures iit $225 nulhiin h >r 19x i g -

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$85 niilln ifl, 19h5 $~l nulln in 1986 $7) nllIhi >Ii 19H' and $6n nulhiin.19xx

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• s Ihe ( ompans s 1984 huant ing respurements '

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were met with $512 nullion iit internally generated 7 j tunds and the remainder from < >utside si eurt es , -

In .lanuar 1984. the < ompans siihl $60 nulhon i st first mortgage tw inds, li t senes, duc 2013 A total F -

i er $122 5 millnin was raised tbri> ugh soeral issues i>f pollut n in i ontrol res enue hiinds ollered dunng 1984 ' , .

through the < 'its i st llurhngton. Kansas. for the Com -

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pany's share ot % >lt Creek polluto in control fat ili - '

ties 'they iniluded $ 4 4 nulhon of vanable rate series M "

honds issued in lune to refund a $25 5 nulhon issue, and m 1)c(ember. the prnate plat ement of s60 mil i I hon and a pobla offenng of $19 5 nulhon 'Iko ,

nulhiin shares of ( ommon st< = k were sold in ( k to 'x her at a per share pn(c to the pubhc of $ $2 625 pnor to the three shares for two sti n k spht the sale pnt e ad l oved for the st< = k spht was $21's a share _

Isstunce of 951,9HO new (ommon shares under the -

1)n1dend Reinvestment and 'itt u k Purchase Plan, and

,. the Emph wees' % = k ()wnership Plan added funds ~

6 of $1' milhon hs_ m i mm .

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Mmmm At the end of 1983, t< w I capitalleation was $1.686 million. Common equity represented 39% of this ttwal, nearly teat hing the giul of 4m, reported in our 1979 annual regurt. long term delg represented 47,H% of tidal capitali/ation and preferred and pref erence stix k,12.7%.

Eiearic reuit rate increases wcre apen n cd in Ixdh Aliwiurt and kinsn in 1983. Iliesthe April 1.

the Kinsn Corporation Commtwlon gr.inted .i $16 I milhon anmul increase, or 12% lhe Alaw>urt Pubbe Sen k e Commiwion appn n cd [wrm.inent int reases inJuly 1983 of $20 2 milhim and an additiosul $2.9 milhon in Jamury 19H e for a ?h it dal int rease in Shwmri anntul cletInc resenue. lheJuly ortler  :

raise I the allim ed return on t ommon equity from ,wp

.p" 15 Mh to 16 2h due to demonstrated nuiugement -

cilit leng lhe Shwourt Comm6wli c appn n cd our request to apply the elettric heating rate to add on heat pump customers, but tw wh the (ommiwlons denlett our requests to redia e the elettric heating rate to 34 kwh, increasing that rate to 3.474 kwh in Miwourt and retaining the 3"K kwh in Kansas.

In September, a contra t was thull/cd with CI'C i Internatforul for anntut delnerks of an estinuted )

2.1 million pounds of steam to its Coin l'nxhkts di siston. w hk h is eximted to triple steam sales l'pon i tompletion by CI'C of an 1H int h, mile kmg pipeline i to our Gr.ind Avenue Nation in early 1986, deliveries T j(

to Cl'C foi its North Kansa City nunuf.hturing f. nil 4!

ity are expc ted to begin by April. lhe anth 6 pated retfudion in unit steam prodtktion costs enabled us to withdraw a requested $965,000 revenue increase, filed wIth the MP5C inJantury 19H3 Wolf Creek was more than 92uomplete and at ye.ir end, three fourths of the prolett's 2H2 systems h.nl been turned ener to the start up team for test ing. lhe plant is silluted on J lO.f XN) .h te site near ilurlington, Kmsas, some 90 nules southwest of Kin s.o City KC11.and Kaasn Gas and Ilettric Company c.a h imn l'% of the 1,150 megawatt unit and Kinsn I:lettric powet Cooperathe, Inc., o m ns the renuining six percent. Wolf Creek operating ikeine hearings before the Atomic Safety and ik ensing liiurd began in J.intury 1986 and lus e been completed

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~j onkhthnis ankl the leghlative eminoment. As a result of long term omtratts ask! onitintu! awcw a ment of o nupctitive oul supplies aiul transp wta ikm, our 19H3 average nul cost of $1Ai2/millhm

{ litu renuinctl well behnv the nath nul aver. ige.

1:lkstivejantury 1,198 6, agreement was rea(l et!

with Atlantic Rk hflekt Comguny to a 20 year tui!

T1 supply for laun Natkut llie omtr.kt calh for annual tietheries of approxinutely two nullkm toen fnnn the Illat k linnk!cr mine in Wyoming.

Ilgnificant perfinnunce impnnements were

.k hinal in generating unit prothntivity anti efli Cornmerk ement of co nomic rtrinery arul pn> clesky aluring the ye.ir. llirce of the Ca nujuny% luse.

h mgetl lu 4 suinmer atal oikt w inter w cather cauwsl lo,al unituq eralett at an anntui availability alw ne new Iwaks in 1983 anil u minbutnl to ten el kw h 'ML Ofihne, l.: Cygne 2 esubbsheti a new KCit sales the prn touulemand peak of Al9H mw was reo mi for large out llrni units at 96 9% avail.ibihty; nienk tl 11 times iluring the sustaincti heat in laran% anmul availabilay f.ntor of 91.7't w;n its August init the new high of 2,32 i mw we wt on sconal highest since it twgan e qwrating in 198n, arul August I? A new winter in otti of 1.635 mw w.n the 25 year okl Montnne i reu nk d 9n.7't, its high re.k heti on 1)n ember 19 during a stiere siege of est in the last ll years.

o >hl wcather uhat h o nernt mta h of the o>untry Anisher impwtant pn ahnthut imprinemerit was The Inght w rather i urt.ulal for me we ilun a a redin tion iti the aserage s.ystetu licat r.ite, w hk li k weck ticincon of hnv sultur untern oul from the amount of heat usal to generate a kw h of clee-minn in Wyoming lin auw of the thilk ulty in oh trk ity 1he system average of 10,06 litu kwh was the tatning altenute u ul supphn amt f n utili/ing o ul h nvest since 1967, atul reprewnted an impnntment hom f ro/en im entory palm, the laun, l.i C)gne .nul of JM litue kwh froin 19H1 Itawthinn suttons wcre igwratnl at panial t' ipa it) Oiir systern wide avaltainlity, whk h w.is rethn ni linimutely, the Com;uny a arrint its imn hud and by 1.s Cygne I, averagni 712 % in 19H 5 'the 740 mw suppkal emergetwy p m er to neight w wing ,ptems i.e C)gne unit bunw k nv grade h eral o ut. 4 hile the 110s was nuile p nuble by the initstandmg gwr umt w;n available for the summer perkx1, it w.n h plitulk e ini ottr ettiph f)en Jl the lM Mer pl.ints, as diMn tuik b oIlhe ycJr for InJh 4 repJlts iniht .1 ! Nil!ct awistnl by 16n tummiwh m and datohuth m st ucm inerluul.

emph nen w ho winknl tempourIly 6

• sncul al9' The opeuting v.aus of llawth an unks I and 2 in unt.mnliar loin numully mining oul into p mvr h bdng a lungni in un p .sking to in.hthe rew tve in plant f aillers Our tenuining resguireme a wcre met 1986, hiining llawtluen unks 3 atul 6 wi Asigrutni w uh gr sking i omhustb o tinbinn . ins' vien hange in 1983, lla v unks are between 29 arul 33 )can of putiluws subsuntut punlusn inun Onulu Pubbe ,iw aunt luve become nu ne nn inhe bi ogwrate Powcr IWiki e cre p wohle twi ause us iI Cal and nuinuin fit p.iking purp nn ilun pun haing houn Ninlear unit was n 4 allnint by the sub ic'" intert lunge capn ity and energy weather .inil nuhini KLPl.to o mwr e knutal finh 33g, syvem rnerve nurgin of au rnluni caiuchy u ul anil Mill help idher utthiin dnippnl h 1%, in 1983; pehmkury Mudin bdng I,img term out omtusis u nct atout three spur o exha tal by I'lus o $ eni lees Irwt ap watal in con ten of the Comiuny% antk flutnl o ul rnpiltemerit5 ltiin1h m with the KCPIAN H3 nilsk m, liklicate a e nrr the nest 2n )can, w uh sp 4 pun luws tiuking minimutn spectu tewne rolukement of 22%

up thc lulant e.1 mg range outunitments . ore nuin A slicable da re.ne in pn =hntk o nuinterunce 10 t.uncil at invis w hk h pn n hie u.sh6hty o(o ul ipulny ngwnse h v the year inultal funn dunges in the

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operating status of Of EPHrs six major technical divisions, we expect

, the llanthorn units direct benefits from research projeds pertaining to 1-4, a shortened coal, energy management, cledrical systems and maintenance sched energy analysis.

ule for la Cygne 2, Of our $2 million EPRI assessment for 1983, the and a reduction Company retained about $ i00,000 for local research in overtime labor projeds, including support of five other researth at all generating organizations. Our participation in these projeds

• stations. multiplies the impad of our research investment The Company's by combining research funds. These organizations generating units repr :sent research into fuel cells, fusion power, bumed 5.2 million electric vehicles and improved p< nver generation tons of coal in 1983, methods.

down from 5.3 mil. Our major in-house projeds focus on experi lion tons in 1982. ments using flyash as soil replacement and filler Natural gas require- in construdion, testing state-of the art heating and ments of 2.1 million cooling systems, developing energy eflicient con-mtf were 1.2 million less than in 1982 and oil struction methods and evaluating pnxtuctivity bumed increased to 130,578 barrels from 121,025 last enhancing computer software packages.

year. The average cost of fuel per million Htu in creased to $1535 from $1.389, and mcluded average Through the turn of the century, the Company's I

cost increases of 131 % for coal and freight and ll.M. naarketing appa ath will be tied closely to the twin or natural gas, w hile as erage oil prices remained mrgets of kcl 1n to reduce the rate of peak load growth and build otT icak eledricity usage. Over the gstorm restoration plan was adopted in caily next 20 years sa planned hwi management adions are impbmented, our comprehensive strategy is pro 1983 to establish procedures for a more rapid and eded to reduce the average growth in peak ioad emcient restoration of electncal se vice following from the unmanaged 2.1% to 1.5%, as controlled, less storm related outages. The plan outlines Company than half of the average 3J% annual growth in kwh responses to storm conditions in categories from sales. The resuhing improvement in kud factor from routine to severe, while alknving for flexibility in 46.2% in 1983 to 59% in 2002, would benefit all dealing with each storm s umque problems. Ihe customers through lower electric rates.

adian plan expands manpower and equipment involvement throughout the Company as needed Implementation of demand control programs has The plan calls for a.1 improved two way flow of been held up due to delays in equipment deliveries and operating problems involving tests of the Two-information with customers by enlarging the tele-phone capacity for incoming calls. Tay Automatic Control System. This system will link our central office computer with each customer A key to the storm plan's efficienq is a computer h> cation by using KCPils own eledric lines for program which helps dispatchers identify problem h>cmions using the customer's " electrical address." transmission of eledronic signals. The 'ITACS system Continued computerization of other transmission will provide muhi fundions which can effed signifi-cant operating economies when fully implemented.

and distribution functions is under way to help '

These nelude not only the air conditioner compres-improve work scheduling and inventory contnyl. sor cycle control available through common systems, Installation of remote terminal units at substations but also enhanced metering capability essential for will centralize control over substat5n functions using the dispatch computer new rate designs; automatic meter reading; monitor-ing security to eliminate tampering; and storm dam.

Existing contr~ cts with W Inc;ds No. 412, age restoration assistance. Fortunately, the reduced representing pnxiuctior .orkers, and No.1613, peak load forecast will provide necessary time to representing clerical ad office personnel, will re- accommodate full testing requirements with imple.

main effective throughJune 30,19&i. We have no mentation scheduled to begin in 1988.

contrad with local No.1161, which represents line~

The action thrust of the marketing plan has men and outside workers and have been operating irwolved building ofTpeak winter elatric sales under work rules and procedures put into etTect through aggressive promotion of electric heating.

by the Company in October 1982. it is anticipated

. lhis program began in 1982 with an educational that negotianons will commence this spnng.

effort to increase consumer awareness-now above Panicipation in the Eledric Power Research Insti- 90% according to opinion sungs-of various heat.

tute maximizes our research investment through a ing and cooling options pn>vided by the electric 12 pooling of resources by some 600 eledric utilities. heat pump. The Company shifted in 1983 to a com.

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• like;'e a gem set in stone Crystal Pavriton and concomimum units restaurant highlights the Still to come are a doubling precast concrete of Crown of ottics space and addi-Center and marks the halt tional residential recres way point in development of lion retail and cultural this privately finsnced city Incilities and parktng within a city Begun in Pstrocis A Brown. dispatch 1968 the 25 block project ,y,yy, ggg,g,g,gg, gggggg

+1 of Hallmstk Cards Inc now tests operation of a remote

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'* terminst umt which links class hotels a 10 scre subststion informstron to -

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member firms of the ' -

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space heating for buikhngs of all sizes. * '

Ihe first results of the aggressive sales phase of our markenng adnines were tabulated in 1983. In the residentul arena. the Company exceeded its goal of IJW o elettncally heated residential connections for the year Huilders equipped ~43 new homes and apartments with eledric heating and cooling systems m and 300 replacement systems were installed on existing residential units This represented 24%

of 1983 new resvJential connedions and was nearly 3

three times the 1982 residential experience.

Commercial electric space heating hvad increased by 6 2 mw dunng the year, as compared with 1.2 mw in 1982 and the five year high of 4.5 mw added in 1980. This substantial improvement was part of -

dynamic activity in the commer ial sector across KCPlfs service area which contributed to an increase of 46 mw of commercial industrial load in 1983, some 61% above the 1982 addition and the highest since the 59 mw gain in 1980 Of these commercial projeds, about 40% or more than 1.5 million square feet was opened in Kansas City, .\lissouri. T\vo major all eledric otTice buildings accounted for nearly 20%

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excellsnt transportation located within 30 minutes concerning a hostpump

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hook-ups. make the srss of Downtown class to later- Instalistion. Mr Roach also a prime location for sists access. sad was served as firstpresident q sccommodating commercial among 3153 new residen- of ths Hast Pump Associs-e '

enterprise with regional and tisl connsctions 1983. tion of Gresist Kansas City y'n actions! marketing. distribu- Of course. It's bested in 1983.

y lion or ssrvice interests. electrically with two 7,,,gy;,p ,q,,,,,,, gg,,

m Visitors find beautiful resi- best pumps.

g,y,, ,,,,ggy, y,g,,,,,,,g dential arsss are also an ,,,ygg, g, ,,, ,,,jg,,g;,y g,,p,,, y,,,,, g,p,,_

important Kansas City assst. gygg,yy,fon,_

,,,,,,,,, g,,, y,gg,3,,gg reviews blusprints with Gary Rosch. prssidsat 15

Kansas CW hmer & laht canpany STATEMENTS OFINCOME War Ended December 31 1983 1982 1981 Ohousands)

Operating Revenues Elearic $ 553,370 $ 475,802 5 465,825 Steam heat 9,173 9,827 5,886 Total 562,543 485,629 471,711 Operating Expenses Operation Fuel 160,653 149,868 156,761 Interchange power (net) 1,345 (20,906) (48,179)

Other 81,078 79,012 71,892 Maintenance 53,358 62,496 54,305 Depreciation 46,319 45,215 44,962 Taxes (See statements)

Income 61,962 39,946 45,577 General 53,345 52,075 51,908 Total 458,060 407,706 377,226 Operating Income 104,483 77,923 94,485 Other Income and Allowance for equity funds Deductions used during construction 53,809 36,089 29,073 Miscellaneous-net ofincome taxes 25 (63) 327 Total 53,834 36,026 29,400 Income Before Interest Charges 158,317 113,949 123 885_

Interest Charges long term debt 70,126 65,260 55,232 Sih>rt-term notes 4,332 6,021 3,896 Misce!!ancous 1,271 1,397 10,489 Allowance for borrowed funds used during construaion -credit (43,893) (39,670) (21.878)

Total 31,836 33,008 +1,739 Yearly Results Net mcome 126,481 80,941 79,146 Preferred and preference stock dividend requirements 21,570 in,193 13,749 Eamings available for common stock $ 104,911 $ 62,748 $ 65,397 Average number of common shares outstanding

• 25,278,388 22,510,368 20,302,723 Eamings per cor'imon share * $ 4.15 5 2.79 $ 3.22 Cash dividends per common share * $ 2.17 $ 2.01 $ 1.88

• 1he amounts for 1982 and 1981 have been restated to reflect the Odober 1983,3 for-2 common stock split.

The accompanying Notes to Financial Statements are an integral part of these statements.

16

Kansas Cny ther & Ught Canpany BALANCESHEETS December 31 1983 1982 Assets (thouunds)

Utility Plant Eledric $ 1,357,477 $ 1,315,105 at original cost steam heat 5,060 5,980 (Notes 5 and 6) Total 1,362,537 1,321,085 less-Reserves for depreciation 452,174 417,779 Net utility plant in sersice 910,363 903,306 Construction work in progress 959,423 709,963 Total 1,869,786 1,613,269 Investments and Nonutility Property 16,854 16,610 Construction Funds IIeld by Trustee 21,345 -

Current Assets Cash 2,916 1,916 Special deposits 281 162 Receivables Customer accounts receivable, less reserves of $1,348,000 and $911,000 38,969 31,745 Accrued unbilled revenues 22,332 19,422 Other receivables 11,785 17,205 Fuel inventories, at average cost 45,280 54,118 Materials and supplies, at average cost 24,015 22,846 Prepayments 1,388 803 Total 146,966 148,217 Deferred Charges 46,064 14,131 Total 5 2,071,015 $ 1,792,227 Liabilities .

Capitalization Common stock-authocized 60,000,000 (See catements) shares without par value-28,320,580 and 24,368,600 shares outstanding *-m:ed ,alue $ 401,534 $ 319,920 Retained eamings (Note 3) 259,915 210,402 Capital srplus 4,824 4.870 Total 666,273 535,192 Cumulative preferred stock 112,000 112,000 Cumulative preferred stock (redeemable) 56,156 56,316 Cumulative prefererce sack (redeemable) 45,833 50,000 Inng term debt 805,644 732,610 Total 1,685,906 1,486.118 Current Liabilities Notes payable to banks (Note 2) 27,u00 -

Current maturities oflong-term debt - 35,006 Accounts payable 47,067 45,280 Dividends declared 5,399 5,401 Accrued taxes 9,7% 5,449 Deferred income taxes 10,841 9,624 Accrued interest 11,298 7,906 Accrued pa) Toll and vacations 9,674 8,606 Other 4,253 3,405 Total 125,328 120,677 Deferred Credits Deferred income taxes 172,089 115,300 Deferred investment tax credits 85,811 68,096 Other 1,881 2,036 Total 259,781 185,432 Commitments and Contingencies (Note 7)

Totai $ 2,071,015 $ 1,792,227

• 1he number of shares for 1982 have been restated to refled the Octoben 1983,3 for-2 common stock split.

Kansas City I'ower 3c I.ight Gunguny STATEnfENTS OF TAXES Year Ended December 31 1983 1982 1981 income Bx Expense <isoitsanas) lixal income tax expense was less than the amount computed by applying the statutory federal income tax rate of 46%

to income before taxes. The reasons for these ditTerences are as folknvs:

Taxes computed at statutory rate on income before income taxes $ 86,574 5 55,491 $ 57,335 Increase (decrease) in taxes resulting from:

Alknvance for equity funds used during construction (24,752) (16,601) (13,374)

Differences between book and tax depreciation not normalized 1,359 1,142 1,032 Removal costs (2,510) (1,080) (797)

Amortization ofinvestment tax credit (2,134) (2,181) (1,754)

State income taxes 3,496 2,088 2,773 Other (310) 832 281 Total income tax expense $ 61,723 $ 39,691 $ 45,496 Ccmponents ofIncome Tax Expense Currently Payable Federal $ 3,798 $ 921 $ 4,701 State 3,594 1,135 2,634 Total 7,392 2,056 7,338 Dcferred Federal (net) 30,775 28,862 22,198 Stare (net) 2,880 2 731 2,500

_ Total 33,655 31,593 24,698 Investment Tax Credit Pnnision 22,913 8,223 15,214 Amoitiation (2,134) (2,181) (1,751)

Total 20,676 6.012 13,460 Taal income tax expense 61,723 39,o91 45,496 I. css income raxes applicible to otlier income and deductions (239) (255) (81)

Income tax expense applicable to operating income 5 61,962 $ 39,946 5 45,577 DeferredIncome kx Expense Depreciation differences $ 8,852 $ 8,468 $ 11,409 Debt component of AFDC 21,159 19,503 12,039 Repair alknvance (824) (810) ( 5 19) 1:nbilled revenues 1,204 1,559 1,093 Taxes and pension costs capitalized 3,134 2,165 1,465 Other 130 708 (759)

Total $ 33,655 $ 31,593 $ 24,698 General Tax Expense Property and real estate $ 18,954 $ 20,924 $ 22,526 Gross receipts 29,413 J6,479 25,243 Other 4,978 4,672 4,139 Total $ 53,345 $ 52,075 $ 51,908 The accompanying Notes to Financial Statements are an integral part of these statements.

18

Kansas City Power & Ught Gunguny STATEMENTS OFSOURCES OFFUNDS FOR GROSSPROPERTY ADDITIONS Year Ended December 3' 1983 1982 1981 (thouunds)

Funds Provided Net income $ 126,481 $ 80,941 $ 79,146 From Operations less dividends dmlared 76,968 61,495 51,966 Total 49,513 16,446 27,180 Items not requiring current use of funds Depreciation 46,319 45,215 44,962 Deferred income taxes (net)-

non current portion 32,438 29,977 23,665 Investment tax credit (net) 20,676 6,042 13,460 Alkmunce for funds used during construction (AFDC) (97,702) (75,759) (53,951)

Total 51,244 21,921 55,316 Funds Provided From Issuance oflong term debt 185,469 47,003 75,000 Outside Sources Construction funds held by trustee (21,345) - -

Issuance of preferred stock - 55,080 -

Issuance of common stock (3,951,980, 3,723,774 and 530,331 shares, respettively) 81,614 57,561 7,231 Net payment received on sale of a portion of Wolf Creek - -

(39,128)

Temporary refunding of kian agreements (54,000) - -

Retirement oflong-term debt (35,006) -

(25,000)

Preference stock sinking fund (4,167) - -

Increase (de cea<c) in sho:t-term bomm-ings (including portion to be refinanced) (31,500) (30,600) 51,100 Txal 121,065  ? 29,Gh 69,203 Decrease (Increase) (Exclusive of short-term Nxnf.vings In Working Capital and current maturities) 13,908 5,9740 7 (v13 Other (3,670) (3 '85) 1,858 Total Funds Uwd for Gross Property Additions 182,547 153,160 133,980 AFDC net of related deferred income taxes included in utility plant (including a reclassification in 1983, Note 1) 122,089 53,878 39,438 Gross Property Additions $ 304,636 $ 207,038 $ 173,418 Decrease (Increase) Cash $ (1,000) $ 5,265 $ 1,096 In Working Capital Special deposits (119) 20 663 Receivables (4,714) (8,424) (1,337)

Fuel inventories 8,838 (5,370) 18,130 Materials and supplies (1,169) (77) (2,262)

Accounts payable 1,787 12,793 (10,036)

Accrued and current deferred income taxes 5,564 190 (1,116)

Accrued interest 3,392 46 (57)

Other 1,329 1,537 2,522 Total $ 13,908 $ 5,980 $ 7,603 19

Kansas City hmer & Ught Company STATEMENTS OF CUMULATIVE PREFERRED AND PREFERENCESTOCKANDLONG-TERMDEBT Decemuer 31 1983 1982 Cumulative Preferred Stock (Note 4) Onousanas>

$100 ParValue 3.80%- 100,000 shares $ 10,000 $ 10,000 4.50%- 100,000 shares 10,000 10,000 4.20%- 70,000 shares 7,000 7,000 4.35%- 120,000 shares 12,000 12,000 7.72%- 130,000 shares 13,000 13,000 No Par $10.70 -200,000 shares 20,000 20,000

$ 2.33 -800,000 shares 20,000 20,000

$ 2.20 -800,000 shares 20,000 20,000 Total $ 112,000 $ 112,000 Cumulative Preferred Stock (Redeemable) (N<xe 4)

$100 Par Value 4% -33,557 and 35,157 shares $ 3,356 $ 3,516 No Par $17.05 -228,000 shares 22,800 22,800

$13.25 -300,000 shares 30,000 30,000 Total $ 56,156 $ 56,316 Cumulative Preference Stock (Redeemable) < sote 4)

No Par $ 8.00 -208,333 and 250,000 shares $ 20,833 $ 25,000

$12.75 -250,000 shares 25,000 25,000 lixal $ 45,833 $ 50,000 l.Ong-Term Debt (exuadina current maturities)(Note 5)

First Mortgage Bonds 3%% series due 19M5 $ 16,000 $ 16,000 5% series due 1990 20,000 20,000 10%% series due 1993* 7,500 --

9.2% series due 1994

• 60,000 -

4%% series due 199i 15,000 15,000 5%% senes due 1997 30,000 30,000 6 A% series du 1%'s 25,000 25,000 74% series due 1999 26,000 26,000 9%% scris due 2000 35,000 35,000 7%% series due 2001 27,000 27,000 7%% series due 2002 30,000 30,000 8'/s% series due 2006 40,000 40,000 8%% series due 2006 30,000 30,000 57s% senes due 2007* 21,940 21,940 57a% series due 2007' 20,000 20,000 8%% series due 2007 30,000 30,000 9%% series due 2008 25,000 25,000 67a% series "A" due 2008* 9,200 9,200 678% series "B" due 2008' 21,800 21,800 12 % series due 2009 50,000 50,000 16%% series due 2011 50,000 50,000 13 % series due 2013 60,000 -

12 % series due 2013* 11,980 -

Guaranty of Pollution Control Bonds 5%% series due 2003 15,000 15,000 Wriable rate series due 2013 (6.65% at December 31,1983) 43,000 -

Loan Agreements 40,000 94,000 Nuclear Fuel Lease (10.83% at December 31,1983) 47,992 45,003 Short-Term Debt to be Refinanced -

58,500 Unamortized Premium and Discount (net) (1,768) (1,833)

Total $ 805,644 $ 732,610

• Pledged in Support Ofl'ollution Control Bonds 20

Kansas City hywer & Ught Company STATEMENTS OFRETAINED EARNINGS Year Ended December 31 1983 1982 1981 (thousands)

Beginning Balance $ 210,402 $ 193,956 $ 166,776 Net Income 126,481 80,941 79,146 336,883 274,897 245,922 Dividends Declared Preferred and preference stock (at required annual rates) 21,598 19,502 13,748 Common stock- .

$ 1.88 per share

• 38,218

$2.01 per share

• 44,993

$2.17 per share 55,370 76,968 61,495 51,966 Ending Balance (Note 3) $ 259,915 $ 210,402 $ 193,956

• The amounts for 1982 and 1981 have been restated to reflect the Odober 1983,3 for-2 common stock split.

he accompanying Notes to Financial Statements are an integral part of these statements. .

NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant System of Accounts: The accounting records of the Company are maintained in accordance -

Accounting Policies with the t'niform system of Accounts prescribed by the Federal Energ) Reguhtory Commis-sion ( FERC) and generally accepted accounting principles.

Utility Plant: t?til,ty plant is stated at historical costs of construction. These costs include taxes. payro!! related costs including pensions and wer fange benefits, and an alknvance for y funds used during cowrudon.

Allowance for Funds Used During Construction (AFDC):AFDC includes the con of

• borrmved fanJs esul for coastruction purposes and a reasonable ra c upon other (equcy) ~ ,

+

funds The alknvance Ex bomnved funds represents an alkration ofinterest costs to construc .

tion, while the alh>wance for equity funds is a non cash item of income. AFDC is charged to construction work in progress during the paiod of construction. When a construction project is placed in service, the related AlDC becomes a part of the original cost of the completed plant which is used to establish rates for utility charges under established regulatory rate prac.

tices. De rates used to compute AFDC, before associated deferred income taxes, are com pounded semi-annually and averaged 12.1% for 1983,12.1% for 1982 and 11.0% for 1981.

Depreciation and Maintenance: Provisions for depreciation are computed on a straight-line basis pursuant to rates ordered by the Missouri Public Service Commission (MPSC).

Approximate annual composite rates were 3.62% in 1983,3.61% in 1982 and 3.63% in 1981.

The Company charges to maintenance expense the repairs of property and replacement and ~

renewals of items determined to be less than umts of property, except for such costs which are charged to clearing accounts and redistributed to urious operating, construction and other accounts. ne costs of renewals and betterments of units of property are charged to the utility plant accounts. Property units retired or otherwise disposed of in the normal course of busi-ness are charged to the reserves for depreciation, along with removal costs, net of sah~ age.

ne amounts of maintenance and depreciation expense other than those set forth in the Statements of Income are not significant. Rents and lease payments for railroad cars, computer equipment, buildings and similar items are also not significant.

Retirement Plans: ne Company has group annuity plans for all its regular employees, including officers, providing for benefits upon retirement, normally at age 65. Under the re-quirements of the Emph)yee Retirement income Security Act of 1974 (ERISA) the Company is obligated to fund the benefits of the plan. The Company's policy is to fund pension costs accrued. Liability for past service costs is not significant. We annual costs of the plans were

$9.2 million in 1983, $9.3 million in 1982 and $8.1 million in 1981.

21

en 4 ,--

i

.. g i

?

I' At the annual saluation date of Odober 1, the actuarial present sulue of accumulated plan 1 benefits uns approxinutely $126 million for 1983 and $118 million for 1982, including $6 mil-tion and $3 million of nonwsted benefits, respectively. Plan net assets were approximately  ?

$148 million for 1983 and $129 million for 1982. Rates of retum of 6% to 7% were assumed in detennining benefits. A Revenue Recognition: %e Company utilizes cycle billing and accrues the amount of revenue for sales unbilled at the end of each reporting period.

Income lhxes: %e Company generally normalizes the effects of the use of accelerated tax depreciation methods. Deferred income taxes have been panided for the ditTerences between _

book and tax depreciation except for the effect of accelerated depreciation on Missouri prop-erty acquired prior to 1972. Accelerated depreciation methods include the use of the Asset -

Depreciation Range System and Accelerated Cost Recovery System which permit shorter lives.

Taxes deferred on property additions for certain prior years are now being restored to income as the timing differences reverse.

%e tax effect of the interest component of AFDC is normalized and the related accumulated deferred income taxes are credited to construction work in progress rather than deferred income taxes on the balance sheet. nis procedure wus followed for all jurisdictions untilJune 1983 when, in connection with a ste order; the Missouri Public Service Commission required the Company to no longer credit deferred income taxes against construction work in progress on the Missouri jurisdictional portion of Wolf Creek unit cosa and to reclassify such accumu-lated balance ($32 million at December 31,1982) from construdion work in progress to deferred income taxes on the balance sheet.

Le Company normalizes for all jurisdictional purposes, incluchng Kansas after December 1, 1981, the tax efr ects of pension costs, pa> Toll tnes and pmperty taxes which are capitalized on the books but deductul currently for income tax purposes %c effects of the current deduc-tion of removal co'ts are flowed through.

Imestment tax credits have been deferred when utilized and are tving amortized to income over the senice lives of the related properties. At December 31,1983, the Company had urmsed and unrecorded investment tax credits of approximately $32 million, which will be available to reduce Federal income taxes payable through 1998.

Subsidiary: %e Company has a wholly 4mned subsidiary,4W10 Fuels, Inc., organized for the acquisition and development of coal properties. %e Company has accounted for its investment in MulO Fuels, Inc., under the equity method and has not prepared consolidated financial statements because the effect of consolidation upon the accompanying financial statements would not be significant.

j 2. Short. Term Borrowings %e Company bormws short-term funds from banks and through the sale of commercial paper l

as needed between financings. L'nder minimal fee arrangements the Q)mpany has bank lines-l of-credit of $100 million which are back up for such bornmings. --

3. Diddend Restrictions Retained eamings at December 31,1983, included $11.6 million which was not asuitable for cash dividends on common stock under the prosisions of the Indenture of Mortgage.

4. Preferred and %e outstanding preferred stock of $112 million may be redeemed at the option of the Q)m-Redeemable Preferred pany at prices which in the aggregate total $122 million, except that the $10.70 series may and Preference Stock not be redeemed at the current redemption price of $110.70 prior toJune 1,1985, through a refunding, directly or indirectly, by or in anticipation of the incurring of any debt or the issuance of preferred stock which has interest or dividend costs to the Company lower than -

10 M %

22

He Company's Cumulative Preferred and Preference Stock (Redeemable) may be redeemed, in whole or in part, ratably from each of the holders of the outstanding shares, at times and prices specified in the purchase agreement for the individual issue. Redemption and sinking fund dates and amounts are as folkms:

Optional Redemption Annual Sinking Fund Date Initial Current Initial Series issued Date Price Date Price Shares Cumulative Preferred 4% 1948 Currently $102.25 Currently $100(a) 1,600

$17.05 1982(b) 1987 127.05 1988 110 ll,400(c)

$13.25 1982 Currently (d) 113.25 1988 100(a) 60,000(e)

Cumulative Preference

$ 8.00 1978 Currently 100.00 Currently 100 41,667

$12.75 1980 Currently (d) 106.375 1985 100 41,667 (a) Alay be satisfied by open market purchases in lieu of sinking fund redemption.

(b) Premium at time of issue of $2,280,000 was recorded in capital surplus.

(c) Company has non-cumulative option to redeem up to 11,400 additional shares each year at $110 per share plus dividends.

(d) The $13.25 and $12.75 series may not be refunded prior to August 31,1987, andJune 1,1985, respectively through refunding at an interest cost or dividend rate which is less than the dividend rate of such series.

(e) Con paay has an option to purchase each year an additiona! 60,000 shares beginning in 1988 up to a maximum of 150,000 of such additional shares.

At December 31,1983, the Company had authorized but unissued 553,557 shares of Q.mulatiw Preferred Stock at a par clue of $100 per share,4,00G,000 shares of Cumulative No Par Preferred Stock and 4,000,000 shares of Cumulative Preference Stock without par mlue.

Scheduled redemption and sinking fund requirements for outstanding redeemable prefsred and preference stock for the next five years are as follows: 19M, $4,327,000, for 1985 through 1987, $8,493,000 each year; and $15,747,000 for 1988.

If any dividends on its preferred or preference stock are not declared and paid when scheduled, the Company could not declare or pay dividends on its common stock or acquire any shares thereof for ccmsideration. If the amount of any such unpaid dividends equals four or more full quarterly dividends, the holders of preferred or preference stock, as the case may be, voting by the classes prescribed for this purpose, could elect representatives on the Q)mpany's Ikurd of Directors.

5. Iang. Term Debt First Mortgage Bonds: %e amount of First Mortgage Ik>nds authorized by the Indenture of Mortgage and Deed of Trust dated as of December 1,1946, as supplemented, is unlimited.

De amount of additional bonds which may be issued is subject to certain restrictive pmvisions of the Indenture. Substantially all of the Company's utility plant is pledged under the terms of the Indenture. The 3%% series due 1985 has an annual sinking fund requirement of $160,000 which will be met by pledging property additions taken at 60% of cost oc fair value to the Q)m-pany, whichever is less.

InJanuary 1983, the proceeds of the $60 million of 13% First Mortgage Ik>nds due in 2013 were used primarily to refinance short term borr(mings.

Iman Agreements: %e Company has a $100 million line-of-credit, expiringJune 30,1985, with a group of intemational banks which provides for the use of unsecured funds at interest rates adjusted quarterly based on the three-month Inndon Inter-Ilank Offered Rate. No kuns were outstanding at December 31,1983

%e Company has a financing arrangement with a bank, expiringJanuary 16,1986, which enables the Company to bomwv up to $50 million by collateralizing its coal and fuel oil inven-tories at rates based upon the current bankers' acceptance discount rate plus an acceptance charge. At December 31,1983, $40 million at 10.55% was outstanding.

1 7 p Ng Nuclear Fuel Lease: The Company has a lease expiring in April,1988, which pnwides for the -

financing of the costs of up to $80 million of the Company's nuclear fuel. The lessor will ob-tain, through the issuance of commercial paper backed by letters of credit from commercial c .

banks, or from revolving credit kuns, the necessary ftmds to purchase the fuel and make -

interest payments when due. ne Company is obligated to reimburse the lessor for all expen- s g, q ditures for nuclear fuel, interest and related costs as the fuel is consumed in the plant. %e # A.N Company is capitalizing the cost, including related interest costs, of the leased nuclear fuel.

Scheduled Maturities: De aggregate amount of nuturities during the next live years of Q[

T Y1- E long-term debt outstanding at December 31,1983, (exclusive of the hun agreements, which the Company expects will be extended, and the nuclear fuel lease) is $16 million in 1985.

6. Jointly Owned Electric ne Company has, under joint ownership agreements with other utilities, undivided interests Utility Plants at December 31,1983, in generating units as folknvs:

WolfCreek la Cygne latan Unit l' nits Unit Company's share 47.0% 50.0% 70.0%

(thonunds)

Utility plant in service - $ 239,220 $ 236,686 Utility plant under construction $ 938,078 $ 1,781 $ 224 Accumulated depreciation (Production plant only) - $ 71,122 $ 31,078 Carapany's accredited capacity 4M 541 685 469 Each participant must pnwide its own financing. De Company's share of direct expense is included in the correorionding operating expenses on the Statements of Income.

~. Commitments and At Decembt t 31 1983, the Compxw's shares of Wolf Creek's tctal constarction a.vi naclear fae:

Contingencies- commitments were approximately $ M nuthon and $194 million, aspectively. Nuclear fuel huclear I lant con.mi tments include approximately $92 million for uranium concentrates, enrkhment and comersion through :997 and $102 million for fabrication through 2010. See Management's Dissussion for :.dditional inf irrnation regarding Wolf Creek cmstru,. tion costs.

An applica:ioa is pending before the Nuclear Regulatory Commission for an operating license for the Wolf Cret k Unit. Without such a license, the Company assumes a risk ofloss in pn>

cecoing with the constrt.citoa of.he Tolf Creek Unit.

AUDITORS' REPORT To the Stockholders and the Board of Directors of Kansas City Power & Light Company We have examined the balance sheets and statements of cumulative preferred and preference stock and long term debt of Kansas City Power & Light Company (a Missouri corporation) aa of December 31,1983 and 1982, and the related statements ofincome, taxes, retained camings and sources of funds for gross property additions for each of the three years in the period ended December 31,1983. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we cot sidered nuessary in the circumstances.

In our opinion, the financial statements referred to above present fairly the financial position of Kansas City P(nver & Light Company as of December 31,1983 and 1982, and the results ofits operations and the sources ofits funds for gross property additions for each of the three years in the period ended December 31,1983, in conformity with generally accepted accounting principles applied on a consistent lusis.

AirDIUR ANDERSEN & CO.

Kansas City, Missouri, January 27,1981 24

g Kansas City twer & light Company MMAGEMENT'S DISCUSSIONMD MALYSIS OF FINMCIAL CONDITION MD RESULTS OF OPERATIONS KWII Sales and Opetuting Revenues The components of change in fuel costs:

Kwh sales increased 8.2% in 1983 and decreasal 3% in 1982 inyy ,,g geyy3,,)

comparal with the prior years. The 1983 increase reflects over erkw year higher residential usage due primarily to prolonged summer i ,3 i ,2 and winter temperature extremes and an uptum in the hical gnigns) nunufacturing economy Since April 1983, kwh sales to a steel Generauon for cusomers and interdunge sales s u) 8 (24) nunufacturer luve increasal 26% over the same 1982 period. Average fuelcost is r in accordance with new rate case procedures, the Company wai sn s n) reclassified municipal firm power sales from interchange power to other sales. This accounted for a 13.4% ($2 million) Interchange Power (Net) increase in other kwh sales for 1983 compared to 19o2. The Expenses increased because of changes in interchange 3% decrease in 1982 was mainly due to the effect of the power (net) of $22.3 million in 1983 and $27.3 million in recession on the hical economy. 1982. The changes occurred primarily because a capacity sale Sales data for the years:

agreement with another utility, which commencedJune 1, 1980, expired May 31,1982. The increase also occurred inaease ( Deaease) treause ofincreased power purchases made necessary dur-mer enor er ing the hot weather and record sales in 1983, and the pur-1* 3 1*2 chase of power when it was available at costs knver than the KW11 Revenues K411 Revenues costs of operating certain of the Company's available units.

unthons) o nthons) The level ofinterchange sales in the future will depend upon sales the Company's system requirements and other factors such h.JustriaH exdusis e of

$ti 1 Y '$ $ tj as fuel costs. maintenancc .equirements and the availability of generating units to the Compmy and pot (ntial perclus-a stu manutatureo 3.3 s o, --

ing utilitie3 aber 21 4 L2, -

stec . fa. te er N 02 ) Maiatenance expense decreased 1L6% in 1983 cempared was o o o ms to to 1982 terle ting decreased maintenance required at several oina Ro enues i 4 generatmg statiens and changes in the operating status of cer-w ,- ,n tain units to summer pealdng, emergency use, or inactive resene. Maintenance expense increased in 1982 compared t to 1981 reflating increased maintenance required at several i

generating stations and increased transmission and distribu.

The componenu ofchanges m operating revenues: tion maintenance.

Inc. case uwruse) Interest Expense os er imr year Interest expense continues to increase because of tw3 tw2 increasal amounts of outstanding long-term debt. This onthons) increase was partially offset by a decrease in interest on Resenued eslusive of steel manufAturer) short-term notes and the knver market rates of interest appli-Kw h sales and steam usage s 38 s4 cable to the variable rate long term debt. Miscellaneous IIINr hr nigh fuel ad iostment dauses ( ) interest expense in 1982 was less than 1981 because ofinter.

.g 3 3 est expense incurred in 1981 for advance payments received sted nunufaturer 2 n prior to the December 1981 sale of an interest in Wolf Creek.

wal s- sn Net AFDC Net AIOC represents the net effat upon the Company's net income of capitalized alkmunce for funds used during gg construdion ( AITC and is equal to alkmunce for equity funds used during construction, plus alknvance for borrowed The average fuel cost per million litu increased to $1.535 in 1983 from $1.389 in 1982 and $1.239 in 1981 reflecting f s used during construction, less deferred income taxes the higher prices for coal, freight and natural gas. The 1983 ont wal funds component increase also reflects the knv availability of a generating unit The continuing increases in the amount of construction due to a major overhaul. This generating unit has historically work in progress at Wolf Creek and higher AIOC rates caused had the knvest average fuel cost per million iltu. The majority net AIOC to increase 36% in 1983 and 34% in 1982. Net AIOC of the costs of the overhaul were capitalized. Approximately will continue to increase until commercial operation of Wolf 30% of the futi cost increases have been recovered through Creek. At that time, without rate relief to adequately reflect the fuel adjustment clauses applicable to the Company's inclusion of Wolf Creek in rate base, net income and earnings Kansas and whok sale sales. per share would decline.

25

- - . _ . . - , _ _ , . ~ .

l Earnings Per Share Any delay in commercial operation of Wolf Creek would Eamings per common share were significantly impacted result in an increase in its total cost; including AFDC accruals by net AFDC as folkm's: of approximately $27 million per month and such labor costs

1. 5 #2 "I as may be required to finish the projea. ne Company's Net AmC(nullions) $76.5 $56 3 s41.9 slure of the above-estimated $2.67 billion construction cost Net AmC Per share $ 3.03 $ 2.50 $ 2.07 of Wolf Creek is $1.25 billion (including $399 million of Earnings IVr share (EPs) 5 4.ls s 2.'9 $ 3 22 AFDCK of which the Company has m. curred through Decem-Net AmC iYr share as a Pertrnt of EPs 73 % 90% M% ber 31,1983, $927 mi: lion (including $260 million of AFIX').

E15 ewhnhng net ARX, $ l.12 $ .29 $ l.15 This estimate is based on the latest available information and Eamings per share, excluding net AFDC, decreased from does not telled the increase in costs that would result from 1981 to 1982 because ofinadequate rate relief and the etTect a delay.

of the recession on the kical economy. %e increase from 1982 to 1983 reflects mainly an uptum in the economy, rate Him of Wolf Creek on Electric Rates increases, and extreme winter and summer weather M lans to mn " phase in" tariffin each retail rate jurisdiction, to be effective coincidental with the Projected Construction Expenditures commercial operation date of the Wolf Creek Plant. Such .,

Projected five-year construction expenditures, excluding AFDC, are:

tariffs if approved by the regulatory commissions would 5 result in kmcr electric rates during the first years of the B Constriation Expendaures phase-in period than otherwise would have been realized m4 ms 19 s 6 tw 19sa Tui under traditional tute making procedures with full cost re-covery commencing in the first year of commercial operation ceru ranng fAiinies si66 3 s 26.8 siOs sNs si4.s s237.9 0 " ,su d d s W S resuh Nmlear fuel 97 MH 12.7 IK5 14.1 75 8 m slightly higher rates in the last years of the phase-in wnsrnission period than if no phase-in wus impkmented.

fAihues 23 2 16 4 18 0 17.2 40 7RH I wM :n wa Financing Requirernents gener.d f.uihnes 3s a 4 o. 3% rt 41- r.I hi addition to tirancing constn.ction expnditures, the m al s2no slos 4 ssis sxs i ss3 sss66 Corapany will require cash during the five years ending December 31,1988, to retire $16 million of maturing long-ne timing of wnstruction and cost estinutes are subject term debt, exclusive of payments on the noclear fuel lease, to continuing resicw and adjustments and actual conuruc- and to sedeem $45.6 millie.n of preferred and preference tion expenditures may ury from ruch es*1 mates. After stock pursuant :o sinking fund obligations.

completon cf Wolf Creck construction expendiferes are .

expected to drop to s:Fmficantly knver levels. It is expeed that 19M financing requirements will be met through sales of debt and equity securities ar urious other Wolf Creek Construction Costs financing arrangements. He amounts, timing and methods of Hased on the targeted February 1985 commercial operation financing will be dependent upon market conditions premil-date, the total construction wst of Wolf Creek, excluding ing at the time the financings are required. It is anticipated nuclear fuel, is presently estimated to be $2.67 billion, that funds for the remaining capital needs will be prosided including $8% million of AFDC. Bis time schedule is less from operatioius. Short-term borrowings will be utilized than that of the average experienced by other nuclear units between financings. We Company expects to seek regulatory currently being completed. Current construction progress now approwl in 19M to increase its total short-term borrowing indicates that such schedule may not be achiemble. De limits from $200 to $300 million.

Nuclear Regulatory Commission's case klad forecast, made nearly one year ago, which incorporates a wide base ofindus. Uncertainties which affect the degree to which financing try experience, estimates fuel krad eight months later than the requirements will be met by funds provided from operations current August 19M target, in which case the commercial in. include other such items as the impact of inflation on operat.

senice date could be lengthened by a like period. I h> wever; ing expenses, the level of kwh sales, tiv level of interchange the Company expects to complete its construction for com. transactions with other utilities and the Company's ability to mercial operation in the spring of 1985. In view of the numer. receive adecpiate rate increases.

ous and diverse problems currently impacting nuclear units, See Supplementary Financial Information for Financial no assurance can be given that Wolf Creek will be immune Data Adjusted for Changing Prices.

from further delay in its construction, licensing and operation.

1 26

Kansas Oty Iwer & Ught Company SUPPLEnfENTARY FINANCIAL INFORMATION Q rterly Operating Results 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 1983 1982 1983 1982 1983 1982 1983 1982 (thousands)

Operating revenues $114,533 $115,347 $124,795 $111,416 $185,853 $140,683 $137,362 $118,183 Operating income 16,2 % 19,273 21,127 14,360 42,453 26,071 24,607 18,219 Net income 20,429 16,930 25,512 12,643 47,857 29,195 32,683 22,173 Earnings per common share' $ .61 $ .63 $ .82 $ 39 $ 1.71 $ 1.03 $ 1.00 $ .69 The business of the Company is subjed to seasonal fluctuations with peak periods occurring during summer months.

• The eamings per share have been restated to reflect the Odobec 1983,3-for-2 common stock split.

Finzncirl Data Adjusted for Changing Prices (Thousands)

Year Ended December 31,1983 Constant Dollar Current Cost Average Average 1983 Dollars 1963 Dollars Net income before book dep toation of $46,319 $ 172,800 $ 172,8J0 Adjusted dcpreciation 106320 114,009 Insun :* J 66,480(a) $ 58,'91 Increase in specific puces (current cud of pnm, plant and equipment held during the year $ 132,679 Decrease ta net reawerable cost $ (4,607) (10,328)

Efled of increase in general price leve! (119,269)

Total (4,607) 3,082(b)

Gain from decline in purchasing power of net amounts owed 40,130 40,130 Net $ 35,523 $ 43,212 (a) Including the decrease to net recoverable cost, the gain on a constant dollar basis would have been $61,873 for 1983 (b) At December 31,1983, current cost of utility plant net of accumulated depreciation was $3,368,000 while historical cost or net cost recoserable through depreciation was $1,872,000.

i 27

Kansas Cay b rwer & bght Cumguny CERTAIN FINANCIAL DATA ADJUSTED FOR CHANGING PRICES (In %ousands of Average 1983 Dollars)

Year Ended December 31 1983 1982 1981 1980 1979 Average consumer price index (national) 298.4 289.1 272.4 246.8 217.4 General information Operating revenues $562,543 $501,251 $516,735 $539,206 $509,056 Gain from decline in purchasing power of net amounts owed $ 40,130 $ 38,298 $ 88,461 $123,566 $136,956 Cash dividends declared per common share" $ 2.17 $ 2.07 $ 2.06 $ 2.17 $ 2.41 Market price per common share at year end" $ 18.43 $ 18.88 $ 15.54 $ 15.59 $ 19.15 IIistorical cost information adjusted for-General inflation income' $ 66,480 $ 23,944 $ 27,640 $ 28,390 $ 4,560 Income (k>ss)* per common share" $ 1.78 $ .23 $ .62 $ .69 $ (.60)

Net assets at year end at net recoverable cost $655,077 $546,174 $486,888 $490,619 $484,428 Current cost information Income' $ 58,791 $ 14,734 $ 16,431 $ 14,809 $(12,6M)

Income (k>ss)* per common share" $ 1.47 $ (.18) $ .07 $ (.01) $ (l.65)

Excess ofincrease in general price level over increase in specific prices after reduction to net recoverable cost $ (3,082) $ (9,436) $ 64,899 $117,038 $143,935 Net assets at year-end at net recoverable cost $655,077 $546,174 $486,888 $490,619 $484,428

• Excluding adjustment to net recoverable cost. The year 1979 is before cumulative efTect of change in revenue recognition.

l "De amotsts for 1979-1982 have been restared to reflect the Octobec IW3,3-for-2 common stock split.

Notes to the Financial Data Adjusted for ChanginB Prices The information prescated abo,e is supplied in accordance with the requirements of FASB Statement No 33, " Financial Reporting and Changing Prices," for the purpose of providing cer-tain infcrmation about the effects of changing pnces. It should be e.ewed as an estimate of the approximate effect of inflation, rather than as a precise measure.

Constant dollar amounts represent historical costs stated in terms of dollars of equal pur-chasing powen as measured by the Consumer Price Index for All Urban Consumers (CPI-U).

Current cost amounts reflect the changes in specific prices of plant from the date the plant was acquired to the present, and differ from constant dollar amounts to the extent that specific prices have increased more or less rapidly than prices in general. The current cost of plant was determined by indexing the surviving plant by the IlandyAGitman Index of Public Utility Construction Costs. Since utility plant is not expected to be replaced precisely in kind, current cost does not necessarily represent the replacement cost of the Company's produdive capacity he current year's provision for depreciation on the constant dollar and current cost amounts of depreciable plant uns determined by applying the Company's composite depreciation rate to the average, depreciable plant amount calculated on a constant dollar and current cost basis.

Since regulation limits a recovery of fuel costs in tuse rate schedules to actual costs, fuel inventories are effectively monetary assets and have, therefore, not been restated from their historical cost in nominal dollars. Also, preferred stock has been treated as a monetary item.

Since only historical costs are deductible for income tax purposes, income tax expense has not been adjusted.

l l Under the ratemaking prescribed by the regulatory commissions to which the company is subjed, only the historical cost of plant is recoverable in revenues as depreciation. %erefore, the excess of the cost of plant stated in terms of constant dollars or current costs that exceed the historical cost of plant is not presently recoverable in rates as depreciation, and is reflected as a reduction to net recoverable cost. To pngrly reflect the economics of rate regulation in the determination ofincome, the reduction of net plan: 'o net recoverable cost has been offset 28 by the gain from the decline in purchasing power of net amounts owed.

Dividends and Stock Prices 1ransfer Agents and Registrars mmon Stock Price Range

• Common Stock 1983 1982 51anufacturers llanover Trust Company rter Iligh low Iligh Low New York, New York 10015 irst $1978 $18% $16 $ 14% United Alissouri llank of Kansas City, N.A.

.rond 20 % 18 % 17 % 15% Kansas City,51issouri 61141 hird 21% 18 17 % 15%

'ourth 22 % 16 % 18 % 16 % Preferred Stock Common stock is listed on the New York Stock Exchange 51anufacturers Ilanover Trust Company ind the Slidwest Stock Exchange. New York, New York 10015 United Alissouri Ilank of Kansas City, NA ommon Stock Dividends. Kansas City,51issouri 64111 Common Stock dividends were declared as follows: Preference Stock and $17.05 Preferred Stock e arter 1984 1983 1982 Kansas City Power & I.ight Company Tirst $0.560 $0.527 $0.493 Kansas City,51issouri 6il11 iccond 0.527 0.493 Ihird 0.560 0.493 Founh 0.560 0.527 Annual Report on Form 10-K Copies of the Company's annual report to the Secu-Preferred and Preference Stock Dividends rities and Exchange Commission on Form 10-K will be Quarterly dividends on Preferred and Preference Stock provided without charge to any shareholder or bene-were declared in each quarter of 1983 and 1982 as folkr.vs: ficial owner of shares of the Company's stock upon Cumulative Cumulative No Par written request to Samuel P. Cowley, Sen!or Vice Preferred Stock Preferred Stock President and Secretary, Kansas City Power & Light Series Amount Series Amount Company,1330 Baltimore Avenue, Kansas City, Nils-3 80% $0.95 $ 10.70 $2.575 soui 64195.

4f0% l.00 $ 2.33 0.5825 4.2% l.05 $ 2 20 0.55 45a 1n875 Dividend Reinvestment

?Q '

j PreSe'r""l,c"e Stock Series

~'

Amount ant: Stock Purchase Plan A Dividend Reinvestm:nt and Stock Purchase Plan is avail-

$ 8.00 $2.c0 61e to all holders of KCPL stock. L'nder the plan, shareholders

$12.75 3.!'37 3 may invest in new common shares through automatic rein-Quarterly dividends on Cumulative Prefemi Stock issued vestment of dividends on common, preferred or preference in 1982 were declared as folknvs: stock and/or invest cash in amounts up to $1,000 quarterly All Quarter stock purchases are free of brokerage commissions. Stock is Series 1st 2nd 3rd 4th purchased with reinvested dividends at a five percent discount 1983 $17.05 $4.2625 $4.2625 $4.2625 $4.2625 from market price and at market price with cash. I'nder the 1982 $ 17.05 5 0676 .l.2625 4.2625 4.2625 Economic Recovery Tax Act of 1981, shareholders may defer 1983 $13.25 3.3125 3.3125 3.3125 3.3125 federal income taxes on reinvested dividends of up to $750 1982 $13.25 - -

2.3188 3.3125 annually ($1,500 for joint retums) until the stock is sold. The All dividends paid by the Company in 1983 were tax benefit is available through 1985. A prospectus for the plan determined to be dividend income and no portion was con. is available by writing to the Secretary of the Company sidered to be retum of capital.

• Adjusted for the October 1983 3 for-2 common stock split.

'Ihis report, including the financial statements contained herein, has been prepared for the general information of shareholders of Kansas City Power & Light Company, and is not intended to induce, or for use in connection with, any sale, offer for sale, or solicitation of an offer to buy, any securities of the Company 29

Kansas City Iwer & Ught Comguny ELEVEN-YEAR SUMMARIES OF FINANCIAL AND SELECTED STATISTICAL DATA Summaryof Earnings 19M3 em2 eml pmn Pr9 19'M Pr' pr6 19 ' s IT4 IP4 Operating Revenues 10 nh) l in trk- $ 553,3'O $ 4'5.MU2 $ 465N5 $ 4en.lM2 $ %%Jine $ 313,'N' $ 36.0%3 $ 2h,29' $ 20'M13 $ l'O.249 $ IM.403

' scam hcz 9.173 93r SpH6 5.'M3 5.'il 4.M'i> 4hn 2m6' 2.%% l.'99 t'%

Ital  % 2,543 4M5.629 4'lfil +45 9h5 4'O M'i 41M.664 T0J42 24'.164 210 4]M l'2.f 4M 15'.149 Operating Empenses t f u Rrs)

Opermu m 2410'6 20' 9'4 IMO.4'4 I? nJfl 14.14 135.490 110.510 92.915 M15% %M.M37 M.950 M.aituenas e 53,358 62.49h 54305 52.6Mu 54.315 30359 29.496 212'i 19.194 14.5 % llM40 lieprn imu m 46,319 45.21% 44,9td 41.'33 34.MM 31174 30,396 24.629 21,H6' 20.f>+M 1M,%0 Tam ino mw 61,962 39.946 453 " 41tNM 9.9tA 26.137 IM.4% 19.M41 16.49% li.2th 40.643 Gener.at 93,345 $2trs i t.<m n 4',9% 41.914 3M311 .M319 31.M22 2M34' 25.20' 21959

% s.al 498,060 40'.'06 4.226 M9.IIM thtM U 264.641 2244% 191.412 169MM 1 4.466 921992 Operating income t tu uhl 104,484 " .924 94.4M5 M6.M4' 460's  % 0 42 46 426 45452 40 6'O 4',td>2 M 14' Other income sad Deductions Unurd Alh marke fie njuwv furkis usal dunng o m9nm1m m 13.n09 .%J s.N 29.0'3 19."% 19.16' 11543 7.W2 3.'m l 1119 511 ljui6 Mis elimice nts i nc1) 25 (64) 3P (122) Me (M'4) (391 IMi 1.?li 642 214 T s2 13.A %4  % 026 29. pn 19654 19'*l 11.669 7.M 4 4.lM 3.M 4 1.154 1.220 Income before laterest daarges (O NH) 198.317 114 *H9 124MMi It ut% o 64 n46 66 '01 %M'9 49.M20 44 %M 3M.7%  %.%'

Interest Charges ( O nh) la ng tenn diin *0.126 65.260  % .242 48.Mr>4 481612 32 21' 26,Mi6 21M3 19.WW4 17 M&t l'.4'3 Wat term niacs 4.332 63121 4pu6 4 'M] 3.W H  !?&) 1.0I4 412 I. uni I592 343 Mis ellaneims 1.2*1 139' 10.4M9 7,141 2.4Hb 341 2M 2% 203 12M 147 Alh wars e fie tm en mni (tawts usn.l dunng a swanatrim s rnlM (43.s93) ( 39.6'u n ( 24.M'M n ( 21<n' t (19211) ( 10.%)) ' 5.904) ( 4N2 ) ( 33%) ( l >162 ) ( l.M4 )

%sJ 31 A36 4 4.ru ss 44.'49 4'.'n T.29% 2 4.'" 212M6 20.19M I?/mn IM342 16.409 laceme before Cumulathe Effea t 00s) 126,481 MO.9t l ' 9.1 66 6M701 36. % I 42.924 31393 29422 26hM 20,.213 19.9 %

Cumulative FEco of Change in Revenuc Reco3nkkiq un ux) - - -

• 202 Net laceme t tumfd 126,4J81 M ', l ir> 6M '01 43.'53 41924 31394 2M22 2h.txH 20.2 ? ) 19.9%H Prt *erreil and Preferente *itork Dietse end Requirementa t o sh) 21 5'O .'49 12414 M *'3 H.'19 7.545 5.128 4/)19 2 442 2.*Pi Applicalle to Comne;u Stock t mu v $ 104,91 3 M y)' $ 96.2M 4 8 43.lMO $ H.205 8 2 tMM $ 2 s.4*4 $ 22.% 5 $ l'y I $ l' llo Earnings Per Ca menon % hare

• 6 4 15 8 2 '9 8 3 22 $ 291 $ 2 01 8 23o $ 1 99 $ 2 26 8 141 8 1 95 $ 192 Lato of Earr.ings to Fhwd Charges 143 2 62 2 'i 2r4 1 99 301 2.'M 3 sH 3r 2 H2 2 68 1cturn on Year-end ragulty 15.7% 11 % 14 2 b 13 2% 7 '7% 10 % M.% 10.0 % inig c2% 93%

Capitalhation Data Common Stoch Esguky psurd $ 666,2'3 $835.192 3 459.313 $ 424/52 $ 3'3.224 8 3P 26' & h42 FWi $ 4.9% $ 219312 $ 18%3% $ 15t39%

beraue durrs outs.anding* 25.2'8.3A8 22310D4 JUS)2.'23 19 S 16 % 16.514 110 14.4%4H1 11424.190 12#17.304 9f0.63M M.920,6 %

M 920f3H C2h dnide rsim per share * $ 2.37 $ 201 8 i NH $ I?9 8 1 76 $ 1 71 $ 1 64 $ 1% $ 1 51 $ 14' $ l 47 Preferred 5tock (sush) lindnd requirement 3 0mard

$ 112,000 $ ll2JX10 $ il2/mo $ ll2fue $ ll2Jan $ Il2.tur) $ 112.00 $ 923No 8 'LINN) $ 92/No 8 52Jux)

$ s.414 $ M,414 I M.414 $ M.414 $ M lle $ M 414 $ 7f2 $ 4.945 $ iMM $ 2.650 $ 2.650 Aser.nge deidend rme 7.5% *% '% 7% 7% 7% 74% 6.% 60% iis 5.1%

Preferred stock (Redeemable) Hu srs) $ 56.156 8 % 3 16 $ 16'6 $ 3MM $ 1946 $ 4,1% $ 4.316 $ 4.4'6 $ 44 % $ 4.'96 8 4.956 Dn dwi rnpurements uu sid $ 7,997 $ 4392 $ 144 $ 153 $ 199 $ 166 $ 173 $ l'9 $ IMS $ 192 $ 19M Asenge dnadend rac ] 4.2% 14 % 4 0 v. 4 (FE 4 &% 4 (rt 4f4 4 IPb 40% 40% 40%

Prefereer= Stock (Redeemable) Ousyd $ 45,833 $ $0Jsn $ 50Ju r) $ 50,0 o $ 29pm $ 2ifoO - - -

Unidend reyutternent5 (D Eh) $ 5.159 $ 5. lM' $ 5. l M' $ 3)til $ 2fNU $ 139 - - - - -

Awrage dnsk nd rme 10.39% 10 3M% 10 3M% 9'3% M UIn M(Arg - - - - -

long term Debt (laciuding curreat maturkles)Ousal $ 805.644 $ '6'616 $ (A2.090 $ 6114" $ MME'6 $ %43nt $4%r2 8 344.IIM $ 344.73M $ 324.441 8 299 '9' frwertms on daiw ebshi $ 70,126 8 69.260 $ % 232 $ 4 Mar >e 8 +0.612 $ 3121' $ 26.M% $ 24%3 $ $ I?,MH4 Ascrage interes r,are 19.96M 3 17.473 9.13% 9 4fr% MMrb M2% 7Mb 69M% 6?tr% 6 35% 6.12% 5 MM% 5 M6%

Othee Data and Ratins t hhty Maw - Gnm aahrnms onsfs) $ 304.636 $ 20'.04M $ l'14]H $ 1%N6' $ JhylM $ 1HM*2] $ IM.2M5 $ 126.01e $ M9.HIM $ 611'9 $ 3M.3%

Ital Assis (OID'd 2,0?I.011 1.'912T lhl',7MI 1,93M.9"M 1391.04M l.166 *60 t /XN.M i t M41302 736.530 661592 6(4.930 lk d bluc per dure' $ 23.53 $ 21 % $ 22 2% $ 21 12 $ 21 30 $ $ 2175 $ 21 29 $

Gunnwm wa k Equny R.nni  % &g 21 90 21 64 $ 21 11 $ 20 62 39.5% 35 %  % )% 341v, 43 % 34 2% 33 M% 35 % 33 1% 34 &L G unrru m % k Prkr*

lhgh $ 22% $ IM% 16% $ 1% $

$ IN% $ 19 % $ 21% $ 20 $ l'% $ IMh $ 22%

hw $ 16% $ 14% $ 12 % $ 14 % $ IM% $ 16 % $

13 $ 16 $ 12% $ 10% $ 15%

• The amourus hm been resmnf to reflat the (htierr. Pml. 3 fic 2 ownrru m gh a k spht.

h

Electric 5 des Statistics 1933 19M2 19MI 19MO 19' 9 N'M 19 19'n 19 ' 5 N'4 N'i OcTenues (tNXii) hwienual $ 199,713 ' $ 16n3cw $ 14916 8 161,9*3 $ 121.1'o $ 111.9'2 8 93343 $ 84.202 $ '930' 8 62314 $ SM.2MO Gunmen tal 227,286 2019 % 192326 l'6.9 r5 i +M.120 12 4.0M3 10'.73H 943b M4.416 6HT3 62D43 Irdugnal 93,% 3 Hn,953 94.1614 MOF21 6,9% 6? eH9 50.914 41105 34.4'M 30.92' 2'3'O 1%lw wreet and h.ghway hghung 11.015 9 hlb 9332 8325 'A43 6,221 63ajH SXM8 5205 4,9 16 3W9 Pubir authirnies- p mer and hglumg 89  % M2 's 09 '4 65 to  %  % 49 Other clatnc utihties 17,6*8 12.631 12h4M 10h48 9We M309 61H6 5315 l'65 2.96H 2.3%

Tisal 549,744 4'33 % 4o16'2 4.M 33' %3352 312.3 H 2M.%4 232f6 206.42' 169.043 154246 Other clatrw nsemnes 3,626 2258 2.153 1.M 5 I ? 32 13'9 1.4W l.421 13mi 1.20h I.15' Tisal $ $53,3'O $ 4'%O2 $ 465825 $ +40.142 $ %5 Jim 8 313?H' $ 206.059 8 23429' 8 2tTM13 $ l'0.249 8 1 %.403 Sales in tlilowsta Hours kAO's) kwlentul 2,719,062 2TM 6a' 2345h46 2hM9.46' 2 2 % .962 2.465.'H2 2.2M.029 2.19 1859 2 3 10.632 2.0'08 % 2,11332b G unmen tal 3,498,936 1339.6'3 3251235 3338.lMS 3.1M3?10 ilM2A75 10MO.%9 2BM9.HMM 2.M46.031 2.651.Ml? 2,6"ffP Induvrul 2,039,7 % 1.959 431 2326.6s>4 2.161.924 23M3.2ne 2 3)2.619 2,14'363 IfMO.230 I?nH3H 1.952?ll 1,9MS.N9 Pubir urect and htghwa hghtieg 66,744 66,625 663a N 6',l*2 6h %I 6M.2 4M 6M2Ho 66 Alt 65.200 65T6 64.1 %

Pubir aishitans-ptmer mulhghung 1,%3 1.65' t h4 th93 176 2,'10 2?O2 2.65' 2.914 1513 1599 Othet elettrw taihins 410,338 325.99' 32' 022 3%.154 428.0'2 3 % .916 41'316 302.m2 264 4ar 235eMR 2363fN Tisal 8,7%,3'9 8.U'2.040 M.ilM309 M393395 M21M3Hi N3% 950 *tRE)4M5 ',416JA) '24'.442 6.9'91t0 '.0MO,MMM Avertoe Number of Customers Rawleruial 309,909 3s ti,'56 3h613 301,41' 2iM 413 291402 2MNT6 24J16 2M1?OH l'M.9'3 2'3332 G unmercui 40,550 403155 39?% 3M.w4 3M3'2 3H.713 3M343 3H.021 3'709 3'.5'5 3'.401 frkluwrul 2.488 2.4'6 239) 2215 2.142 2.121 2 Or4 2.0f4 2D49 21164 2.!!2 Publw urett and highwav hghtmg 120 12tl 122 123 123 123 122 125 126 12H 128 Publw atshi ritas- p mt r mk!hghung 11 11 11 11 11 12 11 11 Il 12 12 Other clatrn unhtns 19 li 13 li in 16 16 15 13 13 13 Tural 353,09' 349.441 46.M'6 342?t>4 349.0's 14.M' 32M.952 3243 % 321.616 318764 311'.*M Res&ntid sal-s Aserage kwh per tustwner 8,? ?4 *?% '.'I H MS24 '3% F 404 ".920 '? l' N.166

• 424

, ','26 Aterage nsemic--- per kwh __te.as 7,345 6't2 6hm S o2s 53'3 4 %I 40h' 3 M3M 34% S lui9 2.*SH a

daEDd $dall!stIC9 Gener.ned e ntil - kwh uners) 5 191.332 9.ly4.2m io.'V .0 90 l l/N5 >e st 'f35301 M.41.224 M,4+ sis) - 6o'.22 t '.201' p4 *225,90

. ',212392 Punha,ni- kwh t sals) 12,559 11.146 11161 II?61 9.i713 21 t WI 18HJH2 l'Ae29) 190.19M 161 (W 0 141?%9 Intenlungnt ; u)- kw^i unOC 1934 % :549.9441 41 ?A >3'9 ) M230 a l 1.1 % 144 214 421 f lM2195) 164.9 % 4( 4.4 ! If+)T2 241921 lisal - kwt- Unurs) 9,3MJ 2' HJsA.49' Mpuo'o2 9.3 63x>l s kiltw1M 9.031 6 % M. e513'6 Mil 26. 40' 'N5' 4*41' 73 %.452 '3914T2 i

Maimum n1 hecri; dernind i kikmarts t e inred 1.435,000 1315J u o 1304.1J 0 IJi9(u n) t 31',it a l t 2%J u o 12%J u o 1.In5J ir d) 1.l(IJp o 1.106 330 i,090.9to Wxmem tx1 hinirtv tiem.ind m kik amis hurnmer) 2324.000 2n'se 2.' 23Ja n 2.IwD u) 196ejn u 2f rfa tt' IJwJa u) 1,920 4 t o 1,902,'en 1.90'.2tu) I '5' ir o Net gemtamgiagulwhrv m luh mets hummer n 2,634,000 27'a.Inni 2sMJWu) 28 Wu u) 2.981JMW) 2sto,ivu) 2.641Jh o 23>ljup) 2334. tun 221MJun 2.224Avu)

• i 43p.h IIV in kik Wsth ha dd) purttumt hummer) - -

(210/10) (1919M1) -

95.0i ni ( 101.t ri)) 118 'NN.) 100J80 14HJNu (25jNN))

luu per nti kwh gener.ated 10,8'4 l l .l _M 11,119 I! 1% ll A33 11.2(4 i t ,51H 11.331 II,%i 11,364 11.521 Employee Data Mlarum and wages omuli) $ 89.246 $ M* #1'.

$ N).239 $ 5 .602 $ 6M 4ns 8 4 693 $ %3N0 $ 496+4 $ 45 3)5 8 3H.61 a $ 40/nfes Penwns and twnefits Uu m)4) 15.060 14.4'3 12.~59 l l .6'O 9 4+' 61461 TTH

• 132

. 6.4M' 53 % 5#0

$ 104,306 $ lo23HO $ 92/71H $ MST2 $ 'M.412 $ 613 % $ 64 2 % $ 56?"6 $ 51.92 $ 4472 $ 4 5.9.M Number st empkarts. Ibember 31 2,939 2.95? 2.928 2M% 2>W4 2726 23'2 2322 2.44 2.4" 23 %

Employee Data- Adjusted *

• Mlanes and w ages um oil $ 81,058 $ N019e $ '242' $ M.iM $ 62.9 9 $ 49?% $ 51716 8 46.491 8 42.74M $ 36 T2 8 39.130 lyn .nisw aid benefns Da nim 13,*92 192MI 11.610 10 ?51 92H2 6.2M' ' 359 67 % 6.l's 5.0M' 5.*29

$ 94.850 $ 9 9. t'5 $ M23' $ ** 220 $ '1851

. $ ShD42 8 59 tri $ 51245 8 4M922 $ 41359 $ 44B59 Number tt empimees. th ember 31 2,708 2720 2fy4 2.62M 2JA9 23** 2,414 23M2 2T9 2T5 2.4'3

• • l% ltkles data rel.ited to emplares alle t Jted im ther parfkI{unts m ja dntlV 4 MDed umt.s UptTated hv ICPL 31

BOARD 0FDIRECTORS COMPANY OFFICERS

• l ArthurJ. Doyle

• Linda flood Talbott ArthurJ. Doyle,60 Chairnun of the Ikurd, Executive Director Chaimun of the Ikurd, President and Chief Executive Clearinghouse for President and Chief Executive O mcer Mideontinent Foundations Omcen 1973

-information exchange William II. Clark for philanthropic Samuel R Cowley,49 President and Executive activities Senior Vice President-Director Corporate Affairs, S(uetary Urban league of Willis C. Thels

• and Chief Legal Omcen 1979 Kansas City Cluirnun of the ikurd

-Community Service Simonds-Shields-Theis Donald T. McPhee,64 3; ;; .

Agen(T Grain Co'mpany Senior Vice President System y ;.f.

-grain merchants and Power Operations,1969 p., . .;. .

Cyrus S. Eaton,Jr.

Chairman of the ikurd warehousemen J. Robert Miller; 59 A. M c .

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Cyrus Eaton World Wade Robert II. West . Senior Vice President- ..

Cleveland, Ohio President, Chief Operating Ransmission and Distribution _1

-intemational trade Operations,1971 Officer and Director llutler Manufacturing kgy c.

William D. Grant

• L uis C. Rasmussen,55 1 b,*p fag Chairman of the ik)ard and Chief Executive Omcer C(h

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cturer and maketer Seni rVice President Finance and Commerce and Chief MQ

. ;g of pre-engineered buildings Ilusiness Men's Assurance systems, agricultural equip- Hnanci 1 O mcet A .. 4 C( n ofAmerica ment and energy manage- J. Michael Evans,38 ment systems George E. Nettels,Jr.

Vice President-System Power Operations,1983

.( Od Robert K. Zimmerman q.. . -

President and Chief Executive IIonorary Charm.m OfPcer A. DrueJennings 37 - EM f heikurd Vice President ana General S McNally Pittsburg Inc.

President Counsel 1980  ; g Midwest Minerals, Inc. Advisory Director Pittsburg, Kansas Robert A. Olson Donald M. Landes, 52 ['5-f;L

--engineering, nunufac- Retired Chairman Vice President-turing, construction of the Ikurd Communications,1975 pf mineral processing and quany operations John A. Mayberry,56 V ce President-Commercial W[

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Louis C. Rasmussen Operath>ns,1971 j l[.: -

Senior Vice President Finance '

William II. Miller,49 and Commerce and Chief Financial Officer Vice President Administration, U:- : .

1980 U. '"' "

pc, Eugene M. Strauss

• Chief Executive Ronald G. Wasson,38 U" ~/

Vice President Purchasing, t: -

The Strauss Companies

-insurance and related 39g3 p' ".'S; -

insurance corpcrations Lee E Miller,62 * --

Reasurec 1975

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Neil A. Roadman,38 K .~ ,p Controllen 1980 ,q.-

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• Member Executive Committee b;.: ~ W ~.,

• Listing includes age, title and ' .N year promoted to officet $9' 32 [:t;;".'

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Kansas City Power & Light Company is a medium sized

, electric utility and the corporate successor to one of the p1-1y

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world's first electric companies, generating electricity since 'T.T %

1882. Ileadquartered in downtown Kansas City, Missouri, the Company generates and distributes electricity to about g;.. ;".J. c-356,000 customers in a 4,700-square-mile .:rea located in al! 3 b.I 4 or portions of 23 counties in westem Missouri and eastem  ?',NM Kansas. Population of the senice area is about 825,000. 46 f O.

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Customers include 313,000 residences,40,000 commercial firms, and 2,600 industries, muncipalities and other electric $ .. ... [.",

utilities. About 73% of total kwh sales and 70% of total reve-  %.

nue is derived from customers in Missouri and the remainder from Kansas.

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,T Steam is generated and distributed to about 175 busi-nesses in downtown Kansas City and accounts for about two d0 7.g N.

L percent of total revenue. ft b ti a,%

Generating Capacity and the MOKAN Pool ,

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Most of the electricity supplied to customers is generated from six power stations with a total 1983 accre.lited capacity }i@Q  ?;.g, of 2,6M mw. KCPL is one of 11 members of the MOKAN Pool, N.: 4 formed in 1962 to share reserve capacity, coordinate planning ~ ' .7 for additional generating units and expand transmission y lines. Thmsmission connedions with numerous utilities in Missouri, Kansas, Nebraska, Iowa and Minnesota erlunce 4

J. l the Company system reliability and have cude Kansas City ..

a key center in the national power gnd which enables bulk - ..

power transactions among the interconneaed utility systems. i 'f(,

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Economy of the Service Territory '$U Most of the Company's business is derised from Metro- J.M politan Kansas City, which is considered to be the world's V*e

agribusiness capital, centered around the Kansas City Board 9 7. n of Trade. Kansas City leads the nation in farm equipment dis- s.@=.

tribution and hard winter wheat marketing; ranks second in @f wheat flour production and grain elevator storage capacity and is the nation's third largest feeder cattle market.

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The metro area has developed into a major retail market, (9.N' ranking seventh among the thirty largest metropolitan areas ;O E. J..

in per caria retail sales. The city is the nation's largest pro- P ': . '

ducer of greeting cards and envelopes, and is a major center #; * -

for automobile and truck assembly, rail and truck transporta-tion, storage, and distribution and for regional wholesale and a) ' [Q ;

senice companies. Kansas City is also a rapidly growing con- .

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vention and entertainment center; ranking among the top ten cities in number of conventions and dollars spent.

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% 1 Jc-Iccation of several foreign trade zones in the area has Y .'

established Kansas City as an intemational trade centec  % ' . ; ..

The area's location midway between.the geographic and $.? J; .

population centers of the country will continue to play an P5 .p important role in the area's economic development. A review ;Wf of Fortune's 500 largest firms shows that 200 have operations '4?

in Metropolitan Kansas City .3 . .

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1 BULK RATE w "r-w U.S. POSTAGE I PAID --

KANSAS CITY, MO KANSAS CITY POWER & LIGHT COMPANY Permit No. 397 1330 Bahimore Amnoe .' ~

YW Kansas City, Missouri 61105 .

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