ML20095A654
| ML20095A654 | |
| Person / Time | |
|---|---|
| Site: | Wolf Creek  |
| Issue date: | 12/31/1991 |
| From: | Cadman W, Hayes J WESTERN RESOURCES, INC. (FORMERLY KANSAS POWER & |
| To: | |
| Shared Package | |
| ML20095A652 | List: |
| References | |
| NUDOCS 9204200075 | |
| Download: ML20095A654 (52) | |
Text
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f i g 1 TABLEhF CQNTENTS, o - e
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! A Leek et i j l- 1991 and Beysphd . ,
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What Are MII+ N Demg Tode y ? s .
The Yest en Review .- 9 Cortspany Prefs,4c ~ 12 Selected Financial Dat ' 14 t.
Menegement s
'!; Discussion end AnIsiyiss 15 '
$tetements and Notes / i t N.;
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1 l-I l' The legd name afthe Conynny b The Karvas Ikeer wui figla Conyxmy, and it u wuler thh naine stock is tmded wvi dividemh dhtributed. The Conyumy de s busine.u throng!wut its sen ice ;
i area under the trade nany M'l Gr 1991 um preparedf>r the genemi ,
1 inprmazion of the shareholden arut emplo>ces <{the Company and is not huended to be rivd in connection uith ain sale or effer to bup; any security <{dw Company.
Shareholden may obtain u irlwat charge a copy <{periculic equ>rtsfiled u ith the Securities awl Exhanp rommiuion. Requests should be addressed to the Shureiwlder Reliaions Damrtment, ,
ID B a 839, 7bpeka, Kansas 66601.
The ontwal nveting ofshareholden h twld on thefint Twvlay in 3fas. In 1992 the meeting -
scill be held 31:y 5 in 1bpeka, Kan.<m, at 11:00 a.m.
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4 Jh E ik2ws, Jr. IVilum A. C.sdsm Ommm cfliv Sad. ' Wr Ovurme.n ofshe had 1% lent. <md QuelEwtuthe Ofver D E A R S H A'IM!eO L O E R:
A unanimous decision on October 28,1990, by the Boards of Directors ofThe Kansas Power and Light Company (KPL) and Kansas Ga;, and Electric
' Company (KG&E) to enter into a merger agreement approaches a successful conclusion. With receipt of all necessary regulatory approvals (see " Year in Review" and Note 2 of the Consolidated Financial Statements), the Company expects to conclude the merger in the first quarter of 1992 and KG&E will be merged into a wholly-owned KPL subsidiary.
KPL has mailed " Forms of Election" to KG&E common stockholders so they may indicate their preference for cash, KPL common stock, or a com-bination ofcash and common stock in exchange for their KG&E common shares.
j ' Integration of the two companies is underway and some of the changes it i
entails are reflected in this insert; including our new Company officers. Your proxy statement willidentify the five directors from the KG&E iloard who will be incorporated into the KPl. Board. We will continue to keep you informed about integration throughout the year with regular quarterly reports and let-ters included with ycur dividend payments.
We thank you for your continued interest in our Company. We look for-ward with enthusiasm to the exciting challenges we will encounter in the coming years.
Sincerely.
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G I a- . John E. Ilam, Jr. Witwn K. Cadnum Chairman of the Board. Vice Chairman of the Board President, and Chief Executive Officer
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COMMONS 1DCK D.tT4
'Earninp Per Share . . . . . . . ... $ 2.1I * $ 2.25
> Dhidends Per Share .. . 2,01 *
- 1.80 Book Vahr Per Share = 111.5 9 18.25
' Awrage Shares Outstanding . . .. . 31,566,170 31,566,170 FINANCI.4L D AT4 t.11illiswa ofDollant Operatirig itevenues . . . .. .. , $ 1,162 S l .150 Operating Eymn es . . . , ,. , 1,033 1,018 Net Ineome , . . , , , 90* 80 Gro+ 1%nt in Senice . . . . 2,535 2,422 i
OPEIL4 TING D.11;t -
Natural Gas: 3
-Sales (Thousana of MCF)
Gas Senice . . . , . 161,987* 143,788 Transportation . . . . . . , -78,055 72,623 ,
- Total, , . . . . 210,012* 216,411 i
Custon,ers (Awrage) .. . .. l .067,Il lo 1.059.140 l
- Electric. ,
Sales (Thouwns of MWill .
Electric Senice . . , . 11,728* 8.216 Firm Interchange . 810 913-Total. . . , , , , , , 9,538* 9,129 Customern ( Aserage) , 306.203 303,535 COAWON STOCK ? ~EA2hWG5 AND E '
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"fru tudes ywrial, une time diridend of$0.18 per share paid Februnn 23. 1941.
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tKG&E) into a sub idiary of The Kan-as Power and 1.ight
- 1991 was an exciting year. Comjun). We m e pr oceeding to firulue the mer per and completc
- Merger activities and declining intere t rate:. combined to bomt tL acep.isition of KGA E stock.
our common stock and raise its market price during 1991. Our challenge now i to mose fonsard with this opportunity.
Earnings for 1991 were SC,41 per share of common stock, We espect fullintegration of the two companie- before the end an increa e of sesen pcrt ent, of March. ;
At theJanuary 1992 metting.the Ruid of Dinrtori rrea+d Oser the ju t 16 months.our employce- h,ne ruct and defnied the quarterly disidend on common tock to U% tents up one co Ir.nate philo ophies, studied operating procedures and I cent from the 1991 quarterly rate. On an annualized basis, the prejured for integration. The etnplosec integration effort- not indicated 1992 rate i $1.90. only identified and defhrd the mean toca t acrger.related We are plea cd to report tlut all regulatory apprmals hase been ~nings, they en ure our uc( e -
received for the merger of Kan-as Gas and Electric Company Thecombaution of our re ourec, allows u to take mhantage of efficiencies and sning fromjoint enerp disiutch, condiined
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meter.readinghilling fumtions consolslated enice tenter & nice l
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3 persomd and uther identified combinations. to prm ide enlunced cu-tomer satiJaction, to share Iw nefits with cu tomers and share-
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holders and, of course, to better meet competitise challenges.
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the exciting changes that are occurring. The special section l m(luded under the etner of this report reflect. some of the i merger-related reorganization, fh 9
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Tir merger i- only iutt of the change w hich faces our Gim;uny monibly bill statement and trained engineers who can use and our industry. The energy marketplace is changing, technology to assist cuaomers in making wisc energy uw deci-Ju t as other industric* learned to capitalize on change and sions. It is concerned cu<omer consultants w ho promptly n.spond
- becane cuaomer orierged and nurket drhen, m too must energs to inquiries or coun clors who help a customer create a budget utilitic$ learn to accept customers has ing a much greater degree that emen all pen onal expenws. It is in taking the time to be of control than thc3 had in the past, a helping hand for out communities through solunteer and Gistomers w ant choice.-product clioices wn ice clioices, and Comptiny-sponsored prograin .
price choices We must offer show choices or ri-L losing res enue Te are concerned with the quality of our enices as vii as as others seek to prmide our traditional wnices. the quantity b strhe to prmide customer scruce in a timely Our industry is changing through the gradual emergence of and sati.,fy ing manner. We moth ate our employees to go Lyond it competitors that offer other sources of energy supply for utility the " expected l' to prmide assistance to bu inesses seeking new customers. Giaomers will loni to other suppliers-pipeline com- .trategies and find innmathe solutions to customeri real hfe panies or independent power producers--if we are unable or circumaances. E centinue our comnutment to use the latest unwilling to meet their demands technokigies and emironmentally .ound practices to sene our Competition, ion. places more attentiun on what customers customers, large and small.
uant, it is not sufficient merely to meet exi ting customer h are dedicated to customer satisfaction and that will be our demands: one must anticipate new denund .. theme for 1992 and beyond.
Our challenge is two-fold: 1) recognize and meet customer I lieliese your Ibanl of Directors'. Company officers', and demands, and 2) seek new markets or resenue ources. employees' decisions and actions base set the tage for your An anchor in meeting these challenge 3 i- our Compan3's Gimpany to be successful in this cuihing, competithe
- tradition of customer suisfaction and our commitment to build marketplace. Our new Compan3 shares this truth with its on that strength and increaw the satisfaction lese l for all forebear -we are only as strong as those we sene, and our our customers. customers are stronger because we sati factorih meet their needs.
Gimpanies succeed and retain customem only if they provide customer satisfaction. Our core hu3ine+ is tied directly to our customers and their grow-th. We recognize that cu tomers are
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takes many forms. We must be flexible in meeting their intere-ts while a+uring reliable service at a reas mable price in order to 3"h" E II""' Jn Rurnun of thr R.ani. Prewi. nt, an<l prmide sati faction. @f E""h"' Uff" "
That flexibility is found in how we add salue to our senice.
It is in such mea 4ures as providing a return emelope with the 3
IME EAN5AS POWIA &NO L1OHT COMPANY
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C U S T O M E R. S A T I S F A C T ID N cuuomers, esiweially iarge ones, can pnwure energy senices l
When questioned by /ndustry Ifeek this past y ear, more than from non-traditional supplien. % recognire these reahties and ,
1 80 percent of the top officers in 360 U.S. comparties suncyed help our customers make informed decisions through our said " customer satisfaction" was their main concern. customer senice and marketing efforts h is our primary pal at KPL. Sati-faction is found in a qualit3 product - reliable and safe ;
This is not a new position. E an jtotly proud of an Wi }wrrent electric and natural gas sen ice. We lune initiated ptograms that
, posithe rating ln our customers, compared to a 73 percent utihty help customers tecciw the quality power ihey require at their I
company average nationwide. Iloweser, such a rating doe, homes and businew a+ure safe, reliable energy delken, and '
leave room for imprmement, and we are dedicated to making demordtrate how to use energ) wiwel) - fnim both an economic that imprmement. and a safety point.of4iew.
b w ill strh e for better cu lomer accepLmee and performance l Included in the objecthes of the Company, as outhned l
hy our lli sion Statement, are goals related to customer rating in the future. It will not be easy: as greater satisfaction .
satisfaction: lesels are reached, each increment ofimprmement becomes
- To provide a ~ustomer senice !cset that generates mme difficult to achicsc. L are. howeser, committed to that cu*lomer satisfaction: achiesement. The sitality and future growth of our Company
- To enhance the Company's reputation for leadership and 6 pends largely on how satis 6cd our customets are with our ,
quality senice with customers, employees and represen- products and senices.
tatives of government and media within the communities A Changing Industry we sene; Industry change is being d risen by , nstomer demands, tech-
- To be a profe+ional, caring, and dedicated employec force; nological innmations. and economic deselopments. Our reynwe
- To acquire, constmet, operate, and maintain the necem,ary to these changes will define our abdity to grow and prosper, resources to provide and deliver safe and reliable energy Competition is the Ibun<Leion ofour economic e> stem. At KPl.,
senices for our customeu: and we wek ome the opportunities asailable through competition. %
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- To become through growth and deselopment a larger, are leading the changes facing the natural gas and c1cetrie financially strong energv comimny, industries, and using these changes to benefit the Company.
l l- With ihese lofty goals before us, how will we secure For examph , our KPI,KC& E merger settlement filed with the -
i tangible resuh.s? Federal Energy Itegulatory Commission WERC) positioir us as Only customen can define customer satisfaction and deter- industry leader, in the open accew for electric transmi+ ion mine whether we are successful in achieving that goal. arena. As Congress considers reform of transmi+ ion acces and Customer satisfaction is more than customer sen iec. Satisfaction the Public I?tility lloiding Company Act, our merger settlement also imohes offering customers service and product c . ins.The holds promise as a model for responsible change and a more energy industry has become increasingly competitise, as competithe energy market emironment.
4-TMi KAN$A5 POW 5B ANO &10ht C0MPANY
[ H AT. ARE WE DOf NG TOD Ai?* .
handling and dip ~d. E participate in the ree> cling of css nuny maieriats.
Our Cuaomer Sen ice System (CSS) is a computer spar m that Our conunitment is deeper than just meeting legal require-ettables 11wth to gain access to infortniu'.on for custometquickly ments emironmentalisin ia. part of the corporale culttarc.
and accuratch. Thiutate-obthe art sprem was placed in opera- Employces from acw the Company ene on a ta L fun e which tion 1-te in 1991, both protx~ s urid userwes canironincrit2il project. tiiat rarige Employees from customer information representathes to from recycling to presenation of wetlands. '
senicepersons. use the CSS to both transfer and resiew infor. A +econd lake at the Jeffres Energy Center (JEC), the mation that includes billing meter readinys, account stat us, and Company's coal-Gred electric generating plant in northeast l work orders. Information is immediately updated and available Kansas, was opened to public fishing in 199L The ausiliary 1
to all sptem users. Bill pay ments at e recorded and new sen ice make-up water lake is one of the state's deepest man.made lakes l
l- hook-nps *peedily proces,.ed. Because the new sptem was and is being managed by the Kansas Department of Wildlife i
designed to be " user-friendly " it enables all employees to and Parks.
perform their jobs better 'r our customers. WILDCARE. the Unhersity of Kansa, Animal Cue Unit's l Another customer sen ice imprmement n suhmg from the CSS rehabiliution progrum for injured or orphaned wikilife, was is a new customer bill form. At the end of 1991, cu<omer recened supported by t#k force efforts through pn aluction of a sidenty,e.
I an ettjarged hilj cogit;3illing more, casier to read iftformation cortstrth' tion of a Oight pell for eag}cN and other constriaction about their account and including a return-mail emekspe. The work at the WilDCAHE facilities, new hill format replaces the postcard hill and allows for inchision The $ ideo educates children and adults to the dangers of
- of stfety, conwrvation, and other notices with the monthly bill. handling wildlife and stresses the importance of calbng trained The new bill also utilim the most natomated nuiling pro- personnel to handle h st or injured animah.
, cedures available, including KPL pre %rting of the enailing for in W 3andotte and Johnson Counties, KPl. is participating in postal carriers before delhery to the Postal Service. t4 ofihis g %_,,, , ,,,, wfj,,,m g;,,, , ,,,_a g a y,;,
ow,,&im nw m j>m win to mut ad una ,rm 4mavatajne innovatiw. cost-effecthe mailing splem is a first for the region rurd wifm. aur man, miaun r,w, nn-num,i ua m/,.n wssm Riot: Ut phw anm aM cwtn 4m our afM k smurd nudun 4 oleasamtl, Enrironrnent andp+sm!h mimi w custamn mquun l The Company's commit ment to the em ironment . 0 1
has king been recogniwd within the energy industry. 63 g
Company ek ciric generation facilities are designed i
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to meet or exceed gosern.nent regulations for '%~ ~
d pr otection of our air and water. We strhe to employ e o }p]' '
the latest deselopments in hazardous materials A si 8,m
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FM$ et A N 3 A $ POWER AND &10MT C O A4 P A N Y
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l the Kansas City Kestrel Project, adminhtered by the Kane standard Deet replacement program includes 20 pick-up irucks Department of Wildlife and Parks.. The rutural nesting site . of and sen ice sans that are dedicated natural ganchichs These the kestrel. or sparrow haw k, are rapidly disappearing because 20 schicles are ann ng the first 1,000 dedicated natural gas of urban desek>pment in those counties. The Comiany 6 pLe- schicles to be manufactured by GMC and will be used in the i i
a ing nesting boxes on electric transmission poles to substitute for Kan-as City and Topeka areas.
l the diminishing tree casities kestreb generally fmor. Natural Gas l'ueling Station in October, the Company KPL employees are working with the Oklahoma Department joined the State of Kansas and Amoca Oil Company in announ.
of Wikilife Comenation to des elop a marshland- habitat on an eing a downtown Torck retail CNG fueling facility. KPL will abandoned oil Seld noch of Nowata, Oklahoma. know n as the transport natural ga- to the Amoco station and help expand ihr Upper Verdigrb Wetlands. nationi CNG refueling network. Amoco was the Grst major oil Alternative li.el Vehicle, An agressise national aber. company to intn, duce CNG at a retail h cation, natise fuel vehicles program could lead to signisant emissions The Topeka project ha as a customer ba e the Companyi reductions in cad,on dimide, carbon nmnmide, niinigen db. dedicated natural gu schicles and the conscrsion of some 30 ,
and other reactive organic compounds, as well as economic and ehicles by the State of Karwas to nat ural gu. The retail oper ation i
l national security benefits for tne countrv will help both KPL and Amoco gain saluable experience in the KPL is part of the research and testing of both electric-and marketing of CSG to better ciuble in to sen e clu nging cintomer natural ga fueled sehicles. The Company and the Kan as fuel need as the 1990 Clean Air tet enacted by Congrem Electric Utilities Research Program are helping fund re carch requin s the comersion of Beet schicles to abernatise fuch.
uing a full-sized electric san at Kansas State Unisersity The KPL Enterpriws l
"GXan" was delis ered in the fall of 1991 and is one of about 150 Since its establ61unent in ottober 1990, the Company i w holly - j being studied by utilities and unisersities across the country in a owned ubsidiary-KPl. Enterprises. Inc.-he descloped r
program spearheaded by the Electric Power ik search Institute sescral non-utility, energprelated sentures. The subsidiary in-
- and General Motors. ciudrs Hangeline Corporation. w hieh began operations in 19M
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The Company is more and now is incorporated into KPL Enterprises. Rangehne w -
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JMt$W e # directly insohed in the primarily a marketer of nat ural gas in the midwest t hat works w ith 4
. 3 l desclopment of compremed htbinewes that do not hase the internal expertise to actiuire or <
g natural gas (CNG) fueled arrange for the acqubition and trardportation of natural gas from I
vehicles A prototype h eu~ outside suppliers. KPl. Enterpri,es al-o includes Contract ;
rently beingtested b5 KPL. Compre% ion, Inc., a compnwion sen ice to oil and ga producers ;
i In 1992, the Companyi principally in Texas. New Mexico. loubiana. Mississippi. and the
-- Gulf of Mexico; KPI I imited Partners. Inc., w hich holds par t.
Compwn oduen and ovuwjum!.ng unuwwd awkfikn w rhe BHl)C4RE <mancIwhabdaatsmfudas nership interests in AMllplus and a regional senture capital l 6
THE aANSA5 POwla AND &4CMf COMPANY i
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1 group; and Till AllK Gas Gathering, w hich constructs, ow ns, A "Creathe Partnenhip" award was presented to KPL by and operates p+ pthering, comprmion. and treatment facilities lh W. I 3all & Company for nhibiting. "in spirit a- well as action, j in the Arkoma Ibin of Oklahoma and Aikansas those principh s ami business practi< es that identif 3 ncryonci
- Electronic 31eter itcading KPL Enterpriwi jertnenhip mutual concern for safety, performance. reliability, cost in A MRphu, a research and dnelopment av oeiation dnelop- competitheness. and a<banced technoh.gies."
l ing adsanced nwter-reading technolop, includes the handheld Our safety comnatment includes a comprehenshe rnicw of l
l electronic meter-reading dn ice w hich Company meter readers our natural ga- sptem by Stone & Webster Contuhant* and a r
l began using during the pring of 1991. performance-ba cd sen ice Ihr repbcement program. Thn. ugh I'
Known as the Datacap, the dmice makes it ea-ier for meter '
i i arly detection and prnentathe measures, natural ga. leak are readen to record information. imprm ing accucacy and produc- being repaimi before problems dnelop.
tivity. The batter >-operated unit alksws the u er to enter data on Gas Safety and linelopment Labornton in Scidember, a keypad. The desice determines whether the current meter KPL joine<t a select few natural ps companies which operate i l
reading is within nornul ranges for itut particubr customer, and high-technology pmfety laboratories. The modern bhornior)
- if not reque-ts a re-check. i l cated o in Kans,w City, Miv,ouri. Its facilities are asailable to j
When the route is completed, the data are transmitted c!cc- all Company operatmg atcas and prmide a sariety of testing l l
tronically to a computer at the local office and then to the -erders aimed at assuring producir perform as eyweted. ;
Companyi customer billing computer in Topeka where The ras safet3 l ab signi6cantl3enhances the effectheness of the bill is prepared and customer account information is the Company' quahty av,urance program. Materiab remmed kwtantaneously updated. from the sptem, ,uch as pipe, couplinp. and other parts and A nother "high-tech" meter reading dn ice being dn cloimu equipment, are anah red and wcaknes-es identified.
by the Company 's limited partnership enables meter readers to The facility also helpuerify that new pnalucts or technologies
, collect readinn from up to 1.000 feet away. The Genesis Meter in the natural gas industry are compatible w ith KPLbytem and i
l Module makes inacces .ible meters a thing of the past. An elec- meet the Campanyi specificatiorb before they are approsed i
tronic dn ice on the meter transmit.+ the data s ia radio waves to for purchase.
f the meter reader's handheld unit. Equipment in the n 3. %m Imestment in such technologies will return dividends to the f5 g lab includes a Company-financial as we[ lib operational-as utilities -trhe to g Y; computerited gas increa,e employee ef6ciency and producth ity in the competithe m chromatograph that energy marketpbce. 6 used to distinguish
. Safety Activities Recognized ,
W w inus P ^** and 'o The Companyi program to achine one of the nationbafe-t tesuhe heat content ,
, hjwt WlL.'rd lesimg rsjlupnwns lit dv 0etjnyn 't 'sr'V (U M!ro lulWW in hmM (,'h j natural gas delhery splend continued to be recognized in 1941. lab de Gym mamium rpa!,o w@ neulemnh weplevd.
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TMi KANSA$ PDWI& ANP LleMF C0MPANT
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of gas. An uhra onic now detector chea for weaknesses Poster.< tar in metal and dastic I parts that otherw i .c couhl only be detected Some TopcLa apartment.dwcliers are helping ihe Company j by de .tructise testing of the parts. W hen necessary. destructiu- tesi a new concept in enerp purchasing.16erStat, a 12-month l tests are JHwsible with I. testing machine capable of generating joint research project of KPL, the fnisersity of Kansw und the j up to 60,000 pounds of pu hing or pulling force and a " quick Kansa 1:lectric 1 tihties lhearch Piogiam, allow co-tomers burst tant" w hich exerts up to 2.500 pounds per square inch to control encrp u c and subwquent electric purchases. i
! < essure. lherstat enable- customers to pre-purcha.e electrkity for i Fire Safety School To better prepare our ow n employ ee , their hom.s. Volunteen in the rescan h propet purcluse " Power- l l
and provide a learning opiortunity for area ftre departments. the cards" similar in appearance to a credit card. % hen ihe Company in September opened a natural ga Gre efety school 16ercard's nugnetic . trip is ;%ed through a slot on the Iber, j I#cated near the Abilene Compressor Station, the fire school Stat unit, the enerp purchase i deposited in the dnice. The help dnelop the skills necessary to safeh and qui < Lly extinguish iberStat di-play unit wru+ a- an "encrp lamk" and prmides l l
l t natural gas fires. the cuaomer w ith information about prewnt u c, u c for the pre. i l
Between 600 and 800 employ em will attend tle one-day traire s ious day and prniou, month, and the cost per kilowatt. !
ing seminars each year, with refresher couro ner) three years. hour heing paid for current electric u c. When the " energy The training ine.ludes an intertsise CLt + nom mion on tir rut ure bank" is running the unit blink and beer to warn ihe i of natural gas, natural gas safety, and customer that another Powercard shouhl be inserted, methods and techniepes for extinguishing f IIII - The research project will pnwide KPL with informa, natural gas Gres. During handwn training.
, y g l r.,
tion about whether IWerSat can offer nsomers the students perform 6re.6ghting exercises in con enience of purchasing electricity on their ow n l five different modes depicting distinct i schedule and the potential for notomer xn ings through natural gas nre situarknts. All trainers are better understanding of electric senice u. age.
certifie d Gre safety instructors.
~
- J Z Pmter Qualisy '
s ddumckng teckinolop not ofil) makes posNkble equip-
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^
merlI t Mt kniprou% tbe qu3kkt) of our work and liuh, kl al%o makes that same equipment more scrwitise tc. slight sarbtion-in electric 5 power quality. Whether the disturhance is within the custoner's I %Q ey mG c ..
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eynj pmcn, or the Company s s3siem, KPL is qualiced to assisi
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all customers in analyzing their wiphisticated circuitry. ;
The Company defines power quality as that which keeps a Top: Customer uubfaerkm through energy envuumpebe nmaarment k the pd ql
- he herStar pwam, ahuh cues repayment and sue racord deures fr mulentud customer's electronic equipment operating reliahly, w hether it electric wrdre.
Entsom: Emptwes learn shr !w terh= pes /vrfAur rawtd rufvn at th' is a proce+ controller in a large industrv an adjustable speed Compm's newfre safety wh<d un AMene, lau<a l
i 8
1M8 EAM$A5 #0W69 AND L 10 M r C O M f' A N Y
l motor drhe in a factory, a bdness or perwnal computer, or a' wubsidiary into which KGd[is to be merged. Our application l digital clo< L to the Securhics and Exchange Commission wa. approved on l.
l The Company promptly responds to cu tmner guiwer Februan 5,1942.
1.
quality concerns with state-of-the-art imestigatne techniques Earnings and Sales and equipment. Earning . per shar e of com mon stock wcre S2A1 for the 3 car, During 1991, tir Com;uny added another sophi-ticated tool compared to S2.25 for 1990. The sesen percent increase was
! to our power quality arsenal, faither estemhn3 our customer attributed to increased energs srdes and a one time change in l senice capability. The Power Profiler analyzes electric power the method of accounting for recognition of unbilled rnenue,
- h. provi !ing detailed infornution on enerp consumption and generally sdes occurring during the List two wcels of December.
the characteri-tics of the load. This data aLo can t.e n-ed by Electric sales to customers of 8.727.929.000 kilowatthoms energy-conscious customers in maximiring the energy were up 6.2 percent. The inercase was related to the warmer efficiency of their operations than normal summer weather in 199L Natural ga, sdes.
l T H E: YE AR IN REVIEW including tran ported gas, increased 10.9 percent to l Merger 240.042.000 mcf (thous;md cubic is. The change was l
[' Much attention during the year was focused on the merger of attributed to colder winter temperatures tiun those of the i
Kansas Gas and Electric (KGdE) of Wichita into a subsidiary year before. A portion of the increase in electric and natural l
l of the Company. pas sales also can be attributed to the accognition of KPL signed a Merger Agreement with KG&E on October 28. unbilled sales.
1990, under which KG&E will become a wholly-owned Hates l mubsidiary of KPL In Ly 1991, the Oklahoma Corporation The KCC in December authorized S39.3 million in natural =
l Commis ion (OCO ruled it had rm jurisliction in the merger. ga- rate increases for our Kansas customers. The Company The waiting period under the Hart-Scott liodino Antitra- had requested a total of $52.1 million. This inchided S32.1 Imprmement Act expired in June without action by the U. S. million in general rate relief to reemer identified major Department of Justice. In September, the Missouri Public Scr-
! inw~.tments made , ,
vice Commission (MPSQ and the Federal Energy fiegulatory in the natural gas 'W Commi.ssion (FERQ approved the merger, and the Kansts delisery system Corporation Commivion (KCQ soted to apprme the merger, .since 1987 and %g n subject to a nu mher of conditions. The KCC's w ritten orderv..'ere $20 million for receiwd later in the y ear. The Nuclear Regulatory Commisdon reemery of cost 3 .
hTij Mi'
~
in Nmember approsed the change of ownership of Wolf Creek associated with *- b ^
I Cenerating Station and an amendment ofIhe operating liceree The Cm;wm pm ulnfmmvdowmelmg<mdImdr tnunmghrennomm mpntag yr ud ana<ua C.amm u n. e emphwndm u 4 &wls u uh m pummewd to traitsfer ht".&E's 47 percent ownenhip interest to the KPl. pn md a-pd my edy cus.,,sm.
I
-9 iW8 K AN$A$ PQWEB AND L i Ce HF C D At P&HY
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f our safety program in Kan as During the past three years, we gas co tomers recched refund as a one-time credit or refural i
, lime irnested more than $50 inillain in Kansts for accelerated gui)inent in late 1991 or early 1942.
leak suncying and customer-ow ned senice line replacenu ni- Ovemmunsty Relations in this important safety program. lie help coordinate our imohement in community acthities i
The OCC on Aup t I made peimanent the interim natmal KPL doeloped a program for emplo3ee imohement through gas rate increa .c it authorized in 1990. The increa c is $1. 4 Communii> I!clations or Cit. Team . Membership is mluntary million annualh. and includes a wide cross-section of empkiyres. Teams h nc tren The Company filed in March with the MPSC to increa-e <stahFshed in communitic. across our senice territory.
l naturalgas nttes forour Missouricustomers The eque t ought During 1991, Cllli am sened a a cataly .i for broader com-an merall rmenue irxTea-t of $20.1 million to reemer the co ts munit3 action, introiheing acthitic, sui h as Chriama in ( h tober 1
l: awriated with the safety program in Miwn.ri and general to many areas Chri.tme in October, which has prmen wry expense increae since our Ltst rate increa .c in 1990. A decision succes ful in Kancs City and now in mcmy other KPL cum-i l- by the Commission granting us $73 million was reached on munities,i a repair and clean-up propum for thw unable to )
Januan 22,1992. This anmunt is inadequate and the Company p-rform necessary work on their homes. Volunicer fnim KPl. !
is evahtating what step < are necessary, including the prompt filing and the community, spend a Satmday painting, mendir.g of a new rate apphration in ihwiuri. -
insulating, and buihling at the honr- of eldedy or disabled com-i l Tight Sands munity residents. Materials are donated by sariou- businew-Shareholders were paid a special one-time dividend of and group,..
$0.18 per share of common stock from proceed- recmcred Cil 'li ant < har helped dewiop community food banks, !
I in the m.orable settlement during 1990 of a natural ge anti- sponsored fund-raising cwnt for many causes. helped tho.c !
trust suit. The payments were made in Fehniary from the left homelew by naturai di asters, and participaieu in settlement with Amoco. ONY U.S. A., and Williant Natural community ments.
Ca* Company. 1housands of pounds of food were collected by empbyces The antitrust suit settlement provides cash pay nwnt,and credit- during driw hehl throughout the ycanoariou locations. While ;
for our custome rs as well as an assured addi'ional source of ome collections were x[f-directe i, we also participated in
< reasonably-priced natural gas mer 20 years. This allows the % . + -
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- dent upon a single gas supplier. The witlement al.,o indemnifies us from liability for certain take-or-pay cost incurred by nur principal supplier.
< The remainder of the settlement funds will be paid to the ygg gm , ,, ,,,,,,,.,, ,, g ,,._ ,,
, . a mnan).e or the Hirn km Gnie ammt)hr nW pdm
. Company during the next 20 years by the ga< suppliers 'ii alum! &y, im i
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? $4 i KANSA1 POwIR AND LIGHf COMPAN7
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conununity. wide effort, such as the llanesten in Kansas Cit > 'lii encour. .ge cu . omers to e eport incidents in w hich persons (w kRTc NPb etnplo)et's collected 32 L917 pound- of foodi, l'ro- w cre anempting to son he w inter tempendures w ithout heat, t he ject Topeka (22.121 ca. s of-nuph and the llutchin. on Peanut Company employ ed a "licip 14 Find 1 hem" campaign in the Butter Drhe (L572 pr ). In each of thew three f.u ul driu s. KPL f dl The program requests cusomen and ollu'rs wlio may know employces' erahusi.t-m led the way with contribution- th.o of those without heat to contact the Company. Employces too, exceeded any other corporate participant. are a major part of the pn. gram, as they check on the edus of Store ihan 900 KPL employec- participated in the \ larch of cusionue during their regular duties such 4w nwier reading and Dimes annual WalkA merica during 199L he Comp.my wrved wnice calb. Our professiorud. hard working employces go to a the major corporate spmwor of WalkAmerica in nine of the extra length-in perform customer smice and are genuinely 15 communities within our senice terntory where Walks concerned about tho .c in need.
were held. Chunges KPL Ga, Senids nrognition that wnior citizen- require and Inuis W. Smith joined the lloard of Dire, tors in Februarv.
desene specialized pnigrand resuhed in lin alta tw in of a Maw ori Smith is pres'i dent ofilie Kanst- City Dhision of Allied-Sigrial Cuidef,9nion and a econd printing of the IGutw led Gmde Aen,-pace Compan3 fhr Senbr Citizen $ The-e Guides are a re-alt of our efforb to Joan D. Edw anb n4 ired from the Board in \ lay. She prmided more effectively sene thi, recial group and complement exiving wi-e counsel to the Company for more than 11 ycan.
Company programs for seniors. The well-accep:ed publicatimis John H. " Jack" Robinum joined the Board of Directors in are an extension of our corporate commitment to add salue to October. Robin-on i e!+ m of the twiard of Rick & Vearch, our products and .enices. Kan-x, Cny, \lissouri.
The projecs were sponsored in conjunction with the Kansas in 1991. C. Bob Chne was named president and chairman -
Department on Aging and the Alis-ouri Dhision of Aging.The of KPL Enterprises, lie luw a hackgniund in the naitiral g;w arid bookles are di-tribut d through the network of senior wn ices peindeum indu try.
acrov hoth states, in KPL G;w Senice offices. and by mail Copie , are acquired and read not orJv by senior citizens, but abo by their children and other careghers.. j The Company's Safety Watch coating s to makt the neighborhomb in w hich we lhe and work s 'er for all. Employces comforted lost children and helped them n turn home: called for quick assi-tance for sirtinw of accidents, fires and robberies and aided in the apprehension of criminah. A> u dail3 part of N mary miden w ,,wirp mm1,/wuMimn. m /mg k va wmor posanun ed woum Mt u a ymer ou r communitics' lhes employ ees are able to pros ide assistance m de mnium u Ash Aerdabudro the ausep and uw their schicle radio- to call for help.
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S E L E C T E D F I N A N C I A L D;A T A1 lear hied Ibe.,nJwr 31. - ~ 4 3y income Statement Data *thJlan in nuumda
- Operating resenues:
NaturalFas . . . S '690,339 S 686.018 $ 675.280 S 704,95-1 S 696,733 Electrie ... , 471,839 463.IO7 452.313 461.160 469,725 Total operating rewnues . 1,162,178 1.149.755 1,127,623 1.166,114 1.166,458' Operating expenses . 1,032,557 1.017.765 1.002.087 1.035,692 1,028,124 Allowance for funds used
- during conaruction . 1,070 1.181 1.503 1.327 871 Income before cumubtise effect of accounting change. 72,285 79.619 72.778 79,791 88.691 Cumubtise effect to Jamtary 1.- 1991, of change in resenue recognition . I7,360 - -
Net income . . . ,. , 89,615 79.619 72.778 79.791 88,691 Earnings applicable to common stock . . .. 83,2G8 77,8 m .6.921 77.821 84.991 2 Dis'II5b@MT.N$bN.3MIA2$dDS 8NM$$O 8.722 Balance Sheet Data il^Jlan m % = 1a Gross pbut in wnice , S2,535. I 48 $2.121.562 S2.305.279 $ 2. ! 62.271 $2,060.583 Censtructionl work in progress 17,114 20.201 19,571 24.915 21,56i Total assets . . .. , ,,. . 2,120,076 2.016,029 1,959.064 1,787.930 1.747.I79 Long-term debt and preferred and preference stock subject to - mandatory redemption . . 690,612 595,524 552.538 556.388 495.725
%r hird Mende 31. . g l Common Stock Data Earninp per share before cumulatiw effect of accounting change $ - 1.91 S 2.25 $ 2.05 3 2.25 S 2.46 Cumubthe effect per share ,_,_;5 0 - - - ---
Earning per share . $ 2.41 S 2.25 $ 2.05 $ 2.25 S 2.16 Dividends per share . . . . - S 2.O l * $ 1.80 - S 1.76 S 1.72 S 1.65 Book value per shaie $ 18.59 $ 18.25 $ 17.80 S17.51 S I 6.98.-
- Interest coverage ratio (before income laws, including AFl!DCL 2.69 2.86 2.96 3.41 3.89
*Includen hwebd. one-nw Jwidenk >j $0.18 per share paid Felvuon :18. I99L 1991 OPfRATING - 1991'OFERATING REVENtJE55 - EXPENSES
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'ME KAN$A$ POWI% ANO 44GHf CQRP/'.NT
, - n.
[M A N A G E MlE N T! S 'D I S C U S S I O N . A N D A N A L Y S I' S - TIX4NCf.4L CONDITION of 8.5%.The net prxceds from the new iv ue were uwd m repay Generah Farn:ngs were $2.11 per share of o amon stock for siairt ter m debt. refinance certain long-term indebtedney and 1991, an increaw from $2.25 in 1990. The increu.c resulted icimburw the Compan3% treasury for con.tructioa ross. ' l fnim increa ed electric and natural gas sale and a oru~ tine At >< arml. thc G:mp.m3 had S185 million arrangnimuler bank change in nwthod of acniunting to record unbilk d rnenun lim- of enslit agn.cnonts w ith two kw L L lunks. a Chicago lunk
- bec Ltc It and arra banks. Tirw thes of credit make availabh diort term The Company rontimm kmghiston ofniurning a majm portie borrowinp ud pnn ide upport for commercial paper inirrowine oicarning to iMhareholden, Diddends per conmmn dure v ere as interim finarring. In January 1992 these lines of credit were SL86 in 1991 beluding a gecial one-time dh klend of S0.18 per increa-cd to $200 million, w brh du Comp.u.3 npect to be suf-sharepaid febrtur3 2ft 199D. an incre#c of is cens from 1990. ficient to meet working capital requiremens during 1992. At In January 1992, the Ibard c ' Directors declared a quartedy did. December 31.1991, dort-term bornmine anmonted to $135.8 dend of 47% cens irt comnnn Jun. an increa,e of me cent mer million in the form of conunerckd paper, the pren.us quarter. The capiial strm ture at December 31,1991, was 47% comnmn The imk value per share we $18.59 at December 3L 1991. stock equity.10% preferred and preferemntuck, and 43% kmg.
cr.mpantN 618.25 at December 31.1990. The 1991 closing tm L term debt. The embedded co t of king term debt wa. 8.5% at price of $2F% wu 153 percent of Imk mh.c. There were Decemlmr 31.1991. 3L506.170 common shares outstanding during 1991. The Gimpany W conunitted tu maintaining a capital structme On Detober 28.1990, the Company and the Kanse Gas and that presenes an appn>priate bal.mcc between ddd and equity. Electric Company t MM Ei entered hno a definitise merger agree- and prmides Hedbility in the timing arnt amounts of long-ment under w hich KG& E w ill becorne a w bollpow ned subsLlian term financing. , of the Company (the WrgerL Allof the regulaton appimab hase j . been recched ami the Company expces to conclude the W ger /MSFLTS Ol'Ol'lllL4TIO.VS in tic first quarter of 1992 He Lie 2n 'll: C impany belinn T he follow ing is an nplanation of sigmficant uriations from prior that therombined companies w ill be ,tronger th m either company 3 car rnolts in rnenws openuing npen-n, other incone and indialuau and s will realize cost anne through operathinal and ded uctions. and iuerest charges ami preferred and preference sinu tund ,y nergies diddeml wquirements. Additional information relating to I.iquidity and Capital itesources: The Companyi hquidity changes between 3can is prodded in the Lie < io Con oli Lacd is a function ofits ongoing const ruction program See " Con-truc- Financial Statements
' tion ihgenditures" graph), anigned to imprme facilities woich Itnenues: The operating rnenues of the Company are based pnn ide electric and natural gas sen ice and meet future customer on rates authorized by certain state regulaton commiwiurn and senice requiremens. the Federal Errrgy llegulaton Commis ion il'EltCt, clayed for
- During 1991 corwructione3penthians forimpnne- the ele and delhery of natural gas and electricits m ents on the natural gas sy tem, including ihe - - -
The-c naen am ikWgned to wcmer t he co-t of sen ice Compann senice line replacement program, wcre CONSTRUCTION and allow ime-tors a fair rate of return Future natural
$82 million. EXPENDITURES 0 gas and ek etric saln wi!! continue to be affected by The coa-truction mpenditures for ihe Companyi *n-r u iw weat her conditions, comp 6ing fuel em ces nsoraes elecuie sptem were S 14 million during 1901. h i- con < nation efforts and the merall economy of the pn.jected that adequate capacity nurgins %ill be main- p Compann senice area.
- tained withmt the adeinn of any major generating g 1991 onfrtigt) m ivwh Ltural gas rnenun facilities thniugh thy turn of the century.
During the lut E e years the Compans inteoal QL increa,ed dighdy due to a two percent increer in natural ge saln culnding sale- related to the-cash generation for construction Im awraged M g %"& . cumulatiw effeet of the unbilled rnenue adjustment
. percent. In 1992 the Gimp.my npret,improwd cash 8 bec Lie 1). The e hwrea+d sah s are a te .uh of cooler generation from the reemery of prnioudy deferred Q b winter temperatows in 1991 compared to 1990 bec senice line replacement program cost und -upplier O "lleating Degree Day? graph).
ga3 tran.sportation costs hee Ltc 4L This inricase was parthd!y offset by large iirhrtrid
- The Companyi capital needs through 1996 of
. upprmimately $77 million for bond nuturitin and h[%
f Qp customer switching to tran-portation for which the Company does not collect the.co,i of gu and ca.h inking fund reqmrements for bond 4 and a decreve in the unit cost of naimi gas which is
'preferetre -tock wi!i he proddcii from internal D "
pa- ed on to customen through the purchased gu and external souten ac. fab!c under then esisting adjustment clause. l - financial conditions. Electric rnenun increa ed im pe rcent due to a On May 17 199L the Comnarn Ted a s @egi tra- three percent increaw m <. ales to retail i *omers thon Iale*nent for- 1.500 Mo s111res of pre fere nn-r *hn L esiludirig sales relateil to ilm timut.diw ef fers of On May 31.1991.the Comem>> offered 1000 000 the unbilled rnenne adjustment See Ltc it The-e of NrW lart% Ot h}0 ter NiaTe MN) a i Idend nb increavd salem aw a rnub of warmer i.nnnner I S -- IMI il SNSA5 POWI# 4ND &iGHrC0MPANi
y _,_ liEATING - COOUNG DEGREE DiYS ~ . DEGREE DAYS . u , non %_.o - a w .a. ,
- temperinure in l1991 compared to . Part; ally off etting ;hi decrea-e
- 1990 bee Mmling Degree Dap" wa*. an increaw in enmmercial and ,
- graph): L indu trial sales of two petecut and
- Partially offsettingtheincreav was @ inetcawd unit cost of fuel u.ed for an 11 percent decrea-e in wholesale -
F 7 ^- electric generation, and firm interchange sales resuhing (.J k., ,L 81 ' Operating thpen*ca: 1991
~ from changingcontract commitments g b (R+ M cotri%nrl)n)1990: Tot.d op rating y
- aml the mailability of kmer co+t power 4g ,
1370 npene increawd lightly mer one on the spot marka. Eq M'i M percent in 1991. The primary factors - 1990 COMP 4NEI) To 19891 Nat-ural gas retenues increased two IN hD
~-
'@b[ .
i' A cau ing the irricanere hkher ottwr operation and mainten uwe npeme '
- percent as a resuh of a lhe percent j/k W9
$[ resuhing frmn dwontinuing the defer.
- increa e ie the unit co-t of natural gas 6e ral of wi.Jwe line repbcoment co.t4n
- which is paswd on ,to customer
- D hy %mriin 1990 and the anvirschu
, thmugh the purchard gas adjuanwnt clau e, Also contrihming to the
%%E
%Y of tho-e co.ts to expen e. Increa n in r:ayroll and mulical npen c4 aLo
-increase were increased rates in contributed h, the inercaw aisell the C6mpanyi Missouri (Wy 1990) as the operation of a tww, impnned i and Okbhoma(April 1990)ownsions cu tomer inforenation system, s : (see Note 4), and a four percent Other factors contributing to higher
#~
.increede in tran portation rnenue. operating npenwA were increa+d property law in Ka%as and
. ' Partially olhetting the increaw in rnenue was an eight percent amortization nnenw of wnice Ime replacement program co-ts J ' decrea.e in rnidential sales resulting from much milder prniously deferred (we Note 4).
temperaturn during the heating season compared to 1989 and Partiall) off etting the+e increa es wa< a reduction in natural gas
- l. normah An 11 percent reduction in commercial and industrial pun haws npeme cau-ed h> a decrea ed nnit cost of natural gu sales. attrib . table to large commercial und industrial emtomers bee "Awrage Co.t of G44" graph).
E switching to trardportation for which the Company don not l9wi rml1% REli n) 1989/lbl operating n penw increawd collecithe gas cost, abo partialh' offwt the increaw in natural two percent in 1990. lncrea,e- in natmal p purchaww and other
? gas rnenues operations expen e were the primary factors eming the increase.
l Electric rnenues 'increawd three percent as a rnuh of a lhe A higher unit cost of eaural p of fhe percee ,.artially off et by percent increa e in sales to retail customers. These increa .ed sales 1.mer ga- ales as a resuh nf milder temperaturn during the heating l' are a result of the warmer summer temperatures in 1990 compared seawn and large commercial and industrial customers witching to 1989. Abo contributing to the inerea,e was a slightly higher u nit to transportation for which the Company don not incur the cost ~'
-_' cost of fuel u ed for electric generation, of gas resuhed in the higher natural gas purchaws npenw. The
_ Partially offsetting the increa-e in n tail sales was a 13 percent inerra c in other operations npenw can he auributed to higher
- decreaw in w bde alcund firm interchange sala as a rnuh ofchang. employee benent3 niense cauwd by rartidly escalating healtli care
; ing contract commitments and the a allability oflower co-t power cost
- and inerra ed pa3 roth on the spot market.- _
Fuel uwd for electric generation was lower in 1990 compared
' 1989 LV)MP4REI) 7Y) 1938: Natural gas resenues decreawd to 1989, ahhough the unit co t of fuel was slightly higher bee
- four percent due to large com merehd and industrial customers "Awrage Cmt of Fuel" graph). Off citing tbh reducts,n was higher j; switching to transportation, for which the Company collected power pun hawd and interchanged ineth The Company wa a net
airtually the same margin but n6t the cost of gas. Ahhough 1989 purchaser ofelectric power in 1990 hecame of the mailability of h heating degree dap were higher than both 1988 and the norm, hmer co-t power from other utilities Other contributors to ihe l_ Ea large portion of degree dap were acenmulated during the iaerea e in total operating n penw were higher depreciation npen c
! record coldypelllate in December after most of the 1989 billing and general taws nwuhing from increa-ed plant in wnice-was completed.Therefore, the increased rn enun from this cold rauhing from continued im c>t ment in the Compan@.cn ice line
- weather were not recognized until 1990, replacement prograro.
f i Partially offwtting this decrease was a full y ear of permanent Partially oftwiring the increaws in total operating npenw wa+ rate relief for the Crimpanyi natural gas operatiom in Kansas lower income tax npenw resuhing from a lower effecthe income (October 1988h an increase in the wholesale cost of gas, and tas rate. increased tramportation rnenue. 19890mHM HEI) M 1983/6tal operating npen e decreased
- Electric resenues decreawd two percent in 1989 compared three percent a, a rnult of fewer gas purchaws because oflarge to 1988 primarily as a result of much cooler summer weather commenial and indu trial cu tomers switching to tran portathtn in'1989.- Contributing to the decrease was a rate redaction . for which the Company does not incur the co t of gas. Also con-
. (February 1989phich was offwt by accelerated amm tization tributing to the decreaw were lower federal and state income
--o f certain deferred income taw
- and did not effect earnings. taus and other taws. Income laws were kmer as a resuh of 16-TH$ MAN 5a1 PCwIt ANL LeOHf COm#ANY
._.___. _ _ _ __ _ _ _ _ . _ _ _ _ _ _ _ _ m --- _ e - - - . . _ . - , -
AVERAGE COSI- _ . _ AVERAGE COST _._ _ _ _ _ _ _ _ OFGAS. GT f ULL
,n. % ~ u,i, a.,m. , o n.
k+ct income and acccierated aner. nient depn dd le pn.pem is firuuired Lizatic.n of cc:tain deferred income with debt that can he repaid willi tases for rate purg,ws. dollars of Ic+ puchasing j a mer. WIule Partially offwiling the decrea+ wcre %% de Compam he nperienced reb-shghtly higher pmer purcham and Mk% tiwly low innation in the iceent past, greairr ca of furl usca for gemaan aa well e a wven penrni increaw in A ykk G MJ A dr -umutahe efreci ot inituion on operating cost- requires tir Company whokwale natural ge costs. So off. setting the decreaw wa- a four percent
' }$gyy,gyy($i M
dr k" TQ to wek regublory rate rehef to recmcr w inerca ts increase in other opt-ration- and 7 IIcgad(IPllt On July 31,199l, mainter>ance npense and a four w FEllC i--ned a htice of Pnipmed percerli E lcreaw in dc[lreckation Ilule making {\OPl{h commonly eg ense. Other operatine and ..[ referred to as the Y gaAOPit. tha' ndntenance npen% .inciva,cd as [j , would sulr.tantially restructure the a tesch of t!r Comluny's enhanced Y erure obligations of interstate ga-gas line survey and senice hne ,
% pipehnes. Among other things the
!- maintena~ce efforts not subject to deferral anl increawd payroll and 1 t ' MegaSOPit propo es mandatory l unbundling of esi. ting pipelitr ye l~ employee beneGt coa . s.drs wnices and repla< ement of Othee income and Deductions! . current tatuton abandomnent pr+ 0;her income and deductkins. net ofincour tases, is signifk andy cedures. as appbed to Orm 'mn-portation contracts of more dian higher in 1990 conyured to 1991 and jrm9 as a resuh of the one 3 car. with a right of-Grst refus:d mechani.an. Mandaiory recognition of lost earnings reemered in th- f.norable ettlement unbmulkng wm Al icquire all pi;mlitus to wil wpanitely the sarious of a flatural gas antilN4 lJwWit. Of line Company'n totaI portioti comp Wrf nt- of their esiding pts Mit5 wrs k t% ttf af t%mi+h 6tt, storage, of de proceeds, approsinutely 312 nd[lhm IcLled to lost earnings and ga, uppig Thew compmens are now combined or and wa- booked, nH of income tase . to other meome in 1990. " bundled" in ga, ale -enires such as dnw purclused by the Intere t Charges aml Preferred and Preference Disidend Company. The righs.of.nr i-refuel progmal would repbec the llequirements: Total interest charges decreased one percent in current abandonment procedure, under which a pipchne mua, 1991 compared to 1990 incause of lower intere.t rates on before abandoning any sen ice, obtain prior FEllC apprmal d at I commercial paper. This decreaw wa3 partially offe by higher com- dis ontinu.ure of tir en ice is in the pub interest. The propoel merciall uper Launces. Tir Compm> 's comnenid paper babtres mechanhm aould by rate authorire a pipchne's abandomnent of
. irrreawd during 1991 to [und eordf rtH iion co%b aIMI Mner dc[ erred a bing terin tran%portation wn kee to a etistottrr w!Mnt%er the assets not yet recoserable in rates. customer faih to maleh the highest rate and lonpst term offered Totalinterest charps irrreased M percent in 1990 co npared to the pipchae by other customer for the particular capacity.The to 1989 herause of both higher commercial paper and long- effect of MegaAOPit on the g# industry, including thr rehabilit>
wrm debt habnces partially offset by lower interest rate on of ge delisenes to u n ice territories and on roaan gm customers. commeirial paper, cannot be dacrmined at thi time, Total interest charps increced men pt.rcent in 1989 compared to 1988. resuhing from greater debt balances and higher intere4 Ol!Tl,00K rates on cummercial paper. Tim Compm> i- w cll prepan11 for the upcoming ch.dlenps facing Preferred and preference dhidend requirement increa ed in the utility industry. including the po+ible increased frequency of 1991 compared to 1990 a- a resuk of a new imuc of preferente nrrgers and acquisitions. Tir Company is in !!r pmcess of integra. stock in the wrond qmrter of 1991. Preferred and preference dis i- tion planning in anticipation of KG&E becondng a part of the dend requirements were reduced for the years 1989 and 1990 Company before the end of the Grst quarter 1492. compared to prior 3 cars a a revdt of redemptions through inling In 1990. Congre-s pa-cd and the Pre >ident -igned neo legi-L-fund requit enents. 1 inn ; hat anant, dr Clean Air Act to re< pure a two plu,e reduction in sulfur dimide and nitropm onle emissions from coahburning OTilFR INFOldletTION power pLns. The Company w ill h,nc limited esposm e to Plu-e i Infla'iun: Ender the raremalmg procedures premibed by the sulfur dionle and nitrogen mide emission hmitations. While dif. regubtory commissions to w hich the Company is subject. only the ficuh to predict. the Company anticipates only minimal capital original coa of pLnt b ree nerable in resenues a* depreciation. expenditures will be required for Phee 11. l- Therefore. because ofinflation, prewnt and future depreciation The Company recognized long agoilut we should redon our prm isions are inadequate for purposes of nuintaining ihe purcha- dependence on foreign oil and rely on donrsiic energy nsources. inr power ime ted by common durchohlers and the re!.ued cash In F)91, the Company generated 96 percent ofits electricity flows are inade<pute for replacing property. The impact of thi- using low-ulfur coal and the remainder from clean-burning ratenuking proces- on common *lurehobiers i, mitigated to the natural ga.s. q7_ rHE KAN$A6 POWIa aNp t#GMi COMPANY
C O N S O L I D AlT E D iB A'l A N C E 'S H E E Tb-1 S"OI. __ g9g py
- Is. tam in nm,amla Assets Utility Plant (Lies I and lin Electric . . .. . S1,676,119 S t .611.616 c Ltural gai . . .>.. -, . . 11511,9 9 9 ' 776,916-2,535,I til 2.421.S62
- Ir -Accumulated depreciation d26,1 t il 761.579 1,709.330 1,659,983
' Con.tiuction work in progrem . . . . . -17.111 20.201 Net utility i lant . . . 1.726,111 1.680.13i Net Non Utility Investments . 21.360 3.400 Current Assets'
- Ca h and ter.porary ca-h investment- (Lie 16 6,111 7 4.515 Accounts receivable (Ltc 1) . . . , . 198,752 125.873 Fuel. at merage cost , 13,171 42,919 Gas stored undergound. at aserage co-t 19,166- 16.826 Material, and suppies, at merage co-t . '
. . I7,092 17.32I
. Prepay ment . . . 1,051 2,993 )
2119,3 19 210.477
~
Deferred Charges: Deferred income tases (Ltc 1L .. . 7,563 19,819 Deferred co. of natural gas (Lie 4) (),815) 48.581 Other (Lws 2 and 41 . . - 77.175 53.568-112,923 121.968 Total Assets .. . . . 82.120,076 $2._016.029 Capitalisation and Liabilities Capitali:ation (Sec statemenn. Common stock criuity (34.566,170 shares eutstanding) S 612,119 8 630 825 Cumulathe preferred and preference stock (Ete 12h
' Lt cubject to mandatorv redemption . , , 21,8511 21,858 Subject to mandatory redemption . . 101,033 5,333 Long-term debt (Lte 5) . . 586,579 590,191 1.357.919 1.251.207 Current Liabilities:
Short-term debt (Lie.7) . . . .. . 135,1100 1 15.5P" 1.ong-term debt due within one 3 ear (Ltc 51 . 2.733 29,233 Preferred and preference $tock redeemable within one year (Ltc 12) 1,300 1,300 Accounts payable . . . . 151,556 154,681 Accrued tases . . . 17.823 '61,953 Accrued interest imd disidends . . 35,224 1 3.570 Other. .. .. . . 16,176 35.610 120,912 431,877 . Reserves and Deferred Credits: Deferred income tases (Ltc 1) . . . 259,583 216.027 l'ederalinvestment tas credits (Lte 1) . 70.6-12 '74,160
'Other-. ,
11.020 12,758
~ 311,215 332.915 ~
Commitments and Contingencies (%tes 2. 3 and 9) Total Capitalization and Liabilities . 82,l20.076 $2.016.029 n Mn to Gawduliwd kwad sawmew, we an bepmt pvt ,f thh a.amna. 18 TM$ KAN$A$ POWfA &NO 18ONf COMPANY
. C_ O N S .0 L I D A T E D - S T A T E M E. N T O F L I N C O_ M E-lear 13.ded ikcerrJ e 51. . -
rikdia, m nwamh. en ept tk he %way Operating Herenues (%tes 1 unul Ih Ltural gas . . S 690,339 S 686.018 $ 675.260 Electric . . 171,1539 463,707 152.313
'liital operating iesenue . . . 1.162,17tl I,149,755 1,127.623 Operating Expensest Ltural ga* purcha es . -139,323 456,868 451.896
- Fuel used for p neration. , . . I16,256 118,681 149.796 lbwer purchased and interchanged inco. ., 5.335 2,658 148 Other operation . . . . 193.319 178,448 171,09i Maintenance 60.513 57,81, a8.412 Depreciation and amortization . 85,73a . 6.81 a < 3.305 Taus (see statemen0:
Federat income . 21,516 21.639 7,251 State in ome , 6,066 6.031 7,029
. General 71.492 65,812 63,123 Total operating npene . 1.032.537 1.017.765 1.002.087 Operating income . 129.621 131,990 125,536 Other income and Deductions (net of tav 8) 3.35 l 9.012 859 Income Refore Interest Charges . 132.972 141,002 126.395
. interest Chart n 1.ong term'dclx .. .. 51,264 a l .512 46.37tl Other- . . .. , 10,190 11,022 8,742-Allowance for borrowed funds u.ed during
- construction (credio (l.070) (l . I81 ) (l.5031 Totalintenst charges ,. , 60,6ft! 61,383 53,617 income Before Cumulc *
- Ej]ect of Accounting Change , . 72,285 74.619 72,778 Cumulative Effect to January 1,1991. uf Change in Revenue Recognition (net of
= income taxes) th.e 1) . I7.360 - -
Net Income : . .. . 89.6-15 79.619 72,778 . Preferred and Preference Diridends , ,. . 6.377 l,744 l.857 Earnings Applicable to Common Stock S. 83.268 $ 77.875 S 70.92 l Arerage Common Shares Outstanding 31.566,170 34,566,170- 31.566,170 Earnings Per Arcrage Common Share Outstanding Before Cumulative Effect ofAccounting Chuage S l.91 5 2.25 S 2.05 Cumulatire Effect to January 1,1991, of
. Change in Revenue Recognition Per Share . ,
.50 - -
. Ear::ings Per Average Common Share Outstan ding, . ,. S 2.4 i S 2.25 S 2.05 Dividends Declared Per Common Share . S. 2.01* S I.80 S l.76 L *includeopecial, one-time dividend of 50.18per Jnweprud Februnn 28,1%I. 11a %n t.. Conndidawd Fmmu int hiawment, urr an inwpalpwt uf tiw aawment. 19 THI at A N 5 A $ 8OW44 &ND &aGHT C 0 M P & P4 Y
. . . - _-- =. . _ . -
~
lC O N SlO L I D A T E D S T A T E M E N T. O F; C'A P I_T A L I Z'A T !.O N -- ' thember 31.
, 199 7 " G199Of ;)
anti.m in M-vula Common Stock Fquity (See tatemen0: Common stock, par salue S5 per share, authorized 85,000,000 J: ares and 60.000.000 shaie , respectisel ,3 out. standing 31,566,170 shares , , 8 172.1131 S 172.831 Paid-in capital, . 117,099 88.222 Retained earning . . 3112,5 l 9 _ 369.7,72 612,i19 -l 7% 630,825 51 % . Cumulatire l'rejbrred and Preference %ck 1%te 12> Lt subject to mandatory redemption, par salue $100 per share, authorized 6.600,000 shares, outstanding-4%% Series, 138,576 sinre , 1 3,11511 13,858 4 %% Series. 60,000 shares 6,000 6.000 5% Series,50,000 shares . . 5,00,0 5.000 2-1,11511 21.858 Subject to mandatory redemption without par salue S100 stated salar, authorized 4.000,000 share,,, out tanding-8.70% Series, 183,000 and 196.000 share , respectisely 111.300 19,600 8.50% Series. 1,000,000 share- , 100.000 - 1.cw: Preference stock reaciiuired, 135,000 shares 12,967 12.967 Preference stock redeemable within orm year . 1,300 1.300 1O1,033 5.333 1211,891 10% 30,191 2% lxmg Term Debt Ikte_5) l'irst mortgage bond < series: 4%% duc 1991 .
- 13.000 8%% due 1991* . -
1-1.000
' 10.0% due 1993* -1,000 6.000-8%% due 1996. , 60,000 60,000 8%% due 1997* 7,3 911 8,631 9.35% due 1998 . . 75,000 75.000 7%% due 1999 . .
'19.000 19.000 8%% due 2000. 20,000 20,000 3%% duc 2000. 75,000 75,000 8%% due 2005. , 35,000- 35.000
- 8%% due 2006, - 45,000. 45.000 8%% due 2007 . .. 30,000 30,000 8%% due 2008. . . 35,000 35,000 8%% duc 2017 . 50,000 50.000-155,3911 485,631 Pollution control bond series:
5.90% due 2007 : .. 32,000 32,UJO 6%% duc 2009. . 45,000 45,000 9%% due 2013 . 511,500 58.500 135.500 135.500
. less:
Unamortized debt discount . . 1,586 1,707
~ I.ong. term debt due within one year 2.733 29J33 586,579 13 % _
590.191 47% Total Capitalisation . . S_l,357,919 100% S1.251.207 100%
%h. mud by W Gu sen k e G.mp<w> 11seme <md IMJ niTnor.
W Min t.. Gm,<>hdatalIinana hd 5:aremenn uw nn miegmlswr cf thu aarement. , 20-fM$ et A N 1 A $ POWEG ANO 1 IGM 1 COMPAN1
'CO N S O LID ATE DrST ATEM E N T:O F C AS H FLOWS - .
i ku bled thrndo 31.
?gQ,pg 7 y -l1;99,o k clAJt,vs in Wusanda E99R9C Cash 17<nesfnnn Operating Activities:
Net income. . ,,, , .. _ $ 89,615 S 79,619 8 72,778 Depreciation and anortization . , , . . , !!5,735 76,815 73,305 Deferred taxes and investment tas credits (neo . . 9,319 3A45 12,161 Changes. in other working capital items: Accounts receivable (Mte 1) (72,1179) 5,976 (21,520) Puel . (522) (9.322) 1,429.
. Ga* stored underground .
(2.310) 47,709) 2,696 Accounts payable . (3,125) (23.954) 58.675 Acerued tases . , , (l1,130) 6,215 26,050 Other . . . , 11,661 1,610 (3,358) Changes in other amet. and liabilitie . . 31,992 8,603 (90.658)
' Net ca .h flows from operating activities . . I35,356 144,328 131.558 Ca<h 17mes Used in Int esting Actirities:
l bn-utilit) imestments . 18,125 - - Construction expenditur<w . , 125,675 135,001 119,885 Cuh flows u,cd in imesiin'g actisities 14.1,800 135,001 119,885 , Cmh 17dtes Ged in financing Activities: i Short-term debt (net) . .. . (20,300) 17,600 (93,100) long-term debt is ued . . - (75,000) -
. long term debt retired . 30.233 3,495 13.27l-Preferred and preference stock redeemed 1,300 1.300 1,300 Preference stock i sued . . (l00,000) - -
Preference stock issuanee cywnses ,- .. 1,130 - - Dnidends on preferred, preference and common tock 76,891 63.963 62.691 Net cuh dows used in (fn m) financing actisities (10,716) 11,358 (15,835-Increase (Decrease)in Cash and Tentporary Cash inrestments (Ltc 1) . S 2,302 S (2.0311 S_(2A92) Supplemental Disclosures of Cash 17mc lefonnation V Cash l' aid for: Interest on financing actitities inct of amuuni capitalked) .~.. . , S 58A62 S 57,029 5 52,373 Income tawa. . ,,. . . 40,062 20,528. 26.818 n Am to Gm,.disant mmaal sawma, me am vuerut sat of dawawwu. l l1 I l I i
'fH8 MAN 8A$ POWER AND LiONi COMPANY
I C O'N S O' L I D A T E D S'T A T E 'M E N T L O'Ff T A 'X E S "--
. yar_Dukd kendw 3L y-c19 1 m>gy +)3%gp
_wap;q - . 339
- w ; , . .. .ex .m
!!Wm in Womia
' kderalinconse Taxes:
' Payable curremly . . $ 1H,179 . $ 27.751 5 18.587 Deferred lates ari ing from:
Depreciation and other property related itenw _ 9.662 7.492 7.602 Energv and purcha.ed gas adjustment clau+, ~ (l5.535) 1.1.610) 10.655 Unbilled revennes . I7.219 (1,891) (l1,426) Natural ga line saney and replacenn nt program 1.015 2.880 3.a13 (hher .. (l,109) (778) 3.281
- Amortization of imestment tas credit . , (l.238) (l.1981 14.2 4fj)
'liital Federa! income tnes . 25,323 29,613 27,997 Federal income tases applicable to non. operating items (l.007) t5.01 l) (7431 .;
Total Federalincome tases charged to operation, 21.516 21.622 . 27.254 State income Ta.nes: Payable currently 4.033 5.5 10 4.123 Deferred (nei) , . 2.276 1.553 2.751 Total state income taxes 6.309 7,093 7.171 State income taxes applicable to nen. operating itenw (2 (3) (1.059) _ (l15) Total state income taxes charged to operations . . 6.066 6.031 7.029 General Taxes: Property and other taxes . 10,129 35.565 33.757 Franchi,e taxes . . - 20.576 20.126 19.707 Payroll taxes i O.566 10.197 9.714' JIbtal general taxes . . 71,571 ( '8 63,178 General tases applicable to non-operating items (79) i (55)
- Tbtal general taws charged to operations 71.192 65 63.123 Total Taxes Charged to Operations . S 102.07 i S 46.1 u S 47.406
~ The effective income tax rates set forth below are computed by dhiding total Federal and state income tases by the sum of - such taxes and net income. The difference betw een the effer:he rate, and the Federal statniory income tas rates are as follow s:
M Duld w ende 31. sry; .. ~ - - vuw - w M. J L?nm % pdav).39 hmn sr 33 989sm4 Effective incorne Tax Itate 32.2% 31.6% 32.6 % EJJect of: Additional depreciation . (2.7) (2.8) (3.3) Accelerated amortization of certain deferred taws . . 3.9 4.8 4.9 State income taxes .. (l.0) (4.0) 14.1) Amortization ofimestment tax credit . . 3* 3.6 3.9 Other differences . . 1.l .8 _. 3 Statutorr FederalIncorne Tax Itate 31.0% 31.0% 31.0% w %, t.. GmwMaud wwud .stamnu u e un sned pre 4this wn#nt. I i l l-22
-THi EANSA$ POWlR ANO 4IGHf C 0 as e A N Y
?
m,- .-. 4 -
. + _
C.G N S.O L I D'A T E DE S T A T E M E N TTO Fc ' ~~ C O M M O'NoS T O C K .E Q U I T W a 4 f hw Ewled Ihmde 31, FComineN? - AEKAIIMNRM I ' suSICHX:ls6 bhCAM1AL2d - R! RETAINN9!!]s E SARNING$k ilAJimn %wla ' ~ ! Halance December 31,1988,. ; L ,J 34,566,170 shares . S172,831 S88,207 t:
$314.047
.kel itK'OIUe .. 4 . . . , . .. , , . 72,778-L1 + - Cash dividends ,
Prefereed and preferenen stock. .
- ( 1,857)
. Common stock, $1.76 per share - . .
(60.837)_ , Espen es on preference skick . . 8 -(8). i Halance Decembs 31,1939, y 34,566,170 $ hare, , . .. . ... . 172,831 88,215 -354,123 h '.-Net inconne . . . , . . .. ~ 79,619 . 4 L Cash dhidend< - . _ l- _: Preferred and preference ste.ek. . ... . . -( ,74 4)
. Common skick, $1.80 pt. share ., . .
(62.219) , Ey>enses or. preferenbe wock ~7 (7) l Balance December 31.1990, 34,566.170 shares . .. S172.831 $88,222 S369,772 Net income - .. . . . . . .. . . . 89,683 ~
' Csh diddend<
' Prefer red and preference stock . .. .
- (6.3 7 7)
Comnion stock, S2.01* per share . 1(70,511)
- . . Ey>en es on preference *'ock . . .,. . . (1,123)
'(7)
- Balance December 31,1991, 34,566.'170 shares . . . . . . . 8172,831 887,099 S382.519 l' %lwk ywe;nt. one-thiw da kkrul4$0.13 per slwe swud Mruary 2h 1991.
; Tiv Lees to Godklared WanckdSuamwnu am an kvegral twt ajrius ,taumwns,
;e i
li I -; 23 tMf k 4 M 5 a l' P O W f 4 AND 1iGHI COMFAN7
, , . - ,a L- .- . -
- NOTES TO CONSOLID ATED FIN ANCI AL ST ATEMENTS .1. Sfilif 110 (8FSf6Xff lC4NT.4CCOl MlA G l'01.10/l3 requiicdimplenwnia!bm dah ha lreniiriennlio Jamw3 1, pm General:The financiahutrumnt of The Kansa IWer and I.ight lim Lompan> ptm to miopt dw arm -undard elfertne Jainun I.
Goniuny, doing Inrinew e Kl'i, Gaern be t kPI_ the Compang 1992,in n.njurwtLin with tir ,winhng mnp, wiih tir kansa Gas include the an ounm.f it who4owird subshinr3. hPI, Enicipn ns aint 1.lciitic Conipaii3 ikGALi iwe- Note 2t. Tin wdi inate ilm , Inc. \lhignuirant inten an u .ains h.r mmnm uus norhtero oher ihr merger ince LGx t: ! 1 ui> tran actam ha.e been chmhutnl. The aitounting 1xdica- dw Conipan3 me in arn nLun e with ha alusub adopini the ern wand.ud. Annaniumni io nnwhis dm gerrrall3 mnmimmuning primipir a applxe.n guicnipubii- onginal undard adi9dnl m FC are nprini in 1992. t rg!n utdars. Tlu counting and rate of Ge Gmyum are *ulars to en ting regulaor> condneins. the C.anpan> nimit tim urulink. tequiirnwnt of ref1.nin tate 7egulator3 cottuniwinn atul the }'nler.d ulmn adopteth w dl not h.nr a tiutclial impact ori dm state!!mtit of l'nern llegubter> Conunis iun tlIliCL ini onm. llowner thn wdiinigua the balance dmet in e-tabbshing l'tility l'lante l'tild3 ptmt iotated at ro t. lir conarurtni pbut. seguloon awt aiuladihrkoubleferredimunr taw of appnnim.cely co t im iude contracted wnice , daert Ld.or ami mactLL. imhrcet $1% md!mn a of December 31.1991, pie.r to e onsidoation of tim clarps f..r engineering. supen ia.n. mwral and adminiarathe n ,t . merger with LG6E , and an alkiwance far fund u ed during construction t Al l IH11 he lietennen Efbrthe January I 1991. the Compam dunged its ' MT DC rate na 6.25% io l491. M5% in iv90. amI Ro% in 1989 m.4h..h l anuunt.ng for nrognump chrtri an.l ttdural ga inenir-The co t of add 4e io utiht3 plun and reptwn:,ent unit of pnymit3 io pnn ide for tir arenuhJ evinuted unbilii d inrinn<l he acnnmt-6 apitalued. Wintesum e n-t and uplacement of mimir item of mg demge poiidn a latter nu' hing of rnanrs w nh n t of winw pro}wrty are < harged to esprn e a im oned. % ben unit of pnn aled so n. r* and aho enn to ninform the Ganpan3'* deprn Lble pn irrty are retirni. thn are elimisteed f rom the account- accounting trea, f unbilled rnenun with the las treaitm nt of and the original to plu dtsmanthng durge hv whve are urhrnenoc*. l'on&d enenue reprewnt the eqimated anmunt s hargni tu accumuloed deprn iation. ne.tonrr wdlic hillnifor enin inmi.Inllrom dmline nrier were l'cinciation: Depnwin.n i. pnn i<rd on the armght lier nothml Li t n ad to the end of the aramnting wrimi. Meien are nad and ha,nl on ntinuini u efulInn of pnymrts Comp ute prm i ie foi wn ien ute hilled on a ode basi . Pru.r to the m nuncing dange. book deprecLiion appnaim. uni 3.31% during 1991. 3.32% during rnenon weir nen.gnited in the arn.unting pernd during winch
- 1990, snd 3.23% during 1989 of tir merap ongirul coa of w rue n w u c l.dled.
depnwiable property. Depreciats m for inconr tas por po n i& pn n idnt Tim af trr.uufh.i t of tir dunge in onumting medul br the 3 ear on different basn and medenL bec inn nm faum. e nded December 31, 1991. i, an in< tea c m net iiwome of ( Cash and 7bmporary Cash lurcornenar l'or purpo 4%f the $15.936AHHh.r $0.16 ;wr dure. I ha iirrer.e i- a n,mhiration of l Conudidded 5unanent of Cash th% ra h and temporar3 ca h an inneaw of $li,360JH10 or $0.50 per hare, auributehic to dr I imninrnt* intimle cash on land and imestnwnt* in marketahic romulche effret of tir aca unting < hange prior to jaury 1,1991. weuriiics mith naturiths of orr month or Icw. Gennally swh and a denrase of $ L 121.000 or 60.0 l per dare in ilm 1991 m. ome imnament, con ht of pmernnwat scourities. la fore rumuldhe HTect of a thange in an ounung principle. The pro t income bes: Income tas npen.,c include prmi->on 'or irronr forma net in.one arni canunp. per lure for the 3ran, ended use, currenth pa3able and deferred income tasn. The Gonpar.3 Deermber 31,1990 and 1989, assmning the as crual for niirruted
- pnnkhs deferred income t.ca on the additionalin deprecianon unhdied rnenun wa, appla > o unacshel3 to the perimb, would luse shich rnults from using the acederated depreciation method a- been $75,186h00 or $2.13 per dure, resperthel 3. for 1990 and I . pnnided in the bitenul itnenue Code. Tasn deferred in prior year- $75.110 Mob or $2.13 pn iluie, nspc.wels for 1989. I'nh;lled now are icing credited io income mer the hfe of the pn.pnty phing rnenon of $61S91M00 air ren.rded a a component of an ount, rise to th- deduction at the weighted u.erage us rare pnaided. n Aahic on the babnce sheet as of Deermbet 31,1991.
Deferred income uu.s aLo are prodied for regulatory encry3 and om Comparg lud rnenn f(r donhtful arrounts wrchable purchased pas adjMnrnt dau n an&- ruin orher cost and roenne* of $2.015h00 and $2.998M00 as Dnemt r 31,1991 and 1990, where there are timing differenen hetween lun.L and t.n ircatinent. r npertheb Un&r ,. tate regubtorv practirn, the Compan3 induded in operating iterior harionar Certain amounts in poor Scan hase been arome the rurrent tas ienc6ts of certain conaneti.m n is principally redawifin; m cenfonn with da 4fication n-ed in the current interea, tasm. and remmal co ts, which were deductnl for inconm war unenntL n. tas purposn hat rapiulized on the in L3.. At Den ,ber 31,1991, tir cumulathe amount of these timing differem n - ahich dcferred 2. .ifi:If6 Eft I!lili KG&E intome taua hme not been pnnided was % rosinutely $20! On Ortolo 28 1990, the Company aad AG&E entned mio a million. Tir additional current inn.nr tu n: Eng from ihne Jc6nkhe nrrpwntmna undn which KGA E w dllreome a w holly. piniously fl .wed through tas bene 6t, i, being rec.wnni ihningh owned suh41ian of de Company (the Wrgen.1;ndo the tenn, of current rnenms the apeement. cadnharc of hGE comnn m shwk willir comcried lenntment tas credits deferred in prior 3 car now areimine into cash. Kl'L comn on tm L, or cash and KPl.eummon n cl at a amortisd to income me- the hfe of the prop,H3 whkt gaw rLe un comer ion ratio hiclined as the nunder of shaw of KPL common tLe credits. work bued for each Aur of LGK E conanon sn r Li nput to $32 The ihneial Accounting StandanL !! oar . - wued a new didled bphe Awrage kPI Price fdefmed e the merage of thc do . i standant on actounting for income tasn ii , 1987. The ing pricn of de Kl1.conunon tock a n portnlon tir b hk 5hwk , l 24 - i te a RAN541 F0WGR AND L1GMf ( QMPANY
Ewlunge G mpodic Li r on each of tir 15 nowrutiw trading dan 3. co.iiiririts;xis asi, rosTisci:scir:s gnecedmg the fifth trading day prior to tir nnwumnution i.f the A lurt ut it ongoing oirtathm auni con trurth n prortum, the Mergern pnnidni that the nonrn, ion ratio will become fisnl ut I A Compun ha commitmens under putiiuse ordo avul connai b
$lare when t}r Ascrape Kl'I. Price fall Irlow $20 lre dure and wiot h had an utryrmlnl balun e of appnainutely $tiH niillu.n {
at 1.3 M wharn wlmn tir Awrap kPl. Prk r ri c. ab.ne $23 75 per ai lintmler 31, IW1.1%rr ho fature nin tna thin to nLting ! shne. To firuvice de Mergi r, tir C iin;.any luw i leaiiril $600 rnillini utilit3 tilaid aire du u ani iii ti .i- "Maiugriria's I)i eti+i ii asiil in firuneing commitment, from Clmmical llank of New WL 'ihe haly i" nnin. remaining Giuiring will cour from iwurar of the Com;unO Thc G.mpain has tren r. oriaird with eight fornrr nunataquini - emnnuin *ck. p die whk h nu3 contain coal tar arul inhet alk gni gudentiall3 Tir Com;uny lu nsciwd alloft.c repuliury i apponal requirixi haririful nute: Lits. 'l wo of ilic*e sites ate utuire prclirriiriar3 irnestiga. for tir Merger and nired to conclude the Merger in tir fint qturier
- ion li> the 1:mironnental Pndnthin Agenc3 ti: pal aval one die i, of 1992. Apprminutely $21.2 mills.n of Merger acqui ak n ont- 1.nng irn.*gaini13 the Kaine licpar tment of licahh and Em non-were m orded in uler deferred durges on tir balarwe ihn1 nrrd. Tir EP\ la n.mpleted a docunwnt catch at fiw of tinv stn.
at December 31.1911. Tir e to w will noaino- to 1.e deferrol The Company las n 4 inciwd am ir brathm from ilm LPA tlut through clodnt, and then benime a componeni of the funher aithm or imntiption willie talen on tle c Jte The Comiurn i acquisition adju,rment. don me antL ijaic any finc or peruhic. related to am of tir,e eigid Replatorpippi or alu On larian 5.1992, the securitin and itet li i rug Ln.m n wlut #3pc or degree of ticanup will be required. Eulunge C<nntniwion i-unt an order apprming tir Merger. The llowner. in tir opnion of the Compan3i marugement, an3 eyrn e order aLograntninenipiran evnrptiin urailjamun l.1995.mnler rebini to tir elcanop of thew site w ilt ru v ir nuierial to tir G onj un3 '. de Pubbe hilin llokhng Comiany Act. finatrial posthm or it* rnah, of operotions On hemher 19.1991.tir L hiarlleguluon Coinmun Lunt The Company has been identified as oir of numerou pitcotially a litter unter appnning the Elf Crect Generating station licem.e rnem ible partin in three hazardou* wastr ein listml by the EPA trarofer in connection with the Menper. as su;rtfund 4tn. One die i a proundwater contamiration die in On hernher 15.1941, de Karca Corimrats>n Cornmiwon ikCu L hita. Kan+. The aber iwu 4tc. are old nolal wa te taridtid landed i ued an onier appnning the Merger, subjnt to a number of in EAardo ille and i!atchinson, Kan# The Companyi obligathm con <htio. The onlcr wanulmrueraly amerulnlon iks emirr 5 aml at drw sin ap; mars to ir limitnl. aral it > the opiriiori of the Dreember 20. Daler comlith e impmed on tir Merger, the KCC w ill Cornpany'i. trurugemerd dut the rewdution of thew rrutters will rud Invie tir combinni ninyank v chttric and n; aural p raie, until lune a nuierialimpact on the financial podtLin of de Compam or it-August 1995. The LCC untered refunth totalling $32 million to he rnult of operatmns. combined onnpani.i nt.,lonrrs in order to hare thc Mergenretuni cmt uninn w ith custorneruluring tir nmratorium Of the total. $&S I. R1TIlM47T1lHLt.W Hl:GlLtTlON milhon wi!!!r n funded am.n a de Merger i effectiw, SR5 milhon 1he Company, und-r rate onh rw fnim iertain >ram regulatory will1.c n turned in Ibermber 1993, um) SIS milhon willlie ieturnni commieion arul tir FEllC. renners im rc#n in 6ml and p cosa in Sciennier 1990 The KCC appnned a nrthanism to dare npull3. thn, ugh ECA. for electrie eu tomen bec Nde 21 mal satinus pur. bitwnm tir combined companin and their awonen, the cohn inp clu nl p ad.nament cl.w MPG \l for cau ustome x Certain state generated in tir Meryer in nee + of de rnemr requirernent nenied regul tory unmmi+ ion require de annualdift rnu e beween actual to allow reemery of the amortization of a portion of de purchaw p ow incurred and co i remered through the application of the premium includingiocone ta, paid'or KGM: common tock up to PG ur deferred uml amortized through rain in sub cauern periods 029.50 grr ihare on a c.o!!ar for dollar ha i from Sning generated. On January 22,1992, the M P5C iwoed an m L nothorizing the Ilr order pnnido an amortiration irriod of 40 cars 3 commerring Company to urrease rutural y rain $7.3 milhon annually, effee. in 1995 for the acqui.ition adf wment. Tir deptceiable life of Jeffrn tiw lanary 5,1992. The Company had Gled an application on Energy Center w dile ntemled from 35 ears 3 to 40 ycan under the Man h 8,1991, requesting an increa c of $20.1 million or sis irrena, order, commencing at the clo e of the Merger. In a cparaic onler on prinarily to naer nah rel.ded to the cn ke line ryleenent program. Januan 23.1992, the KCC appnncd ihe climination of the Energy On February 5,1992, the Company filed an c.ppheation for rehearing Co t Adju tment clm*n (ECAl to irrmit n tention of any fuel sn mp on certain i.e und an appheation for the iwuance of an accounting achined frorp tiw Merger. . onler io defer eniceline replarenrnt propam nab incuned ence On September 2 L 1991, the Miwouri Public Sen ice Commi+ ion juh I,1991, includmg depreciation n;wn n, proper 3 tasn and (MF5C) iwoed an order appnning the Merger auhjeet to the carr>ing n,ss for renner> in the not generai rate ca e. nwolution ofi+un on measurernent of Merger.related emt sning During 1991, the Company filed rate caws with the KCC on to le n tained hy the Company. Thew iwan were nwened for the April 8 and May 3. The fir t application was for a natural p *afety Grst pnreeding following the Merger by an order on Nmernher 27, wurcharge of $20.1 milhon to n cmer onb of the wn ice hne replace. 1991, and the du Let wu closed on llecember 13,1991. ment pn gram. On Septemler 5,1991, the KCC authorized the On Sepermber 14,1991, the FEllC iwued an order appnaing Company to inctnv.c iu annual rnenun through a safety nurcharge
- the 6ffer of witiement, reached by KPl., KGa E. I EllC staff, in the amount of $ 14 million on an interim lusis, The weend applica.
and interwm,n. tion s egunted r .ncrea,c in natural p rain of $ 32 millnn or mne The waiting period under the Hart.Scottdlod:no Antitru t penent to noner inwstmens in a ww and the increa ed ema of ImprowenenM Act npired in June 1991 %ithout anion being taken paynell, m.dcrid, supphn, aml capit.d since t}r Compm)'n [N natund by the Department of Ju tice. gas rate case. Con,ohdated hearinp on buh rat casm were held in On May 6,1991, the Oklahoma Cmponni m Commi 4on (OCQ Nowmber 1991. On Deennber a0,1991, the KCC appnnn: a , i+ued an order tinding no juri diction with re pect to appnnal of pernunent iate increa c of $39 enillion annually w hich included and replaced the interim safety surcharge, On January 21,1992, the LCC . the Merger, 25 - T 88 6 R&N$e$ PQW54 4hD 410Mf COMPANT
. . . - - , _ - ---.---,-a - ~ , ~ - - - , _ ., - . __- -
is.ued an order allowing the Company to continue the delenal of LLC sudr. intention to imestigate the Coinpan> . ein trii eates aml enke line repheenwnt girograin ni t. inn urred situ e jarniary , icquent ilut all ele. tree vaie, le inad. iiiteruii niii.je 1 to si f und, ; 1992,includingdepreciationcywinn,pr '3mrts tasn,andcarr3 ing pending omeome of the imesiiptkin. costs fat tenner 3 n! th. nesi gerwral rate < aw. Tim Compan3 dscon- In 193thibe fl:HC o ued it,0ider k 500 which authomnlihe tinued the deferral of accelerated for suner on Januar) I,1492. Companf> iutmal pm pipehne suppher to econer a portion of their Apprusimately $1&9 nallbnof tie.edefenal tenuininudre delened tahe<,r-;us wulement n. t fnnn their nstomers in 1940.atter aner- , t harpn on the babnir > Java at Deremler 31.1991, w ith the latuu e s.d of Onler L 500in the 15 Circuit Coun of A igleal for theIh u k t being amortised to eyense during a 41:nonth perk.d. commencing of Columbu.the ff.HC hsued Ora s % 528 which authorient new
- Januari 1.1992. imibo.1 fw the allocanon and renner3 of tahe or pay cidenrrd co t, On Februar3 25.1991, the Conyian3 61cd an aiy licatkin wlih in natural ge pipchne* fnan their eu iovis rs. Dutiiig 1991. a witle-the KCC to include increan! *iqiplier gm tr an portation r.dn. elurred nwnt was reatImd triwee u.nc of the Compann ge pipchne* atul to KPL by Panhandle biern Pipehne Company and Trunhline n teton.c
- n.nierning the annioni ami alk.caiion of take-or-pay Gas Company, in the PGt Thew irerra cd rate, are incurred witlement cost to le reunerrd imm it cu tomers. kgoti.cion and in n.nintkin with p tratop..ried on KPl!. behalf to and from hiigathtu n.ntinuen imiween Kl'l.and other suppher conirrning the
>torage facilitin in Echigan. The Conyun3 al o pn.iui ed to amumn of w h co+ tal.c allocated ni kPl .. Due to the pre vec uncer-arnortile pa ! gM trari jmrtation ak rpen t met a litte# -) car lCrH MI. (In taud) of thW 'Wl'"ffW of tlW lltigaf kin afMi nepolialhink, NW b48tnpan)
September 12.199L tb WC authoriicd the Company to beg:n w muhle toestinute am further lubiht3f or take*1u3 *ctdemeni coo seemering, through the PGL deferred co t, of 99.9 milhon incut red b3i t pipehne supplwril t< Comp.my lwbn es it u di be able thniugh Den mber 31.1990 bawd on a three-> car anu rtitatkm to reemer co t billed from ituupplier ihneugh renner) inn lunkm*
*ehedule. On Deetmler 30,1991, the KCC authorized the Cornpan3 appnned b3 n, tate regulan>ry nimmiworn.
to rremer deferred tratspartation twt of apprminutely Shl milhon , l incurred sub equent to December 3i.1990, theough the lu mer D. LOE TElOf DEllT a 32. month perimi. The Company will recmcr oncoing supplier ge The anuiunt of 6rst nurspre innd auilu wedt i , tir KPL4r1 Pre tran portation costs thniugh ihe PG% and will di, continue deferral of and De ed of Tru t dared juh 1.1939, anopplemented. is unbmited, these nata beginning janaar) 1.1992, sime the e iosts wdi be The amount of 6rst enortgage bornI amhoriicd by The Ga* Senh e reemered from co romer*. On December 31,1991, apptounately Company 9C) Wrtgage arul Deed of Tiu t dated 5eptember 1. 013.0 million of the e deferral reinain in other defencd ihargn on 1919. anupplemented, is Smited to a rnasinmm of $200.000 600. the balance , Ject. Annunt of addn nul bond, w hk h nus be med are subket to certain in December 1991, the KCC. MP5C. anal OCC apprmed agree. tntrictne pnae m of each 4rty ment, authorizing KPL to refund to cu tomers apprmimatel3 $ 10 Deld dscount and eymme are being amortiacd mer the remaining million of the pmeced, of the light Sand antiinat htigation wtile. Inn of each %ue. t he KPl.
- inking hmd tequirernent for lit.:
ment to be colk eted on behalf of 4Pll= p* eu tomei*. To .ceure the mortpge innd wiks can le nwi in bonding whhtional propesty. The refund of settlement pn.cceds, the Commi+ ion authorized the sinking fund rcquir ernents for eertain K Pl. pollution controi serin an 1 ntablishment of an inde;* ndently admini.aered tru-t to colleet and G5C first mortgage borul can le net only through ilm acqui.otion eu.d maintain ea h receipt
- neci ed under Tight Sand, settlernent retirement uf ontstanding in.nds. long term deld nuturing and mink
' agreements and prodde for the refumb nude. The trust Iw a irrm it g fund requirements for the 6ie year,,ub equent to De( ernber 31, of 10 3ears. 1991, are a followv On August 1,1991, the OCC uppuned an agreement between the g ym, snynguna g;n.n,rni, Company and the OCC *taf f to innea.c rutural p rain $1.1 nulhon Wr dInw Debt ' pn.pern nennng Hong annuall3 .Timagreenri v4tintheCompann April 21.1989. initial 1992 8 - liondmg[8 ll 80 $2,733 application for rate relief of $1.6 milhon or eight percent and all tw3 _ l.860 2.u3 supplemental apphrations in thi doelet. The $1..I million pernment IwI - 1.810 ?,733 raic increa c included and replaced the $1.1 million interim rate 19 % l ADO 1,810 1.733 increaw apprmed b3 the OCC on April 9,1940. 1996 60 *00 l 830 1 M3 On April 27,1990, the MP5C apprmed an agreernent among On Januar3 16.1991, the Company signed a eredit agreement the Company, the MP5C staff, and intenenor* to inerrase natural wiih Chemical Bank of New hrL for a $600 milhon combination gas rate, $18.5 million annualh, effecthe %> I,1990. This agree. irrm loan and rewh ing credit fu ihty to finance the Company 'q rnd-ment ,ettled the Compann August 29,1989 app!k ation for rate relief ing merger with KGd E. The agnement he a conuniiment fee of % %
of $25.6 million. The Company discontinued the deferral of per annum of the undrawn balance, menea ing to %% on July 25, accelerated line suner and carry ing < harge, on plant imestment in 1991, and returning to % at the rh. sing of the Erger, ha ed on
- new wenice lirn on April 30,1990. Appnrunutely $2.7 milhon of the Compan>' debt ratings.The aperment, which originally npired thew deferrah remain in other deferred c harpm on the baluw e sheet on Deecmher 31.1991, has been niended to Wrch 31, W92.
at December 31,1991, with the balance being amortired to npenw mer a three 3 ear period whk b bepn my 1.1990. 6. EMPLO)EE HEXEllT PL4NS on January 31,1989, the KCC apprmed an agreement among the Pension: The Company mamtaim a nonconitibutory defined Company, the KCC staff, and intenenen to reduce electric ratn $9.3 benefit pen ion plan emerinpubstantially allemployces. Pen ion mdhon annually, effcethe Fehnur) 1,1989Xith this reduction, the benefit
- are based on 3 car of wn k e and the emplo3 ce's conq.en-Company accelerated the amortization of ecrtain delen d ircome *atkin during the fhe highest pakl eonweuth e 3 car, out of ten before taser,. whk h will result in no whenc impact on carning until the retirement. The Compan>', pobr> h to fund pemion emt, accrued.
?alance is fully amortized. This agreement concluded negonanons subket to limitation wi by the Emplo3ce Retirement inconc bracen the partin folknsing an August 1988 unnoun rment of the 5ceurity tet of 147 i and the Internal Hn enue Code.
26 f il 4 EAN$&S POW 89 AN9 6iOHT CDMPANT _ ._~ _ , , .._ _ .- . _ . _ . _ _ _ _ , _ _ , . _ .
_ - ._ _ - -- - .~ . - - - . - -. - - Tie folk. wing table, prmkh, infiumation on the cominunw of $20Al2.000. and f17,005,000 for 1991,1990, and 1989, re pec. i penson cost, funded > latus and actuarial a%umptiorw for the tisel3 , The twt of prmiding berrfit, for 1,911. IM6. and 1,774 Conqun3% pernion plow: retiren for 1991,1990, and 1989. resperthel ,3 i nid acparalde h om he l:nded ikemtwr 31. 4$1.tKKM 1991 1990 pm9 the rmi of ptm idiog berrfit. for the 4,174, 4,614, and l.532 actis c gyngon roc emph9 cc. in I Al,1990, arni 1989. resperthel3 . Senice tv t . .$ 6,589 $ 6.315 $ 4.919 The f%ll ha i+ued a new statement. .*1b h 106, whiih Iniered w t on pronwl establohc6 accounting and reporting standank for po i. retirement berrfit oblyation . 20,985 iH.729 17,026 betrf t <aher than irraions. The new .uenu nt wit miuire the uneml Return on plan a et, 159.161) 13.319: 02,7-ifd of the niweted cost of nm h lenefik during the emphi3ce.' 3 ears of Deferred gain ik+1 on plan awe 311,01a 15.7216 25.815 sensee. Tiw trarnition obhgatiun for prior wnice rendered wiU be kt amortiutu.n . J1316 212 2.340 pha ed in mer 4 pnnimately 20 Scan The Company is n quin d to Ltirrnionemi _$ 6,297 $ 5.776 $ 7.381 ado [d .'fb k 106 no Locr than january 1.1993. In unticipation of the peruhng erwrger, the betwfit pm Lagn uiludh the Company and Iktember 31. s$1.0mM 1991 1990 19R9 Mm rn-d under mWie h dgm du Son m-Funded Stau' unknow n at thi time, Ahhough the effect of adoidion cannot lx fully Aduarial pre ns uh" determined. due to anticipated future regulalon treannent the Id UN# "'8E , Cornpan) does rH4 c4MTl adojdion to haic a nulerial effe(1 on e ults
%nac ted . I3,935 12.740 13.231 "I"f"*"^ Md"dF"""d "I"* d") bd"htmuecouled pursuant
'" " "'""*"I"' ""'""*P"" * " " " " " ""'}
Tiol . .$211.370 $106.052 8189.519 as ets to refleet anticipated future resenon aeriated with reemer) Ib awh tprirriju!!y deld and through raten of post retirenwnt benefit emi tu4 irnloded in the emt rqmt) neepntr>l A fair **hr . $321.780 $274.622 $278.529 d a h n 'lk Grym dwte* tb da WWt's M4n mM Prop ted benefit of,Lyin.n , _ 2112.062 262.83i _219.978 k in dw qM $90 $ $110 millnen before con 41ering 0m elfe<t 1% a et in em uf pnhitd of &ngn m benefit plans Ihat may rnult itom n structunng the hnefd obligation 12,7 Iil i1.791 28,551 nabined employee compensation program
- as part of the pending Entecognizal tranntmn awt i1.253, t1.370r a 137!
',775 **F" " O # y" i nrecognized poor .cnice co t . . 27.216 29.321 I ntnognized ut gain . .~~(69,198) 440.1981 f 19.29*a b"I".pt T he Company maintain *aying plan, m. which sub tantul Acerued pemmn co t . .$ 48131$
ow$ t4 m
- emphnen,y omtributionaH nnployn up to qweifini padu,pate, ne (mnpany maumum hmits. He m bar Endnl ikwnnber 31. 1991 19 % 1989 fund of the plus are deposited with a tru tee and ime ted at the Actuarial Awmildun:
M"P"ye ! option m one or mon inundment fundi, induding . Diwnd rate , 11. 0 % a.0% 7.5% a Compan) 6tock fund. The Compan>' contributions were Annual malan increa* rare 6.0% 6.0% 6.0% $3.321.000, $2.818.000, aml $2,309,000 for 199h 1990. and lwng-term rate of return 8,0% 8.0% 7.5% }989, n,.perthely, The increase in pension npense for 1991 cornpared to 1990 , result
- primarily from changes in plan pnni ion *. & MlORT. TERM IJEUT The deercase in gwmion npense for 1990 compared to 1989 The Compan3'. short term fmancing requirement, are 6ati fwd rnuhs primadly frem the complete amortisation of the 1988 prior thneugh the sale of commercial paper or 'htough bornming under senice cast a.*o<iated with the cady retirement opUm. unsceured linn of credit maintame J with hanL3. Informatine.
Early Retiremens Uption: In January 1988, the lloard of concerning these arrangements for the ym, ended Deennber 31. Directons approwd a s oluntary early retirement incenth e to all wated 1991,1990, and 1989, is *et forth below: non. union participants of the Company'a defined benefit pen ion fuied linnkr 3L dlm 1991 1940 1989 plan who reached the age of aa on or befor Mav 1,1488.Lertam I i"" "I"'d" d' )*"r end . . . $1115,000* $165.On0"$115,000 " ien ion plan amendmens wcre made o fund the additional beneus,
. Imrt anm deld out tanding including a waiu r of tb actuanal reductmn factors for carh retire- e a end . , 135,800 115.500 133,1to ment inormally fe penrnt per 3 car lefore age 62) and a nnonthl) Weihed memc inn-n v uupplemen inea of ntimated socialnecurit> benefit pa3 able until nae on ns .,t out tanding at the age of 62. Of the 280 employn ebgible for the early retirement 3 ear end . . 4.81N H. ! 8% 8 66%
option 150 emplown representing thn e percent of the Company'. himum amnuni of Aort.
- work force, ehrted to retire on or beforr the h 1.1988, deadline. teon de outaandmg The actuarial emt of $5.962.000. based on plan pna isions for the d"6"8 'h" P"'""I ' #3'"" W9" "M Entidy merage
- hon.
carly retirement option was recognized by eyer sing $2.981,000 term drid . 125,968 109.195 71,866 in both 1989 and lW8- Wrigided dad3 menige interew lbst Retirvinent:Tiw Company pnnideertainheahheareand umsjuringtheyear . 6.07% 8.18% 9.05 % hfe insurance lienefits for retired employedubstantiall3all of the .fnc,ymf ,o non o,q,p , jo,, 9 iwy. Companyiemployes are eligible for these benefita if they reach "4=, cwt m sianunuum inImum twl. normal setirement age w hile w or Ling for the Company . The emt of " *=I * 'l""U"'o m /*u*o / *"- retirce heahh care and life imurance benefik i- recognized m in connection with the cononitments, the Company has agreed npense w hen claims and premiums for hfe inun ance imlicin are informally to pay certaic fen and tor maintain certain merage amount-paid. The emt of pnn iding heahh care and hfe imunince benefd* un depo,a with the banks. bines of credit also are utilized to su,iport for retired and artise employee + totaled S22,979,000, the Company'* iwance of conanercial paper. 27 TMI 8 44$A1 90WGR &NO 41eMV C 0 ed 8 A N 1 - _ , _ z. , _ . - . . . _ _ , . - _ _~ ._.
- 8. SEc 4lEN'iS OF Hl'SINESS The Compan3 he been named a* a driemLmt in Lwsuit arising The Company i* a pubhc utiht3 engaged in the rencrathin. out of an nplosion w hich urcuned in the lther LLi men oi Km se tran mi+ ion, distributi,n, and male of elect irity in Kmisa and the Gn, %ouri,in ju1 1990. 3 The G tnpans ha. prnioud 34 mwnled (nuwytution, distribution, aini mle of n.amal g.. in kmisas, bouri, h.didiis hit ihe incident. I hr irr on was Lilled. Tim Comiun3 already and Oklahona. he n~.hed a number of a laint awnited a nb :he irrhina. Ohough w 141 Deweni,a 31. tilpw 1991 199n lum ll"' 8""'unt of daniare, aucynt in the c ca c,i inewnth unknow n, Operating inenure d" C""'P""'. doc. tnit niwi that dr nmojunon of the bn uis %W Mural ru , .$ 690,339 $ thola $ 671280 '""' " '"d"'"I I"'P*1 """n da t,ornpany . fumW n.4 i tion or it-lintric , . 171,839 46Do? 457 313 '*"h* "I"lorabout 1,162,178 IJ 49.75; 1.127.h21 n lv. I.L,4M'S Ogrratmg npelwe$ neludmg , .
ilk'otDt lat : *
% ural gas . 666.825 600E% 614,583 I""l*f4 d"d "l"i '""l nt hrt sin lea c agreemens nret dr enteria.
Ekvair . 337,150 326 2 13 auct forth in M b h 13. for i bssfration as capital lea es. Hental 323.221' 1,001,975 987 # #9 4758 9 l'd)*C"b I"f 'di"12 d"d "l"vating leaws and otimated ten 6d g , gy,
~
comnuttarnt are a bdlow-Capital Opriating b uralgu . II,657p I.072 4.012 y Eng pegm},g3l,igjpgy ; y,, g, Electrir 32.239 29.591 30.231 30,582 1989 $ 676 $ 16""' '
-30.6N. 312M 1940 110 3 17.713 Opersmg iru orrr: gg jyg;- 2]MI butal p . 27,171 24.120 'lu li gg.g,,;
G ctra 102.150 107.870 W:91 3g gg g 9 37333 0 129.621 f_11pno 8 iSin 1993 2.20 t 11,614 htrnurable aw+ a: IW1 2.201 10.647 December 3h tws 1.652 1,109 b utal gu . . . .$ 810,692 8 766.217 $ 73828n 1996 - 800 Electrr 1,146,023 1.t rC80 1 3.8.730 b red er - 3.015 Otler corporate aw+* 83.361 61.002 _ 32.0Lt gj g3u; g 3729]
~~
$2,120.076 $2 016.029 51.9 Mull le* intrerd M7 Oiher informath.n- Vi ol%n $ 7.507
~
liepreciauon and amortuath.n:
%im ! p+ .$ 32.103 5 75.005 $ 22.906 JJ. JOMTISUll NED EEECTRIC plt.%T Ehtrr . a3.63. .d.610 . 0.3w .
'ihe amounfort fonh below reprewnt the L.ompans n 6I percent
$ !!3,735 5 76A15 $ 73.305 a nn4 hare of de j& 3 Em m G men Esb.hqumik Wintenarar: its ow n fmancing, The Companfuhair of espen+ n for the Jef frn Mural gan .$ 26,275 I "1263 1 23.011 Energy Center is im juded on the conwlhbted statemer i ofincome Elettric 31.210 35.428
- 33. % 8 in in gotriah yrmin qiene hw
$ 60.515 $ 57.Bl? 8 58112 ILamlri 31. t$IMMM 19, ,. 1990 bon!arunInfl npelKliturPY g htural gu . ,$ 81,461 6 85.617 $ 93 160 G etrr 13,714 44.381 a6.12a b-muled h.uin 229,888 208,5 n
$_l,23.675 s invol s 119.885 J2. Cl3H L1TilEPRElERRED.4X')PRElERE.%CES70CK
*1%y,uth ad. nynon unh imma,. n..noaan, m,nwnu, wa Not Subject to Mandatory Nedemptions The cumulathe dymnt</w m preferred :hrt h redermable in w hole or in pan on 30 to 60 day.
notice at the option of the Compan3,
- 9. .u:cu PnocEEntscS Susject In nandasm nedempaonaue mamuu,rvinung In February 1987. Green Constnxtion Gmpun3 IGrnent com. fund prmbions of the 8.70% Serin preference stock seguire the menced a bwsmt agairwt the Company in the l'A Dotrict Giurt fi r Company to redeem 13,000
- hare
- annualh on October 1, at par the Deri t of Kansas wrLing 52A milbon. Green wa, tir G,uy un(* s alue. The C9mpan3 may, at its option, redeem up to an adihtional contractor for the construction of a dam the Jeffn 3 Encry3 Center 13.000 sharn on eat h Octolmr 1 at par ialue. The 8.70%rin uusilur3 nute.up lake. Tlr uit alleged Green performed additional al% rcdcemable in whole or in part, at the option of the Company, scrk ond incurred additiorul co t3 for which it was nonompnmted subject to ecoain rntriction on refunding, at a redemption price by the terms of the contract.The Company counterclaimed. celing of $10L35, $103.99, and $ 103.63 per share after October I, damagn for the recorWructiim of the dam, which the Ganpany 1991.1992, and 1993. rnpecth cly. Thc Company held 135.000 claimed was improperly built. Following a jury trial w hich con luded shares in tremary sh ck at December 31,1991, which may not be on December 17,1990. Green wa awarded $220,000. Because of uwd for stock redemptions under mandatory or optional winting. ,
the jury % fimkg that Green had in breaded is contract in the fund prm kiont Comparn, dr Company did ru recche am amou.s it o.ught. Winn- The mandatort sinking fund prmi ions of the 8.50% Nrin to hae the serdid mertuned and /or for a new trial h.ne been denied. preference so.climpmc the Company Io redeem 50,000 sharem The Company ha filed an appeal. annuaH3 beginning on July 1,1997, at $100.00 per share. The 28 THE EANla$ PCW$k A N 81 44OMf COMP &NT
companyn, .u 4n + m ,t. w,na i r,onooaute-on raa ! ;. . vnhr sbc. n- wsoie at o i- REPORT OF iN DEPEN D ENT , ni, . w-iw u w e .,A Companwd v et PU BLIC ACCO U NT ANTS ie ,re w v .on - w w . 6,nic ecor sion.so , ' th ; e p er s ji - p 4t t 101.91 aval $107.37 per shatr . ,ah N j n i a e , tesp. rtisel . 3 .ru du Am Imth M NW d %wm N %Ql(MM f;flusS tl rumduedl "I'lhe Ku"*a. l'ower iand I lght Company Nm.xas in the table are muuthinl but. in ilm opini.in of nunagement, all adju tmens Ininsisting on1 3 ot nornal recurring \\b le mhnd du einqumivy iow. bland hann adju tment i necessan for a fair posentation of the ic uls of *m h period hair been made. The busmess of the Compam L w annulin d"'1 d'"I ddt"""'"'"I"'l"'dh^di'""'I TI"' Kauu l'ower aiul nature and,in the opinion of ntuugernent. <,oniiarbon la twe-n dm 1.iglit Colvpai>> aiul is uli id'ary i a of 1)crernlu : 31,1991 quarter
- of a 3 car do imi gise a true indication of ou rall treenk ami amtPF0 amidu srlmehom.ohdmed amenwnsdinmnus dunges in operasins Undl bowN ta\t%. atid Cotnttp Hi Att M k (* plit) foi f ach ol dp' ditit tl LIM rv f}d [wt del lahr 'e ml b rd to g, ,g , g ,g, 5, pq .g ,
g 1991' watenn nh are du se iwin d Wt3 of du Corn;> anis enanage. operemg rnenue . $389,986 $210,H21 $219,797 $311,573 Opereu im ow - 43,367 22.249 3 1,6110 32.325 enent. Our sc ponsihdit) is to espee an opinion on these c brome twfore tumulaine fin;unial 4atenmnb ha cd on our anhs th1 d a o.unnng char . 28,125 7,192 17.91 H 19,0iu We cotulocted om aiulih in accordance with generally Ganulw c0ed tyj aran I, an M m'ini Mm A T6 MaMM wpiw b w-twl.of dung m rnmr regn%n tre of wome plan and perform the undit to obtain seasonable a+urance
'a"'I - II3M - - -
about wlmther the financial gaternens are her of material kilfo.mr 43,lll5 7,192 17,9]l} 19,050 . 11rnine qvlolk .
""'4"l"""'"' A " d"' hl i"i I"d"' ""'"i"i"k "" " I"4 hd'tN cmnmon % L . 65.071 6,281 15,379 16.537 esidence opinnting the anniontii and dis lo ures m the Lrn;np p v dec lwfmr finaiwial latemenu. An ambt al.o itu hnic as c+ing the nanula est d arountiwnincipk mM dignifiet cui.nmn nude 19 actounbry a kup . $0 !!! $0.111 $0.4 % $0. 811 kmubne rfbt to January I. mamtgement, a well a esaluating Ilm metall firunnal Mate.
lwL drLep in tn enu" ment pic e nwinn. \\c Imliew dut our aMii pmside a retvgrution iwr hare . 0.50 - - - Lndnp p dec . $ 1.31 $0,111 $0.4l $0.111 rea-onaMe ba i for our opinion. Dnalen,b p r dxe . $0.6 0 " $0.165 $0.165 $0.165 in our opinion, the financial staternenn ieferred to ahme Gmmon e L ywe: . Ihgh $24 $25% $ 26', $ 2 ft'. I " ""I " " k" ' " "" '"""' ' "'l "' A "'f"'""'.d P" "" la . $20% $23', $23% $25', of'll e Kanse l'ow-r and 1.ight Cornpany and is mhsidiary - 1990 a of Dn ender 31,1991 an<I P)90,and the ersult ofisopeta. Op raims rnenon $122.5'll $215779 $ 220.778 $2tu.7 Operming inmnr . 43 ~328 23.822 37.2H 27.316 nons and n cash nows for carh of du do ce yem m. A ndod i Vi suer 29.984 4.3;t 21,887 18.341 ended Decembr: 31, 1991, in conformit) with generall3 famir.p a;p!x alk to common e L . 29.511 8.911 21.448 17M79 "" " P """"" "I'I" *
- brning pt share . SOAS 60 26 $0 62 $U 52 A'"plai""d i" N"le I in the fmancial statemenh, rIferlisc Dniden(b p r dwr . 10 -15 f 015 $H 45 $015 Janus) I,1991, the Ominjun) thanged to a pt eferred strthod Gnram ak pre:
thgh 12 % 12 4 $23% $22% "I "" "" "' i " Ff"' ' "" '""" ' ""F " 'U"" - la . 122s, $21'i $20% $ 19!.
*W fins Iver quanen af Iwl <o im o.uoh reponed in M Gminoi Quannly 19pom on Fhem in y lun e been restated to renen the aluovie m thecvtsnting melIunt ofret tgniurtg renrnues to more}ielli dru nhnl sn he
- 1. W epea on un unw Mse < unwlati,e ejfers of nraumtmg clumpe m tle rotasm qwvtantom e m alsfeu wulsluniqwsnen 4 $wlIJw Agnn;l\ gyp lqlyll5 g (9, wul si.lwn emecn,cis wul , n uwrea,e in the ww.ul yunner 4
$J.E D #W Kan a City, Mi ouri, * *lnebules yet val. gne tutr do ulevalof 50 iMjer Jsairpr uiiehnwan 3 P>tt- January 2 4, l992 29 --
i tHe a A t' l a 8 PCW80 &ND L16H1 COMPANY
1 JT E N Y E A R C O M P A R ATIV E D AT A-INCOME STATEMENTIktT4 ISI.000sh Oncrating 1:spennes 1%er Total Natural furl l'urrlinerd & Operating Gas l'.ed hot- Interclianged Other Slain. liepre. Operating ;
)ca r. Hewnura . l'urchance Generatius! Orti Operations tenance ciathen Tawa Ine nner ;
1991 $ 1.162.178 $ l39.323 $146.256 $ 5,335 $ 193.319 $ 60,515 885,735 $102.07 8 $ 129,621 1990 1.189,755 436,5th8 148 t.81 2,658 178,4 4 H $7.1117 76.815 96,876 131.490 ' 1989 ],127,623 451,89u 149.796 148 171.094 511.812 73,305 97,106 125,5 % 1988 1,166.114 186,347 148,787 42.3 %) 165,238 55.128 70.406 111,146 130.422 1987 1,166,438 485,995 141.495 2,328 153,789 49.598 (J,no l 128,115 138.331 1986 1.198.884 511.341 148.693 2 S 65 151.fJ6 15S i2 65.208 13~. 417 142.639 1985 1,351,128 655.429 150.tJ9 2.279 150,295 45.962 60,794- l 42.6H0 116 S10 1984 1.480,182 761.819 173.709 l.J 19 I t's.559 15,181 58.552 141,316 113,727-1983 422,080 376.115 158.127 11,734 82,582 31,719 45,I48 09,791 116.868 1982 552,681 140,151 143 S90 21,115 58,3 % 30.573 35.5 4 H 17.494 Th2v t , ELECTRIC S1ATISTICSI Cannpan) h.tcen ' Suppl.s at 51E ll balca (l.tMNI.) I'ral llour 4%ct 51Wa
% . tem 5.icm - Generating l Heni. Com. imlue. .
IIourl; l'rak Generating Capacity
) care dential mercial trial Other Total l'rak Set tli (apariL Net (IL 1991 2.557 3h68 1.939 1.9 711 (31 9,5314(Si 2,077 1,959 2,622 2,367 1990 2,403 2,952 1.% 4 1.H29 9.129 2.066 1.918 2.5119 2.314 1989 2.2 4 fl . 2.818 1,925 2,077 9.061 1.933 I Jt23 2.589 2,345 1988 2,296 2,782 1.877 2,174 4.129 2,034 1.919 2/ 26 2,287 1987 2,153 2,633 1,816 2 Sol H.603 1.917 1.821 2,505 2,241-1986 2,075 2321- 1.821 2.125 8.542 IJil4 1,710 2.531 2.262 1985 1,489 2.40% 1.115 2 2,296 8.582 1,728 1,615 2,672 2.435 1984 1,991 2,322 1,777. 2,379 8.469 IJt02 1,6t.H 2,6H 1 2,387 l 1983 2.062 2,300 1,599 2.408 R.365 1,853 1,735 2,681 2,371 1982 1,867 2,222 1,561 2.656 8,306 1,719 1.599 2,314 2,044 i
NATURAL CAS STATISTICSI 3fCF Salco i1,(MMle) Ascrage . Cornpan3 Cunt id Gao { 1%rr l'urrha.cel irar. He idential Conuncretal Imlu. trial other - I'lut. Tenn.portation latal_ Jerllqli , 1991- 100,271 47.100 2,8 lb 12.089 15) 81 711.055 210,08245') $2.117 , 1990 95,247 43,973 3.207 1,329 32 72,623 216,1.11 2.90 1989 104.057 47.339 5,637 1,01:1 .355 58,025 216.461 2,75
'1988 104,471 52,567 .19,429 I.376 f,079 37,424 216.816 2.57 1987 94.812 50,916 29,917 1.265 -553 6 28JH1 202,390 2.67 1986 97.363 51,132 18J 81 1.781 742 5,752 207.956 2.50 1985 106.315- 59.947 53,170 6,966 574 9J 6 4 236.636 2.79 1981 108,092 57,624 61.163 1.904 1.911 - 226.691 3 25 f
'1983 48,332 26. I B5 35.507 4,370 4,011 - 118,405 3 10 1982 13,443 10,132 25.401 3,305 7,501 - 59,785 2.15
- t1I Net ofofmsem sales and pehmes.
t:I Restated sa rr)?n t tuwfor.one som L sphs on 3fas 5,1987.
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- 4-i DIREC10RS HITICERS Gene A. Iludig'8 Jolm 1:. Ila3es. Jr. Verneda E l(obinvin Chancellor audinum <f slw IL, ant, l'iniara. \'h e Problent. Ctosoma Sen k e-The I nisersity <f Mrma n ul Chkf Esea utve (ylkrr Gn %n u e Dh idon laurerur, krna.,
Wilhatn E. Ilrw n 1).nid 1:.1(oth Thomas, It. Clesenger' ' Pinkina urul Chief Ewcuthe otncer-li<e Punalaa. Malvin R*sion-firmneial Genuhara kPL Di ishore t Gn ki u e ilirio"n tru hita, knuu Waliam I . John on Kennoth T. W3 ninte Cloud L. L,rav Jr.8 8 " ' I""0'"' #"."V"'""
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#'" "" "'"I Archism, kn.uu Steven 1,. L.ii, ben Eiecutue iue Prnkloa mul jeiry 11 Connngton jnhn C. Dieud. :
OwfIi'"vuial Ullh er Coranulin Chairman if the Rotud Capitol klend Saning l'ted M. Itryan Thoma E. Shen Thed.a. havu I:wrute \ u e l*rnuina, l'uhr, un i< n Dea <wn John E. Ilayes Jr. # Owinton </the U.=vd. Prnidov, John K. Ibenberg Dattell 11 liled .oc Esmahe \1re Prnhina, Aniaara G"andler arul Chief Esecuthe Olm n The kroa, Pou, mil >gla G mqwmy Gowrul Guavel, mul k resny flyul.n, kwai E.13 nn Cook Edward 11. Seluiuh A nistm a D m uu n David 11. Ilnghest$ l'se Pinkina, Gnernvera neknioni l' ice Chainrum m,J Gapvare Gmmuoavate . l'. Thoma~ lIali lIi llallnuck Gmh, Int. irribnu Asdawa Si< e Prnblera, Gannuants knw City,3hswwi M. l,.e lhunton Relathorn-Gn &n h e lhs nion live Prokina. Ele < tnc Pnulurtban John 11. flohinumt8 a,ui lpiyun< h- Al'l th enmn Stacy E Kranu r amirnmn n{the thund Aniania Seneran HLuA & lhurh j,,ne. W. Ingratn kn3ai Cuy, 3fiwwi g;,,p,nup,a,pingurty,n, George l(, Melkng Dwnnunhm. and St<uure~ Auiuma % retan inui,, W. Smith
- 4 prnyina Gv Sen kr ilhi<kon IUchard i1. 'langeman AlliedSigrud Acinipur Gmy.mn- %istma rye p,nid,ra, kruu City, 3fiuouri Lrman E. Jiuben
(*u e Pinkina. Ein tric I;npneenny On openajorp gu y,ic, y;7,g,, Nenneth J. Wagnon Ls mal Danuniuion-EPL thuiskm Preskind Capital Eraerpria, Inc, Itichard it 1.uGree 15ichita, krua.s \'ue President, Elatric Ih tribution Opermiurn-kPL theision William E. Wall'
- Attonri llaim E, Mertens Sider,us, lonerpm & Crouley 11re Pinklent, Engirwering-Erattle, khingum Gas k, ire Dhishon Retired Chairrnan <fulv limed The krsas Pouer and light Gmqvm> Cml W. l'orter l'u e Pin 6Ina. Iield operatiow-Gu Senice Dioishm
- SlowJe kuhr and kname Gev,dnee s ttende Gmy,ermuum Gauruner 8Afewde h un,wnn Gmwiaser 4 Atende G.rprecur Pulde RJu, Gerardun 32 1 di 8 SAN $e$ POW $$ &ND nIONt COMP &NT
k 9 F F i C E R S OFFICERS Kl*l. lDIVISIO.V G AS SERYlCE HIVISlu.V of The Kansta l'own aint 1.ight 3g , g,,, g,,,,,,, g.illiani t John.on , Company, its aub4diaric' Ewidiu Viw I'nsidan. l'admt ad and dhiaim Eh e P M eion Chi < f Ewutiw OEe IQTectin Iibruan H.19% llichanl 31. liaden Jame. W. Ingram EXECUTIFE UITICERS Executhe %ce l'realent. Vice 1%ittent. Production, Sc u en Tnunponanon, and Norage John E. Ilayes, Jr. Chairnun of the lloant 1%ident, and Chief N"""* " E' 3 "* k '"" U""' U*AI"d""' Ewutist We Pn4 dent, he Pnsi< lent, Es ecuthe Of&cr 13ectric Engineering and Gas Engineering Wil.on K. Cadman "I'IU'""N""" I C"'I T' I'"""' Vice Chainnan of the lloard I' "" I '"'IU"" and Ch4dtman of the 16ard Kent it. Ilnm n Fichi Oper4dions of KC4E 1%ident and Chief Euscutise OKien Venieda F. Hobin.on
- William E. Ilnmn n Pn dent, l're ident and Chief Executive Italph H. Fo.ter Cmtomer Senice Officer-KPL Didsion Vice l'rerident and Jame. S. Itatues, Jr. Gennal Coun-ci l' Bunna. Han HI Executive Vice Ibident and
^* '"' "" E"idnit.
Richani D. I,aGn e Conununity Relaiions Chkf Mminiarathe Olneer Viec l'reddent. Field Opnatioia Hieliant H. Tangenian Sinen I. Kitchen A%Want Vice 1%ident. Execume Vice l'reddent and Eldn d l'nidine Gan Opnation. Chief Financial Officer Treasurer and Gintroller
'"#"""'d"""""~N' Itobert L. Hives bW.JtiVe Vice Irft%iderl.
Gerporate Communiewions John K. Ho*enberg Executhe Vice Prc4 dent and General Counsel
CORPOR4TE Kenneth T. Wy nsore Stacy I'. Krarner Fred bl. Ilr3an Vice l're4 dent, hlanagernent Assi taot Scen etar) Esecutive Vice l'reddent. Inf.innation Spten a lluman llewurce, and Telecorninunication* Georve 11. Stelling Aw% tant Secitiary
'jaine T. Clark Tluana. I'. Shea Vice l'reddent. Intenud Audit Treasurer gPl. ENTERPRfSES. INC.
Carl 31. Koupal. Jr. llichard D. Terrill C. Ilob Cline Vice l'resklent, Corporate Secretary CI'ai'""* IC*id""l+ ""d Economic Deselopinent Cidef Eurutne Omcer Jerry D. Courington William 11. Sloore Controller U"""Id T' WI'III"Ck Vice l'rt ddent, finance Yk"I'"*i'IC"E"C"*"T* Darncil D. tiled oc and Tica urer Dasid E. Iloth Awient Controller Vi c l'a ed&nt, labor '**'""#"d"'e'""'"'a#'*' E.L 3nnCook Edwant 11. Schauh Awi tara Treasurer Viec 1%ident, Gmernnient Afairs
I N V E S T O R I N F O R M A T I-O N -- MlAREHOLDER INQUIRIES . DillDEND REINI'ESTMENTl'LAN Comnrunicatiom iegarding stock tran fers, lost or stolen cer. The Cominny's Autonutic Dh idend Heimestumut mul Stot L tific As or dividend diecks or other information niuests shouhl Purdm Plan 1DHiP) oilers common >]iarriu ilders a cornerderit be directed to Manufacturers llaniner Trust (Mill') or to the and economical tnethod of purdiasing miditional shares of Comieny, Please imlude a telephone numl:er wicie peu c an conunon Mos k. Slutes ofi,tockin the plan m e partba cd on ilm i be reached during the de. open market. Snu61 arm llam.ic, in.,i 0.mpan3 A n) common >harcholder ofiecord is eligible in particil sie seuraihowr wlun. Dreanmera in the Plan. Additional information on DHlP and an in tu 249n chu'th N'"4 xawa authoriration card will be sent to you on request to Milt or New brL, b LL lic19 Sharrholder Helatiom. WK4 617.4773 (21216t u lt7 IAIST OR S1YrLEN CERTIllCA11N W Kama,1wr amilMa n.mpany if a entincate i inksing, n 6fy the trander egent or Wrebokh r Itriath.m Sucholder Rdatiom iminendely in w t iting. A "dop trandet" lu lu a89 willla entered in the ecord and an afniLnit will be snailed TopcLa.Kane u,oot m ay to 300 for completion. You enust pay a surety bond fee and tl e mai 299+39 s amount will be inchuled with Ihe affidadt. Investor questions concerning the Company shouhl be ESCH4NGE llSTINL ND S10CK SpulOLS cddressed to the Company's Imestor Relation Department. Nti, w k % A I w hange W Kaim IW: and Ikhl Gungan3 Taler S n.l.! K O Imr.cor IMasu %w paper lannr hanPl. P.(tlu 884 Tv La. una u, sol-nenu CORl*0 RATE A DDRESS 49n,293 g,2n W Mne Iwr und 19:hi Cumnam HlnLaim brnur DillDENDS K""* u.612 1"I",'* en 2 stanu Quarm'y da. idenOn comnwn and preferr ed stock normally are paid on or about the fir < ofJanuary, April, July, and October COMMON. PREIERRElA A ND PREIERENJ:ES1UCK to duucholders of record as of about the third day of the Principal Tran fer Agent and Hegistrar preceding month. Allcash dhidend paid by the Compam are ' W"ul"1"'"a llanmn Tns.e onniani tasable as ordinary income, * """ h"*' ' W"""' D"P""'"" d lu lu 249E Chuo h Nred xdum i ADDRESS CHANGES %" h " L \"" '" '"" " i Addrew changes must be made in w riting to MllT or KPils G,. Transfer Agent Shareholder Helatiom Dep2rtment. To au id errors please 16nk Ir ls La. N O PRINT all < hanges. 1"x l % ma"a on. L,n.nc Pau. In tu an ELIMINATING DUPLICATE MAILINGS ANy Tos. La. kana su,nt CONSOLIDATING ACCOUN1S G,-Hegi,,trar if you are recching duplicate copics of the Company 's quar- W Wo ham Naramalikuik tedy and annutd reports due to pear naum or addrev heing listed I" Ib 178 on our r-cords in rnore than one form, the duplication can be M"' U"* "'"'I
; topped by written request. KPL FIRST MOR161GE DONDS This authorization will not affect the distribution of dividend- Principal Tru tec, Paying Agent, and Registrar
' or proxy. material. You may contact Milt or Shareholder 11am Tn i amt une funk
!!clatiom to comolidate duplicate accounts ill b \l..nne h6 (b ago, llhnus NR 9u TRANSFERHING STOCK 012' 46lM8 ~lled A stock iransfer is required when stock i wild or a name h GSc flRS1'MOR16 AGE RONDS
' changed on the certificate, lo transfer the stm k, complete the Principal Trusice, Pa3ing Agent, and Registrar awignrnent form on the reverw side of the certificate and endore Tk tha.c %nhattan Ibnk. N A it exactly as the registration show n on Ihe face ofIhe certificate. I Va brLPlan The signaturch) mu t be guaranteed by a commercial bank L a L L V a L L I" M or a brokerage 6rm that is a memher of a major stock exchange. G,.Tru tee i The cerdGeate and applicable doeurnentation then is ent, omnnrny ltmt or g,, nn, u
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} 3 REPORT OF I!JDEPElJDtNT ' CCOU11TAllTS I The Board of Trustees Kansas Electric Pawer Cooperative, Inc.: We have audited the accompanying balance sheets of Kansas Electric Power Cooperative, Inc. as of December 31, 1991 and 1990, and the related statements of operations, patronage capital (deficit) and I other equities, and cash flows for the years then ended. These financial statements are the responsibility of the Cooperative's management, our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and I perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
} As more fully described in 11ote 1 to the financial statements, I certain depreciation and amortization methods have been used in the preparation of the financial statements which do not, in our opinion, conform to generally accepted accounting principles.
In cur opinion, except for the ef fects of the matters ref erred to in the preceding paragraph, the financial statements referred to above present fairly, in all material respects, the financial position of Kansas Electric Power Cooperative, Inc. as of December 31, 1991 and 1990, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. 4 Kansas City, Missouri February 21, 1992 1
d - KANSAS ELECTRIC POWER COOPERATIVE, INC. BALANCE SHEETS s December 31. ASSETS J311 1990 l Utility plants Electric plant in service $198,871,019 $199,949,714 Less allowances for depreciation J J,(95.654 18,275,032 Net utility plant 180,185,365 181,674,682 I Construction work in process 565,310 661,726 Nuclear fuel, less accumulated amortization of $9,236,068 and I $9,319,052 at December 31, 1991 4,160,034 and 1990, respectively 2,551,765 Total utility plant 104,910,701 184,888,173 Restricted assets: Cash and short-term investments 203,332 198,397 Investments in associated crganizations 3,602,839 3,349,487 I Bond fund reserve Decommissioning fund assets 3,921,323 1,036_,240 3,873,138 734,278 Total restricted assets 8,763,742 _.... ... 9.15 5, 3 00 Current assets: Cash and cash equivalents 5,342,738 8,091,258 National Rural Utilities Cooperative Finance Corp. patronage capital certificate 8,477 14,436 Accounts receivable from members 5,505,446 5,865,253 Materials and supplies inventory 1,867,692 1,870,145 Other assets and prepaid expenses A4 M O 618.802. Total current assets 13,164,873 16,459,984 Deferred charges: b Deferred charges, less accuculated amortization of $3,570,380 and S2,987,735 at December 31, 1991 and 1990, respectively 27,291,369 27,882,582 Deferred incremental outage expense 2,404,783 781,900 Unamortized bond issue cost 1,286 d11 1,348,159 Total deferred charges 30,98L267 302 012,641 Total assets 5237,821,591 S239,516,098 i l The accompanying notes are an integral part of these financial statements. 2 a
W pecember 31. CAPITALIZATION AND LIABILITIES 1131 193p Capitalization: Patronage capital (deficit) and other equities: Memberships $ 2,900 $ ?,900 Patronage capital (deficit) unallocated and other equities (see statement) (7.050.075) f6.768.559) Total patrenage capital (deficit) and otner equities (7,055,175) (6,785,659) Long-term debt, less current portion 233.002.312 235.009.072 Total capitalization _226.027.137 229.023.413 I Liabilities: I Current liabilities: Accounts payable 5,647,624 4,401,499 Note payable to bank - 531,228 Payroll and payroll related liabilities 51,289 45,016 Accrued property taxes 835,722 704,152 Accrued interest payable 782,546 897,224 Current portion of long-term debt _,2J 70.551 2._ fibs 22 Total current liabilities __10.197.736 9.244till other liabilities: Decommissioning liability 1,036,248 734,278 other liabilitien 570.429 514,211 Total other liabilities It h2[,213 1,248,546 l Commitments and contingencies Total capitalization and liabilities }]37,821,591 $239,516,0_7j i l 1
s - KANSAS ELECTRIC POWEH COOPERATIVE, I tic . STATEME!3TS OF OPERATIOtlS ? Year Ended ' Decemtser 31, l 1991 1990 Operating revenue 1 Menber S 67,875,207 $ 66,612,727 lionmember 131,11Q 737 229. total operating revonue 68,006,718 67,350,006
~~
Operating expenses: Power parchased 35,503,638 33,720,357 tiuelear fuel ,226,974 1,544,367 I Naclear plant operations 2,892,592 2,547,876 Nuclear plant maintenance 1,531,130 1,050,192 fluclear plant administrative and general 3,649,411 3,728,266 Administrative and general 2,222,540 2,323,786 I Araortization of deferred chargee Depreciation 582,645 2,907,673 539,811 2,695,079 < Total operating expenses SO,516.E03 49,649,734 opetating margin 17,490,115 18,700,272 Interest income , 981,930 1,220,831 Income before interest charges _L8, 4 7 2 , 041 19,921,191 Interest expense on long-term debt , 18,741 d6l 19de2,41k tiet margin (loss) $ (269,516) $ 438,692 1 1 I i i The accompanying notes are an integral part oi those financial statements. 3
KANSAd ELECTRIC POWER COOPERATIVE, INC. STATEMENTS OF PATRONAGE CAi' ITAL (DEFICIT) *J4D OTHER EQUITIES W for tht Years f:ndec' Decemt'ef 31, 1990 and M B Patronage I capital (Deficit) Other h ktrehipe Unh11oested Ecuities M al Balance, Decenter 31, 198'3 $2,900 $(11,284,808) l $4,057,557 S(7,224,351) capital ellocation - 322,000 (322,000) - 1990 net margin (losel . _ (782.144) 1.220,836 438,692 Balance, December M, 1940 0,090 (11,744,952) 4,95u,393 (6,785,659) Capital allocation =- 438,692 (438,692; - 1991 net margin (loss) - (1,251,446) 981,930 (269,516) Balance, December 31, 1991 g,900 p12,557,706) 55,499,631 Si7,055,175) l l . I I I I l The accompanying notes are an integral part of there finar,cial statements. 4
W KANSA3 ELECTRIC POWER COOPERATIVE. INC. STATEMENT OF CASH FLOWS ~ Year Ended December 31, L993 1112 Cash flows f rom operations: Cash received from meaber sales S 68,530,845 5 66,544,971 I Cash received from non-member sales Cash paid for purchased power 122,671 792,870 (35,604,318) (34,351,173) Cash paid for Wolf Creek operations (7,123,062) (6,912,385) g cash paid for REPCo operations (2,205,441) (2,156,078) g Interest. pe.id (18,873,969) (21,860,746) Froperty taxet paid (1,545,765) (2,572,295) settlemer+ ct 14t3t. tion - (2,160,645) Investmants matured (p arena.-G ) - 1,001,911 i Interest received Arbitrage rebate payment 1,120,070 1,331,753 (599,200) Cash paid to decommissioning trust (237,800) (178,350) Miscellaneous cash received 2,079 43,204 Net cash provided by operations 4,185,31Q ( 1, 076,tJ12) I casa flows from investing activities: Nuclear fuel purchases (2,489,360) (645,544) Plant additions (1,353,545) (1,041,320) Investment in Central States Compact s584 306) (137,282) Cash received from sale of municipal bonds - 3,769,800 Cash paid for purchase of municipal bonds (80,879) (3,872,897) Cash received from the sale of government bonds 33,768 - I Not cash used in investing activitico (3.948,322? f1,927,243) l Cash flows from financing activities: B Repayment of long-term debt (2,521,205) (2,199,932) Payment of other long-term liabilities (64,304) Draws /(Payment) on line of credit (58,926) f400,000) 400,000 Net cash used in financing activities __(2,985.509) f1,858,858) Decrease in cash and cash equivalents (2,748,520) (4,862,464) Cash and cash equivalentc, beginning of year 8,091,258 12.953,722 Cash and cash equivalents, end of year S 5,311311g S 8,091,218 i Continued 5
s _ KANSAS ELECTRIC POWER COOPERATIVE, INC. STATEMENT OF CASH FLOWS Year Ended December 31, 1211 1112 Reconciliation of not income to net cash provided by operating activities: Net margin (loss) $ (269,(lk) $ 438,692 a Adjustments to reconcile not margin to net cash provided by (used in) operating activities: 3 Depreciation 2,907,673 2,695,079 Amortization of r.uclear fuel 881,092 1,197,992 Amortization of deferred charges 582,645 539,811 Amortization of deferred outage expense 1,546,172 1,200,653 [ Amortization of bond issue costs 62,045 62,166 Accretion of discount / amortization of premium (2,255) 3.375 Loss on asles of assets 62,654 173,587 Increase in restricted cash and
. short-term invectments (4,936) (11,519)
Increase in investments in associated 17,623 (8,657) organtzations Incretse in Wolf Creek Nuclear Operating Corporation investments (222,669) (186,549) (Increase) its decommissioning f und assets (301,970) (225,423) Increase in decommissioning liability 301,970 225,423 (Increase) in deferred incremental outage expense (3,169,055) (1,982,553) Increase in arbitrage payable 118,423 (455,554) Not change in current assets and liabilities: Short-term investmentu - 1,001,911 National Rurcl Utilities Couperative Finance Corp. patronage capital certificate 5,959 (816) Accounts receivable 359,766 (361,602) Materials and supplies inventory 40,562 309,367 Other assets and prepsid expenses 128,730 (27,039) Accounts payable 1,243,479 8,271 , Pcyroll and payroll related liabilities
~
5,273 (9,603) Accrued property taxes 131,570 (1,022,632) Accrued interect payable (245,925) (2,480,098) Other linhilities - f2.160,645) Total adjustments 4,454,826 fl,515,055) Total provided from (used in) operatiens S 4,185,31_O $ (1,076,363) l The accompanying notes are an intregral part of these financial statements. 6
. KANSAS ELECTRIC POWER COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS
- 1. Eggartures From Generally _bc0ept ed Acq unt ina PIinciplest Effective February 1, 1967, the Kansas Corporation Commission (KCC) issued an
/ order to Kansas Electric Power Cooperative, Inc. (KEPCo) requiring the use of [ present worth (einking fund) depreciation and amortization. As more fully deocribed in Notes 3 and 4a, such depreciation and amortit.ation practices constitute phase-in plans which do not meet the requirements of FASB No. 92, a
" Accounting f or Phase-in Plans. " The ef f ect of theco departures on the financial M statement s as of Decerrier 31, 1991 and 1990 la to overstato net utility plant by S21,891,571 and S17,578,058, everstato deferred charges by S2,973,796 and I S2,415,087, understate the deficit in patronage capital (deficit) by $24,865,367 and S19,993,145, repoetively, understate the net loss by 54,872,222 in 1991 and overstate net margin by $4,936,437, in 1990.
- 2. Su~ mary of S ian1LinaLAccou nt i n, P2 LLg_i e s :
- a. Evst em of AccouDM.i s
KEPCo maintains its accounting records substantially in accordance with the Federal Energy Pegulatory Ccamission's chart of accounto as adopted by the Rural Electrificaticn Administration (REA) and in accordance with accounting practices prescribed by the KCC.
- b. Utility P13 pt and OpJtate_clelupJn h Utility plant is stated at cost.
I The costs of repairs and minor replacemente are charged to operating expense as appropriate. Coots of renewals and bettermants are capitalized. The original cost of utility plant retired and the cost of removal, less salvage, are charged to accumulated depreciation. Through January 31, 1987, the provision for depreciation for electric plant in service was computed en the straight-line method at a 3.44s annual compos it e rate. Effective February 1, 1997, in accordance with an order I issued by the KCC, the provision for depreciation is computed on a present worth (sinking fund) metho) which provides for increasing annual provisions over 1991the andnext 199025were years. The composite rates f er the years ended December 31, 1.5362% and 1.40151, respectively. The provision for depreciation, computed on a straight-line basis, of other components of utility plant are as followsi i Transportation equipment 25 to 33% office furniture and fixtures 10 to 20t Leasehold irrprovement s 20% Transmission equipment 10% i Depreciation is not significant. expence other than as oct forth in the statements of operations I l Continued 7 ___ ----_ - - - - - - - - - - - - - - - - - - - - - ~ ^ - - - ~
s _, c. Ihlt. lea r fue l 1
, Nuclear fuel cost is amortized to fuel expense based upon the quantity of heat produced for the generation of electric pow?r. The permanent disposal
- of spent f uel is the responsibility of the Department of Energy (DOE). KEPCo pays one mill per net kilowatt-hour of nuclear generation to the DOE for the future disposal service. These disposal costs are charged to fuel expense.
- d. Lnyeetreat e in Aeg2plaled 012g liIAid2aH_1 _
Investments in associated erganizations consist principally of patronage capital certificates, capital term certificates and subordinated term certificates of the National Rural Utilit 'es Cooperative Finance Corp. (CFC) . CFC patronage capital certificates maturing within a year of the balance sheet date are reflected as a current asset,
- e. Cash Ecalvalent e:
All highly liquid investments purenased with an initial maturity of three months or less are considered to be cash equivalents and are stated at cost which approximates market. f . f.h;It -t e rm Investments: Short-term investments consist ut 't. S . Government Agency obligations and are stated at cost which approximates me'ket. g . lig.t e ri a l e a nd Supplite_LtLve,.3L e Matertain and supplies inventory for the Wolf Creek Generating Station is stated at cost determined by the average cost method.
- h. Unamortized Bond._Iasue Cestst Unamortized bond issue costo related to the inuuance of the floating / fixed rate pollution control revenue bonde and mortgage notes payable to the National Rural Utilities Cooperative Finance Corporation are being amortized using the interest method over the remaining life of the bonds.
'l i. De_coretissionin7 Fund Aseets/Dece-21p_signin7 Liabilityt At December 31, 1991 and 1990, 51,036,248 and S734,278, respectively, has been collacted and is being retained in an interest-bearing trust fund to be t
used for the physical decommissioning of Wolf Crock. During 1969, the KCC l extended the estimated usef ul lif e of the wolf Creek Generatir.g Station to 40 years from the original estimate of 30 years only for the determination of decommissioning costs. Additionally, the estimated cost of decommissioning Wolf Creek was increased to $206 million in 1988 dollars. KEPCo is
! responsible for a 6 percent share of the decommissioning costs for the Wolf Creek Generating Station. These costs are being recovered and charged to operations over the life of the plant.
- j. Income Taxest In February 1992, the Financial Accounting Standards Board (FASB) issued FASB Statement No 109, " Accounting f or Income Taxen," which requires companies to adopt the new method of accounting f or income taxes no later than fiscal yerr 1993. FEPCo has not adopted early application of the provisions of FASH Statement No. 109 and has not detersnined the etfecto that such adoption will have on ito finarcial statements.
Continued 8
7
- k. Ent renace Capit al and Other Ecthel operating margin, net of interest e x pe nse , is credited or charged to patronage capital. Nonoperating marg n (interest income) is credited to other equities; however, upon an af fir. native vote of the mentership, margins may be allocated to patrnnage capital unallocated.
- 1. Pateel The KCC has authority to establish KEPCo's electric rates subject to times interest earned ratio and debt service coverage requirements set forth by the Rural Electrification Administration (REA).
KEPCo believes it is pro'_,able that future rateo, as established by the KCC, will allow the recovery of deferred charges. (see note 4.) If subsequent recovery is not permitted, the unrecovered def erred balances would be charged ~ tn expense at that time.
- m. Eevenuee.L P.s venue r from +he sale of electricity are recorded baseo on billings to
[ cuotm.ers and on contracts and scheduled power usages, as appropriate. ri . }Lqrglg s s i f i ca t ion s_ KEPCo has reclassified the presentation of certain prior year information to conform with the current presentation.
- 3. Wolf Creek Generatinq Stationt
'q KEPCo owns 6 percent of the Wolf Creek Generating Station near Burlington, Kaasas. The remainder is owned by the Kansat Oaty Power & Light Company (KCPL-47%) and Kansas Gas & Electric Company (KGE-47%). Substantially all of KEPCo's utility plant represents its share of the Wolf Creek Generating Station. KEPCo is entitled to a proportionate share of the capacity and energy f rom Wolf Creek which is used to supply a portion of KE PCo ' s n.embe r s ' requirements. FEPCo is ,
~
billed for 6 percent of the operations, maintenance and administrative and general costs related to Wolf Creek. All operations are accounted for in the _ same manner as would be a wholly-owned facility, The KCC declared Wolf Creek commercially operable on Septenter 3,1985. KEPCo's
! total investment includes interest and administrative costa during construction.
l Ef f ective February 1,1987, the KCC issued an order to KEPCo to utilize a present worth (sinking fund) depreciation method which does not conform witn generally [ accepted accounting principles and which constitutes a phase-in plan which does l not meet the criteria of FASB Ho. 92. If depreciation on electric plant in service was calculated using a mathtd in accordance with generally accepted accounting principles, depreciation expense would be increased and KEPCo's l operating margin would be decreased by $4,313,513 and $4,349,926 for the years
] ended December 31,1991 and 1990, respectively. In addition, not utility plant would be decreased and the deficit in patronage capital (deficit) unallocated would be increased by $21,891,571 and $17,578,058 at December 31, 1991 and 1990, respectively.
Continued 9
s s 4. Deferred charces: - a. Disallowed centsi - Effecti"e oct ber 1, 1985, the KCC issueu a rate order relating to KEPCo's i investment in Wolf Creek which dicallowed approximately $22.9 million of L KEPCo's investment in Wolf Creek. A subsequent rate order, effective February 1, 1987, allows KEPCo to recover these disallowed costs, as well as interest costs and praerty taxes related to Qe disallowed portion for the period from Septembet 1905 through January 31, 1987, over a 27.736 year period starting Fet ruary 1, 1967. KEPCo is using present werth (sinking fund) amortization to recover the disallowed costs which enables it to meet the times interest earned ratio and debt service requirements in the KCC rate order dated January 30, 1987. The method used by KEPCo constitutes a phase-in plan which does not meet the criteria of FASB No. 92 and 1ccordingly, an ac'd i t ional $558,709 and S586,511 should be charged to expense for 1991 and 1990, respectively. In addition, def erred cParges would be decreased and the deficit in patronage capital (deficit) unallocated would be increased by - [ $2,973,796 and $2,415,087 at December 31, 1991 and 1990, respectively.
- b. Utility Plant cester Certain utility plant costs were not included in KEPeo's 1985 rate request 3 because the KCC required KEPCo to file the rate request based on projected
( total utility plant costs. The February 1, 1987 rate order included these costs in KEPCo's rate prospectively. However, no provision was made in the rate order for recovery of the related depreciation, property taxes and interest costs for the period from September 3, 1985 through January 31, 1987. Accordingly, KEPCo included the related depreciation, property taxes and interest costo f or the period f rom September 3, 1985 through January 31, 1987 in deferred charges an the acccmpanying Dalance sheets. The KCC issued a rate order dated February 11, 1988 which provided KEPCo with the option to recover these costs from savings achieved from the tofinancing of a certain portion of KEPCo's long-term debt in 1963 or to include them in l a f uture rate request. The Board of Trustees of KEPCo elected to recover the l costs from future savings and, accordingly, began amortizing these costs on January 1,1988 over 26.82 years. Annual amortization will increase over the recover / period. l c. Pevenue and Exr>enses f or the Period f rm Seft erber 3, 1985 Throucah Seritembel
,3 0 , 1985:
I Although the Wolf Creek Generating Station began commercial operations on September 3, 1985, the KCC ordered KEPCo to secumulate all revenues and expenses related to the operation of Wolf Creek f or the period from September 3, 1985 through September 30, 1985 in deferred charges. The KCC issued an order on February 1, 1987 which allowed KEPCo to recover these costs over a ten-year period. Annual amortization of such costs increases over the recovery period.
- d. Def erra l / Amort i rat ion of Wol f Creek Pettelin Coet s :
On April 9, 1991, the KCC issued an order that allowed KEPLo to defer its 6 percent share of the incremental maintenance and replacement power costs asociated with ref ueling of the Wolf Creek Concrating Station. Such deferred costs are being .mortized over the operating cycle coincident with the recognition of the related revenues. Total costs deferred at December 31, 1991 and 1990 were 52,404,783 and 5781,900, respectively. Amortization expense for 1991 and 1990 was S1,546,172 and $1,200,653, respectively. Continued 10
J
- 5. Lona-term Debtl
- Long-term debt consist s of mortgage notes payable to the United States of America acting through the Federal Financing Bank (FFB), the National Rural Utilities , Cooperative Finance Ccrporation (CFC) and others. Substantially all of KEPCo's assets are pledged as collateral. The terms of the not es are as follows: pecerber 31, 1991 1990 Hortgage notes payable to the Federal Financing Bank (FFB) at rates varying from 7.316% to 9.366%, payable in quarterly installments through 2018. 5132,262,867 $133,934,072 Mort,4ge notes payable to the National Rural Utilities Cooperative Finance Corporation at a rate of 10.0281% through December, 1997 and 9.83% thereafter, payable semi-annually, principal payments commencing in 2003 and 1 continuing annually through 2017. 51,340,000 53 340,000 a Mortgage notes payable to the National Rural Utilities Cooperative Finance Corporr. tion at I a rate of 9.5274% through December, 1997 and 9.33% thereafter, payable semi-annually, principal payments commencing in 1989 and continuing annually through 2002. 10,250,000 10,700,000 Floating / fixed rate pollutier control revenue bonds, City of Burlington, Kansas, Pooled Series 1985C, variable interest rate (4.385% at December 31, 1991) payable annually through 2015. 42,100,000 42.500,000 235,952,867 238,474,072 Less current portion 2 870,555 2.665,000 5233,08?,312 $235,809,072 Aggregate maturities of mortgage notes payable to the Federal Financing Bank and National Rural Utilities Cooperative Finance Corporation and floating / fixed rate j pollution control bonds as of December 31, 1991 are as follows: Year bmount 1992 $ 2,870,555 1993 3,258,203 1994 3,481,803 1995 3,742,231 1996 4,165,436 Thereafter to 2018 218,434,639 1235,9521867 At December 31, 1931, KEPCo has approved FFB loans guaranteed by REA with balances of $132,262,867. Of this amount, $5,345,786 currently has a maturity date of March 31,1992. Upon maturity of each short-term advance, KEPCo may refinance the amount with another two-year advance or elect to refinance with a long-term maturity date of December 31, 2017. Continued 11
d 8 - Restricted cash and short-term investments consist of unexpended loan proceeds remaining in the Construction Fund. These funds will b9 utilized for scheduled q principal reduction of the originating debt. , KEFCo has entered into a bond covenant whereby _.e Cooperative is required to maintain, with a trustee, a Bond Fund Reserve of a stipulated amount of approxircately $3.9 million, sufficient to satisfy cartain future interest and principal obligations.
- 6. Short-tern Borrowince:
KEPCo has available a $12 millicq line of credit with the CFC which remained unused at Decenter 31, 1991.
- 7. Orieratine teneet KEPCo leases office space under a noncancellable operating lease *xpiring on December 31, 1996. The r, ated rental expense for 1991 and 1990 was $98,462 and 589,715, respectively.
Future minimum lease payments for office space anf equipment leased at Decerrbe r 31, 1991 are as follows: le_a_r, Amount l 1992 S 93,073 i 1993 87,353 1994 B1,312 1995 71,532 1996 71.521 j404,8_02 l The minimum lease payments can be increased to the extent that taxes and irwut ance paid by the lessor exceed 1990 levels. _ l
- 8. Pension Plant._
- a. National Pural Electric Coot)erative Association (NPECA) Pfqtirement 41Q '
Security Proqramt ) i KEPCo participates in the Naticnal Rural Electric Cooperative As socia'.bn I (NRECA) retirement and security program for its employees. All employeec of merrbers of NRECA are eligible to participate in the program. A moratorium on contributions is in effect for the period July 1, 1987 through scenter 31, 1991 due to reaching the full funding limitation. In the master multiemployer plan which is available to all members of NRECA, the accumulated benefits and plan assets are not determined or allocated by individual employee. KEPCo has no pension expense for the plan for the years ended Decertter 31, 1991 and 1990. Substantially all employees of KEPCo also participate in the NRECA Savings Plan 401(K) option. Under the plan, EEPCo contributes amounts not to exceed 3 percent, dependent on the employee's level of participation, of the respective employee's base pay to prov.ide additional retirement benefits. KEPCo contributed approximately $27,846 and $23,050 to the plan in 1991 and 1990, respectively. Continued 12
J
- b. Wo1 f Creek Nue) ear Overatino Corrgrat ion Petirement P1ar-
- KEPCo has an obligation to the Wolf Creek Nuclear Operating Corporation Retirement Plan for ite 6 percent ownership interest in the Wolf Creek . Generating Station. This plan provides for benefits upon retirement, normally at age 65. In accordance with the Employee Retirement Income Security Act of 1974 (ERISA), KEPCo has satisfied at least its minimum fundi..; requirements, benefits under this plan reflect the employee's I compensation, years of service e sd age at retirement. Provisions for pensions are determined urder the rules prescribed by l B Financial Accounting standards Board (FASB) S. .tement tio. 87 is KEPCo*s portion of the funded status of the plan:
'Ihe f ollowing pecember 3 L i Accumulated benefit obligation:
1m m2 -- Vested 5 215,040 S 160,500 Nonvested 101,f22 77,880 Total j 316 g j 230,380 l Determir.ation of plan assets less obliaations: Fair value of plan assets (a) S 507,660 S 420,420 Projected benefit obligation (b) 952,740 (662,.40) Difference g445,rpO) S(233,220) Reconciliation of difference: Contributtons to tructs: Accru6d liability S(246,840) S(105,120) 3 Unamortised transition amount (145,140) (152,400) Unrecognized net gain 12,300 59,160 Unrecoqniced prior service cost ( 6 5 , 4 0,Q ) (34.860) Difforence MSJM) S(233,220) (a) Plan assets are invested in insurance contracts, corporate bonds, equity securities, U.S. Government securities and shcrt-term investments. _ (b) Based on discount rate and rate of increase in future salary levels of 8% and 6%, respectively. Long-term rate of return on plan assets of 8% was used. Components of provisions for pensions: s 1991 1990 Service cost $128,160 5127,680 Interest cost on projected benefit cbligation 52,920 42,240 Actual return on plan eseets (69,960) (4,920) Other 40,380 (17,100) Total pension expense j l_51M0_ L1471 9 03 13
_ 9. Income Taxee: L At December 31, 1991 , KEPCo had unused net operating loss carryforwards available to redace f uture taxable income and investment tax credit carryforwards , as follows: Net Operating Net Operating Loss Loss Investment Available Carryforwards Carryforwards Tax Credit Throuat_ 1 JBook Basis) (Tax Desis-) Carrvforwards 1996 S - S 7,160,000 S - 1997 - 12,410,000 203 1998 - 17,123,000 896 1999 194,274 21,45.8,000 1,210 2000 1,977,542 4,442,000 7,731,227 2001 2,885,169 3,899,000 - 2002 1,292,882 4,263,000 - 2003 - - - 2004 - 1,562,000 - 2005 - 1,683,000 - 2006 26L11s 2,720,002 -
$6,619,393 $76,730,000 $7,733,636 The dif ference between the net margin (loss) shown in the accompanying financial statements and the net operating losses for tax return purposes for 1991 and 1990 is due primarily to operating expenses deferred for financial statement purposes and expensed for tax return purposes and timing differences related to oepreciation expense and deferred refueling costs.
An income tax provision based upon the margin shown in the accompanying financial statements of approximately S180,000 f or 1990 has been of f set by the re slization of the tax benefit of operating less carryforwards. This tax provision and the offsetting benefit has not been presented in the statement of operations. As there was a net loss in 1991, no income tax provic Lon has been recorded in 1991.
- 10. Pqrtinaenciest
~
- a. Litication:
There is a provision in the Wolf Creek operating agreement whereby the owners treat certain claims and losses arising out of the operation of the Wolf C. reek Generating Station as a cost to be born by the owners separately (but not jointly) in proportion to their ownership shares. Each of the ownars has agreed to indemnify the others in such cases. KG&E in one of the defendents in a case where the plaintiff claime damages be:suse of his termination and his activities relating to the Q-1 program at Wolf Creek. His original complaint alleged nine counts of civil RICO Act claims s(eking S23 million in damages. All the RICO claims have been dismissed by the court, but the plaintiff has filed amended complaints alleging Kansas common law claims seeking 36 milion in compensatory damages and $30 million in punitiva damageo. The discovery has been suspended and motions to dismiss the amended claims have been pending since last June. The probable, potential liability, if any, cannot be determined at this time. As in the case with other electric utilities, the Cooperative, f rom time to time, is subject to various actions which occasionally include punitive damage slaims. The Cooperative maintains insurance providing liability coverage; however, the insurance companies generally reserve the right Continued 14
s ! to challenge insurance coverage for punitive damage recoveries. In the opinion of the general counsel of the Cooperative, there is not a significant probability that, as a result of pending or threatened g personal injury actions, the Cooperative will be liable for payment of
- actual or punitive damages in an amount material to the financial position of the Cooperative.
- b. Nuclear Liability and Insurance The Price-Anderson Act currently limits the public liability, including
, attorney costs, of nuclear reactor owners for claims that could arise from a nuclear incident to S7.807 billion. Accordingly, KEPCo and other owners ~ of Wolf Creek have liability insurance coverage of this amount which consists of the maximum available private insurance of $200 million and , Secondary Financial Protection (SFP). The SFP coverage is funded by a mandatory program of deferred premium, assessed against all owners of ~ licensed reactors for any nuclear incid?nt anywhere in the country. The mcximum assessment per reactor is $63 million (53.8 million - KEPCo's ~ share), plus 5% for attorney costs. The owners of Wolf Creek are jointly and severally liable f or these charges, payable at a rate not to exceed $10 million (5600,000 - KEPCo'. share) per incident per year. I The owners of Wolf Creek also have property damage, decontamination and
) decommissioning insurance for loss resulting from damsge to the Wolf Creek j f acilities in the amount of $2.515 billion. Nuclear insurance pools provide
$1.265 billion of coverage. Nuclear Electric Insurance Limited (NEIL) provides $1.250 billion. In the event of an accident, insurance proceeds l
must first be used for reactor stabilization and site decontamination. The remaining proceeds f rom the $2.515 billion insurance coverage ($151 million KEPCo's share), if any, can be used for property damage up to S135 million (KEPCo's share) and premature decommissioning costs up to $16 million (KEPCo
- S share) in excess of f unds previously collected f or decommissioning.
The owners of Wolf Creek have also procured extra expanse insurance from NEIL. Under coth the NEIL property and extra expense policies the Company is subject to retroactive assessment if NEIL losses, with respect to each policy year, exceed the accumulated funds available to the insurer under that policy. The eutimated maximum retroactive assessments for KEPCo's share under the policies total approximacely $852,495 per year.
~
In the event of a catastrophic loss at Wolf Creek, the amount of insurance available may not be adequate for property damages and extra expenses incurred. Uninsured losses, to the extent not recovered through rates, would be assumed by-the KEPCo and could have a material adverse effect on the KEPCo's financial condition,
- c. Nuclear Fuel Cormitments:
At December 31, 1991, Wolf Crook's nuclear f uel commitments (KEPCo's share) were approximately S2.6 million for uranium concentrates through 1997, S18.8 million for enrichment through 2014 and S6.6 million for f abrication through 2014.
- d. PEA Developmer._t1 KEPCo has received noti'ication from the REA trat the REA has not approved KEPCo's audited financial r,tatements f or the years ended December 31, 1988, 1989 and 1990 because such financial statements are not in conformance with generally accepted accounting principles as discussed in Note 1. In the opinion of management, such non-spproval of KEPCo's financial statements will have no significant impact on KEPCo 's financial condition and will not impair its ability to refinance existing debt.
Continued 15
- 11. Other Mattersa on February 14, 1992, the KCC staff and KEPCo submitted a stipulation and agreement to the KCC for approval. The terms of the stipulation and agreement provides for an increase in KEPCo's energy rate of 2.5 mills per kWh effective l April 1, 1992.
i i 16 _ - . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - - - - - - - - _ _ - _ - _ _ -}}