ML20141L947

Kansas City Power & Light Co 1996 Annual Rept

ML20141L947
Person / Time
Site:	Wolf Creek
Issue date:	12/31/1996
From:	KANSAS CITY POWER & LIGHT CO.
To:
Shared Package
ML20141L945	List: ML20141L943 ML20141L947 ML20141L951
References
NUDOCS 9706030203
Download: ML20141L947 (44)

Text

- - _.._ __ . . .

w RASHAnnuelRep_n)CiG i

+

i i

l, i

l

.'l i I

l i

l i

l 4

vsfdhoriuralihf i

i I

Partners 9706030203 970529 PDR ADOCK 05000482 I PDR i

~

WJXenisfGty Poweif Light 03mpeW Year atisflan& T3 1

3 4

5 1

i l Year at a glance Table of Contents i *Pioposed merger with Westem Highhghts of the Year Resources gives shareholders $32 of i Westem stock for each KCPL share Message to Shareholders

, owned

• 2 l

• Earnings per share decreases to $1.69 Year in Review

! 4 from $1.92 reflecting 50 31 per share charges for merger related costs Questions & Answers

• Total retum to common shareholders in Management's Discussion & Analysis

1996 was 151% compared with a 1.2% 13

industry average Consolidated financial Statements

!

• Board increases quarterly common stock 20

! drvidend to $0 405 per share Notes to financial Statements j

• EVA*, a measure of our economic Report of Independent Accountants

, performance, increases $7.2 million -.

from last year i m- m- -y Dfficers an Directors

, QAbout the Company f M 'KCPL reorganizes for competition n Summary sations/ Financial Data

)3 s

hgg'

< ~

N

• KCPL enters into stipulation and s agreement with Missouri Pubhc Service '

j [48h4N80dBAIMMF9feshiestf Commission, lowenng rates in two phases Dectnc Stat stics I

918481B 'h

• KCPL pursues new business i @ ' p"p ? Yi '

asfaledes ooportunities in custom commercial i{ markets and consumer products Shareholder Information o

64 JC.

i >

I MMEWh * ]y *KCPL plants still ranked among lowest-femunesmigggggggggggg , cost in nation

! gggy M gggy

• KLT Inc. expands global reach with i

g i) 4 investments in nonregulated opportunities kN M8EEhlEOFM8188W imJ

• Customers set records for peak r pow r o ages j ,QSIWpME Megglignelgff seasonal demands in third and fourth MggfM44Whh,sunh$sf?;f quarters j Magh- M, ~ 'M ', o b ' Installation of CellNet

, 3 g~ ,

~ - 3 completed in Kansassystem City area 1

,isWhWapIIhrsheri s c . .- .. . . ;

1er

• Wolf Creek completes eighth scheduled j ,

811 NEB i

pgqudn%8BEElWD.)

f M g gesgg}-

N d refueling and maintenanc A LCPL Corporate Headgarters e independent Power hotects

-v a v s m or 9uis i i usiem ries-es som . cnergy uaneyement services

!, v. p : - %K s i

(.

• 0:16 Gas Devebpment v.:

Y}

• ed W 5*

! .e d n e v a n es=== = = mme w s

-g I . M.MeasedpastauMM.

rMn i 4 P

N i',.,ll '< ' NN

..,,.6 i'- ,, s --^

, ./ . w~ ,

.=-,

j (sugamEasnekassersehnfm.asm}

j ;eimmh8WhauEhnfessi;, j

.. a w h n l Lanc h u.inta h d i ,

4

DTaitseTVltifewsif1TsVCoonenTHi#1!#ts of theTVoiB 1

i lacrease i

Highlights of the Year 1996 1995 (Decrease)

(dollars in tholisands encept per shars amounts) j Dettnc operating revenues S 903,919 $ 885.955 2.0 %

i Net income $ 108,171 $ 122.586 (11.8)%

1

. Eamings available for common $ 104,381 $ 118.575 (12.0)%

! Average number of shares 61,901,594 61,902.081 -%

I Per common share: ,

Eamings $ 1.69' 1.92 (12.0)%

l $

! Dividends $ 1.59 $ 1.54 3.2 % l Book value $ 14.71 $ 14.50 1.4 %

Year-end stock pace $ 28% $ 26 % 8.6 %

l Return on year-end common equity 11 % 13%

Comrnon dividend payout 94 % 80%

Utikty capital expenditures S 100,947 $ 134.070 (24 7)%

Electnc plant S 3,472,607 $ 3.388.538 25%

{ Selected statistics i

Retail megawatt hour sales 12,365,597 11.941.427 3.6 %

Peak load - summer (mw) 2,987 2,909 2.7 %

Peak load - winter (mw) 2,012 1.864 7.9 %

(

j Average number of retail customers 435,003 429.907 12%

26,763 29.657 (9 8)% i l' Number of common shaieholders 1 Capitalization (% of total)

I Common equity 47 % 49%

j Prefened stock 4% 5%

l Long-term debt" 49% 46%

l

• Reflects $0.31 per share charges for merger related costs l " Excludes current matunties i

i i

i ~

." # ~ g 3 011 6 l'

g .

E. E g g* g g .$ Nuclear Natural Gas

• 23 2%~ , ,yg Io l3 30 l E! gg "O IE A

) s g*  : '"

I g  ! l f N

i l i,  ;  !  : I f l

!'  ; I'  !

( l .I l \

l ( 1 f .

/ Coal

)  ! ' l l i

/ 76 1 %

j  ; N/

f' I I <

, l i i  ! Coal 50 85 per milhon Bru l ' ' i Nuclear 50 51 er milhon Blu i  !  ; i

System Average 5 79 per niilhon Btu

, t , i ,

l I

O2 93 94* 95 46 " KCPL E Ul"* 56P 92 93 94 95 96

~

h .

" tu tiecen utm ineen Milhoes

-- teemass Omdesuls "Refleca e so 27 pee ebate castee les the

. ecsta et the volumery es,1y tehromem pug,em

! "nonsen se si s sh chosesem i e. ,mmen osin

.f

k@ alp lll_Powgd]1gb((LmpgMc_ssue] tom"the P(g [ggnt

. ---- v - - _ . . ,

higher value than that promised in the 7

UtiliCorp merger or previous Western offers, brings to KCPL the prospects of a new competitive strategy and a diverse

. earnings stream. Western's bold actions in recent months significantly aftered that company's profile, and demonstrated

that a merger of our two companies l .. can fulfill KCPL's vision of a competitive, j

' disersified company. This merger is I a positive outcome of months of 3 negotiations and will offer exciting opportunities to shareholders, customers and employees.

,.,~ Merging the operational excellence of I ..

I -

i KCPL with the growth plans of Western j

! l, .

bnngs opportunities beyond what j .

KCPL alone might have accomplished.

7j ~

Together with the initial dividend expec-8 tation of the merged company and

) __ __

.. ,, the share price apprecia' ion, this new "In a competitive industry, you pica To Our Shareholders:

initiative offers you an exciting invest-partners in an attempt to lead not ment in the Changing utility market.

l Io//ow" The excitement of change and new t Upon closing, this merger will create a I

opportunity continues to grow in our l

company capable of leading in energy industry and I am pleased to say that et mMod i KCPL was at the forefront of both in 1996.

, home secunty and intemational develop-Merger Announcement KCPL's merger ment of power projects.

activities throughout the year spurred us Remaining iocused While managing onto a strategic platform that we bekeve l the changes in our company. KCPL l will ultimately lead to superior growth continues to focus on serving customers

in the value of your investment in our eaq mepl de b l company Our proposed merger with g g g g Westem Resources, Inc , at an even in 1996 was 151% refierting the

hPBS ChhKtL{diphtjpyeWMesspge from the Pr[sident]

strategic move we began with Util Corp build a new fiber optics system in the last year, continued excellence in midwest region will create a crucial link operations, new marketing initiatives to many potential customers outside and investment in nonregulated opportu- KCPL's trad:tional service temtory The DTI

. nities. Our plants still operate more effL venture is expected to close later this

' ciently than many others and KCPL main- spring. KLTs purchase of shares of j : tains its reputation as one of the lowest- Central Costanera power plant in cost electric producers in the region. Argentina will provide a platform for 1

' further investment in independent power We were pleased to be recognized i pportunities in Latin Amenca.

recently for our innovative use of CellNet j technology with the 1997 Ut/hty A New Future KCPL is poised on the

Automation Innovation Award for Best bnnk of exciting change. Last year, we Utihty Project. Also, our unprecedented aggressively embarked on our quest to service guarantee to residential customers drive KCPL toward success in a deregu-I has been expanded to include all lated marketplace. The changes we j commercial and industnal customers, are making now will guide our strategies ensunng their complete satisfaction with and vision for the future. We are KCPL These accomplishments are a confident we willlead others as we tnbute to all KCPL employees who prepare to take advantage of the many l

remain focused on the job of running this opportunities deregulation of our industry

' company so well. will bring Our KLT Inc. initiatives took hold firmly increased shareholder value, a new l in the marketplace as we announced competitive strategy and a diversified l the acquis: tion of Minneapoks-based energy company will result from the Environmental Lighting Concepts by strategic and innovative actions KCPL KLT Energy Services. Together with undertook in 1996. With your continued the existing Power System Solutions confidence and support, we look forward company founded in 1993 by KLT Energy to a very promising future.

Services, our expectations are for for the Board of Directors, significant growth in the commercial and industrial energy management and v

(_

energy procurement industnes In addition KLT Telecom's venture with Digital Teleport Inc. (DTI) of St. Louis to 5

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

W(fsTtlitDas,iiiijt Jicht ComponNe4Gn Mde%.C3 i

1

! l Merger To Bring Added Value  ; (MPSC), effectively lowering rates by

' $ 0 maon to Misswn astomers in  ;

l KCPL and Westem Resources have two phases. The stipulation reduces rev '

signed an agreement and plan of merger l

nws om Ms houh wMomms

!  ! bringing two top utility companies nd increases depreciation and amortiza-l together to create a stronger company hon expense he new rate sNdums

{ capable of meeting the growing increase prices during the summer i  ; demands of a new competitive market-months to more closely follow KCPL's place. We believe this combination will f bring increased value for shareholders  ; ncmased wMs of generahng eled but decrease prices during the winter

' and more choices for customers as the combined company stuves to become a : months. KCPL's agreement wit MPSC effectively lowers rates to premier energy and security provider w asmus,incmasng Ms throughout the nation.

competitiveness in this area.

) ' Upon completion of the merger, share-Operadonal becHence holders will receive $32 of Westem Resources stock for each KCPL share in 1996, KCPL maintained its reputation owned

• This merguexpected to be for operational excellence. Two of KCPL's

. tax-free to shareholders, will create a  : plants,latan and Wolf Creek, again company with more than two million  : ranked on Utility Data Institute's list of f

' customers, $9 5 billion in assets, $3 least-cost producers Fossil fueled plant  ;

! biilion in revenues and more than 8,000 ' availability was 89% well above the

megawatts of electric generation industry average.

mswmes.

. A heavy snow storm in October inter-As a division of Western Resources,  : mpted power to an estimated 175,000 KCPL will maintain its name and head- customers, damaging thousands of quarters in Kansas City, Missouri. Drue ' trees and bringing down power lines Jennings will become Vice Chairman of across the metropolitan area. While this l

Westem Resources and be responsible was considered the most damaging for the combined electric operations of storm in the city's history, KCPL and its KCPL, KPL and Kansas Gas 6 Electric. employees received a good grade from

. the MPSC for their restoration efforts.

Rate Stipulation and Agreement Signed Employees from KCPL and neighbonng

- In July 1996 KCPL announced a rate ' utilities worked atound the clock to

' sitpulation and agreement with the restore power.

Missoun Pubhc Serv ce Commission l

1

l TT~~1MaiWGT~tTgWRWWeWMz;13

\

l I

l l

An increasing number of customers and market, and is a recognrtron of strong a higher usage-per-customer caused electncal growth prospects in that region.

records to be set for peak seasonal g g demands in the third and fourth quarters in these exciting times, KCPL has laid of 1996 KCPL has a total capacity of the essentialgroundwork to become a 3,542 megawatts, adequate to meet customer needs and generate a profit fo, successful, diversrfred energy company Our proposed merger with Westem the company by selling excess capacity j Resources will bring signrficant value in the wholesale marketplace to shareholders' investments, while Noriregulated lleriturer : crease catapulting KCPL into the future and KLT Inc.. KCPL's wholly-owned creating a company capable of achieving j nonregulated subsidiary, aggressively success in a compet;tive marketplace.

pursues new market opportunities in The new company's enhanced abihty' to energy-related fields by combining our serve customers well, combined with

~ expertise with the knowledge of joint our low production costs, will position us venture partners. well foi future competition KLT Energy Services Inc., with offices KCPL's innovative use of technology nationwide, provides to clients the . allows us to cut costs and offer new expertise needed to make innovative services to customers. CellNet. KCPL's energy conservation programs economi- wireless communication device, will cally effective Clients include school enable us to effectively automate our l

f d:stricts, hotel chains and engineering distnbution system while expanding our firms. customer service through a vanety of energy-based pr ducts and services

' KLT Telecom recently announced plans Other technologica! innovations will help to invest in Dig:tal Teleport. Inc (DTI) of mt and exceed emission conuol St Louis to provide a new fiber optic guidelines and increase customer ser-network for telephone service across the wce n u e by ahonng wMoms region. We beheve fast growth in the to pay monWy Ms e h intet telecommunication business will make

.m.c w w wwx,e ax w xn mn this a value added investment. meums u 9% i i w % am 6 ud trft snme KLT Power expanded its global reach whh the february 1997 purchase of stock in Argentina's Central Costanera power plant. This investment marks KLT Power's entry into the South Amencan W

Mt3p sRMbTveWiightTompanibduestions &Jiit519T nn - - ,

m~mm QJCorporate Development F*/M . n the section below. KCPL.s executive needs and expectations of shareholders, 7xv var .  ;

< WN b management team discusses KCPL's

' customers and employees. Together' Menn,Whereranwen

,8BBWfMWMk past year, future competition and strate- we look forward to creating a stronger AEthBBNelW419pasi L pggggggggf : gies for meeting company objectives. company by building on each other's Marpen**stensemanaise] O . Why have

[MMNIEWIIB8Ek ~

suengts and you decided to capabilities.

' @ ;G IPadI M W IIt h i

gagsgjisj[

• Mt with Western Resources? Q What are KCPL's priorities in  !

An " ' > 1 # esp 8EE'O'88EI# b preparing for competition? I ep48WkeWhWmNSISBND i A Western Resources, strategic WasskapapeggenfM p .

181mBBIf4 M ,o-

~c.q accomplishments in the last few months s

A ' KCPL is already competing auBIWWIFAAut%b -

-t p

e==vand

.s- s - ae.~a , a_ demonstrate that a merger successfully with others in our industry.

of out two GEISRHEMIEP M 48EW80r#89 . compan:es can fulfill KCPL's vtsion for the As a low-cost power producer, w pw ga y2. - %y' , '

r W

M future. Western's recent, bold actions t W M agi M sj continue toIcad in the bulk power 088-MGMMhNY d make it a more attractive rnerger partner market, with 25% of our annual energy g biWA.' for KCPL Westem's improved offer to production sold on the wholesale 8

gggggeagyggggygeggggggggguy. KCPL shareholders males this merger market Our recently announced pro-

'MkhMABhGr$

gyggaghih} the nght move now. posed merger with Western Resources bf As a combined company we will have will position us well to compete in a deregulated retail marketplace.

the ability to respond significantly to competitive opportunities in intemational To prepare foi open competition on the j l

power development, monitored home retail side, we are aggressively lowenng secunty, and other nonregulated costs while maintaining quality service customer product and service develop- to customers and building market share ments We can see a strategy now with through enhanced services and nonregu-Western that can successfully meet the IJted subsidiaNes KCPL's innovative b)

Qa n s aTCVP5T&BTpbin f,,0 uof5T6 R s wir[]

I

, 4 n ., a

/

1

~

1 u . .

) ^

I T .

l ,' I w - _ . ..

technology, CellNet already attactied to Q. How do you make the decision "A99fe55/ve Pursmf of opportunities willprepare us to meet the demands of l

mnst meters in our service terntory, will to devote significant resources to a competitive mvrAerplace "

l

, enable KCPL to offer a variety of exciting. a strategy?

useful services to customers.

, Our first pnonty is to preserve, In addition, we must prepare our protect and enhance our shmeholders' l employees for a changing industry investments When makirig a decision Today, they are being asked to do to devote significant resources to a more and at the same time adjust strategy, it is essential to look first at and develop new skills In a changing your industry and where it is going business environment, it is one of How will you achieve success?

management's responsibil:ttes to provide What are shareholder and customer new opportunities in order to retain the expectations? These are the questions good employees we alieady have. driving our strategies and visions 1

7.... ~ _ ._ __ _ ._- - - -

l

( $ati5a551k h 5f] $2 T S NY Ek0 AE# " '#

l l

f 1

^

( n 4 s

" ,w

.s s 8,,,, - *

, a 7 ,, <,

t

' J.-

. 4 t,..s y

'4 ,. 8A.

4 . '

g

?

'_ g 4

• g(?- l A.

~

j '

< l

', 1 .., - - -- '

hj ,

, p. .

' Price and quality of service will be KCPL has art:culated clearly to share- Q. How willl(CPL and the combined i customers' priorities when choosing their energy provider "

holders three main elements of our com- electric utility operations of the merged

! pany's strategy: to grow and enhance company lower costs to compete effec-l value within our cutrent market, to grow tively in a deregulated environment?

beyond Our market through combination, i., the past, costs associated e>pansion, joint ventures or alhances.'

g gg., g the business wete and to manage resoulces within the captured by rates charged to customers company Since 1989, a consistent pat-Once the generation and transmission tem and direction of our decisions hav areas of KCPL are deregulated, we will emerged. Culminating in oJr pr0 posed no longer rely on f aising rates to capture merget with Western Resources This costs Out objective, then, is to compete combination will allow KCPL to achieve effectively by OMloading kom the core its ob;ectives while significantly increas-business every cost burden that is not )

ing value to shateholders.

[ 83

[Ef*EltL.QhfPoweHflidt C6tirkniNQigsjinHAn.ngli!M 4

d 1

1

essential to delivering this electricity We expect this profile to change i

j to customers. dramatically in the next five years. While

) EVA*, Economic Value Added. is a f; nan- we expect the core utikty business to i <

J continue to grow, by the year 2001 we att inc. u.,6.im, j cial measurement t001 currently being n, _ _ n I nticipate it will represent only 70% of -

used to assist manaaement and other 1 a i KCPL's total eamings. We believe KLT

employees in their productive use and I / xcpt, k nd as mahng Mabves, c. me, l

a evaluation of KCPL's use of capital. By

- - - ~

through more rapid growth, will con-j providing the necessary tools. EVA

• will 1 Eelmiiiiis3iiii]imm

! tribute the remaining 21% and 9% of 4 assist us in making wise,long-term total camings respectively KCPL's pro-investment decisions The dnving pywnmymv7 G $ Utility Business Q 7

j . objective of EVA" is to evaluate how p sed merger with Western Resources,

., {

4 e if successful, is expected to drive growth t

KCPL uses assets and the retum on . . ' ~. .

and eamings even higher. -  %

~

i <

those assets. In 1996, our economic 4

c value measure increased by $7.2 milkon Investments by KLT Inc. emphaaize the

( 4 l

i from the previous year. tremendous impact we believe our non- '

Am  :

s . . . .

. . ~

nq

[What is KCPL's growth strategy? regulated subsidiaries can have on KCPL ,

,m 1,

14ew:

• a v U

1

,l r  % .q SWIC m by captunng investment retums well in

'M l

. An emphasis on incremental g g g g $ y $g excess of our regulated business.

ggwgg\

marketing pragrams and new initiatives gggyihn J i in customer products and services are Out initiative with the CelNet technology Is Msg ati

%  % y%Nif?1 u

4 expected to enhance KCPL.s earnings is an important element in bringing non-3 J@4 t 4gg 2 regulated opportunities to KCPL The M tam41fGil M 4IiMIIM ovv - ME3 '.

measurably in five years, Currently, the WWWW ~ <

1.

importance of this technology goes far cof e utility business provides nearly all of k4 air 1

DeIIht W agedesaggehjgtesi/

f.

KCPL's earnings.

beyond the ability to read meters wire-

.. a:

g'1,c ,

g apWfutef amede$heet., A.

! lessly. It is a communication avenue to '

. ~ e lom J a n L.d&d, QEhduid10 i

l Qa0DE$ NIL 5!1$!5!!E$9Nastgucsticis I Answers 21 a

customers ir. the Kansas City area or Q. What kinds of products and anywhere the CellNet device is deployed services does KCPL have to attract new 1

and offers a platform from which to offer customers?

]

i a vanety of innovative services t a

A.. KCPL has been successfulin customers including. but not limited to.

1 developing a variety of energy-based

home secunty monitonng and electronic

! products and services designed to help parking meter systems for municipalities. both large and small customers us 4

1 Q. Why did KCPL reorganize? energy better and more efficient!y for p m m m m en ma:u1 0 " " "

forporate Finance. Administration (1 KLTInt b . We have reorganized to take # 0 U hehed4e esonennues6andj tomers. we offer Custom Commercial Aeshistadse44dsemeCuperses y advantage of the opportunities that are N$ Services (CCS) and Custom lighting andhisesesWesappesas,4rsesdage) opening up inside and outside of our ss/shisednisessappseddeabsesh j Services (CLS) CCS is a comprehensive

! '.s.. gg,

!asssserpsesWe sostenMPEandMM

. . . s g primary market. Our reorganized struc-2 Energy Services-type program that

- d ture places key executives in positions of

-~ . .

ins asesidadse, eses #suk s 3

i fM,4 '

l ahows commercial and industnal

ggg4gpgp g c

l) accountability over three separate but sesfugitesdadsidsgWM . customers to concentrate on their M interdependent divisions of KCPL: the

Jhpdess%ssesgresisded 3 l Assissessenasesa...esses'esEas? 3 businesses while KCPL manages their

,...-.7 ,- . ,- f core util.ty business; finance, administra-(andesasset aines seatart c Q i aksmere ssMeaspheme'en'aswjl tion and unregulated subsidianes;wal and ensgy nds Wo&Wgn

! redseesperennisser'ammehiis sw1

, a w - .,. -

espeselmshassegresiseudSneds eseh"' corporate development. As the industry quality outdoor lighting services

, ~. - .

M' # '"N """". . Y focus on the municipal market. These posessa kussassses deErk Assej changes. KCPL must have a strong two programs alteady have a strong ApeselssedEPEb usset as Assessis' ass} management team in place that is das j

ephedse .,

i assipseselse, Anlipsedent,M. o s 4 presence in our region; the potential u s, . . . - -

. . 5 willing to take calculated nsks in order I.

pisarh*adsheagyarassalesis M M

" ~

w; L.  : .

g Q+ , ^ y y to grow shareholders. value.

to expand this service nationwide is Lepelse espassies of OsElus,assessissy $

very exciting Qsmanise,ses,,yeusses ,sryj w e,n ns ki ,s m en = asdesww.!

aa.m.s-aM y

DaTis CItDiinil BDint CornphnfbiiisliinITTniED 0 .

,K*" *t

~

Residential customers can take advan- -

l i

I tage of our new award wir;ning Worry j free Service to replace their old electnc i

I heating and cochng appliances. KCPL's .

Worry Free Service bundles financing, .% 3-

^

?

, \

maintenance and warranty services for

1. ) l A.

Wg one low monthly fee The program has won numerous awards, including eel's l Award for Excellence in Marketing ,

l Achievement. ior its innovative partner-g ing with a contractor organization.

i Also available to customers are l . .

g .

i products and services designed to l I 1 pratect sensitive electronics equipment F l

{

' and appliances from power sutges

"~ ~ ~ 'J our nonregulated subsidiary, must show "The world is our marker and our

& How do you evaluate potential opportun,ry "

a potential rate of retum greater than investinents for KLT inc.?

the costs of those investments, bnnging A. We rely on EVA", Economic more value to our shareholders.

Value Added, when assessing projects Q. How did KCPL fare financially for investment. EVA", also used by such companies as Coca Cola and ATErT, I" NI l

1 I evaluates KCPL's productive use of A. It was a good year for the

/ assets and the return on those assets. company, even with merget activ(ties All investments, including those made in

i 4

LWCliUI5ITTl5FGEbW67eTiitWMs ke r s R 4

i i

e i

4 i

j and damage from an early heavy snow- Certain forwardlooking htformation ,

1 This annua! report coritains certain forwierd-louimg storm. KCPL served our investors well, mformanon tne twate secunhes tit gaton Refmm

]

Act of t995 provdes a new " sate hmbor" tur

! delivenng a strong total retum of over '"""**'"9'"t**"'*"*""""d3" i comp.inies to pmvde prasptttive informa50n utout their compaines without feat of imgabon so long as l 15% to shareholders, well above the such nbrmatiorus dentfied as tuard imang and 65 accompened by merungful caationary statements 5 """"*"9""""'""*5*"'d'""3""""'

industry average of 12E Annualded q tesults to differ materially from those prontted

! to the informahan KCpliden0fies the followerig I important fanms which could cause actuat resuits dtvidends remained strong. increasing

m emet matenas fmm any such resalts wmth i mgt.t be propcted. foreta

.t. e::limated of budgeted 4% from last year.

gggg, ,,g, ,yg,,, ,7 , n j factors are d% cult to predtct and many are beyond the control of KCrt Accordmgty. wtule KCPt Revenues and kwh sales were up. oeurs thanne assumonons uro 9rg the tmwai

noning mfmmanon me reasonave for l

despite relatively mild weather. purposes of the development of esuma'es of rev.

i 4 enue enhancem(mts and cost savin (js. there can be no assurmites that such assumptions will

Customers and their energy usage appimate aos experience or that all such j revenue enNm ements and cost savings will be l continued to increase steadily, again 'eAnd m thanesuinng betes as e potendal stock values will p' ave to be torrect wid r1 such event.

l actual resatts could differ matenally fror.: the predic-l setting records foi peak seasonal nons he ein These imponant factors alude W j tuture econumec condit<ons m the reporul rational demands dunng the third and fourth ""d *'**"b"""I *"'"'5 '" **'h ECPl ""d

Westem Fesources compete. (b) state. feueral end toregn segulabon and possmle additonM reductions

quarters. KLT inc continued to pursue in reguimea electnt rates; n weathei cmonons.

j M imanual manet cmetans. muumng. but not and invest in strategic partnerships '""' d D """9" """*' ""8'"5 - ("I "*" "

l iares. (f) changing compeuton. niading but not

} limited to, the detegabbon of tv umted States

across the country and around the world. electn( untonoustry. and tv entry of new com-Pt? tors. @ the ability to cany out mmkehng and l

i s*s phos mme an,my to ao. eve genfuion I platnng goals and the occunent e of unplanned gener.ihon nutges. !!) the abil4 to enter new nat.

J kets Suttes5fa0y and tapit;ihle Dr1 OfoWth Opportu-rdbes in nontegulJted bubnenes, and () aitverse

! chanam in appkcaue laws. regulations or rules gov-4 etning environmen!d tax of accuuntmg matters

'Ihis a'iflual report (nritilms (ef tam statemeGtS of 1 opNon and beket i

i I

4 I

4

[M

)~ _

( > c ? f,( r

^

'A' t \ ,

,3 <

4 ,

t J'

M  ? 4 I J .; 5 r ' E9gslatiS8 RBd C9mpetitite J  ;

, l competing suppliers access to their retail customers (retail q wheeling). Many other states are actively considering retail ~

i AsIompetition dhvelops throughout the electric utility  ; .

[ industry, we are' p' o sitioning Kansas City Power fil.ight wheeling. Kansas has created a retail wheeling task force - i to study and report on related issues /

omhany {KCPL) to excel in an open market. We are ,

Q; improving the efficiency of KCPL's ~

core utility operations

. Competition through retail wheeling could result in market - e iand creating growth through its unregulated subsidiary. <

l based rates below current cost-based rates l This would '

l As cornpetition presents new opportunities, we will also'

provide growth opportunities for low-cost produ'cers and c j

? consider various strategies including partnerships, acquisitions, risks [for higher-cost producers, especially those with large !  ;

E combinations, additions to or dispositions of service terri-

. industrial customers l Lower rates and the loss of major: U L Etory, and restructuring wholesale and retail businesses. In customers could result in under-utilized assets (stranded .

} 1{7 we will begin offering natural gas contracts to: certain investment) - and place an unfair burden on the remaining i

customers. We have entered an Agreement and Plan of customer base or shareholders. If an adequate and fair l Werger with Westem Resources, Inc. (Westem Resources),  !

provision for recovery of these lost revenues is not provided,

This agreement was reached after nine months of defending certain generating assets may have to be evaluated for

' against an unsolicited exchange offer (see Note 11 to the - mpairment and appropriate charges recorded against : ,

Consolidate' d FinancialStatements).' '

-eamings. In addition to lower profit margine, market-based ,

rates could also require generating assets to be depreciated .

iln December 1996 the federa! Ene' rgy Regulatory over shorter useful lives, increasing operating expenses.

/ $ Commission NERC) issued a statement conceming electric F utility mergers. Under the statement, companies must Although Missouri and Kansas have not ye't authorized retail < l ndemonstrate that their merger does not adversely affect wheeling, we believe KCPL is positioned well to compete in -

. competition or wholesale rates; As remedies, FERC may '

. an open market with its diverse customer mix and pricing .

strategies. About 22% of KCPL's retail mwh sales are to l l1 upgrades or divestitures of generating assets. consider a {ange of c

. industrial customers compar$d to the util'ity everage of about 35%. KCPL has a flexible rate structure with industrial rates Competition in the electric utility industry was accelerated that are competitively priced within our region. In dddition,-

/ with the 'Nati$nal Energy Policy Act of 1992. This gave ng twm connads aMn pace w unk ne#adm a'

' TERC the authority to require electric utilities to provide , !

. transmission.line' access to independent power producers ge p n s n usdabalesle@s Ween direct competition for retail electric service in our service j

' (IPPs) and other utilities (wholesale wheeling). KCPL; territory although there has been competition in the bulk i already active in the wholesale wheeling market, was one .

~

p wer market and between altemative fuels.

of the first utilitiegto receive FERC's approval of an open-

. access tariff for' wholesale wheeling transactions. In April increased competition could also force utilitios to' change 1996 FERC issued an order requiring all owners of trans- accounting methods: Financial Accounting Standards Board j mission facilities to 'adopt operFaccess tariffs and partici- (FASB) Statement No. 71 - Accounting for Certain Types -

. pate in wholesale wheeling; KCPL has made the necessary of Regulation, applies to regulated entities whose rates are ],

? l filings to comply with that order- designed to recover the costs of providing service. An entity's ]

( FERC s April order is likely to encourage more movement perations could stop meeting the requirements of FASB a us teamns,inc ng a cWge hgdann m

]

• c t'o ward retail competition at the state level An increasing .

a change in the competitive environment for a compan(s number of states have already adopted open access regulated services. For those operations no longer meeting f requiretrients for utilities' retail electric service, allowing .

q l

.I 1

_j

1 ~

QKensafCNMiewer] MhtReapnMw]e5beantYMaesssie.g und heeln#1 w

i the requirements of regulatory accounting, regulatory . , a $0.05 per share gain on the sale of fait cars. Despite the

- assets would be written off. KCPL's regulatory assets; unfavorable weather and merger related charges, continued '

< , totaling $164 million at December 31,1996, will be - load growth contributed favorably to 1996 EPS.

~rnaintained as long as FASB 71. requirements are met. . . . .

. EPS for 1995 of $1.92 increased $0.28 from 1994.'This

^

it is possible that competition could eventual!y have a ' increase was due mostly to 1994's one-time $22.5 million materially adverse affect on KCPL's results of operations and ($0.22 per share)  ;

financial position. Should competition eventually result in a .- charge for the voluntary '

1 significant charge to equity, capital costs and requirements early retirement program ~ ' $ ,g {; 5 ' -l

' ~

could increase significantly. (see Note 2 to the I Consolidated Financial Nearegulated Opportunities '

.Statementst Other L KLT Inc. is a wholly-owned subsidiary pursuing nonregu!ated, factorsincreasing

[

mainly energy related business ventures. KLT's strategy 1995 EPS included u N- N' es es-  :

[

capitalizes on new market opportunities by combining our load growth, warmer ' N expertise in energy-related fields with the knowledge of our L summer temperatures, "*Mg'*""g" ,

. joint venture partners. Existing ventures include investments savings from the 1994 ."'"'""""  !

in domestic and intomational nonregulated power produc ' early retirement program and a net gain of $0'.05 per share -

. tion, energy services, oil and gas reserves, telecommunica. . from the sale of railcars. Partially offsetting these ,

'l ' tions, and affordable housing hmited partnerships. increases.1995 EPS also reflected decreased bulk power '

sales and higher fuel and purchased power costs as s ,l We had a total equity investment in KLT of $61 million as of result of a forced outage at a coal plant. -

December 31,1996, and expect that investment to grow to .

' about $210 million within the next five years KLT's cor, soli- .. Megawatt hour (Mwh) Sales and Udated assets at December 31/1996, totaled $224 million. '

Electric Operating Revenues

.Within the next five years we expect KLT consolidated Sales and revenue data:  !

assets of about $800 million, generated through the $210 , increase (Decrease) frorn Not Year - ,

million of equity investment. subsidiary retained eamings l 1996- 1995 l and borrowings. The growth of KLT accounts for the majority Mwh Revenues Mwh Revenues }

of the increate in KCPL's consolidated investments and ~

Retail:

nonutility property. -

Residential 1% $- 6% $ 17 j Commercial 4% 10 3% 9 i Earnings Overview - In'dustrial 6% 5 -% (1) i Other (4)% -

(6)% - i Eamings per share (EPS) for 1996 of $1.69 decreased 4%

Totalretail 15 3% 25

$0.23 from 1995. Terminating our rnerger agrcement with Salos for resale: ,

UtiliCorp United inc. (UtiliCorp) and defending against Bulk power sales 1% 6 (15)% (11)

Westem Resources' unsolicited exchange offer reduced Other 29 % -

- (11)% -

!n (1996 EPS by $0 31. Other factors contributing to the Total 21 14 ,

L.

decrease included mild summer temperatures and the lotal electric .

Toffects of a new'ripulation and agreement with the operating

. revenues $ 18 $ 18 '

l Missouri commission. Iri addition. EPS for 1995 included d

l

}

L UlenentAM9 M9er#Maiht$emeennhtenenement's OkcusMonWdkaltsisR .

During 1996 the M!ssoun Public Service Commission to load (MPSC)7 growth. Load growth consists of higher usage-

approved a new stipulation and agreement authorizing a '. ~ ' per-customer as well as the addition of new customers. i l $20 million revenue reduction in two' phases, and an .

i a increase in deprbeiation and amortization expense by..fletail mwh sales for 1996 increased 4% over 1995 while, retail revenues increased only 2%.This difference is due :

." $9 million per year. In July

.  ; . largely to the Missouri revenue reductions discussed above .

19M we implemented l and the effect of long-term sales contracts with certain i

, na phase 9ne of the revenue major industrial customers. These contracts are tailored to

. *t*L l' ! ! ,

-" reduction designed to

' meet customers' needs in exchange for their long-term reduce revenues from c mniment to purchase energy. Long-term contracts are w commercial andindustrial .

~hnun u-~ customers by an estimated .

n place or under negotiation for a large portion of our n saks NM%*"WD1 $9 million per year.This decrease is achieved with an increase in summer revenues fletail mwh sales and revenues for 1995 increased 3% over offset by a inger decrease in winter revenues. This design 1994.This increase was due mainly to improved weather more closely follows our increased costs of generating '

and continued load growth. Similar to 1996, longi term electricity in the summer. The second phase of this contracts with major industrial customers resulted in a stipulation, effective January 1,1997, will further reduce slight decrease in 1995 industrial revenues from 1994,  ;

Missouri residential, commercial and industrial revenues '

despite an equallevel of mwh sales. -

by an estimated $11 million per year. The decrease in l

' 1996 revenues es a result of this stipulation and agreement Bulk power sales vary with system requirements.

was about $3 million. generating unit and purchased power availability, fuel >

costs and the requirements of other electric systems.

' These lower rates, combined with lower billed sales in-A combination of these conditions contributed to rec'ord

December of 1996 versus December of 1995, resulted in a ' bulk power sales in 1994.

lower accounts receivable c m,, .

• balance at December'31 Changes in other revenues during 1996 and 1995 reflected changes in classification between other revenues and bulk

• • -N ~

l --" 1' I l l -

• 1996, compared with

- ssee December 31,1995; power tales.

c.--w_

[ . During April and May of Total revenue per mwh sold varies with changes in the m.m a ~ " 1995 about 600 net ccm- mix of mwh sales among customer classificatione and the i I nNuna mercial customers were effect of declining price per mwh as usage increases.

M Mflinikaeus a reclassifiedtoindustrialto An automatic fuel adjustment provision is included in more approp;iately reflect their business operations. This only sales for resa!c tariffs, which apply to less than -

'. change resulted in the reclassification of about $680.000 1% of revenues. ,

(10300 mwh sales) from commercial to industrial in each Future mwh sales and revenues per mwh will be affected subsequent month. Po.or penods have not been restated. ,

by national and local economies, tariff changes, weather Summer temperatures were very mild in 1996 compared and customer conservation efforts. Competition, including  ;

with 1995, remaining below normal for the fourth consec. attemative sources of energy such as natun! gas, utive year. Despite this mild weather pattem, retail co-generation, IPPs and other electric utilities, may mwh sales increased in each of the last four years due also affect future sales and revenue.

I 4_ g-t

[KinMW Citifosei DiW:CornianydManenemehtYDitcassion hadAn9niti

~ Fuel and Purchased Power a low-cost, coal-fired generating unit. We replaced the pw ncmadng thusagdgheFmM, maWed Combined fuel and purchased power expenses for 1996

- units and purchasing power on the wholesale market. r

- increased 8% or $15 rnillion from i995, while total mwh '

Damage to munk was mem@nswandows, sales (total of retail and sales for resale) increased only 3%. .

uninsured, incremental fuel and purchased power costs

, This increase is largely attributable to an increase in capacity were about $4 million; t purchases. Capacity purchase contracts provide a cost-Combined fuel and purchased power expenses for effective attemative to constructing new capacity and have 1.995 increased 5% or $9 million from 1994, despite a

~"'*' contributed to increases c,, 2% decrease in total mwh sales. Items contributing to in purchased power expenses. Additional this increase include the laCygne forced outage, 8 ncmam in capachy pwchase mnuam, incmam in de 4% -""

capacity purchases c st of nuclear fuel and a $3 million increase in fuel costs increased purchased ,

fr m c I nventary adjustments.

.- power expenses about liuclear -50.20 e2 ua n n $9 million in 1996 and Other Operation and Maintenance Expenses k %e@WMMIER/ A $4 millionin1995.

Combined other operation and maintenance expenses for Nuclear fuel costs per MMBTU remained substantially less 1994 were higher than 1995 and 1996 due mainly to the than the MMBTU price of coal, despite increases of 26% costs of the voluntary early retirement program in that dunng 1996 and 15% during 1995. Nuclear fuel costs per year. Total program costs of $22.5 million ($0.22 per share)

MMBTU averaged 59%,45% and 40% of the MMBTU were expensed during 1994. The decrease in 1995 price of coal during 1996,1995 and 1994, respectively. expenses from 1994 was partially offset by KCPL's We expect this relationship and the price of nuclear fuel to $2 million share of Wolf Creek's voluntary early retirement ..

remain fairly constant through the year 2001. During 1996 - program recorded during 1995. Other cost variances in coal represented about 75% of generation and nuclear fuel 1996 and 1995 resulted from the timing of scheduled about 25%. During 1995 nuclear fuel accounted for about maintenance programs.

30% of generation as no refueling outage was scheduled We continue to emphasize new technologies, improved during that year (see Woll Creek section).

methods and cost control. We are changing processes to The price of coal burned rieclined 4% during 1996 and provide increased efficiencies and improved operations.

increased 1% during 1995. Our coal procurement strategies Through the use of cellular continue to provide coal costs at or below the regional technology, a majority of D'7" Q"" ,

average. We expect coal costs to remain fairly consistent customer meters are read Aa'agaa n.$ w with 1996 levels through 2001. automatically.These "Y'"

types of changes have

/

Other items affecting the change in combined fuel and purchased power expenses from 1995 to 1996 include a allowed us to assimilate Na jm work f.erformed by those MD,

$2 milliori decrease in expense from coal inventory adjust-who elected to participate ments, an increase in replacement power expenses for

. the early retirement Wolf Creek's spring 1996 refueling outage (see Wolf Creek In p ggp q programs.

section) and a 1995 forced generating station outage.

During July 1995 a fire forced an outage at LaCygne I, g_ __

TCnkeir CM Power UinhLCo#ionsMen ; sass nt'slifsbussion and)4nalysiu}

'lIncomeIaxe5 Miscellaneous deductions increased in 1995 over 1994 l Operating income taxes decreased $9 mi!! ion in 1996 from due to increases in charitable contributions, fees related 1935. The decrease was primarily due to adjustments nec-e saw cusemer accounts recede and gmMng subsidiary operations..

essary to reflect the filing of the 1995 tax retums and the

- settlement with the Intemal Revenue Service regaroing tax g,com,y,,,,

issues included in the 1985 through 1990 tax retums. This We accrued tax credits in 1996,1995 and 1994 of $12, i sedement is also the primary reason for the decrease in

$5 and $1 million, respectively, related primarily to KLT's !

. accrued taxes. '

investments in affordable housing limited partnerships.

Tax credits from the investments in affordable housing GeneralIBXBS more than offset the increase in interest expensa Components of generaltaxes:

incurred from these investments. Non-taxabie increases 1996 1995 1994 in the cash surrender value of corporate-owned life pusands) insurance contacts also affected the relationthip

' Property $ 45,519 $ 46,019 $ 46.895 between iniscellaneous deductions and income taxes.

Gross receipts 42,554 41,416 40,397 Other 9,175 9,386 9.070 Interest Charges -

Total $ 97,248 $ 96,821 $ 96,362

_ Interest expense increased during 1996 reflecting higher i average levels of long-term dsbt outstanding compared f

Other income with 1995. The higher levels of debt resulted from addi-tional financing by KLT to support expanding subsidiary Miscellaneens income o erations and new investments in unregulated ventures.

Miscellaneous income for 1995 includes a $5 million gain from the sale of steel railcars, which were replaced Interest expense increased during 1995 reflecting higher by leased aluminum cars. Aluminum cars are lighter- average levels of long term debt outstanding and higher

! weight and offer more coal capacity per car, contributing weighted-average interest rates compared with 1994.

to lower delivered coal prices. The higher average level of outstanding debt was

. primarily due to subsidiary investments in affordable Miscellaneous Deductions housing partnerships.

Miscellaneous deductions increased in 1996 from 1995 due primarily to the termination of the UtiliCorp merger The average interest rate on long-term debt, including

agreement and defense against Westem Resources' current maturities, was 6.0% in 1996 and 1995 compared ,

f unsolicited exchange offer (see Notes 11 and 12 to the with 5.4% in 1994.

I f

' Consolidated Financial Statements). During the third I quarter of 1996, $13 million in previously deferred We use interest rate swap and cap agreements to limit the !

merger costs and a $5 million termination fee were interest expense on a portion of our variable-rate long-term expensed. In addition, costs incurred to defend against debt. We do not use derivative financial instruments for j the unsolicited exchange offer increased 1996 expenses trading or other speculative purposes. Although these  ;

. by $13 million. .Also, subsidiary expenses increased agreements are an integral part of our interest rate about $9 million reflecting increased investing activities. ! management,theirincrementaleffect oninterest I

Total subsidiary expenses, including interest charges expense and cash flows is not significant. j discussed below, are substantially offset by related tax

, . benefits.

__ -g

[Keriksi Cityfo6Erbht Com6hKMononemeWkpjiocutsion/ aid Analind j W0ll Creek j missioning the unit at the end of its life and to potential

! Wolf Creek is one of KCPL's principal generating units. retrospective assessments and property losses in h representing about 18% of its accredited generating f excess of insurance coverage. These risks are more fully i capacity. Th'e plant's operating performance has remained discussed in the related sections of Notes 1 and 4 to the

! strong, contributing about 25% of the annual mwh t .

{ Consolidated Financial Statements.

p generation while operating at an average capacity of 88%

l Envir0ninental Matters

' over the last three years. It has the lowest fuel cost per i p s to adn an ensonantaHy sponWe manner MMBTU of any of KCPL's generating units. l j l and use the latest technology available to avoid and treat

'I Wolf Creek's eighth scheduled refueling and maintenance l contamination. We continually conduct environmental f- j 1 outage began in early February 1996 and was completed  ; audits designed to ensure compliance with govemmental in April 1996 (64 days). The incremental operating, I regulations and detect contamination. However, these .

} I q maintenance and replacement power costs are accrued  ! regulations are constantly evolving; govemmental bodies . -

! evenly over the unit's operating cycle, normally 18, l may impose additional or more rigid environmental ' '

months. As actual outage expenses are incurred, the  ! regulations which could require substantial changes to refueling liabHity and related deferred tax asset are  ! operations or facilities.

!

• I.

I reduced. The eighth outage started one month early when the plant was shut down after water Cow from the cooling e canl M Manhnts of W contain two t lake was restricted by ice buildup on an intake screen. This pmgmms g canWaHec ng ndus4

{ We have spent about $5 million for the installation of i extended the length of the outage and was the primarv )

reason foi the increase in Wolf Creek related replacement  ! mn nu us ernissbn monMng e@menMo saWe

requi,ements under the acid rain provision, The other power and maintenance expenses in 1996. Wolf Creek's ninth refueling and maintenance outage is scheduled for utility-related program calls for a study of certain air toxic -

substances. Based on the outcome of this study, regulation

, j the fall of 1997 i

! of these substances, including mercury, could be required.

It Wolf Creek's assets and operating expenses represent about ! We cannot predict the likelihood of any such regulations or

! 45% and 20% of total assets and operating expenses,  ; compliance costs.

' respectively. Currently, no major equipment replacements l are expected, but an extended shutdown of the unit could l Other proposed regulations to revise the ozone and 4 >

{ have a substantial adverse effect on KCPL's business, l ticulate matter National Ambient Air Qua4ty Standards, scheduled to be findized in June 1997, may require capital j financial condition and results of operations. Higher replacement power and other costs would be incurred as ,

en w cannM b edmad at h be.

a result. Although not expected,an unscheduled plant f Pr0jected COnStrHClion Expenditures shutdown could be caused by actions of the Nuclear l

! Regulatory Commission reacting to safety concerns at eam y expl ng hem es to new mnstmeton.

l the plant or other similar nuclear units. If a long-term u ng we en an pe ng leas a new

{ shutdown occurred, the state regulatory commissions W us u e, em W Nadin

could consider reducing rates by excluding the Wolf Creek i

service during 1997. We have also contracted to purchase capacity through fixed-price agreements (see Note 4 to the l investment from rate base.

Consolidated Financial Statements - Capacity Purchase  !

i

' Ownership and operation of e nuclear generating unit ' Commitments). Compared to the long-term fied costs of

! l t

L exposes KCPL to risks regarding the cost of decom- , building now capacity, these contracts provide a cost-effective !

~

\

\

L

b w-,. -A -. -- --

way of rnesting uncertain levels of demand growth, even though - of Wolf Creck in 1985!The costs incurred to repair j ,

' there are risks associated with market price fluctuations. damages from an October 1996 snow storm also lowered

)

j cash flows from operating activities in 1996 and increased l Total utility capital expenditures, excluding allowance for I j Other Regulatory Assets on the balance sheet.

funds used during construction, were $101 rnillion in 1996. ! Amortization of these costs will begin in 1997 and be The utility construction expanditures are projected for the reflected as Amortization of Other in the Statement of Casti .

> t next five years as follows:

- l Flows. Amortization of Other decreased in 1996 as the '

j

! deferred costs of the 1993 flood were fully amortized Iin Construction Expenditures 1995. l 1997 1998 1999 '2000 2001 Total j '

(millions) l Cash used in investing activities varies with the timing of Generating ' utility capital expenditures and KLTs purchases of invest-

.facikties $ 35 $ 27 $ 35 $ 33 $ 19 $149 ments and nonutility properties. The increase in nonutility j

- Nuclear fuel 20 21 2 24 27 94 l properties during 1996 resulted mainly from KLTs purchase )

Trans ssion of certain oil and gas projects during the year.

Distribution l Subsidiary obligations increased during 1996 toI finance and general  ! I facilities 67' 53 51 48 43 262 KLTs purchases of nonutility property and investments. - ""

l Total $133 $106 $ 90 $109 $ 92; $530 KCPL's common dividend payout ratio was 94% in 1996, l 80% in 1995 and 91% in 1994. Merger related costs in l

! 1996 and costs of the voluntary early retirement program .

Th.is construction expenditure plan is subject to continual >

t in 1994 contributed to the higher ratios in those years, ,

review and change. The next plan will be filed with the  !

t l i

Mcsoun commission n July 1997, l EPS for 1997 will be reduced by $0.52 due to a $53 million l l payment in February 1997 to UtiliCorp for terminating a -

l Capital Requirements and 1.iquidity mergs agreement with them and then signing an agree-l As of December 31,1996, KCPL's liquid resources included ment to combine with Westem Resources: After taxes, the cash flows from operations, $300 milhon of registered but l payment will reduce 1997 net income by $32 million. We unissued, unsecured medium term notes and $375 million j sold commercial paper to pay this termination fee. l l of unused bank lines of credit. The unused lines consisted of KCPL's short-term bank line; of credit of $280 million

" Y P"" " ' ' " ' " * " " "4" ** ""

I dividends are expected to be met with intemally-generated and KLTs long-term revoMng line of credit of $95 million, j funds. Uncertainties affecting our ability to meet these require- -

KCPL continues to generate positive cash flows from oper- . ments with intemally-generated funds include the offect of j *s ating activities, although individual components of working inflation on operating exper ses, the level of mwh sales, i N

capital will vary with normal business cycles and operations regulatory actions, compliance with future environmental including the timing of receipts and payments. Cash required l regulations, the availability of generating units, and the to meet current tax liabilities has increased as we no longer outcome of pending legal proceedings {see Note 13 to the l i

receive the benefits of accelerated tax depreciation on any Consolidated Financial Statements). The funds needed for significant generating plant assets. Accelerated depreciation the retirement of $393 million of maturing debt through the ,

lowers tax payments in the earlier years of an asset's life j year 2001 will be provided from operations, rehnancings or l I

while increasing deferred tax liabilities; this relationship short-term debt. We might incur additional debt and/or issue reverses in the later years of an asset's life. Our last additional equity to finance growth or take advantage of significant generating plant addition was the completion  ! new opportunities.

g.

hs.-ear.a.wyW si mavedge tua.,- ,is.ee.vW+-e-mu-wAA-erm=-aMe- **d-* m-Heyesweham.+emeae i= c e4-emr=%-' e-.. -e,a.g.-s-,,ams.-ap,,,, ,r.m

.w,.i.,y,,p,,,,.;,,, ag, n ; o s. , c o a. a o a c a"iurn+'sarmomiseca,ean C

f Consolidated Statements ofincome i

I Year Ended December 31 1996 1995 1994 I-(thousands)

Electric Operating Revesnes ' $ 903,919 $ 885,955 $ 868,272

, Operating Expenses Operation 1

- Fuel - 140,505 139,371 135,106 i Purchased power 52,455 38,783 33,929 Other 180,719 178,599 202,304 f' Maintenance '

71,495 78.439 72,468 Depreciation 103,912 97,225 94,361 Income taxes 68,155 . 77,062 70.949 Generaltaxes 97,248 96,821 96,362

-Deferred Wolf Creek costs amortization 11,617 12,607 13,102 Tota! . 726,106 718,907 718,581

] Operatingincome 177,813 167,048 149,691 l Otherincome Allowance for equity funds used during construction 2,368 2.279 2,087.

l' i

Miscellaneous income 4,843 8,623 3,015

' Miscellaneous deductions (55,172) (11,101) (7,174) income taxes 36,402 10,259 4,572 Total (11,559) 10,060 2,500 income Before laterest Charges 166,254 177,108 152,191 Interest Charges Long-term debt 53,939 52,184 43,962

. Short term debt - 1,251 1.189 1,170

' Miscellaneous 4,840 3.112 4,128

-Allowance for bortcwed funds used during construction (1,947) (1,963) (1,844)

Total 58,083 54,522 47,416 Net income 108,171 122,586 104,775 ~

Preferred Stock Dividend Requirements 3,790 4,011 3,457 Earnings Available for Common Steck $ 104,381 $ 118,575 $ 101,318 Aeerage Number of Common Shares Outstanding 61,902 61,902 61,903

] Earnings per Common Share $ 1,69 $ 1.92 $ 1.64 j Cash Dividends per Common $ hare $ 1,59 $ 1.54 $ 1.50 l

l 1

i Consolidated Statements of Retained Earnings l

[ br Ended December 31~

1996 1995 1994  ;

} (thousands)  !

Begidy Balance $ 449,966 $ 426,738 $ 418,201  ;

Net income 108,171 122,586 104,775 Dividends Declared Preferred stock-at required rates 3,782 4,029 3,384 Common stock 98,421 95,329 92,854 Ending Balance $ 455,934 $ 449,966 $ 426,738 i ,,. -e.. ,o ce...u-m _m. .,. s . .m_m1..  !

ggg .

p , ,, , ,, 7 Consolidated Balance Sheets  !

December 31 1996 1995 Assets (tho"S8"d51 Utility Plant, et Original Cest Electric $ 3,472,607 - $ 3,388,538 Less-accumulated depreciation 1,238,187 1.156,115

. Net utility plant in service ,

2,234,420 2,232,423 -

Construction workin progress /

69,577 72,365 Nuclear fuel, net of amorthation of $84,540 and $81,452 39,497 54,673 Total- 2.343,494 2,359,461

' Regulatory Asset-Delerred Wolf Creek Costs - 8,880 .

Regel: tory Asset - Recoverable Taxes 126,000 123,000 investments and Nonutility Property 231,874 166,751 Current Assets Cash and cash equivalents 23,571 28,390 Customer accounts receivable, not of allowance

' for doubtful accounts of $1,644 and $1,574 27,093 32,830 Other receivables -

36,113 31,838 Fuelinventories, at average cost 19,077 22.103 Materials and supplies, at average cost 47,334 47,175

l. . Deferred income taxes 2,737 5,947

!: Other , 5,055 5,179 f Total 160,980 173.462 Deferred Charges flegulatory assets 1 Settlement of fuelcontracts 9,764 13,007 KCC Wolf Creek carrying costs 1,368 4,104 Other 26,615 21,231 Other deferred charges 14,417 12,610 Total 52,164 50,952 Total $ 2,914,512 $ 2,882,506 Capitalization and liabilities Cepitalhation (see statements) $ 1,943,647 $ 1,824,087 Current Liabilities Commercial paper .

- 19,000 Current maturities of long-term debt 26,591 73,803 Accounts payable 55,618 52,506 Accrued taxes 18,443 39,726 Accrued interest 21,054 16,906 Accrued payroll and vacations 25,558 22,764 Accrued refueling outage costs 7,181 13,563 Other 11,980 11,787 Total 166,425 250.055

, Deferred Credits and Other Liabilities  !

! Deferred income taxes 643,189 648,374 l

Deferred investment tax credits 67,107 71,270  !

Other 94,144. 88.720 Total 804,440 808,364 Commitments and Contingencies Inote 4)

Ictal $ 2,914,512 $ 2,882,506 The accompanpng Notes to Consolidated Financial Statements are an integral part of ttese statements.

. . pp -

l

a .. . .

IS ,

ii

)

! ~ ~ ~ -

.' C: m mn2nu r =cr m nhw L; Consolidated Statements of Cash Flows Vest Ended Decemhw 31: 1996- 1995- -1994-(thousands)

Cash Flows fria Operating Actnuties :

( yNet income z' _ "

' Adjustments to reconcile net income to net cash :

$ 108,171 - $ 122,586.

'$ 104;775 <'

, J

from operating' activities

! Depreciation ; 103,912 97,225 94,361:

!=

. Amortizationof:

. Nuclear fuel , 16,094 14,679 10,136 11,617 .

' Deferred Wolf Creek costs. -12,607 13,102 :

Other i 5,507 . 8,152 9,608 -

Deferredincome taxes (net).. (8,662) (3,268) L 20,524:

' investment tax credit amortization and reversals -(4,163) (11,570)- (4,345)-

1. Deferred storm costs . (8,885) -- --

(Allowance for equity funds used during construction (2,368) ; (2,279) (2,087)

Cash flows affected by changes in:' ,

Receivables 4 1,462 (17,551) 1,543 Fuelinventories" 3,026 (5,533) (2,020) -

Materials and supplies . (159) (2,222) (796) C

^ Accounts payable . 3 3.112 (20,980) 14.065' Accrued taxes -(21,283) 15,042 . (3,116)

' Accruedinterest 4,148 4,697 (3,366)

Wolf Creek refueling outage accrual (6,382) ' - 11,443 (5,142)'

Pension and postretirement benefit obligations (84) (4,176) - 32.203 -

0ther operating activities . 11,846 ' 4,325 ~ (2,860) -

, e Not cash from operating activities 216,909 ~ 223,177 ' 276,585' Cash Flows from invest"ag  ; Activities

- Utility capital expenditures . (100,947) (134,070) L (124,965)L

Allowance for borrowed funds used during construction (1,947) (1,963) ~ (1,844) 1 Purchases of investments'. (35,362) (56,759)- (67,560)

, Purchases of nonutility property (20,395) -

Otherinvesting activities 9,046 5,624 -

(931)

Net cash used in investing activities (159,582) (183,746) -(188,745)

(Cash Flows from Financing Activities issuance oflong-term debt 135,441- 111,055 133,793

- Repayment oflong term debt (74,230) (33,428) (170,170)

Specialdeposits ~ --- - 60,118 o Net change in short term borrowings (19,000) (13,000)' 3,000

, . Dividends paid (102,203)- -(99,358) (96,238)

Other financing activities- (2,154) 3,4 73 335 Net cash used in financing activities (62,146) (31,258) (69,162)

Not Change in Cash and Cash Equivalents (4,819) 8,173 18,678 t Cash and Cash Equivalents at Beginning of Year 28,390 20,217 1,539 Cash and Cash Equivalents et End el Year 8 23,571 $ 28,390 $ 20,217

- Cash Poid During the Year for:

interest (net of amount capitalized) $ 52,457 $ 48,200 $ 48,246 Income taxes 8 58,344 $ 67,053 $ 53,720 U' The accompanying Notes to Contddated Fmancial Statements are an integral part of these :.tatements I

- y. g - ~, _ -.

p y 3

m t

y 8- ~ .- . ,;z===y; =-.;.c,__Jw

. ,; , 4. ..;c, M ..:: ,,118 >

8 f Consolidated Statements of Capitalization - ,

tecember 31 1996 '1995':

4.:

y- y (thousands) - .

Commea Sted Equitj :: 1 Common stock - 150,000,000 shares authorized without par value -

]  :

,d J 61,908,726 shares issued, stated value , ' $ ; 449,697 . $ 449,657 JRetainsd eamings (see statements); 45G,934 L449,966 : I L Oncealized gain on securities available for sale 6,444 )

l I

, Capital stock premium and expense . '{1,666) - (1,725)

Total s 910,449 L 897,938 - .l-Canudosive Preferred Stock .

' ;I .$ 1og ParValuei ,

~

3.80% - 100,000 shares issued : 10,000 10,000.

L 4.50% -- 100,000 shares issued , 10,090 :10,000:  !

'4.20% 70,000 sharesissued 7,000 : 7,000 d

q 4.35% .120,000 shares issued 12,000 12,000 - U No Par Value1 'I

! 4'.38%" 500,000 shares issued '50,000 50,000 ,

, f

$13 Par Value . Redeemable - i

!4.00% J (note 8): 62 1,436 Total ' 89,062 90.436 Long-term Debt (excluding current maturities) ;

4 General Niertgage Seeds: .

i Medium-term Notes due 1997-2008,6.81% and 6.72% i '

j

? weighted-average rate' at December 31 468,500 ; 387,000- -

4.24%* Environmentalimprovement Revenue i Refunding Bonds due 2012 158,768 . :158,768 i i

Guarasty of PeNution Centrol Bonds '-

= 196,500 1: 4.13%* due 2015-17 196,500'

-l Subsidiary Obligations .

1 '

' Affofdable Housing Notes due 2000-05,8.51% and 8 54%

- weighted-average rato at December 31 65,368 ' 69,945 Bark Credit Agreement due 1999,6.78% and 7.66%

L. weighted-average rate' at December 31 55,000 - 23,500 l

% Total' .944,136 835,713  !

' Total; $ 1,943,647 $ 1,824,087 l

]

j

' Variable rate securities, weighted-average rate at December 31,1996

' The accompanying Notes to Consolidated Financial Statements are an integral part of these statementsc

, j

-l 1

y.

U

.]

, a

-l

._~_g j

aE

. WKar.sss;Citylow;6 Light CompanyMotes to Consolid;ted Finsacial StatemintsA

1.Surriinary of Significant rates on a portion of KCet s variabie-rate debt. interest rate

_. ACC0unting Policies caps limit the interest rate on a portion of KCPL's variable-rate debt by setting a rnaximum rate, The costs of rate The Company: caps are paid annually and included in interest expense.

Kansas City Power & Light Company is a medium-sized Any difference paid or received due to these agreements is electric utility with more than 435,000 customers in westem recorded as an adjustment to interest expense.

Missouri and eastem Kansas. About 95% of our retai revenues These agreements are not marked to market value as they are from the Kansas City metropolitan area, an agribusiness -

are used only to manage intetest expense and the intent is center and major regional center for wholesale, retail and

! to hold them until their termNtion date. We do not use a

. service companies. About two-thirds of our retail sales are derivative financial instruments for trading or other

~ to Missouri customers, the remairder to Kansas customers, speculative purposes.

The consolidated financial statements include the accounts fair Value of financialInStruments of Kansas City Power & Ught Company and KLT inc., a

. e sta@abes oHnandalinsuuments as of

- wholly-owned, nonutility subsidiary. The consolidated entity December 31,1996 and 1995, approximated fair market is referred to as KCPL. KLT was formed in 1992 as a holding

company for various nonregulated business ventures. Cur-alues. Es kementabsrodng rate b sWa@

rently, the electric utility accounts for about 92% of consoli-was ud Menne faMue # quW ma%6s dated assets and substantially all results of operations. Inter-company balances and transactions have been eliminated-Securities Available for Sale KLT's revenues and expenses have been classified as Other Certain i$ vestments in equity securities are accounted for as income and Interest Charges in the income statement.

iemiWM imh # hd

The accounting records conform to the accounting standards Accounting Standards Board (FASB) Statement No.115 -

prescribed by the federal Energy Regulatory Commission Accounting for Certain Investments in Debt and Equity (FERC) and generally accepted accounting principles. These Securities. This requires adjusting the securities to market sixdards require the use of estimates and ascumptions value with unrealized gains (or losses), net of deferred that affect amounts reported in the financial statements income taxes, reported as a separate component of share-and the disclosure of commitments and contingencies. holders' equity.

Cash and Cash Equivalents investments in Alfordable flousing Cash and cash equivalents consists of highly liquid invest.

l.im ted Partnerships ments with original maturities of three months or less. Through December 31,1996, a subsidiary of KLT had invested $97 million in affordable housing limited partner.

Derivative financialInstruments ' ships. About $80 million of these investments were We use interest rate swap and cap agreements to reduco recorded at cost; the equity method was used for the

' the impact of changes iri interest rates on variable-rate debt.

remainder. Tax credits are recognaed in the year generated.

Interest rate swap agreements effectively fix the interest A change in accounting principle relating to investments l

- g -.

?

._,-,.-.M-,..m.~

pKaeH gpWWTDettVMpedir@efeallWMWferOR@iH9FWWATfe]ts made a' fter May 19,1995, requires limited partnership are accrued monthly over the unit's operating cycle, normally 1 investments of more than 5% to use the equity method. ' about 18 months. Estimated incremental costs, which - '

Of the investments recorded at cost, $70 million exceed include operating, maintenance and replacement power this 5% level but were made prior to May 19,1995. expenses, are based on budgeted outage costs and~the estimated outage duration. Changes to or variances from .

' Utility Plant those estimates are recorded when known or probable.

Utility plant is stated at historical costs of construction. These costs include taxes, an allowance for fun'ds used during liluclear Plant Decommissioning Costs construction. (AFDC) and payroll-related costs including The Missouri Public Service Cornmission (MPSC) and the ,

. pensions and other fringe benefits. Additions of, and Kansas Corporation Commission (KCC) require the owners replacements and improvements to units of property are of Wolf Creek to submit an updated decommissioning cost capitalized. Repairs of property and replacements of items study every three years. The most recent study was filed '

! not considered to be units of property are expensed as dJring 1996 and is currently under review by the MPSC incurred (except as discussed under Wolf Creek Refueling and the KCC. Based on this study, total decommissioning

. Outage Costs). When property units are retired or other- costs are expeqted to increase to reflect 1996 dollars; ' ~

wise disposed, the original cost, net of salvage and however, no increase in the current level of funding and .

removal, is charged to accumulated depreciation. expenses is anticipated.

AFDC represents the cost of borrowed funds and a retum The following table shows the decommissioning cost on equity funds used to finance construction projects. It is estimates and the escalation rate and eamings assumptions

~ capitalized as a cost of construction work in progress. AFDC approved by the MPSC and the KCC in 1994 with regard to .

. on borrowed funds reduces interest charges. AFDC on equity the study filed in 1993. The decommissioning cost esti- ,

funds is shown as a noncash item of other income. When a . mates are based on the immediate distrantlement method construction project is placed in service, the related AFDC, and include the costs of decontamint, don, dismantlement as well as other construction costs, is used to establish and site restoration. Plant derr,imissioning is not expected

' rates under regulaWy rate practices. The rates used to to start before 2025.

cornpute gross AFDC are compounded semi-annually and KCC MPSC averaged 8.5% for 1996,8.7% for 1995 and 7.8% for 1994.

Future cost of decommissioning:

Depreciation is computed using the straight line method Total Station $ 1.3 billion - $ 1.8 billion -

over the cstimated lives of depreciable property based oa 47% share $ 595 million $ 859 million rates approved by state regulatory authorities. Average Current cost of decommissioning (in 1993 dollars):

l annual composite rates were about 3.1% in 1998 compared Total Station $ 370 million $ 370 million i

' with 2.9% in 1995 and 1994.. 47% share $ 174 million $ 174 million Annual escalation factor 3.45% 4.50% j Wolf Creek Refueling Outage Costs Annuai retum on trust assets 6.48% 7.66%

l Forecasted incremental costs to be incurred during scheduled {

Wolf Creek Generating Station (Wolf Creek) refueling outages i l

m

. . _ _ _ _ _ _ _ . __._____i___

- .A . . - - ~.w - man ~,--~ ~ , .l--~, .--n...-..~,..- .

Di%ioT Chi P6W6ffijibhcimpeWyJHeikM%ted!InancisIAtatume6kQ1 l -_ We contribute to a tax-qualified trust fur 4 (about $3 million l Ur.ier the Nuclear Waste Policy Act oi 1982, the Department j l for each of the last three years) to be used to decommission l of Energy (DOE)is responsible for the permanent disposal  !

l .

j

] Wolf Creek. These costs weie charged to other operation  ; of spent nuclear fuel. We pay the DOE a quarterly fee of

' f expenses and recovered in rates. Based on the 1993 study, j one-tenth of a cent for each kilowatt-hour +of ne

, j contribetions are expected to increase slightly beginning in generation delivered and sold for future disposal of spent

'1 j 1997. These funding levels assume a certain retum on trust nuclear fuel. These disposal costs are charged to fuel 68 sets. If the actual return on trust assets is below the expense and recoveied through rates, anticipated level, we believe a rate increase will be allowed A permar.ent disposal site may not be available for the j ensuringfullrecoveryof 6 nmmissioningcostsoverthe ndustry until 2010 or later, although an interim facility remaining life of the uni

• Tus assumes we continue t l may be available earlier. Under current DOE policy, once be regulated.

a permanent site is available, the DOE will accept spent 1 _l

. As of December 31,1996 and 1995, the trust 'und balance, j nuclear fuel on a priority basis, the owners of the' )oldest -

including reinvested eamings, was $31 and $26 million, spent fuel will be given the highest priority. As a result, respectively. These amounts are reflected in Investments and disposal services for Wolf Creek may not be available prior Nonutility Property The related liabilities for decommissioning to 2016. Wolf Creek has an on-site, temporary storage are included in Deferred Credits and Other Liabilities - Other, f facility for spent nuclear fuel. Under couent regulatory -

guidelines, this facility can provide storage space until

). l In 1996 FASB issued an Exposure Draft of a proposed about 2006. Management believes additionsi temporary f Statement of Financial Accounting Standards, Accounting l for Certainliabilities Related to Closure or Removal of storage Long- space can be built or obtained as necessary. ,

Lived Assets, that addressed the accounting for obligations llegulatory Assets arising from dismarcJement, removal, site reclamation, and l

l FASB Statement No. 71 - Accounting for Certain Types decontamination of certain long-lived assets. FASB hopes to l of Regulation, applies to regulated entities whose rates i finalize a statement or revised exposure draft i11997. If i

.i l are designed to recover the costs of providing service. In . 1

! current electric utility industry accounting practices for such ~'

l fecommissioning costs are changed: 1) annual decommis-i .

accordance with this staterrv.snt, certain items that would N/

! I normally be reflected in tl'e income statement are deferred

' sianing expenses could increase, and 2) trust fund income

on the balance sheet. These items are then amortized as the from the extemal decommissioning trusts could be reported l

l related amounts are recovered from customers through rates.

j as investment income. We are not able to predict what ,

j affect those changes would have on results of operations, We recognize regulatory assets when allowed by a b financial position, or related regulatory practices unt]commission's the rate order or when it is probable, based on finalissuance of a revised accounting guidance. However, regulatory precedent, that future rates will recover the amortization of the deferred costs. We continuously monitor we do not anticipate results of operations to be significantly , ,

affected aslong as we are regulated. l changes in market and regulatory conditions and consider j the effects of any changes in assessing the continued ,

t Nuclear fuel

• f applicability of FASB 71. If we were unable to apply FASB .

.i Nuclear fuel is amortized to fuel expense based on the 71, the unamortized balance of $164 million of our regulatory quantity of heat produced for the generation of electicity, assets, net of the related tax benefit, would be written off. l

& ^

+

7; Ni 7 mmamw:n ,

r.

,, l Deferred bliCreek Cests [.. tax rates scheduled by the tax law to be in effect when the .  ;

The KCC and MPSC allowed continued construction : 1 L differences reverse, ,

a accounting for ratemaking purposes after Wolf Creeb's :

~

J . Regulatory Asset - Recoverable Taxes i 1985 commercial in-service dateLCertain other carrying i- r ~

t 3 future revenue requirements'necessary to recover the tax L > .

costs were' abo deferred. The deferrals were amortized .

' benefits of ex..isting temporary differences previously pas. sed -

rand recovered in rates from 1987 through'1996. l

~

through to customers. Operating income tax expense is ? q RecovereldeTues- recorded based on ratemaking principles. However, if the

~

l See the following Income Taxes section : . method used fnr the balance sheet were reflected in the ~

income statement, net income would remain the same? ,

'm flettismeet of FeelCostrects . ~

fWe deferred the cost of terminating certain coal purchase" 'investment tax credits are deferred when utilized and d c contracts. These costs are being amortized over various l 7 amortized to income over the remaining service >! liv

[perihds endingin 2002.

3 elated pyopertiet RCC bliCreek Canying Costs i Environmental Matters L Tip KCC oi$ered certain Wolf Creek carrying costs to be Environmental costs are aa. rued when it is probable a liabil{

T deferred, These costs are being recovered and amortized s

_i ity has been incurred and the amount of the liability can be'. l Jover sixyears endingis June 1997.

m 3 .

~

. i reasonably estimated. We believe all appropriate costs L s "Other

~ related to environmental matters have been recorded.

Other regulatory assets include premium on d re' eemed .

idebtfdeferred costs'to decommission and decontaminate i federal uranium enrichment facilities and other costs.

[ 2. Pension Plans and -

r

/ Tbse defeirals are amortized over various periods ^

Otlier Einployee Benefits

.,  ! extending to 2023sAlso included in other regulatory i assets are incremental costs of $8.9 million related to an - Early. Retirement Program

- October 1996 snow storm. We have ' received accounting

, in 1994,332 employees retired under a voluntary learly .

L. authority orders from the KCC and MPSC approving the .

retirennent plan. We expensed estimated pension and 'l .

r

{ defer'al of these costs. The costs will be amortized postretirementover program costs'of $16.5 and $6.0 million, 7 five years beginning in ~ January 1997' respectively ($0.22 per share). j.

..  ! -6 I. [Revenne Recognition-  ! In 1995,56 employees retired under the Wolf Creek voluntary early retirement plan. We expensed our share of l

? We use cycle' billing and accrue estimated unbilled' revenue estimated program coste of $2.1 million ($0.02 per share) -  :

Lat the end of each reporting periodf ,

, during the second quarter of 1995 - j

!' i  ;

Income Taxes --

l Pens.ion Plans i The balance sheet includes deferred income taxes for all . .

KCPL has defined benefit pension plans for its employees, U temporary differences between the tax bas.is of an asset or .

including officers. Benefits under these plans reflect the j

" liability and that reported in the financial statements. These j ,

[ deferred tax assets and liabilities are determined using the l employees' compensation, years of service and y- __:- g - - . u l 3 t

~ ~ ~ ~

[ .

retirement. KCPL satisfies at least the minimum funding P0stretirement Benefits requirements under the Employee Retirement income Other Than Pensions Security Act of 1974.-

In addition to providing percion benefits, certain post-Fundedstatusof theplans:

retirement health care and life insurance benefits are December 31 1996 1995 provided for substantially all retired employees.

(thousands)

Accumu'ated benefit obligation:

We acc'ue the cost of postretirement health care and life -

c  !'

- Vested $ 247,264 $ 251,042 Nonvested 6,526- insurance benefits during an employee's years of service.

6,474 Total $ 253,790 $ 257,516 These costs are currently recovered through rates on an

< accrual basis in Missouri and a pay-as-you-go basis in

. Determination of plan assets less obligat. ions:

. Fair value of Kansas. In 1995 we began funding the year's overall net

. plan assets ta) $ 363,285 $ 339,236 periodic postretirement benefit cost, subject to maximum Projected benefit I obligation (b) deductible limits for income tax purprses.

307,050 315,395 Difference $ 56,235 $ 23,841 Reconciliation of postretirement benefits to amounts Reconciliation of difference: recorded in the balance sheets:

1 -

Accrued trustliability $ (13,645) $ (13,890) December 31 1996 1995 Unrecognized transition (thousands) obligation 10,541 12,612 Accumulated postretirement

. Unrecognized benefit obligation (APBO)(al:

] 1 net gain Unrecognized prior 63,022 29,293 Retirees $ 20,582 $ 22,515

• Fully eligible active service cost (3,683) (4,174) plan participants 3,149 2.659 Difference ' $ '56,235 $ 23,841 Other active (a) Plan assets ere invested in insurance contracts corporate tnnds, plan participants 8,459 9,315 eauity securities. US Governrnent securines. notes, rnongages and Total APB0 32,190 34,489 (b) or age discount rates of 80% in 1996 and 7.5% in Fair value of plan assets (b) (3,620) (2,189) 1995; and increases in future salary levels of 4% to 5% in 1996 and 1995. Unrecognized transition l

j obligation (18,791) (19,965) i Unrecognized net Components of provisions for pensions (excluding 1995 and gain 3,255 892 1994 early retirement program costs): Unrecognized prior 1996 1995 1994 Accrued postretirement

{ (thousands) benefit obligation j Servicecost $ 8,164 $ 6,414 $ 8,193 (included in Deferred interest cost Credits and Other on projected Uabilities - Other) $ 12,325 5 12.441 benefit obligation 23,379 22,593 20,759 ja) Based on weightetaverage discount rates of B 0% h 1996 and 7.5% in Actualretum on 1995; and increases in future salary levels of 4% in 19% and 1995.

plan assets (40,831) (50,108) (1,143)

(b) Pian assets are invested in certificates of depasst.

Other 15,347 25,656 (22,297) l' Net periodic '

pension cost 8 6,059 $ 4,555 $ 5.512 Lontterrn rates of return on plan assets of 8.5% to 925% were used l

...~ - - - - - . . ~ - -

U spset CiW Pew a R D g N P R B M b7:GoLC&insolidated fina'ncialJtatementsd 1 Net periodic postretirement benefit cost (excluding 1995 grant date. One-half of all options granted vest one year and 1994 early retirement program costs): after the grant date, the other half vest two years after the r grant date. When exercised, recipients recei"e shares of -

1996 1995 1994 .

= l thousands) stock and accumulated dividends (as though they had been Service cost $ 574 $ 435 $ 645 reinvested). Unexucised options expire 10 years after the e interest cost , grant date.

on APB0 2,520 2,423 .2.305 Amortization of 7 KCPL follows APB Opinion 25 - Accounting for Stock issued unrecognized to Employees and related interpretations in accounting for transition obligation 1,174  ?.175 1,175 this plan. Because of the dividend provision, we expensed Other 6 (60) 75

$1.4, $1.0 and $0.4 million for 1996,1995 and 1994, Not neriodic postretirement _

' respectively. The expense includes accumulated and '

benefit cost $ 4,274 $ 3,973 $ 4,200 .

t reinvested dividends plus the appreciat. ion in stock price Actuarial assumptions include an increase in the annual

. Since the grant date. If the stock price fell below the health care cost trend rate for 1997 of'10%, docieasing exercise price, the cumulative expense related to those options is reversed.

. gradually over a four-year period to its ultimate level of 6%.

(TNe bealth care plan requnes retirees to share in the cost if KCPl. accounted for this plan using the optional, fair-value when premiums exceed a certain amount. Because of this method of FASB Statement No.123 - Accounting for provision, an increase in the assumed health care cost Stock-Based Compensation. the fair value of options trend rate by 1% per year would only increase the APB0 as granted and related expense recorded for these plans of December 31,1996, by about $704,000 and the corn would not be material.

bined service and interest costs of the net periodic post-For options outstanding at December 31,1996, exercise retirement benefit cost for 1996 by about $80,000.

prices range from $20.625 to $26.188 and the weighted - ,

long term incentive Plan average remaining contractual life is 7 years.

We have gented stock options where the exercise price Stock option activity over the last three years is equals the(narket price of KCPL's common stock on the summarized below:

1996 1995 1994 shares price

• shares price' shares price' Outstanding at January 1 266,125 $ 22.14 197,375 $ 21.87 145,125 $ 22.60

. Granted 59,000 26.19 68,750 23.06 69,125 20.63 Exercised . (26,250) 22.27 - -

(6,000) 21.63 Canceled - - - - (10,875) 23.88 Outstanding at December 31 298,875 $ 22.96 266.125 $ 22.18 197,375 $ 21.87 Exercisable as of December 31 206,500 $ 22.02 162,813 $ 22.14 102.125 $ 22.20

• weghted amage enarcase pree

?

Vtennt City]oditnGhRomp:ny,9 Notes tic nsolidsisd 9 finencial $[tTee hts 4

3. lHcome Taxes The t x effects of major temporary differences resuiting in defened tax assets and liabilities in the balance sheets are Income tax expense consisted of the following:

as folloA'r 1996 1995~ 1994 (thousands) December 31 1996 1995 Cunentincome taxes: (thousands)

Pi nt related $ 562,287 $ 572,792 Federal $ 35,816 $ 69,697 .$ 42,736 .

8,762 11,944 ea m , ,000

. State 7.462 Other 29,165 21,635 ,

Total 44,578 81.641 50,198 Net deferredincome Deferred income taxes, net: taxliability $ 640,452 $ 642.427 -

Federal (7,441) - (3,152) 17,005 State (1,221) 3,519 The net deferred income tax liability consisted of (116)

Total (8,662) (3,268) 20,524 the following:

! Investment- December 31 1996 1995 tax credit- (thousands) amortization Gross defenedincome -

and reversals (4,163) (11,570) (4,345) tax assets $ (60,979) $ (61,181) ,

Totalincome tax Gross deferredincome taxliabilities 701,431 703,608_

expense ' $ 31,753' $ 66.803 $ 66,377 Net defened income taxliability $ 640,452 $ 642,427 KCPL's effective income tax rates differed from the stettnory federal rates mainly due to the following:

1996- 1995 1994 4. C0mmitm8HIS and COnling6HCieS Federalstatutory . .

. income tax rate 35.0 % 35.0 % 35.0% Nuclear 1.iability and insurance -

s Differences between book andtax Liabilityinsurance depreciation The Price-Anderson Act currently limits the combined not normalized (0.4) 1.2 1.2 Amortization of public liability of nuclear reactor owners to $8.9 billion for -

investment claims that could arise from a single nuclear incident. The tax credits . j- (3.0) (2.5) (2.5) owners of Wolf Creek (the Owners) carry the maximum income tax credits (9.1) (2.3) (0.2) l i

Stateincome taxes 3.5 4.1 4.2 available commercialinsurance of $0.2 billion. The Other (3.3) (0.?) 1.1 remaining $8.7 billion balance is provided by Secondary Effectiveincome Financial Protection (SFP), an assessment plan mandated tax rate 22.7 % 35.3% 38.8% '

. by the Nuclear llegulatory Commission. ,

I i Under SFP if there were a catastrophic nuclear incident ul 3 invoMng any of the nation's licensed reactors, the Owners

{

would be subject to a maximum retrospective assessment per incident of up to $79 million ($37 million, KCPUs share).

i v..+-- - - . , . ,- . . . . - . -

1

y 4 s gg y .

_ emanusumuusumamannut m

i -

a >

M 5The Owners are jointly and severally liable for these lOther d l'

' charges,

payable'at a rate not to e' xceed $10 million ' >

In the event of a catastrophic loss at Wolf Creek, .

l$5 million, KCPUs'sha're) per incident per year, excluding -  ; the insurance coverage may not be adequate to . <

' appdcable premium taxes. The assessment, most recent% : ; cover property damage and extra expenses incurred. ,

L tevisedin 1993, is s'ubject to an inflation adjustment every Uninsured losseh, to the exte' n t not recovered through .

five years based on the Consumer Price Indei rates, would be' assumed by KCPL and could have a I

[Neperty,Decentamination sid ; ' material, adverse effect on our financial condition and .

( Premature Decommissioning'lasurance o

- results of operations?

p]

The Owners also carry $2.8 billionl$13 billion, KCPUs Nucleat Fuel Commitments -

Yshke) of property damage, decontamination an$ premsture '

w .

As of December 31,1996, KCPL's portion N Wolf Creek'

" idecomm , issioning insurance fo'rloss resulting from dabge .

+

nuclear fuel commitments included $130 million for a y O tbthe M/olf Creek fabities Nuclear insurance pools 1 enrichment and fabrication through 2025 and $15 million '

( provide $0. 5 billion of coverage, while Nuclear Electric . .

for uranium and conversion.through 200t s"

~ In'suranc's limited (NEIL) provides $23 billion, Environmental Matters .

. In the event of an accident; insurance proceeds must first '

. . . . -  ! i .

i be used for reactor stabilization and site decontamination. KCPL's operations must comply'with federal, state and '

! KCPU shareof anyremainingproceedscanbeusedfor local environmental laws and regulations. The generation

property damage and premature decommissioni,ng costs.

and transmission of electricity uses, produces and requiresl 'i Premature decommissioning coverage applies only if an disposal of certain products and by-products, including '

~

accident at Wolf Creek exceeds $500 million in property polychlorinated biphenyl (PC8s), asbestos and other O Jdamage and decont' amination expenses, and only after potentially hazardous materials. The Fedural Compre- f l trust funds have been exhausted (see Note 1 - Nuclear - hensive Environmental Response, Compensation and.

Plant Decommissioning Costs). Liability Act (the Superfund law) imposes strict joint and 1

seve .,1 liability for those who generate, transport ' r-o' 1 Extra Expense ' Insurance - .,

/- deposit hazardous waste. This liability extends to the H including Replacement Power- .

l current property owner as well as prior owners since the i

/The Owners als'o cary additionalinsurance from NEIL

. time of contamination. We continua:ly conduct environ-  ;

to cover costs of thplacernent power and other extra i mental audits designed to detect contamination and j i expenses incurred in the event of a prolonged outage  !

ensure compliance with govommental regulaticas.

,  ; resulting from accidental property damage at Wolf Creek. - <;

However, compliance programs needed to meet future l

[ Retisspective Assessments ' . environmentallaws ar.d regulations goveming water and <

I Under all NEll policies,' KCPL is subject to retrospective air quality, including carbon dioxide amissions, hazardous

! assessments if NElllosses, for each policy year, exceed - waste handling and disposal, toxic substances and the the accumulated funds available to the insurer under. that effects of electromagnetic fields, could require substantial policy.The estimated maximum amount of retrospective - changes to operations or facilities.  ;

, i assessme'nts to KCPL under the current policies could total I

h v about,$8 miIlion. ,

T ,

_, _. . rg-gi u

3 GXahtsi Chy]ocer Et LlihtlCghp0MLNotes solodblidated ilhancial;StatimhtsM

(

long term Coal Contracts total $267 million through 2016. During 1996,1995 and 1994, cap city purchases were $26, $17 and $13 million,

- KCPL's share of coal purchased under long-term contracts respectively. For the years 1997 through 2001, these com-was $36, $42 and $21 million in 1996,1995 and 1994, m men amage $22 m%on p yean For came w "

' respectively. Under these coal contracts KCPL's remaining five years, net capacity purchases represent about 11% of <

share of purchase commitments totals $113 million. .

KCPL's 1996 total available capacity.

Obligations for the years 1997 through 2001 total

$34, $20, $20, $10 and $10 million, respectively. The Legal Proceedings remainder of our coal re0uirements are fulfilled through spot market purchases.

y teases 5. Securities Available for Sale KCPL has a transmission line lease with another utility KLT Inc., a wholly-owned subsidiary of KCPL, held a $5 mil-whereby, with FERC approval, the rental payments can be lion investment in convertible preferred stock. In September increased by the lessor. If this occurs, we can cancel the 1996 the investee company comp!cted a public offering lease if we are able to secure an attemative transmission triggering conversion of the preferred stock into common path. Commitments under this lease total $2 million por stock. As a result of the conversion, the carrying value of year and $54 million over the remaining life of the lease if

. the investment at December 31,1996, was adjusted to its it is not canceled-market value of $15.2 million. The $10.2 million increase in Rental expense for other leases including railcars, computer market value over original cost <esulted in an unrealized ,

equipment, buildings, transmission line and other items was gain at December 31,1996, of $6.5 million (net of deferred

$18 to $20 million per year during the last three years. The taxes cf $3.7 million). .

remaining rental commitments under these leases total

$174 rnillion. Obligations for the years 1997 through 2001 6. Sale Of Acconuts Receivable U avorage $14 million per year. Capital leases are not material As of December 31,1996 and 1995, an undivided interest 6

- and are included in these amounts.

in $60 m!!! ion of designated customer accounts receivable As the managing partner of three jointly-owned generating was sold with limited recourse. Related costs of $3.5, $3.8 units, we have entered into leases for railcars to serve and $2.8 million for 1996,1995 and 1994, respectively, those units. The entire lease commitment is reflected in weie included in Other income - Miscellaneous deductions.

the above amounts although about $2 million per year

($31 million total) will be reimbursed by the other owners. ~

7. Short term B0rr0 Wings Purchased Capacity Commitments short-term borrowings consist of funds borrowed from We purchase capacity from uther utilities and nonutility banks or through the sale of commercial paper as needed.

suppliers. Purchased capacity gives us the option to pur. The weighted-average interest rate on the short-term debt chase energy if needed or when market prices are favorable. outstanding as of December 31,1995, was 5.9%. As of This provides a cost-effective altemative to new construction. December 31,1996, under minimal fee arrangements, $;

As of December 31,1996, contracts to purchase capacity unused bank lines of credit totaled $280 million.

g__ _

• o

( 4

WKIiiefCithiwer 8 light Cbmpany: JVotnito]irisblidated financreI5tkcmentsf l

8. Common Stock Equity, Preferred Stock As of December 31,1996,0.4 million shares of $100 par Cumulative Preferred Stock,1.6 miWion shares of Cumulative and Redeemable PreIcrred Stock

, No Par Preferred Stock and'11 million shares of no par Common Stock Equity Preference Stock were authorized. We have the option to redeem the $89 million Cumulative Prefeded Stock at KCPL has shares of common stock registered with the

. prices p roximating par or stated value.

Securities and Exchange Commission for a Dividend ,

Reinvestment and Stock Purchase Plan (the Plan). The Pian allows common shareholders, directors and employees to . 9, l.ong term Debt

. purchase shares of the common stock by reinvesting divi-dends or making optional cash paymentsuWe a'e currently General Mortgage Bonds and Unsecured Notes purchasing shares for the Plan on the open rnarket.

KCPL is authorized to issue mortgage bonds under the As of December 31,1996 and 1995, KCPL held 12,907 and General Mortgage Indenture and Deed of Trust dated 6,643 shares of its common stock to be used for future December 1,1986, as supplemented. The Indenture N distribution, respectively. The cost of these shares is creates a mortgage lien on substantially all utility plant, included in Investments and Nonutility Property.

As of December 31,- 1996, $644 million general mortgage The Restated Articles of Consolidation contain a restriction bonds were pledged under the indenture to secure the out- '

relating to the payment of dividends in the event common standing medium-term notes and revenue refunding bonds.

d equity falls to 25% of total capitalization.

KCPL is also authorized tu issue up to $300 million in if preferred stock dividends are not declared and paid when unsecured medium term notes under an indenture dated scheduled. KCPL could not declare or pay common stock December 1,1996. This indenture prohibits KCPL from

' dividends'or purchase any common shares. If the unpaid issuing additiona! general mortgage bonds while any preferred stock dividerids equal four or more full quarterly unsecured notes are outstanding. As of December 31 dividends, the preferred sharehulders, voting as a single 1996, no unsecured notes had been issued.

's class, could elect members to the Board of Directors.

Interest Rate Swap and Cap Agreements Preferred Stock and As of December 31,1996, we had entered into five interest Redeemable Preferred Stock rate swap agreements and three cap agreements to limit Scheduled mandatory sinking fund requirements for the the interest rate on $120 million of long-term debt. The swap redeemable 4%' Cumulative Preferred Stock are 1,600 agreements mature from 1997 to 1998 and effectively fix shares per year. Shares issued as of December 31 totaled . the interest rates en $60 million of variable-rate debt to a 12,757 in 1996 and 14,357 in 1995. Shares held by KCPL at

• 0* *'*0 "* * " * '

. The cap agreements limit the interest rate on $60 million of December 31 to meet future sinking fund requirements variable-rate debt to 5.0% expiring through 1998.

totaled 12,134 in 1996 and 3,192 in 1995 The cost of the shares held at the end of 1936 is reflected as a reduction of As of December 31,1995, we had entered into eight -

the capital account while at the end of 1995 is included in interest rate swap agreements and three cap agreements investments and Nonutility Property. - limiting the interest rate on $150 million of long-term debt.

Neu=uus

QL, '

p, , <

3 y [I u , . . . , . . s,,

..>a-rs ' -- '

r

' 'l MaaseslChii%gedWUgWComien~j)LMotitjaTeiiihketstfinansW8tetenn68tWd ? i m

e shap rgreements ' matured from 1996 to 1998 and - Wolf - . . .

' effectively fixed the Interest ratos on $90 rhillion of variable; ,

ee gW "

nt  !

L rato debt td a weightedivorage rate of 3.7% as of .

. KCPUs share ? 47%' 50%- 70%

December 31i1995?The cap agreements limited the . interest i . Utility plant in service , $ 1,344 ' ; $ 287 $;244L s

~

- rate' on $60 milDon of variable-rate debt to 5.0% expiring i Estimated accumuiated~ .

?thr'o ugh 1998? ' i >

depreciationi _ . i.

m . (production plant .

~

JThese swap and cap agreements are with several h'ghlf i  ; only) $ 357i $ 171J $)129l ,

E  ; rathd financial institutions and simhly limit our exposure to .

. Nuclear fuel, net - $: 39 - ' $ - $'- ,

4

1. . . . . . . . . . . - - -

. KCPL's accredited ancreases in interest rates. They do not subject KCPL capacity - - 1

, , s to any material credit or market risks. The fair value of J megawatts. 548i .'672 469 'E i

$ these agreements is imma'terial and is tot reflected in the x financial sta'tements' Although' derivatives are an integral 1 . Each owner must fund its own portion of the plant's oper 1 f

4 ,

part of our interest rate management, their incremental effect ' ating expenses abd capital expenditures. KCPL's share 'of1 i

on interest expense for 1996 abd 1995 was insignificant.

- direct expenses is included in the appropriate operating.-

. .. .~ '

i 4 iSubsidiary Obligations' i expense ci ssificati ns in the incomo statement. Westem)

' Resources, Incl (Westem Resources) also owns a 47% L j

? During 1995 KLT entered into a lonhterm revolving line ' '

M

^

share of the' Wolf Creek unit and a 50% share of ths '

of credit agreement for $65 million collateralized by the -

t,-,> .

. LaCygne units (see Note 11)..

4  ; capital stock of KLT's direct subsid . .ianes During 1996 KLT .

~

amended this agreement, extending the amount of credit .

3 9 available to $150 million. 0ther significant terms were not i

11. Agreement and Plan of Merger-d changed. The affordable ho'! sing notes are collateralized by .

with Western Resources

.ths ' affordable housing investments. ~j

. . On February 7,1997, KCPLand.Westem Resources - ,

Scheduled Maturities . . ,

entered into an Agr'eement and Plan of Merger (the Merger .

Long-term debt maturities for the~ years 1997 through 2001 - - Agreement) to form a strategic business combination. The

. are $27, $73, $136, $66 and $91 million, respectively. effective time of the merger is dependent upon all condia

1. tions of the Merger Agreement being met or waived. At z o

~t he effective time, KCPL will merge with and into Western i i10.;Jo.m:tly-owned Resources, with Western Resources being the surviving . ,

Electric Utility Plants corp &ation. .

Ooint ovinership agreements with other utilities provide . Westem Resources first delivered an un'solicited exchange

- undivided interests in utility plants as of December 31,1996, offer to KCPUs Board of Directors during the second quarter 1 L as foQows (in millions of dollars): , of 1996. This initial offer, subject to numerous conditions, proposed the exchange of $28 (later increased to $31) . j t

worth of Westem Resources stock for each share of KCPL ,

t

' stock. After careful consideration, both offers wore rejected -

[-  ;

- by KCPUs Board of Directors. In July 1996 Westem Resources ,

L! ,

s j: ' t

-. -g .-

I i

t -4 ) a -

~ __

s 3 =

m J.  ;

_pt , s c > r e<' '

j',

^C- 'I

= 1 O; Z.d .. ' ' - ' '

' i.i . _ - " ' '

kihn:l w ~

WOWHa*O*tHNkrW50leit*Nat*M .- . 1 3

7 .. XVu '

Jcommence an exhhange offer for KCPL bortim~on skock. ness: In .combination with a third party that made a proposal j g . -- L -

t

IEe,1996 KCPL began diciissing a possible merger with. ; , to' combine prior to termination. Western Resources will

j f- '

3:

J , ,

.;N ,. , F _

$ Western 'Rescuices l'ea'1d"ing to the Merger Agreement.N . pay K' CPL $'5 to $35 millionif ,the M ' erger Agreement is -

+< _,,

p, terminated snd all closing conditions are satisfied other a

' Under the terms.of the. Merger Agreement lKCPL commonj .

' than conditions relating to Westem Resources receiving a; i

" stock will b,e ex, changed for Westem Resources common ' t c yz m . .- - -  : * - .

favorable tax . opinion,"a favorable letter from its accountants 1 ,

, 4tock valued at $32.00, subject to a convers. ion ratiolimiting

- . . : - a s. o .regarding pooling accounting, favorable statutory approvals;:  !

T  :.. the am.ount of Westem Besource*s common stock that ' -

t -

- ~ - m. . .- - .

. or an exemption from the Pubhc Utility Holding Company :

q 1 holders of KCPL common stock would rec'eive per share lof .

.....-' 4

. .- ..g.. '

shares Act of 1935.

l'

i KCPL common stock to'no mors than.1.1 (if Westem

<

$ Resources' stock is priced at or below h29.U9 a per sh'Inre),-' February 1997 KCPL paid dtiliCorp United inc. (UtiliCorp) a Jand nh EssIhan 0.917 shires (if Westem Rosources' ' $53  : million for agreeing to combihe with Westem Resources L '

l l stoEk is prIbd/t'or above $3b0 per sharek However,  ; within'two and one-half years from the termination of KCPL's; j there is a provision in the Merger Agreement that allows.

agreement to merge with UtiliCo.rpiThis agreement was

, o JKCPL ot' terminate the merger if Westem Resources'stockL [ ' terminated due to failure of KCPL' shareholders to approvei <i a

' price drops below $27.64, and the decline excoeds ba%

the transaction with UtiliCorp.' '

H h - Snkdecline in the Standard arid Poor's Electric Companies :

]

L Index. Westem Resources co'uld avoid this temiination by : - . - -

4 ..

improving the conversion rat.io. .12. Omarterfy Operating Results (u dii.d)

^1 s -c

) ,

iThe transaction is subject to several closing conditions Quarter -

- including approval by each company's shareholders, 1 996- 1st 2nd (millions)'

3rd ' 4thD

{ H Yapproval by a number of regulatory authorities (statutory Operating . ,

g J approvals) hnd dissenting shares equaling less than 5.5% $ 270; ;$ 201 . '

. revenues $ 207 . $ 226 i of KCPL's outstanding shares. If the effective time has not Operating income 35 - 42 , 68 - ' 33 '

[ occurred by June 30,1998 (the termination date), either - Net income .- 25 :27 -36 . 20 ..

' party may t'erminate the agreement as Idng as they did not  : ar P c no share - $0.38 $0.43 L $0.57 $0.31 Lcontribute to the delay. This' termination date will b'e autoi

} j I Y mitically extended to June 30,1999;if all of the Merger Quarter Y

" Agreeme'nt closing cond.tions have been met except for 1995- 1st 2nd' 3rd ' 4th l I

/ certain conditions relating'to : statutory approvals.

Operating b

r

. revenues - $ 199 $ 205. $ 278 . $ 204

IIG Merger l Agreement does not allow KCPL to increase Operatingincome - . 20 31 72 ' 35 l!

?

i its conmionl stock dividend prior to the effective time or - Net income- 23 19. 58 23 L 5 thrminationilt also requires KCPL to reduem all outstanding . .

Eamings per ' .

l F Idhares obreferred sfock prior to completion of the merger. . common share .$0.35 s $0.29 : 30.91 = $0.37 w y

If the. Merger Agreement is terminated under certain . The quarterly data is subject to seasonal fluctuations with i

(circumstances, a payment of $50 million will be due peak periods occurring during the summer months. As a j '

Wostern fiesources if, within two and one-half years result of terminating the merger agreement with UtiliCorp, Cfollowing termination 3 CPL agrees to consummate a busi- $13 million in previously deferred merger costs and a .

p ,

r -

' uker4* apnye. t mah m^7*  %. M ..W-m'

% k n

.. p ;, ,

~k Y t

\1 VKanw?MitVfoyer & Light CaiUanV:iReport of]ndependent AccoOntants1 s5 million termination fee were' expensed lowering 1996 Report OflRdependent accountants third quarter eamings. During 1996 about $13 million in costs to defend against Westem Resources'concited To the Shareholders and Board of Dire;; tors exchange offer were expensed ($5 million during the Kansas CityPower & Light Company:

second quarter and $8 million during the third quarter).- l*

sheets and statements of capitalization of Kansas City -

13. Legal Pr0CeedingS Power & Light Company and Subsidiary as of December 31, 1996 and 1995, and the related consolidated statements of Jack R. Manson (Manson), as a representative of KCPL's -

income, retained eamings, and cash flows for each of the N -

shareholders, alleged in a District Court proceecing, that three years in the pericd ended December 31,1996. These

-e KCPL and its directors breached their fiduciary duties in finam:ial statements are the responsibilii, J tw.nmpany's - .

' adopting the Amended Merger Agreement with UtiliCorp , '

mar,agement. Our responsibility is to express an opinion on (Agreement). Manson also alleged their actions 1) were . -

these financial statements based on our audits.

illegal,2) illegally deprived KCPL shareholders of voting and appraisal rights under Missouri law, and 3) were a 7 We conducted our audits in accordance with generally .

' disproportionate response to Westem Resources' acquisition 'l accepted auditing standards. Those standards requi offer. Also, on June 7,1996, Westem Resources and we plan and perform the audit to obtain reasonable assur-

• Robert L Rives each alleged against KCPL in the same ance about whe:her the financial statements are free of -

9 g . court proceeding, that the Agreement was isegal under material misstatement. An audit includes examinir.g, on a Missourilaw and the directors had breached their fiduciary test basis, evidence supporting the amounts and disclosures s

duties by adopting the Agreement. in the financial statements. An audit also includes assessing the accounting principles used and significant By order r4ted November 25,1996, the District Court estimates made by management, as well as evaluating -

4 allowed Manson to amend his allegation to allege that the the overall financial statement presentation. We believe directors breached their fiduciary duties by refusing to that our audits provide a reasonable basis for our opinion.

negotiate a merger with Western Resources and committed ~

reckless, grossh; negligent, or negligent waste of corporate in our opinion, the financial statements referred to above assets by pursuing the merger with UtiliCorp. Manson seeks present fairly, in all material respects, the consolidated -

monetary damages in an unspecified amount for the waste financial position of Kansas City Power & Light Company of corporate assets. KCPL fi!ad a motion on December 9, and Subsidiary as of December 31,1996 and 1995, and p

1996, to dirmiss Manson's amendment; it is curently the consolidated results of their operations and their cash flows for each of the three years in the period ended ' ~

pending before the District Court. The Company cannot '

predict the outcome of these proceedings at this time. December 31,1996, in conformity with generally accepted accounting principles.

^

14. Subsequent Events u. s W er#f' In 1997 KLT closed investments tota ling nearly $60 million Kansas City, Missouri financed through additional bortowings. f ebruary 14,1997 e

~

1 . .

t 1 .. .

s

~

UWisRsWPowerfLl5t Companir:Allicers hnd Directors 43

< e i

KCPL0fficers* KLT Inc. Officers" ' W. Thornas Grant 11 Drue Jennings,50 Ronald G. Wasson,52 Exec i e Officer, Chairman of the Board and President Resident Seafield Capital Corporatica 1980 1995 a holding company with a focus on health

' Barnard J. Beaudoin,56 Mark G. English,45 - care andinsurance services g Executive Vice President and . Vice President end General Counsel Chairman of the Board, President and Chief FinancialOfficer 1995 Chief Executive Officer, 1984 David M. McCoy,49

. Lab 0ne, Inc.

Marcus Jackson,45 , Vice President- centralized laboratory that markets -

Executive Vice President and Business Development clinical, substance abuse and -

Chief Operating officer 1996 insurancelaboratory services 1989- Floyd R. Pendleton,53 George E. Nettels, Jr.

Turner Whitef 48 Vice President .

Chairman of the Board, Executive Vice President - Business Development

' Corporate Development Midwest Minerals,Inc.

1992

< 1990 Jan6e C. Rosenthal,35 # "##### "'"#""### ' "## "# ""#

quany paaem .

' John J. DeStefano,47 Corporate Secretary and Treasurer President, .

. Senior Vice President - 1992

. Business Development : Yampa Resource Associates,Inc.

Teresa Cook' 36 ""'# '""# '" "*" #"*U "

1989 .

Controller Jaanie Sell Latz,45 1997 Dr. Linda Hood Talbott i

. Senior Vice President Corporate President,

..ustina includes name. titia and year named Services Corporate Secretary and ro7 inc. or,,cer Talbott Et Associates l

Chief Legal Officer ^ consultantsin strategicplanning.

1991 phaanthropic management and

' Frank L. Branca,49 development to foundations and

'"#"8N8"#

s Vice President e Wholesale and Board Of Directors Transmission Services Chairman ~

Center for Philanthropic Leadership C rman of the Board and President Steve W. Cattron,41 s

~

Vice President - Marketing and Sales Dr. David L. Bodde 1994 Charles N. Kimball Professor of hha n ft Boa d and Chief Executive Officer, ~ ,

Charles R. Cole,50 Technology and innovat.in at the Butler Manufacturing Company Vice Piesident -Customer Services Blo,ch School of Business. supplier o/non-residential Utwercity of Missouri-Kansas City an Purchasing building systems

~"'*'"*'"""'"'"*"""*

Doug M. Morgan,54 ei n

> Vice Presiderit -Information -*

Urban League of Greater Kansas City hnolo91 communityservice agency .

9 Richard A. Spring,42 Robert J. Dineen***

ce President - Prnduction C rm e Chri' stensen Company Bailui M. Tate Jr.; 50 #"' "# #"'" ' *#""# ,

Vice President-Human Resources Arthur J. Doyle ***

1994 Retired Chairman of the Board Neil Roadrnan,51 .

Controi!er 1980 Mark C. Sholander,51 f

Genetal Counsel 1986 Andrea Bielsker,38 Treasurer 1996 tistmo includes age. inie and year promoted to othcet

~

L__ _ _ - - - - - . -_

~ y, 4 , , ,,

Summary of Operations and Financial Data

. Summary of Earnings in-w 1996- 1995. 1994 1993 1992 1986 Operating Revenues $ 903,919 $ 885,955 .$ 868,272 $ , 857,450 $ 802,668 $. 719,938 Operating Expenses : 726.106 ' 718,907- 718.581 < 701,148- 662,094 566,907 Operating Income 177,813 167,048 149,691' 156,302 -140,574 153,031

Otherincome (11,559)- 10,060- 2,500 1,909 3,163 (41,569)"

income Before ' ' -i.

Interest Charges ' '166,254 177,108 152,191 158,211 143,737 111,462-

. interest Charges 58,083 54,522 47,416 52,439 57,403 101,093 Net income 108,171 122,586 104,775 .105,772 86,334 10,369 "

f Preferred and Preference Stock Dividend Requirements 3,790 4,011 3,457 3,153 3,062 19,973 Available for Common Stock $ 104,381. $ 118,575 $ 101,318 $ 102,619 . $ 83,272 $ (9,604)"

Capitalization n%mt Common Stock Equity $ 910,449 $ 897.938- $ 874,699 .$ 866,151 $ 853,J24 $ 764,163 Preferred Stock 89,000 89,000 89,000 89,000 89,000 92.000 Redeemable Preferred Stock 62 1,436 1,596 1,756 1,916 32,876 Redeemable

' Preference Stock - - - - - 8,333 Long-term Debt- $ 970,727 $ 909,516 $ 831,889 $ - 868,152 $ 814,709 $ 1,130,114 00mm0n Stock Data Average Shares .

Outstanding enousanal 61,902 61,902 61,903 61,909 61,909 61,884 Eamings per Common Share $ 1.69 $ 1.92 $ 1.64 $ 1.66 $ 1.35 $ (0.16)"

lictum onYear-end Common Equity 11,5 % 13.2% 11.6 % 11.8 % 9.8% (1.3)%

Cash Dividends per Share $ 1.59 $ 1.54 $ 1.50 $ 1.46 $ 1.43 $ 1.05 BookValue per Share $ 14.71 $ 14.50 $ 14.13 $ 13.99 . $ 13.79 , $ 12.34 Common Stock Equity Ratio . 46.8% 49.2% 49.6% 51.2% 49.3% . 38.7%

Common Stock Price High $ 29 % $ 26 % $ 23 % $ 26 % $ 24h $ 16 %

tow . '$ 23 % $ 21h $ 18 % $ 21h . $ 19 % $ 11 %

OtherData and Ratios Utility Capital j

Emenditures wm $ 100,947 $ 134,070 $ 124,965 $ 129,199 $ 129,559 $ 72,386 Total Assets we $ 2,914,512 $ 2,882,506 $ 2,770,397 $ 2,755,068 $ 2.646,923 $ 2,665,855 Ratio of Eamings to Fixed Charges 3.85 3.94 4.07 3.80 3.12 l 1.27

• Inciades amounts to be redeemed or purchased and current maturites

" Company applied FASB Statement No 90, resulting in a write-off of $96.1 milhon after taxes. -

y

g ,

_ _ _'[T:asse City Power A light CombbnyMikctrit StsristicsM .

m KElectric Statistics-Electric Sales

' Statistics 1996 1995 1994 1993 1992 1986 Revenues (thousands .

, Residential $ 306,340 $. 306,171 $ 288,872- $ 287,862 $ 258.124 $ 233,398 Commercial 379,824 370,467 361,254 360,219 351,024. 289,206 Industrial 119,395 114,539 '116,271 121,515 118,389 .110.373-DIher ' 14,488 14,303 - 14,223 14,514 14,316 13,101 ,

Totai retail - 820,047 805,480 780,620 784,110 - 741,853 646,078

- Bulk power 71,894 65,749 - 76,180 60,636 48,058 55,068

Other sales for resale - 3,549 3,143 3,459 4,445 4,319 I 5,167 Total. 895,490 874,372 - 860,259 849,191 706,313 794,230 j Other electric revenues 8,429 11,583 B,013 8,259 8,438 i 3,142

> Total- $ ' 903,919 $ 885,955 $ 868,272 ' $ 857,450 $ 802,668 l $ 709.455 -

Megawatt-Hour Sales

Residential 3,906,196 3,879,975 3.644,789 3,582,925 3.172,611 2,839,310

' Commercial 5,659,237 5,422,077 5,283,884 5,141,169 4,984,285 . 4,034,403 Industrial 2,737,464 2,573,883 2,561,695 2,507,205 2,429,883 2,266,131 Other' 62.700 65,492 69,612 72,556 72.129 - 70,881 Total retail. 12,365,597 11,941,427 11,559,980 - 11,303,855 10,658,908 l 9,210,725 Bulk power 4,071,222 4,045,225 4,733,951 3,725,115 2,940,905 j - 3,112,236 Other sales for resale 100,809 78,127 87,334 108,581 102.971 4 113,134 Total 16,537,628 16.064,779 16,381,265 15,137,551 13,702,784 j 12,436,095 Ayersoe Number of Customers -

l Residential 381,389 377,302 372,098 367,792 365,069 l 331,587

. Commercial 50,677 49,797 49,763 49,004 48,522 43,293 ,

' Industrial 2,814 2,677 2,271 ~ 2,317 2,328 2,558 Other 123 131 130 131 133 133 Totairetail 435,003 429,907 424,262 419,244 377,571 416.052 ]

Bulkiower . 28 22 32 25 24 l 22 Other sales for resale 12 11 12 12 12 ! 12 Total 435,043 429,940 424,306 419,281 416,088 l 377,605

' Residential Sales , j l Average mwh per customer 10,2 10.3 9.8 9.7 8.7 8.6 Average revenue per kwh 7.8c 7.9e 7.9e 8.0c B.le 8.2e j Lsed Statistics .

a . Net generation-mwh - 16,128,325 15,852,834 16.158,937 14,558,295 13,416,669 12,115,894 Purchased-mwh 1,218,715 969,525 980,306 1,206,514 924,107 965,612 Total-mwh 17,347,040 16,822,359 17.139,243 15,764,809 14,340,776 i 13,081,506 Maximum net hourly demandin ,

megawatts-winter - 2,012 1,864 1,810 1,713 1,687 1,490 megawatts surnmer 2.987 2.909 2.714 2,819 2,624 2,373 Net generating capability in megawatts (summer) 3,134 3,103 3,098 3.085 2,937 3,089 ;

Net capacity purchased  ;

summer (megawatts) 408 426 453 380 306' 41 Btu per kwh generated 10,669 ~ 10,619 10,553 10,641 10,632 10,754 Numbar of Employees December 31 2,257 2,330 2,362 2,735 2,782 i 2,771 December 31-adjusted

• 2,682 2,643 2,738 3,130 3,181 i 3,039

• Excludes employees allocated to other partcipating companies at laCygne ar.d latan stations and includes employees allocated fromWoll Creek.

g _

UTGiTcTry: Paw stim,i&nicsbmtMinwmetied ShareholderInformation Dividend Reinvestment and .

Stock Purchase Plan

,7

.p .g'g,g KCPL offers its common stock shareholders the opportunity to increase their investment through a Dividend Reinvest-Copies of KCPL's 1996 annual report filed with the securities and Exchange Commission on Form lo-K rnent and Stock Purchase Plan. Quarterly common stock will be provided at no charge to any shareholder or dividends may be automatically reinvested to purchase beneficial owner of shares in KCPL's stock upon common stock. Optional cash amounts, ranging from $100 F written request to: to $5,000, may also be invested monthly toward the pur .

Corporate secretary .

chase of additional shares. Shareholders.may choose to -

Kansas City Power it Light Company surrender their stock certificates to.the transfer agent for

- P.O. Box 418679 deposit (safekeeping) in their Disidend Reinvestment Kansas City, Missouri 64141-9679 accounts. For more informat;on or an authorization form,

' " * * """ "' " #8 " ' " ' ' '

Exchange Listing and Stock Symbol Common stock is listed on the New York Stock Exchange DireCl Deposit of Dividends -

- (NYSE) and the Chicago Stock Exchange. Convenient direct deposit of dividends is available to share .

Ticker Symbol: KLT holders who wish to have dividends deposited directly to Number of common shareholders: 26,763 on pers nal checking, savings or other accounts. Electing December 31,1996, direct deposit will change only the mailing of dividends.

Annual reports and proxy materials will not be affected. For

. All dividends paid by KCPL in 1996 were determined to an enrollment form, please contact Investor Belations or '

l be dividend irwome and no portion was considered a retum UMB Bank, n.a.

ofcapital Shareholder inquiries Common Stock Dividends Paid For account information or assistance, including change of Guarter 1997 1996 1993 address, stock transfers, dividend payments, duplicate First $0.405 $0.390 $0.380 accounts or to report a lost certificate, please contact .

Second 0.390 0.380 Investor Relations at 800-245-5275.

Third 0.405 0.390 Fourth . 0.405 0.390 Financiallnquiries Security analysts and investment professionals seeking >

financial information about KCPL may contact Investor Preferred Stock Dividends Relations at 816-556-2312.

Quarterly dividends on preferred stock were declared in '

each quarter of 1996 and 1995 as follows:

Transfer Agent and Stock Registrar '.. ,

UMB Bank, n.a.

Cumulative Preferred Stock Series Amount Securities Transfer Division P0. Box 410004 3.80% $0.95 Kansas City, Missouri 64141-0064 4.00% 1.00 4.20% 1.05 816 6 -7786 43 4 ggj $5 Annual Meeting of Shareholders

. All shareholders will receive in April proxy materials and information about KCPL's annual shareho!ders' meeting.

IWD Year Common $10ck History Any questions may be directed to investor Relations at <

Krh's common stock price range was as follows:

800-245-5275.

1996 1995 "

Ouarter - High Low High Low World Wide Weh Site First $27% $24 $24% $22% information available includes Company news releases, i Second- 27 % 23 % 24 % 22 % stock quotes, customer account information and information

- Third 28 % 26 % 24 % 21 % about KCPL's products and services. You can visit the site

. Fourth 29 % 20 % 26 % 23 % at www.kcpl.com.

[*3 f .. .

,.,,- e# ..m4.

'- g

,3. e&'pydM. u . , ,njp Q ( ' , ,* gd' u.1 T t9 .. i @' i I /9 e. d 'J ie 3

y.. g-. c.e, m yw Mr;g gy% ,

r c

w n .m w , .;

f . g (,v o

a( =g*

j*.-8 n !w , (

', .+

5 f , ,4 9

.rI,.,. ,

- M;.: ,'). )

~

.m, .

..f.

.y ,, , ,

, j hf.f.h .Y '

8 E y l l '.

.R l> { [.~) i;.l  % < r

?

., yf,} -

.,v3 an -

p M, g; ~ e #@>c

. + . >

w s. . - -;7".y-s <

, p .4,. n(wo a

'M

.* ~ '

'7,g9.. . ,m" t :k s;;,.q .? {n%, -

. x

)-

.g 4 4, r v g,

T.",

• ' j%;; fL ) : g&%. " pn)l y -

: ') \

i;, '. . ;.Q 2 : ' 1 s g ,3h r: ' y (s i ',l >; ' - , [ _,

h9 ,'f'.. .: q_ q r: .v A . . ,( ) . '. g mp

+t ,y

,3,, m 'ug t ,

y ;y -

p,py w(-, ~ %_ , . > #. > <

. ," e ,

o ,

l.,-c Ia,l,N k,- --

.) _,

4 _ p_

f,. -, I ' >

' %} ~

}~ ~+y g ngn;r,

,w -,

. e.y.t w g 7 i,

%p ',

) "F

>- ,,4 , m~ ,- ,

4-.. g ,

l, +. [p,+, . ';E g p, . , . . ,Ig.I , - -

i

, ;+.m ~

cy + n, ,

<( Vfh, i

t 4 if . *

• s [,.  :, ,r w  :,7 ,,' ,f s

yf$, Qby yh ' ' H~ '

f} W O [

• s- %  ;.

y x

w $o e ;.:, .

L '?

n afl f ~ '

' !?

• O 'ls' ~

k . \:

r '

n_ # '

Ay,'.l_w,v.,N3=

.a

, N: p.y: y :,. .?&n ,L , ,.

W 3

,t.,.,, ,

a:4,

-m ,.p ,. , > v 4. m 6c 9 < ., ,;

R L ,*;u%

5;;&e d my %;w ' J : '

5^

>' s

. d., a

':;; ~;, & ,

J,-

,r.5 r

... . ,< .j .,

nu a <

5 a

r 3- " t

- i e

@'n %< m4' r , q g id-d_,,, - , " ) 'm b}c .9._-v9, r g; . .

~7 (

=

a a + my a

'  ; ['

,- }0; n'  ; t~a

.% N t e

-2'g. ,.__ [.Yl.:;.Q'1 ^- ,-..,;." .y ', r z , , y 4

, .l,E.y?g.j 'g , .a_ i ' j g. . t.+ 3

",s '

i,,"a. ro i

"(,' .p- *J '-5 6.

&'x %g ;* w' '

Jj. M.a.tp(g

' [ '. '%! " < ,

~ , " ' ' '

> 1 v , ,,

kV , ? . . .

I d..

- r y ,I

< . c.  %- .

l , ' ' 1

_$?

r,l-g l.f~,'v ?' j Ji'p ,gy,, s(

. g

'( !.,vi7 +

g,_g%l K s c S 3

M .s'. * ,

er >

)Hj

^

. -l l L 5.::. %

.$x c g< wa %m Olsf.. e

,, :a,

~

f90MW, ,o, ,J@Q,;

W,, a ,u -i{ a. r

• A ,s m , , y.

..y.

. ,n .

s e ': y i ,

q:. . ;j'y , LLk w% . :.3

• ' .v

< <y s ,,

• l' '.y '

?; , b. " / .,

Mv' gy sm-p= t yH / ,.r 4

35+< ' - ,'

's '

,g jM , W. 9 4 4, p3

)' q a%

1 .

fc" x-

' p't' .U b

. jp 7

I, .

a.

ll'hd,N ))

~ .

• ?" .l

} l l l

'"GL* ' " * ' ^_

Q( - s

1& negy&%$ ttft uim} >

W% lhl%

w, x

+ {G P 3);

b  ;  % L s

')

n _. n. .. ,

.. n .

?,, #

, y' ,

fCorporatiDifices j 4 .

A yL <

2

, l Kansas City Powar & !.ight C9rnpanyJ L. ,

7m

,3 g7 , 2

- 4 -

1201 Walnut - a n ,,

. @' TiJ

• iansas' City, Misso' urf 64106-2124 -

'V'M, ,~h h J

'v_

, s.

g ,. L

%^ x i r,-m. . -.-f-,

m'yo , gl

( e.

, ,, kHiq #dMsk, ,

.J 63

-b'. ' '

s <

RO Box 418h7h '

i;E;.3 Y./f 1 Kansas City, Missouri 641414679 .g

, , > 4

, , s .~

r g,3 , a

. .p .

m : -

, r (6 A -

_yw .-

4 si.O W s KCPL is proud of its commitment to the envunment.

k-n um u

t (D~ 56e y- o

.k

. ~

, , Only environmentally friendly recycled paper was a

used in the production of this annual report.

W-.. ; r

, gp/ w 3 ; 4 Front Saction: recycled with 20%

m , _

post-consumer fiber -

.p

' s t

Financial Section:40% pre consumer waste .

+

7

< '~ 9 10% post-consumes wasto nwi ,

~ v. a

?

% , , inks: Only soy-based hks were used, which are not

, . . 4-c ,

,4 07W , .. , . .

, harmful to the environment ,,

1;rn y < >

, y

+

• G Q_g ; . egm-

.t n .

r.) y j q s ,

c g , '

S$

f 4 ,

& 3, 62h % ; t i , *

. ~ Lgh.n - ','2..

- ~ . . ~

/ ' 7Q 9 yI . ,*L M

y *) .. Jr . g': 'j,g" ,. , l:, ., . . + / , y, .( s 's q . ', a .'. } . , . f;; ,4.'f "; l.;yl h,y

• I} ': m, -

.) . , 4.;.,.; ',:n j:, ,"{:h.4.g

,'. . ,K':l-l:?

r, N:n .g'.i. "::,: , i:'.Q'.:l'[.: .  ;{ Q:.:-l ,- dk/:?:q'J.;O'V.,;:.] V Y:[.n, Q y, r. ..

p.ft  %,g%o l,A 5 f.f.Q4  :.D.ghrej. gT.';,Of' ::'.y,.Q, a ,k: f.* g. W.&, 4p )<^. Ay 4 . ,: , $.

','*p g:. j > *.e

' ! .. / S ," .4 .- ,c e, ,d,,,r.. m .. . ,g S

t. W%g n,u.

r. t g ,f,.;,4. ',ll

. 4 ,; & '. y V: - ~ ;.';:. . y. s,. g' . . , .: . +a , ,:

/ ,

p

. : .i . '* ..:,:a.  : '. ., ;,. .: ;. . .:

': .:.. . i ~ , ,; .,( a

, p. ' _ ;: , . < . ' ;. ;.q,..: 2.; y? '.,p#;;Q ,.:. s g,:> '- y  ; :' n;...:,

L.y' '?:. :[:. . :y .'., ,;:;.,_ p: > ,;-:1,:f;l;,5.;3.::< .3,.; , . j

.'; y :;. .), by '

"S,%. ..

. : y.y ... . t..; p.:f' s.y. ,. L ,;, ;;* ;, ;;. ....:. , .

<'.t<, ,

. ...n.,2_q. 2 ' l.,s .

t ',"Or, ', , ,: 'u .  : ' ,

. . [..I , . .

' ' *, ;v .%,

./, ; ' .' f f. ' . ' ' ."h ,

.' ' 1 c:' f ..>. ,. ;

• n :. . .. .

g..'.

.t'r,. l. ,, p... , , , ', .. .*; g .[ f .'.9 '.

(. r..;

.. yz .g . . \ . . : , l. . . . g,.,..r, f i; s, . 1 l~

.- . l g{ ,? 9 '%*

g, ' n .,. .,.:, ' . ,j ;' i, t; , p.?. i.q s ,[.,

7: .: .: q 1., vy,.sp.,,..l.,..

., .; . y,.

• :.p,

> s ( ,. ,

3. ,,

q ,.,z . j 3,3  ; { ;.%

f,.,, ,,. ..s.f- - .. .

, , y g ,

. Q '.9 ' g c., 7,. i...y ,, G . ,:f9 y J. ',: Q ,

. ^

, , '!9 ,;tl. L' 2,* :.:..:,. : o . ','K C' MT n ,% ty  % ;Vl 7  : ' s. ' .q, ,,,i,,,'( .. .; . ..:,;w'. ... . .'.(

y' . e.? ri {': ?, ? ; ;\ -' 3 Y ' = -, .  : P +;', . , . ' . .

,,. . . G l , .

'it i ' : .: :T; A. tl.:> .: e .. ~ ;.1 p ': v. . ;

. , ,.V .a;.v; Q. i';. * '? _Tc:k v. : 2. M. p .,w. ' . , b,.'3 . Jn. ',..{;:. ..o, ), <. ,

% ;p;'cp . ,, . r t . /. ,4:,.g>q :.).::;i,., 4 ,4. K., , y  :

.e Qfy , '.,'., ,,.. . 7:

".

• y ,l. "

• f,:' , . 4..,N.- , c .?Dx.b., .4,7;,.f t

i. ,i.;,f .;; . . . ., ,.. a; . . ~ ; , . /,.. . k. , ;',~.'.f.jp ', .

,y. v ycf.d.i.o, .p..r..,,.g la . , .,l.,.-'.{, , v,s: .,,. y. .....,.n:.+...,'

y.. .,.a., a, . ;. . .,J .> o , . .,. ;,e- p .

. ,a < . , . , . . ,.

..n...a...*.  ; ;i _.4.!1 a . ., ,

,yi,,,.

.',,a, e .e .', . l,z. i.

, i ,yN ,;

4.

9. . ,, .7.p 4, :p 7* g.. . . . ,* .

,o.y,. > (l ,. '

s.

, , , . ',j

..<sn . s. .>.v,. '3,,',<<.e.', .'?. ..:.- . - ) . ., . . ..,c . . 4 . .; , . .

• • I.;

$, 'h * ..,,..Y' Q. .' '* 'b j'

f. 3  % . V ' l-l. , ;? ' , ' .'.,' f'\ ', A ? , . ' ,iY NI ..,,f~b4. D.

' . .. .m ? s , .y:. ; ?* .: . ' ' -l \. ,'. f f 3 'U.l>%'.,, 2; & 'i%.:c.;;, S,'f;," . . .., ,7; M :Cr.r':y .s,. gw:.;. .D p,%. :- O:h: C.:. c.V.'?, ;.: ': :.k;Wy;:'.  ::.n.l^ q.. . . :.,U , R.'.W.M::L.: N.%:.m .:0,:'-wf,.l'.3. .~.yd, ' .v,&. ,:. 'h. ; ! ' - . Y . : ::lM.:: s. , ..;, +.. i' v.c, .;.;;[f n. .9.. .:.. y; , . ' .' .;, . ;: . .. ;\ ' 3::.s..

. c.. , *%' .k . y';

. Q . . ' & , . ?),, '. ; ['.s;i8.; .* ":'*', v.;; .'.. q:s:j [u.%.,; .:.. :" ' v' ,.. s := 1' s) ' .. :

• e: .

' .. ,..) . . . . f 4. ., ;. c . - ' i

? ,, ' . , ,' ,S , , ..f k,'\ .~h .x/1,',h 'Ns, ' 4'. V '.. ;:l.jf / _ , ' , . ' . "f,"  ;.,,g: *.c l .'[: o,, :  ; . * ' . i . ,: , l' , . .' .\.; L :;

• l, :.,'.jp', " 4. '. ' .y l;', . C',*.e . . .::[ 1': {.j.f,.  :; ' : '.., . . .

N'l.Y 'jk', l';,.&l:'

'..

Y  :. ;;5. . ;.. . '.:;?.'.!- l. ' .' . ,".

,.,:'_.,;o' Q. k,y . f. 1 *g...e. . .,C

• p ' * .>. *.< * . . ' _- - .: ": '

5,' 1, L.  !. .W;; "; .: ( ?. . '.'. .'.- , . , . ,: T, ;P &*H ** . .. r, ' * '...s. .'*:.s*.... * "' . . , . ,w .. .. - ' , . **',s., .' - '.**i $ " 2 . .. U 'L,.... I't Y *i . ;,

,'\' . *

; . < ', . ,:  % . .' ,E ' . . ' . ' . : .'* #:'4 l l ~ . .:',. .k,'

..'..',,.;...Y'.b .'.'.'s. '..f.( ;e -: . a: ,.,a..."l 1:. .',n:.e '. ! 6. \ , ;yl r :<G..k.?;b ~ y. . Q 'j ~ . ,,* ' . . '< ;J:f. '.t 1. ',h' .'"% ' . ~ . :l . \s ,..I'..'.,,,.te . . ,. 3 . '. ~ + ** {. .  : - ,. .- ,. m:]*,n. c '. m . . , s,y ..,g; '1.,*. ...,, y , t ,0.'.'.*  : ,, .,.- a, . , j. . ,. ,6,. :, - ' $p a- .y i s d - '.a : .,,:.- .:. , . - -i..,.,. ..

• 1 ;$ lC

.s" , , .* , , .,ll . "., . ' *.(.*a. . . (h').l. ..c .', t.,. .'\. yJ * ,, .( .: '1 ' < n * , . (~.,y.',f , * ,s. . . - ',.., .-e. ,..* .... .,. . ~p '. %, '.'.;.. . ..: l

• . ',. '  ; A' Y. . '.,, l ', l.; s

.'- <' ', '. .Q,

u. .

.r'*+ .. . .f. .. :G ,,;.s ,. -. '.-, )e. ' , ;.,, ,'. . .-~.,:.,... . " . . . . -.... ',. .. . s y .. g. t , . . , , -.J.;... [ .' , 3, . , h.

'N <J Y. E. ' i . n, f.

- .t.

• 9 'c : . , ; , .4;- .+  ; . .,>t .gf.r.. ,'..... ...... ,,.' ,T,,., ; .1.'.., / ', .', .,o,. ,.;:....* m

.: , . ' ['. . 1 i, - !: ', <'.,.,i . .: >s. .. ". . ., .,s..O,.. < f, , .e .L , .;* ? . ; . .: -en ....a ,s i ,~.n.t.,a.>;..... . s, , t ,. - ..t.,,. .a .. . . . . p , , ., .-s . i. .. $ ... . . >/ . c, . ,

• u.

<4. . .i , a. .+g....t. . .,.d. . ,: -. ., 5..,. a *..,. w, ., . . .. ,s n . ; ..~

i. .g r o.

... ,...+ . .,,.,4,., :g:...4-( . r  : ,,..h..,.1,,,,e.....,,/-.?".....' v . . .- s....,- - - . ....+c... ...t .

• . /( ..

.

.,.:c.'  : ; ,+,/.  : .. * ..: . .; .

4.-. . :g; ... .;, '. i. e.s. .~. . .! , s

.. . .' " . , . ,u

. e.,s...,.. ..r. . , o, ,,1, , , . . . >:::( .

v. . ,, . ,r. .. l: ..g k: u:. > .. ~.. .. . .. , ,3. . -. .. , ... ! : i . e - .. ..e.,.a...  ;

....,,..f.,..,.....y^'. 8 .; . .. .. >. :,...., ., ., . :,....s.... . . .. .... . + : ,. : \ . . . ., . .s..~..y....:, .., .~< ,M.. .-. .,,(,... .....s..... ,::: ..s: ,;n.,a .>~.,,m . fr. q .....e. . . .. . d . .., . . . . ,e ..,,m r . ; .,. . .. . . - , ..m.... r . . . s. ,; . .,. . .e.,.. .' . s.;. . ' ,i. . .. .  ::.  : e . 'w. . .'.i . ~ . . *. . .....~c. ,,_.2- .. " . . ,; ; . ' :. *!:.n * ( . . . . . . c . % ,: . ?.

. . .e . .

. , 1:G. :. . . .., . '. :,; ' < .. . :. .: ;.'....1 :. * - w. .'y,,... q.,. -

: Y

? ::: .f~:u.:' s. ac q. 'W.. . ;, .'.a..,- .. -; :: .:. ' . . s.; .~.~?. - . ~. .s  :. .  ::~ : . : .. ; ;.., ;,.. . ..:.! , . ) F .rf. ....;: .' '. . , . . . " . . ', Q . . , . > ,M . . :. t  : < '.. : ly. J. .'. :. .: ., ',, ~ ;, '; .,.b. '. .. , .,w ". . . . . :' . :D, , .". ... . - t"  ; - . C."..".;...... .. , . . .,- L.'..:;. ,., ' . ^ ... f.# . . , .,':'n . . .... . ....,i;.  ?:. ~._. . . . ' ' . : n. ,' i..'.'.. .3.,.:.: *.. ,.. ,.y.. . . , , , . ;. ,.f .%, . . ....,..,v. .v .* . . . .~ *;.,,.,*.. ., , ,.. . .'.,; ,,o..

'e.,..

.p

..,.. ,.1 v.

r  % '.. .. . .

.( .Q.

.'y,**,......,4 =. f ;*a',j..,.v'.c w ln. k - s.. ,. ,s

s. . . , - . ' ..

' . ' *; n , .'s ,, .., :.. ., *'t.,'*, * ,.,v. .g. ...j5,., ,s.,I...,1. d 'I . , / #. ';,,8 - - ' #- .,,,',,....;.,} ' . . , ' . .( * ', [' ' . ' ., ,,,,'.i.,,'v./*:. 7* * ,

• I ) h. ,," i ,' ~ ; . '

s,'l [. s.',, .g ,. '? .e , .,, , . ' M . .' h:, s- g.,*. : . . ,h.,...a.,~8,, . . . . , ,. . : # .. '. ",4. ,a,.,... t+m<. . , . .*. ,, ,,,,,a...,.(,.,r.,. ,, @t- '.. ,w, . '..s...-

. . .. . 3 .' ' ' .w *h.

....g .v'.. ....,e,.fp. . ,,...,s* *...r, . ., + 4, . ,c .. ,., f ..i...;,..., .,,,,'31.. >, - . . <.. s...i..,c,.,, .. .. .' .. ,. ,. ..,.,.', ..f .e , e , . 1,- r.i - ,, - . j gs. . r; ,:4 ,, y. f...,,. e ./ . - s,, s .,r . u .. . ,. v - (.~,., , . , , . . ,. , , , . , . a. .. y,..;.-. . ,....,,y. . -, .,i.,..- ,e.%.,. a*; .. < q ... .. - . o. ....y,~, . ..j..>,..*,...,..,i.. , 4 9*+* ~.. ., , .** , , ,. , ... .e. .e ..- . ,, c . ,.n..,.,.,.a r. . , . . 9 ,n . , . , ". .,. .. . .. .., -. . . . ... ,...., .sN-c.. ,, , , ,. . ' . - i i . , . . , . ./',. p. . -.. . ' . 4. .,y.., ,.f. (,. .I- ~ . ,,3,..,,,.,. .v, i g , ; ; , .. i.. ' . . ' -

• g.. . ' , ,: ,< .. s, 4

.e'.".,, .- 5l *;' $ '. , ' .' - - 1 c , ,. ,. ..'.,), . , :: s. '.; . . :,, t s. ,; ;,, >. ', . . . ... . ', . . t~ . .'<:.. ..*...,,,., . . .:.;',, . .. .*. ,. '.:;- :,.,,,'. ,' : . * .:.'. - / . . .- ,g,fs. . "%;, .e;; ..i\ o. ... . a. . s .f .

., vn .'

(: 4.,....>~.;.-

\ ';., '.,.s/ . '. g. .. .4.r.yO. ,- .',,, , .f<,*.r .,z \." . .: L. c - e.: .- .., . ,.".: . t v.. . v

• 4 %n. ,g.~ ..L .. " . . - .; e , . ; P..... ',

. . , '--t. ,e ,...'..*.....,.n..',_ ;p,..,.m....,.,.,.,o,,.. [ .r -~. .' ' ( .. ' ' :c'  :'..'.,.

v., . \ . .:e's . . '. :..,..s.  % :. ' . .. ...~,,.~.y

.,,..,,s. e.,. . . .n. ;.c,. , ., ; . ,- } , . . . . ~ ~ . . * . . , y y .; ,., .! . ..... ..-. ..,.i ,,s.%. . \ ' . . .lm: ~.. . . . .. .., .. .n.,u . ' ' N..*: . . ': - ' .> ., .a

& ,',

' ;,. ',.'.f',.;'.',...

y .- '. 'j .c . ...: d;;,,  ; f,- 3, - q L., .\. ,.l s,,. '...*.&..- -; ', ; .* . ;" J?* , ' .../ . ,p , ', '.,[/.- : . * . d.. .*. * . . . ' ' '. ' ,& c *.:, .* n;;. ..;,'.',,',,f,..'> \ s, ,.. .y.* l ... . * .. .' ; (s .' w., , %. { . , , ;.a .,.u,.'. g , .,, a<,, - .) - .. .. 4 .. ' .  : . , . :. . ."..,.1,- g , , .:,*',<i','.'...:st ' . . . ..y- . . p. .C. , ' , g, 4 ... ,..M;a - 3 . st ..., .3 , p.., .*,. s,., . . ...s , , , i'. ' . ,.' ;, u. .6 , . i5 .;%,.. - ,4, . .,. 'f. ;w ,,'. ,7.  ;, , . . e p , f. ~4 v. ,. . ' ,.g.) [ 43 ,.,A ug. . , .  ; . v -y <V , d.g i . ,. ,'y,,,. ,.. , . g % ,. . -  ;... , .i,y . - / 5 . , *. Q; . . . ,y ~3 . ...~,o .../..,.. y . <" -*:  %,1.: -, - .. . _ , 3 e 7 .f . . :, ,., ,, ,[ f.: Y'l'.< ,' ,[./ . d s M l'$ . ,.' .' . .. .' .-;,,. .,$ -. , ,. .' , .P.f ;.,,,t..:'... , ' , '., *. "',' . .,[ h'.,. ./:[ v ' , '.,'.// [, ,.f fI S ,;.'.2 ', ,'* 5[ . ..':. ', t ,,.' N $<<}';' .[aw'. f.  % ". , /,J.. [s,.)., ', :  ;;, .,.:,.'.~,.' a .,- ,: .,.,- , m. a ,. : n v e .. , ,, ..,o ,;,,'...n..  :. <- -,- n. n . r; \ ., f, ;?3.% ' l . ' le q? c. ;u ; > 1 .: fp , .*! . . .,,.. ,..,'I,.>;,..- c .r:  :. m. J, .,, ] :. ., .a* :. p , . .s ' . L ,* -l..,. . , \ . ,,. ,%.4 ..,j. , . y + . .,. '  ; . ?. -. . *y. ., ., * , . , ) .,. .. < s , , . .,, . m, *. . 'P . '<; t.a:- > 7. < , .- . , .,-s .., ..;,y,,  : ...s,.. i { ,' s , s.' . . ...e r . ,.,..'4....,".. ,, . 5g , , . J -, .rg ,. , . ' ' , ' !e..* . .g;e , '., ,e.g 6 d, . , .c",4.,.',.s . .1.-p sg.,',.' . ,- . ..,..ay . . t ,: , ' . .4 ,, . a. y. . . . t p; . , s . , " ' . , A: = .o . . . -

• 7 .

y , -'l?,,'$. 7,', .5.d. , . ' , ' .. - .l 0 .,.(t.,#..

r. g./ . 6 , . .

,I',[,,! ', - .*- '.'.\. 8 *; -i.Q, . A ;, , , M ,' .3 ,> ".% t s , . . , . . . . M / ' [ N'(,I,% [p. .3 q .:7.., .'d.p, Q.l; ~, N:D ..l. .'it.f, ?', y Q; t l , ..'.n .".,,':p' , ,(,, .. , q:::.T.,# . , - , ,s, , . s ,s ~, ) . ; . . . . , , ;.,. s: . ,l 7 , ,';,. ,' ,' ,, ,,j '.s ',,,..y' '.x . x : .;.. ' . 3 t' a'q',: n F*</ Nl,Y.4 A.fh"N / M . lll6k,?! :fh'.l. . s" NM,'%h *& O :)\ 4hf,[ :.? T'J If '.,  ?:,N 2:e l.Dl;.f. .M'N :." ?~ Yhlf.i' l^ [(,.-yY;f.. 'ji.'N. .X f{^-l. h. '. ' h. - n:'h%' . [;9 < ' j 'N :h. 9, .-[:96 .i ? O h

,d 't

.bQ

,N.'?;'\ );.O ?Nllh., f. .."( .%.. ...N,:" M . W ' *,' gN,,a,;ip'.. ;') : . t. lQ e. .y:l h &.% .lq '.',,.:  ? .  % 4d. - - >" ,. ;* ,l - '- .  ; .' 4' , ' . > * '. c . * - d

;;..;l * - 4 " )' . K, 'i,l $

.'.~.*%, ~ N- . . ..- '[*; , '.:) 1:mj',~[.y'.",. , ,'. *y . 'l'.i??:;; b@,' .h'_.;.f, l}~~g'.!', yy' s:.

..:f.:g., . ,y;.3 >'l-).

' ;:, ' Q,G,y').;;"', f .f o;V. .', ; c:q ..' ' .; ';.i,: _.;.,,; ?s,,.,y  :;g,),'.,. ', ' ,.i. .  :. ,.q'  ; f*. c f.  : 4 .! , .,,'% , . . 4: ,'. , ;., /.: : r, . :.. . .: .:: p, W .l -l .p;_. .; .v.. 3:,'; ". . . ,. l 1 , ,K.' n ,.f

• • %. . ,' !" K ' . Y ' h,  ; ' .*Q. .. Q. f. ',.",.

. .; It L;Y . 19 .,0* o. .'.., -A * ., . '. .I' y.Q, ? ' ,.i ,5.l.% . ' ..:a. ' ,, .1". : . ., . . ;q , h . . . .r . ',  ; '.,.  : ;r, +: ' h '  ; q -' k  :.l,. f'.Q.e%s:* ,. . {'A"Q*f. ,.s r' . i'.;* .*.)q.y& ,. . J '. m v.p, . , ; . y. .'S ' -' ,e. l:e. .',,,., ,. s.. l '.. . ;.l.- :4.,..  ;< .: . .1. .c y.. s ,e

i.,, . , g * ....m,,,p.

o 4 .. s, y . , . ....* 8 . .s . - V a .,,.;.,. U <I . :3. :" 3.* <: ,, . e . . $ . ,;. ".#,.* .j; .2 :=..'A...,, * -, ,q : 3 - ; q .. O ;-  %

6 . , ,,<~.?-

• ( .m, , *,,by >.,.}.'ya '..;.*,,, ,(.,.,.,s.- .. ,. .<

yi .' ..,::. ... ';1', :: ; ' f. .. .. . W"',

v .3.1.%., .,,:. -

.%. 'Wi l*n ::. .q..., . ;,c,....,,.1,. r . ' ." y l:  %.R. . * .,  : s. "' ';, l '-r %,;;g t i'

.b;,'(;.  :

~L 9 . * !.'. r . ..-; , a*,,o : %n. - h. ...?.'. ^ {: 'eQl+:g. Y.].Q :; : .f : . fi, . j; .fsy.f,*,;l.'7, '_.l.' Q;.{ ,'; '[:.q ,

• v.+

fl, ;'$. .;,.T.;* s.j $f..(-Q my! _ R,!n;: C.G.7,';ly.l'Q, ;l j:. :lQ[:. ,';,&y;i:;,. - .,j!. .h,' y[. ' . i . i , .'l'. f,^ Q. ,.' - f.,;'. .;.b;f: .' i'l5 - l ', W! .* b' 'L ' ' ' ',f** l l [ ,,. .) Y,t ,j, .'.' s. .fQ " ' .. , ,G 0 $ '*  ;&; .. .I' ." ";;$:' '; ~l,.j ', .' .,'::ql.G & l ': I l '.'d ' d* ;' ' ,f .b - '. h ,  ;'; ' '  :'M'  ;,., ll? pt

f. (.

9 & ,

, .l ,

.  ; . , .  ;; T.l. b :i I- l .;" ';' *-l

l. *]' ('? '.^,' '.)ff .Oe*.W'

.M * ' ,',  ;; . " . L '}t. .;; , { ' ',, - , ' \ * . ' . '[ :U  : . r #. $j^f.'h'.jjo',i.jl}, ^: i;y  : . ...,.! - *: :A .. .k:' k 'g a'f'

b ' *. .

.f .? I N h.'Y If:4 O 'l',b * :.{ Y:lQl

..;.,' . .'* (. .l .E .(b*b'i.l. ': ,,;...,',.... 1 ?': '!.,y;^0*:. * ' 'Y. { *. .'?', U *" k ,l..; g ,'~ * ' fl, .i*..Y f.:,2 h*y

l. .~' .Yl};.!.,.' u,'y

. .' I' 105 f'., 1;fb,J Q .: '{', . , p'k .,y!v,' % : < :Y.^'N.Y'..f. j'. :.V,".; sc n , g . c ,.t . p "** , ,,l.t ~ > } " ' i ' ' 4;. - .. .p

' t. .s '.D;,,

',*,'9 :,?

.u

• 1.W ' .l,f;

*

,,)'.,f.

7' n .)b;.y ':: d.i; >y,,. . !h. Ql :Q '.l;% .' ]i}'1 .?.) * ...\'.', - " ,,' ;Y.m N;,,, w.,%,

• , b; ,T,

'G,l',:~ . l.  : u. . l *. ' :.,:,. ^ !*;;d;' c.-

D N' ;,'*C.'

- - .

• 1. . t +

i ': ;.?,. .~ ; i ): .. .: . . . .'. ;. ,.A i. '

• n 'f, ,,' '!:lM ,w..,?

~ (,$'1s,l*s.; Q! i ?*T)':# ') ,', l}**:'.'. sV,". ! ' . .' '. ;' ., '. . ,?. *; ,. - 3; W, .*j.,' -s W ', '..Ql I;*5 .;' ,. C'. .> W a' f.. a ' . ., p . .;.. :f;,f(, .t C:. g'.*."" .y5% i f. y .' . . - , 0 e , r ' . .. 5't,, 4 ;f ! 4t, y . t '. ' 4,"' k 'l,:::- -)/

g. "Y i ' ! ' ?-

a

• ,'i4. '.: -'- .,.,,:  : . ' ' ,,9. '

e5 4.. v q. 4' 1 'Y (* ; 4 ,. ,, . . r 7 {:?' .'. ,. : V .,V'r:.r l,l %:!, I. (O r k f'*' ' @s'.:,*..- . .' l l - ,, s.i j Q Q. " ' , .i .- - i. .'.;Y

• 9 V).'s Q* ' , ! l' .' %, ', C. ! V % .** . D') q- ,yl 6

,'. . ? e ' ,,r,j'y, y*i'f

, , ; e ,y+ y?!' 'l, -r e,5 < ,

. .). ,

.>. {' . . i i . . o.  : s D ,, Y. .nh :, ;u \. :  :..' ' . L f . f*DY.*f* .l ~ ,. f j'. ,, ( .s' y !'! ! ' ':. . V;:' ** l # !. .y:. , ) h l : *.? " ! . '. lj,v., ., Y l'%?${i ., RW. .' ., { .'*"); ' ,4l'.: (; ['. & kh,j ' ,-(: n. '(l'h': b &s.~< .*bib,, 1 ,a .)." , )2y.'.:.L .y;l& 4. .. i :Mu: \ .o ,a)c j

• 4. ;. ';."vWb. *% gc. .:.3,y, .

-

l} r ps l~/,gL ~.,# ..);a, l;p. ,g

n. ;

y.Q

.-. ": , ..s.- . .f , . . . ." . p;, ,. .,.. ;'.r; h.~,h.9:. .. s, .."...;,,,- ' , u ,,; );'; f ., '., J. , . .. ... Q.,._.... . ,'....c',, . ,.1. *l,'.::'q . a .., .. '. ;. .,;J.L*.,.y,.W. ,f a  % l s . ' 1. p ,9 ., s. yo .; . ,t.a .o . . ..z,?, ., e, , . ' .6p,. . . . ,, .

s. u .:..v M:, .'-,.s 1 *o . .u. ,, . *

4. .  % <.

.*'(..,.; y ( ,. ..g .r, d 4, ,,*e,,.o,., .. s .;..,- , ...,:, .,,A. 1,,.,P".,. a a 9 A., Pg , . g ' */ - j g

• 4; , , , - , . . s. .1. .

.x. , o.- g d.! ,*

• v,  :..

.. .. ,r ,p- . -, -: ,, .. . .

t.p

' .*W: . e. v '

e. 4iG Q.;.m,: ' . f,

• s.%, < < . m.. p. ,. .q m.n .,.

< ~. 4. , . t}  ; , n. > .:,  : '. . .". .: r . .% n iv. , . .;t l., ,' ~. 9, . ,  :" . , . - .. ,y. :. s v* ur .c.

. s .s , . e c.. ... ~. :1. - v.. ,' . ' -..:~.. .I o

. .,*.. .o,g.. . v.. , .e . . n. ~. : a. e..' .. ; ' ./ . . .. ..+,... ' .:., . < q, ;.:.*. na. ~ .a,. < . ...:c. . . . . .. : r . ,; g.  : ,W* :e u . . . ,> . e.e. .. , ,; e,  : ,.% :Ly. .a, .

.,t..

. . ..~...; g.: y

• L 9;:  :.,

. P. '. . .,. . .c e. ~ , . y e . '. ...,..t..*...,.. m ... . , . ... ~.. .. ... :. s. ..c: . ~ ,4. ..

J.

.,~..:.'.4,..., '

s. .p, . .:, .: .. c. . : . ' .c a. .J, l . + , . . ~ . .

. . . , , 1 .l . ,. . . . . t js . a. .. . ; .Y~,; .. .,.< . .t . e < . ,,-lu, u :...t. . .9...:  : . c. .

.2, 3,c, n. . .,'...

.H.,...c.. ., s,m '.;:l.l. -. -1

(,. b';.f,' e,

n. y .,

., o , .  ;'. . . ' . . 't. :t' f , ,.p. .r . . ' . . " , , , , Q.  ;,  ;. - .}i * ' . ,s . .; l .', s'y :,' , t .*'.':.s'. i o y, t & ,..;a,  %, .:

e. p e . , ::,.n ,,.ri?., - . p. .,:.a . *g.

!., . .; U , Ya...,,,.s. ,." . > . . . . , .:. . , . ...;, , .; . .c, f..  ; v, ., s r , e ,, t . . . . .q u . . - . ,, . o - . .. ts , .. ..~- . ~. 4.,s. . .. g , , s,- y ...,.c,., . . ., .... .w;.e ., . . > .; , . s .9.e;.. i ,.: !. ....,r: 4s .r->.. . .. ,,.:y . ., . . .,.r,, f ., .o, e.,c.4.. .<t,.,..,,.y b ;, .; ... -r,: .. t. .Ja, . w . ,,: , . i.n 9 ,.g, . . . .....,1, . . i, ,y - '..r. ' - s.<. y . ,N.d , .f .-  ; ... . .. ,/. , . ; l, - . r.. . , 'g a 3' ' , , , , . -'. . . .~ . , , ' ' , * . . " ~.i: b s.*:,. . ' - )'  ::s ,. ~.'s.j'*..,4, .,E',\.*,-.'..i..... .o ,,?.'d..**,'\'.'lt,t.- . 'lf;{ Y. s , ,' '. .*> ,.r h,',%g..w > s <: ._ 't :*'l'.,l'...

s,

,'. ' . ' - ..,l',.'4.. .', 'e. . >.*s'.',*vs .!.'. ,.n  :. ..,>>..,,'...'o,N,n,'..' ,., p' . ?. V. .*.'. . -j' . ,;,.,,i.r. l , ? ' . ' ,;s ". :,...,.'..,.:'A .es b,<.*.,.', .e.* :'

.y , ,

<.v.., ..m,r,.-. .- - p ..%,s + .,s.

j y s.

.. -s .,:s . s.e . , ,.. .. ~ "

a . n . .-7..n..-l,... .*.v'*  : ,, .m . . ,.,.~...,.c,, n,-

• a .,;t . .S . p .. . > 9s .

'p* n , f o, : ...- "-t * ; ;r:. ... . , . ' .*b- .~,w, . . -.n* n * . 3o .i . . , 'o t f'% . A. YJ : ~* m W s' e . p,:s )v',2 ,G -*p .', , ',n .. . s s  : s .:' .yd . ,c.? . v.;; ._'; ,; ',, , - - y' .',;; : i g.:R ; g , Q  %.  :-u~ ;', .'. y...J.-Q)a. .SQ :

y:p..;: V:. : ' .7 '

,'.'.!;g&n f'? 8. ;*::. *: .,: yN,k' o,,_)"I';"% '*y i ". ; , .:n.y9,.: . , ,, ;/ ,J;;."h' Q.'.f(,. K'< ,T,1;:'. ' y$lhfi. .9 Y.:"T. O '.j:" v' ' - ). ".h ' -:. , * ., 3l .',hic .;.y.dc., '.'.4 'Ql'yj, '.I;I/;W'.lw. ,h1 '.J.' S s,'\ P, ? .;., ; . w. 5. ',, i .'c ', y : f" - +:y  ; .fd:/ 4 '-l./;. .:.;, . = y$.'.y.y . >,p..,- . 4.y,.,t-

y;8 a.(. s.>_,x,. (.

.y, ;. ,g.' .'.t, yL .[. , .. r:dI;,,[ ,'. ' ,l' Y

<.- g , l pl.. l,*. Q ,'. $.,F' .:.,y ,;... . .. .l. ;; : f, 5' {:;* , ,. 4 l' K. .? ., . ;t' . . .>.g , j . :** .w. . .*- n....:> > , .; Q ,.r,;; ...u..' q f. o..*.. . . .c. , o.t.f., ..r..,.*-:.,,'. . ,.....i. ;:- ...;.~... ..:;.-,..,.'.,.ji:r.J .-g. . 9,_ , '. . ~ ,,A_..,  ; ,;. _ ' .' '.;. .' f. ,  : g + - - - ,..r.....v..4 q n N, . . ,s .... .e.~,9 b . .a- ,.. -s.. . .p..,4.v , m. w ,.g - ,.4,, z .c . r ~ . . .%.. f r. < .n . ..' . ,'h t'.; ' '. 4,P . . , h.'h.',...,./."!, 'e ~ . . r a . .. .e. t.w . m . . > - , . . f, , ',: ;,4'; . . ' :. .l? '&' ~<,4 ;f}. r .- <  : e . .: ~- s g?. :% , <yf. ,. ; & ,1f % ' . :. . .ei - .': f, ' _.; ';,' L " i 'r * . ^ J. ' ~ - ' .  ?- L . :'. ' " ? i f l. ), ':  : ':fs R'a'. ."~\;.' . f _l, .'h': .,, .i,y '..  :. )q..> '.y :, 'h'.' ' L: . ' .} . '. ? Q O%w% y.: :J.,<%:.@....,<. G' ',. '; !,* :*y. ':;.'?s,. j] y ll,. se ..'.. .-;' ..  ;? -, .. a a .s y:_.

• • .: . 's l,:;;p 'o;. : ,. s.-'.,:dy y (',pe,

/, c . i,9,,t,Q_.G. .s.- .[ l &, ;f::'8':.E'.s' - .~ s.. ** . ' ._

'L,_ ;f, %, .' -.', _f *y.Y. d.;,',

~f ' v ,.j

. J . ,,w '+

. i t*.-

. , :,,,, ., 's.{%. .' .: .'l??  :

• ,T, J

  ,cu .T.a*v*

.dyt' tj.% C -) w - 7. . - .,~4.c. . f 7. ,m,.* s..c-r.p:- . , -:, .'.r .1:., .. _U) L:;~..>c..y a.:+ -..m.t.%;. ) :y ..., 4 k.. .y s,. ..g; .. , i. . :m* N', '. ,.. ,; .w. . p ..v . .,. '&. ;,-..%

= V. t . r*s.-. :e.s.*v.'+.-t . . . . , . . , . , ja'f' ..a . c. ~. , . e, ...

m  ?. $ . o t  : ,:Q,4,,..,3 < o ...;<.%,-.h..... ta .-: --j ; . **- .tA,A- ., 5 ?:. : s,,, . , . ~ . - r ~:' -; .(g a.. 'c . e '. L l ': . ,"?s. -;  ;,:a . .. q\ ',t -. r .c w

r. ,s. *; yh;[,. : g w* ,., A '.

,.v :. , y. ,. . . .g, - -: r . -, c g . n , . * . -: , . . . . ' ' %'  ;< 'r , .. .,.  : .. r  :  : ~- lw. ".',m. v ',, . .y].. . .g' s,y. .  %

' u;,a . oy. .,J"1: y .  :  :~,C.+j . . .' ): ., V V. ' .,; :L'. . , la  :. ,'.% .S. s .  ;. a.

pc o t V;; . ' ,,,.s h.lc:.,.

• :.;y . .,  ; . . ,.,. .

, ' . .  : ,; - i  ? ...2-  :, t ..g e- .s- .: s - - >: . cq h' . '% .o ; a,t . A. y3 . . :..,1  ; .,p; _6.,g;;;%. , -f. .- y .f ., . ' 7 s:.is;a, . . ,, '. y .;: , . ,1 :.. ': . . . .:L 'q *4, .r .;...r

• e, c'.< : n gc .o\: *.

<;k -:Q,:y,/ , Q. . r.

;: .. .  ; .r" c. < .

..,s. y y . .I , ; ,a . : . %:;.,*.,...,c.,,..  ;' t. ' _ . . . b. ,;,, . w.,, : ...- ( . i-).; . ..' ;v: . .' .y"M .., ,w.: .,L .. , c

, ., . ,.. ..sy:s .s,. . . - ...,

> .e, . %p . . q ..s.. n m f . .  ; .%..~....n..e . ..".w + ..  :, m,.. '- .,i. .y s - s :;,;',: . . . ; ^ :. .' 7. , a .c. .  ; . w'. . e . . / . . e. ,.. .. .~. r .  ? t: . . f. , . .p >, .. , 4

s. ..,e n. .. , ; .......;.. ,. :.,s.. .. , t:y}s, ,

, ;c 'O '. 'j ;.;:) -e ,w . .. 'f:.. , ,..; g:R. ._- , n .. .,m' . jy ;. , ..y... L,. "'< ,lg.. .:V;7 j. i.m. (4. : . >. :;.) g.. o, ,u ;.y, , . .+. , ' ,g.; s ,v , s . . ..; ; +u, \ ;,. ..t ~ p.f., *, 4, .: W. . .?:' b ;g y  !.,, ,1.. ~ o . p:. :'d,. * * .; ' V,- m' ',i": g; . .. .. e. >. u ,. ,; .[m,;  ;.;gu;, .,;r' : x*, y_ .r'. :q , ' . . G. . :c,,, . . .F.x,f , .' *m,, - .s.*'4.,.. s > .n 9. . . pe g: ...~:  :: g.u . w .; . . .,.xw.

.,.. - p . ,

,.s t;. . - y  ;(:2:. ,v..:.l

.... n. ... n.. . y ,,'d; 4. s.." . y::...,, .V M., .. q;<;Q,/(.ym.

m e.:.4. .;s,'.m,Jf n >.: ,,, ..v . A: p: .:h . .. 9,. e.y

kQ,:~. R; w:q:i%,2;f. c.,

. ,.;~:j!,q:t . ..,.b..N...y z - . .,: w. '..j;: .;;% , i . .)c+ . . .::* . , . . , . , . .ia < , . . . . . . . . ..rr.': . ..-f.. ll:; y.v. .e< .- x .. . . .+. :.:: ,e ,a. .. ,.": .' rli s... ";.t v.: .y;  :.es.. ,- .;- e . ;,4. : ...,.. . ".. ,.D..-;.:.,. .,.... ;q .

,;

• q,,4: y. :.,f. ..,.w..

M  ; ,~..,.>

ia. .-

1 < . v%:... .. . y :jo. M.m 4:'. 1-.%;;{,p n .

.t .

• viv w.w,., .,.; n;. ,.;,:;' %) .:.

. ... :V  ;  ;. . . .. .; h, . .;  ;'1 3 . . ..+-. a . . m , . . :9.:. . >: 4, V. ef:  ; :i.c  :). .,. ... .. (} ,. <g . t..' .,  : .e q *y;  ::.: ,  ; . - . :c ;~.. '.:..'. .s. ....;. ~.?. .:g::'*>':t '~I, W. . 4;.9 ,;. c. . . ::e.. . m .t.g ;.. . . W, M . ,: ~,f. . : ;7<I: . + . Q a:.: ,:,(c '- 1. ~; .: :-, :s +* i 4' ' . . m c. vy; 'a. .. ; n .o.3:;. 4se.: . . 9 , .; c.n.;g .* . ;.g p%.,..i;.. c y ...;r .v,f.. v 9,.4:..p.....i.a.w. ,n ?  ; - e

u. 'c .

w.?,v.

. , 7.:q', , 8*;..-k... ..,';yv .s.;. . %. 5... .-.;.:. ': s . .o. . .y.;.

- w,i; ;4. e ~n ,i . . . .;.u. .*. ,m; . . : ~.y ~.:,u~,.:t ^..n.e.. >p I. * ' I , .5 'y(. ~E;f ',g x:y[f~- '$, -  ; fN ],'.a. ; t,] ' . ' , , .'. .[.(*,* - a '* .. g[, ( . ** ' ' . .* Ej -. {. ,g' . ...,.[ w ;[ , {. 4 f [,.' d li , h*;l  : : is:.. ,.p .v ,J l '.l

m - n::'ea_:.": , n'. .;. 7m..u L. g.n'Mi.4'.s

.[.'t. d f .*( . ; s /, '. ,n .'I ; -* .J ' [ .[.,-~s.. 't . ,#7, ? .. . , ' '.. ~y. .4,:n. u' e, + 4; ;e , '. J. 'a/M , '- v' C , c /: .., :..:, : w :,x . :: >a .c.c:. ~  ; m....i ...;g .. .a w v.. v. q .c; c g : ,; , u . m . . . . . ,. . .:. c.. .y z.,;s. .. . m %w, c ...,. .

3 .a..,.:;m .

.. h. c 5.n p , ::v: m' >.w:,+. . . o ..m. .y