ML20148S424

Kansas City Power & Light Co Annual Rept for 1987

ML20148S424
Person / Time
Site:	Wolf Creek
Issue date:	12/31/1987
From:	Doyle A, Jennings A KANSAS CITY POWER & LIGHT CO.
To:
Shared Package
ML20148S408	List: ML20148S412 ML20148S424
References
NUDOCS 8804180439
Download: ML20148S424 (35)

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n 5 ION THE COVER

Lead lineman splicerJohn Osborn, a 25 year. .

! KCPL wieran, m>rks on merhead lines to i L keep electric service ihming to customen,. ,

reflecting KCPUs long standing conunitment to pnwiding ufe, reliable and trasonable-cost L y service. Folkming a dimcult' year < -f austere transition,in 1987 employres Coinpany wide :

focused their effbrts on impnning emcleng and pnxtuctivity while cen. T costs.

allowing the Company to regain s linner .

~

financial footing. . .

These efforts, along with the C<nnpanfs ' ,

. mcreased awareness of the needs ofits share.

l hokien, mstomen and employees haw -

l- fostered a new spirit-a competithe edge

- which will enable KCPL to meet the competi-

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l tive challenges of the future. -

1988 ANNUAL AtEITING -

l l .The 1988 Annual Alceting ofStockholden will be held on "Ibesday. April 2ti 198K at 10:0fhun.,in the 4th floor auditotiuin of the l Company's omces at 133011altimore Awnue.

Kansas City,51iwntri. Shareholden ofircon1 on Alarch 7,1988, are eligible to vote at the - i meeting and will be snailed a notice of meet-l ing, pnixy statement and (brm of proxy.

CORPORATF. OFFICES 1330 Baltimore Awnue i

Kansas City. Alissouri 61105 i SIAILING ADDRESS -

P.O.11ox 418679 Kansas City. 51issouri Gil41 '

?

CONTFNIS i l

flighlights of the Year . . . . . . . . . . . . . . . 1 +

Letter to Shareholders. . . . . . . . . . . . . . 2-3 -

The Year in Resiew . . . . . . . . . . . . . . . 4-12 t

l Financial Sununaq . . . . . . . . . . . . . . ,13-29 I i

j Boani of Directon and Omcen ~. . . . . . . 30 l Sharehokler Infonnation . . . . . . . . . . . . 31 The Company and Senice Arra . . . . . . . 32 i

! '4 r

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HIGHLIGlITS OF THE YEAR u.i*wjnui w aced

, fiesidret of #At 04mipany Pet rent e 19#7 earnings immese Inucase 7.3 % se $1.0lper common 1987 1986 (Den ease) ,g,,, ,,,n,g gg,y

'lbtal oper ating resenues (0(Wh) $ 704,839 $ 664,870 6.0 c tin cs saimpros, ,

Net incoine ((Mh) $ 103,982 $ 106,158* (2.3)

i luai nings available ihr common ((HHk) $ 93,100 $ 86,185* 7.6 e querserly reaimon stor4 4

Ascrage number of shaies 30,954,363 30,912,149 -

gg,y,,id lamesd 12 %

Per unnmon share: ,,, g ,,,,, p,,, ,gy i Earnings $ 3.01 $ 2.80* 7.5 Net non-cash credits" $ .66 $ 1.56 (57.7) ,,,,,,

Disidends $ 2,12 $ 2.09 1.4 28.44' 27,79* 2.3 ' N "I'"""

thmk salue $ $

70 75* 8 '"A "d""*d

Dividend payout (4 ) (fi.7) .

I Construt tion expenditures (IM)os) $ 78,648 $ 72,386 8.7 e""A*8"'

Elet tric and steam heat plant ((Mh) $2,953,582* $2.899,668

• 1.9  ;

Return on year end conunon

• Elf Creek compl**d '

equity (W i 10.6* 10.l* 5.0 snondyearofcomaierrief j C:pitalitation (% total)*** operation, essa 6fiaAnd l Common equity 44.0* 11.5* to y,,,ns...,,1,.c Prefen ed and pteference stocL 5.0

• GA* ,,,,,,,g ,,,,,ng 4 1.ong term debt 51.0* 52.l*

! Selected Statistics , gg, gppg

Kilowatt hour sales (000s) 9,827,924 9,323,859 5.1 Peak load- sununer (Lw) 2,531,000 2,373,000 6.7

'""*""' */  !

Peak load-winter (Lw) I,514,000 1,190.000 1.6 '"e"""" '" *e"*

Fuel mix (% ) "#i"# e"/'""""" I Coal 76.8 73.8 i oil ,3 A e femuse in cussemen and  :

Natural gas ,1 .2 uenaer summer urether Nut! car 22.8 25.6 1, 4 se twent au A sein l As erage elec tric fuel c ost ..d nn,p,.A demand;

($hnillion litu) $ .950 $ 1.050 (9.5) g,s,nhange seles reach Numher of employees 2,799 2.771 1.0 g,,;,,ie Aign Number of stockholders 40,413 41,363 (2.3) e liase matners settled in

• ~1 he Comium will apply FASit Statements Nu 90 and !Niin the first quarter of 1988 by restating the 1986 Griancial statements Af ter restatement.1986 net income will be Minoariand A.nases:  ;

$lo,369fM10 and earnings .e ailable for common stm L and earnings per common share a periad ofruse sso6flity

will reflect a loss of $<9,601/MXI) and $(.31). Other statistical information noted abuse will 6crias

]. change accordingly.See Note 2 for further diu msion.

" Allowance for funds uwd during comtnation and defened Wolf Cicek carning (osts i and operating expenws net of awiciated defened iruome tau s and the defJned cost a Moodyt Dug &l%elps  ;

j of equity resulting from the MPSC rate phaw-in plan. raise fint Mortgese j 1 "*EuImhe of long term debt and preferred and preferen<c stock includeilin tunent and ratings i liabilities l I I l

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To OUR SII AREIIOLDERS ror the > car, cainine per (onuinin shaie l were $3.01, an inacase of 7.5% fioin the $2.80 j ielx nted in 11186.\1oie significant was the l Ily all incasures,11187 was a paiticulaily linjuosement in caining qualitr. In lilS7, putif ying > car. .\icaningf ul jnogiew was non cash iteins cominiwd 22% of total cain-l accoinplished in virtually nery as}xit of our ings a substantial reduuion troin the Sti%

i businew, thus nuning us significantly clowr non-cash }xntion in 11186 l to our goal of full fiscal reunciy. .\ tost heait- Our anlit intinp weie upgnuled by I)uf f j ening is the fact that all the Company's con- & Phelps, Inc., aint again, ihr the wrond l

stituencies-its sharehohlen, its customen stiuight > car, by .N!oodyN Imeston Sen iu.

j and its employees-shared in that success Redemptions and iefinancing helped us irduce inteiest (hanges and prefened and m4 ~ prefeience disidend icquirements by about i

[

' '. $15 million annually. '

) l Rea( hing agirement with our segulatoiy

, i comnnwions on snend siginticant inatten,

'e we eII:ninated nulch of the segulatory uru ci-1 tainty prnuiling since completion of Wolf l Creek Generating Station. Iwues relating to Wolf Creck's completed (ost were resobed,

'8 including the amount of disallowanets tliat

/ will result in a write-of f of about $!Ni nJllion j q on an after-tax basis We will icilect this wiite-

~ ,

of f in the fint quarter of l!iSS by intating lilSti financial statements f.- Continued cost (ontainment elloits and I- '

icduced fnleral income tax nues, coupled with fasorable sales giowth, base enabled us 1 -

to seduce electric rates for Kansn customen ArtAurj. nryl, A. nwjening and cancel part of the inacaws v heduled for .\1iwouri customen. Our cle( tric inte j Our financial health improved sufliciently inch in the two states will be unnparable  ;

by mid year that on August l the lloard of by mid liiSR 1)it ecton dec laicd an ina eaw in the quarteily While continuing to c onunit penonal time conunon stm k disidend to 54i c ents per shate, and resomces to their (onununity, our em-4 intoiing twnthirds of the disidend redoc- ployees irs lxmded admirably to our acquots tion inade in hlay !!aSR That auion sefle ts to inaeaw eflicieno and cut costs-to do continued confidence in our ex1xs tations more with less Exp:nuled Quality Cifde

for earninp growth, enabling restoration of prognuin provided the op;xntonity for nune j ihe entire dhidend cut and tesumption of employees to auisely participate in impiov.

I dhidend growth at an cally date. ing day to-day Company oix naions On,luly 15, memben of IllEW local No,1161, icpie-senting our 'Iransmiwinn and 1)istribution woilerw aucpted a new 12 month (ollecthe bargaining agiecment. (onduding more than the yean of negotiations The Company now has ominuts with the thice tilEW locah icpinenting all our ( olleuh e lur-(

gaining employees i

4 e

I

'I hiough depar tmental icalignments in include c(onomical capacity and energy caily I!)S7, we base ghen new emphasis to puu bases f rom other utilitien, upgiuding the goal of improving (ustomer sen h e by and ichabilitation of genciating units and better awcwing custoiner needs, analy/ing load management.

wap to meet those needs, and inricasing in the months and Scais ahead, the cleo puxim tisity to hohl dow n our cost of elec. nic uti ity indmiry will see major (hanges.

tiic enit e. Inocasing competithe piewuies will call While experiencing the tint f ull calendar for innosuthe businew plam and flexible Scar of cost sasing piognum implemented iesonite strategies. For our Company, l!)S7 under our Fiscal Recosen Progium, our was a photal year; we completed the tiumi.

Company saw the number of cmtomen we tion lioin major comtruction to stable oix i-sene incicase 11,501), up 39 oser I!iS6 to a ations. As we enter l!!SS, we ate pleased to total of almost Sil7)HHL As a iesult, Lilowatt- note that KCPL is now a profitable, price-hour *, ales surged to a record itS billion for competithe, f ull senice elet tric energy com-the year, up R 19. This giowth also pushed pany. We aie confident that in l!)SS further our sptem to a new peak demand of 2,531 significant jungrew will be made by the megawatts onJuly 31, suipawing the !!iS6 Company toward full fiscal recosciy.

peak by 679.

Eru outuged by our i,uttewes and by our Foi the lioard of I)itecton ability to smtain the inomentum begun last scar, we find icinforcement for our couanit-

~

[" de-ment to become the "preferied *,upplier of elettruity m our mcicasmgh (ompetiti'e h emitonment. With tegulatoty uncertainty ArthurJ.1)oyle behind m and no major power plant con- C/vmwm <f the /hnd tiuction immediatch twfore us we base now ,

hx med our energies moie (leatly on op tut-ing an ellic ient,(u ,tomet or iented elet n ic h

tompany, and strising f or a i ompetithe edge in piicing our puximt. A.1)ruejenning*,

We aie mindful, howeser, of the impact Anident that impid giowth and demand for our piod-ut t can base on f utme capital re<piiicments. Mnmn 12,19ss Per haps oui gicatest (hallenge will be to auommodate growth while (ontaining imestment in new genenuing lat ilities in older to temain price competithe.

1)aring the year, we completed KCPl.AN

'S7, our ujxlated longnmge ,trategs to meet cu,tomer icquirements reliably and at the l least powible (ost. lietame we have an '

exclnplai) (omplement of lowt ost (oal and  ;

malear base load genetuting f atilities- I whit h at hicsed a setool 537 sptem asuila-bility in lilS7-we base eseiy expe(Luion of meeting that (hallenge. KCPl.AN '87 outlines metal options for meeting higher demands l without adding any (apitalintemhc new

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l base. load capacity till liftitt 1 ho ,e options l

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TlIE COMPEITI'lVE ElmE Additional s.nings iesuhed inon the tw in< r - p,np n m n, EMI'lDYEl3 Reloim At t of 19sn whit h reduced federal '@=a 'a' r-t'"3 a inuime tax obligations. '"*'"*"'Fven=8 pnn ide oppwtunitin

'lo suu ecd in an ein imunient of inn icasing Performance /"' ""ek')"' '" "6"#)

((niij)ctilhe lneutlicN K( PI,iTunt inailltain ( )ltistdialing (tj)ciating lM't h u in.tiu rs b "8 ,

alul enll.lin e untoiner sen it c w hile o mtain- Comlunpwide aho p!.ned a WJjor sole d &d#) "#b#""# # l ing .md iethaing busincu unts In the p.nt in uinnolling dollar outlas foi 1987- '"'""' ' A' P"'C" "" l year, we h.ne ac hined signilk.mt suu cues in peitonnant es espn ialh latulable in light '"""#"'"""""Uk' cia h (d these alcas as K(IPl. cliiplinees }i.nc (>l lHulgrt atul tiianlH Dwei resiti( titin A gained tuoie u mlidern e in their abilities aml

• Setemwide. KCFl:s genciating setem of A' h""l'A' 0"d) h.ne heuime inoie detennined to regain eight baselo.ul coal .uul ma lear Imits pinted U"'" A"C""""e'?

their Comp. uni competitise edge. an .netage asuilability ot 839. "' l*"' ' A*'""""8

• EstablisHug a new inord for the Comp.un "'i' '"" M* * " " '" A aiul cv erding irutustiy .ncrageN om snen u>c thn so iannh pmb.

$ (oalliied units at hined an aseiage ; nail. "' " "d e"" ' '"'" 6"" '

ability of osci Niq . Ir.uling the list was """"""8""'"'-

I aCmne l' nit "? with an .netage availability "'*"*'8'"""""

of oset tHiq . a new KCPl. ieund. In addi- '"'""""'"'""k"'"'"'"?

tion, those snen units had an equimlent nmtann u. pus one of availability of neatly s29. teonding the "'"") d'*"d '"'e'")"'

litth u> rcuthe Scar of iminosing plant " A* ""ll'A#"d""'"

_ per f onna nc e. C""' "' "" k"d*" ' D'" '"'

8 In Srl)teitdM'r, E ull Will! ( lerk inn h dr Unit unnpleted its scunal f ull scar of suuesdul d"M' " " "h "l'""

~ unnmen ial operation.1)niing its fint two P"'"""" '""d' '" # #'

'"# " '"8 " "#'" J '""" "#

scan of ( o:Hinen ial opetution, Wolf (:irek genclated Hu ne than lli billion giou k@ine ry new and a

"*'If"ed 6in tunnat. Ae kilowatt houts a ieund foi l!.S. mu lcar Thrift power plants. U"9"") U """' " 6

Employees Companywide h.ne .u hined

• iligh unit availabilin, low Iuci nsts and """d*d"'"'"f"'*' I significant u nt4avings maler the Fiscal aggieuhe mar keting bo< nted intcu hai ge """"0"d"4 Reu er) Prognon. In 1957, the Company sales to (ne 3.3 billion kwh foi the seat, '

"*/'"'""*""'"'

icali/ed in first tuli scar of those rumomics. setting a new Company icond for the third I"d"" ""d "*'" ' '" '" ""

• Atter foul sean of etha t, negotiatimn snuigla Sc.u. Reundcd as a iedm tion in "d' "d " "i"8' '" 6" */

in inid-luNi netted 523 million lowei rail operating expeine, net imen hange sales 4""'i"8 "/""" '* "F" trainpoitation o nts foi u ul in 1957 Ihmugh ating mn=n (belou i mn.

diin th of het 1987 pnxha tion (osa in $11 a new long tenu agicement. KCPI:s total million, a 139 imponement (nei !!nd "" *"h" d"li"' '" ' N-deliscied f uel una aie now appmsimatch * ()per.uing heat rate (a me.nm e i,1 pl.uu 10 (enh per N1.\ llitu. one of the lowest ellh ienn b.ned on the amount of heat ss sIciti lle (lisIs Ili t le ilu InIn. llpglp(l[g) g g glgg p 3 (lh ygg[.jp qgy) h q en g ,

• Retinaining of highet ont debt atul pic- fouil planh sntem wide was 14713 litu .

tened and prefriern e sn a k reduc ed lonR 2 per kwh. an imponernent (nei 19% 5<_*

trun debt intciest (harges .uut picfrned

• Cornenion of the tjoce unin at Ntommse aint pietricin e disidend requitemenn in Station f unn high- to low 4ultur o ut oper-  :

about 51'i million b o 19x7. ation was u nnpleted during the scar. With ,,

e Adlu icm e to suingent budg( h and ( au- the eu eption of laCygne l' nit "1. all the I tious spending sh.ned both u nntnu tion (:omp. uni < oal liicd up.u in is m >w f ueled expendinues and operation .uul mainte- with low sulf ur u ul. taking nen gicatei narue(ost'

.nhantage of inha ed (oal una and helping e A in enth iricased study by an indepro .noid the .uhene imp.n t of poteinial .u iil dent national o msuhing finn tanked KCPI:s iain Irgist.uion.

latan unit as the lourth lowest (ost encigT punha ei of inci 3sn nul fired units sun cy ed.

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n< owine midra'ial TlIE CmlPEITI'lVE EDGE From its beginning in 1981 KCPIAN and remmercialconJfrw- Q 'g [ Q j[7,] $ has involved a 17.Inember Citi/ ens Athisol) tion boom in the artm- Planning GIoup, consisting of htnitiew and politan Kansas City arra o>lunntnity leaden, in its dnelopment and includes douwtouw resid'*

4 Though ihe pace of tiew constniction peii<xlic ns isioni. The latest ulxlate, KCPI AN tialpewjects such as l'nio" dn>m sigin of inodeinting, Kanw City's '87 tellects our origuing trainitioii hot:1an l llillin tat midtouw arns, diwne econoniv and centtal location con- era of iliterne (o'Stiintiott with heasy ca]> ital )

and (pality flill(pictured tinue to spui the area to initali/ation, iequiteinents to a peticxl ofieduced con- l

' at irfU ncar (As A< art of glowth atid prosperity. I he total inuniber of stitu tioli requileinents In lxnitioning the ,

Kas:sas Cit) ctatotnen we sene has giown by inoie thati Conipatiy to nicet inteinitied conipetition '

thir Magner, marketi"* 13!i since 1981, including a net gain of in the future, one objectise of RCPI AN '87

]'

l artAirect in enAnical sup- 11,509 in 1987. ~1b succeed within our chang. is to defer as long as lxmible cototruction of port (right), Arlps ms- ing environtnent, we niust cotitinue to nieet iiew baseload cap 'ch), historically the sitigle tena<rs ia planniac/or and the increasing deinatui fioin this giowing laigest capital expcine for lxith the Coinpany making the mast efficient inunber of clototness while inaintailling and its custoinetx l i uic of tArir clatric Acating competitise prices. We inust pluside ade- p l and lighting smice. Fisio" I quate, reliable elet tiic senice, along with ;f  ;

q((

2030, tac Compand stra- '

lir t claw (totomer senice to allirin atid b tegic cwtomer smice ptan, sharpen our coinpetitise edge.

focuses Date's egorts and those ofotAm on pruac* Dentand tisely aceting tac changi"4 Cunently more than 29 tuillion square needs ofour esJtem. [ ppg g[ jarge conHtien cial pn{lccts (30.000 '! l

follouing a remrd squate feet or inoie) ate runently ufuler way h  !

inemtse in 19M the or iti the planning stage. Colupletion of .g namarr ofcustanners smed A[g['g 'p 3 wig pg j] ion,()ne }Umsas Cit) Place 4 r;'*

by the Ce=ta"J '"c"*5ed and other pnijeca has reshaped the Kanu /4 y tor; to aho t m,oooia Cin sksline. Residential constna tion has also 3 ,/ Ca '

19 C th< lou ), rvflerting the A=. ~~4mmirmammam giown 'at a hiisk pa(c. In 1987, mole than

, ma'i""i"# PN'Pm'J */ 13.fi(H) housing pelmits were iwtied in the KCPI AN 'XI hohes oli sdend optiolh

'Arl*alem" " > metropolitan alca. For KCPl., this gion th to meet inc reased customer electrical needs

, inmslated into nune cmtomets more sales through the year 200ti-economical optioin l j and higher demand, with the flexibility necewar) to adapt to

' l

'lotal electric kilowatt hour sales in 1987 a (hanging bminew em ironment. Major '

were the highest ner at 9.8 billion kilowutt. elements of the plan itulude:

hours, up 51ri owr 19Ni The bigy wt in. uptcin pim/mn-0119 tem purchases cica e, Tct'i, came in the residential sector, will be our major capacity strategy in the f ollowed by connnercial at 62(i and indus. shon tenn. Our cost for the pun based power trial at 2.2'i . is much lew than the fixed cost of new i s c . ,,, w r ,,, Electricity me set a seties of four peak load generation, inaking the s esoun e an econom-y records during the last week ofJuly, topping ical alteinatiw. We tuay contract to buy up to i out at 2.331 mw on July 31. 'I he demand out. 323 mw thiough 1993 and powil4 bemnd.

j. ' '

stripped the pinious record demand-2,373 Unit upraling-We are study ing the leasi.

- 5 mw establi,,hed in 198ti-by 67!i . In addition, bility of boosting output by 18 inw at our R KCPl. cmtomen established a winter peak baseload LaCygne Station through variom il demand of 1,311 mw in 1)ecember 1987, and hardwaie nuxlitications to Unit "2. In addi.

! i shortiv thereaf ter set a te(ord winter peak tion, we ate comidering pur uing the detuand of 1,373 mw onJanuary 6195X, teliteming of Wolf C eek Genciating Station itici higher than the 198ti high of 1,190 inw. to operate at fiw penent gicater capacity.

'I he so-called "stretc h nuing" (ouhl add l Supply anothet 23 :nw to om sntein capacity with l Txias's mmpetitise emitonment calh fot no f.u ility c hanges.

innosutiw. flexible strategies to pn n ide cmtom- l'mt rehaMitaten-Studies indicate that we en wi;h the elecificity they need in a irliable (ouhl emnomically trac tivate unin "3 and and low cost manner. KCPI:s blueptint for "I at llawthorn Station as natund gas lited meeti ig these eneigT needs is KCPI AN '87. peaking units for a irlatiwly low capit,d o

l outlay, we wea d gain 221 inw of peaking piopmah to sedue; oisting intes or foiego capacity. Plus we wouhl h.nc the flexibility at pait of the inte iinicases aheady appiosed t a later date to (oinert the units to huin low- aiul v heduled. Our Company was pleased to sulphur westein coal it desituhle. he able to icawn to customen the beneths of hie-lamopfacihty-KCPl. is bnestigating ieduced federal inu>me tases icsulting itoin the feasibility of a waoc to e ivv facility the 'lh Refinm At t of 1986 hmer horiowing doelopedjointly with Wheetah ator i in i- costs, cunmmies ac hined by our interne ioninental Sptenn ine, of New Ilam}nhiie. helt lightening measuies and Siacased Wheelahnitor wouhl huild and opeinte ik eleuticity cornumpt ion.

iefuse plant; KCPL wouhl purchase the st,. ;m in Kansas KCPL teduc ed rates hy 24 to pn> duce electricity fi>r customen. ~1 he in August 1987,md xhedoled a IXYi project would help addiew the area's pn>hlem ieduction for Augmt 1,1958. sning a total of of dwindling landfill space for solid waste $11.7 million for Kainas nntomen annually. 14< m rnti o,apleted disposal, while providing the Coinpany with We l'uilher agiecd iiot to seek inacases piioi AIVT Touss ibriba and 20-40 inw of generating capacity. to 1990 hecause of load grow th aiul not to on, Lnsas 6ty lw seek inacases piior to 1991 irlating to the Aishlight A*nms fith n<u-h;5#

g mum - ei inacase in valuation of' Wolf Cicek agteed to s&3 tin,, pn, riding a mic by the Kansas coininiwioil. bar&dmpfer tue Arrt.

in Sliwouri, we agiced to calu el f uture -ahle spli4 ers (righ tl.

1. ** ,O atinual incicases v heduled in the Wolf (: erk AC)*l's Gain Arspet 16 phase in plati aber iinplementing the 21"i com traiu =<tn readm.

muse jinicase set for hla) 19X8. 'I hat ainouins to liar Melanic herum f ahan,J,

, about $90 iitillion in sasinp for hlIwomi to pai particular af fention custoinen through April 1991 la l Ar 'pnial arnis of

~

Along with the sninp,(intorricts can lo<ik rer rain rus f<nners, s ud h

• forwald to v%cnd sean of pli(e stabilin. a. the sidal>

^

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Iligh senit ancilabilit%

Seniec reducedfueIsuste and in outpa(ing the (oinpetition, an cuential aggrrs sise mar &, ting by but manarment--lo help ieduce the (ompanion to icliable electric senic e is fint- pnpl< liA< foe rrug super.

need for additional capacity by shasing peak noe untomer senit e. KCPlh stratep to mar in # Ar n orm rontn>l l load growth. KCPL\N 'S7 secommends an emit h untomer seni(c ef foits is t hatuuri. renenvi,p,punkdl99 integnued piognun of load management ired as Union 20r4 woiLing now to dnelop intm Aance sal <s to a rn and inte design. This imludes the n(ling a moie < ustomer oriented, maiket dri en ord u 6il w n.

of raidential air cooling compiessor units, (ompany in the f uture. ruitomer emu rA and loweting the osciall peak demand without flcments of the sinucp imlude: unnna summer uvaf 4n alln ting the customer's (omfort loel, and a 1)neloping a highly iniined gioup to A<lped bma 19c ku A the piiting of clntiilit) hased on how mut h proside moic penonali/rd senic e aiul sales D a nronf 9.A bilha the electiirity (osts to pioduce depending in huical ach it e to ( ustomen. <6, iou t upon wheit, where and how the (intoitici a Pinsiding a girate inunhet of rute <iptioin uses it. System plannen estimate that load to meet sutious encip ioluitements and 80, s management piognmn (oubt ieduc e peak usige patterns of untomers load by oser 110 inw user the next 20 ye.us. = Continuing imohement in c ommunin,  ;

(

• nit <vMim-In order to wntinue ( hic,( haiitahic, and Hinew org.mi/aiions to ineet ( ustomers' demand we antic ipate

• Emphasizing load inanagement. .;

the need to add some onnhmtion peakii g

• implementing diin t sales piogiann to tuihines osci the next two decades, plus some iinicase ott peak encip um ,;

haseload capacity near the tuin of the centun. = Fm using on < hanging untomer needs ' '

Changes in time and in hnolop will Prin Stability nn cuitate ( hanges in (Ln to d.n implemen.

KCPL\N 'S7 ininon KCPIN unnmitment tation of Fiuon 2000. Ilowner, the snutem's to be a onnpetiti e encip piosider in out oseniding goah-goah that unnplement 1 irgion. Out ounmitment to piit e stabilits KCPl.AN-will iem iin u nntant: h e pn >-

is aho hideiu ed lli at tioin taken with out side a qualit) pn >dulI; to punide what the iegubton :n 1987.1)uung the se,u, both the ontomer wann at a nonpetitise plic e; and Kansn and hliwouri muuniwioin appn ned to punide topoon h uniomer senit e.

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! l iw wi. , w - di.ator-TlIE CmlPEl'ITIVE EI)GE Of arch-redeemed the $17.0Toeiics l l *nuun ni"'"' */'

photo), taA<s a pmonal SI1 AllElIOl.lEllS I"ClC" "I$"

• k "'"I P"" h""'d 'h" S 3 2 87I' seiies pictencd sto, L aint the $12.7Ti seiics j inimit i. hanhoum a.4 pietciern e st< x k.

i tArir d=9mir*s. u< aad Coheient atul well-defined positioning = September-icdcemed the $1323 series fru=nmamswfuyur'ta sinuegies for the futute are iniuisite for a pich ned sux L.

j Ilartmaa trishipActo) kan- i ompany alul in sharehohlen as the electric a October-relinam ed $90 million of i

dic encral A==dirdiettas utility innhat:T moses f roin a kimw n segula- vatiable nite pollution omtrol bonds aad ransfm. skanhoum toit einituninent to an uineitain one, KCPI, &the-liccaine XCI'!:s financial health rwa.)<ar, sy awmiswiv anal its employees ate optinustic that today's h.n impuned suintant:aHy amt prospech shannoun inguirin ad plain and continued diligence will gisc our ain iaue to look piomking, sneral agencia w ductiga Aanhower Compain numinow's competitise edge. upgnuint our medit ratinp duiing the yean sune, le 19s7, rAc com-e Dull & Phel[n, May ll, tuised in mting on pr as endcawrrd '* Fiscal Recosery the Companis tint moitgage lunuls nunt.

imprmuu aspurs V Finainial statistics for 1987 l x> int to gage bonds, aint secuted pollution control

! shanhoMa sm*r- KCPD considemble piogiew towant tiscal inenue bonds to 1&P/ low single A) from

, lateal ms t-c*'tiv termen mer the last 22 months. D&P 8 (high triple 11. ~1 he finn raised the

, egort,a.dstmq Adouat'- Ihlh- Rnoni kilowuu. hour sain nuing on the Companfs prefened sto(L to

! Aour ala A*'ted boat pushed 1987 openiting inenues to $70 LS D&P.S from D&P9 (mi!dle triple 15).

, 19N7 carnings to $101 pn tuidion, up Rol mer 19Ni O[wniting - . . , ,

w mon sharr <6,1=i, i a 7.5 % innras< mer 194's expeines fi>r the year amounted to $Tdo.2 million, a lti9 increase mer 1986 Kilowatt-

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' .\

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hour genetution inacased 79 Ose 198ti.

l irantly, #A< guelin ofrara- satisf>ing inacased customer demand and

%.'y+

( s

] ivi natia"ed 'a i"trar allowing for ieconi inten hange sales for the * .,

ai n,# no.aa errait, auountedform of1917 thint year in a n>w. At the sune time, aserage g f g' ')

fuel cmt per million lito dea cased 109. Esen .(  % '

l rarnino 1= Aumt 1947,

'A< 8"ard V Di"r8""

with the inac.ned genetution, total fuel (mt, the larynt single expense item, decreased

'~

~ T inn w edta <g=arter6 l "Jiq fiom 1986 The oscrullinacase in w mon itor A di4+ fend s*

Wy operating expenses icsulted from additioital .

a rrate, meon=c tu* genend taxes and the amor titation of dctened N / ., ,

i iAinds of f As diasfend cut Wolf Cieek (mh.  !

l

=adr ia Afay 19%

Fm nig for the scar wae $101 per com- ' - lP-

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l mon share, up 7.59 from 19Ni Significainh, '

] the spialin of caininp and cash now hom a Moodfs bnestors Sen ice, Inc. june 15, I operatioin h.ne impimed dnunaticall). In raised our fint mongage and secuted pob

'7JL"jnOf"' 1987 non cash aedits accounted for only lution control rnenue bonds to /d fnnn W 229 of eaininp oimpared to 569 in 198d llaal, mortgage bonds to ILtal from llaa2, c ; Non-cash aedit halude net allowance fi>r prefened stoc k to haal from haa2 and funds used during constnation, net defen ed l

' unsec uted pollution (onnol inenue bonds Wolf Cirek can3i ng unt and operating to 11aa2 hom Itaal expenses, aint the delened ant of eipiity iesulting f rom the Miwomi Public Senice Shareholder Support

!, ~ Conunission phase in plan. Earnire availa- In the midst of ellons to impnne ettitienn-ble for (oannon st x k in 19S7 also telln t a w hile ieduc ing c osts, the Company aho took a

$ '. $1Id inilliot) %ning, or 12.89 det te.nc iil sic {n to innpune the qualit of si nice to interest (b.uyes aiul piefened aiul l uelet- shareholders as well as impune (ommuni-cia e disidend icquiicmenn due piimat il) to catiom w ith inneston. analysn and other refinatuing and refundinp. memben of the financial community.

In the area of shatehohler irlatioin. the ufmptiom- I he Company an omplished Compq h.n ende.noird to enhance the sneral iedemptions and one a ctinatu ing qmdin of shm Imlda x ni(n. For ex.unph, n u e v. e in 1987:

m mpone the CompainN inponsisenew to einr .s.u a m.m =Jann.u)-icdcemed a lei % 9, $50 milli""

d i omnuin n qunn ,n d e inmuu e of l

.ini m w ar-, tint nuingage bond.

e ra tw rw sun' u ninnun or sqlm ment dkida nd I1

chet k'., we selec ted a new tramfer agent, ;m inneument 5:n peihrme.1 compethi cly '*

• W'w'~'*

' h x ated in Kamas City. 'a tix k ( ci tificates i.r- with both Star ,latd & Pmr/4,500 sux L hido m.w printed and mailed locally, allowing the and the ele (ni. utility nu!mtry owe thc lust j l Company to inue most new sun k ceitificatn the years 'I he guph suggests that $l0/E within 2 6-30 houn af ter a icqunt is ie(cised. imested in KCPi. (,onmon sod at the end 2 7 In 1987, the Comjuny condia ted a suncy of 19S2, with dividen:h reimnted, would among sh.nehohlers of i s nuaan stock. A base giow n to about $21,70G at the crut of large majority indicated duy weic "pleased" 1987 . hk ll7c ceiurn is appnmim.ael) l or "wiy pleased" with sharehohler sen in s equivalent to a i3 .nerage .mnu d ictur n z arul mmunmications mer thh the year petic. ,

he a(hliti, n. many helptul suggenen i were made t y shareholdett 'Ihe l'oo:p uw Administruthe De ectopments , j is wot king to implement as many of these onidnet-On Ma c 'i. the Poant of liiicoon as pnicticabh. named A.1)ruejern inp Pinident of RCPL

!)uring 1987, a period of change for both Senior Vice Pinida of Maiketing and Pub-

nCPl. .uul the stock m uket, emuting the fair lic & I mployee Rela'iom > hue May 1986 uduation of KCPI securitin became itu reat Jennings suu reds Arthurj. Doyh, w ho mn- n u e a d ingly im[mrt.au. As part of an ongoing imev tinues as Chainnan of the no. ul and Chief j tor relatioin piognun, the Company hmted lhecu *e Ollicer. , 'C'y'MZ meetings with Lev memben of tFe finaruial Jenning, ll, joined the Com;uoy in 19M I" y' communities in New Yor k and other east coast as a stafI attoiney from private law pmctice. ,,

! cities. We prosided tht m with infonnation 1Ic was appointed Auktant Genend Coumel E aboat finatuial and operating results, regu. in 197S and became General Counsel the  : ,

6 laton deselopment, and oppoitunitin that following year. lie anmul the addit;ona!  % ',

lie ahead fnr KCPl Such meethgs fmter respoasibilitie of Auktant Senet.uy in Ivo, I a cleaier undentanding of the coinp.un's benune Vire PiniJent in 19S3 and Sedo: .

prospec ts among the fin mcial commumty, Yke Pini<knt in !!W whith allonk gic.ner opportunity for RCP!:s Adehtionalb. th :lioard appoitoed ,

mnunon stock to be f aiily valued in the j. Mk hael Enmv i2, to the ellie o. Scritor [

d marketplac e. Vite Pinident of Splem (y enitiom. In hk F

. 'lo remain (ompetitiw, hCPl. imnt aho inw p< Jtion, Ecun has sc tomihiht) fo:

5 continue to pnnide a a.:npetitive ieturn Truntniuion and Di uitcdion 0; enoion, to sharehoklen. M indicated by the mm- in addition to Sprem Power Openniom.

paratise total return graph below, KCPl. .a Nnd r,m!m- At the anmro meeting on A; nil 2% tuS7, shatebolden ekx ted Piinuun-i..~,o - ~s e ~ n la ut :nni two new dire (ton to KCPI:s tw .od.

' 9 '7p"" iIw % d;in na are A DmeJennings _, a% .

i um Coirpany Pinident, and RobertJ. Dineen. .A -

"" m6 Dm. en, X is Picsident uul Chiel Fwuti e t

{, < w:uer of 'I he Madey Lompany, . hamas )

4 ( it) based diwisitied nunuf at t'ning and  ;

, nic e compam. Dineet, Edned Mar k> '

. 1983 as Prnident and '.hief Or4: rating ,

e

( oficer, af ter wiring as noident and Chici } j q f l I co.ti e Officer of an llhuok f.um eqtJr .

f uent (( Hn[Mllt. I

• b l AW'l Qg. . g fem \;-f* 4 s e {

tWm I%n y ,

Mr t '

l.

k f\ if 49 M A7

' mis .tm ise, f > f mL rwres i s.! .4h w )

e A , ,viel b u 1 12 t

FINANCIAL SUhlhiARY or*< 'a-r$ millmassif Statements of Income . .14 k llalance Sheets . .15 Statements of Lxes . ,.10  ! 1 l

Statements of Cash Flows . .17 Statements of Cumulative .

f Preferred and Preference Stock ,

and ImngTenn Debt . .18 I Statements of Retained Earnings . . 19 3 Notes to Financial Statements .19-23 Auditori Re[xnt . .24 Management's Discussion i o se s3 u s7 and Analy3is. .25-27 l 1

Eleven year Sununaries .28-29 Vet inten ha%v %s sh4-billwes) r.

E e4 k

l

$l1 83 84 89 M M7

~

ll

.kers tintsv iwi G>st D

t$%nkui 2

i E

l 4 Wprrima Art fica 1%uW h, f >perating A rnstyil,u lhiesti Iwlerd aM.A!%.ew o pw it,<=wd i unds ( W lh.rms ll3 Constiwt==

13

l

' Kansas Csty 1%mer & Ligia Gmpery STATEh1ENTS OF INCOh!E Year Ended December 31 1987 .1986 1985 (tho,ssand> F Operating Revenues Electric $ 696,665 $ 654,387 $ 583,113 Steam heat 8,174 10,483 13,508 Total 708,839 664,870 596,621 Operating Expenses Operation Fuel 141,752 145,451 163,003 Interchange power (net) (44,090) (39,159) (23,371)

Other 122,668 123,525 109 255 Maintenance 75,143 73,509 .70,841 Depreciation 83,412 84,177 62,443 Taxes (See statements)

Income 67,961 66,289 62,560 General 73,831 64,951 59,801 Deferred Wolf Creek expenses and amortization (Note 3) 9,500 (6,904) (14,344)

Total 530,177 511,839 490,278 Operating Income 174,662 153,031 106,343 Other Income and Allowance for equity funds Deductions used during construction -(16) (1,345) 64,590 Deferred Wolf Creek carrying costs (Note 3) 8,700 38,407 42,522 Af PSC rate phase in plan (Note 3) 14,866 16,714 -

Afiscellaneous-net ofincome taxes 512 744 (2,429)

Total 24,062 54,520 104,683 Income Before Interest Charges 198,724 207,551 211,026 Interest Charges 1.ong term debt 89,723 97,747 98,824 Short term notes 3,347 1,299 1,778 Alisce!!anecaus 1,708 1,868. 1,365 Allowance for borrowed funds used during construction (36) 179 (46,062)

Total 94,742 101,093 55,905 Yerrly Resuhs Net income 103,982 106,458* 155,121 Preferred and preference ,tock dividend requirements 10,882 19,973 21,867 Earnings available for common stock $ 93,100 $ 86,485* $ 133,254 Average number of common shares outstanding 30,954,363 30,942,149 30,196,715 Earnings per common share $ 3.01 $ 2.80* $ 4.4 i Cash dividends per common share $ 2,12 $ 2.09 $ 2.36

• The Company will apply FASB Statements No. 90 and 96 in the first quarter of 1988 by restating the 1986 financial statemer,ts After restatement,1986 net income will be $10,369,000 and earnings available for common stock and earnings  ;

J per common share will reflect a Fm of $(9,601D00) and $(.31). See Note 2 for further discussion.

The accompanying Notes to Financial Statements are an integral part of lev <tatements.

14 (

J

Kasuas Cay Ibam & light Compa,ry BAIANCE SHEEIS December 31 1987 1986 ASSFIS mo ao Utility Plant Electric $2,931,161 $2,876,731 {

at originalcost Steam heat 22,421 22,931 )

(Notes 2,8 and 9) 'lbtal 2,953,582 2,899,668 Less-Reserves for depreciation 629,312 551,490  ;

Net utility phnt in senice 2,324,250 2,348,178 {

Construction work in progress 25,549 23,039 Nuclear fuel, net of amortization of $39,897,000 and $26,293,000 7,269 8,231 lbtal 2,357,068 2,379,448 Deferred Wolf Creek Costs, net of amortization of $9,500,000 and $0 (Note 3) 91,315 98,172 Investments and Nonutility Property 10,899 9,748 Current Assets Cash 139 1.998 Temporary cash imestments -

5,506 Special deposits 8,415 246 Receivables Customer accounts receivable, less reserves of $1,416,000 and $1,259,000 47,611 46,244 Accrued unbilled revenues 23,451 22,345 Other receivables 12,079 13,863 Fuel imentories, at aserage cost 25,5 0 25,902 Niaterials and supplies, at average cost 43,564 43,699 Prepayments 5,942 5,343

'Ibtal 166,726 165.146 Deferred Charges KCC Wolf Creek carrying costs (Note 3) 2,941 -

N!PSC rate phase-in plan (Note 3) 31,580 16,711 Deferred income taes 4,625 5,863 Other _ 26,256 26,803 lbtal 65,402 49,380 Tbtal $2,691,410 $2,701,891 LIABILITIES Capitalization Common stock-authoriieti 60,000,000 (See statements) shares without par mlue-30,954,363 shares outstanding-stated value $ 449,697 $ 449,697 Retained earnings (Notes 2 and 6) 428,520 406,759 Capital surplus 1,991 3,796 Tbtal 880,208 860,252 Cumulative preferred stock 92,000 92,000 Cumulatise preferred stock (redeemable) 2,716 32,876 Cumulatise preference stock (redeemable) 4,166 8,333 Long-term debt 1,019,505 1,077,992 Total 1,998,595 2,071,453 Current Liabilities Notes payable to banks (Note 3) 39,000 -

Current maturities oflong-term debt 60,000 52,122 Preferred and preference stock (Note 7) -

45,300 Accounts payable 56,872 45,827 Dividends declared 1,677 4,448

! Accnied taxes 10,752 8,931 Deferred it.come taxes 8,439 10,923 Accrued interest 17,698 17,458 Accrued pay roll and vacations 10,186 10,241 Other 5,927 4,810 To'al 210,8M 200,060 Deferred Credits 1,eferred income taxes 375,467 329,601 Deferred investment tax credits 101,489 97,945 Other

( lbtal 5,008 481,964 2,832 430,381 Commitments and Contingencies (Notes 2 and 4) 4 lbtal }2,691,410 $2,70 ) ,891

.15 L

nn., ae, n ewa <-.,m STMDENE OF TAXFS Year Ended December 31 1987 1986 1985 INCO.\lE1AX EXPENSE o u w so lhtal income tax expense was less than the amount computed by applying the statutory federal income tax raic of 39.959 in 1987 and 16% in 198(i and 1985 to income before taxes.The icasons for these differences are as ibliowv Taxes computed at statutory rate on income beibre income taxes $ 68,697 $ 79,ol2 $ 100,029 increase (decrease)in taxes iesulting fium: i Allowance for equity funds used during construction 6 6:3 (29,711)

Wolf Creek carrying costs-equity (610) (8,8r2) (10,935)

SIPSC rate phase-in plan (5,939) (7,688) -

Dif fer: ,ces between book and tax

..epreciation not normaliicd 4,388 5,511 1,288 Removal costs (1,219) (1,286) (1,161)

Amortization ofimestment tax ctedit (3,847) (3,810) (3,027)

State income taxes 4,889 3,212 2,791 Other 1,610 (666) 1,063 lbtal income tax expense $ 67475 $ 66,fil 2 $ 62,33i CONIPONEN1S OF INCO.\lE TAX EXPENSE Currently Payable Federal $ 13,742 $ -

State _ 2,948 - -

'Ibtal 16,690 - -

Deferred Federal (net) 42,547 61,503 60,193 State (net) 5,194 5,919 5,168 lbtal 47,741 70,452 65,361 Investment Tax Credit Prosision 7,391 - -

Amortiration (3,847) (3,810) (3,027) lbtal 3,544 (3,810) (3,027) lotal hicon c tax expense 67,975 641,612 62,334 less: Inmme taxce pplicable to other income and dedu(tions 14 323 (226)

Income tax expense applicable to operating income $ 67,961 $ 66,289 $ 62,560 DEFERRED INCO.\lE TAX EXPENSE Depreciation dif ferences $ 35,832 $ 55,472 $ 37,395 Debt component of AFDC 20 (88) 22,211 Wolf Creck carrying costs-debt 3,116 9.256 9,013 Defc5 red Wolf Creek expenses (873) 3,213 6,005 Repair allowance 36 (l.014) (817)

Unbilled icsenues d,248) (25) 2,025 Expenses capitalized 50 2,169 1,150 Tax loss carry f orwar(' I1,851 (1,875) (12,976)

Other (3,443) _

3,014 (1,675) lbtal $ 47,741 $ 70,152 $ 65,361 GENERAL TAX EXPENSE Property and real e tate $ 30,086 $ 21,873 $ 23,6 5 Gtoss acceipts 36,751 33,825 31,153 Other 6,994 h,253 5,i16 lbtal $ 73 831, $ til,951 $ 59.891 The acwinpanying Notes to Financial Statements are an integral pas t of these statements.

l 16

.1

kmas aty twr digt napen STMEAIFNIS OF CASH FLOWS Year Ended December 31 1987 1986 1985 CASil FLOWS FRONI OPERATING ACrlVITIES uwe Net income $ 103,982 $ 100,158 $ 155,121 Adjustments to reconcile net income to net cash provided by operating actisities:

Depreciation 83,412 81.177 62,113 Amortiration of nuclear fuel 13,648 18 197 7,796 Deferred income taxes (net) 47,741 70,152 65,36 a im estment tax credit (net) 3,544 (3,810) (3,027)

Deferred Wolf Creek costs and an ortization 800 (15.311) (56,866)

SIPSC rate phase in plan (14,866) (16,714) -

Allowance for equity funds used during construction 16 1,315 (64,590)

Ltal 238,233 215,06I I66,238 Cash flows impacted by changes in:

Receivables (689) (3,625) (12,314)

Fuel inventories 377 10,103 9,675 hiaterials and supplies 135 (i1,608) (5,668)

Accounts payable 11,415 (1.110) 6,283 Act rued taxes 1,821 (569) (168)

Accrued intes est 240 (746) 1,078 Other operating actis ities 4,401 (3,506) 5,211 Net cash prmided by operating actisities 255,563 203,703 170,335 CASil FLOWS FRONIINVFXDNG ACIIVITIES Construction expenditures (78,618) (72,386) (157,727)

Allowance for borros,ed funds used during construc tion (36) 179 (16,062)

Other investing actis ities 2,554 2,377 (1,369; Net cash used in imesting artis ities (76,130) (69,830) (205,158)

CASII Fl.OWS FRONI FINANCING ACflVI'lll'S lssuance of long term debt 109,971 73,380 110,289 Consu uction funds held by trustee - - 16,292 Ismance of common stock (o; 16,036 and 1,212,922 shares, respectisely) -

435 21.371 Increase ia borrowings under loan agreements - - 13,000 Retirement of long term debt (161,094) (79,713) (61,885)

Retirement of preferred and preference stock (75,300) (20,000) -

Premium on retirement of stock and long-term debt (9,347) (5,810) -

l Preferred and preference stock sinking fund (4,327) (12,660) (8,491) increase in short term borrowing 39,000 - -

Dis idends declared (74,658; (81,052) (92,903)

Other financing activities (l1,013) (819) () 46)

Net cash uwd in 6nancing activities (186,798) (129,269) 27.521 NETINCREASE(DECREASE)IN CAS11 AND TEN!PORARY CASil INVESFAlEN'IS (7,365) 1,601 (7,299)

CASII ANDTENIPORARY CASIIINYF51 NIFXIS AT BEGINNING OF YEAR 7,501 2 900 10,199 CASil AND TESIPORARY CASif INVFSTSIEN'IS Mr END OF YEAR $ 139 $ 7,50I $ 2,900 Cash paid during the year fm:

Interest (net of amount cr.pitalized) $ 93,302 $ 100,765 $ 53.915 Income taxes 16,557 2,322 989 j3

$ 09 85_9 $ 103,087 $ 51,901 1

17

w ca,n-er r u cm STATEMENE OF CUMUIATIVE PREFERRED &

PREFERENCE S'IOCK & LONG TERM DERI' December 31 1987 1986 CU Af ULATIVE PRFFERRED STOCK (Note 7) m,.a,,

$100 Par Value 3.80% - 100,000 shares $ 10,000 -$ 10,000 4.50% - 100,000 shares 10,000 10,000 4.20% - 70,000 shares 7,000 7,000 4.35% - 120,000 shares 12,000 12,000 7,72% - 130,000 shares 13,000 13,000 No Par $ 2.33 - 800,000 shares 20,000 20,000

$ 2.20 - 800,000 shares 20,000 20,000 lbtal $ 92,000 $ 92,000 CUM ULATIVE PREFERRED SIUCK (REDEEMABI.E) (Note 7)

$100 Par Value 4% - 27,157 and 28,757 shares $ 2,716 $ 2,876 No Par $13.25 - O and 300,000 shares - 30,000 Total 5 2,716 $ 32,876 CUMULATIVE PREFERENCE SIOCK (REDEEAIABLE)(Note 75 No Par $ 8.00 - 41,665 and 83,332 shares $ 4,166 $ 8,333 i 'Ibtal 4,166

$ $ 8.333 LONGTERM DEWl'(ruludingcurrent maturities)(Notr 8}

First Mortgage Bonds 11% series due 1989 $ 50,000 $ 50,000 5% ~ series due 1990 20,000 20,000 13%% serles due 1991 25,000 25,000 13,48% series due 1991* 25,000 25,000 10%% series due 1993* 7,500 7,500 9.46% series due 1994* 60,000 60,000 4%% series due 1995 15,000 15,000 5%% series due 1997 30,000 30,000 6%% series due 1998 25,000 25,000 7%% series due 1999 26,000 26,000 9%% series due 2000 35,000 35,000 7%% series due 2001 27,000 27,000 7%% series due 2002 30,000 30,000 8%% series due 2006 40,000 40,000 8%% series due 2006 30,000 30,000 5%% series due 2007* 21,940 21,940 5%% series due 2007* 20,000 20,000 8%% series due 2007 30,000 30,000 9%% series due 2008 25,000 25,000 6%% series"A"due 2008* 9,200 9,200 6%% series "B" due 2008* 21,800 21,800 13 % series due 2013* * - 60,000 12 % series due 2013* 11,980 11,980 Mortgage Bonds 8%% series due 1991 60,000 60,000 Guaranty of Pollution Control Bonds 5%% series due 2003 15,000 15,000 Variable rate series (% at December 31,1987):

Refunded in 1987 - 40,000 1 Refunded in 1987 -

50.000 '

6.26% series "A" due 2015 56,500 56,500 6.65% series"B" duc 2015 50,000 50,000 6.51% series "A" due 2017 50,000 -

6.52% serles "B" due 2017 40,000 --

loan Agreements 118,000 118,000 Nuclear FuelIrase (8.84% at December 31,1987) 45,819 41,820 Unamortiied Premium and Discount (net) (1,231) (1,748) lbtal $1,019,505 $1,077,992

• Pledged in support of pollution control bonds or other agreements.

• • Redeemed onJanuaq 15,1988-included in current liabilities.

18

~_

knuu cry iten UlagM Gmfuny STMEAIENIS OF REFAINED EARNINGS Year Ended December 31 1987 1986 1985

%,ias Beginning Balance $406,759 $381,353 $322,135 het income 103,982 106,458 155,121 510,741 490.811 477,256 loss on Reacquired Preferred and Preference Stock 7,563 - -

Dividends Declared Preferred and preference stock (at required annual rates) 9,035 19.383 21,722-Conunon stotk-

$2.36 per share 71,181

$2.09 per share 61,669

$2.12 per share 65,623 74.658 81,052 92.903 Ending Balance (Notes 2 and 6) $428,520 $406.759 $384,353 The accompanying Notes to Financial Statements are an integral part of these statements.

NorES TO FINANCIAI.STATEAIENIS

1. SUNINIARY OF SIGNIFICANT Negative AFDC is being recorded on credits canied ACCOUNTING POLICIES in nuclear fuel in pn> cess resulting from the settlement System of Accounts: The accounting records of the of nucle r fuel htigation in 1980.

Company are maintained in acconlance with the Depreciation and Maintenance: Provisions for depreci-Unifonn System of Accounts prescribcd by the Fedeml ation are computed on a straight line basis punuant to Energy Regulatory Commission (FERC) and genemlly rates ordered to be used forjurisdictional propeny by accepted accounting principles.

the 51issouri Public Senice Commission (h!PSC) and Utility Plant: Utility plant is stated at historical costs of the Kansas Corporation Commission (KCC). Approxi-construction. These costs include taxes, papoll related '" '""""" I (""'l*> site rates were 3.07% in 1987,3.01 %

costs including pensions and other fringe benefits and m 1986 and 3.51% m. 198a an allowance for funds used during construction. ,Du Cmnpany charges to inaintenance expense the repain of propeny and replacement and renewals of Allowance for Funch Used During Construction items detennined to be less than units of pmperty, (AFDC): AFDC includes the cost of borrowed funds except for such costs which are charged to clearing used for construction purposes and a reasonable rate accounts and redistributed to crious opemting, con-upon other (equity) ftmds. The allowance for borrowed struction and other accounts. The costs of renewuls funds represents an alh> cation ofinterest costs to and bettennents of units of property are charged to construction, while the alh,wance for equity funds the utility plant accounts. Property units retired or is a non cash item ofincome. AFDC is changed to othenvise disposed ofin the nonnal coune of busi-  ;

construction work in progress during the period of ness are charged to the resenes for depaciation, construction. When a construction project is placed along with removal costs, net of sahnge.

in senice, the related AFDC becomes a part of the The amounts of maintenance and depreciation original cost of the completed plant which is used expense other than those set forth in the Statements to establish rates for utility charpes under established ofIncome are not significant Rents and lease pay-regulatory mte pmctices. The rates uwd to compute ments for rai' road can, computer equipment, %ildings gross AFDC are compounded semi annually and aver- and similar items are also not significant, aged R8% in 1987,116% for 1986 and 12.2% for 1981 19

Retirement Plans: The Company has pension plans Comixments of 1987 aiul 1986 provisions for pensions fbr all its wgular employees, including of Ucen, pros id. (in thousands);

ing ihr benefits upon ictirement, nonnally at at;c 61 S.enice cost S 5,088 $ 1,051 In accordance with the Emplo>ee Retirement h'icome ,

Interest cost on projected S.ecurity Act of 1971 (FRISA), the C,ompany has satisGed at least its minimum funding raluirements. lienehts hD obipis lul9 1L915 Actual return on plan assets (21,396) (20,270) under these plans reflect the employee's compensa- Other 11,133 6.120 tion, yean of sen ice and age at retirement. Prior to S 4,3 14 S 2,116

.lbul Pension Expense 1986. pension expense equaled the amounts accrued ihr funding.

lleginning in 1986, provisions for pensions ate The pension expense was $3.3 million in 1985.

detennined under the ndes prescribed by Financial Accounting Standants lloard (FASil) Statement No. 87. Nuclear Plant Decommissioning Costs: The MPSC Pension expenses fbr 1987 and 1986 were detennined and the KCC estimated in 1985 dollars the cost of using the ibliowing factors: decommissioning the Woif Creek Generating Station (Wolf Creek) to be $103.3 million and $140 million, December 31 d O S M M 19m in Km ad lW M6 Af av 5,1986 in 51issouri, the Company begim rate Ohousands) n,c;>vey of the respectivejurisdictional portions of

. its 179 share of these costs which are being charged Accrued lienefit Obh.ganon: .

unuam to M. and E ,

Vested $112,337 $120,056 '" "I*"" '"E "* P",n m Nona ested 2,695 4,713 '"luitements, suco amounts are being recosered over

' Intal S115.032 S121,769 ' h" #" "

• P'""'""d Pt "'"d " " " ' ""l ' '" ' '

fund to be used only for the physical decommissioning Deteimination of Plan Assets less Obligations: Nuclear Fuch The cost of nudear fuct is amortiicd to Fair value of plan fuel expense based on the quantity of heat pnxiuced asnts (a) $ 193,553 $176,208 for the genenuion of electric encigv. Under the Pndected benefit Nuclear Waste Polig Act of 1982, the Department oblig;uion (b) 115,172 157,117 of Energy (DOE) is iesix;nsible ihr the pennanent Dilleience S 48,381 S 18,761 disposal of spent nudear fuel. The Company cunently pays a quarteily fee of one mill per kilowatt-hour of Reconciliation of Dif ference: nuclear generation to the DOE lbr future pennanent Contributions to trusts disposal sen-ices. 'l he disposal costs are charyed to Prepaid S 1,829 $ 1,208 fuel expense and reunered thniugh electric rates.

Accrued liability (2,741) (1.607)

Unamortized tran'sition Defand Chagm Cenain com such as diow incund amount 30,551 32,680 hu nudor storms, premium on iedeemed debt, debt Unrecognized net gain (loss) 24,G10 01,614) expense, and other costs, are icconled as defened Umecogniicd prior chaiges w hen it is probabh, based on histo ical reg-sen ice cost (5.898) (6.906) ulatog piecedent, that iuture n.tes established by Difference S 48,381 S 18,761 the regulaton will iccover amonii.uion of such costs.

Revenue Recognition: The Company utilizes cycle (a) Plan assets are invested in insumnce contmcts, bil!ing and accrues the amount oficwnue Ibr sales corpomte bonds equity securities. U.S. Gmernment unbilled at the end of each reixn1ing period.

securities and shon tenn investments.

Income Taxes: The Company genemlly nonnaliics (b)liased on a dismunt rate and mte of m. crease in future salag lcrets of 99 and 54 for 1987 and k dfe of the use of acceierated tax depreciation 89 and 5G for 198h, methods and other timing differences Defened mcome taxes have been pnnided fbr the dilferences }

, A 79 fong term mte oficturn on plan assets was used. between book and tax depreciation except Ihr the I

ef fec t of accelemted depreciation on Mismuri property acquired prior to 1972, hes defeited on piuperty t

l 20  ;

I w _

i

additions for cenain prior years are now being restored quarter of 1986 that recovery of the disallowed costs to income as the timing differences reverse. ns remote.

The effects of the current deduction of removal In acconlance with these new stambrds, the Wolf costs are flowed tinough to net income. Creek regulatory disallowances will result in a write-off The tax effect of the cumulative net amount of in 1986 of $145 million before taxes and $96 million income tax timing differences fbr which defened after taxes.

income taxes have not been prmided is approximately

$40 million at December 31,1987.These amounts are being recovered through allowed revenues as the MTE hlAITERS timing differences revene. Slissouri: The h!PSC's rate phase-in plan has resulted For the yean 1986 and 1981 the Company incuned in deferral of a cash recovery of a [mrtion of the cost net tax opemting losses of appn>ximately $ 1.3 million of equity with recovery of such defernils plus the and $26.6 million with estimated tax benefits of $1.9 canying costs on the defernal in later yeais.

million and $13.0 million which were used to reduce The 51PSC's phase in plan rates as originally the provision fbr defenrd income taxes. Such a nounts authorized were modified on April 1,1987 and of deferred income taxes were irstored during 1987 November 23,1987 to provide to hiissouri retail elec-as the net tax operating losses were utilized and tric customers the benefit of conmrate income tax climincted. mte reductions resulting from the Federal'Iax Refbnn investment tax credits have been defened when Act of 1986 as well as other economies achieved by the utilized and are being amortiicd to income over the Company. The only rate increase or decrease remain-senice lives of the related properties. At December 31, ing under the phase in plan is a scheduled 2.2% rate 1987, the Company had unused and unrecorded invest- increase on Af ay i 198R ment tax credits of approximately $24 million.These in acconiance with the Nmember P3,1987 agree-

, carn fonranis will be available to reduce federal income ment, the Company has ceased, cffective September taxes payable through 2002. 30,1987, deferring a return und-r the plan.The Company will cc,ntinue to aconic can)ing costs oc this defenal through December 31,198& Phase in

2. FASB SI AFEAf f VI5 NO. 90 AND 96 deferrais, including canying costs, will total S314 mil-FASB St.uement Nu 90 (FASB 90), issued in Decem- U"? at Deccink M M AnmnMon ohe her 1986, requires recognition of a loss on the financial defennis om Se >ran will beg.m onJanuary 1,1989.

statements because pan of the wst of Wolf Creek was Kansas: OnJuly 7,1987, the KCC issued an Onler disallowed fbr nue-making purposes by the $1issouri resolving certain accounting issues and authorizing and Kansas commissions. decreases in annual Kansas retail electric revenues FASB Statement Na 96 (FASB 96)- Accountir.g for of S4.3 million (2.0%) effective August 1,1987 and Income 'laxes, issued in late December 1987, requires, $10.4 million (4.85%) effective August 1,198R The among other things, that deferred tax assets and lia- nue reductions reflect the impact of the Federal ~.x bilities be adjusted for changes in current tax rates. Refbnn Act of 1986 as well as othereconomies achieved Because the Company is a regulated utility the only by the Company.

j effect an net income that will occur from the appli- In itsjuly 1987 Order, the KCC revalued the Com-cation of FASB 96 is an increase in the after tax pany's Kansasjurisdictional investment in Wolf Creek FASB 90 write oft. at its full pnident cost of $2,294 per kw. The KCC also Application of FASB 90 and 96 is not required until authorized the Company to acenie, with provision for the first ouarter of 1988 and 1989, respectively, how- future recovery, additional carrying costs on 314 mw i ever, earlier application is encouraged. Application of alleged excess capacity beginning August 1,1987.

of FASB 90 is being delayed until FASB 96 can be implemented so that the tax efTects attributable to the Deferred Wolf Creek Costs: Orders from the KCC d SIPSC pided for continuance of cormruction write off can be reconied m accordance with FASB 9h Application ot FASB 96 requires the detennination of accountmg for ratemaking purposes subsequent to

)

the September 3,1985 commercial in service date of mrious balance shee: adjustments. Fhe Company wdl Wolf Creek to September 30,1985 and Afay 51986, apply both of these statements m the fint quarter of respectively. Also authoriicd was the defennt of cer-l 1988 by a one time restatement of the 1986 firy ancial

statements. The detennination to restate 1986 results s oh r q % m 'h Md md%

is based on the Company's conclusion m the fburth amortized and recovered in rates over an approximate

g 21

1. CONI.\llT.\lFXIS AND CONTINGENCIES 7. PREFERRED AND REDEE.\f All!.E PREFERRED AND PREFERENCE SIUCK Nuclear Insurance: .I he ownen of Wolf Li eek base purchased the maximmn anillable public liability The outstanding Cumularise Picfened Stock of insumnce of $160 million and an adtlitional S560 mil- S92 million may be redeemed at the option of the lion of covemge is insured by Secoadary E mancial Company at prices which in the aggregate total Protection (SFP).The SFP covemge is f.mded by a $98 million.

mandatory prognun of defen ed [ncmiums assessed Scheduled sinking fund icquirements for outstand-against all ownen oflicensed reacton. The amount ing redeemable prefened and preference stock fi>r of assessment per reactor is $5 million ($2.35 million, the next five > cars are as follow 3: Sl.1 million in 1988 Company's share) for one incident and $10 million for the remaining shaies of the SR00 Cumulative (S 1.7 million. Company's share) for any calciular year. Piefeience Stock aiul S.2 million for 1988 thnmgh The Price Anderson Act which limited the public 1992 fi>r the sinking fund on the Mc Cumulatise liability of nuclear reactor ownen for claims arising Preferred Stock.

from a nuclear incident to $710 million expired on During the period 1985 through 1987, the fi>llowing August 1,1987. 'I he House of Repreentiuives has issues wer e iedeemed or purchased:

passed a bill which wouhl establish a limit fi>r this liability of approximately $7 billion with assessment Number per reactor of up to $63 million (S29.6 milPon. Rniemption snics or shares Amount Compann share) per incident. Senate conunittees ohousandu are considering similar bills. C""l"p" P"4""f,g,g gyg 3ggy g The ownen of Wolf Creek hase procunxi properr damage insumpce of approximately St. l billion (the cumulaiise Piereont Redeemable) maximum available as of December 31,1987) and 1983-87 4's luo(c 5 160 i 19M7 $17.05 228 910 522.800(b) extm expenw (ieplacement power) insurunce. Under igg 3;g 37., j ogy g 3;gyngg both policies, the Company is subject to retroacthe 1987 51125 300 9 o $30 000 assessments ifindustiy losses, with respect to eac h polig year, exceed the accuinulated funds antilable un t Mu ermMe) i i

3 to the insurer under that polig.The estimated maxi- i93 >s 6 5123> 4 thiW $ 1.107 inuin retroactise assessments for the Company under 19X6 51235 4 ] Ai79) $ 4.166 the policies total approximately $5 million per year. 19 s $123 > 12i w $12/>ooM (a) Repe rsents annual mandaton sinking fund.

h,uclear Fuel Comm itments: At December 31,198.,. ,

M 1mluded in moeni habintica inn embd,19%

Wolf Creek's nuclear fuel commitments (Company's M Optional sinking f und.

share) weie approximately Sf>7 million for unmium concentmtes through 1997, S?l5 million for enrich- At December 31,1987, the Company had authorized ment through 2014 and $16 million for fabric;nion M7,157 shares of Cumulative Prefened Stock at a par through 2011. mjue of $100 per shaic,3,172D00 shares of Cumulative No Par Preferred Stock and U)00,000 shares of Cumu.

lative Preference Stm k without par udue.

5. S1IORI JI ER.\1 ll()RROWINGS If any dividends on its prefernxi or prefesence The Company honows short term funds from banks stock are not declared and paid when scheduled, the and through the sale of commercial paper as needed. Company could not declase r . pay dividends on its Under minimal fee anungements the Company has '

conunon stock or acquire any shares thereof fi>r con-bank lines-of-credit totalling $100 million. sideration. If the amount of any such unpaid dividends equals four or more full quarterly dividends, the holden of prefened or preference stock, as the case j

6. Di\'lDEND RFNI RIGIIONS may be, voting by the cl #es prescribed for this pur.

Retained earnings at December 31.1987 included pom could elect representatises on tho Company's

'5"""I"IDir""-

$12 million which was not available fi>r cash dividends on connuon stock under the provisions of the Inden-ture of.\f ortgage securing First .Nf ortgage llonds.

WG TM DW' Fint Mortgage Bonds: The Company cannot iune additional First .\for: page lionds authorized by the Indenture of.\1ortgage and Deed of'limt dated as 22

of December 1, IM6, as supplemented, as long as any due 2011, which was reflected in canent maturities of the N!ongage Ilonds (discussed below) are outstatui- oflong-tenn debt as of December 31,1986, ing. Substantially all of the Company's utility plant is On Januaq 15,1988, the Company redeemed pledged under the tenns of the Indenture. $60 million of First .\1oitgage lionds,13'7e series due 2013, which was reflected in current maturities of Afortgage Bonds: .I.he amount of.\f ortgage Bonds long-term debt as of December 31,198 <.

authorized by the G,enend .\f ortgage Indenture azul Deed of Tnist dated as of December 1,1986 as supple-mented,is unlimited.The amount of additionallxmds 9.JOINTir OWNED El.ECl RIC UTi!.ITY PLAN'IS which may be issued is subject to certain restrictive provisions of the General N1ortgage Indenture. The 'I he Company has, undery. .nnt ownenhip agree-ments with other utih,ues, undiuded interests at G,enend Afortgage Indenture constitutes a moitgage ...

lien ulxm substannally all of the Company.s utih.tv December 31,198 .e, m uniity plants as fbliows u.n plant a.1d is junior to the lien of the Fint Afortgage I uHions of douanh Wolf Creek la Cygne latan loan Agreements: The Company has an agieement, t' nit t'nin t nit expiring .Nf ay 31,1991, with a group of international C""'Pa"f' $hdre 47 4 5"% 709 banks which ]novides for umecured loans up to $200 g,ii;n pi,n, ;n syn ;< c $3,333 $2;; $339 million at interest nues derived from the lamdon Inter- Nudcar fuel in senit e $ 3-Bank Offered Rate. At December 31,1987, $100 million Spent nudear fuel 5 21 - -

at interest rates nmging from 7 jig to R3% was out- , ['"[",'"[d[l""i"""" $ 91 mn $ 61 standing ($135 million atJanuary 31,1988). huinulated aniortiution The Company has a financing ammgement with (Nut har ruch 5 10 - -

a bank, expiringJanuary 16,1990, whic h enables the C""'panis aurediini opuin -nn. E0 m U,9 Company to bonow up to $50 million by collateraliz. Each participant must provide its own financing.

ing its coal and fuel oil imentories at nues based upon 1 he Company's share of direct expenses is included the cunent bankers' acceptance discount mte plus an in the conesponding opemting expenses on the accept u.ce charpe At December 31,1987. SIS million Statements ofIncome. See also Note 2.

at ROW was outstanding.

Nuclear FuelIrase: The Company has a lease e;piring April 30,1992, whic h provides for financing of (osts 10. QUARI ERIX OPERATING RI' SUI.lS up to SSO nu.llion of the (.ompany s nuclear inel.'I.he (UNAUDII ED) lessor will obtain, through the isstiance of commercial 1st 2nd 3rd 4th paper ba(ked by letten of credit from commercia] Quann Qu.u ta Quas ter Quaner banks, or from resohing credit loans, the necessan 1%7 Obousandu funds to purchase the fuel and make interest payments "P"'d"g res enun $1W42 $D&9% $21&372 $ 1 %f>69

. Operating mc ome $ 32,131 $ 16.3til $ 61,851 $ 31,019 when due. I.he C,ompany cap.ita lizes the cost, mcluch.nM Nct inonne $ 16.834 $ 2Ntm $ 41.6% $ 13n7 related imerest costs, of the leased nudear fuel in E.u nings per process foi both book and rate making purposes. The (""""""'h"e $ .62 $ .s i $ 1.36 $ .39 Company is obligated to reimbune the lessor for the 39xn nuclear fuel obligation as the f nel is consumed in Operoung inenue. $ 112.159 $ 167,620 $203,733 $151.03s the reactor. Operating inunne $ 23.791 $ 3&x68 5 57f,0' $ 30.765 Net income $ 30,137 .$ 30.728 $ 11.193 $ l.39N a)t h)

Scheduled Afaturities: The foHowing pollution control Iwnings per bond series base sinking fund requirements irginning '"""""" sh u e $ E0 $ 82 5 1.17 5 .00th) in various years: 5%Q in 1997,5%Q in 199K 6%9 "A" (a) Reflects $8.7 million net-of. tax w rite-of f of defened in 1999,6%9 "B"in 1999 and 5%9 in 1989.The aggie- Wolf Creek costs.

( I gate amount of maturities and sinking fund require-ments during the next five years oflong-tenu debt (b) See Note 2 telating to th restatement of 1986

\ outstanding at December 31,1987 (exclusive of the financial statements in the first quarter of 198R After loan agreements, which the Company expects will be

~

restatement Ith quarter 1986 net income and earnings extended, and the nu< lear fuel lease)is $50.2 miHion per com on share will reflect a loss of S(91/i91900) in 1989, $20.2 million in 1990, $50.2 million in 1991 ands N U.

)

and S.2 million in 1992. The business of the Company is subject to sea.

OnJanuaiy 27,1987, the Company redeemed sonal fluctuations with peak peiiods occuning during

$50 million of Fint .\fortgage lionds,16%% series summer months.

23

AUDrIORS' REPORF 7b the Stockhobbrs and the Mrd <f Dirntors <fKansas City linwr & Light Gnnjnny We have examined the balance sheets and statements of cumulative prefened and preference stock and long-term debt of Kansas City Power & l.ight Company (a Missouri corporation) as of Deceml>er 31,1987 and 198R ami the related statements of income, taxes. retained earnings arul cash flows for each of the thice years in the period ended December 31,1987. Our examinations were made in acconlance with genemlly acc epted auditing standaids and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessmT in the circumstances.

In our opinion, the financial statements refened to above piesent fitiily the financial position of Kansas City Power & l.ight Company as of December 31,1987 and 1986, and the results ofits operations and its cash flows for each of the three years in the period ended December 31,1987, in confonnity with genemlly accepted accounting principles applied on a consistent basis.

ARF 11CR ANDERSEN & CO.

Kansas City. Missouri, January 29,198R i

j

(

1 I

u 4

es

kman Cats nw &Ight compmy MANAGEMENTS DISCUSSION AND ANAIXSIS OF FINANCIAL CONDITION AND RESUI:IS OF OPERMIONS KWII sal.ES ANI) OPERAIING REVENUES FUEL. COSIS Sales and revenue data: Average systcm fuel cost per million til U decreased to $950 in 1987 fmm $11)50 in 1986 and $1.333 in 1981 Increase (I)eacaw) rn,m Prior year Atemge cost per milh.on III U of nuclear fuel, m.clud.

19x7 1986 ing disjmsal costs, decirased to S.53 in 1987 from $65 KWil Rnenun _KWii Rn e n u" in 1986 and 1981 This decicase refletts the lower cost (million9 (millions) of. nuclear fuel loaded m. the reactor during the refuel.

Kwh salm ing completed in 1)cccmber 1986 Genemtion innn

( ia e) ,

Wolf Creek accounted for 23% of the 1987,26% of Indusuial 2.2 3 .8 S the 1986 and 12% of the 1985 total 15IUs used in Other (2.9) _-- (20.3) J) lotal 5Aq 42 electric jmxluction.

n.89 72 Sicam heat and Average fuel cost per million BI.U for Ibss.l i plants other in enues m 0) decteased to $1.073 in 1987 from $1.186 in 1986 and w ul sin $6x $1.131 in 1985 The 1987 and 1986 decreases are due The components of change in resenues applicable to reduced delisered costs of fossil fuels, mainly due to kw h sales: to a new contract reducing niilroad freight charges effectise April 1,1986 In addition,1987 reflects the I",Cj,(,[#

, ,n , ["[ completion of the western coal conversion projects vis7 g; which allowed the Company to utilize less expensive

(""lli"n5) western coal.

Rn enu" Kwh saln $L.

The compments of change in fuel costs:

$U l 10 11 f_su rcases uel tost reitnenmthrough baw rates fu l adjustment dauses 0) f.'""i P"."r T. ear J) -19"I

.I<st $12 E (mill,ons)

E*i Residential and commercial kwh sales increased Fowil f ueled gencianng units in 1987 and 1986 compared with prior Sean reflect. *',"; ",' fj',$$'f,'"c"""" ""d 39 $ g3 f ing primarily increased usage due to an increase in .kcrage f url o nt W) (2S i

the nuinber of customei5 and wanner summer weather ' Intal 1 (90 Industrial sales were signincantly impacted by  %"jed'Ijl;";', g3 gg incicased sales in 1987 and decreased sales in 1986 herage f uel uist on -

to a major steel mar.ufacturer. Euluding this manu. Lial 0) IP facturer, industrial sales decicased 6% in 1987 and 'I"ul WO 50m increased 1.1"c in 1986 Resenues were posithelv impacted by the Kanus setail electiic annual rate increase of $28.2 million INTERCIl ANGE POWER (N1T) in late 1981 In addition resenues weir positively Interchange sales exceeded inteichange purchases impacted by the .\fissouri retail electric first and by increasing amounts in 1986 and 1987. The increases second. year rate increases under the phase in plan aie due primarily to improved availability of the Com-i of $2a2 inillion etrectise Nf ay 5,1986 and S7.7 million pany's fossil. fueled generating units, lower fuel costs I

effectise Af ay 51987.These increases were partially and the requitements of other electric sprems. '1 he I ofIset by the $1.3 million limsas retail electric annual level of interchange saks in the future will depend mte decrease, effective August 1,1987. upon the Company's sptem requirements as well as The decroases in steam heat and other sevenues in the f actors mentioned above.

1987 and 1986 are due to a change in the pnxiuct and process of a major steam customer which was instituted

( by new ownenhip in the thst quatter of 1986 and a

( decrease in the number of steam cmtomens n

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

WOLF CREEK GENERAL TAXES Wolf Creek, a nuclear plant, commenced com. Geneml taxes, excluding those associated with Wolf mercial operation on September 3,1985 The plant Creek, increased $7.5 million (13.4 %) in 1987. This operated at a capacity fisctor of 91% during the four increase is mainly due to higher gn>ss receipts taxes months of commercial operation in 1985 70% in 1986 because of higher billed sales and higher property and 66% in 1987.The 1986 and 1987 capacity facton and real estate taxes. The increased 1987 propetty reflect Wolf Creek being out of service fbr 66 and 96 taxes are due to a refund of $2.3 million received in dap, respectively, for scheduled refueling, during which 1986 for a settlement of the 1985 51issouri protested time mrious maintenance projects were completed. property taxes and an increase in property tax rates.

The 1987 refueling outage wns completed onJanuary 4,198R The Company's 47% share of the operating expenses incuned at Wolf Creek since commercial DEFERRED WOLF CREEK FXPENSES AND operation are shown below. Ah!ORTIZATION, AND DEFERRED WOLF CRELK CARRYING COS'IS 1987 19x6 im . .

gniiiiono Deferred Wolf Creek E.xpenses and Amortuanon, and Deferred Wolf Creek Carrying Costs reflect the er operation $8 income statement defernds, oniered by the KCC and

.staintenance 13.2 11.1 2.8 5!PSC, of Kansas and hhssoun Junsdicuonal Wolf Depreciation 37.2 38.7 16.2 Creek costs from the September 3,1985 commercial 1 $11 511 51 . in senice date to September 30,1985 and Afay A 1986, respectively Net kwh generated (OMO 3.061.976 3.261.338 1,381,303 Deferred Wolf Creek C;ulying Costs also includes c.:n)ing costs subsequent to September 30,1985 on On!! " OPERAFION EXPENSE *" " # '"P"' '"# """"

base by the KCC. I hese defennis were recorded Other opemtion expense, excluding that associated throughJuly 1987 in the asset Defened Wolf Creek with Wolf Creek, decreased t9.8 million (9.8%) in 1986 Costs. ElfectiveJanuary 1,1987 for 5!issouri and The 1986 decrease results mainly from higher regula- .sugust 1,1987 for Kansas, the Company began amor-tmy expenses in 1985 due to costs incurred f or rate tiration of the respectiwjurisdictional portions of this cases and a one-time 1985 accrual for bonuses payable asset. Such amortizations are included in Deferred '

to bargaining unit employees upon the signing of nev' Wolf Creek Expenses and Amoniration on the collective bargaining agreements. In addition,1986 income statement.

expense reflects the ieduction of pension expense due Defenul of can)ing costs subsequent tojuly 1987  !

to application of FAS11 Statement No. 87-Emploiers on the 314 mw of Wolf Creek capacity excluded from i Accounting for Pensions.

mte base was recorded in the asset KCC Wolf Creek l Canying Costs. In acconlance with the KCC'sjuly

.\fAINTENANCE 1987 Onler, these can ying costs are based on Wolf Creek's prudent cost ($2,2M per kw), an increase from Nfaintenance expense, excluding that incuned at the valuation used in the KCCs September 1985 Order i Wolf Creek, decreased $60 million (8.8%) in 1986 The ($1,290 per kw).

1986 decrease reflects a reduction in transmission and distribution maintenance.

.\f PSC RAFE Pil ASE-IN PLAN in accordance with the AIPSCs rate phasein plan (see Note 3 to the Financial Statements "Rate 5!atters"), the Company has reconfed as income the non-cash defened cost of equity and the canying costs thereon.

f

INTERFST ENPENSE PROJECTED CONSTRUGFION EXPENDITURFS I The decrease in interest expense during 1987 re- Projected five year construction expenditures, ficcts primarily the retirement of bonds in August 1986 excluding AFDC, are as follows:

andJanuary 1987, partially offset by lower interest mte bonds issued in December 1986 The dectrase also construction Ewenditures g33 g39 g gg, gg pg reflects a reduction in the nuclear fuel lease obliga-oninions) tion resulting from payments to the lessor as the fuel Generating is consumed in the reactor. Lower interest mtes on the facilitie$ $21.5 $ 22.2 $ 101 $ 16.2 $ 13.9 5 t<9.9 Company's variable interest rate debt was also a con- ("N"'j,f{,1 19.2 233 HJ 22J 2&2 M9 tributing factor to the decrease. These decreases were racilities 9.2 10.1 25.0 15.1 6.7 66.1 partially offset by an increase in shon term interest Distribution expense due to an increased lesel of short term debt an i eral o 6M 62A 58 3 6Lo 292 >

outstanding during 1987.

The decrease during 1986 reflects mainly lower

%u $99 9 $uM su s.2 $u21 $ms $55u interest rates on variable rate debt and a decrease in The timing of construction and cost estimates are the outstanding nuclear fuel lease obligation. The subject to continuing review and adjustments. Actual impact on interest expense of new bonds issued in construction expenditures may ury significantly from September 1985 and December 1986 was ofTset by such estimates.

the early retirement of bonds in October 1985 and August 1986 CAPrFAL REQUIREAIENIS AND LIQUIDFIT EARNINGS PER SHA~ . The Company cutTently estimates that jt will be ,

able to meet constmction expenditures with internally.

Earnings per share, excluding the listed non cash genemted funds. It is anticipated that funds for matur-credits, are as follows:

ing debt through 1992 and the pn.ferred and pieference 1987 19s6 m85 stock sinking fund obligations will be provided from operations or short-tenn debt.

Earnings per $ hare tFPs) $3.01 $2 w $ui Uncertainties which affect the degree to which these less: Net AFDC per share" .18 .90 iM capital requirements will be tuet by funds provided e r 1(a -

.12 .27 from operations include such items as the impact of NIPSC phawin plan inflation on operating expenses, the lesel of kwh sales, per share .48 .58 -

regulatory actions, availability of the Company's Net "

• g $ 1.2 4 * $ .10 generating units and the lesel ofinterchange sales

• See Note 2 to the Financial Statements relating with ther utilities.

to the restatement of 1986 financial statements in The Company presently has on file with the Secu-the first quaner of 198R After restatement,1986 rities and I xchar,ge Commission a sheirregistration

! earnings per share will reflect a loss of $(.31). The statement under which the Company can issue up to write ofTis another non< ash adjEment so the $100 million of additional Alongage llands.The

$1.24 will not change. a unt and timing of future sales of these securities will depend primarily upon marke* conditions and

• • Net AFDC represents the combination of allowance the needs of the Compam.

for funds used during construction and deferred '

Wolf Creek canying costs, net of defermd income taxes.

"*The increases in 1987 and 1986 earnings per share, excluding the above non-cash credits, reflect increae.ed rates, increased kwh sales, reduced fuel g and interest expenses and irduced preferred and

[ preference dividend requirements.

27

\ .

L m C6/bv&IgetGefmy ELEVEN YEAR SUAINIARIES OF FINANCIAL AND SELEGI ED STATISTICAL DATA Summary o(Fa aings 19H7 19w 1952 1956 19=1 Iw2 twl tw 19N 197x 1977 Opesating Re,e.we, mns t in ti k 1 696.66% $ 654397 $ 1o3113 $ 5NW $ Sn370 $ 47% a02 $ 46%^25 5 4:419 $ Mi>me 5 SitJM7 5 2% fat

%scarn heat 8.174 10.443 lives 12 M% 9 173 9 N27 u% TJM3 179 4 A 76 4 fm I.4al 704 539 hav4 570 59ei n21 531414  % 2 541 int @s 4717ll 411 % ) 37tt475 il m.661 279. tai?

. Operanng E ap ane itteam (lpctaimn 220.130 *

.?.3 A17 2 H N57 240524 241076 2"1974 I M8). 8 7 4 17 4 t#.1 (A4134 1314W 11010

\t a m ten am e 75.143 73..% F 70.n 41 57p>2 3 tn4 t>L 4% 3630% 32 emo 3431) 3u39) rs.4%

lie ptet iai n en 83.412 f. 4 177 62.443 47 Ji61 46319 45.215 4 4 9nt 413U 14.m til74 yp3%

la nes Irwome 67.961 M 2ma #4Di us.h til %2 t#3 46 41577 42 rm.* 9 %9 26.137 I k. 4 %

! 6cnc e al 73.331 64.9;l M*9 6 niel 533n $2.07 % S t .9' m 17.9 % 41 914 v ',I l W319 Deferred bil Ostia etgs,$es and an.otWation 9.30s) /6 'ot t (14.3441 - - - - - - - -

"lot.sl 530.177 %ll At8 4'*f 273 4 7f t!.% 4 '>m **wn 447 3d=> 377.?;5i i W. l l s fin *wl 2616 t f 274 3 %

Operating income num 174.662 131.411 U=iM41 112.62= In44x1 77S24 94.4 6 1% > l7 4407% no12 46.126 Other Intone and Deductions a m u Allowan< c 6.c cqmer f unds used durmg e onstnm emn 116) (13th 0 4 V*i 78 433 M*9 h '*4 ?8471 14 I75 l'* 467 12343 7.W2 lleirtred hil t ret h m n mg :osn 8,700 34.407 42? 22 - - - - - - - ~

\lP%4. raFr phaw m plan 14.266 16784 - - - - - - - -- -

\f ru ellaneout f nco $12 744 (2 4f's 44 ? 41) 2% iW 127 t il2: W4 s%743 (P4 T. dal 24.062 54324 laI M1 74172 Rx *. 4 3o 026 74 4'd8 19 tdt 14 771 I I M9 7.U 3 Income before inscrest DEN'~" ___I N24_ _ j.pgl_ ,,jl,q__,3y__ ,@ { @ 9 W_, ] 213'E Itent _tyt,*. 4{ jg7j f _ _ _,54 (7w laserest Garges vasm l ong ice ni dctit 89J23 97 747 9a .*2 4 anA41 70. lln e i2ew  % 232 4 4 ***4 44612 11 247 26.4 %

j Wri set 9 notes 3.347 I ?c s 1J74 1341 4312 6.021 3p+b 4Jhl 1.44% I W8 l id A

\t +4 rtlaneous 1.704 th 13rd 1 274 1.271 1397 lR 4*9 7.151 2. t xs. 54) ?u 41maru e for 6tn=ed f urrh uwd dae mg t onwor ton t% IN # 66M2s in%o 4 41.=9 ti 134 r;7eo (24 d7N ,22 'io7 p (14.2111 41n790 69"4i

't. 4 1 94342 l ol us t  % %s n%n 31 xw nes

• 4 4J 49 173m 27 29s 2tJ77 22 2 %

income befure Cumulatne Fffe<1 puru 1019x2 I sl.4 t l ne e l lin. n* lu l2l 626. 9 1 Tu t to e.A f o i  %. % ) 41 424 t l .wi Camulasne FIfect of Giange f

6n Resemer Remgnesian am o - - - - - - - -

7 ?o? - -

Nel lareme mru 103.982 1% 6W IM l21 151.441 12e; pl put.9 41 79 146 t,wfi's 41351 (1 924 3lyt Preferred and Preferente %eas n Dnidend Requeremente r**m 16.R42

- 19471 - .21 NT 21 ;N 14.191 11749 12 t i n lo sig g 719 73,s

-- -- -.21 - 17 h h ro n . 5 9tl#4  % 4a' " $ li12il $ IN V4 f 4197 5 %Pt S - it lau 1 $_ ._- . - - - . . - -

1---l o l.u l l $ .w.

- 62 784 $- _ =_ $-- 14 ?n 5 24 n4=_.

Farminp Per Gem emn hee 1 3 01 1 2** 4 41 5 J 79 $ 1 22 $ 2 91 1

$ 4 in i i15 $ 2 01 5 2% 5 1 95 Ratio of Faramp se Fiwd Garges 2 77 2 07* 1 ou 3 37 1 44 Y h) 27% 2 mu 3 me 1of 2 7=

Return on %earend Equsry* 10 6 % 10 1 % ii % 1721 1%74 11 P$ 1421 It24 7 tog io %4 4M i C_ ape _taliaanon Data Qimumn h k Iquity s=*6

• 5 AA6.204 $ stM.2 5 mwt94 $ -.1314 5 tm617 i $ 5nl92 5 m 311 $ 424 n;2 $ 37t211 1 327 ? o S P2 Dei

, W r age sheers.=ewanduqi 30354163 M 9421 W %i,1% 7 B . =..* C lo ? ri t7m 223lo wn 2q.to2321 19 373.t.M 1 h314.114 14 4tA431 1232 4 l'*t

( ch dn WeruhFr aarr i 2 12 5 2 ird S 2% 5 231 5 2 17 5 f ul 5 l 'a 1 iN $ 1 76 $ 1 il 5 I to Preferred h b Fa ro ) 92ts0 $ 42.r m $ ll21so $ l i t e = *) $ ll2m $ ll 2.tsts.: $ lig am $ ll2Juni $ ll2tm $ lit am $ t l 2 != =>

D = 4cn.t requormenn n n o S 6 273 5 7 7'a' $ 58'4 5 A414 5 d 444 $ M.414 $ x 414 5 a til 5 m elt 5 n.414 S 73??

l ker a<c do dend raic 6 air, 741 744 7 P5 7 vs ;y 7q 7 y4 7W 7M 741 {

Preferred h k l

iRedecenable) cm

• t " $ 2J16 $ h'oli!6 $ #O 8 % $ tA W $ %I% $ W316 $ StO. I twi $ iM $ 11% $ 4 316 thwiend requnerrwun asu $ 3.682 5 Cthi 5 9.279 $ $ 8,77 $ 7W7 5 4.W2 $ 144 $ I Nt $ tw $ 16h $ 171 berage r%derd rer 13 #% 14 l'4 1414 le 1% 1421 1471 4% IM 4W 401 0.01 Preferense Wh titedeemabact o s eo " $ 4.166 $ 2".x t T 5 1 M15 5 il f#.7 1 n *it $ Wm 1 Wm $ Wm S 2 \ 'm $ li(n's -

Daidend rrymremenn "a o S 927 $ Om $ 41=s 1 4 *26 5 il w 5 il*7 1 1157 5 3 xil S 2 4m 5 IN -

besnedmderdra 9 11 % I4717 to 7W lo w 7 lu w1 1010 jo ul 9711 e twr1 a tall -

teng term Debi d8 8N" ll.079.505 $1 lu ll e 5 3.I S N l l .n 4 51 " 7 $ M b4t 5 'u? A16 5 t+2.ow $ 612 877 S %* C6 $ vit n44 1 4 W372 Intriest on debt unio ) 189123 $ 97347 $  % =2s $ an e.i t $ *o lie $ e.'i pa $ M 2TJ $ HA4 $ 44t,12 3 1J 217 $ p r e, bernc rrucieu rav 11 . 2 0 % a !O 91M 'n'. 9lP; 94o1 n n* 4 x 17 % T3ng nm h 7c4 Of heT Data and Ratioe*

Cur +rm tem cspendmees vs s u 1 74.644 $ 7235'. $ 1571 17 $ 2*7 h72 $ I M;' %4 7 $ thivl l I R"O $ '2MI6 $ 2+ A3 M S 170 Ws1 $ 157J41

'Iset Aorn oa ns o %2.6*l .4 t e $JJole94 716540 % $1424 to? $1 H*1 1% $ 1J92 227 1' 6173 *1 Sl3h MA $ l391/itA $1.DeJM $l inu xi t 10,4 blue pre ib.re 1 28.44 $ 17 79 $ 27 la 5 ri ti $ 21 H $ 21 % $ 22 25 5 21It 5 21 m 5 21 w 5 21 7s

( orwi % h l yorn item 4004 4131 34 W 37 ;'4 164 36 W H74 %I% 34M .11 7'i 342%

4 s.none.n so. L Pne r ibgh $ 11 % $ St S 244 5 N. 1 2h $ la. 5 1 *4 $ l '. 4 5 l*+ 1 Irs 5 21 %

l"= 1 21 * $ la 18W 5

!! 5 $ l' 5 14w 1 It 1 12 + 5 14 5 8 le i 1

• v.

• Ihe Iam pe, v.U q% i H)I %etrw % w end % on ukef-n poem of f ue e be remmg ska l4%(~rmal weavsu 4 hre townsat. (W vt rewaw wille $IfLiswan)etwsme medaMr p.r e u-s e.,4 w mc om .wn sre e a a + t e sy qiwatun et s In tuker m,u.et s,.p m.n., ~>er4 me vu w er es.+

8'IsenI=f,q sawman k Av r* sert as tw v 4*wraf e esm4 nertrist unives*>4ers M

r Electrie Sales kaeistas 19M7 19 4 tw% 19Al 19xt 19n2 1941 luo 1979 197n 1477 ltesenues (fxnru Resatentbl $ 252.217 $ 231tm $ $6.M9 $ l'at625 $ l**9313 $ thn.%4 $ 134 916 $ 161.971 $ !!I.170 $ 111.972 $ 91363

- Gmmen bl 309.001 2M.3 'ri 2543A3 241/ws3 2272Mei Dai mi 194326 176 Sis 144,125, 124/ int lo7Ju indusanal 113.649 190373 101145 103316 933h3 Ark 953 94 thm no.M2] 7h4% nl.4M M9 t l Publu strect and highwa hght.sig l $.240 litsr2 12.127 11.h04 11.015 9.b l 6 9.342 6325 7.n41 h32) 639M Puhin authorines - p.e and hghtmal 10% W 9m 97 M9 M n2 75 69 74 as Othev eles trw utdmes 4.999 1167 6 12) 11J54 17.674 . 12.611 12.644 10.633 93P)4 A %9 Alah lutal 693.21S ts*il .2 4 3 379267 Sr4M99 549344 671%4 461672 4 M.417 M1352 Sit.2ta 264484 Other elettnc rrsenues 3.452 1542 1946 16W 3.h26 2.2 6k 2.1 19 IA41 1 732 1379 ~ l.409 lout $ 696.666 $ ta4.387 $ M9.113 $ 5703W $ M13*O $ 475An2 ' S 4*A 425 $ 440.192 5 % i044 $ Sitia7 $ Thh.M1 Sales in Kilowase floors tim #At Residential 3.030.543 2A N.310 2 657.01 R 2.621140 2.719Jm2 2378.447 2.34 th46 2,M9.467 2.254. % 2 2. 46).7 M2 23M4JC9 Commen bl 4.282J79 4.094.403 ?JS7.14 4 1 579.710 3. 4".9 % 3.3M673 1231.2 % 13 Mini 11a3310 3. l M 2.673 3nno3n9 indu. areal 2.315.894 2.2e4111 2.244324 2.272.457 2139JM l.9W 411 2326f44 2.141,924 2.9 1201 2.Kr! 619 2.147. % 4 Publu niscet and heghwas hghtmg 69.117 69277 hum 7 67.707 f478 4 (A62% 6630M 67,172 fA%1 bM.24N EX24 Publw auth entn - p mer and hghnng 1.635 1400 1.6A2 1.647 1.%4 1.657 1.614 1.693 IA76 2.710 2392 Othee c6cruw urdnm 197.952 113.134 160.174 26i137 s 4103M 325 W1 327.022 3 % 144 32tH72 198.916 317316 Twal 9_._M2._7.92 49 42in_W N.*tuintN M *W737t> M.7V379 A072.Lin A3 3 N.3'N 8391 W5 8_218343 M

.3.-M9M 7!"* 4

• 5 i

- . , = =

Average Number et Ceseceners kesidenual 342.09N 3913M7 324.133 3153n7 3093np4 $n63 %  % 4 61% M1417 2'*M.413 2 % 402 2M376

( nm me ri tal 44.974 43791 41.947 to M26 40 3 % 40u63 19 3 % 3As=4 M372 SN 713 S til indu.in41 2,446 23M 23 9 232M 2.4% 2.476 2.3 W 2.2 ti 2.142 2.121 2Ja?64 Publu street end hegh=as hghtmg att  !!2 123 121 120 120 122 I?"  !?1 121 172 Pubin authontorn- peer and bghtmg Il 11 11 11 11 Il 11 .1 11 12 11 Othee rlettrk undetecs al 12 14 17 19 13 13 14 14 16 16 total SM9.701 3773= 4 368 x16 sv392 35 tin 7 141 441 346A76 342 764 319.07% 3143*7 322.% 2 betage kmh per g unw.mer A.917 4_% 1 M 197 Nj?7 Mj74 7J$$ 7JOO S.423 7.5 % M.464 7 'r20

% esse rewnvept r k=hy renas 8.26m

_ n 281 7 %9 7 449 ' 3 45 6 742 6 hut 6 fr23  % 373 4 341 4 88*7 Imad 5easnaire Generased ancu- k.h Fss4 I I.965.94 A 12. l l %.M 4 ll.170Jfr2 10.1 % Mal 9.191312 9.13A 24 0 19J6233o inJn).mol 73%391 43dl.224 M 4 4n. I N Pun hami- k = h easru 143ta $1212 12.% 4 12 526 12.%9 11.146 11.05l 11J61 754093 fi l.wl I Ma>*2 inerei hanged Inco - k a h rtm ary g 2.492.315, s 2.l Ma gen 41.wgil g ih3 6 3,4a 193 g g (g39 93g, , g yg,x 379) sta r!341) 1,1 % 1 t>4 flM,4 21 (I M2.6%)

local- kwh oearn i t e n7_J.e. .t. _9__%_927o

,.9..w-s_n_9.1 _93. )m o_7o. _93_973_27 N

._68 N. 497 , _'88_6 _4702

. _9. 2m. ._n61 __M a l l_fe_ _ _9 0._116. %__m_.4 413_76 Maunium net hnueh dem4nd m k o. main i= mact) 1.514.000 1.490f a no I 4 86.tzwi 1.tm a.th e 1.4 % te m 1.4lis um t.304. fun I rrJ.f a ns 1.317;mm 12*63mo 13MJu st Maumum net imori, <lem4wl m kd.mem aumnien 2.531.000 2373Jun 2f titwo 2.W73= n 2.32 4 tswl 2.1673xv 2.12tta m 21%nw I.%4 evn !Jn7jMun ljam>Jno Mt gener4emg < apabihn in k dasm ann aummer) 2.917.000 2.917 tsm 2.m7/n H 2.477 t#O 2 63 4.smm 2 7*4JuM 2,M 4 3# M J M3434c 2.VUWU fyalJwn 2.67$3m m

\ct (4 pat H) m b tiamatie isohh mnl hated aumente t (44.000: 41.tmo 41fu nn 15 l f'in 4 t jy o - gmygg glMrwm - 9symio g lo t.enan Inf M pef hfi ke h geMet# fed 10.6*6 IqJ54 10.6 % 103 % 10.n? 4 l l.13x 11.119 l l.14 I I ,h13 f t.2hn 16318 fanhee Data blar m an41.agn .u rro 8 96607 $ % 999 $ 97.4!3 8 '<! 9 M $ M9.2 46 $ M71'ai $ 242 % $ 73fe2 $ t* *do '$ 54 m1 $ 5fM Pens ms and hrnehn stm o 11.319 9 4xt 11_4v7 1337* 15Jud) 14 474 12339 lih70 9 947 6 M61 7A7m

$. 107.946 $-r to .n=2 -- $.._ lim ar22 $ lu6327 $ . I n4_3n6 $ 10:t.3*i

.. -. - - - - . - - . %_ 92.we.

- $- .R._T 272 $. _ _7t41_2 $. _til..%. _4 5-

-- . 4.6 2%

\ umbre id e n pt= cs ine. cmber 11 2J99 2374 the 2AM 29N 2.M7 2 929  ! >i *i6 2. Ard 2J26 2372 b"I dgee Data-g-. sed

• uune. and nn mm $ liut e $ mis 2 $ vm $ at w $ miu $ ei $ m 27 $ mi,w $ 2sm $ m% $ sifi6 Penusms and lw ncfus gsafu 12.616 10312 IW2 123 % 11792 Ittml li.hlo 1033l 42*2 6.2* 7 7.3 W

$ 122.660= $=116 464 $ If14*19 $ 973 % $ 94 aw $ 91475

==:= :-== ==.:-.- - - . _ :a .

$ x 4217 $ 77220==-~.=-.:

=r=-_.-

$ 7l JtAl=$=Molf $ S9 0n

- - -- :: =:

h umkarf 4d emy bnec% llet etUbre 31 3.l $4 1lM $Jer4 f ($1 2jh4 2]QQ 2,h9 4 T h24 ff/p) !J22 2.4 l (

% hden er pedudre He %:4 se re% ws eihmud sa ** paa etw parrep nu na p.mavemed emis l.

I l

29 4

s

BOARD OF DIRECIORS -

ARfilURJ. DOYLE* GEORGE E. NEITELS,JR. WILLIS C. TlIEIS* ,

Chairman ofthe Boani nrsident, Aliduest Alinerals,Inc. Chainnan ofthe Boani arulOnlefErnutite Oficer Pitt.sburg Karum Simonds Shieldslheis Gmin Gumfnny ,

WILLIAh! 11. CLARK *

~ ""#"##I"" '"'"#" N"N"E ~K"" '"*A""U #" ""'#"""""#'

14esident and Executite Director

" I1 """I "l*" "

RollERT Ii. WESf* i

~ Urban Itague of Grmter Kansas City LOUIS C. RAShf USSEN Chainnan oftheIknrd

-community sertice ageruy Exxutite Vice1WesidentFinance Butler Alanufacturirg Gmpany  ;

and GirfRnanM Opar -supplin of mnn-raidnutial buildiry RollERfJ. DINEEN ystans jmity unfonents and

, 14esident and GiefExecutite Ojiar GEORGE A. RUSSELL

""'""'E"" #*Y" The Alarley Ompany Guincellor l

-ditersifial rnanufactunng Unitenity ofAlissouri-Kansas City

1. ""I""1 EUGENE 51. STRAUSS WilllAhi D. GRANT

• Owner ofStmins ,

, Chainnan of th:Iknrd iruurancegeneralagmy ROllERT k. 21hIhiERhiAN l Bruiness Alen's Assurance Gmfnny ggg9A 999933g339g3 i%ry Dirator

1. /^ *#"## ikesident ROBERT A. OISON

~ " " " ' "

Clearinghousefor Alidcontinent Advisory Director A. DRUEJENNINGS Rmmlallom President -infunnation exchangefor philanthropic actit'ities *hfember Executive Committec l

i i

il COMI%NY OFFICERS ** t i

4 ARrilURJ. DOYLE, GI J. AfICHAEL EVANS,42 RONALD G. WASSON,42 Chainnan of theIknrd arul Senior VicelynidentSystan Oferations Via 14esidentAdministmtite Snvices ChiefFxxutite OJ]icer 1933 1933 BERNARDJ. BEAUDOIN,47 KENNErli P. BALDWIN,61

A. DRUEJENNINGS. 41 ViceIVesidentFinana Treasurer 14esident 1984 1986 1

1930 JAh!ES L llOGAN,57 NEIL A. ROAMAN,42

} J. ROBERT 5IILLER,63 O"#*II" ViceIkesident Engiraering Executite ViceIVesident-Operations y934 19S0 EDWIN B. hfcBURNEY,61 hiARK C. SHOLANDER,42 7f Via 14esidentTransminion GntaalGumd LOUIS C. RAShiUSSEN,59 19S6 and Distr.bution i Exnutite Via14esidentFinarve j934 awlChieffinancialOficer **Lhting incluttes age, title and 1974 WILI.lAh! H. hlIllER,53 scar promoted to oflicer VinIVesident-Customer, Employa SAh!UEL P. COWLEY,53 and1%blic Relatioru  !

Senior Vice 14esident Grporate Afairs, j93g l Senetary and ChiefImd Of]iar 1 1979 ,

1 30  !

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

SHAREHOLDER INFORMMION INYFSIOR CONTACIS CO.\l.\ TON SIOCK PRICE RANGE Shairholder Account Information 1987 1986 Shareholder Relations Department Quarter fligh Low liigh 1.ow (816) 556 2053 F rst 31% 27 % 29 % 22%

Financial lnfonnation Second 29 % 21% 29 % 23 Investor Relations Thini 31 24 % 32 % 24 %

(816) 556 2312 Fourth 28% 21 30 % 26%

Conunon stock is listed on the New York Stock ANNUAL REPORI' ON FOR.\1 10 K Exchange and the Slidwest Stock Exchange.

Copies of the Company's annual report to the Secu- NYSE Symbol: KI.T nties and Exchange Comnussion on Fonn 10-K will be provided without charge to any shareholder or COhth10N SIOCK DIVIDENDS beneficial owner of shares of the Company's stock upon written request to Samuel P. Cowley, Senior Vice Common Stock dividends were declared as follows:

President and Secretary, Kansas City Power & Light 1988 1987 1986 '

Quarter l Company, P.O. Box 418679, Kansas City, hiissouri 61141.

First S0.56 $0.50 $0.59 DIVIDEND REINYFSINENT PI AN Second 0.50 0i>0 Third 0.56 0.50 Because of the Company's reduced need to raise capi- Founh 0.56 0.50 tal and the high administrative costs of maintaining the plan, the Dividend Reinvestment Plan was discon- PREFERRED AND J tinued elfecw eJuly 31,1987. PREFERENCE SIOCK DIVIDENDS TRANSFER AGENIS AND REGISI RARS Quarterly dividends on Preferred and Preference Stock were declared in each quarter of 1937 and 1986 Gnnmon and Preferred Stock a, (o;;os,.

United h!issouri Bank of Kansas City, N.A.

Securities Transfer Dept. Cumulative Cumulative No Par P.O. Box 410061 Preferred Stock Preferred Stock l Kansas City, Afissouri 61141 Series Amount Series Amount (816) 556 7888 3.80 % S0.95 S 2.33 S0.5825 4.00 % l.00 2.20 0.55 l Preprnve Stock .g,yoq 1,05 17.05e 4.9025 l Kansas City Power & l.ight Company 4.35 % l.0875 13.25** 3.3125 1 1330 Baltimore Avenue 4.50 % 1.125 12.875* 3.21875 Kansas City, hiissouri G1105 7.72 % 1,93 (d16) 556 2053 Cumulative No Par Preference Stock Series Amount S 8.00 $2.00 12 75* 3.1875 All dividends paid by the Company in 1987 were detennined to be dividend income and no portion was considered a return of capital.

• The $17D5 Series, $12.875 Series and $12.75 Series

' vere purchased or redeemed in Siarch 1987.

• • The $13.25 Series was redeemed in September 1987.

31 1

\

l l

THE COMI%NY AND fl3 SERVICE AREA Kansas City Power & Light Company is a Service Area medium ske electric utility and the corpomte Soine 95% of the Company's business is successor to one of the world's fint electric derived fiom metrolmlitan Kansas City which companies, generating electricity since 1882. has experienced steady economic growth. A lieadquartered in downtow n Kansas City, key factor is the disenity of the area's industry, 5fissouri, the Company generates and dis- reflected in an unemployment mte which has tributes electricity to about 397D00 customen heen consistently below the national aserage in a 4,700 square-mile area located in 23 In November 1987, the anca unemployment counties in western 51issouri and eastern mte as emged 53(i compaied with :he national Kasas. Population of the senice area is asetuge of a69.

about 850000. Customen include 319.000 Kansas City is considered to be the wodd's residences,45000 commercial firms, and agribusiness capital, centered around the 3D00 industries, municipalities and other Kansas City lloard of Tra le. Kansas City leads electric utilities. About 70% of total kwh sales the nation in fann equipment distribution and revenue are from Missouri customen and hant winter wheat maiketing, mnks sec-and the remainder fmm K:msas. ond in wheat flour production, thini in gain Steam is pnxluced and distributed to elevator storage capacity and is the natioris 117 businesses in downtow n Kansas City third largest feeder cattle manket.

and accounts for about one percent of In addition to its strong agribusiness bam total revenue. Kansas City leads the nanon in the pnx!uc-tion of greeting cants and the manufacture Generating Capacity and the MOKAN Pool ofinstntment landing systeras, has the natioris The Company's 1987 tocal available capac- second largest mil center an6is the third ity was 2E93 mw, including 1937 mw of largest pnxtucer of automobilea and trucks.

installed genemting capacity less 41 mw of Kansas City has deseloped into a major retail net capacity sales. Its 1987 sptem peak load ma:Let, ranking among the top 30 meno-was a record 2.531 mw and resulted in a politan areas in total ietail sales. Kansas City capacity margin of about 12.59, the equiu is also a major comention and entenain-alent of a resene margin of 11.3%, in addi- ment center.

tion to being a member of the Southwest Located halfway between the geogmphic Powei Pool, a regional reliability council, and population centers of the country and KCPL is one of 11 memben of the MORAN midway between llouston and the Canadian Pool, formed in 1962 to share resen e capacity, border, Kansas City is well positioned as a coonlinate planning for additional generating national hub for ef ficient networks of tmns-units and expand tansmission lines. Trans- portation and communications which will mission connections with numerous utilities continue to play an imimrtant role in the in 51issouri, K;msas, Nebraska, Iown and area's steady economic gmwth.

Minnesota enhante the Company's sprem reliability. Kansas City is a key center in the interconnected sptem which enables regional and intenegional bulk power transactions among electric utility sptems.

32

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V 1

WL'*'

KANSAS CTIT POWER & LIGliT COAfPANY 1330 Baltimore Avenue Kansas City, Alissouri G1105 i

i l