ML20197J434
| ML20197J434 | |
| Person / Time | |
|---|---|
| Site: | Wolf Creek  |
| Issue date: | 12/31/1985 |
| From: | Doyle A KANSAS CITY POWER & LIGHT CO. |
| To: | |
| Shared Package | |
| ML20197J428 | List: |
| References | |
| NUDOCS 8605200039 | |
| Download: ML20197J434 (35) | |
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1: 3 : . . - . . -
KANSAS CITYPOWER &UGHTCOMPANY 1985 ANNUAL REPORT
- TABLE OFCONTENTS
- l Highlights of the Year . . . . . . . . . 11 '
Letter to Shareholders ... .... 2
' The Yearin Review ...........~4 Financial Statements . . . . . . . . . 14 Notes to Financial Statements ' . . . 19 Management's Discussion cnd Analysis . . . . . . . . . . . . . 24 Supplementary Financial -
Information . '. . . . . . . . . . . . . 26
- Eleven Year Summaries . . . . . . . 28 Board of Directors and Officers . . 30
~ ShareholderInformation . . . . . . . 31 The Company and Service Area ..................32 This report, including the fnancial state-
- ments contained herein, has been preparedfor .
the generalinformation ofshareholders of [ Kansas City Ibwer & Light Company, and is
. not intendal to induce, orfor use in connec .
tion with, any sale, ofpr to sell, or solicitation ofan offer to buy, any securities of the - Company.
I l IGHLIGHTS OFTHE YEAR Percent increase 1985 1984 (Decrease) a Wolf Creek begins Total operating revenues (000s) $ 596,621 $ 583,414 2.3 commercial opera- Earnings available for common (000s) $ 133,254 $ 129,524 2.9 tion; initial perform- Average number of shares 30,196,715 28,887,407 4.5 ance outstanding ltr common share: Earnings 5 4.41 $ 4.48 (1.6) o Generatingsystem establishes new Dividends $ 2.36 $ 2.33 1.3 efficiency marks Book value $ 27.10 $ 25.29 7.2 Net AFDC' $ 4.04 $ 3.74 8.0 o Tree trimming, storm Dividend payout ('7c) 54 52 3.8 plan enhance system Construction expenditures (000s) $ 157,727 $ 277,072 (43.1) reliability Electric and steam heat plant (000s) $ 2,831,884 $ 1,332,177 112.6 i Construction work in progress (000s) $ 19,214 $ 1,315,418 (98.5) o Electric heat connec- lleturn on year-end common tions set record
- equity (ic) 15.9 17.2 (7.6) o Commercial con- Capitalization (7c total) struction exceeds $3 Common equity 38.5 3_/.a billion,31 million Preferred and preference stock 9.7 11.0 square feet Long-term debt 51.8 51.5 Selected Statistics
. o Kansas rates increase Kilowatt-hour sales (000s) 8,893,609 8,807,576 1.0 16.27c; Missouri case 2,235,000 2,297,000 Ibak load -summer (kw) (2.7) pendmg 1,446,000 1,388,000 4.2 Ded load -winter (kw) Fuel mix (7c) Coal 86.7 98.2 Oil .4 .5 Natural gas .7 1.3 Nuclear 12.2 - Average electric fuel cost ($/million Btu) $ 1.333 $ 1.479 (9.9) Number of employees 2,863 2,838 .9 Number of stockholders 49,338 53,324 (7.5)
- Allowance for funds used during construction and Wolf Creek carrying costs net of associated deferred income taxes.
1 I I l l
TO OUR SHAREHOLDERS
.L.
This Annual Report contains much To date, Wolf Cnyk's operating record has a Although, historically. only57c ofour
" good news" and some " ominous been outstanding with an atuilability residential customers hatv usat electric news" ior KCPL shareholders. factor of 977< (including 134 consecutits space hasting, in 1935 alvut one-third of days at 1007c ), and a capucitypctor of our nae connections utre all-electric.
For both Kansas Citians and the I 927c. KCPL's 477c, or530 mas share of Company,1985 was, in many aspects, a Wah reddsns h&th h mmAr of a year oi remarkable and rewarding Wolf Creek has reduced our dependence on customer outages and their duration, periormances: amiand nowprot ides alvut 187c ofour including a 267c reduction of tree-related Displaying Ihe " Kansas City Spirit", f""3h'S ojg '"I{,, f, ,,, ','j,'.c'_ outages attributable ta our new tree trim-
"""S P'*S'"*' ' I5"bEIE'? ""' j our Royals electriped lusclullpns with inents at an incremental energy cost which successite come-from-lvhind victories, is less than half thefuel cost of energy
""Y" " " " '
wmning the American Exagueand 1%rld gainated at our aml-fred units. Overshadowing these, and many Championships. m re stellar performances by our In otha awas KCPLt 19S5 dectric swan - dedicated KCPL employees, ns our After years ofplanning and promise, geratsns avre imprssive. Downtown Kansas City frcame the site of greatest corporate concern and chal-a Ourtuse-laidcoal-fralgerwratinX lenge, i.e. to secure necessary and 11 ongoing rnajor construction projects, unus hadan awageawdabduy of827c -a significant rate increases tefl'ecting including 38-and40-storyoff etouvrs. 13-yair high, an attrage ca;ubility of our $1.45 billion investment in Wolf Throughout our hietropolitan area, the 767c -a system record, and utre operatal Creek. With non-cash net AFDC momentum of revitalization and expansion at an attrage heat rate of 10,687 Btu per representing about 92% , or $4.04 per ' escalatal with rnare than 31 milhon square beh-thelowest in 18 years- share, of our 1985 earnings, it is now
- Systan fuel costs dropped to S1.333 per necessary to convert that amount ,
tYr i t ii 11 ori, t der mto cash carmngs after taxes. r
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md. lion Blufrom $1.479 Ihrough the uny or targeted for completion ly Ihe end I ofl939, a 157e iricreasefrom a year ago, NWSofial"M 0fS0 As reported earlier, our retail rate and new residentialconstruction up 247c contracts and ninct the u!"C 05 "Y'*d of %IfCreek's increase 5"PP filingsN in Missouri and 65c per milhon Btu nuclearfuel costs- Kansas requested one-time revenue I invr 1984 which had set a 25-year record.
' I"'.eniumge sala of aiagy to other increases totaling $277.6 million. or With the Septanber 3,1985, commercial 52Vc. As an alternative, to soften the utilities aggregated 2.6 bilhon keh-an operation of Wolf Creck, our 1,128 nne nmpact upon our customers, we all-time record.
nuclear unit, our ComIany brouSht to a urged our regulatory commissions to close its major construction program a The number ofcustomers uv sen egrew adopt a four-year pliase-in through which has stunned more than 20 years and by 10,000-the largest gnrwth m 30 years. inereases of 267c,147c,87c and 57c. mcluded Ihe completson of ourptv largest , 5g, utan 100 mwof nae commercial generatmg umts. In modified rate order on and industrial electric faids uvre connected November 15, the Kansas Commn_s-l %If Cnyk' s94-month construction from in 1935 and, where decisions hazy Even
*I*" E licensing to fuellaid uns one of the shortest made, alvut one-halfof all large connner- ; *" c'0oi$}8.2 I5il1 n 16 2%),
constructwn schalules for contem;vrary cialconstruction projects have optalfor compared to our request ior a one-Li.S. nuclair pouvr plants. Its 176-day low electnc s;nceheatmg. time Nansas increase of $90.5 million, pauvr testmg and pravr ascension to a in n cast proceedings, the Kansas Com- and directed the Company to submit commeraaloperation urre snuvth and inission permitted continuation ofour a new rate case based on the first six ahaid of schedule. Its $2,700 per he cost 3.74c per beh residential electric spice months oE WoliCreek operating uns signifamtly lviow the attrage of all heatin rateartd the Afissouri Commission experience. Accordingly, weintend com;urable nuclear muts constructed m has mida considaaHan our proposal to file a new Nansas rate case in this country smce 1979. 3,35, p(7 yyy 7ay(. y p,5;,3y, goye,yg7 7,,,973g7, __w-+ 3 ,(
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l l l affecting about 30% of our retail and Kansas rate case experiences I electric operations, has been ap- since the early 1970's, we believe that l pealed to the Kansas Supreme Court, the new accounting standards pro-l where it is now set for oral argument posed by FASB would be a disservice ( on N1 arch 28. It is anticipated that the to the electric utility industry, its - , Supreme Court's decision will be customers and shareholders and to - g-rendered prior to a late summer or the financial community as a whole, g8 5 early fall hearing by the Kansas because financial statements based Commission on our April rate filing. thereon likely would distort and not In N1issouri, which accounts for reflect the realities of future regula-tory expectations. We are actively about 70% of our retail electric opera _ urging FASB to reconsider and with-tions, our request for a one-time revenue increase of $187.1 million draw its current proposal. was, after lengthy hearings, submit- With Kansas City located about ted in December to the hiissouri half-way between the geographic Commission for decision. However, center and the population center of revised accounting schedules filed this country and mid-way between Arthur J. Doyle by the Commission staffin mid- Houston and the Canadian border, February indicate staff suggested dis- our Company's electric system is ability to secure adequate and timely allowances of 37% of our hiissouri truly in hiid-America. As U.S. man- rate relief necessary to provide the Wolf Creek investment proposed for ufacturing operations continue their electric service expected by our cus-rate base treatment. Implicitly, these flight abroad and we become a soci- tomers. We continue to believe we schedules suggest a one-time net ety economically more dependent have taken the correct course. Al-revenue increase in the range of $61 upon the distribution of goods and though Wolf Creek's rate impact at million to $71 million, before phase- services, Kansas City is well this time is significant, we are con-in. Such suggestions, if adopted, positioned as a National hub for vinced that it will enable us to con-would have a very serious adverse efficient networks of transportation tinue to provide adequate and reliable effect on our future financial results. and communications. We believe the service to our customers at the lowest Of course, those staff suggestions are " centrality" of Kansas City's location reasonable cost over the long run, not binding on, and, hopefully, will is the driving force of our dramatic including, if permitted by our regu-not be found either credible or per- ongoing construction and expansion. latory commissions, a reasonable suasive by, the hiissouri Commission. return to our shareholders on the
, As we view what is going on We now anticipate a hiissoun rate around and about us in the Kansas Company's total mvestment dedi-order m,early spnng. cated to that service.
City area, we are even more confident The adverse effects of any such and reassured about our past plan- l February 28,1986 htissouri rate order, and those of the ning decisions. Our Companv's , electric system is now adequa'te and For the Board of Directors K.msas rate order now on appeal, in combination with the new accounting capable of serving the increased standards (requiring write-off of electric loads related to that construc- I disallowances) proposed by the Financial Accounting Standards Board (FASB), could result in an erosion of your common equity in tion and expansion. Our system operations are running smoothly and at record high degrees of reliability and efficiency. All factors and ele-d{ Chairman of the Board and President pL l the Company. Based on our hiissouri ments appear favorable except for our ; 1 d.
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EVIEWOF OPERATIONS
.L ~ Generating System 1985 was a milestone year for the belongs to Kansas Electric Ibwer ply agreements effective in 1984 and Company's power generating system. Cooperative, Inc. 1985, and cost savings provided by Among the year's accomplishments nuclear fuel. Average fuelcost per were the baseload addition of the Genemtinglinits Establisir million Btu for electric fossil plants Wolf Creek nuclear generating plant Efficiency Reconfs declined to $1.431 in 1985 from $1.479 and systemwide improvements in For the Company's generating in 1984 under contracts renegotiated operating efficiency. to take advantage of declining coal system,1985 marked the third con, secutive year of operating efficiency prices, and provide for a more flexible i l Wolf Circk Goes Connnercial mprovements. Our system of eight fuel supply. The Company's nuclear i baseload units, including Wolf Creek, fuel cost averaged 65 cents per million Commercial operation of the Wolf Btu, less than half that of coal. l Creek unit began on September 3, averaged 85% availability, the highest 1985. That date culminated nearly six ever recorded. Our coal-fired units
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achieved the highest annual avail, lInn'asonable RailCharges months of power ascension testing Challenged after the low power operating license ability in the last 13 years, and set a was granted by the Nuclear Regula- system record for average capability. Rail deregulation made transpor-tory Commission (NRC) on March Significantly, these gains were tation cost increases a priority con-
- 11. Six days later, the plant's nuclear achieved while reducing station cern of the Company and other " cap-fuel was fully positioned for start-up manning levels and minimizing tive shippers" such as coal-based and low power testing. Successful plant operation, maintenance and utilities with few transportation completion of the test schedule led to overtime costs. alternatives. As part of the strategy to 4 i
NRC authorization on June 4 to bring Efficiency gains were also evident control coal delivery costs, the Com-the plant to full power. The plant in the record low system heat rate, or pany has challenged unreasonable achieved 100% power on August 8, amount of heat needed to generate a rail shipping increases before the and in less than one month, all regu- kilowatt-hour. The generating system Interstate Commerce Commission latory criteria for commercial opera- heat rate declined to 10,635 Btu /kwh (ICC). We also par ticipate in Con-tion had been met. from 10,756 Btu /kwh in 1984. The sumers United for Rail Equity, a The unit's 94-month construction- average for our fossil units reached a broad-based shipper coalition seek-to-fuel-load schedule is one of the low of 10,687 Btu /kwh. ing legislative relief from excessive shortest of alllarge pressurized water Furthermore, improved fossil- rate increases. reactors licensed since 1979. Equally fueled unit availability made possible In addition, we have filed with the l significant, its average cost of about record sales of off-system interchange ICC for " trackage" rights at latan
$2,700 per kw is well below the $3,000 energy equal to nearly 30% of retail Station. The Burlington Northern per kw average cost of 23 plants sales. Net interchange sales, which railroad currently controls rail access under construction at mid-year. are accounted for as a credit to pro- into the plant and gaining trackage ,
The Company's 530 mw,47% share duction expense, reached $23.4 mil- rights for other railroads would yield of Wolf Creek represents 18% of our lion, up from $14.6 million in 1984. substantial savings by opening coal i system's total accredited capacity and shipping contracts to competition. will fulfill about 30% of our custom- . FuelCost Reductions Acin.ewd ers' energy requirements. Kansas Gas and Electric Company also owns The reduction in average fuel cost a 47% share, and the remaining 6% in 1985 was a result of new coal sup-l t
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1 EVIEWOF OPERATIONS _ _ _ Transmission and Distribution , Reliability of the Company's trans- ordering materials and repairing all Researcir and Dewlopment mission and distribution system is a damage on assigned circuits. Also Our primary research empha3is long-recogmzed operating strength. included on teams are contract elec- involves joining with 500 other elec-During 1985, outages averaged 1.1 tricians to repair damage to cus- tric utilities in sponsoring the Electric ' per customer and less than 100 min- tomers electricalequipment, not Ibwer Research Institute (EPRI) of utes in duration, both within our normally a responsibility of the Palo Alto, California. This joint par-objectives. Sigmficant progress was Company. ticipation multiplies our research I also achieved in programs which Other changes include expanded investment and provides access to focused on customer and employee use of computer evaluation, improved the pool of technologies and innova-safety, efficiency and cost control, coordination with telephone line tions developed for the benefit of response to new service requests and repair, and provisions for temporary utility sponsors and their customers. environmental regulations. power supplies to nursing homes, Du' ring 1985 EPRI .dkscated about i These positive results have come day care centers and emergency half of its $267 million budget to through greater emphasis on preven- shelter facilities. We have also dou- projects to improve fossil-fired and l tive maintenance and programs to bled to nearly 500 the number of nuclear generation, and to develop
; reduce equipment related outages as employees tramed to evaluate and advanced generating systems and l implemented by our System Reliabil- report storm damage to the restora- renewable resources. The balance ity Committee. Another major factor tion teams. went to environmental studies, is the Company's program for trim- projects to improve performance of mmg trees close to transmission and Efficiencif, Cost Control transmission and distribution equip-l distribution lines. This program was Pn> grants lindermay ment, and energy management modified in early 1985 and calls for testing.
A Tracking Resources and Coor. trimming trees throughout the Com- Of the Company's 52.35 million dinating system is now in place for pany's entire system in three-year EPRI assessment in 1985,20% or our transmission and distribution cycles. As a result, non-storm tree! network. This computerized work $470,000 was retained for Company related outages dropped nearly 26 7c designated research in Missouri and
, mana8ement system was first i m 1983. h,ansas supporting 30 local projects adopted in 1983 to improve efficiency through savings of both time and and five research organizations.
j Stonn Plan Ansplified money in planning, scheduling and These projects include studies of documenting normal construction new equipment designed to improve , The Company's Storm Restoration and maintenance. production and distribution system l Plan details the companywide re-Other cost control efforts extend efficiency and reliability, and com-j sponse to large scale outages caused the life of wooden utility poles puter programs to assist m long-by major storms. The plan coordi-l through inspectic,ns, maintenance range planning and forecasting. Tests n'ates manpower and materials neces-and chemied treatment; research and of state-of-the-art heating and cooling l sary to expedite service repairs and timeh, efficient servite restoration. A test new technologies, and improve equipment address two lor)g-range preventive maintenance of system targets - controlling peak load new feature of the plan employs ' equipment. growth, and promotion of off-peak , " restoration teams" or self contained electricity usage for space heating. l units with defined geographical ) responsibilities for clearing trees, i f
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EVIEWOF OPERATIONS
.L CominercialOperations increasing off-peak electricity sales Contnrercialload Expands media stress effective use of building and load continues to be the Com- h1arketing representatives work facade and security lighting. Another pany's primary marketing goal. Our with architects, engineers and de- Promotion encouraged residential comprehensive marketing plans customers to convert natural gas post velopers to encourage installation of promote sale of electric heating t electric heating in new building lamps to electricity resulting in about i increase winter load, and lighting design and rehabilitation projects. 300 new installations.
applications to increase overnight New commercial buildings in 1985 A research study completed during l'
- sales. represented 87 mw of summer de_ the year confirmed the impact of mand and 12.7 mw of electric heating. security lighting on reducing crime. l ElectricIIcat Installations At year's end, in Aletropolitan Kansas A joint project with the police depart-Reacir All-Time Higir ment and a Kansas City neighbor-i City alone, large commercial projects either under construction or in the hood association, this study involved During the year, the Company added 3,602 residential electric l$ eat- installation of 96 dusk-to-dawn lights design stage totaled 31 million square feet. Where heat system selections and 140 photocell porch lights in the
- ing systems, representing one-third have been made, a' bout half of the neighborhood. After 12 months, of new service connections. Though the area reported a 29% drop in most of the systems were installed in projects will be heated electricalh>. '
nighttime crime - a statistic to be new residences, 217 involved heating featured in upcoming security light-system conversions. This result Ligitting Promotions 7inget reflects aggressive sales and informa- Business and flame Elses
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tion programs aimed at electric heat From our earliest days, lighting Marketu.rg Researth to Continue , pump and space heating markets. has been a key off-peak use of elec- Afarketing plans for 1986 will Dealer assistance is provided through cooperative advertising campaigns, tn ,ty. Todays mmnucial cgnstruc- intensify concentration on increasing tion and renovation activity m Kansas sales of off-peak lighting and electric ( incentive programs, and joint infor-City is creating diverse marketing ! mational seminars and materials. heating. One goal is to install electric opportumties f r lighting. The Com- heating systems in 38% of new living The Company also participates in pany currently prom tes the benefits units in our service territory. To help home and outdoor exhibitions and ' of pmperlighting through programs dieve this and assure customer semiannual homes parades featuring and special semmars for builders and satisfaction, marketers will identify a growing number of electrically "'IS' I" " heated homes. d 'C ""' # *"8 customer expectations through re-' messages placed m the local business search and later test market potential A number of the parade homes are designated "SAVE PLUS", a category alternatives. of energy efficient new homes which the Company helped establish in 1985. The homes feature both the S/WE (Save America's Valued Energy) , construction standards, and an energy-saving heat pump. The Com-
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ORPORATE AND FINANCIAL REVIEW (L.- Earnings for the year were $4.41 allowance for funds used during extensive travel requirements. He construction which equaled $4.04 per had served on the Board since April per average common share, a decline of 7 cents, reflecting increased in- share, or 92% of earnings in 1985, up 1966. His resignation concluded more terest and operating expenses related from the 1984 per share amount of than 60 years of dedicated service to the Wolf Creek plant, and addi- $3.74, or 83% of earnings. from him and his father before him. I tional outstanding shares. Operating revenues increased 2.3% to $596.6 New financing LaborAgivernent Readied ; million, due to the Kansas rate in- On September 26,1985, the Com- On July 1,1985, Company propos-crease, and slightly higher kwh sales. pany completed an offering of $106.5 als were offered to each of t'hree I Total electncity sales were up one miliion of Customized Purchase Locals of the International Brother-percent and included increases of Ibilution Control Refunding Bonds. hood of Electrical Workers (IBEW) 1.2% in residential usage and 5% in Issued through the City of Bur- representing 1,840 employees. commercial, offset by a 1.1% decline lington, Kansas, the bonds mature Effective August 17,198'5, an agree-in industrial sales. The 1985 increase September 1,2015. Proceeds financed ment was reached with IBEW Local resulted from continued economic pollution control facilities not previ- 412, which represents power plant improvement moderated by the ously financed with tax exempt workers. The settlement called for a impact of very mild summer weather bonds as well as refunded $43 million 5% wage increase on August 17, with on residential sales and decreased of floating rate pollution control subsequent 49 annualincreases on usage by a major steel manufacturer, bonds issued in 1983. The new bonds February 17,1986,1987 and 1988. the Company's largest customer. provide the Company greater flexibil- The agreement with Local 412 also Operating expenses in 1985 ity to meet changing' market condi- provided for a five-year continuation included $40.7 million related to tions and are traded based on rates of pnsion benefit levels; a 110% , commercial operation of Wolf Creek. and maturities similar to tax exempt four-month increase in retirement Of these, the Company deferred commercial paper. benefits for our currentiv retired
$14.3 million as a result of orders by . employees;an addition 51 $25 per Strare/rolders Elect New Directors month contribution per employee to the Missouri and Kansas commis.
i sions allowing continuation of Under a new bylaw amendment the Health and Welfare Plan and a construction accounting until the increasing the Board size, share- one-time bonus payment of $2,200 to effective date of rate orders. Operat- holders elected twe aew directors at each regular, active employee with at ing expenses after the deferral the 1985 annual meeting. They are least six months service. amounted to $490.3 million, an in- Dr. George A. Russell, a nuclear As of this report, Local 1464 repre- . crease of 4.1% , and included in- physicist and Chancellor of the Uni- senting transmission and distribution versity of Missouri, Kansas City; and emplovees, and Local 1613 represent- ! creases of $13.7 million in mainte-nance, $14.9 million in depreciation, J. Robert Miller, senior vice president ing ou'r office and clerical employees, i and $26.2 million of other operation and chief operating officer of the have not responded to the Company , expenses. These were partially offset Company. proposals. i by a $9.3 million decrease in fuel At its November meeting, the expense, and an $8.8 million increase Board regretfully accepted the resig-in net interchange sales. nation of Cyrus S. Eaton, Jr. who Company earningsinclude a resigned to devote more time to a higher contribution from the net restructuring of his business and
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i ORPORATE CITIZENSHIP l 1 (L.- . l Through support of the economic, of safety education, our Lineman entering into long-term coal contracts l 4 civic and community well-being of Speaker's Bureau made electric safety for low-sulfur Wyoming coal. When l i our service area, the Company has presentations to more than 22,000 fully implemented in January 1987, recognized over the years that its children last year and over 125,000 this will result in a 15-fold reduction l obligations as a corporate citizen children in the six years since the in sulfur dioxide emissions when ! extend beyond the business purpose program was begun as a result of a compared with the 1980 " target" year. I of providing an unceasing flow of suggestion from an employee. These The Company has addressed water electric energy. In 1984, our Board of are but two of hundreds of examples pollution control, and all of our Directors formalized this commit- of our efforts to fulfill responsibilities plants operate under permits issued ment by adoption of a Corporate of corporate citizenship. by the appropriate state authorities. Social Responsibility Statement with Bottom ash and fiv ash from coal a program of emphasis overseen by a EnvironmentalEnhancement burning operation's have historically committee of the Board. The Company has always been been disposed of in sedimentation This program involves contribu- sensitive to its role of a good neighbor ponds to guarantee the quality of the tions of both funds and actions and and is dedicated to the goals of clean water returned to streams and ponds. the current emphasis focuses on six air, clean water and the protection of Our concern for esthetics is dem-areas: the environment from contaminants onstrated in substation design and e assisting customers who have produced while generating and landscaping and for wildlife in pro-difficulty paying utility bills or face delivering electricity to customers. tection of habitat. During the con-termination of utility service. This dedication has resulted in an struction of latan Station, we main-e enhancing economic growth and ongoing active program and Com- tained the originalinvemory of wet-prosperity through community pany expenditures of some $200 lands by creating some 55 acres to development activities. million during the last 20 years since replace those affected by plant
. protecting community health re-awakening of environmental facilities and have added 108 acres and welfare by minimizing the impact protection through federal and state since that time.
of Company operations on the envi- legislation. Polychlorinated Biphenyls(PCBs) ronment. N1uch of this effort has involved air are considered an endangerment to e educating the public about the quality improvement. The Company health and welfare and the environ-dangers and safe use of electricity. pioneered development of wet lime- ment. We are removing from our e fostering equal opportunity for stone scrubber technology at La distribution system all PCB filled all through proactive programs. Cygne 1, and high etficiency electro- capacitors in compliance with a 1988 e encouraging voluntary participa- static precipitators are installed on all deadline of the Environmental Pro-tion of employees in community six of our other coal-fired units. We tection Agency and we will voluntar-service. estimate these air pollution control ily replace all PCB distribution trans-The process involves reports which devices removed from the atmosphere formers by 1989. now document citizenship efforts of some 3.5 million tons of dust and the Company and its employees. A 572,000 tons of sulfur dioxide for the recent partial survey indicates man- 5-year period 1980 through 1985. agement employees alone are con- Niore recently with the termination tributing volunteer time to some 500 of some high sulfur midwestern coal community organizations. In the area contracts, the Company has further reduced sulfur dioxide emissions by d d 3 i 12
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Lans.us Cit y Iwr & L ,ght Compmv STATEMENTS O.c INCOME Year Ended December 31 i 1985 1984 1983 t thou w,ulso
$ 583,113 $ 570,558 $ 553,370 Operating Revenues Electric 13,508 12,856 9,173 Steam heat 596,621 583,414 562,543 Total Operating Expenses Operation 163,003 172,333 160,653 Fuel (23,371) (14,566) 1,345 Interchange power (net) 109,255 83,057 81,078 Other 70,841 57,092 53,358 Maintenance 62,443 47,561 46,319 Depreciation Taxes (See statements) 61,962 62,560 69,568 Income 59,891 55,741 53,345 General Deferred Wolf Creek expenses (Note 2) (14,344) - -
490,278 470,786 458,060 Total 106,343 112,628 104,483 Operating Income Other Income and Allowance for equity funds M ,590 78,415 53,809 Deductions used during construction - Deferred Wolf Creek carrying costs (Note 2) 42,522 - (2,429) (4,293) 25 Miscellaneous-net of income taxes 1 M ,683 74,122 53,834 Total Income Before 158,317 211,026 186,750 Interest Charges 98,824 86,M3 70,126 Interest Charges Long-term debt 1,778 3,343 4,332 Short-term notes 1,365 1,273 1,271 Miscellaneous Allowance for borrowed funds (46,062) (55,950) (43,893) used during construction -credit 55,905 35,309 31,836 Total 155,121 151,441 126,481 Yearly Results Net income Preferred and preference stock 21,867 21,917 21,570 dividend requirements
$ 129,524 5 104,911 Earnings available for common stock $ 133 2_54 1 Average number of common 30,196,715 28,887,407 25,278,388 shares outstanding
$ 4.41 $ 4.48 $ 4.15 Earnings per common share
$ 2.36 $ 2.33 $ 2.17 Cash dividends per common share The accompanying Notes to Financial Statements are an integral part of these statements.
14
namcayan&u ktcm s ry BALANCE SHEETS December 31 1985 1984 ASSETS trws.nssi UtiEty Plant . Electric $2,809,467 $1,327,410 atoriginalcost Steam heat 22,417 4,767 (Notes 6 and 71' Total 2,831,884 1,332,177 Less-Reserves for depreciation 472,668 423,653
. Net utility plant in service 2,359,216 908,524 Construction work in progress 19,214 1,315,418
. Nuclear fuelin service, net of
. amortization of $7,796,000 - 36,531 -
Total 2,414, % 1 2,223,942
- Deferred Wolf Creek Costs (Note 2) 55,421 -
Investments and Nonutility Property 9,836 12,566
- Crnstruction Funds Held by Trustee - 16,292
= Current Assets - Cash 2,900 3,190
. Temporary cash investments and specialdeposits 162 7,196
' Receivables Customer accounts receivable, less reserves of $1,079,000 and $1,028,000 43,926 39,028 Accrued unbilled revenues 22,3 % 18,195 Other receivables . 12,505 9,290
+ Fuelinventories, at average cost 36,005 45,680 Materials and supplies, at average cost 32,091 26,423 Prepayments 4,017 1.210 Total 1M,002 150,212 Deferred Charges 19,838 21,590 Total $2,654,058 $2,424,602 LIABILITIES Capitalization Common stock-authorized 60,000,000
. (Sce statements) shares without par value-30,938,327 and 29,725,405 shares outstanding-stated value $ 449,262 $ 424,891 Retained earnings (Note 4) 384,353 322,135 Capital surplus 4,779 4,708 Total 838,394 751,734 Cumulative preferred stock 112,000 112,000
- Cumulative preferred stock (redeemable) 65,836 65,996 Cumulative preference stock (redeemable) 33,333 41,667 Long-term debt 1,128,681 1,032,117 Total' 2,178,244 2,003,514 Current Liabilities Current maturities of long-term debt 7,915 16,000 Accounts payable 47,237 40,9M Dividends declared 5,334 5,551 Accrued taxes 9,500 9,668 Deferred income taxes 10,892 8,721.
Accruedinterest 18,204 17,126 Accrued payrolland vacations 10,092 9,488 Other 4,169 3,350 Total 113,343 110,858 Deferred Credits Deferred income taxes. 261,823 204,052 Deferred investment tax credits 98,671 104,4M Other 1,977 1,714 Total 362,471 310,230 Commitments and Contingencies (Note 21 Total $2.,6M,058 $2,424,602 15
km.us Cuty nurr & Dght Computy ~ STATEMENTS OFTAXES Year Ended December 31 1985 1984 1983
- INCON1E TAX EXPENSE uw,uta Total income tax expense wasless than the amount computed by applying the statutory federalincome tax rate of 46% to income before taxes. The reasons for these differences are as follows: :
Taxes computed at statutory rate on
' income before income taxes $ 100,029 $ 101,867 $ 86,574 Increase (decrease) in taxes resulting from:
Allowance for equity funds used during construction (29,711) (36,071) (24,752) Wolf Creek carrying costs-equity (10,935) - - Differences between book and tax depreciation not normalized 3,288 1,446 1,359 Removal costs (1,164) (908) (2,510) Amortization ofinvestment tax credit (3,027) (2,580) (2,134) State income taxes 2,791 3,792 3,496 Other 1,063 2,462 (310)- Totalincome tax expense $ 62,334 $ 70,008 $ 61,723 CON 1PONENTS OF INCONTE TAX EXPENSE Currently Payable Federal $ - S 6,537 $ 3,798 State - 3,691 3,594 Total - 10,228 7,392 Deferred 60,193 35,367 30,775 Federa1(net) 5,168 3,332 2,880 State (net) Total 65,361 38,699 33,655 investment Tax Credit Provision - 23,661 22,810 Amortization (3,027) (2,580) (2,134) Total (3,027) 21,081 20,676 Totalincome tax expense 62,334 70,003 61,723 Less: Income taxes applicable to otherincome and deductions (226) 440 (239) Income tax expense applicable to operating income $ 62,560 $ 69,568 $ 61,962 DEFERRED INCONIE TAX EXPENSE Depreciation differences $ 37,395 $ 7,569 $ 8,852 Debt component of AFDC 22,211 26,325 21,159 Wolf Creek carrying costs-debt 9,043 - - Deferred Wolf Creek expenses 6,005 - - Repair allowance (817) 1,362 (824) Unbilled revenues 2,025 (1,994) 1,204 l 1 Taxes and pension costs capitalized 4,150 3,719 3,134 Tax loss carryforward (12,976) - - Other (1,675) 1,718 130 Total 5 65,361_ $ 38,699 5 33,655 GENERAL TAX EXPENSE Property and real estate $ 23,622 $ 19,290 $ 18,954 Gross receipts 31,153 31,243 29,413 Other 5,116 5,208 4,978 Total $ 59,891 $ 55,741 $ 53,345 The accompanying Notes to Financial Statements are an integral part of these statements. 16
t
~ Kamas City new & Light Cump,,ry ;
STATEMENTS OF SOURCES OF FUNDS FOR GROSS PROPERTY ADDITIONS Year Ended December 31 1985 1984 1983 wwn,as> l Funds Provided Net income . $ 155,121 $ 151,441 $ 126,481 From Operations Less dividends declared - 92,903 89,221 76,968 Total 62,218 62,220 49,513 Items not requiring current use of funds Depreciation 62,443 47,561 46,319 Amortization of nuclear fuel 7,796 - - Deferred income taxes (net)- x non-current portion 63,190 40,819 32,438 investment tax credit (net) (3,027) 21,081 20,676 Deferred Wolf Creek expenses and carrying costs (56,866) - - Allowance for funds used during construction (AFDC) (110,652) (134,365) (97,702) Total 25,102 37,316 51,244 Funds Provided From Issuance oflong-term debt 110,289 207,409 185,469 Outside Sources Construction funds held by trustee 16,292 5,053 (21,345) Issuance of preferred stock - 10,000 - Issuance of common stock (1,212,922, 1,404,825 and 3,951,980 shares, respectively) 24,371 23,357 81,614 Increase (decrease)in borrowings underloan agreements 43,000 35,000 (54,000) Retirement oflong-term debt (64,885) - (35,006) Preference stock sinking fund (8,334) (4,166) (4,167) y Decrease in short-tenn borrowings - (27,000) (31,500) Total 120,733 249,653 121,065 Decrease (Increase) (Exclusive of short-term borrowings In Working Capital and current maturities) 6,780 (6,716) 13,908 Oth:r 5,112 (3,181) (3,670) Total Funds Used for -
' Gross Property Additions 157,727 277,072 182,547
- AFDC net of related deferred income taxesincluded in utility plant 103,348 125,607 122,089 Gross Property Additions $ 261,075 $ 402,679 $ 304,636L
- Decrrase (Increase) Cash $ 290 $ (274) $ (1,000) l In Working Capital Temporary cash investments
, and specialdeposits 7,034 (6,915) (119) l Receivables (12,314) 6,573 (4,714) Fuelinventories 9,675 (400) 8,838 Materials and supplies (5,668) (2,408) (1,169) l Accounts payable 6,283 (6,113) 1,787 Accrued and current deferred income taxes 2,003 (2,248) 5,564 Accrued interest 1,078 5,828 3,392 Other (1,601) (759) 1,329 Total $ 6J80 $ (6,716) $ 13,908 17
y Kanm City narr & Light Company STATEMENTS OF CUMULATIVE PREFERRED & PREFERENCE STOCK & LONG-TERM DEBT _ December 31 1985 1984 CUMULATIVE PREFERRED STOCK (Note 5) m una 3.80% -100,000 shares $ 10,000 $ 10,000
$100 Par Value 10,000 4.507c -100,000 shares 10,000 4.20'7c - 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
$10.70 -200,000 shares 20,000 20,000 No Par
$ 2.33 -800,000 shares 20,000 20,000
$ 2.20 -800,000 shares 20,000 20,000 Total $ 112,000 $ 112,000 CUMULATIVE PREFERRED STOCK (REDEEMABLE)(Notc 5) 47c - 30,357 and 31,957 shares $ 3,036 5 3,196
$100 Par Value 22,800
$17.05 -228,000 shares 22,800 No Par
$13.25 -300,000 shares 30,000 30,000
$12.875 -100,000 shares 10,000 10,000 Total $ 65,836 $ 65,996 CUMULATIVE PREFERENCE STOCK (REDEEM ABLE) (Note 5)
$ 8.00 -124,999 and 166,666 shares 5 12,500 $ 16,667 No Par
$12.75 -208,333 and 250,000 shares 20,833 25,000 Total $ 33,333 $ 41,667 LONG-TERM DEBT (exchiding current maturities)(Note 61 14% series due 1989 $ 50,000 $ 50,000 First Mortgage Bonds 57c series due 1990 20,000 20,000 13h% series due 1991 25,000 25,000 13.487c series due 1991* 25,000 25,000 10%% series due 1993* 7,500 7,500 9.467c series due 1994* 60,000 60,000 4%7c series due 1995 15,000 15,000 5%% series due 1997 30,000 30,000 6%% series due 1998 25,000 25,000 7W% series due 1999 26,000 26,000 9W7c series due 2000 35,000 35,000 7%% series due 2001 27,000 27,000 7%7c series due 2002 30,000 30,000 8%% series due 2006 40,000 40,000 8W7c series due 2006 30,000 30,000 5%% series due 2007' 21,940 21,940 5%% series due 2007' 20,000 20,000 8W% series due 2007 30,000 30,000 9%7c series due 2008 25,000 25,000 6%% series "A" due 2008' 9,200 9,200 6%% series "B" due 2008' 21,6J0 21,800 12% series due 2009 50,000 50,000 16h% series due2011 50,000 50,000 13% series due 2013 60,000 60,000 12% series due 2013* 11,980 11,980 Guaranty of Pollution 5%% series due 2003 15,000 15,000 Control Bonds Variable rate series (% at December 31,1985):
Refunded in 1985 - 43,000 7.93% series due 2014 40,000 40,000 7.75% series "B" due 2014 50,000 50,000 7.21% series "A"due 2015 56,500 - 7.01% series "B" due 2015 50,000 - 118,000 75,000 Loan Agreements (8.75"c at Detember 31,1985) 55,390 65,401 Nuclear Fuel Lease Unamortised Premium (1,629) (1,704) and Discount (net) Total $b128,681 $1,032,117
' Pledged in support of pollution control tends or other agreernents.
IS
P w ciry nw& u+r commny STATEMENTS OFRETAINED EARNINGS . Year Ended December 31 1985 1984 1983 s (thouwn.id Beginning Balance $ 322,135 $ 259,915 $ 210,402 Net income 155,121 151,441 126,481 $. 477,256 411,356 336,883 , 0. Dividends Declared Preferred and preference stock (at required annual rates) 21,722 21,991 21,598 Common stock -
$2.17 per share 55,370 4
$2.33 per share 67,230
$2.36 per share 71,181 92,903 89,221 76, % 8 Ending Balance (Note 4) $ 384,353 $ 322,135 $ 259,915 The accompanying Notes to Financial Statements are an integral part of these statements.
NOTES TO FINANCIAL STATEMENTS
- 1. Summary of Sigr:ificant Accounting Eblicies The company charges ta maintenance cxpense the
" System ofAccounts:The accounting records of the repairs of property and replacement and renewals ofitems Company are maintained in accordance with the Uniform determmed to be less than umts of property, except for such costs which are charged to clearing accounts and System of Accounts prescribed by the Federal Energy redistributed to various operating, construction and other Regulatory Commission (FERC) and generally accepted i accounting principles. acc unts. Ihe costs of renewals and betterments of units of property are charged to the utility plant accounts. Property
; Utility Piert: Utility plant is stated at historical costs of units retired or otherwise disposed ofin the normal course
. ' construction. These costs include taxes, payroll related of business are charged to the reserves for depreciation,
. costs including pensions and other fringe benefits, and an along with removal costs, net of salvage.
allowance for funds used during construction. The amounts of maintenance and depreciation expense Allomanceforrunds Used During Construction (AFDQ: AFDC other than those set forth in the Statements of Income are
.. includes the cost of borrowed funds used for construction not significant. Rents and lease payments for railroad cars, purposes and a reasonable rate upon other (equity) funds. computer equipment, buildings and similar items are also The allowance for borrowed funds represents an alk> cation not significant.
ofinterest cmts to construction, while the allowance for equity funds is a non-cash item ofincome. AFDC is Nuclear Plant Decommissioning Costs: The KCC currently estimates the cost of decommissioning the Wolf Creek
- charged to construction work m progress during the period
, Nuclear Generating Station (Wolf Creek) to be $140 million of construction. When a construction project is placqd m on a present value basis. On September 30,1985, the effec-service, the related AFDC becomes a part of the ongmal l
cost of the completed plant which is used to establish rates tive date of the new Kansas tariffs, the Company began rate recovery of the Kansas jurisdictional portion ofits 47% for utility charges under established regulatory rate prac-share of these costs which are being charged to operating tices. The rates used te compute AFDC, before associated expense. Pursuant to KCC requirements, such amounts are L deferred income taxes, are compounded semi-annually ! rnd averaged 12.2% for 1985,12.2% for 1984 and 12.1% for to be recovered through tariffs over the life of the plant and 1983. will be placed in an external fund to be established and used only for the physical decommissioning of Wolf Creek. Deperciation nadMaintenance: Provisions for depreciation are computed on a straight-line basis pursuant to rates The recovery of the Missouri jurisdictional portion of decommissioning costs will be determined in the pending ordered by the Missouri Public Service Commissyn rate request before the MPSC. (MPSC) except that the MPSC has not yet determmed the rate to be used for the Company's nuclear plant The Com. Nuclear fuel: The actual cost of nuclear fuel bumed is amor-piny depreciated its nuclear plant in 1985 using the rate tized to fuel expense based on the quantity of heat pro-established by the Kansas Corporation Commission (KCC) duced for the generation of electric eneigy. Under the for the Kansas jurisdictional property. Approximate annual Nuclear Waste iblicy Act of 1982, the Department of Energy composito rates sere 3.51% in 1985,3.61% in 1984 and (DOE) is responsible for the permanent disposal of spent 3.62% in 1983. nuclear fuel. The Company currently pays a quarterly fee 19
of one mill per kilowavour of nuclear generation to the ter lives. Taxes deferred on property additions for certain DOE for future perm ..ent disposal services. The disposal prior years are now being restored to income as the timing costs are charged to ruel expense and the Kansas jurisdic- differences reverse. tional portion is currentiv recovered through electric rates. 'T.he tax effect of the interest component of AFDC is Recovery of the Missourilurisdictional spent fuel disposal n rmahzed and the related accumulated deferred income costs will be determined in the pending rate request before taxes re credited to construction work in progress for all the MPSC. projects except for deferred taxes related to the Niissouri Dcferred Charges: Certain costs, such as those incurred for jurisdictional portion of Wolf Creek which are credited to major storms, are recorded as deferred charges when it is deferred income taxes on the balance sheet. probable, based on historical regulatory precedent, that
' The Company normalizes for all j.unsdictions the tax future rates established by the regulators will recover amor- .
et & s of pension c sts, payr 11 taxes and property taxes tization of such costs. The incremental cost, $5.3 million, of which are capitahzed on the books but deducted currently the 1984 ice storm has been deferred with amortization for inc me tax purposes. The effects of the current deduc-over five years starting in April 1984. Deferred charges tion of removal costs are flowed through. include $4.5 million of other costs which for regulatory The tax effect of the cumulative net amount of income tax purposes are included in rate base. timing differences for which deferred income taxes have Retirernent Plans: .The Company has pension plans for all not been provided is approximately $40 million at
.ts i regular employees, m.cluding officers, providing for December 31,1985. These amounts are being recovered benefits upon retirement, normally at age 61 In accordance through allowed revenues as the timing differences reverse.
with the Employee Retirement income Security Act of 1974 At December 31,1985, the Company had incurred a net (ERISA) the Company is obligated to meet minimum fund-ing requirements. ~1 he Company's policy is to fund pension tax operating loss of approximately $26.6 million with an costs accrued in accordance with ERISA requirements. estimated tax benefit of $13 million which was used to Liability for past service costs is not significant. The annual reduce the provision for deferred income taxes. Such costs of the plans were $3.3 million in 1985, $6.9 million in amount of deferred income taxes will be restored as the net 1984 and $9.2 million in 1983. The decrease in 1985 costs tax operating loss is utilized. resulted from assuming for accrual purposes an increase in Investment tax credits have been deferred when utilized the rate of mvestment return for the collective bargaining . and are being amortized to income over the service lives of enyployees pension plan and accruing only for the the related properties. At December 31,1985, the Company - mmimum funding requirement. Ihe decrease in 1984 costs had unused and unrecorded .mvestment tax credits of resulted frore the c,ompany's decision to cease accruing approximately $48 million, which will be available to reduce pension costs for three months for collective bargaining Federal incon$e taxes payable through 2000 employees because of expiration of the collective bargain-ing agreements on July 1,1984, and since funding for the Subsidianf: The Company has a wholly-owned subsidiary, 1984 plan year prior to that date had exceeded minimum WYNIO Fuels Inc. (WYN10), organized for the acquisition funding requirements. and development of coal properties. The Company has asuntM for its investment in WYNIO under the equity At the annual valuation date of October 1, the actuarial method and has not prepared consolidated financial state-present value of accumulated plan benefits was approxi- *""'" matelv $133 million for 1985 and $135 million for 1984, panying f.""*"!hnkt mancial statementsdwouldconsolidation not be significant. upon The the acco including $4 million and $7 million of non-vested benefits, respectively. Plan net assets were approximately 5175 $g.uyd 2./ million1984 and $4 net million,income of the respectively, Company to reflect the was reduc million for 1985 and $160 million for 1984. Rates of invest- low on dwks resulting from the write-downs ment return of 69 to 7'1 were assumed in determining the of WYNIO's hxed assets to reflect the approximate value actuarial present value of accumulated plan benefits. estimated by management. The hxed assets et % YNIO Rcwnue Recognition:'lhe Company utilizes cycle billing and have now been totally written off. accrues the amount of revenue for sales unbilled at the end
- 2. Commitnrents and Contingencies of each reporting period.
Rate Matters: Wolf Creek, an 1128 mw unit, commenced Income Tucs: The Company generally normalizes the ef-fects of the use of accelerated tax depreciation methods. commercial operations on September 3,1985. The $1.45 Deferred income taxes have been pros ided for the differ- billion (including $483 million of AFDC) cost of the Com-ences between book and tax depreciation except for the pany's 47'1 share of Wolf Creek (330 mw)is included in effect of accelerated depreciation on N1issouri property plant-in-service. The Company filed requests early in 1985 acquired prior to 1972. Accelerated depreciation methods for increases in retail electric rates in Niissouri and Kansas include the use of the Asset Depreciation Range System to recover its ownership and operating costs in Wolf Creek and Accelerated Cost Recovery Svstem which permit shor- atter commercial operations. 20
y a: The KCC issued an interim order on September 27,1985, Considering the KCC orders and the current status of the and modified it on November 15,1985, authorizing an Missouri rate case proceedings, it is management's opinion
' increase in annual Kansas retail electric revenues of $28.2 that no write off of the Wolf Creek in estment will be neces-million(16.2%). Approximately30% of theCompany's sary, except through normal depreciation, under present revenues are derived from operations in Kansas. The Com- generally accepted accounting principles. However, on pany had requested an increase in its annual Kansas reve- December 19,1985, the Financial Accounting Standards
- nues of $90.5 million based on a 1985 test year. Board (FASB) issued an exposure draft of a proposed state-The KCC determined that: ment that prescribes new accounting standards that would (i) The Company's Kansas jurisdictionalinvestment in require any costs of a newly completed plant disallowed Wolf Creek of over $400 million should be reduced by (either directly or through a reduced return on investment)
$40.3 million because of alleged imprudent construction for rate-making purposes to be recognized as a loss on the costs (excess man-hours and construction delays). financial statements. If this proposed statement is adopted Accordingly the Company was denied a return and in its present form, the Company's financial statement depreciation on that amount. presentation of common stockholder's equity would be (ii) For return purposes, the Company's jurisdictional significantly reduced.
investment was further reduced by $288.7 million for Defemil of Costs IMated to hbtf Cn ck: Orders from the KCC economic revaluation of Wolf Creek and alleged excess and MPSC provide for continuance of construction ac-capacity of 314 mw; however, the KCC allowed depre' counting for ratemaking purposes subsequent to the com-ciation on this amount. The revaluation of the Com- mercial in-service date of Wolf Creek until the effective pany's jurisdictionalinvestment in Wolf Creek was date of the rate orders associated with the cases filed in based on a cost ($1,290 per kw) for a hypothetical coal- 1985. In addition the September 27,1985, KCC order fired generating station. directed the Company to defer a portion of the carrying On November 15,1985, the KCC denied the Application costs on alleged excess capacity. The carrying costs on the for Rehearing filed by the Company on October 7,1985. On alleged excess capacity are calculated by applying the debt December 23,1985, the Kansas Supreme Court announced and preferred and preference stock weighted cost compo-it would hear the Company's appeal on March 28,1986. The nent of the cost of capital to the economic value ($1290 per
- Company also plans on filing for additional increases in kw) assigned by the KCC to the portion of Wolf Creek con-Kansas retail rates in April 1986. sidered to be excess capacity. In accordance with these The Company's filing with the MPSC proposes a rate orders the Company has deferred certain costs as an asset.
increase of $228.3 million (63.5%) to be phased in over four These deferrals at December 31,1985, include $14,344,000 years or a one-time rate increase of $187.1 million (52%) of operating expenses, $40,798,000 of carrying costs (calcu-based on a 1984 test year. In February 1986, the staff of the lated by applying the AFDC rate to the jurisdictional total MPSC filed revised accounting schedules recommending plant chst of Wolf Creek), $1,724,000 of carrying costs in that the Company's Missouri jurisdictional Wolf Creek accordance with the Kansas order applicable to alleged investment (for rate base treatment) be reduced by approxi- excess capacity and a reduction of $1,445,000 of deferred mately $338 million. After this exclusion and other pro- taxes applicable to Kansas jurisdictional carrying costs for a posed cost of service adjustments, the staff's revised total of $55,421,000 Increasesin the amount of Missouri accounting schedules implicitly suggest a one-time net jurisdictional deferrals will continue until new retail electric revenue increase in the range of $61 million to $71 million. service rates go into effect. Kansas jurisdictional deferrals, The staff's revised accounting schedules further reflect a except for carrying costs on alleged excess capacity, were suggested phase-in of rates with no rate increase in the discontinued when the retail electric service rates went current year and rate increases in subsequent years predi- into effect on September 30,1985. The carrying costs on the cated on annual rate filings by the Company and on the alleged excess capacity will accumulate at the rate of Company's future load growth. An MPSC rate order is $350,000 per month until the related portions of the plant expected this spring. are included in rate base. Missouri has legislation which permits the regulatory Future rate case filings will request recovery of these commission to phase-in rate relief and defer or deny reve-deferred costs in rates. The Company is currently unable to nue recognition of costs which are, among other things, predict over what time period either the Missouri or Kansas found to have been incurred in whole or part due to lack of Commission will allow recovery of these deferrals which efficiency or prudence or have resulted m excess capacity. were recorded as a result of regulatory action. In manage-The Company, which derives approumately 70% of its ment's opinion any dicallowance of recovery would not be retail revenues from Missouri, cannot predict whether, mial when compared to 1985 net income. when or to what extent the MPSC will grant the rate relief requested by the Company or suggested by the staff. The Under the proposed accounting standards discussed Company's future financial results would be adversely above, the entire deferred amount would be charged to affected if inadequate, inappropriate or untimely rate relief espense if the commissions do not specifically provide for is granted by the MPSC. recovery in rates within 10 years. yf
I r- NucicarInsimmce: The Price-Anderson Act currently limits 5. Preferred and Redecmable Pirfened and the public liability claims that could arise from a nuclear Preference Stock incident to $650 million. The Company and other owners The outstanding Cumulative Preferred Stock of $112 have purchased the maximum available private m.surance . . milli n may be redeemed at the option of the Company of $160 miHion and the excess $490 million of coverage is at prices which m the aggregate total $121 million. insured by Secondary Financial Protection (SFP). The SFP coverage is funded by a mandatory program of deferred The Company's Cumulative Preferred and Preference premiums assessed against all owners of licensed reactors. Stock (Redeemable) may be redeemed, in whole or in part, The Act currently limits the amount of assessment per ratably from each of the holders of the outstanding shares, reactor to $5 million ($2.35 million, Company's share) for at times and prices specified in the purchase agreement for one incident and 510 million ($4.7 million, Company's the individual issue. Redemption and sinking fund dates share) for any calendar year. The Act is expected to be and amounts are as follows: extended bevond its current expiration date in 1987 with significant increases to the limits and assessment amounts. gM[i[In Annual sinking runa C The owners of Wolf Creek have procured $1.11 billion sene, i 's $$' &','L"' '$'O' % % (the maximum available) of property damage insurance s nui g e,g;,g ~ ~~ ~ '~~ ~~ ~ coverage from a combination of the " nuclear insurance n 1948 currenny $102.2s currency siot.23m vioo si7.03 %2 ivs 127.03 iuw rio ni.4oo(b) pools" and Nuclear Electric Insurance, Ltd. (NEIL). The $i123 i982 Currenth(d li3 25 i4% iootai 60,0co(a) owners of Wolf t, reek have also procured extra expense si2x3 im mg 3 0,, iy,,9 100 33,332 insurance from NEIL to cover some of the increased cost of cornuuta ,preferene, 5 no i<s im currenny im 41,w replacement power should Wolf Creek sustain a prolonged currenu3 5'2#5 "" '""""Y '" 25 """"Y '* "## outage. The NEIL extra expense policy is structured with a six month waiting period deductible and one year of cover- (a) May be satisfied by open market purchases in lieu of age at the weekly indemnity limit, followed by one year of sinking fund redemption. coserage at 50'3 of the weekly indemnity limit. The Com- . (b) Company has non-cumulative option to redeem up to pany'sh eekly indemnity lim'it is approiimatelv $ L13 mil. 11400 additional shares each year at $110 per share plus lion. Under both NEll policies, the Company is subject to dividends. retroattive assessments ifindustry losses, with respect to each policy year, exceed the accumulated funds available to (c) The $13.25 series may not be redeemed prior to August the insurer under that policy. T he estimated maximum 31,1987, through refunding at an interest or dividend retroactive assessments for the Company under the NEIL cost to the Company lower than 13.25% policies are approximately $7 million per year. (d) Company has an option to purchase each year an addi. Nucicarluct Conunitments: At December 31,1985, Wolf tional 60,000 shares beginning in 1988 up to a maximum Creek's nuclear fuel commitments (Company's share) were of 150,000 of such additional shares. approximately 533 million for uranium concentrates (e) Company has non-cumulative option to redeem up to I through IW7, $180 million for enrichment through 20!4, 41,667 additional shares each year at $100 per share plus and 533 million for fabncation through 200' dividends. !
- 3. Sitort-knn Horrou'ings Scheduled redemption and sinking fund requirements or outstanding redeemable preferred and preference stock T he Company borrows short-term funds from banks and "'Ihe next five years are as follows: 1986 and 1987, $8.5 tbrough the sale of commercial paper as needed. Under nuH.mn ca year,515.7 million for 1988, and $14.9 million l
minimal fee arrangements the Company has bank lines-of- each year for 1989 and IWO. credit tot ihng $150 million which are backup for such borrow ings. No short-term borrowings were outstanding at At December 31,1985, the Company had authorized December 31,1985, or December 31,19S4. 550,357 shares of Cumulative Preferred Stock at a par value l of $100 per share,4,000,000 shares of Cumulative No Par Preferred Stock and 4,000,000 shares of Cumulative Prefer-
- 4. Dividend Restrictions Retained earnings at December 31,1983, included
""'" ' ""' E" ""I"" $12 million which was not available for cash dividends if any dividends on its preferred or preference stock are on common stock under the provisions of the Indenture not declared and paid when scheduled, the Company I
of Mortgage. could not declare or pay dividends on its common stock or acquire any shares thereof for consideration. If the amount of any such unpaid dividends equals four or more full quarterly dividends, the holders of preferred or preference stock, as the case may be, voting by the classes prescribed 1 22 L
C ,c
- for this purpose, could elect representatives on the Com- and make interest payments when due. The Company
- pany's Board of Directors. capitalizes the cost, including related interest costs, of the leased nuclear fuelin process for both book and rate mak-
- 6. Long-Tenn Debt ing purposes. The Company is obligated to reimburse the
- . HrstMortgage Bonds:The amount of First Mortgage Bonds {essor f r the nuclear fuel obligation as the fuelis consumed in the reactor.
. authorized by the Indenture of Mortgage and Deed of Trust dated as of December 1,1946, as supplemented, is unlimited. SdredadedMaturitics:The aggregate amount of maturities The amount of additional bonds which may be issued is and sinking fund requirements during the next five years subject to certain restrictive provisions of the Indenture. of long-term debt outstanding at December 31,1985, (exclu-
' Substantially all of the Company's utility plant is pledged sive of the loan agreements, which the Company expects und(-the terms of the Indenture. The following Ibilution will be extended, and the nuclear fuel lease) is $50.2 million Contral Bond series have sinking fund requirements begin- in 1989 and $20.2 million in 1990.
ning in various years: 5 7/8% in 1997,57/8% in 1998,6 7/8%
"A" in 1999,6 7/8% "B" in 1999 and 5 3/4% in 1989. 7. Jointly Owncil Electric Utility Plants loan Agreements: The Company has a loan agreement, The Company has, under joint ownership agreements
- expiring June 30,1988, with a group of international banks with other utilities, undivided interests at December 31, 1 which provides for the use of unsecured funds up to $200 198'i, in utility plants as follows:
million at interest rates adjusted quarterly based on the Wolf Creek La cygne latan
.t hree-month London Inter-Bank Offered Rate. At Unit Units Unit December 31,1985, $100 million at interest rates ranging Company's share _ 479 _ _ 50'1 70'1 _
- from 8.1% to 8.5% was outstanding. (millions)
Utility plant in service $1,449 $241 $238 The Company has a financing arrangement with a bank, Nuclear fuelin service $ 44 - -
. expiring January 16,1988, which enables the Company to Estimated accumulated borrow up to $50 million by collateralizing its coal and fuel depreciation oilinventories at rates based upon the current bankers' (Production plant only) $ 16 $W $ 48 acceptance discount rate plus an acceptance charge. At Accumulated amortization December 31,1985, $18 million at 8.7% was outstanding. (Nuclear fuel) $ 8 - -
Company's accredited Nuclear Tuct lease: The Company has a lease expiring in capac ty-MW 530 658 469 April 1990 which provides for financing of costs up to $80
. million of the Company's nuclear fuel. The lessor will Each participant must provide its own financing. The obtain, through the issuance of commercial paper backed Company's share of direct expenses is included in the by Ictters of credit from commercial banks, or from revolv. corresponding operating expenses on the Statements of ing credit loans, the necessary funds to purchase the fuel Income.
AUDUORS' REPORT l Tb tire Stockitolelers anel tire Boani of Directors of Kansas City l\nwr & Ligitt Carnpany l We have examined the balance sheets and statements of cumulative preferred and preference stock and long term debt
, . of Kansas City Ibwer & Light Company (a Missouri corporation) as of December 31,1985 and 1984, and the related statements of income, taxes, retained earnings and sources of funds for gross property additions for each of the three years in the period ended December 31,1985. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the financial statements referred to above present fairly the financial position of Kansas City Ibwer & Light Company as of December 31,1985 and 1984, and the results of its operations and the sources of its funds for gross property additions for each of the three years in the period ended December 31,1985, in conformity with generally accepted accounting principles applied on a consistent basis. ARTHUR ANDERSEN & CO. Kansas City, Missouri january 27,1986. 23
L kusCa hmr&IftCemra v nu , MANAGEMENT'S DISCUSSION AND ANALYSIS OF 1 FIN _ANCIAL CO.NDITION AND RESULTS OF OPERATIONS - - - _ _ _-. IMllSales and OperatingIhwnnes latan generating unit resulting from negotiating a favorable 20-vear coal contract and increased availability of and Kwh sales increased 1.09 in 1985 and .SG m 1984 com- ~ pared with the prior years reflecting primarily the continu- geiseration by the La Cygne 1 generating unit. ing revival in the local economy. Industrial sales in 1985 The components of change in feel costs: declined because sales to a major steel manufacturer de- Increase toecrease) i mm Prior Tear creased 12.31. Industrial sales in 1985 excluding this steel toss 1%4 manufacturer increased 4.5% . The 1984 increase was par-tially of fset by a reduction in residential usage due to mil- ohihons) l ossil plants der summer temperatures compared to 1983. The loss of a Generation for customers and wholesale customer effective June 1,1984, decreased other s1 sales for both years. In addition, revenues were positively , ", an[les impacted by the Kansas retail electric annual rate increase of $28.2 miilion ($25.1 million effective September 30,1985, Nutlea nt generauon and an additional $3.1 million effective November 18,1985), w $m s 12 the Missouri retail electric annual rate increase of $23.1 million effective July 1983 and the liansa3 retail electric W" ek test run energy of $6.4 million from June 13, annual rate increase of $16.1 million effective April 1983. 3, to Septemba 2, M3, was recorded as interchange
'I he increases in steam heat and other revenues in 19S5 purchan and 1981 are due to sales to a major steam custon er which began in April 1984. During the first quarter of 1986, a Intercitange Ihter(Net) change in the customerk product and process will be insti- Interchange sales exceeded interchange purchases by tuted by new ownership which will decrease the level of increasing amounts m 1984 and 1935 The incroases are'due future steam sales to this customer. primarily to imprm ed availability for interchange sales of Sales and revenue data: the Company's fossil-fueled gensrating units. The level of inc rease (Decrease) interchange sales in the future will depend upon the Com-I rom I nor ied' panyk system requirements and other factors such as fuel I I*I costs, maintenance requiremenM and the availability of k% Il th enues Ahlt ib enues generating units to the Company and poteniial purchasinp' dhlhons) Ohlhons) utilities.
kw h sales Residenuai L2< $4 0 an gg) Woff Crcck Nnclear Plant l4 Wolf Creek commenced commercial operation on Sep-i) > t i tember 3,1983, resulting in transfers of $1.45 billion, repre-oiber no m p) L sent;ng the Company's 477 share of the cost of the plant, intai to. p- pi(i >. ~(i' fmin mnstruction work in progress to electric utility plant steam heat ana in service, and $44.3 million, representing the Company's 4 other rn enues i cost of the nudear fuelassemblies in the reactor, from rota 50 g
- construction work in progress to nuclear fuelin service. As a result of commercial operation of Wolf Creek, the follow-Ihe components of change in revenues applicable to ing Wolf Creek operating expenses are ret!ected in the kwh sales: income statement; int rease (Ib rease)
I rom h iuricar (Mj[jjgng} 19 i+4 Fuel $ 9.2 Other operation 9.6 6hlhons)
""" Maintenance 2.8
" I n base sates } "
- 1 r I uel mst ret os erv through turl Iotal $4().7 m gh
~ ~'
adju stment t f ausn lotal s12 g See Note 2 to the Financial Statements for additional information concerning the deferral of costs related to Wolf Ihe average electric fuel cost per million 11i U det reased Creek. to $1.333 in 198; f rom $1.479 in 1984. I he generation f rom Ot/tcr Operafian l'tpense Wolf Creek beginning in September 1983 accounted for Other operation expense, excluding that associated with bM of the total decrease. 'I he cost per million 11I U of Wolf Creek, increased $16.6 million (20';)in 1985 reflecting nuclear f uel of $ Al7, induding disposal co4s is less than an increase in regulatory expenses due to costs incurred half the aserage cost of coal. Average tuel cost per millmn tor rate cases and an accrual for bonuses payable to bargain-til U for electric fossil plants decreased to S1.431 in tus5 fmm $1.479 in 198 4 due to decreased prices of oil, gas and mg unit employ ees upon the signing of new collective bargaining agreements. wal. Ihe aserage cost decicased to 51.179 in loS4 f rom
$1.509 in 1981 reflecting the reduced price of coal tor the 24
Maintenance Creek except for carrying costs on alleged excess capacity. hiaintenance expense, excluding tb it incurred at Wolf As a result, the portion of earnings contributed by net Creek, increased $10.9 million (19.2% )in 1985 reflecting AFDC will be reduced. The net effect of the denia'l by the boiler and turbine overhaul expenses at several generating KCC of a return on part of the Wolf Creek investmen't and units. the discontinuance of accruing AFDC on such amounts is Repair of the distribution system damaged by various approximately $30 million per year. storms caused maintenance expense to increase in 1981 compared to 1983. Stearn lleat litility Plant The Company's steam heat utility plant in service in-Interrst Etpense creased in 1985 because of the transfer of the $16.7 million Interest expense continues to increase because of greater cost of the Grand Avenue generating unit from electric amounts of outstanding long-term debt. The 1985 increase utility plant in service. The unit is now used only for steam was partially offset by decreased interest on short-term heat production. notes due to lower levels of outstanding short-term debt and lower rates. The 1984 increase also represented higher Profccted Constniction Espenditurrs rates of interest applicable to variable rate long-term debt. Projected five-year construction expenditures, excluding AFDC, are as follows and reflect a substantial yearly de-Otlier Inconte and Deductions - Miscellaneous crease when compared to 1985 construction expenditures The 1985 and 1984 miscellaneous-net of income taxes of $158 million: includes decreases of $2.7 million and $4 million, respec- Construction Eyenditures tively, due to write downs of the Company's investment in ~ its WYh10 subsidiary. 39g, ~ 39 s % ~ ~ gyg - ~ i990 ' w 3;~ mikons) NIMOC Generating fxihties $25.1 $ 27.8 $ 20.4 $14.7 $14.3 5102.3 . Deferred Wolf Creek carrying costs were calculated by Nuclear fuel 10.1 9.3 13.1 14.5 11.5 58.5 the same method as allowance for funds used during con- Transmission struction (AFDC). For purposes of analysis, net AFDC racihties 6.5 14.6 9.5 1.2 9.8 41.6 represents the combination of AFDC and deferred Wolf Df"y'",g l Creek carrying costs. Net AFDC is equal to allowance for facihnes 51.9 63.1 64.9 81.5 6u 30s.1 l equity funds used during construction, plus allowance for Total 593.6 5114.8 5107.9 591.9 $99.3 5;o7.5 borrowed funds used during construction, plus deferred Wolf Creek carrying costs, less deferred income taxes on The timing of construction and cost estimates are subject the borrowed funds component of each. to continuing review and adjustments. Actual construction The increases in construction work in progress at Wolf expenditures may vary significantly from such estimates. Creek until the September 3,1985, commercial operation date and the subsequent recording of carrying costs on Capital Requirvntents and Liquidity both the plant and deferred Wolf Creek ex'penses caused it is expected that 1986 construction expenditures will be net AFDC to increase 13% in 1985 and 41% in 1984. met partially through the utilization of available credit hionthly net AFDC is expected to decline to less than $.5 under loan agreements and short-term borrowings. It is million after he hiissouri rate order, expected in the spring anticipated that funds for the remaining 1986 to 1990 capital of 1986. needs including retirements of maturing long-term debt and redemption of preferred and preference stock pursuant fantings IUrStrate to sinking fund obligations will be provided from opera-Net AFDC represents a significant component of earn- tions. inge per common share as follows: Uncertainties which affect the degree to which capital 1985 1984 1983 requirements will be met by funds provided from opera-Net AF DC(millions) 5 121.9 $108 0 $7h.5 tions include such items as the Company's ability to receive Net AFLX'IbrShare 5 4M 5 3.74 $ 3.03 adequate rate increases, the impact ofinflation on operating I:arnings Ibr Share (EPS) $ 4.41 5 4.48 5 4.13 expenses, the level of kwh sales, and the level of inter-Net AfDCIbrShareas a change transactions with other utilities. Ibrcent of EPS 92 % 837 ,.,3' ; 1:l% euludmg net Al DC $ .37 $ .74 $ 1.12 1he Company has a pending retail rate increase applica-tion in N1issouri which is expected to be decided in the Earnings per share, excluding net AFDC, decreased spring of 1986. The Company's financial results would be from 1984 to 1985 primarily due to increased other opera- adversely affected if inadequate, inappropriate or untimely tion, maintenance and interest expenses. The decrease rate relief is granted. See Note 2 to the Financial Statements from 1983 to 1984 reflects milder 1984 temperatures and for further discussion regarding rate matters and impact on increased interest expense. the financial statements if generally accepted accounting As of September 30,1985, the effective date of the new principles are changed. K.msas tariffs, the Company discontinued accruing all net See Supplementary Financial Information for Financial AFDC on its Kansas jurisdictional investment in Wolf Data Adjusted for Changing Prices. 23
u, .. c , n-a. w.e c.. , ,,, S_le.'_PLEMENTARY FINANCIAL INFORMATION QllAR'ERLY OPERATING RESl!L13 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 1985 1984 1985 1984 1985 1984 1985 1984 tilwuumh > herating revenues $137,770 $134,659 $139,770 $142,638 $172,934 5172,432 $146,147 $133,685 Operating income $ 23,571 $ 23,600 $ 24,248 $ 25,246 $ 35,561 5 38,717 $ 22,963 $ 25,065 Net income $ 38,456 5 32,910 $ 39,703 5 34,560 $ 52,698 $ 49,483 $ 24,264 $ 34,488 Earnings per common share $ 1.11 $ .97 $ 1.14 $ 1.02 $ 1.56 $ 1.51 $ .61 $ .98 The busine3s of the J'cmpany is subject to seasonal fluctuations with peak periods occurring during summer months. r FINANCIAL DATA AD]L15TED FOR CHANGING PRICES IiIwnm id Year Ended December 31,1985 Current Cost Average 1985 Dollars
$ 205,486 E$t income before book depreciation of $50,365 (a) 113,528 Adjusted depreciation (a) s 91,958 Income' S (22,501)
Adjustment to net recoverable value of plant 52,942 Gam from decline in purchasing power of net amounts owed
$ 30,441 Net (a) Book depreciation and adjusted depreciation were developed to reflect the impact of continuation of construction accountmg as ordered by the state regulatory commissions which resulted in book depreciation of $12,078 being included in Deferred Wolf Creek Costs.
(b) At December 31,1985, current cost of plant net of accumulated depreciation was $4,029,000 while historical cost or net cost recoverable was $2,417,000. h P
~ ' CERTAIN FINANCIAL DATA AD]USTED TOR CHANGING PRICES Un &mamk{ Awray 19M Ddlarn I Year Ended December 31 1985 1984 10 1982 1981 Average consumer price index (national) 322.2 311.1 298.4 289.1 272.4 , Generalinformation
; Operating revenues $596,621 $604,230 $607,411 $541,230 $557,949 1 Gain from decline in purchasing power of net amounts owed S 52,942 $ 49,362 $ 43,331 $ 41,352 5 95,520
[ p Cash dividends declared per common share $ 2.36 $ 2.41 $ 2.35 $ 2.24 $ 2.23 7 Market price per common share at year-end $ 22.27 $ 20.30 $ 19.91 $ 20.39 $ 16.79 F Current cost information = Income' $ 91,958 $ 83,423 $ 63,480 $ 15,909 $ 17,741 h income (loss)* per common share $ 2.32 $ 2.10 $ 1.59 $ (.19) $ .07 Adjustment to net recoverable value of plant 5(22,500) $ (7,284) $ 3,328 $ 10,189 $(70,075) Net assets at year-end at net recoverable cost $825,078 $767.698 $707,325 $589,736 $525,722 k ' Excluding adjustment to net recoverable cost. E Notes to Ihe linancial Data Adjustedfor Changing Prices The information presented above is supplied in Since regulation limits a recovery of fuel costs in base accordance with the requirements of FASB statements rate schedules to actual costs, fuel inventories are on Financial Reporting and Changing Prices, for the effectively monetary assets and have, therefore, not purpose of providing certain information about the been restated from their historical cost in nominal
- effects of changing prices. It should be viewed as an dollars. Also, preferred stock and deferred Wolf Creek (g/A/ .
= estimate of the approximate effect of intlation, rather costs have been treated as monetary items. (..g than as a precise measure. <T Current cost amounts reflect the changes in specific Since only historical costs are deductible for income tax n'..' .. t t prices of plant from the date the plant was acquired to purposes, income tax expense has not been adjusted. N e: u the present. The current cost of plant was determined Under the ratemaking prescribed by the regulatory - f; g a by indexing the surviving plant by the Handy-Whitman Index of Public Utility construction costs. Since utility commissions to which the Company is subject, only the historical cost of plant is recoverable in revenues
'9
, plant is not expected to be replaced precisely in kind, as depreciation. Therefore, the excess of the cost i 4 current cost does not necessarily represent the replacement cost of the Company's productive capacity. of plant stated in terms of current costs that exceeds the historical cost of plant is not presently recoverable z t g
.s. y
. The current year's provision for depreciation on current in rates as depreciation, and is reflected as an adjust- ,4 M E p cost amounts of depreciable plant was determined by applying the Company's composite depreciation rate to ment to net recoverable value of plant. To properly reflect the economics of rate regulation in the M/ the average, depreciable plant amount calculated on a determination of income, the reduction of net plant to AG
.N '
current cost basis, adjusted for the impact of net recoverable cost has been offset by the gain from the s_ continuation of construction accounting as ordered by decline in purchasing power of net amounts owed. M., .s the state regulatory commissions. e
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Ym Cau nur & bght Compony ELEVEN-YEAR SUMMARIES OF FINANCIAL AND SELECTED STATISTICAL DATA 19M1 1#0 1979 198 19'7 1976 19'3 1%5 1944 1 *41 1982 Summary oi tarningo Operating Revenues H8W l lei tnc $ 583.113 $ 570 %A $ M1.3'O $ 475X2 $ ELA25 $ 44a lk2 $ %5.0*4 $ 313J87 $ 266,053 $ 234 297 $ 207.813 2.505 9 827 S un 5 783 5391 4,R76 4 609 2.26? steem hear 13,500 12.8 % 4.173 4M 629 318.663 270.662 137 164 _ _. _210.31_8
-.___. _596,6_21 % 3.414 %2._M1 471J11. ~ 449.465. _ _P0 875 7 8_al Operahng 1upmes usArd t h6. l M 135.450 110.510 92.945 83.555 248,R97 24d M24 241 0'6 207 M4 190 474 174 661 Operahon 52 6a0 R 315 30.359 29.4 % 22.275 19.194 70,841 57.092 53,1w 614% R105 Mamtenance 33,174 30.356 24 fi29 21, A67 47.561 % .319 4 i 215 44. % 2 41 733 34 868 Drpreoanon 62.443 Ines 42A*4 9.969 26.137 18.455 19 841 16.495 62,%c 69. % 8 61.962 w 446 49.577 Irwme 47.9 % 41.914 38,511 35,519 31.822 23.517 54,a91 59.741 51.M9 %2 075 51.wm Cancial - - - - - - -
DeferveJ hoH Creck e=penses 114,3441 - - - 326A10 263.631 224.3 % 191.512 169.648 4%Med) 3'7.226 159 118-.- _ _ Total _. - 490._278 _ 4701%.-- _ 40710_6 _ 4-.652
- 94. 4x5 44.075 55,012 5 40.670
. _ - _ _ _ - -86 84_7 _ - 46.326 O_ perstm. g imom_e haiO_O _._ _ _1_0_6._3_.43 _1_12.6__28-.__ ._104. 4M . .77.421 Other luome and Dedudiens 4s OW Allamanie for equity funds 7,592 3.983 2.119 64,590 7M.415 51.m* % 089 29 073 19.775 19.47 12.541 uwJ Junng omstrutton - - - - - - -
Deh-trcJ Wo:t Creek iarrymg costs 42,522 - - 304 (874) (14) 145 1,715 (2,429) (4 291) 25 (61) 327 (122) Aln.cllaneoun dnet) 2* 400 11.e4 7.553 4.16A 384
% .026 _ .19 653. - - - 19,771
. _ __ Tota. l_ . - - . - -
104.681 -74.122
. . . - - - _ 51.h .-4 -
luome beforeInterest 51879 49.820 44 504 19 317 113 949 123.p5 61.R46 66.701 Garges umurd. ~ . . - . _ _ . _ _ _._211,026_ 186J.50 106 %)0. __ interest Omegee @up 26 856 23,%) 19.964 h 643 70,126 65.2hd M.232 43.k64 40.612 32.217 teng term debt 94.824 3 89h 4 381 3,40K l.969 1,066 412 1.0M5 1,7"8 3.34 1 4 132 6.021 Wrt tenn noin 203 1,%5 1 273 1.271 i N7 10 M9 7,151 2em 341 268 255 Maiellaneoun Allimanse for is9niwed funds (10.750) (5.904) (4.022) t1.3%) ih,062) (% 9%h 141 keh 09 e?0) C4KM) (22.997) (19.211) uscJ Junng tonstrui tann -t redit 3100m 44.7N 37 23.777 22.286 20.198 17.900_
- _ _ . _ __ 55.905_
3 ( 109 _ _ _31. Ah . _3W____27.295_ __ Lta_l___ _ Imome liefere Cumulative 42,924 31,593 29.622 26.604 155,121 126 431 M0.941 '9 146 6h 701 % .551 E ffect um00 15L441 CumulativeItiert of Change - - 7.202 - - in Revenue Recognition ntaro - 79 14h tA.701 41,751 42.924 31.593 29.622 26.604 155.121 151.441 126 481 14 441 Net income um1LN Preferred and Prefereme Steak 7.545 5,124 4.019 21,867 21.417 21.570 IM 191 11 749 12.418 to 573 8.719 Dividend Requirements unitro Applicable to Common 24.048 $ 24.498 $ 22.585 6214* $ 311N0 $ 34.205 $ Secak h s tro $ _113.2_54_ $
- - .129.524- _ $_ _ .104 911 5 65.N7 $ _ %.2M_ $.
l.95 $ 2.26 $ 1 22 $ 2 91 $ 2 01 $ 2.3e $ 2 41 t.arning= Per Common Share $ 4.41 5 44* $ 4 15 $ 2.79 $ Raho of Iaanmgs to 3 04 3.09 3 37 3 41 2 62 219 2 R0 1W 3.01 218 fined Charges 1 08 14 2% 112% 7.0% 10 5% A 5% 10 0% 10.5% Return onivar-end E quity 15.9% 17 24 15 74 11 7% Capdalisation Data _ _ ___ _ ._ Common 5tosk Equitv unou $ 838,344 $ 7517M $ 6h6 273 $ 515 192 $ 4N.111 $ 424 ns2 $ r3 224 $ 327.260 $ 282.106 $ 244.938 $ 213.312 19.173 655 16.514.110 14.466,491 12324,199 10,817,304 9.370.638 Aserage shares outstandmg 30.196J15 28 4 7.407 25 278.ba 22. 910. %M 20 3o2121 2 33 $ 2 17 $ 2 01 $ IM $ 1 79 $ 116 $ 1.71 $ 1 64 $ 1.% $ 1 51 Cash JmJenJ, per share $ 2.36 $
$ 112,000 $ etwl $ ll2 Am o $ 112 05a1 $ ll2.uul 5 ll2 mu $ 11 1 000 $ 112.000 $ 112,000 $ 92 000 $ 72.000 PreferreJ Stock Huou 8 414 $ 7,372 $ 4.445 $ 3.84 s,414 $ M 414 $ 8414 $ 8 414 $ 8 414 5 R 414 $ 8.414 5 DnidenJ uequirementu ded $
74% 67% 60% 7 54 7 51 7 54 7% 75% 7.5% 75% Ascrage JmdenJ rate 7.5% Preferred Stotk 4 316 5 4.476 $ 4 636 65,6 % $ h4.wn 5 % I% $ % 11a $ 1 676 $ 18% $ 3.**o $ 4.156 $ (Redeemable) 4t 0 c $ 8 677 $ 7 w*7 $ 4 %2 $ le $ 153 $ 1% $ Ifi6 $ 173 $ 179 $ 185 thudend requirement $ ctro 5 9.2"O $ 4 04 40% 40% 40% 4 OM 40% 40% 14 1% 14 1% 14 2% 14 3 Aserage JmJend tae r Prefereme hk
$ 33,333 $ 41,667 $ 4; M11 5 %n 000 $ %1 000 $ %) 000 $ 25.000 $ 25.000 - - -
IRedeemableh0tml
$ 4,1M $ 4 82ti $ 519 $ 5. !'47 $ 5 147 $ 3.M 1 $ 2.000 $ IN - - -
Thudend requirements neFC A crage Jmdend rate 1055% 10 60% 10 N% 10.V1 10381 47M 800% 8.00% - - - Long-term Debt tindudmg
$ 1,13e.596 $ 1049117 $ M0'i h44 $ 767.614 $ co2 W $ 612 4*- $ 'skA.876 $ 503 044 $ 416.372 $ 3n4.118 $ 343 738 curreat matuntied dWO Interest on det t un eN $ 98.524 $ % 643 $ 70.12n 5 65 2m $ % 212 $ 4'5 864 5 40 612 $ 32 217 $ 26.856 $ 23.553 $ 19 468 v5% 41M 9 40% R fon M 274 7.54% 6.98% 618% 6.35 % 6 12 %
Awrage mterest rate 916% Other Data and Ratios 84 818 Uhhts Plant-Grsm additum,dt9 $ 261.0'5 $ 402 6N $ 104 6 % $ 207.0V $ 171 419 $ 1% %7 $ 234 818 $ 188 121 $ 16A.285 $ 126.014 $ Total Awet* @On $ 2,654.054 $ 2 424 602 $ 2.071,014 51 N2227 $ 16171M $ l.5M 974 $ 1.391.038 $ 1,166 760 $ 1.008.A14 $ 841.502 $ 7 % .530 25 29 $ 23 51 $ 21 *e $ 22 25 $ 21 12 5 21.30 $ 21 90 $ 2115 $ 21 64 $ 21 29 Itook ialue per $ hare $ 27.10 $ 3i5% B7e % 1% M 2% 11 1 % 34 2 % 33 8 % Conmwn h k I quity Rano 385% 37 % N% % 0% (ommon ws k the 19 % $ 21 % $ 20 $ 1*% Hgh $ 24 % $ 20 - $ 22 $ 1% $ la $ IVs $ 1+* $ 14 , $ IC $ 14e $ It $ th $ 14's $ 16 $ 18 % $ low $ 12 % low $ IS $
.M
Electr6:Salen $satistics 19ss tws4 1983 14N2 19N1 19MO 1979 19"8 1977 1976 1975 Sevenues ((310'sf Residentu! $ 200,839 $ 196,625 $ 199.713 $ 160, % 4 $ 144.916 $ 161.973 $ 121.170 $ 111,972 $ 93,343 $ 84,202 % 79.507 Conunesdal 254,53$ 241.On3 227,2A6 203,904 192,526 176.505 144.120 124.083 83,416 107.738 94.306 Industrial 105,145 105. A16 93.463 86,953 94.16# MO.821 76.956 61.4M9 43,105
$0.914 34.4'8 hbhc street and highway hghtmg 12.127 1Le04 11.015 9.616 9.332 8.325 7,043 6.221 6.398 5,888 5.205 Nbhc autionswm - power s.mf hghtmg % v? ne 86 82 75 69 74 65 60 %
. Olhershstncatihtws 6,525 11,754 17.678 12.631 12.644 10.638 9.944 8.369 6,186 5,315 3,765 Total 579.267 $M.899 549,744 473.544 463.672 438,337 % 3,352 312.208 264.644 232.876 206.427 Other clednc revenues 3,8# 3.659 3.626 2.248 2.153 1.845 I,D2 1.579 1.409 1,386 1.421 Total $ 585,113 $ 570.558 $ 553.370 $ 475 n02 $ 465,825 5 440.182 $ %3,0M $ 313.787 $ 266.033 $ 234.297 $ 207.813
$ ales ita Miowatt fleurs avu Residenttsi 2.657,018 2.625,440 2.719.062 2.378 647 2.345.646 2,689.467 2.254.962 2,193.899 2.465.782 2.2 4 .029 2.300,432 Commercial 3,757,144 3,579.710 3.49R.9% 3.339.673 3.251.235 3.33A.185 3.183,710 3.182.675 3.0MO,$n9 2,889,838 2.8 % ,031 Induetnal 2,248.524 2,272.4%7 2.039,736 1,959.431 2.326,664 2.141,924 2,3s3.204 2,302,619 2.147, % 3 1,768.308 1.9MO.230 Nbhc otreet and haghway lightmg 69,097 6?,707 66.744 66,625 66.306 67,172 H .*61 68,248 68.286 65,260 66.814 Nbhc authuntes - power and hghtmg 1,652 1.687 1.563 1.657 1,634 1.693 1,876 2.710 2,702 2.657 2.914 Other electnc utshews 160,174 260.575 410.33n 325.947 327.022 355,154 328.072 336,916 317.516 302.842 264.497 Total -e,s93,609_ A 807,576 8.7% 3?9 8,072.030 8,318.509 8.593.595 8.358.950 7.436,290 e -
8.218,3,85, -7.900,485 ,_ 7,247.4_4_2,. Averase Number of Customers Rewdentul 324,133 315.287 304,904 306,756 304.613 301.417 298.413 293.402 288,376 281,708 284.296 Commerdal 41.947 40.826 40,590 40.065 39,758 38.984 38.372 38,713 38,343 38.024 37.709 Indudrial 2,5n8 2.52A 2.4An 2.476 2.359 2,215 2,142 2,121 2.084 2,049 2.065 hbhc street and hoghwav hghtmg 123 123 120 120 122 123 123 123 122 125 126 hblic authontre - power end hghtmg 11 11 11 11 11 11 11 12 11 11 11 Other electric utihtwa 14 17 19 13 13 14 14 16 16 13 13 Total 368.816 35n.792 353.097 349.441 346.876 342.764 339.075 3'4,3n7 321,616
.=x.c= 328.952 324.5 %
i i Residential Salee Awrage kwh per customer 5,197 8.327 A.774 7,754 7.700 8.923 7,5% 8.404 7,920 8,166 7.717 Averrge revenue per kn h - cents 7.599 7.4M9 7.345 6.742 6 604 6 023 5.373 4 541 4 OR7 3.838 3.4% Lead StaHatics Genersted (net) - kw h(00fH 11,170,702 10.1 %.804 9.191,33' 9.138 284 10.762.030 10,095.801 7,535.591 8.581,224 8.4M.189 7,t 67,221 7,203,748 hrcha.ed - kw h fuWs) 12.504 12 826 12,5'9 11,146 11,051 11,761 79,993 211.991 1A8.082 194.250 190.198 Intenhanged (net) - kw h t0WsJ (1,589.1159 M51.560) 193.436 ($39.933) (1.908.379) (902,501) 1,196,104 218.421 (I A2.699) M4.9% 463.542 Totel - kwh iOUI1W 9 9 518.070 9.397.327 8.609.497 8.864.702 9,205,061 6,811.688 _.994,091 8.451.576 8.026.407 7.857,488
- . . .- - . _ . . . i . 9.011.6 % .
i . = _ _ = = Masimum net hourly demand m kikwatts twmter) 1,4 # ,000 1.3MR.000 1,435 000 1.315,000 1,304,000 1,299,000 1,317,000 1,286.000 1.255,000 1,165.000 1.161,000 Mairum pet hourly demand in kilowstes (sur,mer) 2,235.000 2.297.000 2,324,000 2.167,000 2,123.000 2.198,000 1.964,0m) 2,097,000 1,980,000 1.920.000 1.902,700 Nrt generatmg capability in kdowrits(summer) 2,937,000 2.477.000 2.634.000 2 774.000 2,8A4.000 2.838,000 2,560.000 2.560,000 2,361,000 2.675.000 2.334.000 N+t espacity in kak* watts hold) purchased (summer) 41.000 151,000 41,000 -. (200,000) (150,000) - 95,000 (101.000) 118.000 100.000 Stu per net kwh generated 10.635 10,756 10.874 11.138 11,119 11,158 11,633 11.266 11,518 11,331 11.5#5 Emplopel'ata Salarws r.nd wegen tolew $ 97,425 $ 92.990 $ 89.2 4 $ 87,907 $ 80.239 $ 73.602 5 68,MS $ 54.693 $ % ,380 $ 49.644 5 - 45,305 Prneions and berw6ts amon 11,497 13.377 15,060 14.473 12.759 11,670 9.947 6.861 7.878 7,132 _ 6.487
$ 108,92
- x..,2 $ 106,327 $ 104.306 $ 102.380 $ --
92.948 $ 85.272 $ 78.412 $ 61,554 5 64.258 $ %.776 $ 51,792 Number of empkiyeen. Dr(ember 31 2,863 2.838 2,919 2.957 2.928 2,856 2,868 2,726 2,522 2,+84 2.572 Employee Data - Adjusted
- Salarws and wagen rotou $ 91.627 $ M.9m6 5 81.05A $ A0,194 5 72.627 5 66.469 $ 62.569 $ 49,755 $ $1,716 $ 46.491 $ 42,748 IVnuons and benehts @pu 11.092 12.3'io 13,792 13.281 11.610 10.751 9.2A2 6.287 7,359 6.754 6.174
$ 104.719 $ 97,336 $ 94.850 $ 93.475 5 84.237 $ 77.220 $ 71.851 $ 56,042 $ 59,075 5 53.245 $ 48.922 Number of empkw Dwember 31 3,069 2.633 2.70N 2.720 2.694 2.628 2.659 2.577 2.414 2.382 2.379
*E whuin or meluJn Jara relatst u emploom alwatat u er fmm etowr prty,put, a punt!pxmed u,vt,.
29 ~ . . .. .. .
BOARD _O._F_D_I_ RECTORS WILLIS C. THEIS* GEORGE E. NETTLES, JR. AR111UR J. DOYLE* Chairman of the Board, President and Chief Executive Officer Chairman of the Board NicNally Pittsburg Inc. and Niidwest Simonds-Shields-Theis Grain President and Chief Executive Officer Niinerals, Inc. Company Pittsburg, Kansas -grain merchants and WILLIAN1 H. CLARK
-engineering, manufacturing, warehousemen President and Executive Director Urban I eague of Greater Kansas City construction mineral processing and quarry operations ROBERT H. WEST *
-. Community Service Agency President and Chief Operating Officer CYRUS S. EATON, JR." LOUIS C. RASMUSSEN Butler Manufacturing Company Executive Vice President and - manufacturer and marketer of Chairman of the Board Cyrus Eaton World Trade Chief Financial Officer pre-engineered buildings systems, Cleveland, Ohio agricultural equipment and energy
-intemational trade GEORGE A. RUSSELL management systems Chancellor University of hiissouri-Kansas City ROBERT K. ZIN1N1ERNIAN WIL1 I AN1 D. GRANT
- Honorary Chairman of the Board Chairman of the Board and Chief Executive Of6cer EUGENE M. STRAUSS
- Business Men's Assurance Chief Executive Advisory Director Company of America The Strauss Companies ROBERT A. OLSON
-insurance -insurance and related insurance Retired Chairman of the Board corporations J. ROBERT MILLER LINDA HOOD TALBOTT
- Member Executive Committee Senior Vice President and Chief Operating Officer President "Mr. Eaton retired from the Board in Clearinghouse for Midcontinent October 1985.
Foundatiens
-information exchange for philanthropic activities COMIMNY OFFICERS ***
ARTHUR J. DOYLE,62 J. MICHAEL EVANS,40 JOHN A. MAYBERRY,58 Vice President-System Power Vice President-Commercial Operations Chairman of the Board. President and Operations 1971 Chief ExecutiveOfficer 1973 1983 WILLI AM H. MILLER,51 LOUIS C. RASMUSSEN,57 JAMES L. HOGAN,55 Vice President-Administration Vice President-Engineering 1980 Executive Vice President and Chief FinancialOfficer 1984 RONALD G. WASSON,40 1974 A. DRUE JENNINGS,39 Vice President-Purchasing Vice President and General Counsel 1983 SAMUEL P COWLEY. 51 Senior Vice President-Corporate Affairs, 1980 LEE E MILLER,64 Secretary and Chief Legal Officer 1979 DONALD M. LANDES,54 Treasurer Vice President-Communications 1975 J. ROBER f MILLER. 61 1975 NEIL A. ROADNf AN,40 Senior Vice President and Chief Operating Officer EDWIN B. McBURNEY,59 Controller Vice President-Transmission and 19S0 1971 Distribution BERNARD J. BEAUDOIN,45 1984 Vice President-Finance *" Listing includes age, title and year 19S1 promoted to officer 30
=
SHAREHOLDER INFORMATION STOCK PRICES AND DIVIDENDS TRANSFER AGENTS AND REGISTRARS Contmon Stxk Price Range Connnon and Preferred Stock 1985 1984 United Miss.niri Bank of Kansas City, N. A. '
- _ Quarter liigh Low liigh Imw Stock Transfer Dept.
i First 24 19 % 20 % 16h PO. Box 64 Second 24 % 19 % 18 % 14 % Kansas City, Missouri 64141 Third 24h 18 18 % 14 % (816) S56-7883 Fourth 23 % 19 % 20 % 17 % Common stock is listed on the New York Stock Ex-change and the Midwest Stock Exchange. Kansas City Ibwer & Light Company [ 1330 Baltimore Avenue Common Stak Dieldends Kansas City, Missouri 64141 Common Stock dividends were declared as follows: Quarter 1986 1985 1984 ANNUAL REPORT ON FORM 10-K First $0.590 $0.590 $0.560 Copies of the Company's annual report to the Sec-Second 0.590 0.590 urities and Exchange Commission on Form 10-K will be Third 0.590 0.590 provided without charge to any shareholder or beneficial Fourth 0.590 0.590 owner of shares of the Company's stock upon written request to Samuel P. Cowley, Senior Vice President and Pre /Frred and Preference Stock Dieldends Secretary, Kansas City Ibwer & Light Company,1330 Quarterly dividends on Preferred and Preference BaMmom Avenue, Kansas @, Mssouri 6U05.
- Stock were declared in each quarter of 1985 and 1984 as follows
- DIVIDEND REINVESTMENT AND
- STOCK PURCHASE PLAN i
Cumulative Cumulative No Par Preferred Stock Preferred Stock A Dividend Reinvestment and Stock Purchase Plan is [ Series Amount Series Amount available to all Company stockholders. Under the plan, 3.80 % $0.95 $10.70 $2.675 shareholders may investin common shares of the 4.00 % 1.00 2.33 0.5825 Company through automatic remvestment of dividends ! 4.20 % 1.05 2.20 0.55 n c nun n, preferred or preference stock. 4.35 % 1.0875 17.05 4.2625 Under the Economic Recovery Tax Act of 1981, 4.50% 1.125 13.25 shareholders could defer until December 31,198a, 3.3125 7.m 1.93 inc me taxes on remvested dividends of up to $750 annually ($1,500 for joint returns). The tax benefit Cumulative expired December 31,1985. Preference Stock Effective February 4,1986, the plan was amended to Series Amount i provide the Company with the option to either issue
$ 8.00 $2.00 new shares or purchase shares on the open market to 7
12.75 3.1875 meet plan requirements. The Company also discontinued both the five percent discount and the [ Quarterly dividends on Cumulative Preferred Stock option to purchase additional shares with cash. ! issued in 1984 were declared as follows: These changes reflect the Company's reduced need to ! r ise capital and coincided with the expiration of the i Quarter Series 1st 2nd 3rd 4th fav rable federal tax treatment which had been available for qualified reinvested dividends. The plan was 1984 $12.875 -
- 2.575 3.21875 continued to provide shareholders with a convenient 1985 12.875 3.21875 3.21875 3.21875 3.2187,5 method of purchasing with reinvested dividends the All dividends paid by the Company in 1985 were Company's common stock at market value and without determined to be dividend income and no portion was brokerage commissions.
considered a return of capital. 31
THE COMPANY ANDITS SERVICE AREA
.L in a capacity margin of about 24.9% , around the Kansas City Board of Kansas City Ibwer & Light Com-the equivalent of a reserve margin of Trade. Kansas City leads the nation in pany is a medium-size electric utility and the corporate successor to one of 33.2% . In addition to being a member farm equipment distribution, hard the world's first electric companies, of the Southwest Ibwer Ibol, a re- winter wheat marketing, and man-gional reliability council, KCPL is a ufacture of aircraft instrument land-generating electricity since 1882.
member of the MOKAN Ibol, formed ing systems; ranks second in wheat Ileadquartered in downtown Kansas in 1962 to share reserve capacity, flour production and grain elevator City, Missouri, the Company gener-ates and distributes electricity to coordinate planning for additional storage capacity; and is the nation's about 374,000 customers in a 4,700- generating units and expand trans- third largest feeder cattle market and square-mile area located in all or mission lines. Transmission connec- producer of automobiles and trucks. tions with numerous utilities in Kansas City has developed into a portions of 23 counties in western Missouri and eastern Kansas. Ibpula- Missouri, Kansas, Nebraska, Iowa major retail market, ranking sixth and Minnesota enhance the Com- among the thirty largest metropolitan tion of the service area is about 850,000. Customers include 329,000 pany's system reliability. Kansas City areas in per capita retail sales. The residences, 42,000 commercial firms, is a key center in the interconnected city is the nation's largest producer of and 2,700 industries, municipalities system which enables regional and greeting cards and envelopes and is a interregional bulk power transactions major center for rail and truck trans-and other electric utilities. About 70% of total kwh sales and revenue are among electric utility systems. portation, storage, and distribution and for regional wholesale and ser-from Missouri customers and the vice companies. The metro area remainder from Kansas. ServiceArra Steam is produced and distributed . ranks fourth in the number of con-gost of the Company's busm. ess is sulting engineers. Kansas City is also to about 130 businesses in downtown denved from metropolitan kansas Kansas City and accounts for about a major convention and enter'tain-City which has experienced steady ment center, ranking among the top two percen't of total revenue. economic growth. A key factor is the 10 citiesin number of conventions diversity of the area's mdustry, re-
' " " d '"l"d '""""" "'
Cencrating Capacity and the flected in an unemployment rate . Our service area's location, midway AfOl01NIbol which has been consistently below between the geographic and popula-
,The Company's 1985 total available the national average. In December .
tion centers of the country, will con-capacity was 2,978 mw, includin8 1985, the seven-county area un- .
""" " E "I " " E ""
2,937 mw of installed generating emPl oyment rate averaSed 4.9% stimulating steady economic growth. capacity and 41 mw of equivalent against the national average of 6.99. capacity purchases. Its 1985 system Kansas City is considered to be the peak load was 2,235 mw and resulted world's agribusiness capital, centered 32
1986ANNUALMEETING The 19% AnnualMeeting of Stock-holders will be held on Tuesday, April 22,1986, at 10:00 a.m., in the 4th floor auditorium of the Company's offices at 1330 Baltimore Avenue, Kansas City, Missouri. Shareholders of record on March 3,1986, are eligible to vote at the meeting and willbe mailed a notice of meeting, proxy statement and form of proxy. INVESTOR CONTACTS
\ ^ Shareholder AccountInfonnation Shareholder Relations Department -(816)556-2053 FinancialInfonnation Investor Relations (816) 556-2312 CORPORATE OFFICES 1330 Baltimore Avenue Kansas City, Missouri 64105 (816)556-2200 I
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BULK RATE b ' U.S. POSTAGE
- PAID KANSAS CITY, MO Ibrmit No. 397 KANSAS CITY POWER & LIGHT COMPANY 1330 Baltimore Kansas City, Missouri 64105
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