View:
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule
240.14a-12
KANSAS CITY POWER & LIGHT COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
####
Second Quarter Financials / 2843
July 12, 1996
FOR IMMEDIATE RELEASE
KANSAS CITY POWER & LIGHT REPORTS INCREASED EARNINGS
Kansas City, Missouri, July 12, 1996 -- Kansas City Power &
Light Company (NYSE: KLT) today announced common stock earnings
for the second quarter ended June 30, 1996 increased to $0.43 per
share, or $27 million, compared with $0.29 per share or
$18 million this quarter last year. Warmer than normal weather
this quarter had a positive impact on earnings. As a result of
defending against Western Resources' hostile offer, earnings were
reduced this quarter by $0.05 per share. Earnings were lowered
in the second quarter of last year due to ongoing mild weather
and several one-time costs including a one-time charge for Wolf
Creek Generating Station's voluntary early retirement program.
Retail revenues for the second quarter of 1996 increased 10%
to $205 million, reflecting an 11% increase in retail kwh sales.
Operating revenues for second quarter increased to $226 million.
For the twelve month period ended June 30, 1996, common
stock earnings were $129 million, or $2.09 per share, up from
$108 million, or $1.74 per share last year. Twelve month
operating revenues increased to $915 million from $850 million
the previous year.
Drue Jennings, KCPL's Chairman, President, and Chief
Executive Officer stated, "I want to congratulate everyone at
KCPL for keeping their eye on the ball and delivering a terrific
quarter. Despite the distraction created by Western Resources'
ill-conceived hostile offer we served our shareholders well. It
is unfortunate that we had to expend resources to defend against
Western's hostile bid. We have gone to great effort to make a
focused response; however, we would be shirking our fiduciary
responsibility if we failed to make our shareholders aware of our
belief that Western's offer is based on a number of faulty
assumptions that raise serious questions as to Western's
financial prospects and its ability to sustain its promised
dividend rate.
"KCPL can be very proud, we increased earnings and stayed
focused on forming Maxim Energies -- our merger with UtiliCorp.
This merger is on track to be completed in the second quarter of
1997 -- a timetable, we believe, nobody else can match."
(more)
Kansas City Power & Light Company provides electric power to
a growing and diversified service territory encompassing
metropolitan Kansas City and parts of eastern Kansas and western
Missouri. KCPL is a low-cost producer and leader in fuel
procurement and plant technology. KLT Inc., a wholly-owned
subsidiary of KCPL, pursues opportunities in non-regulated,
primarily energy-related ventures.
[SEE ATTACHED CHART]
# # #
Investor Contacts:
David Myers
816 / 556-2312
Sue Johnson-Kimbel
816 / 556-2904
KANSAS CITY POWER & LIGHT COMPANY
FINANCIAL - RESULTS OF OPERATIONS
(In Thousands)
Item 3 Months Ended June Year-to-Date June 12 Months Ended June
____________________ ______________________ _______________________ _______________________
1996 1995 1996 1995 1996 1995
_________ _________ _________ ___________ __________ __________
1. MWH Retail Sales 3,044,676 2,735,781 5,953,243 5,473,189 12,421,481 11,506,966
% Increase 11.3% 8.8% 7.9%
2. Operating $226,205 $205,305 $432,829 $404,211 $914,573 $850,080
Revenues
3. Net Income $27,674 $18,696 $52,197 $41,583 $133,200 $111,691
4. Preferred $935 $1,022 $1,892 $2,048 $3,855 $3,863
Dividends
5. Earnings $26,739 $17,674 $50,305 $39,535 $129,345 $107,828
Available for
Common
6. Average Number 61,902 61,902 61,902 61,902 61,902 61,902
of Shares
Outstanding
7. Earnings Per $0.43 $0.29 $0.81 $0.64 $2.09 $1.74
Share 48.3% 26.6% 20.1%
% Increase
8. Common Dividends $96,567 $94,091
9. Return on Equity 14.4% 12.4%
(end of period)
Earnings for the 1995 year to date and twelve months ended were increased $5 million ($0.08 per
share) from the gain on the sale of unit train cars.
[Letter sent to KCPL Retirees]
July 12, 1996
Dear [Retired Employee]:
As a retired KCPL employee, you are probably watching the
KCPL/UtiliCorp merger activities with great interest --
especially after the well-publicized take-over attempt of
our company by Western Resources. Because of your personal
interest and long-time support, I want to explain to you the
actions of our Board of Directors in turning down Western's
unsolicited offer to merge with KCPL.
In rejecting Western's offer -- and in reaffirming our
intent to merge with UtiliCorp -- the KCPL Board is seeking
the best value for all KCPL shareholders. After carefully
reviewing and analyzing Western's proposal, we see none of
the business advantages offered in our merger with
UtiliCorp, but rather we see significant risks in a
combination with Western. We believe Western's proposed
merger is based on faulty assumptions that could jeopardize
its dividend promises and raise questions regarding its
financial forecasts that we believe could adversely affect
future stock price performance.
In addition, the KCPL Board questions Western's commitment
to KCPL employees. Western has stated that no layoffs would
result from its proposal, but Western's filings with the
Kansas Corporation Commission state that 531 employee
positions will be eliminated and all resulting savings
available by January 1, 1998. We do not believe Western can
reduce 531 positions in that short time frame without laying
off KCPL employees.
The KCPL Board has concluded that Western's proposal is not
in the best interest of KCPL or its shareholders, employees
or the communities we serve. For your information,
attached is a summary detailing several reasons for this
conclusion.
If you are a shareholder, you have received details of our
proposal and our response to Western. If you have further
questions or need assistance in completing your proxy card,
please call KCPL Investor Relations at 800-245-5275. If you
are not a shareholder and would like copies of our response
or more information, Investor Relations would also be happy
to help.
On behalf of the Board, I thank you for your continued trust
and support of the company you have served so well.
Sincerely
/s/Drue Jennings
Drue Jennings
Chairman of the Board,
President
and Chief Executive Officer
[Attachment for D. Jennings' Letter to KCPL Retirees]
KCPL Board Rejects Western Resources' Exchange Offer
There are many reasons which have led the Board to the
conclusion that Western is an unattractive partner. Of paramount
concern is the belief that Western's hostile offer is based on a
number of faulty assumptions that raise serious questions as to
Western's financial prospects and its ability to sustain
dividends at its promised dividend rates. For example:
- Western faces significant rate reductions which KCPL
believes will imperil its ability to sustain promised
dividends. The staff of the Kansas Corporation
Commission has recommended that Western reduce its
rates by $105 million annually, which is 12 times
greater (in the first year of reductions) than the $8.7
million per year over seven years that Western has
proposed. If the $105 million annual rate reduction is
implemented, then virtually all of Western's projected
earnings for a combined KCPL/Western entity in 1998 (as
reported in Western's own prospectus dated July 3,
1996, and as adjusted by KCPL to reflect the full
impact of the Kansas Corporation Commission Staff's
recommended $105 million annual rate reduction) would
be required to pay dividends at the rate promised to
KCPL shareholders.
- KCPL believes that reductions in merger-related savings
realized and/or retained will further hamper Western's
ability to make its promised dividend payments. Based
on a review of Western's claimed merger-related
savings, KCPL believes that Western has significantly
overestimated the amount of savings that would result
from a combination of KCPL and Western. In addition,
both the Kansas Corporation Commission (in its order
regarding the merger of Kansas Gas and Electric Company
(KGE) and Western's predecessor, Kansas Power and Light
Company (KPL)) and the Missouri Public Service
Commission Staff (in the pending Union Electric/CIPSCO
merger) have advocated an equal (50-50) sharing of
savings between shareholders and customers. In
contrast, Western's proposal to acquire KCPL
contemplates that Western be allowed to keep 70% of
merger-related savings.
- KCPL believes that Western will be under pressure to
reduce rates for its KGE customers, and any reduction
to Western's revenue base would further threaten
Western's ability to makes its promised dividend
payments. Testimony before the Kansas Corporation
Commission indicates that if the rates charged to
Western's KGE customers were reduced to equal the rates
charged to Western's KPL customers, Western would
suffer a $171 million annual revenue reduction. Even
if the Kansas Corporation Commission follows its own
staff's recommendation and the entire $105 million
annual rate reduction is applied to KGE customers,
Western would still face a rate disparity of
approximately $65 million per year. In an increasingly
deregulated utility environment, KCPL believes that
Western must address the rate disparity issue because
Western's customers may otherwise choose to purchase
cheaper power from Western's competitors.
- A KCPL/Western combination would concentrate risk in a
single asset and a single geographic market. A
combined KCPL/Western entity would own 94% of the Wolf
Creek nuclear plant, concentrating a significant amount
of capital and risk in a single asset. In contrast, a
combined KCPL/UtiliCorp company will own only 47% of
Wolf Creek. In addition, a combined KCPL/Western
entity would conduct a substantial portion of its
business in two states, Missouri and Kansas. KCPL
believes that a combined KCPL/UtiliCorp entity would be
much better prepared for the deregulated utility
environment because it would have operations in eight
states and six foreign countries, thereby achieving
geographic, regulatory and climatic diversity.
- The KCPL Board questions Western's commitment to KCPL
employees. Western has stated that no layoffs would
result from its proposal, but Western's filings with
the Kansas Corporation Commission state that 531
employee positions will be eliminated and assume that
all resulting savings will be available by January 1,
1998. The KCPL Board does not believe that Western can
reduce 531 positions in such a short time without
laying off KCPL employees.
The KCPL Board has also reaffirmed its support for a merger
with UtiliCorp to form Maxim Energies, Inc. The KCPL Board
believes that Maxim will be a customer-focused, low-cost energy
supplier with diversified assets and the financial resources to
grow and thrive in the electric utility industry which is on the
verge of deregulation. The KCPL Board believes that Maxim will
allow KCPL shareholders improved opportunities for long-term
earnings and dividend growth which are superior to that offered
by Western's hostile offer.
#####