SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) July 31, 1997
WESTERN RESOURCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
KANSAS 1-3523 48-0290150
(State or Other Jurisdiction of (Commission (Employer
Incorporation or Organization) File Number) Identification No.)
818 KANSAS AVENUE, TOPEKA, KANSAS 66612
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number Including Area Code (785) 575-6300
WESTERN RESOURCES, INC.
Item 5. Other Events
Western Resources herein files the following:
Exhibit 99.1 - Unaudited Pro Forma Combined Financial Information of Western
Resources, Inc. and Kansas City Power & Light Company.
Exhibit 99.2 - July 30, 1997 Form 8-K as filed by Kansas City Power & Light
Company.
AVAILABLE INFORMATION
The reader's attention is directed to additional filings of Western
Resources, Inc. (Western Resources) and Kansas City Power & Light Company
(KCPL).
Western Resources and KCPL are subject to the informational requirements
of the Exchange Act, and in accordance therewith file reports, proxy
statements and other information with the Securities and Exchange Commission
(the Commission). Reports, proxy statements and other information filed by
Western Resources and KCPL with the Commission may be inspected and copied at
the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington D.C. 20549 and at the
public reference facilities in the Commission's Regional Offices at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
information may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Because Western Resources and KCPL each file certain documents
electronically with the Commission, reports, proxy and information statements
and other information regarding Western Resources and KCPL may also be
obtained at prescribed rates from the Commission at the Commission's Web Site,
http//:www.sec.gov. The Western Resources Common Stock and the KCPL Common
Stock are listed and traded on the NYSE. The KCPL Common Stock is also listed
on the Chicago Stock Exchange. Reports, proxy statements and other
information filed by Western Resources and KCPL with the Commission may be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005 and, concerning KCPL only, at the offices of the CSE, 440 South LaSalle
Street, Chicago, Illinois 60605.
INFORMATION ON KCPL INCLUDED IN UNAUDITED PRO FORMA FINANCIAL INFORMATION.
On February 7, 1997, KCPL and Western Resources entered into an
agreement providing for a combination of KCPL with Western Resources.
While Western Resources has included in Exhibit 99.1 filed beneath
information concerning KCPL insofar as it is known or reasonably available to
Western Resources, Western Resources is not affiliated with KCPL. Western
Resources has not examined KCPL's books and records for the purpose of
preparing this document. Therefore, information concerning KCPL which has not
been made public was not available to Western Resources for the purpose of
preparing this document. Although Western Resources has no knowledge that
would indicate that statements relating to KCPL contained or incorporated by
reference in Exhibit 99.1 in reliance upon publicly available information are
inaccurate or incomplete, Western Resources was not involved in the
preparation of such information and statements and, for the foregoing reasons,
is not in a position to verify any such information or statements. In
addition, Western Resources was not involved in the preparation of Exhibit
99.2, and therefore is not in a position to verify any of the information
contained therein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Western Resources, Inc.
Date July 31, 1997 By /s/ Jerry D. Courington
Jerry D. Courington,
Controller
Exhibit 99.1
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On February 7, 1997, Kansas City Power & Light Company (KCPL) and Western
Resources, Inc. (Western Resources) entered into an agreement providing for a
combination of KCPL with Western Resources (Merger).
The following unaudited pro forma combined financial information presents
the consolidated balance sheet as of June 30, 1997 and the consolidated
statement of income for the 12 months ended June 30, 1997 for Western
Resources and KCPL, assuming the Merger is accounted for as a pooling-of-
interests.
The unaudited pro forma combined financial statements were prepared
utilizing the historical unaudited interim financial statements, including the
notes thereto, of Western Resources and KCPL. The information shown below
should be read in conjunction with the consolidated historical financial
statements of Western Resources and KCPL as filed with the Securities and
Exchange Commission. The following information is being presented for
illustrative purposes only and is not necessarily indicative of the financial
position or operating results that would have occurred had the Merger been
consummated at the beginning of the periods for which the Merger is being
given effect, nor is it necessarily indicative of future operating results or
financial position.
The Merger
The Merger Agreement provides that each share of KCPL Common Stock will be
exchanged for $32.00 of Western Resources Common Stock, subject to certain
limitations, as set forth more fully herein. Pro forma shares outstanding and
related earnings and dividends per share information have been calculated
assuming a Conversion Ratio of 0.93773 based on a closing price of $34.13 per
share of Western Resources Common Stock on July 29, 1997. The actual
Conversion Ratio will be a twenty day average of the closing price of Western
Resources Common Stock calculated for a period beginning on the twenty-ninth
business day prior to closing the Merger and ending on the tenth business day
prior to closing the Merger.
The Merger is assumed to generate substantial cost savings. The assumed
cost savings have not been reflected in the pro forma combined balance sheet
and statements of income. Transaction costs associated with the Merger
including fees for advisors, attorneys and other consultants and incremental
direct costs of completing the Merger are estimated to approximate $48
million.
There are no material changes anticipated in either Western Resources' or
KCPL's accounting policies as a result of the Merger. Both companies accrue
unbilled revenue for energy delivered at the end of each reporting period, use
composite depreciation methods at group rates specified pursuant to regulation
and have certain other accounting policies which differ from each other as
well as from other commercial enterprises due to the nature of how regulators
have allowed certain costs to be recovered from customers.
Western Resources has joint interests with KCPL in the LaCygne Station and
Wolf Creek electric generating facilities. These generating facilities
represent approximately 23% of Western Resources' total generating capacity,
39% of KCPL's total generating capacity and 29% of the combined company's
total generating capacity.
Other Transactions
In December 1996, Western Resources and ONEOK announced the formation of a
proposed strategic alliance. Under the terms of the agreement, Western
Resources and ONEOK will each contribute essentially all of their natural gas
assets to a new company controlled by ONEOK. Following the completion of the
transaction, Western Resources will have a 45% equity interest in the combined
new company. The net natural gas assets and earnings from this business unit
will be replaced by equity investments, equity earnings and preferred
dividends after this transaction closes. The cash flows from the strategic
alliance are expected to exceed the cash flows historically provided to
Western Resources by these assets. The proposed transaction is expected to
close following approval by ONEOK's shareholders and appropriate regulatory
approvals in the second half of 1997.
WESTERN RESOURCES AND KCPL
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
June 30, 1997
(in thousands)
ASSETS
Pro Forma
Western KCPL Total
(Historical) (Historical) Adjustments Combined
Current Assets:
Cash and cash equivalents . . . . . . . . . .$ 1,899 $ 43,018 $ - $ 44,917
Accounts receivable and unbilled
revenues (net). . . . . . . . . . . . . . . 277,676 60,897 - 338,573
Other current assets. . . . . . . . . . . . . 169,414 79,864 - 249,278
Total current assets. . . . . . . . . . . . 448,989 183,779 - 632,768
Property, Plant and Equipment, net . . . . . . . . 4,362,786 2,347,826 - 6,710,612
Deferred Charges and Other Assets:
Deferred future income taxes. . . . . . . . . 259,537 126,000 - 385,537
Other assets. . . . . . . . . . . . . . . . . 1,631,007 401,083 (44,000)(a) 1,988,090
Total deferred charges and other assets . . 1,890,544 527,083 (44,000) 2,373,627
Total Assets . . . . . . . . . . . . . .$6,702,319 $3,058,688 $(44,000) $9,717,007
LIABILITIES AND CAPITALIZATION
Pro Forma
Western KCPL Total
(Historical) (Historical) Adjustments Combined
Current Liabilities:
Short-term debt . . . . . . . . . . . . . . .$1,272,658 $ 64,913 $ - $1,337,571
Accounts payable. . . . . . . . . . . . . . . 153,502 58,700 - 212,202
Other current liabilities . . . . . . . . . . 197,524 78,702 10,000(a) 286,226
Total current liabilities . . . . . . . . . 1,623,684 202,315 10,000 1,835,999
Other Liabilities and Deferred Credits:
Deferred income taxes . . . . . . . . . . . . 1,147,402 641,812 - 1,789,214
Deferred investment tax credits . . . . . . . 122,169 64,994 - 187,163
Other . . . . . . . . . . . . . . . . . . . . 474,171 109,731 - 583,902
Total other liabilities and deferred
credits. . .. . . . . . . . . . . . . . . 1,743,742 816,537 - 2,560,279
Capitalization:
Long-term debt, net . . . . . . . . . . . . . 1,406,654 934,767 - 2,341,421
Company-obligated mandatorily redeemable
preferred securities. . . . . . . . . . . . 220,000 150,000 - 370,000
Preferred and preference stock. . . . . . . . 74,858 89,062 - 163,920
Common equity . . . . . . . . . . . . . . . . 1,633,381 866,007 (54,000)(a) 2,445,388
Total Capitalization. . . . . . . . . . . . 3,334,893 2,039,836 (54,000) 5,320,729
Total Liabilities and Capitalization. . .$6,702,319 $3,058,688 $(44,000) $9,717,007
WESTERN RESOURCES AND KCPL
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
For the Twelve Months Ended June 30, 1997
(in thousands except per share data)
Pro Forma
Western KCPL Total
(Historical) (Historical) Adjustments Combined
Operating Revenues $2,135,276 $ 881,254 $ - $3,016,530
Operating Expenses:
Fuel $ 632,217 $ 137,849 - $ 770,066
Purchased power 27,240 54,852 - 82,092
Other operations 664,017 183,162 - 847,179
Maintenance 98,763 70,637 - 169,400
Depreciation and amortization 223,094 117,085 - 340,179
Taxes:
Income 88,627 58,181 - 146,808
General 93,884 94,154 - 188,038
Total Operating Expenses 1,827,842 715,920 - 2,543,762
Operating Income 307,434 165,334 - 472,768
Other Income (Expenses), net 33,049 (37,233) - (4,184)
Income Before Interest Charges 340,483 128,101 - 468,584
Interest Charges 179,700 63,130 - 242,830
Net Income 160,783 64,971 - 225,754
Preferred and Preference Dividends 10,589 3,812 - 14,401
Earnings Applicable to Common Stock $ 150,194 $ 61,159 $ - $ 211,353
Earnings Per Average Common Share $ 2.32 $ .99 $ - $ 1.72
Average Common Shares Outstanding 64,632 61,899 (3,854)(b) 122,677
(a) To reflect Western Resources' and KCPL's estimated direct merger costs of
$54 million incurred to date as a reduction to equity.
(b) To reflect the issuance of Western Resources Common Stock to KCPL
shareholders in connection with the Merger using an exchange ratio for
Western's closing price on July 29, 1997 of $34.13. Pro forma shares and
related earnings per share have been calculated assuming a Conversion Ratio of
0.93773 based on the closing price per share of Western Resources Common Stock
on July 29, 1997 of $34.13. The actual Conversion Ratio will be based on a
20-day average of the price of Western Resources Common Stock calculated for a
period beginning on the 29th business day prior to Closing and ending on the
tenth business day prior to Closing.
WESTERN RESOURCES AND KCPL SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL
INFORMATION
Twelve Months Ended June 30, 1997
Pro Forma Combined (unaudited)
Ratio of earnings to fixed charges (1). . 1.94 (2)
(1) Earnings are deemed to consist of net income to which has been added
income taxes (including net deferred investment tax credit) and fixed charges.
Fixed charges consist of all interest on indebtedness, amortization of debt
discount and expense, and the portion of rental expense which represents an
interest factor.
(2) The ratio includes a one-time payment during the first quarter of 1997 of
$53 million from KCPL to UtiliCorp United Inc. This payment was made as a
result of KCPL's announcement of its agreement to combine with Western
Resources. Excluding this one-time payment, the ratio would have been 2.10 on
a proforma combined basis.
Exhibit 99.2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported)
July 30, 1997 (July 30, 1997)
KANSAS CITY POWER & LIGHT COMPANY
(Exact name of registrant as specified in its charter)
1-707
(Commission file number)
Missouri 44-0308720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification-No.)
1201 Walnut Street
Kansas City, Missouri 64106-2124
(Address of principal executive offices) (Zip Code)
(816) 556-2200
(Registrant's telephone number, including area code)
NOT APPLICABLE
- --------------------------------------------------------------
(Former name or former address, if changed since last report)
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
June 30 December 31
1997 1996
ASSETS
UTILITY PLANT, at original cost
Electric $3,486,400 $3,472,607
Less-accumulated depreciation 1,283,825 1,238,187
Net utility plant in service 2,202,575 2,234,420
Construction work in progress 100,245 69,577
Nuclear fuel, net of amortization of
$94,540 and $84,540 45,006 39,497
Total 2,347,826 2,343,494
REGULATORY ASSET - RECOVERABLE TAXES 126,000 126,000
INVESTMENTS AND NONUTILITY PROPERTY 327,330 231,874
CURRENT ASSETS
Cash and cash equivalents 43,018 23,571
Customer accounts receivable, net of allowance
for doubtful accounts of $1,333 and $1,644 36,403 27,093
Other receivables 24,494 36,113
Fuel inventories, at average cost 18,842 19,077
Materials and supplies, at average cost 47,132 47,334
Deferred income taxes 4,606 2,737
Other 9,284 5,055
Total 183,779 160,980
DEFERRED CHARGES
Regulatory assets
Settlement of fuel contracts 8,951 9,764
KCC Wolf Creek carrying costs 0 1,368
Other 23,710 26,615
Other deferred charges 41,092 14,417
Total 73,753 52,164
Total $3,058,688 $2,914,512
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common stock-authorized 150,000,000 shares
without par value-61,908,726 shares issued-
stated value $449,697 $449,697
Retained earnings 412,890 455,934
Unrealized gain on securities available for sale 5,085 6,484
Capital stock premium and expense (1,665) (1,666)
Common stock equity 866,007 910,449
Cumulative preferred stock 89,062 89,062
Company-obligated mandatorily redeemable Preferred
Securities of subsidiary trust holding solely
KCPL Subordinated Debentures * 150,000 0
Long-term debt 934,767 944,136
Total $2,039,836 $1,943,647
CURRENT LIABILITIES
Notes payable to banks 1,400 0
Current maturities of long-term debt 63,513 26,591
Accounts payable 58,700 55,618
Accrued taxes 11,581 18,443
Accrued interest 18,620 21,054
Accrued payroll and vacations 23,533 25,558
Accrued refueling outage costs 11,657 7,181
Other 13,311 11,980
Total 202,315 166,425
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes 641,812 643,189
Deferred investment tax credits 64,994 67,107
Other 109,731 94,144
Total 816,537 804,440
COMMITMENTS AND CONTINGENCIES
Total $3,058,688 $2,914,512
* The sole asset of the KCPL Financing I Trust is the $154,640,000 principal
amount of 8.3% Junior Subordinated Deferrable Interest Debentures due 2037
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Year to Date Twelve Months Ended
June 30 June 30 June 30
1997 1996 1997 1996 1997 1996
(thousands of dollars)
ELECTRIC OPERATING REVENUES $ 215,420 $ 226,205 $ 410,164 $ 432,829 $ 881,254 $ 914,573
OPERATING EXPENSES
Operation
Fuel 29,291 36,096 64,213 66,869 137,849 138,476
Purchased power 17,676 12,540 28,922 26,525 54,852 50,990
Other 47,538 45,519 91,461 89,018 183,162 174,133
Maintenance 19,764 19,409 36,580 37,438 70,637 72,699
Depreciation 27,731 24,861 55,573 49,577 109,908 98,448
Taxes
Income 13,836 18,927 22,366 32,340 58,181 85,862
General 22,026 23,451 44,718 47,812 94,154 98,095
Deferred Wolf Creek costs
amortization 684 2,904 1,368 5,808 7,177 11,864
Total 178,546 183,707 345,201 355,387 715,920 730,567
OPERATING INCOME 36,874 42,498 64,963 77,442 165,334 184,006
OTHER INCOME
Allowance for equity funds
used during construction 733 457 993 1,117 2,244 2,656
Miscellaneous income 8,568 1,948 12,461 2,689 14,615 2,257
Miscellaneous deductions (13,503) (10,928) (75,664) (14,713) (116,123) (19,870)
Income taxes 9,862 8,245 40,095 14,466 62,031 20,951
Total 5,660 (278) (22,115) 3,559 (37,233) 5,994
INCOME BEFORE INTEREST CHARGES 42,534 42,220 42,848 81,001 128,101 190,000
INTEREST CHARGES
Long-term debt 17,628 13,205 32,144 26,629 59,454 53,590
Short-term debt 331 496 1,170 614 1,807 712
Miscellaneous 1,035 1,386 1,910 2,492 4,258 4,347
Allowance for borrowed funds
used during construction (589) (541) (1,373) (931) (2,389) (1,849)
Total 18,405 14,546 33,851 28,804 63,130 56,800
PERIOD RESULTS
Net income 24,129 27,674 8,997 52,197 64,971 133,200
Preferred stock
dividend requirements 959 935 1,914 1,892 3,812 3,855
Earnings available for
common stock 23,170 26,739 7,083 50,305 61,159 129,345
Average number of common
shares outstanding 61,897 61,902 61,896 61,902 61,899 61,902
Earnings per common share $0.37 $0.43 $0.11 $0.81 $0.99 $2.09
Cash dividends per
common share $0.405 $0.39 $0.81 $0.78 $1.62 $1.56
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
Year to Date Twelve Months Ended
June 30 June 30
1997 1996 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 8,997 $ 52,197 $ 64,971 $133,200
Adjustments to reconcile net income
to net cash from operating
activities:
Depreciation 55,573 49,577 109,908 98,448
Amortization of:
Nuclear fuel 10,000 5,689 20,405 13,226
Deferred Wolf Creek costs 1,368 5,808 7,177 11,864
Other 4,032 2,762 6,777 6,849
Deferred income taxes (net) (2,451) 7,369 (18,482) 9,883
Deferred investment tax credit
amortization (2,113) (2,049) (4,227) (4,181)
Deferred storm costs 0 0 (8,885) 0
Deferred merger costs (5,597) (11,718) 6,121 (11,718)
Allowance for equity funds used
during construction (993) (1,117) (2,244) (2,656)
Cash flows affected by changes in:
Receivables 2,309 (9,158) 12,929 (30,301)
Fuel inventories 235 4,156 (895) 1,367
Materials and supplies 202 1,075 (1,032) (480)
Accounts payable 3,082 94 6,100 14,278
Accrued taxes (6,862) (3,447) (24,698) (18,740)
Accrued interest (2,434) (270) 1,984 3,589
Wolf Creek refueling outage
accrual 4,476 (11,290) 9,384 (5,874)
Pension and postretirement benefit
obligations 868 929 (145) (3,898)
Other operating activities 2,350 4,642 9,554 12,236
Net cash from operating
activites 73,042 95,249 194,702 227,092
CASH FLOWS FROM INVESTING ACTIVITIES
Utility capital expenditures (67,055) (52,734) (115,268) (134,758)
Allowance for borrowed funds used
during construction (1,373) (931) (2,389) (1,849)
Purchases of investments (89,702) (11,166) (113,898) (44,827)
Purchases of nonutility property (5,841) (9,558) (16,678) (9,558)
Other investing activities (8,751) (3,489) (6,193) 1,921
Net cash from investing
activities (172,722) (77,878) (254,426) (189,071)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of mandatorily redeemable
Preferred Securities of
subsidiary trust 150,000 0 150,000 0
Issuance of long-term debt 54,360 20,441 169,360 49,114
Repayment of long-term debt (26,807) (44,230) (56,807) (44,239)
Net change in short-term borrowings 1,400 50,000 (67,600) 55,000
Dividends paid (52,041) (50,183) (104,061) (100,440)
Other financing activities (7,785) (363) (9,576) 2,669
Net cash from financing
activities 119,127 (24,335) 81,316 (37,896)
NET CHANGE IN CASH AND CASH
EQUIVALENTS 19,447 (6,964) 21,592 125
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 23,571 28,390 21,426 21,301
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $43,018 $21,426 $43,018 $21,426
CASH PAID DURING THE PERIOD FOR:
Interest (net of amount capitalized) $36,780 $28,306 $60,931 $51,621
Income taxes $0 $27,588 $30,756 $80,992
KANSAS CITY POWER & LIGHT COMPANY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(thousands of dollars)
Year to Date Twelve Months Ended
June 30 June 30
1997 1996 1997 1996
Beginning balance $455,934 $449,966 $451,980 $419,220
Net income 8,997 52,197 64,971 133,200
464,931 502,163 516,951 552,420
Dividends declared
Preferred stock - at required rates 1,906 1,900 3,788 3,874
Common stock 50,135 48,283 100,273 96,566
Ending balance $412,890 $451,980 $412,890 $451,980
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KANSAS CITY POWER & LIGHT COMPANY
Date July 30, 1997 By: /s/ Jeanie Sell Latz
Name: Jeanie Sell Latz
Title: Corporate Secretary
