UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994 or
Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ___________ to __________.
Commission file number: 1-3368
THE EMPIRE DISTRICT ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Kansas 44-0236370
(State of Incorporation) (I.R.S. Employer
Identification No.)
602 Joplin Street, Joplin, Missouri 64801
(Address of principal executive offices) (zip code)
Registrant's telephone number: (417) 623-4700
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock ($1 par value) New York Stock Exchange
5% Cumulative Preferred Stock ($10 par value) New York Stock Exchange
4-3/4% Cumulative Preferred Stock ($10 par value) New York Stock Exchange
Preference Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of February 1, 1995, 13,954,629 shares of common stock
were outstanding. Based upon the closing price on the New York
Stock Exchange on February 1, 1995, the aggregate market value of
the common stock of the Company held by nonaffiliates was
approximately $230,251,379.
The following documents have been incorporated by reference
into the parts of the Form 10-K as indicated:
The Company's proxy statement, filed pursuant Part of Item 10 of Part III
to Regulation 14A under the Securities Exchange All of Item 11 of Part III
Act of 1934, for its 1994 Annual Meeting of Part of Item 12 of Part III
Stockholders to be held on April 26, 1995. All of Item 13 of Part III
<PAGE>
TABLE OF CONTENTS
Page
PART I
ITEM 1. BUSINESS 3
General 3
Electric Generating Facilities and Capacity 3
Construction Program 4
Fuel 5
Employees 6
Electric Operating Statistics 7
Executive Officers and Other Officers of the
Registrant 8
Regulation 8
General 8
Rates 8
Fuel Adjustment Clauses 8
Environmental Matters 9
Conditions Respecting Financing 9
ITEM 2. PROPERTIES 10
ITEM 3. LEGAL PROCEEDINGS 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS 11
ITEM 6. SELECTED FINANCIAL DATA 13
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 14
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 19
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 34
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 34
ITEM 11. EXECUTIVE COMPENSATION 34
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 34
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 34
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K 35
SIGNATURES 38
INDEX TO EXHIBITS 39
<PAGE>
PART I
ITEM 1. BUSINESS
General
The Empire District Electric Company (the "Company"), a
Kansas corporation organized in 1909, is an operating public
utility engaged in the generation, purchase, transmission,
distribution and sale of electricity in parts of Missouri,
Kansas, Oklahoma and Arkansas. The Company also provides water
service to three towns in Missouri. In 1994, 99.5% of the
Company's gross operating revenues were provided from the sale of
electricity and 0.5% from the sale of water.
The territory served by the Company's electric operations
embraces an area of about 10,000 square miles with a population
of over 330,000. The service territory is located principally in
the southwestern part of Missouri and also includes smaller areas
in Southeastern Kansas, Northeastern Oklahoma and Northwestern
Arkansas. The principal activities of these areas are industry,
agriculture and tourism. Of the Company's total 1994 retail
electric revenues, approximately 87% came from Missouri
customers, 7% from Kansas customers, 3% from Oklahoma customers
and 3% from Arkansas customers.
The Company supplies electric service at retail to 120
incorporated communities and to various unincorporated areas and
at wholesale to four municipally-owned distribution systems and
two rural electric cooperatives. The largest urban area served by
the Company is the City of Joplin, Missouri, and its immediate
vicinity, with a population of approximately 135,000. The Company
operates under franchises having original terms of twenty years
or longer in virtually all of the incorporated communities.
Approximately 42% of the Company's total electric operating
revenues in 1994 were derived from incorporated communities with
franchises having at least ten years remaining and approximately
29% was derived from incorporated communities in which the
Company's franchises have remaining terms of ten years or less.
Although the Company's franchises contain no renewal provisions,
in recent years the Company has obtained renewals of all its
expiring franchises prior to the expiration dates.
The Company's electric revenues in 1994 were derived as
follows: residential 41%, commercial 30%, industrial 18%,
wholesale 8% and other 3%. Producers of food and kindred products
accounted for approximately 5% of electric revenues in 1994. The
Company's largest single on-system wholesale customer is the City
of Monett, Missouri, which in 1994 accounted for approximately 3%
of electric revenues. The Company's largest single retail
customer is Praxair, Inc., whose industrial chemical plant
accounted for just over 1% of electric revenues in 1994.
Electric Generating Facilities and Capacity
At December 31, 1994, the Company's generating plants
consisted of the Asbury Plant (aggregate generating capacity of
211 megawatts), the Riverton Plant (aggregate generating capacity
of 169.5 megawatts), the Empire Energy Center (aggregate
generating capacity of 180 megawatts) and the Ozark Beach
Hydroelectric Plant (aggregate generating capacity of 16
megawatts). The Company also has a 12% ownership interest (80
megawatt capacity) in Unit No. 1 at the Iatan Generating Station.
See Item 2, "Properties - Electric Facilities" for further
information about these plants and other plants under
construction.
The Company and the ten other power suppliers in Kansas and
Western Missouri who comprise the MOKAN Power Pool have agreed to
share reserve capacity and provide emergency standby services for
fellow members. Pool members participate in studies for long-
range generation and transmission facilities' requirements.
Pursuant to the MOKAN agreement, the Company is obligated
annually to maintain a capacity margin of not less than 15.3%.
The Company is also a member of the Southwest Power Pool, a
regional division of the North American Electric Reliability
Council. During 1994, the Company became a member of Western
Systems Power Pool, a marketing pool which facilitates the
purchase and sale of power among members.
<PAGE>
The Company currently supplements its on-system generating
capacity with purchases of capacity and energy from neighboring
utilities in order to meet the demands of its customers and the
capacity margins applicable to it under the MOKAN agreement. The
Company has entered into agreements for such purchases with
Associated Electric Cooperative, Inc. ("AEC"), Kansas Gas &
Electric ("KG&E"), Public Service Company of Oklahoma
("PSO") and Southwestern Public Service Company ("SPS") for
periods into the year 2000. In addition, on January 16, 1995, the
Company entered into an agreement with Western Resources ("WR")
for the purchase of capacity and energy through May 31, 2010. The
amount of capacity purchased under these contracts reflects the
Company's on-system capacity, its current expectation of the
future power needs of its service territory and its current plans
to construct additional generating units as indicated under
"Construction Program" below. The following chart sets forth the
Company's purchase commitments and anticipated owned capacity (in
megawatts) during the indicated contract years (which run from
June 1 to May 31 of the following year).
<TABLE>
<CAPTION>
Purchased Anticipated
Contract Power Owned
Year Commitment Capacity Total
<S> <C> <C> <C>
1992 200 657 857
1993 220 657 877
1994 267 657 924
1995 225 734 959
1996 260 734 994
1997 210 832 1042
1998 230 832 1062
1999 255 832 1087
</TABLE>
The charges for capacity purchases under the contracts referred
to above during calendar year 1994 amounted to approximately $9.6
million. Minimum charges for capacity purchases under such
contracts total approximately $68 million for the period June 1,
1995, through May 31, 2000.
The maximum hourly demand on the Company's system reached a
new record high of 741 megawatts on July 5, 1994. The Company's
previous record peak of 739 megawatts was established in August
1993. The maximum hourly winter demand during 1994 was 674
megawatts which occurred during the month of February.
Construction Program
Total gross property additions (including construction work
in progress) for the five years ended December 31, 1994, amounted
to $211.7 million, and retirements during the same period
amounted to $13.6 million.
The Company's total construction-related expenditures,
including AFUDC, were $71.6 million in 1994 and for the next
three years are estimated for planning purposes to be as follows:
<TABLE>
<CAPTION>
Construction Expenditures
(millions)
1995 1996 1997 Total
<S> <C> <C> <C> <C>
New generating facilities $13.5 $15.4 $5.4 $34.3
Additions to existing
generating facilities 6.1 8.2 11.5 25.8
Transmission facilities 5.8 11.9 8.8 26.5
Distribution system
additions 25.9 25.4 22.7 74.0
General and other
additions 3.4 2.1 1.5 7.0
Total $54.7 $63.0 $49.9 $167.6
</TABLE>
The Company's projected construction plan for the years 1995
through 1997 includes expenditures for two new 98-megawatt gas-
fired combustion turbine units. One of these units is expected to
be placed in service in mid-1995, and the other unit is expected
to be placed in service during 1997. These two units will be
located at the Company's new State Line Power Plant, west of
Joplin, Missouri. Because of the long-term agreement recently
entered into with WR for the purchase of capacity and energy, and
changes in the Company's anticipated load growth, the Company's
long-term construction plans no longer include the baseload
and combined cycle units previously disclosed. The
foregoing plans for construction of new capacity are subject to
change, as they have in the past, and the above expenditures
could vary significantly from such estimate, both as to amount
and as to timing.
<PAGE>
The Company's estimated construction expenditures are
reviewed and adjusted for, among other things, revised estimates
of future capacity needs and the cost of funds. Actual
construction expenditures may vary significantly from the
estimates due to a number of factors, including changes in
equipment delivery schedules, changes in customer requirements,
construction delays, ability to raise capital, environmental
matters, the extent to which the Company receives timely and
adequate rate increases, the extent of competition from
independent power producers and co-generators, other changes in
business conditions and changes in legislation and regulation,
including regulations governing the wheeling of power.
Fuel
Coal supplied approximately 97.7% of the Company's total
fuel requirements in 1994 based on kilowatt-hours generated. The
remainder was supplied by natural gas (2.1%) and oil (0.2%).
The Company's Asbury Plant is fueled entirely by coal except
for startup fuel. The Company is currently using a blend
consisting of approximately 86% Western coal and 14% local coal
on an mmbtu basis. Under normal conditions, the Company attempts
to keep approximately a 45 day supply on hand. As of December 31,
1994, the Company had sufficient coal on hand to supply
anticipated requirements at Asbury for 36 days. See Item 7,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" for information concerning railroad
transportation difficulties which have impacted the Company's
coal supplies.
The Riverton Plant's fuel requirements are primarily met by
blended coal with the remainder supplied by natural gas and oil.
During 1994, a blend of approximately 75% Western coal and 25%
local coal on an mmbtu basis was burned at the Plant. Under
normal conditions, the Company attempts to keep approximately a
45 day supply on hand. As of December 31, 1994, the Company had
coal supplies on hand at Riverton to meet anticipated
requirements for 27 days.
The Company has a long-term contract, expiring in 2004, with
a subsidiary of Peabody Holding Company, Inc., for the supply of
low sulfur Western coal to meet its requirements for such coal at
the Asbury and Riverton Plants during the term of the contract.
This Peabody coal is supplied from the Rochelle Mine in Campbell
County, Wyoming and is shipped from there to the Asbury Plant by
rail, a distance of approximately 800 miles. The coal is
delivered under a transportation contract with Western Railroad
Properties, Inc., Union Pacific Railroad Company and The Kansas
City Southern Railway Company. The Company owns one unit train
which delivers Peabody coal to the Asbury Plant, leases rail cars
on an as needed basis to supplement inventory and is currently
negotiating a one-year lease for an additional train, which is
expected to be available by the middle of the second quarter of
1995. The Peabody coal is transported from Asbury to Riverton via
truck. Transportation costs account for over half of the cost of
the Peabody Coal. Anticipated requirements for local coal at both
Plants are supplied under a coal supply agreement with the Mackie-
Clemens Fuel Company which expires on December 31, 1999.
Both peaking units at the Empire Energy Center, which are
currently fueled by light oil, are undergoing a conversion to
permit operation with natural gas as well. The fuel conversion is
expected to be completed in the first quarter of 1995. The
Company attempts to maintain a supply of oil at this facility
which would support full load operation for approximately three
days. In a previous rate case, the Missouri Commission allowed
the Company to include this amount in its cost of service
calculation. Based on current fuel prices, it is expected that
these units will be operated primarily on natural gas following
completion of the conversion.
The Company has entered into a firm agreement with Williams
Natural Gas Company for the transportation of natural gas to the
Empire Energy Center, the new State Line Power Plant or the
Riverton Plant, as elected by the Company. The effective date of
the agreement will be the earlier of June 1, 1997, or the date of
initial delivery under the agreement. The Company expects that
its remaining gas transportation requirements, as well as the
majority of its gas supply requirements, will be met by spot
purchases.
<PAGE>
The Iatan Plant is a coal-fired generating station which is
jointly-owned by Kansas City Power and Light ("KCPL") (70%), St.
Joseph Light & Power Company ("SJLP") (18%) and the Company
(12%). Low sulfur Western coal in quantities sufficient to meet
Iatan's requirements is supplied under a long-term contract
expiring on December 31, 2003, between the joint owners and the
Arco Coal Company, a division of the Atlantic Richfield Company.
The coal is transported by rail under a contract expiring on
December 31, 1995, with Burlington Northern, Kansas City Southern
Railway Company and the MO-KAN-TEX railroads. The joint owners
have reached a tentative agreement with the railroads for a new
transportation contract running through the year 2000.
The following table sets forth a comparison of the cost,
including transportation costs, per million btu of various types
of fuels used in the Company's facilities:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Coal - Iatan $0.888 $0.940 $0.921
Coal - Asbury 1.040 1.017 0.973
Coal - Riverton 1.173 1.173 1.132
Natural Gas - Riverton 1.820 2.299 1.803
Oil 4.006 3.560 3.928
</TABLE>
The Company's weighted cost of fuel burned per kilowatt-hour
generated was 1.194 cents in 1994, 1.252 cents in 1993 and 1.146
cents in 1992.
Employees
At December 31, 1994, the Company had 650 full-time
employees, of whom 343 were members of Local 1474 of The
International Brotherhood of Electrical Workers ("IBEW"). On
December 30, 1993, the Company signed a labor agreement with the
IBEW expiring on October 31, 1996.
<PAGE>
<TABLE>
<CAPTION>
ELECTRIC OPERATING STATISTICS
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Electric Operating
Revenues (000s):
Residential (Note 1) $71,977 $68,477 $59,645 $62,682 $56,718
Commercial (Note 1) 54,052 50,264 45,264 43,841 39,892
Industrial (Note 1) 31,317 28,880 26,596 26,289 24,647
Public authorities 3,509 3,419 3,177 3,069 2,856
Wholesale on-system 8,173 8,038 6,837 6,745 6,661
Miscellaneous 2,393 2,302 1,975 2,052 2,174
Total system 171,421 161,380 143,494 144,678 132,948
Wholesale off-system 5,391 6,244 5,997 4,938 7,904
Total electric
operating revenues $176,812 $167,624 $149,491 $149,616 $140,852
Electricity generated and
purchased (000s of Kwh):
Steam 2,495,055 2,322,749 2,307,854 2,243,083 2,253,848
Hydro 83,556 102,673 77,644 79,865 59,551
Combustion turbine 51,358 39,532 5,048 63,387 24,407
Total generated 2,629,969 2,464,954 2,390,546 2,386,335 2,337,806
Purchased 1,394,470 1,443,410 1,119,025 1,096,056 1,138,202
Total generated and
purchased 4,024,439 3,908,364 3,509,571 3,482,391 3,476,008
Interchange (net) 630 11,266 2,657 (2,917) 6,728
Total system input 4,025,069 3,919,630 3,512,228 3,479,474 3,482,736
Maximum hourly system
demand (Kw) 741,000 739,000 680,000 678,000 668,000
Owned capacity (Including
interst in Iatan) (Kw) 656,500 657,300 657,300 657,300 657,300
Annual load factor (%) 57.32 54.88 52.77 54.02 51.77
Electric sales (000s of
Kwh):
Residential 1,264,721 1,248,482 1,068,595 1,142,752 1,057,656
Commercial 1,018,052 950,906 850,829 826,774 774,868
Industrial 827,067 760,737 695,271 689,377 668,797
Public authorities 86,463 83,239 78,050 77,068 74,205
Wholesale on-system 234,228 232,815 220,916 227,087 216,033
Total system 3,430,531 3,276,179 2,913,661 2,963,058 2,791,559
Wholesale off-system 304,554 366,729 360,251 270,920 453,311
Total electric sales 3,735,085 3,642,908 3,273,912 3,233,978 3,244,870
Company use (000s of Kwh) 9,260 9,117 8,924 9,222 9,419
Lost and unaccounted for
(000s of Kwh) 280,724 267,605 229,392 236,274 228,447
Total system input 4,025,069 3,919,630 3,512,228 3,479,474 3,482,736
Customers (average number
of monthly bills
rendered):
Residential 109,032 105,079 101,943 99,916 98,437
Commercial 19,175 18,447 17,796 17,276 16,938
Industrial 318 283 267 264 262
Public authorities 1,558 1,517 1,467 1,427 1,388
Wholesale on-system 7 7 7 7 7
Total system 130,090 125,333 121,480 118,890 117,032
Wholesale off-system 6 5 5 4 5
Total 130,096 125,338 121,485 118,894 117,037
Average annual residential
sales per customer (Kwh) 11,600 11,881 10,482 11,437 10,744
Average annual residential
revenue per customer $660.14 $651.67 $585.08 $627.34 $576.18
Average residential
revenue per Kwh $0.0569 $0.0548 $0.0558 $0.0549 $0.0536
Average commercial revenue
per Kwh $0.0531 $0.0529 $0.0532 $0.0530 $0.0515
Average industrial revenue
per Kwh $0.0379 $0.0380 $0.0383 $0.0381 $0.0369
</TABLE>
<FOOTNOTE>
Note (1): In connection with the Missouri electric rate
proceeding described under Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations," the
Company's rate structure was changed in 1994 to more accurately
reflect the cost of providing service, resulting in a greater
rate increase for residential customers than for commercial and
industrial customers.
<PAGE>
Executive Officers and Other Officers of the Registrant
The names of the officers of the Company, their ages and
years of service with the Company as of December 31, 1994,
positions held and effective date of such positions are presented
below. Each of the officers of the Company has held executive
officer or management positions within the Company for at least
the last five years.
Age at With the Officer
Name 12/31/94 Positions with the Company Company since
since
R.L. Lamb 62 President (1982), Director (1978) 1955 1974
M.W. McKinney 50 Executive Vice President (1994), Vice 1967 1982
President - Customer Services
(1982-1994), Director (1991)
V.E. Brill 53 Vice President - Finance (1983), 1962 1975
Director (1989)
R.B. Fancher 54 Vice President - Corporate Services 1972 1984
(1984)
D.A. Vice 59 Vice President - Transmission and 1965 1984
Distribution (1984)
J.H. Weitzel 62 Vice President - Production (1984) 1959 1984
G.C. Hunter 55 Secretary-Treasurer (1989) 1965 1983
G.A. Knapp 43 Controller and Assistant Treasurer 1978 1983
(1983)
D.W. Gibson 48 Director of Financial Services and 1979 1991
Assistant Secretary (1991)
Regulation
General. The Company, as a public utility, is subject to the
jurisdiction of the Missouri Public Service Commission ("Missouri
Commission"), the State Corporation Commission of the State of
Kansas ("Kansas Commission"), the Corporation Commission of
Oklahoma ("Oklahoma Commission") and the Arkansas Public Service
Commission ("Arkansas Commission") with respect to services and
facilities, rates and charges, accounting, valuation of property,
depreciation and various other matters. Each such Commission has
jurisdiction over the creation of liens on property located in
its state to secure bonds or other securities. The Kansas
Commission also has jurisdiction over the issuance of securities.
The Company's transmission and sale at wholesale of electric
energy in interstate commerce and its facilities are subject to
the jurisdiction of the Federal Energy Regulatory Commission
("FERC") under the Federal Power Act. FERC jurisdiction extends
to, among other things, rates and charges in connection with such
transmission and sale; the sale, lease or other disposition of
such facilities and accounting matters.
The Company's Ozark Beach Hydroelectric Plant is operated
under a license from FERC. See Item 2, "Properties - Electric
Facilities." The Company is disputing a Headwater Benefits
Determination Report it received from FERC on September 9, 1991.
The report calculates an assessment to the Company for headwater
benefits received at the Ozark Beach Hydroelectric Plant for the
period 1973 through 1990 in the amount of $705,724, and
calculates an annual assessment thereafter of $42,914 for the
years 1991 through 2011. The Company believes that the
methodology used in making the assessment was incorrect and is
contesting the determination. As of December 31, 1994, FERC had
not responded to the comments filed by the Company on July 31,
1992.
During 1994, approximately 92% of the Company's electric
operating revenues were received from retail customers.
Approximately 87%, 7%, 3% and 3% of such retail revenues were
derived from sales in Missouri, Kansas, Oklahoma and Arkansas,
respectively. Sales subject to FERC jurisdiction represented
approximately 8% of the Company's electric operating revenues
during 1994.
Rates. See Item 7 for information concerning recent electric
and water rate proceedings.
Fuel Adjustment Clauses. Fuel adjustment clauses permit
changes in fuel costs to be passed along to customers without the
need for a rate proceeding. A fuel adjustment clause is not
permitted under Missouri law. The Company, with approval from the
Kansas Commission, eliminated the fuel adjustment clause
applicable to the Company's retail electric sales in Kansas in
1989. Automatic fuel adjustment clauses are presently applicable
to retail electric sales in Arkansas, Oklahoma and system
wholesale kilowatt-hour sales under FERC jurisdiction.
Significant increases in fuel costs may be recovered in Missouri
and Kansas only through rate filings made with the appropriate
Commissions.
<PAGE>
Environmental Matters
The Company is subject to various federal, state and local
laws and regulations with respect to environmental matters. Items
regulated include: air, water, hazardous waste, asbestos, PCBs,
solid waste and other items. The Company believes that its
operations are in compliance with present laws and regulations.
The 1990 Amendments to the Clean Air Act ("1990 Amendments")
affect the Asbury, Riverton and Iatan Power Plants. The Riverton
and Iatan Plants are classified as Phase II facilities and will
become affected units on January 1, 2000. The Asbury Plant is a
Phase I facility that became an affected unit on January 1, 1995.
All Phase I units were required to apply to the EPA for a permit
to operate. During 1994, the Company received such a permit to
operate the Asbury Plant. This permit is valid for a period of
five years after which time the State of Missouri will administer
and issue future permits.
Emission allowances, which allow the holder to emit one ton
of sulfur dioxide per allowance, are awarded to each affected
generating unit under the provisions of the 1990 Amendments.
Utilities covered by the 1990 Amendments must have emission
allowances equal to the number of tons of sulfur dioxide emitted
during a given year. Excess allowances may be traded between
utilities or "banked" for future use. A market for the trading of
emission allowances exists through the Chicago Board of Trade.
The Asbury Plant is currently burning a blend of coal that
emits approximately 1.2 lbs. of sulfur dioxide per million btu of
coal burned. This rate of emissions will allow the Asbury Plant
to maintain compliance with the number of allocated sulfur
dioxide allowances under both Phase I and Phase II of the 1990
Amendments.
The Iatan Plant currently emits 0.9 lbs. of sulfur dioxide
per million btu which will enable the Plant to meet the sulfur
dioxide requirements that will be imposed on it during Phase II
of the 1990 Amendments.
The Riverton Plant currently emits 2.2 lbs. of sulfur
dioxide per million btu of coal burned. This level of emissions
will create a shortage of available allowances in the year 2000
when Phase II of the 1990 Amendments takes effect at the
facility. The Company is evaluating various methods to achieve
compliance with the Phase II requirements applicable to the
Riverton Plant, including using sulfur dioxide allowances from
the Company's other plants, purchasing allowances from other
sources, modifying certain coal handling equipment to permit the
use of greater percentages of low sulfur coal, increasing the use
of natural gas as a fuel at the Plant and purchasing additional
power. As a result, the cost of achieving such compliance cannot
be estimated at this time.
The 1990 Amendments also contain limits on the amount of
nitrogen oxide ("NOx") the Company's Iatan and Riverton Plants
may emit. As currently operated, the Iatan Plant is in compliance
with the Phase II limits that will become applicable to it in
2000. The Riverton Plant's current operation would not permit
such compliance. The Company is reviewing options to add low NOx
burners at the Riverton Plant to enable that facility to meet
such limits. In addition, the 1990 Amendments require the EPA to
complete additional studies on several issues such as low NOx
burners and air toxic issues. Depending on the outcome of these
studies, the Company could have additional compliance issues to
address.
The 1990 Amendments require the installation of continuous
emission monitoring ("CEM") equipment for sulfur dioxide,
nitrogen oxides, carbon dioxide, flow and particulate matter at
the Asbury, Riverton and Iatan Plants. CEM equipment has been
installed at each of these plants.
The Company operates under the Kansas and Missouri Water
Pollution Plans that were implemented in response to the Federal
Water Pollution Control Act Amendments of 1972. The Asbury, Iatan
and Riverton facilities are in compliance with applicable
regulations and have received discharge permits and subsequent
renewals as required. Current discharge permits for the Iatan,
Riverton and Asbury Plants have expiration dates of October 17,
1996, September 30, 1996, and June 15, 1998, respectively.
All necessary environmental permits have been obtained for
the construction of the Company's State Line Power Plant, which
will be tested upon completion for the purpose of obtaining
operating permits.
<PAGE>
Conditions Respecting Financing
The Company's Indenture of Mortgage and Deed of Trust, dated
as of September 1, 1944, as amended and supplemented (the
"Mortgage"), and its Restated Articles of Incorporation (the
"Restated Articles"), specify earnings coverage and other
conditions which must be complied with in connection with the
issuance of additional First Mortgage Bonds or cumulative
preferred stock, or the incurrence of unsecured indebtedness. The
Mortgage generally permits the issuance of additional bonds only
if net earnings (as defined) for a specified twelve-month period
are at least twice the annual interest requirements on all bonds
at the time outstanding, including the additional issue and all
indebtedness of prior rank. Under this test, on December 31,
1994, approximately $94.6 million of additional bonds (at an
assumed interest rate of 8.5%) would be permitted to be issued.
In addition to such interest coverage requirement, the Mortgage
provides that new bonds must be issued against, among other
things, retired bonds and 60% of net property additions. At
December 31, 1994, the Company had retired bonds and net property
additions which would enable the issuance of at least $74.0
million principal amount of bonds.
Under the Restated Articles, (a) additional cumulative
preferred stock may be issued only if net income of the Company
available for interest and dividends (as defined) for a specified
twelve-month period is at least 1-1/2 times the sum of the annual
interest requirements on all indebtedness and the annual dividend
requirements on all cumulative preferred stock, to be outstanding
immediately after the issuance of such additional shares, and (b)
the amount of unsecured indebtedness outstanding may not exceed
20% of the sum of the outstanding secured indebtedness plus the
capital and surplus of the Company. Under these restrictions,
based on the twelve months ended December 31, 1994, the Company
could issue shares of cumulative preferred stock with an
aggregate par value of approximately $86.4 million (8-1/8%
dividend rate assumed) and at December 31, 1994, could incur
maximum unsecured indebtedness of approximately $78.3 million .
ITEM 2. PROPERTIES
Electric Facilities
At December 31, 1994, the Company owned generating
facilities (including its interest in Iatan Unit No. 1) with an
aggregate generating capacity of 656.5 megawatts.
The principal electric generating plant of the Company is
the Asbury Plant with 211 megawatts of generating capacity. The
Plant, located near Asbury, Missouri, is a coal-fired generating
station with two steam turbine generating units. The Plant
presently accounts for approximately 32% of the Company's owned
generating capacity and in 1994 accounted for approximately 52%
of the energy generated by the Company and 34% of the total
energy sold by the Company. Routine plant maintenance, during
which the entire Plant is taken out of service, is scheduled
twice each year, normally for approximately three weeks in the
spring and one week in the fall. Every fifth year the spring
outage is extended to a total of six weeks to permit inspection
of the Unit No. 1 turbine, which inspection was last performed in
1991. When the Plant is out of service, the Company typically
experiences increased purchased power and fuel costs associated
with replacement energy.
The Company's generating plant located at Riverton, Kansas
has three steam-electric generating units with an aggregate
generating capacity of 124 megawatts and three gas-fired
combustion turbine units with an aggregate generating capacity of
45.5 megawatts. Two of the steam-electric generating units,
totaling 92 megawatts of capacity, burn coal as a primary fuel
and have the capability of burning natural gas. The remaining
steam-electric generating unit, which has 32 megawatts of
capacity, is operated principally during periods of system peak
load and burns only natural gas or oil. This unit is scheduled to
be retired in June 1995.
The Company owns a 12% undivided interest (including a 3%
interest in the site and a 12% interest in certain common
facilities) in the 670 megawatt coal-fired Unit No. 1 at the
Iatan Generating Station located 35 miles northwest of Kansas
City, Missouri. The Company is entitled to 12% of the Unit's
available capacity and is obligated for that percentage of the
operating costs of the Unit. KCPL and SJLP own 70% and 18%,
respectively, of the Unit. KCPL operates the unit for the joint
owners. See Note 8 of "Notes to Financial Statements" under
Item 8.
The Company also has two oil-fired combustion turbine
peaking units at the Empire Energy Center in Jasper County,
Missouri with an aggregate generating capacity of 180 megawatts.
The Company is currently in the process of converting these
peaking units to operate on natural gas as well as oil as a
source of fuel. This conversion is expected to be completed by
the end of the first quarter of 1995. Based on current fuel
prices, it is expected that these units will be operated
primarily on natural gas following completion of the conversion.
<PAGE>
The Company's State Line Power Plant, which is currently
under construction west of Joplin, Missouri, will consist of two
98-Megawatt combustion turbine units which burn natural gas as a
primary fuel and will have the capability of burning oil. The
first unit is expected to be placed in service in mid-1995 and
the second unit in mid-1997.
The Company's hydroelectric generating plant, located on the
White River at Ozark Beach, Missouri, has a generating capacity
of 16 megawatts, subject to river flow. The Company has a long-
term license from FERC to operate this plant which forms Lake
Taneycomo in Southwestern Missouri.
At December 31, 1994, the Company's transmission system
consisted of approximately 22 miles of 345 kV lines, 395 miles of
161 kV lines, 740 miles of 69 kV lines and 82 miles of 34.5 kV
lines. Its distribution system consisted of approximately 5,675
miles of line.
The electric generation stations owned by the Company are
located on land owned in fee. The Company owns a 3% undivided
interest as tenant in common with KCPL and SJLP in the land for
the Iatan Generating Station. Substantially all the electric
transmission and distribution facilities of the Company are
located either (1) on property leased or owned in fee; (2) over
streets, alleys, highways and other public places, under
franchises or other rights; or (3) over private property by
virtue of easements obtained from the record holders of title.
Substantially all property, plant and equipment of the Company
are subject to the Mortgage.
Water Facilities
The Company also owns and operates water pumping facilities
and distribution systems consisting of a total of approximately
70 miles of water mains in three communities in Missouri.
ITEM 3. LEGAL PROCEEDINGS
No legal proceedings required to be disclosed by this Item
are pending.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's common stock is listed on the New York Stock
Exchange. On February 1, 1995, there were 9,727 record holders of
its common stock. The high and low sales prices for its common
stock reported in The Wall Street Journal as New York Stock
Exchange composite transactions, and the amount per share of
quarterly dividends declared and paid on the common stock for
each quarter of 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
Price of Common Stock Dividends Paid
1994 1993 Per Share
High Low High Low 1994 1993
<S> <C> <C> <C> <C> <C> <C>
First Qtr. $20-1/2 $18-5/8 $23-1/4 $20-7/8 $0.32 $0.32
Second Qtr. 20 16-1/8 23-3/8 22 0.32 0.32
Third Qtr. 17-1/2 16-1/4 24-3/8 22-3/8 0.32 0.32
Fourth Qtr. 17 15 24-3/4 19-1/8 0.32 0.32
</TABLE>
<PAGE>
Holders of the Company's common stock are entitled to
dividends if, as and when declared by the Board of Directors of
the Company out of funds legally available therefore, subject to
the prior rights of holders of the Company's outstanding
cumulative preferred stock and any preference stock.
The Mortgage and the Restated Articles contain certain
dividend restrictions. The most restrictive of these is contained
in the Mortgage, which provides that the Company may not declare
or pay any dividends (other than dividends payable in shares of
its common stock) or make any other distribution on, or purchase
(other than with the proceeds of additional common stock
financing) any shares of, its common stock if the cumulative
aggregate amount thereof after August 31, 1944, (exclusive of the
first quarterly dividend of $98,000 paid after said date) would
exceed the earned surplus (as defined) accumulated subsequent to
August 31, 1944, or the date of succession in the event that
another corporation succeeds to the rights and liabilities of the
Company by a merger or consolidation. As of December 31, 1994,
said dividend restriction did not affect any of the retained
earnings of the Company.
The Company's Dividend Reinvestment and Stock Purchase Plan
(the "Reinvestment Plan") allows common and preferred
stockholders to reinvest dividends of the Company into newly
issued shares of the Company's common stock at 95% of market
price average. Stockholders may also purchase, for cash and
within specified limits, additional stock at 100% of market price
average. The Company may elect to make shares purchased in the
open market rather than newly issued shares available for
purchase under the Reinvestment Plan. If the Company so elects,
the purchase price to be paid by Reinvestment Plan participants
will be 100% of the cost to the Company of such shares.
Participants in the Reinvestment Plan do not pay commissions or
service charges in connection with purchases under the
Reinvestment Plan.
The Company has a shareholders rights plan under which its
common stockholders have one-half a Preference Stock Purchase
Right ("Right") for each share of common stock owned. One Right
enables the holder to acquire one one-hundredth of a share of
Series A Participating Preference Stock (or, under certain
circumstances, other securities) at a price of $75 per one-
hundredth of a share, subject to adjustment. The rights (other
than those held by an acquiring person or group) ("Acquiring
Person"), which expire July 25, 2000, will be exercisable only if
an Acquiring Person acquires 10% or more of the Company's common
stock or if certain other events occur. See Note 4 of "Notes to
Financial Statements" under Item 8 for further information.
The By-laws of the Company provide that K.S.A. Sections 17-
1286 through 17-1298, the Kansas Control Share Acquisitions Act,
will not apply to control share acquisitions of the Company's
capital stock.
See Note 3 of "Notes to Financial Statements" under Item 8
for additional information regarding the Company's common stock.
<PAGE>
<TABLE>
<CAPTION>
ITEM 6. SELECTED FINANCIAL DATA
(Dollars in thousands, except per share amounts)
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Operating revenues $177,757 $168,439 $150,302 $150,442 $141,612
Operating income $32,005 $29,291 $30,090 $31,761 $27,071
Total allowance for
funds used during
construction $1,715 $229 $119 $275 $1,419
Income before
cumulative effect of
a change in
accounting principle $19,683 $15,936 $16,905 $18,768 $15,473
Net income $19,683 $15,936 $16,905 $18,768 $18,808
Earnings applicable
to common stock $18,120 $15,551 $16,513 $18,328 $18,296
Weighted average
number of common
shares outstanding
(Note 1) 13,734,231 13,415,539 13,119,515 12,812,166 11,740,278
Earnings per share of
common stock (Note 1):
Before cumulative
effect of a change
in accounting
principle $1.32 $1.16 $1.26 $1.43 $1.28
Net income $1.32 $1.16 $1.26 $1.43 $1.56
Cash dividends per
common share (Note 1) $1.28 $1.28 $1.26 $1.22 $1.17
Common dividends paid
as a percentage of
earnings applicable
to common stock 97.0% 110.4% 99.9% 85.3% 75.1%
Allowance for funds
used during construction
as a percentage of
earnings applicable to
common stock 9.5% 1.5% 0.7% 1.5% 7.8%
Book value per common
share outstanding
at end of year (Note 1) $12.42 $12.33 $12.26 $12.06 $11.73
Capitalization:
Common equity $173,780 $167,861 $163,293 $156,910 $148,847
Preferred stock
without mandatory
redemption provisions $32,902 $7,902 $7,902 $7,902 $7,902
Preferred stock with
mandatory redemption
provisions $- $- $- $200 $1,200
First mortgage bonds $184,977 $165,227 $143,619 $142,214 $142,310
Ratio of earnings to
fixed charges 3.16 2.73 2.91 3.13 2.77
Ratio of earnings to
combined fixed charges
and preferred stock
dividend requirements 2.70 2.63 2.80 2.99 2.63
Total assets $520,213 $463,617 $406,731 $387,363 $378,562
Utility plant in
service at original
cost $611,360 $576,083 $543,323 $515,119 $493,543
Utility plant
expenditures during
the year $71,649 $42,648 $29,500 $21,991 $45,926
</TABLE>
<FOOTNOTE>
Note (1): Amounts shown for 1991 and 1990 have been restated to
reflect the two-for-one stock split effective January 29, 1992.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Operating Revenues and Kilowatt-Hour Sales
Of the Company's total electric operating revenues during
1994, approximately 41% were from residential customers, 30% from
commercial, 18% from industrial, 5% from wholesale on-system
customers and 3% from wholesale off-system customers. The
percentage changes from the prior year in kilowatt-hour ("Kwh")
sales and revenue by customer class were as follows:
<TABLE>
<CAPTION>
Kwh Sales Revenues
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Residential 1.3% 16.8% 5.1% 14.8%
Commercial 7.1 11.8 7.5 11.0
Industrial 8.7 9.4 8.4 8.6
Wholesale On-System 0.6 5.4 1.7 17.6
Total System 4.7 12.4 6.3 12.4
Wholesale Off-System (17.0) 1.8 (13.7) 4.1
Total Sales 2.5 11.3 5.5 12.1
</TABLE>
Residential Kwh sales increased during 1994, due primarily
to a 3.8% increase in the average number of residential customers
served compared to the year-ago period. This customer growth more
than offset the effect of mild summer weather in 1994.
Residential revenue was up due mainly to the effect of the
electric rate increases and the changes in the Company's rate
design discussed below.
Commercial Kwh sales and revenue increased during the
current year reflecting primarily a 3.9% growth in the average
number of commercial customers. During 1994, retail Kwh sales and
revenue were positively impacted by continuing expansion and
increased economic activity throughout the Company's service
territory, particularly in the Branson, Missouri area. Revenues
from on-system wholesale Kwh sales were up slightly during 1994
due primarily to the operation of the Company's fuel adjustment
clause applicable to such sales. Revenues from Kwh sales to other
electric systems (off-system) were down during 1994 primarily as
a result of a decrease in low-margin, pass-through sales of hydro
energy to other electric systems.
Kwh sales to, and related revenues from, the Company's own
customers were up significantly during 1993, due primarily to the
return of more normal summer temperatures following the mild
summer experienced during 1992, to colder than normal
temperatures during the heating season in early 1993 and to
continued customer growth. Revenues from Kwh sales to other
electric systems were up during 1993 primarily due to increased
low-margin, pass-through sales of hydro energy to other electric
systems.
Rate increases also increased the Company's revenues during
1994. The following table sets forth information regarding the
Company's recent electric rate increases:
<TABLE>
<CAPTION>
Percent
Date Increase Date Increase Increase
Jurisdiction Requested Requested Effective Granted Granted
<S> <C> <C> <C> <C> <C>
Missouri 12-01-93 $7,968,879 08-15-94 $7,350,000 5.2
Oklahoma 08-12-94 563,387 10-21-94 399,370 6.9
Kansas 03-16-94 717,529 09-12-94 512,000 4.6
</TABLE>
<PAGE>
On November 8, 1994, the Company filed a notice withdrawing
the request for rate relief it filed with the Arkansas Public
Service Commission on June 20, 1994, after comparing actual data
with projected data included in the original request. The Company
had originally filed a request on June 20, 1994, for a $274,824,
or 4.5%, increase. The Missouri electric rate increase included
at the request of the Missouri Public Service Commission a
restructuring of the Company's rates to more accurately reflect
the Company's cost of providing service. This restructuring
resulted in a greater rate increase for the Company's residential
customers than for its commercial and industrial customers, and
in the shifting of revenue from winter billing periods to summer
billing periods.
The Company's future revenues from the sale of electricity
will continue to be affected by economic conditions, business
activities, competition, weather, regulation, changes in electric
rate levels and changing patterns of electric energy use by
customers. Inflation affects the Company's operations in that
historical costs rather than current replacement costs are
recovered in the Company's rates.
On January 24, 1994, the Missouri Public Service Commission
approved an increase in rates for the Company's Missouri water
customers in the amount of $124,931, or 14.3%, effective February
13, 1994. The Company had originally filed a request on August
30, 1993, for a $165,829, or 20.4%, increase.
Operating Revenue Deductions
During 1994, total operating and maintenance expenses
increased approximately $2.1 million (2.0%) compared to 1993
levels. Purchased power costs were up approximately $1.2 million
(3.5%) during 1994, although Kwh purchases declined 4.1%. The
higher purchased power costs were due to an increase of 47
megawatts in capacity purchases during 1994, at a cost of
approximately $3 million. The Company supplements its own
generating capacity with purchases of capacity and energy from
neighboring utilities in order to meet the demands of its
customers and the capacity margins applicable to it under the
MOKAN Power Pool agreement.
Total fuel costs were up approximately $0.8 million (2.8%)
during 1994 compared to the prior year, due primarily to a 7.8%
increase in fuel-generated Kwhs to meet greater customer demand.
Fuel costs did not increase at the same rate as Kwhs generated,
primarily because of a 33.3% increase in generation at the
jointly-owned Iatan Plant, one of the Company's lowest-cost
generating units. This increase more than offset the effects of a
slight decrease in generation at the Asbury Plant and higher fuel
costs incurred during increased usage of the combustion turbine
units at the Riverton Plant during periods of high demand when
Energy Center Unit No. 2 was unavailable while repairs were being
made to its generator shaft. Peaking units are more costly to
operate than the Company's coal-fired units.
Since the summer of 1993, the Company has experienced
significantly increased railroad delivery cycle times for
shipments of Western coal to its Asbury Plant. The primary reason
for these delays is the increased demand for low-sulfur Western
coal by electric utilities across the country. In an effort to
make required deliveries under their transportation agreement
with the Company, the railroads have provided supplemental
deliveries to the Company during this period using additional
equipment. In order to reduce its dependence on the railroads to
provide supplemental equipment and deliveries, the Company is
negotiating a one-year lease for an additional train which is
expected to be available by the middle of the second quarter of
1995. However, if the lease is not signed or delivery cycle times
continue to increase, the Company's inventory levels of Western
coal may decline to the point where the Company would be forced
to increase usage of its higher-cost gas and oil fired generating
units, or purchase additional power. Because no fuel adjustment
clause is applicable to its retail sales in the states of
Missouri or Kansas, the Company can recover any increase in the
cost of fuel or purchased power related to sales in those states
(in excess of that contemplated by its rate structures) only
through an increase in rates.
Other operating and maintenance expenses during 1994 were
virtually level with 1993 amounts. Depreciation and amortization
expense increased approximately $0.9 million (5.3%) during the
year due to the additional plant and equipment placed in service.
Total income taxes increased during 1994 due primarily to higher
taxable income. See Note 7 of "Notes to Financial Statements" for
additional information regarding income taxes. Other taxes were
up approximately $0.5 million (5.5%) during the year reflecting
increased property tax rates, higher levels of plant-in-service
and increased franchise taxes relating to higher revenues.
<PAGE>
Operating expenses during 1993 were significantly higher
than 1992 levels. Purchased power costs were up primarily due to
increased purchases of energy to meet increased customer demand
resulting from warm summer temperatures and to replace on-system
generation during periods of unavailability of certain of the
Company's plants due to flooding. Purchased power costs were
higher than the previous year on a per-kilowatt-hour basis in
large part because flooding reduced generation at a number of low-
cost, coal-fired generating stations in the Midwest and because
of planned outages of low-cost generating units at neighboring
utilities. Fuel costs were up during 1993 compared to the prior
year primarily due to increased usage of the more costly to
operate combustion turbine units at the Energy Center and the
Riverton Plant while the Iatan Plant was unavailable. Other
operating and maintenance expenses were up reflecting increased
employee benefits expense related to the adoption of SFAS 106.
Maintenance expenses were up due to increased maintenance at the
Asbury Plant and on the Company's distribution system.
Nonoperating Items
Total allowance for funds used during construction ("AFUDC")
amounted to approximately 9.5% of earnings applicable to common
stock during 1994, 1.5% during 1993 and 0.7% during 1992. The
increased level of AFUDC during 1994 reflects a higher level of
construction work in progress and higher rates for AFUDC
determined in accordance with formulas prescribed by the FERC.
See Note 1 of "Notes to Financial Statements" for more discussion
of AFUDC.
Interest income decreased during 1994 compared to prior year
levels reflecting less cash available for investment. Other
interest charges were up during the year due to increased levels
of short-term borrowing to finance the Company's construction
program.
Competition
The National Energy Policy Act of 1992 (the "Energy Act") is
expected to result in significant changes in the electric
industry. As a result of the Energy Act, federal and state
regulations designed to increase competition within the industry
are anticipated over the next several years. The primary source
of competition for the industry is likely to be deregulation,
which may require, among other things: open third-party access to
a utility's transmission system by independent power producers
and other utilities, thus allowing customers to select a
different power producer, and use the transmission system of the
utility formerly supplying those customers to deliver the energy
(wheeling); and amendments to the Public Utility Holding Company
Act which simplify the development of exempt wholesale generators
("EWGs") and companies engaged in the generation of electricity
at qualifying facilities ("QFs") exclusively for wholesale
customers by imposing lower regulatory requirements on those
producers than are currently imposed on more traditional energy
producers such as the Company. FERC has begun requiring utilities
under its jurisdiction to provide access to their transmission
systems to enable wheeling to wholesale customers. The Energy Act
granted states the sole authority to allow individual retail
customers to buy power in the open market. At this time, none of
the states in which the Company operates has taken any such
action.
In addition, under the Public Utility Regulatory Policy Act
of 1978, the Company is required to purchase energy from a QF if
the QF can sell the energy at a price equal to or less than the
Company's avoided cost (as reasonably determined by the Company)
of generating the energy or acquiring it elsewhere. The Company
is currently involved in proceedings before the Missouri and
Kansas Commissions relating to a proposal by Ahlstrom Development
Corporation ("Ahlstrom") to sell power to the Company from
generating units yet to be constructed, which Ahlstrom claims to
be QFs. While the Company does not believe that the Ahlstrom
facility can meet its avoided cost, if the Commissions determine
that the Company must accept the Ahlstrom proposal, a provision
in the Company's long-term agreement with WR for the purchase of
capacity and energy would permit the Company to terminate that
agreement.
Several factors exist which may enhance the Company's
ability to compete as deregulation occurs. The Company is able to
generate and purchase power relatively cheaply; in 1993, the
latest year for which data is available, the Company's retail
rates were approximately 25% less than the electric industry
average. In addition, only 5% of the Company's electric operating
revenues are derived from sales to on-system wholesale customers,
the type of customer for which FERC is already requiring
wheeling. At the same time, the Company could face increased
competitive pressure as a result of its reliance on relatively
large amounts of purchased power and its extensive
interconnections with neighboring utilities. The Company is
continually reviewing various options to maintain its competitive
position for the benefit of its customers and stockholders.
<PAGE>
Earnings
Earnings per share of common stock were $1.32 during 1994
compared to $1.16 earned in 1993. The increase in earnings
reflects the rate increases received in Missouri, Kansas and
Oklahoma combined with the effect of continued customer growth.
These increases were offset in part by increased fuel and
purchased power costs discussed above, and by increased preferred
stock dividend requirements resulting from the Company's issuance
of preferred stock in a public offering in June 1994.
The Company plans to file for rate relief in the states of
Missouri and Kansas during the first half of 1995 to recover the
costs of Unit No. 1 at the new State Line Power Plant. Any rate
increases granted as a result of such filings are not expected to
become effective until late 1995 or early 1996. The Company has
not yet determined when it will file for rate relief in the
remaining jurisdictions.
Earnings per share of common stock were $1.16 during 1993
compared to $1.26 earned in 1992. While sales and revenues during
1993 were considerably above the prior year, the cost of
providing electric energy to customers increased at a greater
rate as purchased power, on which the Company relied more in 1993
than in 1992, became substantially more expensive than
anticipated, due primarily to the impact of Midwest flooding.
Other factors contributing to reduced earnings per share during
1993 were increased employee benefit expenses related to the
adoption of SFAS 106 and increased usage of the Company's higher-
cost generating units. See Note 6 of "Notes to Financial
Statements" for additional information concerning adoption of
SFAS 106 and recognition, rate recovery and funding of
postretirement benefits.
LIQUIDITY AND CAPITAL RESOURCES
The Company's construction-related expenditures totaled
approximately $71.6 million, $44.4 million, and $31.4 million for
the years 1994, 1993 and 1992, respectively. The increase in
construction spending during 1994 is primarily a result of
expenditures of approximately $23.5 million on a 98 Mw combustion
turbine unit to be placed in service in mid-1995 at the Company's
new State Line Power Plant. The Company has entered into an
agreement with Westinghouse Electric Corporation to build a
second 98 Mw combustion turbine unit at that site with scheduled
completion in mid-1997, at a cost of approximately $23.7 million.
Additions to the Company's transmission and distribution systems
to meet projected increases in customer demand also contributed
to the increased level of construction expenditures during 1994.
Approximately one-half of construction expenditures and other
funds requirements for 1994 were satisfied internally from
operations; the remainder was provided from the sale of preferred
stock and first mortgage bonds, the issuance of commercial paper,
and from the sale of common stock through the Company's Dividend
Reinvestment Plan and Employee Stock Purchase Plan.
The Company estimates that its construction expenditures
will total approximately $54.7 million in 1995, $63.0 million in
1996 and $49.9 million in 1997. Of these amounts, the Company
anticipates that it will spend $25.9 million, $25.4 million and
$22.7 million in 1995, 1996 and 1997, respectively, for additions
to the Company's distribution system to meet projected increases
in customer demand. Also included are expenditures of $13.5
million, $15.4 million and $5.4 million anticipated in 1995, 1996
and 1997, respectively, for new generating facilities.
The Company estimates that internally generated funds will
provide approximately one-half of the funds required between 1995
and 1997 for estimated construction expenditures. As in the past,
the Company will utilize short-term debt to finance the
additional funds needed for such construction and repay such
borrowings with the proceeds of sales of long-term debt or equity
securities, including the sale of the Company's common stock
pursuant to its Dividend Reinvestment Plan and Employee Stock
Purchase Plan and from internally-generated funds. Subject to
market and other conditions, the Company currently plans to issue
common stock and possibly first mortgage bonds during the first
half of 1995. The Company will continue to utilize short-term
debt as needed to support normal operations or other temporary
requirements. See Note 5 of "Notes to Financial Statements"
regarding the Company's line of credit.
<PAGE>
At December 31, 1994, the Company's ratings for its first
mortgage bonds, preferred stock and commercial paper were as
follows:
<TABLE>
<CAPTION>
Standard &
Duff & Phelps Moody's Poor's
<S> <C> <C> <C>
First Mortgage Bonds A+ A1 A-
Preferred Stock A a2 BBB+
Commercial Paper D-1 P-1 A-2
</TABLE>
The Company currently has on file with the Securities and
Exchange Commission ("SEC") a shelf registration statement under
which it may sell up to an additional $65 million aggregate
principal amount of first mortgage bonds and/or par value of
cumulative preferred stock from time to time, each in one or more
series. The Company has also on file with the SEC a shelf
registration statement covering the sale to the public, from time
to time, of up to 1,800,000 shares of its common stock.
On June 2, 1994, the Company sold 2,500,000 shares of its 8-
1/8% Cumulative Preferred Stock, $10.00 par value in an
underwritten public offering. On November 3, 1994, the Company
sold $20,000,000 aggregate principal amount of its First Mortgage
Bonds, 8-1/8% Series due 2009, in an underwritten public
offering. The proceeds of both offerings were added to the
Company's general funds and used to repay short-term indebtedness
incurred in connection with its construction program. See Note 4
of "Notes to Financial Statements" for additional information
regarding the Company's preferred stock, and Note 5 of "Notes to
Financial Statements" for additional information regarding its
long-term debt.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
The Empire District Electric Company
In our opinion, the financial statements listed in the index
appearing under Item 14 on Page 35 present fairly, in all
material respects, the financial position of The Empire District
Electric Company at December 31, 1994 and 1993, and the results
of its operations and its cash flows for each of the three years
in the period ended December 31, 1994, in conformity with
generally accepted accounting principles. These financial
statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the
opinion expressed above.
As discussed in the Summary of Accounting Policies note to the
financial statements, the Company changed its method of
accounting for postretirement benefits other than pensions in
1993.
PRICE WATERHOUSE LLP
St. Louis, Missouri
January 16, 1995
<PAGE>
<TABLE>
<CAPTION>
Balance Sheet
December 31,
1994 1993
<S> <C> <C>
Assets
Utility plant, at original cost:
Electric $606,519,616 $571,541,699
Water 4,863,228 4,565,345
Construction work in progress 45,317,772 10,971,528
656,700,616 587,078,572
Accumulated depreciation 210,858,722 193,521,764
445,841,894 393,556,808
Current assets:
Cash and cash equivalents 3,362,653 2,802,957
Accounts receivable - trade, net 10,653,580 9,993,605
Accrued unbilled revenues 5,041,575 6,100,232
Accounts receivable - other 2,878,122 2,101,913
Fuel, materials and supplies 12,970,376 11,627,521
Prepaid expenses 708,253 384,898
35,614,559 33,011,126
Deferred charges:
Regulatory asset 23,657,498 21,840,132
Unamortized debt expenses 13,166,603 13,568,995
Other 1,932,798 1,639,949
38,756,899 37,049,076
Total Assets $520,213,352 $463,617,010
Capitalization and Liabilities
Common stock, $1 par value,
13,941,531 and 13,571,186
shares issued and outstanding, $13,941,531 $13,571,186
respectively
Capital in excess of par value 106,055,389 101,223,637
Retained earnings 53,783,342 53,066,108
Total common stockholders' equity 173,780,262 167,860,931
Preferred stock 32,901,800 7,901,800
Long-term debt 184,976,950 165,227,031
391,659,012 340,989,762
Current liabilities:
Accounts payable and accrued 11,459,243 11,754,869
liabilities
Commercial paper 16,000,000 15,000,000
Customer deposits 2,385,182 2,203,424
Interest accrued 3,413,850 3,052,013
Taxes accrued, including income 1,557,744 552,517
taxes
34,816,019 32,562,823
Commitments and Contingencies
(Note 9)
Noncurrent liabilities and
deferred credits:
Regulatory liability 20,683,409 20,945,953
Deferred income taxes 56,229,391 53,651,705
Unamortized investment tax credits 10,741,000 11,347,000
Postretirement benefits other than
pensions 4,083,626 2,545,670
Other 2,000,895 1,574,097
93,738,321 90,064,425
Total Capitalization and
Liabilities $520,213,352 $463,617,010
</TABLE>
<FOOTNOTE>
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Statement of Income
Year Ended December 31,
1994 1993 1992
<S> <C> <C> <C>
Operating revenues:
Electric $176,811,882 $167,624,489 $149,490,712
Water 945,077 814,435 811,417
177,756,959 168,438,924 150,302,129
Operating revenue deductions:
Operating expenses:
Fuel 30,401,171 29,579,342 26,498,217
Purchased power 34,610,643 33,451,206 22,533,383
Other 30,702,085 30,710,926 27,081,977
95,713,899 93,741,474 76,113,577
Maintenance and repairs 10,784,130 10,632,335 10,300,720
Depreciation and amortization 18,339,180 17,407,978 16,521,590
Provision for income taxes 10,679,000 7,666,000 8,380,000
Other taxes 10,236,194 9,700,408 8,895,985
145,752,403 139,148,195 120,211,872
Operating income 32,004,556 29,290,729 30,090,257
Other income and deductions:
Allowance for equity funds used
during construction 730,359 - -
Interest income 91,685 101,111 115,435
Other - net (220,578) (267,274) (339,165)
601,466 (166,163) (223,730)
Income before interest charges 32,606,022 29,124,566 29,866,527
Interest charges:
Long-term debt 12,956,643 12,907,344 12,619,675
Allowance for borrowed funds
used during construction (984,546) (229,028) (118,510)
Other 950,826 510,266 459,939
12,922,923 13,188,582 12,961,104
Net income 19,683,099 15,935,984 16,905,423
Preferred stock dividend
requirements 1,563,028 385,090 392,590
Net income applicable to common
stock $18,120,071 $15,550,894 $16,512,833
Weighted average number of common
shares outstanding 13,734,231 13,415,539 13,119,515
Earnings per weighted average
share of common stock $1.32 $1.16 $1.26
Dividends per share of common stock $1.28 $1.28 $1.26
</TABLE>
<FOOTNOTE>
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Statement of Common Stockholders' Equity
Year Ended December 31,
1994 1993 1992
<S> <C> <C> <C>
Common stock, $1 par value:
Balance, beginning of year $13,571,186 $13,284,980 $12,986,408
Stock issued through:
Dividend reinvestment and stock
purchase plan 290,342 220,084 235,237
Employee benefit plans 80,003 66,122 63,335
Balance, end of year $13,941,531 $13,571,186 $13,284,980
Capital in excess of par value:
Balance, beginning of year $101,223,637 $95,325,910 $89,260,335
Excess of net proceeds over par
value of stock issued:
Stock plans 5,687,298 5,823,913 5,977,541
Expenses related to stock split - - (64,353)
Issuance costs canceled related
to preferred stock redemption - - 3,424
Expenses related to preferred
stock issuance (914,902) - -
Installments received on common
stock/(stock purchase), net 59,356 73,814 148,963
Balance, end of year $106,055,389 $101,223,637 $95,325,910
Retained earnings:
Balance, beginning of year $53,066,108 $54,682,098 $54,663,060
Net income 19,683,099 15,935,984 16,905,423
72,749,207 70,618,082 71,568,483
Less dividends paid:
8-1/8% preferred stock 1,008,667 - -
5% preferred stock 195,090 195,090 195,090
4-3/4% preferred stock 190,000 190,000 190,000
9% preferred stock - - 9,000
Common stock 17,572,108 17,166,884 16,492,295
18,965,865 17,551,974 16,886,385
Balance, end of year $53,783,342 $53,066,108 $54,682,098
</TABLE>
<FOOTNOTE>
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Statement of Cash Flows
Year Ended December 31,
1994 1993 1992
<S> <C> <C> <C>
Operating activities
Net income $19,683,099 $15,935,984 $16,905,423
Adjustments to reconcile net
income to cash flows:
Depreciation and amortization 19,336,048 18,247,883 17,346,466
Deferred income taxes, net 1,440,000 4,050,000 2,770,000
Investment tax credit, net (606,000) (610,000) (615,000)
Allowance for equity funds used
during construction (730,359) - -
Issuance of common stock for
401(k) plans 661,937 636,842 600,475
Other 1,252,201 2,189,668 -
Cash flows impacted by changes in:
Accounts receivable and
accrued unbilled revenues (377,527) (2,314,867) (1,016,859)
Fuel, materials and supplies (1,342,855) (445,048) (427,113)
Prepaid expenses and deferred
charges (870,280) (5,571,943) (1,658,757)
Accounts payable and accrued
liabilities (295,626) 4,162,234 120,050
Customer deposits, interest
and taxes accrued 1,548,822 (1,003,744) 512,189
Other liabilities and other
deferred credits 310,717 40,053 141,286
Net cash provided by
operating activities 40,010,177 35,317,062 34,678,160
Investing activities
Construction expenditures (71,621,134) (44,360,120) (31,403,234)
Allowance for equity funds used
during construction 730,359 - -
Net cash used in investing
activities (70,890,775) (44,360,120) (31,403,234)
Financing activities
Issuances of long-term debt 20,000,000 94,295,350 37,246,875
Proceeds from issuance of
preferred stock 25,000,000 - -
Proceeds from issuance of common
stock 4,540,159 5,547,091 5,619,514
Dividends (18,965,865) (17,551,974) (16,886,385)
Repayment of long-term debt (134,000) (74,050,000) (36,100,000)
Net proceeds from short-term
borrowings 1,000,000 - 9,000,000
Redemption and retirement of
preferred stock - - (200,000)
Net cash provided by (used in)
financing activities 31,440,294 8,240,467 (1,319,996)
Net increase (decrease) in cash
and cash equivalents 559,696 (802,591) 1,954,930
Cash and cash equivalents,
beginning of year 2,802,957 3,605,548 1,650,618
Cash and cash equivalents, end of
year $3,362,653 $2,802,957 $3,605,548
</TABLE>
Cash and cash equivalents include cash on hand and temporary
investments purchased with an initial maturity of three months or
less. Interest paid was $12,766,000, $13,303,000, and $12,470,000, for
the three years ended December 31, 1994, 1993 and 1992, respectively.
Income taxes paid were $8,763,000, $5,293,000, and $6,577,000, for the
three years ended December 31, 1994, 1993 and 1992, respectively.
<FOOTNOTE>
See accompanying Notes to Financial Statements.
<PAGE>
1. Summary of Accounting Policies
The Company is subject to regulations of the Missouri Public
Service Commission (MoPSC), the State Corporation Commission of the
State of Kansas, the Corporation Commission of Oklahoma, the Arkansas
Public Service Commission and the Federal Energy Regulatory Commission
(FERC). The accounting policies of the Company are in accordance with
the rate-making practices of the regulatory authorities and, as such,
conform to generally accepted accounting principles as applied to
regulated public utilities. Following is a description of the
Company's significant accounting policies:
Property and plant
The costs of additions to property and plant and replacements for
retired property units are capitalized. Costs include labor, material
and an allocation of general and administrative costs plus an
allowance for funds used during construction. Maintenance expenditures
and the renewal of items not considered units of property are charged
to income as incurred. The cost of units retired is charged to
accumulated depreciation, which is credited with salvage and charged
with removal costs.
Depreciation
Provisions for depreciation are computed at straight-line rates
as approved by regulatory authorities. Such provisions approximated
3.2%, 3.2% and 3.3% of depreciable property for 1994, 1993 and 1992,
respectively.
Allowance for funds used during construction
As provided in the regulatory Uniform System of Accounts, utility
plant is recorded at original cost, including an allowance for funds
used during construction (AFUDC) when first placed in service. The
AFUDC is a utility industry accounting practice whereby the cost of
borrowed funds and the cost of equity funds (preferred and common
stockholders' equity) applicable to the Company's construction program
are capitalized as a cost of construction. This accounting practice
offsets the effect on earnings of the cost of financing current
construction, and treats such financing costs in the same manner as
construction charges for labor and materials.
AFUDC does not represent current cash income. Recognition of this
item as a cost of utility plant is in accordance with regulatory rate
practice under which such plant costs are permitted as a component of
rate base and the provision for depreciation.
In accordance with the methodology prescribed by FERC, the
Company utilized aggregate rates of 7.03% for 1994, 3.3% for 1993 and
3.84% for 1992 (on a before-tax basis) compounded semiannually. In
1993 and 1992, average short-term debt outstanding exceeded average
construction work in progress. Under such circumstances, FERC rules
prescribe the assumption that all construction work in progress is
financed by short-term debt. Accordingly, all AFUDC for 1993 and 1992
was considered attributable to borrowed funds and was credited to
interest expense.
<PAGE>
Income taxes
The Company adopted Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes," (SFAS 109) effective January
1, 1993. Adoption of SFAS 109 did not materially affect the Company's
results of operations, but did affect certain balance sheet accounts
resulting in the Company recording a regulatory asset in the amount of
$20,263,152 and a regulatory liability in the amount of $20,361,010 in
1993.
SFAS 109 requires the use of the asset and liability method of
accounting for income taxes. Under the asset and liability method,
deferred taxes represent the tax effect of temporary differences
between the financial statement and tax bases of assets and
liabilities using presently enacted tax rates. The portion of the
Company's deferred tax liability applicable to utility operations
which has not been reflected in current service rates represents
income taxes recoverable through future rates, and has been recorded
as a regulatory asset on the balance sheet.
Investment tax credits utilized in prior years were deferred and
are being amortized over the useful lives of the properties to which
they relate.
Postretirement benefits other than pensions
The Company adopted Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" (SFAS 106) effective January 1, 1993. The impact of this
change is discussed in Note 6 under Other Postretirement Benefits.
SFAS No. 112
Effective January 1, 1994, the Company adopted Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits." Implementation of this Standard did not have
a material effect on the Company's financial position, results of
operations or cash flows.
Unamortized debt discount, premium and expense
Discount, premium and expense associated with long-term debt are
amortized over the lives of the related issues. Costs related to
refunded long-term debt are amortized over the life of the related new
debt issues.
Accrued unbilled revenues
The Company accrues on its books estimated, but unbilled, revenue
and also a liability for the related taxes.
Accumulated provision for uncollectible accounts
The accumulated provision for uncollectible accounts was $248,000
at December 31, 1994 and 1993.
Franchise taxes
Operating revenues include franchise taxes of $3,276,352,
$3,097,161 and $2,777,427 for each of the three years ended
December 31, 1994, 1993 and 1992, respectively.
<PAGE>
Liability insurance
The Company carries excess liability insurance for workers'
compensation and public liability claims. In order to provide for the
cost of losses not covered by insurance, an allowance for injuries and
damages is maintained based on loss experience of the Company.
2. Rate Matters
During the three years ending December 31, 1994 the following
rate changes were effective:
Missouri
The MoPSC approved a stipulated agreement which authorized the
Company to file revised rate schedules designed to produce an increase
in overall Missouri jurisdictional gross annual electric revenues in
the amount of $7,350,000, or 5.2%, effective August 15, 1994. The
Company's original request was for an increase of $7,968,879, or 5.7%.
A provision of the Missouri agreement authorized the Company to
recover the cost of SFAS 106 in rates subsequent to August 15, 1994
and to reflect pension cost under Statement of Financial Accounting
Standards No. 87, "Employers' Accounting for Pensions" (SFAS 87) on an
accrual basis with modifications to certain calculations. See further
discussion in Note 6 - Other Postretirement Benefits.
On January 24, 1994, the MoPSC approved an increase in rates for
the Company's water customers in the amount of $124,931, or 14.3%,
effective February 13, 1994. The Company had originally filed its
request on August 30, 1993, for a $165,829, or 20.4%, increase.
Kansas
On September 7, 1994, the Kansas Corporation Commission approved
a stipulated agreement between the Company and the Commission Staff
authorizing the Company to file revised rate schedules designed to
produce an increase in overall Kansas jurisdictional gross electric
revenues in the amount of $512,000, or 4.6%, effective September 12,
1994. The Company's original request was for an increase of $717,529,
or 6.7%.
Oklahoma
On October 19, 1994, the Oklahoma Corporation Commission approved
a stipulated agreement between the Company and the Commission Staff
authorizing the Company to file revised rate schedules designed to
produce an increase in overall Oklahoma jurisdictional gross annual
electric revenues in the amount of $399,370, or 6.9%, effective
October 21, 1994. The Company's original request, as amended on August
12, 1994, was for an increase of $563,387, or 9.7%.
<PAGE>
Arkansas
On November 8, 1994, the Company filed a notice withdrawing the
request for rate relief it filed with the Arkansas Public Service
Commission on June 20, 1994, after comparing actual data with
projected data included in the original request. The Company
originally requested an increase of $274,824, or 4.5% in annual
revenues.
FERC
Effective June 22, 1992, the FERC approved an increase in rates
for the Company's wholesale customers in the amount of $851,776, or
11.9%. The Company had originally filed a request on August 30, 1991,
for a $1,157,770 increase.
3. Common Stock
The Dividend Reinvestment and Stock Purchase Plan (the
Reinvestment Plan) allows common and preferred stockholders to
reinvest dividends paid by the Company into newly issued shares of the
Company's common stock at 95% of the market price average.
Stockholders may also purchase, for cash and within specified limits,
additional stock at 100% of the market price average. The Company may
elect to make shares purchased in the open market rather than newly
issued shares available for purchase under the Reinvestment Plan. If
the Company so elects, the purchase price to be paid by Reinvestment
Plan participants will be 100% of the cost to the Company of such
shares. Participants in the Reinvestment Plan do not pay commissions
or service charges in connection with purchases under the Reinvestment
Plan.
The Employee Stock Purchase Plan, which terminates May 31, 2000,
permits the grant to eligible employees of options to purchase common
stock at 90% of the lower of market value at date of grant or at date
of exercise. Contingent employee stock purchase subscriptions
outstanding and the maximum prices per share were 68,505 shares at
$15.30, 45,750 shares at $20.03, and 40,514 shares at $19.13, at
December 31, 1994, 1993 and 1992, respectively. Shares were issued at
$15.53 per share in 1994, $19.13 per share in 1993 and $15.92 per
share in 1992.
The Company's Stock Incentive Plan (the Incentive Plan) provides
for the grant of up to 800,000 shares of common stock through January
22, 1996. The terms and conditions of any option or stock grant are
determined by the Board of Directors' compensation committee, within
the provisions of the Incentive Plan. The Incentive Plan permits
grants of stock options and restricted stock to qualified employees
and permits Directors to receive common stock in lieu of cash
compensation for service as a Director. During January 1994, 1993 and
1992, grants for 633, 2,119 and 2,566 shares, respectively, of
restricted stock were made to qualified employees under this plan. For
grants made to date, the restrictions typically lapse and the shares
are issuable to employees who continue service with the Company three
years from the date of grant. For employees whose service is
terminated by death, retirement, disability, or under certain
circumstances following a change in control of the Company prior to
the restrictions lapsing, the shares are issuable immediately. For
other terminations, the grant is forfeited. During 1994, 1993 and
1992, 3,198, 766 and 5,876 shares, respectively, were issued under the
Incentive Plan. No options have been granted under the Incentive Plan.
<PAGE>
The Company's Employee 401(k) Retirement Plan (the 401(k) Plan)
allows participating employees to defer up to 15% of their annual
compensation up to a specified limit. The Company matches 50% of each
employee's deferrals by contributing shares of the Company's common
stock, such matching contributions not to exceed 3% of the employee's
annual compensation. The Company has authorized 500,000 shares for
issuance pursuant to the 401(k) Plan. The Company contributed 36,479,
27,992 and 23,702 shares of common stock in 1994, 1993 and 1992,
respectively, valued at market prices on the dates of contributions.
The stock issuances to effect the contributions were not cash
transactions and are not reflected as a source of cash in the
Statement of Cash Flows.
At December 31, 1994, 3,024,991 shares remain available for
issuance under the foregoing plans.
4. Preferred Stock
The Company has 5,000,000 shares of $10.00 par value cumulative
preferred stock authorized. At December 31, 1994 and 1993 these shares
were designated as follows:
<TABLE>
<CAPTION>
Shares
1994 1993
<S> <C> <C>
Series without mandatory
redemption provisions 3,300,000 800,000
Undesignated 1,700,000 4,200,000
</TABLE>
In the event of involuntary liquidation, holders of all
outstanding series of preferred stock will be entitled to be paid the
$10.00 par value of their shares plus accumulated and unpaid dividends
before any distribution of assets to holders of common stock.
The Company also has 2,500,000 shares of preference stock
authorized, including 500,000 shares of Series A Participating
Preference Stock, none of which have been issued.
<PAGE>
Preferred stock without mandatory redemption provisions
Preferred stock without mandatory redemption provisions issued
and outstanding at December 31, 1994 and 1993 is as follows:
<TABLE>
<CAPTION>
Shares
1994 1993
<S> <C> <C>
5% cumulative (400,000 shares
authorized) 390,180 390,180
4-3/4% cumulative (400,000
shares authorized) 400,000 400,000
8-1/8% cumulative (2,500,00
shares authorized 2,500,000 -
3,290,180 790,180
</TABLE>
In the event of voluntary liquidation or redemption of the 5% and
4-3/4% series of cumulative preferred stock, holders will be entitled
to the following amounts per share plus accumulated and unpaid
dividends: 5% cumulative - $10.50 (aggregate amount $4,096,890); and 4-
3/4% cumulative - $10.20 (aggregate amount $4,080,000).
Preference Stock Purchase Rights
The Company had 6,970,766 and 6,785,593 Preference Stock Purchase
Rights (Rights) outstanding at December 31, 1994 and 1993,
respectively. Each Right enables the holder to acquire one one-
hundredth of a share of Series A Participating Preference Stock (or,
under certain circumstances, other securities) at a price of $75 per
one one-hundredth share, subject to adjustment. Each share of common
stock currently has one-half of one Right. The Rights (other than
those held by an acquiring person or group (Acquiring Person)), which
expire July 25, 2000, will be exercisable only if an Acquiring Person
acquires 10% or more of the Company's common stock or announces an
intention to make a tender offer or exchange offer which would result
in the Acquiring Person owning 10% or more of the common stock. The
Rights may be redeemed by the Company in whole, but not in part, for
$0.01 per Right, prior to 10 days after the first public announcement
of the acquisition of 10% or more of the Company's common stock by an
Acquiring Person.
In addition, upon the occurrence of a merger or other business
combination, or an event of the type described in the preceding
paragraph, holders of the Rights, other than an Acquiring Person, will
be entitled, upon exercise of a Right, to receive either common stock
of the Company or common stock of the Acquiring Person having a value
equal to two times the exercise price of the Right. Any time after an
Acquiring Person acquires 10% or more (but less than 50%) of the
Company's outstanding common stock, the Board of Directors may, at its
option, exchange part or all of the Rights (other than Rights held by
the Acquiring Person) for common stock of the Company on a one-for-two
basis.
<PAGE>
5. Long-term Debt
The principal amount of all series of first mortgage bonds
outstanding at any one time is limited by terms of the mortgage to
$1,000,000,000. Substantially all property, plant and equipment is
subject to the lien of the mortgage. At December 31 the long-term debt
outstanding was as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
First mortgage bonds:
5.70% Series due 1998 $23,000,000 $23,000,000
7-1/2% Series due 2002 37,500,000 37,500,000
8-1/8% Series due 2009 (1) 20,000,000 -
9% Series due 2019 30,000,000 30,000,000
9-3/4% Series due 2020 2,250,000 2,250,000
7% Series due 2023 45,000,000 45,000,000
7-1/4% Series due 2028 14,366,000 14,500,000
5.3% Pollution Control Series due 2013 8,000,000 8,000,000
5.2% Pollution Control Series due 2013 5,200,000 5,200,000
185,316,000 165,450,000
Less unamortized net discount 339,050 222,969
$184,976,950 $165,227,031
</TABLE>
(1) Holders of this series have the right to require the Company to
repurchase all or any portion of the bonds at a price of 100% of
the principal amount plus accrued interest, if any, on November 1,
2001.
The carrying amount of the Company's long-term debt was
$185,316,000 and $165,450,000 at December 31, 1994 and 1993,
respectively, and its fair market value was estimated to be
approximately $167,751,000 and $168,521,000, respectively. This
estimate was based on the quoted market prices for the same or similar
issues or on the current rates offered to the Company for debt of the
same remaining maturation. The estimated fair market value may not
represent the actual value that could have been realized as of year-
end or that will be realizable in the future.
At December 31, 1994, the Company had a $20,000,000 unsecured
line of credit. Borrowings are at the bank's prime commercial rate and
are due 370 days from the date of each loan. In connection with the
Company's line of credit there is an informal compensating balance
arrangement under which the Company maintains deposits averaging 5% of
the line of credit. This arrangement does not serve to legally
restrict the use of the Company's cash. The line of credit is also
utilized to support the Company's issuance of commercial paper
although it is not assigned specifically to such support. There were
no outstanding borrowings under this agreement at December 31, 1994 or
1993.
<PAGE>
Short-term commercial paper outstanding and notes payable
averaged $16,319,000 and $8,970,000 daily during 1994 and 1993,
respectively, with the highest month-end balances being $29,000,000
and $15,000,000, respectively. The weighted daily average interest
rates during 1994, 1993 and 1992 were 4.3%, 3.3% and 3.8%,
respectively. The weighted average interest rates of borrowings
outstanding at December 31, 1994, 1993 and 1992 were 6.3%, 3.4% and
3.7%, respectively.
The proceeds of two issuances of first mortgage bonds in December
1993, along with additional funds of the Company, were deposited in an
irrevocable trust for the purpose of paying the redemption price of
the 6-7/8% Pollution Control Series due 2006 and 6.80% Pollution
Control Series due 2008, and were so used in 1994. As a result, the 6-
7/8% Series and the 6.80% Series were considered to be no longer
outstanding at December 31, 1993, and were extinguished for financial
reporting purposes.
6. Retirement Benefits
Pensions
The Company's noncontributory defined benefit pension plan
includes all employees meeting minimum age and service requirements.
The benefits are based on years of service and the employee's average
annual basic earnings. Annual contributions to the plan are at least
equal to the minimum funding requirements of ERISA. Plan assets
consist of common stocks, United States government obligations,
federal agency bonds, corporate bonds and commingled trust funds.
Net pension cost for 1994, 1993 and 1992 is comprised of the
following components:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Service cost - benefits earned
during the period $1,610,855 $1,474,218 $1,387,850
Interest cost on projected
benefit obligation 3,920,751 3,654,127 3,357,947
Actual return on plan assets (514,240) (5,897,665) (4,080,822)
Net amortization and deferral (5,094,972) 751,892 (575,139)
Other (58,275) 17,428 (89,836)
Net pension benefit $ (135,881) $ - $ -
</TABLE>
For years prior to 1994 the MoPSC recognized funded amounts for
ratemaking and the Company charged these amounts to expense as paid.
As discussed in Note 2, effective August 15, 1994, the MoPSC adopted
SFAS 87 for ratemaking purposes although it modified certain
calculations. Effective on that date, the Company commenced charging
pension cost calculated under the provisions of SFAS 87 to expense.
Such change had no material impact on the Company's financial
position, results of operations or cash flows.
<PAGE>
Assumptions used in calculating the projected benefit obligation
for 1994 and 1993 include the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Weighted average discount rate 8-1/4% 7-1/2%
Rate of increase in compensation 5% 5%
levels
Expected long-term rate of return 9% 9%
on plan assets
</TABLE>
The following table sets forth the plan's funded status at
December 31, 1994 and 1993:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefits $39,266,745 $39,612,506
Nonvested benefits 265,744 517,363
Accumulated benefit obligation 39,532,489 40,129,869
Effect of projected future
compensation levels 11,696,628 12,301,833
Projected benefit obligation for
service rendered to date 51,229,117 52,431,702
Plan assets at fair value 56,773,077 59,307,720
Plan assets in excess of
projected benefit obligation 5,543,960 6,876,018
Unrecognized net assets at
January 1, 1986 being
amortized over 17 years (3,929,243) (4,420,398)
Unrecognized prior service cost 5,645,694 6,090,263
Unrecognized net gain (7,854,724) (9,087,802)
Accrued pension cost $(594,313) $(541,919)
</TABLE>
Other Postretirement Benefits
The Company provides certain healthcare and life insurance
benefits to eligible retired employees, their dependents and
survivors. Participants generally become eligible for retiree
healthcare benefits after reaching age 55 with 5 years of service.
<PAGE>
Effective January 1, 1993, the Company adopted SFAS 106, which
requires recognition of these benefits on an accrual basis during the
active service period of the employees. The Company elected to
amortize its transition obligation (approximately $21.7 million)
related to SFAS 106 over a twenty year period. Prior to adoption of
SFAS 106, the Company recognized the cost of such postretirement
benefits on a pay-as-you-go (i.e., cash) basis. Adoption of this
Standard had an adverse effect on earnings in 1994 and 1993 of
approximately $682,000 and $1 million (net of income taxes),
respectively, representing the Missouri jurisdictional portion of
costs that were not deemed recoverable under ratemaking procedures.
However, the MoPSC authorized the inclusion of SFAS 106 costs in rates
effective August 15, 1994, as discussed in Note 2, Rate Matters. In
addition, the states of Kansas and Oklahoma approved recovery of the
SFAS 106 costs in the rate orders received by the Company in 1994. The
Company is deferring SFAS 106 costs relating to the FERC and Arkansas
jurisdictions as management believes that such amounts are probable of
recovery. Accordingly, approximately $642,000 has been deferred at
December 31, 1994, for the recovery of increased postretirement
benefits costs.
In accordance with the above rate orders, the Company established
two separate trusts in 1994, one for those retirees who were subject
to a collectively bargained agreement and the other for all other
retirees, to fund retiree healthcare and life insurance benefits. The
Company's funding policy is to contribute annually an amount at least
equal to the revenues collected for the amount of postretirement
benefits costs allowed in rates. Assets in these trusts amounted to
approximately $867,000 at December 31, 1994, and were invested in a
money market account.
Postretirement benefits, a portion of which have been capitalized
and/or deferred, for 1994 and 1993 included the following components:
<TABLE>
<CAPTION>
Year Ended December 31,
1994 1993
<S> <C> <C>
Service cost on benefits
earned during the year $490,964 $506,510
Interest cost on projected
benefit obligation 1,732,866 1,739,114
Amortization of unrecognized
transition obligation 1,084,017 1,084,017
Net periodic postretirement
benefit cost $3,307,847 $3,329,641
</TABLE>
<PAGE>
The estimated funded status of the Company's obligations under
SFAS 106 at December 31, 1994 and 1993 using a weighted average
discount rate of 8-1/4% and 7-1/2%, respectively, is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
1994 1993
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees $9,979,495 $11,920,176
Other fully eligible plan
participants 5,236,065 5,087,720
Other active plan
participants 6,174,315 6,134,078
Total benefit obligation 21,389,875 23,141,974
Plan assets at fair value 867,033 -
Accumulated postretirement
obligation in excess of
plan assets (20,522,842) (23,141,974)
Unrecognized transition
obligation 19,512,293 20,596,304
Unrecognized net gain (3,073,077) -
Accrued postretirement
benefit cost $(4,083,626) $(2,545,670)
</TABLE>
The assumed 1995 cost trend rate used to measure the expected
cost of healthcare benefits is 9%. The trend rate decreases through
2026 to an ultimate rate of 6% for 2027 and subsequent years. The
effect of a 1% increase in each future year's assumed healthcare cost
trend rate would increase the current service and interest cost from
$2.2 million to $2.9 million and the accumulated postretirement
benefit obligation from $21.4 million to $25.9 million.
<PAGE>
7. Income Taxes
The provision for income taxes is different from the amount of
income tax determined by applying the statutory income tax rate to
income before income taxes as a result of the following differences:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Computed "expected"
federal provision $10,593,000 $8,246,000 $8,587,000
State taxes, net of
federal effect 939,000 308,000 459,000
Adjustment to taxes
resulting from:
Investment tax credit
amortization (606,000) (610,000) (615,000)
Other (342,000) (314,000) (81,000)
Actual provision $10,584,000 $7,630,000 $8,350,000
</TABLE>
<TABLE>
<CAPTION>
Income tax expense components for the years shown are as follows:
1994 1993 1992
<S> <C> <C> <C>
Taxes currently payable
Included in operating
revenue deductions:
Federal $8,420,000 $3,762,000 $5,527,000
State 1,425,000 464,000 698,000
Included in "other-net" (95,000) (36,000) (30,000)
Deferred taxes
Depreciation and
amortization 2,035,000 2,265,000 2,237,000
Loss on reacquired debt (185,000) 2,385,000 567,000
SFAS 106 (318,000) (550,000) -
Other (92,000) (50,000) (34,000)
Deferred investment tax
credits, net (606,000) (610,000) (615,000)
$10,584,000 $7,630,000 $8,350,000
</TABLE>
Empire began normalizing the effect of deferred state income
taxes and other federal tax items in 1994 in conjunction with the
MoPSC electric rate agreement discussed in Note 2 above. The impact of
these changes was not material to the financial position, results of
operations or cash flows of the Company.
<PAGE>
The following table summarizes the deferred tax assets and
deferred tax liabilities:
<TABLE>
<CAPTION>
Balances as of December 31,
1994 1993
Deferred Tax Deferred Tax Deferred Tax Deferred Tax
Assets Liabilities Assets Liabilities
<S> <C> <C> <C> <C>
Noncurrent:
Depreciation and other
property related $13,193,240 $73,903,229 $13,341,766 $69,261,326
Unamortized
investment tax credit 6,823,000 - 6,902,000 -
Miscellaneous
book/tax recognition
differences 1,961,429 4,259,831 1,388,352 4,043,497
Change in statutory
tax rate 547,000 591,000 524,000 2,503,000
Total deferred taxes $22,524,669 $78,754,060 $22,156,118 $75,807,823
</TABLE>
At December 31, 1994 and 1993, the Company had regulatory assets
of $22,359,272 and $21,484,130, respectively, and regulatory
liabilities of $20,683,409 and $20,945,953, respectively, to reflect
the anticipated future ratemaking effects of deferred taxes.
During 1993, the Omnibus Budget Reconciliation Act was signed
into law. This Act required an increase in the corporate income tax
rate to 35% for net income greater than $10,000,000 and was effective
retroactive through January 1, 1993. Additionally, in 1994, Missouri
raised its state tax rate from 5% to 6.25% and reduced its federal
income tax deduction from 100% to 50%. The deferred tax assets and
liabilities were adjusted accordingly.
8. Iatan Plant
The Company owns a 12% undivided interest in a neighboring
utility's coal-fired 670 megawatt generating unit. The Company is
entitled to 12% of the available capacity and is obligated for that
percentage of costs which are included in corresponding operating
expense classifications in the Statement of Income. At December 31,
1994 and 1993, the Company's property, plant and equipment accounts
include the cost of its ownership interest in the unit of $44,576,000
and $44,037,000 and accumulated depreciation of $21,303,000 and
$19,627,000, respectively.
<PAGE>
9. Commitments and Contingencies
The 1995 construction budget is $54,700,000. The three year
construction program for 1995 through 1997 is estimated to be
$167,600,000.
The Company has entered into long-term agreements to purchase
capacity and energy, to obtain supplies of coal and to provide natural
gas transportation. Under such contracts, the Company incurred
purchased power and fuel costs of approximately $48,000,000,
$45,000,000 and $36,000,000 in 1994, 1993 and 1992, respectively.
Certain of these contracts provide for minimum and maximum annual
amounts to be purchased and further provide, in part, for cash
settlements to be made when minimum amounts are not purchased. In the
event that no purchases of coal, energy and transportation services
are made, an event considered unlikely by management, minimum annual
cash settlements approximate $23,000,000 in 1995, $24,000,000 in 1996,
$28,000,000 in 1997, $22,000,000 in 1998, $24,000,000 in 1999 and
$31,000,000 in 2000 and reducing to lesser amounts thereafter through
2005.
10. Selected Quarterly Information (Unaudited)
A summary of operations for the quarterly periods of 1994 and
1993 is as follows:
<TABLE>
<CAPTION>
Quarters
First Second Third Fourth
(dollars in thousands except per share amounts)
<S> <C> <C> <C> <C>
1994:
Operating revenues $41,673 $41,595 $52,339 $42,150
Operating income 6,993 6,433 11,353 7,226
Net income 3,743 3,406 8,350 4,185
Net income applicable to
common stock 3,647 3,147 7,746 3,580
Earnings per average
share of common stock $.27 $.23 $.56 $.26
1993:
Operating revenues $39,408 $37,298 $51,370 $40,363
Operating income 7,354 6,059 9,934 5,944
Net income 4,085 2,718 6,578 2,555
Net income applicable to
common stock 3,989 2,622 6,482 2,458
Earnings per average
share of common stock $.30 $.20 $.48 $.18
</TABLE>
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item with respect to directors
and directorships may be found in the Company's proxy statement for
its Annual Meeting of Stockholders to be held April 26, 1995, which is
incorporated herein by reference.
Pursuant to instruction 3 of paragraph (b) of Item 401 of
Regulation S-K, the information required by this Item with respect to
executive officers is set forth in Item 1 of Part I of this Form 10-K
under "Executive Officers and Other Officers of the Registrant".
ITEM 11. EXECUTIVE COMPENSATION
Information regarding executive compensation may be found in the
Company's proxy statement for its Annual Meeting of Stockholders to be
held April 26, 1995, which is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
To the knowledge of the Company, no person is the beneficial
owner of 5% or more of any class of the Company's voting securities,
and there are no arrangements the operation of which may at a
subsequent date result in a change in control of the Company.
Information regarding the number of shares of the Company's
equity securities beneficially owned by the directors and certain
executive officers of the Company and by the directors and executive
officers as a group may be found in the Company's proxy statement for
its Annual Meeting of Stockholders to be held April 26, 1995, which is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item with respect to certain
relationships and related transactions may be found in the Company's
proxy statement for its Annual Meeting of Stockholders to be held
April 26, 1995.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Index to Financial Statements and Financial Statement Schedule Covered
by Report of Independent Auditors
Balance sheet at December 31, 1994 and 1993 20
Statement of income for each of the three years in the period
ended December 31, 1994 21
Statement of common stockholders' equity for each of the three
years in the period ended December 31, 1994 22
Statement of cash flows for each of the three years in the
period ended December 31, 1994 23
Notes to financial statements (except Note 10 which is unaudited) 24
Schedule for the years ended December 31, 1994, 1993 and 1992:
Schedule II - Valuation and qualifying accounts 37
All other schedules are omitted as the required information is either
not present, is not present in sufficient amounts, or the information
required therein is included in the financial statements or notes
thereto.
List of Exhibits
(3) (a) -The Restated Articles of Incorporation of the Company
(Incorporated by reference to Exhibit 4(a) to Form S-3, File
No. 33-54539).
(b) -By-laws of Company as amended January 23, 1992 (Incorporated by
reference to Exhibit 3(f) to Annual Report Form 10-K for year
ended December 31, 1991, File No. 1-3368).
(4) (a) -Indenture of Mortgage and Deed of Trust dated as of September 1,
1944 and First Supplemental Indenture thereto (Incorporated by
reference to Exhibits B(1) and B(2) to Form 10, File No. 1-
3368).
(b) -Third Supplemental Indenture to Indenture of Mortgage and Deed
of Trust (Incorporated by reference to Exhibit 2(c) to
Form S-7, File No. 2-59924).
(c) -Sixth through Eighth Supplemental Indentures to Indenture of
Mortgage and Deed of Trust (Incorporated by reference to
Exhibit 2(c) to Form S-7, File No. 2-59924).
(d) -Fourteenth Supplemental Indenture to Indenture of Mortgage and
Deed of Trust (Incorporated by reference to Exhibit 4(f) to
Form S-3, File No. 33-56635).
(e) -Sixteenth Supplemental Indenture dated as of November 1, 1989 to
Indenture of Mortgage and Deed of Trust (Incorporated by
reference to Exhibit 4 to Annual Report on Form 10-K for year
ended December 31, 1989, File No. 1-3368).
(f) -Seventeenth Supplemental Indenture dated as of December 1, 1990
to Indenture of Mortgage and Deed of Trust (Incorporated by
reference to Exhibit 4(j) to Annual Report on Form 10-K foryear
ended December 31, 1990, File No. 1-3368).
(g) -Eighteenth Supplemental Indenture dated as of July 1, 1992 to
Indenture of Mortgage and Deed of Trust (Incorporated by
reference to Exhibit 4 to Form 10-Q for quarter ended June 30,
1992, File No. 1-3368).
(h) -Nineteenth Supplemental Indenture dated as of May 1, 1993 to
Indenture of Mortgage and Deed of Trust (Incorporated by
reference to Exhibit (l) to Form S-3, File No. 33-66748).
(i) -Twentieth Supplemental Indenture dated as of June 1, 1993 to
Indenture of Mortgage and Deed of Trust (Incorporated by
reference to Exhibit (m) to Form S-3, File No. 33-66748).
<PAGE>
(j) -Twenty-First Supplemental Indenture dated as of October 1, 1993
to Indenture of Mortgage and Deed of Trust (Incorporated by
reference to Exhibit 4 to Form 10-Q for quarter ended September
30, 1993, File No.1-3368).
(k) -Twenty-Second Supplemental Indenture dated as of November 1,
1993 to Indenture of Mortgage and Deed of Trust (Incorporated
by reference to Exhibit 4(k) to Annual Report on Form 10-K for
year ended December 31, 1993, File No. 1-3368).
(l) -Twenty-Third Supplemental Indenture dated as of November 1, 1993
to Indenture of Mortgage and Deed of Trust (Incorporated by
reference to Exhibit 4(l) to Annual Report on Form 10-K for
year ended December 31, 1993, File No. 1-3368).
(m) -Twenty-Fourth Supplemental Indenture dated as of March 1, 1994
to Indenture of Mortgage and Deed of Trust (Incorporated by
reference to Exhibit 4(m) to Annual Report on Form 10-K for
year ended December 31, 1993, File No. 1-3368).
(n) -Twenty-Fifth Supplemental Indenture dated as of November 1, 1994
to Indenture of Mortgage and Deed of Trust (Incorporated by
reference to Exhibit 4(p) to Form S-3, File No. 33-56635).
(o) -Rights Agreement dated July 26, 1990 (Incorporated by reference
to Exhibit 4(a) to Form 8-K, dated July 26, 1990, File
No. 1-3368).
(p) -Amendment to Rights Agreement dated July 26, 1990 between the
Company and Chemical Bank (successor to Manufacturers Hanover
Trust Company), as Rights Agent (Incorporated by reference to
Exhibit 4 to Form 10-Q for quarter ended September 30, 1991,
File No. 1-3368).
(10) (a) -1986 Stock Incentive Plan as amended July 23, 1992 (Incorporated
by reference to Exhibit 10 to Form 10-Q for quarter ended June
30, 1992, File No. 1-3368).
(b) -Management Incentive Plan (A description of this Plan is
incorporated by reference to page 5 of the Company's Proxy
Statement for its Annual Meeting of Stockholders held April 27,
1989).
(c) -Deferred Compensation Plan for Directors (Incorporated by
reference to Exhibit 10(d) to Annual Report on Form 10-K for
year ended December 31, 1990, File No. 1-3368).
(d) -The Empire District Electric Company Change in Control Severance
Pay Plan and Forms of Agreement (Incorporated by reference to
Exhibit 10 to Form 10-Q for quarter ended September 30, 1991,
File No. 1-3368).
(e) -The Empire District Electric Company Supplemental Executive
Retirement Plan.*
(12) -Computation of Ratios of Earnings to Fixed Charges and Earnings
to Combined Fixed Charges and Preferred Stock Dividend
Requirements.*
(24) -Consent of Price Waterhouse.*
(25) -Powers of Attorney.*
(27) -Financial Data Schedule for December 31, 1994.*
*Filed herewith.
Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of
1994.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
Valuation and Qualifying Accounts
Years ended December 31, 1994, 1993 and 1992
Deductions from
Balance Additions reserve Balance
at Charged to at
Other Accounts
begin Charged close of
ning to Descrip- Amount Descrip- Amount period
of income tion tion
period
<S> <C> <C> <C> <C> <C>
Year ended December 31,
1994:
Reserve deducted from Recovery
assets: of
Accumulated provision amounts
for uncollectible previously Accounts
accounts $248,238 $325,100 written $255,578 written $580,464 $248,452
off off
Reserve not shown
separately
in balance sheet: Property,
plant &
Injuries and damages equipment Claims
and and
reserve (Note A) $924,378 $477,347 clearing $449,657 expenses $782,775 $1,068,607
accounts
Year ended December 31,
1993:
Reserve deducted from Recovery
assets: of
Accumulated provision amounts
for uncollectible previously Accounts
accounts $248,035 $226,800 written $216,130 written $442,727 $248,238
off off
Reserve not shown
separately
in balance Property,
sheet: plant &
Injuries and damages equipment Claims
and and
reserve (Note A) $878,998 $424,807 clearing $404,416 expenses $783,843 $924,378
accounts
Year ended December 31,
1992:
Reserve deducted from Recovery
assets: of
Accumulated provision amounts
for uncollectible previously Accounts
accounts $252,119 $165,200 written $187,715 written $356,999 $248,035
off off
Reserve not shown
separately
in balance sheet: Property,
plant &
Injuries and damages equipment Claims
and and
reserve (Note A) $881,561 $414,862 clearing $400,013 expenses $817,438 $878,998
accounts
</TABLE>
<FOOTNOTE>
NOTE A: This reserve is provided for workers' compensation and
public liability damages. The Company at December 31, 1994
carried insurance for workers' compensation claims in excess of
$250,000 and for public liability claims in excess of $250,000.
The injuries and damages reserve is included on the Balance Sheet
in the section "Noncurrent liabilities and deferred credits" in
the category "Other".
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
THE EMPIRE DISTRICT ELECTRIC
COMPANY
R.L. LAMB
By............................
R. L. Lamb, President
Date: February 24, 1995
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the date indicated.
Date--|
R. L. LAMB* |
.................................. |
R. L. Lamb, President and Director |
(Principal Executive Officer) |
|
V. E. BRILL |
................................... |
V. E. Brill, Vice President-Finance |
and Director |
(Principal Financial Officer) |
|
G. A. KNAPP |
............................ |
G. A. Knapp, Controller and |
Assistant Treasurer |
(Principal Accounting Officer) |
|
M. F. CHUBB, JR.* |
.......................... |
M. F. Chubb, Jr., Director |
|
R. D. HAMMONS* |
....................... |
R. D. Hammons, Director |
|
R. C. HARTLEY* |
....................... |
R. C. Hartley, Director |
|
February 24, 1995
J. R. HERSCHEND* |
......................... |
J. R. Herschend, Director |
|
F. E. JEFFRIES* |
........................ |
F. E. Jeffries, Director |
|
R. E. MAYES* |
..................... |
R. E. Mayes, Director |
|
M. W. McKINNEY* |
.............................. |
M. W. McKinney, Vice President- |
Customer Services and Director |
|
M. M. POSNER* |
...................... |
M. M. Posner, Director |
|
|
*By V. E. Brill |
................................. |
(V. E. Brill, As attorney in fact |
for each of the persons indicated) |
|
--|
THE EMPIRE DISTRICT ELECTRIC COMPANY EXHIBIT 10(e)
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Effective January 1, 1994)
ARTICLE I
Establishment
1.1 Establishment and Purpose. The Empire District
Electric Company (the "Company") hereby adopts The
Empire District Electric Company Supplemental Executive
Retirement Plan (the "Plan"), effective January 1, 1994
(the "Effective Date"). The purpose of the Plan is to
provide each Participant in the Plan with the benefits
the Participant would have received under The Empire
District Electric Company Employees' Retirement Plan,
as amended, ("Retirement Plan") except for the
limitations on compensation and benefits imposed by
Sections 401(a)(17) and 415(b) and (e) of the Internal
Revenue Code of 1986, as amended ("Code") or any
successor thereto. The Company, with the approval of
the Board of Directors of the Company, adopts this Plan
and is referred to hereinafter as "Employer". The Plan
is intended to benefit a select group of management
employees of the Employer.
1.2 Applicability. The provisions of the Plan shall apply
only to a person who terminates employment with the
Employer on or after the Effective Date and shall not
apply to any person not in the active employment of the
Employer on or after the Effective Date.
ARTICLE II
Participation
2.1 Eligibility and Participation. Each officer of the
Company who is a participant in the Retirement Plan,
whose accrued benefit under the Retirement Plan is
reduced by the limitation on compensation imposed by
Section 401(a)(17) of the Code or by the limitations on
benefits imposed by Section 415 of the Code or whose
anticipated salary for any year, as such term is
defined in the Retirement Plan (without applying the
limitation under Section 401(a)(17) of the Code),
exceeds $120,000 shall become a Participant in the
Plan; provided that no person shall be or become a
Participant hereunder prior to January 1, 1994. (Each
person who becomes a Participant shall be referred to
hereinafter as a "Participant.")
2.2 Duration. Any person who became a Participant shall
continue to be a Participant as long as he is entitled
to benefits hereunder.
<PAGE>
ARTICLE III
Benefit/Payment
3.1 Accrued Benefit.
(a) If at any time any benefit otherwise payable under
the provisions of the Retirement Plan in respect to
a Participant, including any benefit payable with
respect to the Participant's spouse or other benefi
ciary entitled thereto, shall be reduced by reason
of the limitations on maximum benefits under
Section 415(b) and/or Section 415(e) of the Code,
and/or the limitation on the amount of compensation
of a Participant that may be considered under
Section 401(a)(17) of the Code, the Participant or
his spouse or other beneficiary shall be entitled
to receive a retirement benefit, subject to the
terms and conditions of the Plan, equal to the
excess, if any, of --
(1) the amount of the benefit under the Retirement
Plan, calculated without regard to the
limitations imposed by Section 415 and
401(a)(17) of the Code; provided, however,
amounts deferred by a Participant under a
Company-sponsored deferred compensation plan
shall be treated as compensation for purposes
of this determination, but in no event shall
the compensation of a Participant for years
prior to 1994 exceed the Section 401(a)(17)
limit in effect for those years and for 1994
compensation in excess of $242,280 shall not be
considered, such amount shall be increased each
calendar year hereafter in accordance with the
cost of living adjustment factors issued each
year by the Secretary of the Treasury, or his
delegate, in the same manner as the adjustment
described in Section 415(d) of the Code. In
the event such cost of living adjustment is not
available, the Company shall adopt an
appropriate substitute index to measure
increases in the cost of living and the limit
on the compensation to be considered shall be
adjusted in accordance with that index.
(2) the amount of the benefit under the Retirement
Plan as limited by Sections 401(a)(17) and 415
of the Code.
(The benefit determined under this Section 3.1 shall be
referred to hereinafter as the "Accrued Benefit.")
(b) The Accrued Benefit under the Plan shall be paid
only if, and under the condition that, the benefit
under the Retirement Plan described in Subsection
3.1(a)(2) be and is paid to the Participant, his
surviving spouse, or other beneficiary; no benefit
shall be payable unless the Participant at the time
of his termination of employment or death has been
credited with 5 years of vesting service under the
Retirement Plan, and the forfeiture, for any cause,
including death, of the benefit under the
Retirement Plan as described in Subsection
3.1(a)(2) above shall cause the forfeiture of the
Accrued Benefit under the Plan.
<PAGE>
3.2 Time and Method of Payment. The Accrued Benefit shall
commence to be paid with, and continue to be paid as
long as, benefit payments to such Participant or his
spouse or beneficiary entitled thereto under the
Retirement Plan, and shall be paid in the same form and
manner as benefits under the Retirement Plan.
Actuarial equivalency shall be determined in accordance
with the actuarial assumptions set forth in the
Retirement Plan.
ARTICLE IV
Funding
4.1 Funding. All benefits under this Plan shall be paid
directly from the general funds of the Employer, and no
special or separate fund shall be established and no
other segregation of assets shall be made to assure
payment. No Participant, spouse, or beneficiary shall
have any right, title or interest whatever in or to any
investments which Employer may make to aid the Employer
in meeting its obligation hereunder. Nothing contained
in this Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a
trust of any kind, or a fiduciary relationship, between
the Employer and any Participant, spouse, or benefi
ciary of a Participant. To the extent that any person
acquires a right to receive payments from the Employer
hereunder, such rights shall be no greater than the
right of an unsecured creditor of the Employer.
Notwithstanding the foregoing, the Company may at its
sole discretion establish a grantor type trust,
commonly known as a Rabbi Trust, as a vehicle for
accumulating the assets needed to pay the promised
benefit. In the event a Rabbi Trust is established,
such trust shall be funded in accordance with an
actuarial funding method and actuarial assumptions
designed, in the reasonable judgment of an actuary
named by the Company, to replicate the funding policy
followed with respect to the Retirement Plan.
ARTICLE V
Amendment, Administration
5.1 Amendment and Termination. The Company intends the
Plan to be permanent, but reserves the right at any
time to modify, amend, or terminate the Plan, provided
that the Company shall not cancel, reduce, or otherwise
adversely affect the amount of benefits of any
Participant accrued as of the date of any such
modification, amendment, or termination, without the
consent of the Participant.
5.2 Administration. The Plan shall be administered by the
Board of Directors of the Company, which shall be
authorized to interpret the Plan, to adopt rules and
practices concerning the administration of the Plan, to
resolve questions concerning the eligibility for the
amount of the Accrued Benefit, and to delegate all or
any portion of its authority hereunder to a committee
of the Board of Directors or to designated officers or
employees of the Employer.
<PAGE>
5.3 Deduction of Taxes from Amounts Payable. The Employer
may deduct from the amount to be distributed under the
Plan such amount as the Employer, at its sole
discretion, deems proper for the payment of income,
employment, death, succession, inheritance, or other
taxes with respect to benefits under the Plan.
5.4 Indemnification. The Employer shall indemnify and hold
harmless each employee, officer, or director of the
Employer to whom is delegated duties, responsibilities,
and authority with respect to the Plan against all
claims, liabilities, fines and penalties, and all
expenses reasonably incurred by or imposed upon him
(including, but not limited to, reasonable attorney
fees) which arise as a result of his actions or failure
to act in connection with the operation and
administration of the Plan to the extent lawfully
allowable and to the extent that such claim, liability,
fine, penalty, or expense is not paid for by liability
insurance purchased or paid for by the Employer.
Notwithstanding the foregoing, the Employer shall not
indemnify any person for any such amount incurred
through any settlement or compromise of any action
unless the Employer consents in writing to such
settlement or compromise.
5.5 Expenses. The expenses of administering the Plan shall
be paid by the Employer.
ARTICLE VI
Miscellaneous
6.1 Interests not Transferable. Benefits payable under
this Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution, or
levy of any kind, either voluntary or involuntary,
including any such liability which is for alimony or
other payments for the support of a spouse or former
spouse, or for any other relative of a Participant
prior to actually being received by the person entitled
to the benefit under the terms of the Plan, and any
attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, charge, or otherwise dispose
of any right to benefits payable hereunder shall be
void. The Employer shall not in any manner be liable
for, or subject to, the debts, contracts, liabilities,
engagements, or torts of any person entitled to
benefits hereunder. If any person shall attempt to, or
shall alienate, sell, transfer, assign, pledge, or
otherwise encumber his benefits under this Plan, or if
by reason of his bankruptcy or other event happening at
any time, such benefit would devolve upon any other
person or would not be enjoyed by the person entitled
thereto under the Plan, the Board of Directors of the
Company, in its discretion, may terminate the interest
in any such benefits of the person entitled thereof
under the Plan and hold or apply them to or for the
benefit of such person entitled thereto under the Plan
or his spouse, children, or other dependents, or any of
them in such manner as the Board of Directors of the
Company may deem proper.
6.2 Contract of Employment. Nothing contained herein shall
be construed to constitute a contract of employment
between a Participant and the Employer.
6.3 Headings. The headings of Articles and Sections are
included solely for convenience of reference, and if
there is any conflict between such headings and the
text of this Plan, the text shall control.
6.4 Invalidity. If any provision of this Plan shall be
held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions
hereof and the Plan shall be construed and enforced as
if such provisions, to the extent invalid or
unenforceable, had not been included.
6.5 Law Governing. The Plan shall be construed and
enforced according to the laws of Missouri other than
its laws respecting choice of law.
IN WITNESS WHEREOF, the Company has executed this Plan
this 27th day of October, 1994.
By:
By:
ATTEST:
EXHIBIT (12)
Computation of Ratios of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock Dividend
Requirements
<TABLE>
<CAPTION>
Year ended December 31,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Income before provision for income taxes
and fixed charges (Note A) $44,293,156 $37,149,166 $38,458,969 $41,131,878 $35,427,062
Fixed charges:
Interest on first mortgage bonds $12,190,405 $12,382,695 $12,334,718 $12,353,688 $10,954,937
Amortization of debt discount and
expense less premium 766,238 524,649 284,957 204,340 194,540
Interest on short-term debt 710,910 294,558 272,909 287,196 1,409,155
Other interest 239,916 215,708 187,030 177,145 137,098
Rental expense representative of an
interest factor (Note B) 118,587 165,571 123,932 107,093 87,656
Total fixed charges $14,026,056 $13,583,181 $13,203,546 $13,129,462 $12,783,386
Preferred stock dividend requirements:
Preferred stock dividend requirements
not deductible for tax purposes $1,484,992 $304,760 $312,260 $360,260 $431,510
Ratio of income before provision for
income taxes to net income 1.538 1.479 1.494 1.492 1.463
Nondeductible dividend requirements 2,283,918 450,740 466,516 537,508 631,299
Deductible dividends 78,036 80,330 80,330 80,330 80,330
Total preferred stock
dividend requirements $2,361,954 $531,070 $546,846 $617,838 $711,629
Total combined fixed charges and
preferred stock dividend requirements $16,388,010 $14,114,251 $13,750,392 $13,747,300 $13,495,015
Ratio of earnings to fixed charges 3.16 2.73 2.91 3.13 2.77
Ratio of earnings to combined fixed charges
and preferred stock dividend requirements 2.70 2.63 2.80 2.99 2.63
</TABLE>
<FOOTNOTE>
NOTE A: For the purpose of determining earnings in the calculation
of the ratio, net income has been increased by the provision for
income taxes, non-operating income taxes and by the sum of fixed
charges as shown above.
NOTE B: One-third of rental expense (which approximates the interest
factor).
EXHIBIT (24)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statements on Form S-8 (Nos. 33-9238, 2-64667 and 33-
34807 which also serves as a Post-Effective Amendment to Form S-8 No.
2-67598) and to the Prospectus constituting part of the Registration
Statements on Form S-3 (Nos. 33-52713, 33-56635 and 33-54539 which
also serves as a Post-Effective Amendment to Form S-3 No. 33-35308)
of The Empire District Electric Company of our report dated January
16, 1995, appearing on Page 19 of this Form 10-K.
PRICE WATERHOUSE LLP
St. Louis, Missouri
February 24, 1995
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
R. L. LAMB
..............
R. L. LAMB
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
V. E. BRILL
...............
V. E. BRILL
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
G. A. KNAPP
...............
G. A. KNAPP
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
M. F. CHUBB, JR.
...................
M. F. CHUBB, JR.
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
R. D. HAMMONS
................
R. D. HAMMONS
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
R. C. HARTLEY
................
R. C. HARTLEY
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
J. R. HERSCHEND
.................
J. R. HERSCHEND
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
F. E. JEFFRIES
................
F. E. JEFFRIES
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
R. E. MAYES
...............
R. E. MAYES
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
M. W. McKINNEY
................
M. W. McKINNEY
<PAGE>
EXHIBIT (25)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a director
of THE EMPIRE DISTRICT ELECTRIC COMPANY, a corporation organized and
existing under the laws of the State of Kansas, does hereby
constitute and appoint R. L. LAMB and V. E. BRILL, and each of them,
the true and lawful attorney-in-fact of the undersigned, in the name,
place and stead of the undersigned, to sign the name of the
undersigned to the Company's Annual Report Form 10-K for the fiscal
year ended December 31, 1994, File Number 1-3368, to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and to any amendment thereto, and to cause the same to be filed
with the Securities and Exchange Commission, it being intended to
give and hereby giving and granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform any act and
thing necessary and proper to be done in the premises as fully and to
all intents and purposes as the undersigned could do if personally
present; and the undersigned hereby ratifies and confirms all that
said attorneys-in-fact, or any one of them, shall lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 26th day of January 1995.
M. M. POSNER
...............
M. M. POSNER
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AT DECEMBER 31, 1994 AND THE STATEMENT OF INCOME AND THE
STATEMENT OF CASH FLOWS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1994 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 445,841,894
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 35,614,559
<TOTAL-DEFERRED-CHARGES> 38,756,899
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 520,213,352
<COMMON> 13,941,531
<CAPITAL-SURPLUS-PAID-IN> 106,055,389
<RETAINED-EARNINGS> 53,783,342
<TOTAL-COMMON-STOCKHOLDERS-EQ> 173,780,262
0
32,801,800
<LONG-TERM-DEBT-NET> 184,976,950
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 16,000,000
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 112,554,340
<TOT-CAPITALIZATION-AND-LIAB> 520,213,352
<GROSS-OPERATING-REVENUE> 177,756,959
<INCOME-TAX-EXPENSE> 10,679,000
<OTHER-OPERATING-EXPENSES> 135,073,403
<TOTAL-OPERATING-EXPENSES> 145,752,403
<OPERATING-INCOME-LOSS> 32,004,556
<OTHER-INCOME-NET> 601,466
<INCOME-BEFORE-INTEREST-EXPEN> 32,606,022
<TOTAL-INTEREST-EXPENSE> 12,922,923
<NET-INCOME> 19,683,099
1,563,028
<EARNINGS-AVAILABLE-FOR-COMM> 18,120,071
<COMMON-STOCK-DIVIDENDS> 17,752,108
<TOTAL-INTEREST-ON-BONDS> 12,956,643
<CASH-FLOW-OPERATIONS> 40,010,177
<EPS-PRIMARY> 1.32
<EPS-DILUTED> 1.32
</TABLE>
