PROSPECTUS SUPPLEMENT
(To Prospectus Dated April 20, 1995)
$25,000,000
THE EMPIRE DISTRICT ELECTRIC COMPANY
FIRST MORTGAGE BONDS, 7.20% SERIES DUE 2016
The New Bonds offered hereby (the "Bonds") will mature on December 1, 2016 and
are not redeemable prior to maturity. Interest on the Bonds is payable
semi-annually on each June 1 and December 1, beginning June 1, 1997.
The Bonds will be issued and registered only in the name of Cede & Co., as
nominee for The Depository Trust Company, New York, New York ("DTC"), as
registered owner of all the Bonds. Principal and interest payments on the Bonds
will be made to DTC. Individual purchases will be made only in book-entry form
(as described herein). Purchasers of such book-entry interests in the Bonds will
not receive physical delivery of bond certificates and must maintain an account
with a broker, dealer or bank that participates in DTC's book-entry system. See
"Certain Terms of the Bonds -- Book-Entry System," herein.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Price to Underwriting Proceeds to
Public(1) Discount Company(2)
Per Bond............ 100.000% .875% 99.125%
Total .............. $25,000,000 $218,750 $24,781,250
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(1) Plus accrued interest, if any, from December 10, 1996 to date of delivery.
(2) Before deducting expenses payable by the Company estimated to be $140,000.
The Bonds are offered subject to receipt and acceptance by the Underwriter, to
prior sale and to the Underwriter's right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. The Bonds are
being offered by the Underwriter as set forth under "Underwriting" herein. It is
expected that the Bonds will be delivered in book-entry form only, on or about
December 10, 1996, through the facilities of DTC.
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SALOMON BROTHERS INC
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The date of this Prospectus Supplement is December 2, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS HEREBY
OFFERED AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
SUMMARY INFORMATION
The information set forth below should be read in conjunction with, and is
qualified in its entirety by, the detailed information contained in, and the
financial statements incorporated by reference into, this Prospectus Supplement
and the accompanying Prospectus.
THE OFFERING
Issuer...................... The Empire District Electric Company, a Kansas
corporation.
Securities Offered.......... $25,000,000 aggregate principal amount of First
Mortgage Bonds, 7.20% Series due 2016.
Interest Payment Dates..... Semi-annually, on each June 1 and December 1,
beginning June 1, 1997.
Use of Proceeds........... To be added to the Company's general funds which
will be used to repay short-term indebtedness or
for expenses incurred in connection with the
Company's construction program.
CERTAIN SUMMARY FINANCIAL INFORMATION
INCOME STATEMENT DATA:
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-----------------------------
1996 1995 1994 1993
---- ---- ---- ----
(IN THOUSANDS EXCEPT RATIOS)
<S> <C> <C> <C> <C>
Operating Revenues ................... $203,171 $192,838 $177,757 $168,439
Operating Income ..................... 35,047 33,151 32,005 29,291
Net Income............................ 20,584(1) 19,798(1) 19,683 15,936
Ratio of Earnings to Fixed Charges
(2) .................................. 3.03x 2.90x 3.16x 2.73x
</TABLE>
CAPITALIZATION OF THE COMPANY AT SEPTEMBER 30, 1996:
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED (3)
------------------------- -------------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE
----------- ------------- ----------- -------------
(ALL DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C>
First Mortgage Bonds Not Due Within One Year $194,634 44.2% $219,634 47.2%
Preferred Stock.............................. 32,902 7.5 32,902 7.1
Common Stock Equity ......................... 213,010 48.3 213,010 45.7
----------- ------------- ----------- -------------
Total Capitalization....................... $440,546 100.0% $465,546 100.0%
</TABLE>
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(1) Reflects a pre-tax charge of approximately $4.6 million for certain
one-time costs associated with the Company's voluntary early retirement
program.
(2) For the purpose of computing this ratio, earnings consist of net income
(including allowances for funds used during construction) plus current and
deferred income taxes, deferred investment tax credits and fixed charges.
Fixed charges consist of interest charges (before reduction for allowances
for funds used during construction), amortization of debt expense and debt
discount and premium, and the interest factor of rental expense.
(3) Adjusted to reflect the issuance of the Bonds. See "Use of Proceeds."
S-2
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Bonds, after deducting
the underwriting discount and estimated offering expenses, are expected to be
approximately $24.6 million. The net proceeds from the offering will be added to
the Company's general funds which will be used to repay short-term indebtedness
or for expenses incurred in connection with the Company's construction program.
At September 30, 1996, the Company had outstanding approximately $20.5 million
of short-term indebtedness bearing interest at an average rate of 5.52% per
annum. For further information with respect to the Company's construction
program and capital requirements, reference is made to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995 and other
documents incorporated by reference.
CERTAIN TERMS OF THE BONDS
The following information concerning the Bonds supplements and should be read
in conjunction with the statements under "Description of the New Bonds" in the
accompanying Prospectus.
GENERAL
The Bonds will be issued as a new series of the Company's First Mortgage
Bonds under the Mortgage (as defined in the accompanying Prospectus) as
supplemented by the Twenty-Eighth Supplemental Indenture to be dated as of
December 1, 1996.
The Mortgage does not contain any covenant or other provision that
specifically is intended to afford holders of Bonds special protection in the
event of a highly leveraged transaction.
INTEREST AND MATURITY
The Bonds will bear interest at the rate per annum shown on the cover page
hereof, payable semi-annually on June 1 and December 1, beginning June 1, 1997.
Interest will be paid to the person in whose name a Bond is registered at the
close of business on the May 15 or November 15 next preceding each semi-annual
interest payment date. The Bonds will mature December 1, 2016 and will be
limited to a principal amount of $25,000,000.
REDEMPTION
The Bonds are not subject to redemption prior to maturity. There is no
sinking fund applicable to any outstanding series of bonds and the Twenty-Eighth
Supplemental Indenture will not provide a sinking fund for the Bonds.
BOOK-ENTRY SYSTEM
DTC will act as securities depository for the Bonds. The Bonds will be issued
as fully-registered securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully-registered Bond (the "Global Bond") certificate
will be issued for the Bonds, in the aggregate principal amount of $25,000,000,
and will be deposited with DTC.
The Company understands that DTC is a limited-purpose trust company organized
under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. "Direct Participants" include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers
S-3
<PAGE>
and dealers, banks, and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Securities and Exchange Commission.
Purchases of Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Bonds on DTC's records. The
ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is
in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership interests in the
Bonds are to be accomplished by entries made on the books of Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Bonds, except in the event that use of
the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Participants with
DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of Bonds with DTC and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Bonds; DTC's records reflect only the identity of the
Direct Participants to whose accounts such Bonds are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices will be sent to Cede & Co. If less than all of the Bonds
are being redeemed, DTC's practice is to determine by lot the amount of the
Bonds of each Direct Participant to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds.
Under its usual procedures, DTC would mail an Omnibus Proxy to the Company as
soon as possible after the relevant record date. The Omnibus Proxy assigns Cede
& Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Bonds are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Principal and interest payments on the Bonds will be made to DTC. DTC has
advised the Company and the Principal Trustee (as defined in the accompanying
Prospectus) that its present practice is, upon receipt of any payment of
principal or interest, to immediately credit the accounts of the Direct
Participants with such payment in amounts proportionate to their respective
beneficial interests in the Global Bond as shown on the records of DTC. Payments
by Direct and Indirect Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the
Trustees (as defined in the accompanying Prospectus) or the Company, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of the Company or
the Principal Trustee; disbursement of such payments to Direct Participants will
be the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners will be the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depository with
respect to the Bonds at any time by giving reasonable notice to the Company or
the Principal Trustee. Under such circumstances, in the event that a successor
securities depository is not obtained, Bond certificates are required to be
printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Bond certificates will be printed and delivered.
Beneficial Owners should consult with the Direct Participant or Indirect
Participant from whom they purchased a book-entry interest to obtain information
concerning the system maintained by such
S-4
<PAGE>
Direct Participant or Indirect Participant to record such interests, to make
payments and to forward notices of redemption and other information.
Neither the Company nor either Trustee have any responsibility or liability
for any aspects of the records or notices relating to, or payments made on
account of, book-entry interest ownership, or for maintaining, supervising or
reviewing any records relating to that ownership.
UNDERWRITING
Subject to the terms and conditions of a purchase agreement (the "Purchase
Agreement") between the Company and Salomon Brothers Inc (the "Underwriter"),
the Underwriter has agreed to purchase and the Company has agreed to sell an
aggregate of $25,000,000 principal amount of the Bonds.
The Purchase Agreement provides that the obligations of the Underwriter are
subject to certain conditions precedent. The Underwriter will be obligated to
purchase the entire principal amount of the Bonds if any of the Bonds are
purchased.
The Company has been advised by the Underwriter that it proposes initially to
offer the Bonds to the public at the public offering price set forth on the
cover page of this Prospectus Supplement, and to certain dealers at such price
less a concession not in excess of 0.50% of the principal amount of the Bonds.
The Underwriter may allow and such dealers may reallow a concession not in
excess of 0.25% of the principal amount of the Bonds to certain other dealers.
After the initial public offering, the public offering price and such
concessions may be changed.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
and to contribute to payments that the Underwriter may be required to make in
respect thereof.
There is at present no trading market for the Bonds. The Underwriter is not
obligated to make a market in the Bonds, and the Company cannot predict whether
a trading market for the Bonds will develop or, if developed, will be
maintained. The Company does not intend to apply for listing of the Bonds on a
national securities exchange.
LEGAL MATTERS
Certain legal matters in connection with the Bonds are being passed upon by
Spencer, Scott & Dwyer, P.C., Joplin, Missouri; Anderson, Byrd, Richeson &
Flaherty, Ottawa, Kansas; Brydon, Swearengen & England, Professional
Corporation, Jefferson City, Missouri; and Cahill Gordon & Reindel, New York,
New York, counsel for the Company. Certain legal matters are being passed upon
for the underwriters or purchasers by Thompson Coburn, St. Louis, Missouri.
Cahill Gordon & Reindel is relying as to matters of Kansas law upon the opinion
of Anderson, Byrd, Richeson & Flaherty, as to matters of Missouri law (except as
to matters relating to the approval of the Missouri Public Service Commission)
upon the opinion of Spencer, Scott & Dwyer, P.C. and as to matters relating to
the approval of the Missouri, Arkansas and Oklahoma public utility commissions
upon the opinion of Brydon, Swearengen & England, Professional Corporation.
EXPERTS
The statements of law and legal conclusions made under "Description of the
New Bonds--Security" in the accompanying Prospectus have been reviewed by
Spencer, Scott & Dwyer, P.C. and are included in reliance upon the authority of
that firm as experts. As of November 27, 1996, members of Spencer, Scott &
Dwyer, P.C. held an aggregate of 6,675 shares of the Company's Common Stock.
The audited financial statements and financial statement schedule of the
Company incorporated in this Prospectus Supplement and the accompanying
Prospectus by reference to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
S-5
<PAGE>
No dealer, salesperson, or any other $25,000,000
person has been authorized to give
any information or to make any
representations other than those
contained in this Prospectus
Supplement or the Prospectus in
connection with the offer contained
in this Prospectus Supplement and the
Prospectus and, if given or made,
such information or representations THE EMPIRE DISTRICT
must not be relied upon as having ELECTRIC COMPANY
been authorized by the Company or the
Underwriter. Neither the delivery of
this Prospectus Supplement and the
Prospectus nor any sale made
hereunder shall, under any
circumstances, create any implication
that there has been no change in the
affairs of the Company since the date
hereof. This Prospectus Supplement
and the Prospectus are not an offer
to sell or a solicitation of an offer
to buy any security in any
jurisdiction in which it is unlawful FIRST MORTGAGE BONDS,
to make such offer or solicitation. 7.20% SERIES DUE 2016
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TABLE OF CONTENTS
PAGE
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Prospectus Supplement
Summary Information ...............S-2
Use of Proceeds ...................S-3
Certain Terms of the Bonds ........S-3
Underwriting ......................S-5
Legal Matters .....................S-5
Experts ...........................S-5
Prospectus
Available Information .............. 2
Incorporation of Certain
Documents by Reference ............ 2
The Company ........................ 3
Use of Proceeds .................... 3 ----------------------
Description of the New Preferred SALOMON BROTHERS INC
Stock.............................. 3 ------------------------
Description of the New Bonds ....... 6
Plan of Distribution ............... 9 PROSPECTUS SUPPLEMENT
Legal Matters ......................10
Experts.............................10 DATED DECEMBER 2, 1996
