SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
(Amendment No. 49)
Tender Offer Statement
(Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934)
Kansas City Power & Light Company
(Name of Subject Company)
Western Resources, Inc.
(Bidder)
Common Stock, Without Par Value
(Title of Class of Securities)
48513410
(CUSIP Number of Class of Securities)
John K. Rosenberg
Executive Vice President and General Counsel
Western Resources, Inc.
818 Kansas Avenue
Topeka, Kansas 66612
Phone: (913) 575-6300
(Name, Address, including Zip Code, and Telephone
Number, including Area Code, of Agent for Service)
Copies to:
Neil T. Anderson
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
William S. Lamb
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
(212) 424-8000
This Amendment No.49 amends and supplements the Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1"), originally filed by Western Resources,
Inc., a Kansas corporation ("Western Resources"), on July 8, 1996 relating to
the exchange offer disclosed therein to exchange all of the outstanding Shares
for shares of Western Resources Common Stock upon the terms and subject to the
conditions set forth in the Prospectus, dated July 3, 1996, and the related
Letter of Transmittal. Capitalized terms used and not defined herein shall
have the meanings set forth in the Schedule 14D-1.
Item 11. Material to be Filed as Exhibits.
Item 11 is hereby amended and supplemented by adding thereto the
following:
(a)(130) Advertisement issued on October 28, 1996.
(a)(131) Presentation made at Edison Electronic Institute beginning
October 28, 1996.
(a)(132) Third Quarter Financial Update for Western Resources, Inc.
distributed on or about October 28, 1996.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
WESTERN RESOURCES, INC.
Date October 28, 1996 By /s/ JERRY D. COURINGTON
Jerry D. Courington,
Controller
<PAGE>
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Description Pages
(a)(130) Advertisement issued on October 28, 1996 1
(a)(131) Presentation made at the Edison Electric 37
Institute beginning October 28, 1996.
(a)(132) Third Quarter Financial Update for Western 8
Resources Inc. distributed on or about
October 28, 1996.
Exhibit No. (a)(130)
The following advertisement was issued on October 28, 1996:
THANK YOU KCPL SHAREOWNERS
27 MILLION KCPL SHARES ALREADY TENDERED.
What does this mean to you?
1. This means by tendering nearly 44 percent of all KCPL shares to Western
Resources so far, KCPL shareowners are calling on the board to make this
a friendly merger now. We believe the KCPL board should hear what so
many shareowners are saying.
2. This means you have nothing to lose by tendering your KCPL shares to
Western Resources and everything to gain. We will serve as the "safety
deposit box" for your shares until we are ready to buy your shares in
1997. Until then, we can arrange for you to get your shares back quickly
if you need them for any reason. All KCPL dividends will continue to
come to you. Voting rights remain yours.
3. This means when you tender your KCPL shares that it can help us create a
stronger company with greater value for you-short term and long term.
We are extending our expiration date to November 15, 1996, to give all KCPL
shareowners the opportunity to tell the KCPL board that they support the
Western Resources' offer* of $31 and a projected $2.00-$2.35 dividend per KCPL
share.
To tender your shares by November 15, 1996, call your broker or call toll-free
1-800-223-2064.
[logo]
Western Resources
* Dividend per KCPL share is based upon Western Resources' projected annual
dividend rate of $2.14 per share of Western Resources common stock in the
first year after the merger and the exchange ratio in Western Resources'
offer. Price per KCPL share (payable in Western Resources common stock)
assumes that Western Resources' average share price is between $28.18 and
$33.23 at the time of closing. Western Resources' exchange of KCPL shares
pursuant to its offer is subject to certain conditions which Western Resources
anticipates will be satisfied by the end of 1997.
This advertisement is neither an offer to exchange nor a solicitation of an
offer to exchange shares of common stock of KCPL. Such offer is made solely by
the Prospectus dated July 3, 1996, and the related Letter of Transmittal, and
is not being made to, nor will tenders be accepted from or on behalf of,
holders of shares of common stock of KCPL in any jurisdiction in which the
making of such offer or the acceptance thereof would not be in compliance with
the laws of such jurisdiction. In any jurisdictions where securities, blue sky
or other laws require such offer to be made by a licensed broker or dealer,
such offer shall be deemed to be made on behalf of Western Resources, Inc. by
Salomon Brothers Inc or one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
<page1>
Exhibit No. (a)(131)
Presentation made at the Edison Electric Institute beginning October 28, 1996:
Page 1
Western Resources
The Company
The Vision
The Plan
Page 2
Overview
* Who is Western Resources?
* Western Resources' Strategic Plan
- Core Business
- National Branded Business
- International Power Development
* Why Does WR/KCPL Merger Make Sense?
Page 3
Who is Western Resources?
"Western Resources will be the leading provider of energy and energy-
related services for homes and businesses."
Page 4
Who we are
Page 5
Opportunity
70-years old, $6 billion in assets, 1.2 million customers . . . and that's
just the beginning.
"A wise man will make more opportunities than he finds."-Francis Bacon
"We will increase our customer base through new products and services that
will make our customers' lives a little easier."-Western Resources
Page 6
History
* 1924: Company founded under the name The Kansas Power and Light Company
* 1980: Profile -- The Kansas Power and Light Company:
- 400,000 customers
- Less than $1 billion total assets
- Less than $300 million in market value
- $49 million earnings
* 1983: Bought Gas Service Company for $70+ million
* 1988: Began Rangeline (now Westar Energy) Gas Marketing
* 1992: Merged with Kansas Gas & Electric to create Western Resources
* 1992: Launched Astra Resources
* 1993: Sold 40% of Gas Service for $400+ million
* 1995: Acquired Mobilfone Security and CSI to start Westar Security
* 1996: Acquired The Wing Group
Page 7
Today's Western Resources
* 650,000 natural gas customers in Kansas and Oklahoma
* 600,000 electric customers in Kansas
* More than $6 billion in assets
* Market value of $1.9 billion
* Earnings of $183 million, 12-months-ended 9/30/96
Page 8
Financial Statistics
* Market price at 10/22/96 = $29.50
52-week high/low $34.875 - $28
* Dividends:
- 1996 indicated annual dividend = $2.06
- Paid every year since 1924
- Increased every year for the last 20 years
* Current yield = 7.0%
* Bond ratings of A- and A3
Page 9
Where we are going
Page 10
Vision
Western Resources will be the leading provider of energy and energy-related
services for homes and businesses.
"Progress is impossible without change."-George Bernard Shaw
"In this new era, maintaining the status quo is one of the riskiest strategies
we could pursue."-Western Resources
Page 11
Our Strategic Plan for Growth
* Maintain a strong core utility business
* Build a branded national presence
* Become a leader in the international energy business
Page 12
Strategic Priority: Strong Core Business
Characteristics:
* Low-cost producer of energy
* Strong brand identity
* Superior customer satisfaction levels
Opportunities:
* Increase product offerings to consumers
* Lower costs through reorganization
Investment Strategies :
* Business will generate cash flow to fund growth businesses
* Acquisition opportunities include KCPL
Page 13
Strategic Priority: Branded National Presence
Characteristics:
* No utility has more than 4% of market
* WR has 1% of market; critical mass goal is 5-10 million customers, or
5%-10% of market
* Electric utilities may not yet sell outside franchises, except to other
utilities and municipalities
* Federal and state legislative changes will likely allow utilities to
compete for customers similar to AT&T, MCI, and Sprint
Page 14
Strategic Priority: Branded National Presence
Opportunities:
* Find a product with characteristics similar to electricity or natural
gas that may be sold nationwide today. . . security
* Sell products (electricity, natural gas, & security) under umbrella of
brand names, similar to General Motors -- i.e. Oldsmobile,
Chevrolet, Saturn, etc.
* Today WR markets under Westar, KPL, KGE, and soon to market under the
resurrected Gas Service name
Page 15
Strategic Priority: Branded National Presence
Investment Strategies:
* Income opportunities will reside with end-user consumers and low-cost
generation
* One opportunity is ADT
- 7% market share
- 20%+ market share of top 100 security providers
- Only 20% of market penetrated
Page 16
Strategic Priority: Leader in the International Energy Business
Characteristics:
* Much of the growth in generating facilities and energy consumption
during the next 20 years will take place outside the U.S.
* Most of the growth will occur in developing nations, like China
* Foreign countries are privatizing generation now; eventually
distribution will follow
Page 17
Strategic Priority: Leader in the International Energy Business
Opportunities:
* Develop relationships with central governments
* Find local partners; seek third-party financial partners
* Receive carried interest for structuring expertise and obtain
opportunity for equity investment as appropriate
* Position involvement with an eye toward eventual distribution
privatization
Page 18
Strategic Priority: Leader in the International Energy Business
Investment Strategies:
* Those who build infrastructure will be best-positioned to serve end
users eventually
* Acquisition opportunities include:
- Wing-type developers
- Existing plants
- Greenfield projects
Page 19
What we see
Page 20
Future
New opportunities for growth for aggressive, visionary companies.
"Vision is the art of seeing things invisible."-Jonathan Swift
"The future is going to run on energy."-Western Resources
Page 21
Western Resources' Unregulated Businesses
Organizational Chart:
Western Resources
- Westar Energy
- Westar Security
- The Wing Group
- Westar Capital
Page 22
Westar Energy
* Began in 1988 as Rangeline Gas Marketing
* Unregulated, full-service natural gas marketer, serving mostly large
users -- industrial, commercial, and municipal
* Profile:
- Revenues of $193 million 12-months-ended 9/30/96
- Currently serve 500 large customers
- Recently won 8% of Wyoming Retail Option customers
Page 23
Westar Energy
* 1996 - 2000
- Continue to grow gas marketing presence
- Participate in unregulated opportunities to gain customers
- Leverage large wholesale power position
Page 24
Westar Energy
Westar Gas Marketing
CHART: Map of the United States which discloses the states in which Westar Gas
Marketing conducts operations.
Page 25
Westar Energy
National Electric Marketing-
Retail Wheeling Possible Opportunities
CHART: Map of the United States which discloses the states in which Westar
Energy National Electric Marketing has possible retail wheeling opportunities.
Page 26
Westar Energy
National Electric Marketing
Westar Resources Off-System Transactions
CHART: Map of the United States which discloses the states in which Western
Resources has made Off-System Transactions.
Page 27
Westar Security
* Acquired CSI, Mobilfone, Sentry, Safeguard and CMS within the last year
* We serve 105,000 customers, making us the 10th largest security company,
by estimated customer count, in the country
* This growth further establishes the Westar name with a branded product
identity
Page 28
Westar Security
CHART: Map of the United States which discloses the states in which Westar
Security conducts operations.
Page 29
Westar Marketing Reach
CHART: Map of the United States which discloses the states in which Westar
Marketing reaches.
Page 30
The Wing Group
* Purchased in early 1996
* Premier developer of power projects in the world
* Signed an agreement with CPI in September, involving more than 2,000 MW
generation
* Closing on Turkey project, a 478 MW plant, in the fourth quarter
* 1996 - 2000
- Focus on Asia and South America
- Seek majority of capital from third parties
Page 31
International Power Development - The Wing Group
CHART: Map of the world which discloses the countries in which The Wing Group
conducts operations.
Page 32
Westar Capital
* Acquired a 34-million-share stake in ADT
- Value of $650 million vs. cost of $500 million
* Contract Compression
- Acquired in 1992 for $20 million
- Sold in 1995 to Hanover for $60 million in stock
- Company plans to go public in 1997
Page 33
How KCPL fits in
Page 34
Strategy
This merger will create one of the country's premier energy companies.
"Destiny is not a matter of chance, it is a matter of choice; it is not a
thing to be waited for, it is a thing to be achieved."-Williams Jennings Bryan
"Competition is here, and we embrace it."-Western Resources
Page 35
Western Resources / KCPL Merger
* $31.00 vs. $23.875 per share (*)
* $2.00 - $2.35 dividend (*)
- At current pace (4 cents annually), it will take KCPL 10 to 19
years to reach the same level
* Western Resources has a business plan that differentiates our company
from the majority of the industry
* Solicitation fee program for brokers
(*) Subject to exchange ratio of 0.933 - 1.100 Western Resources shares for
each KCPL share. KCPL closing share price of $23.875 on the last trading day
before announcement of initial Western Resources' offer. Dividend at closing
based on 1998 post-merger annual dividend rate of $2.14 per Western Resources'
share as projected in Western Resources' exchange offer and the exchange
ratio. Western Resources' current indicated annual dividend is $2.06 per
share.
Page 36
What it will mean
Page 37
Achievement
A sure course for success.
"Success is about shaking convention to it roots."-Victor Hugo
"Our financial projections are sound and achievable."-Western Resources
Back page (no page number)
This booklet is neither an offer to exchange nor a solicitation of an
offer to exchange shares of common stock of KCPL. Such offer is made
solely by the Prospectus dated July 3, 1996, and the related Letter of
Transmittal, and is not being made to, nor will tenders be accepted
from or on behalf of, holders of shares of common stock of KCPL in any
jurisdiction in which the making of such offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction.
In any jurisdiction where securities, blue sky or other laws require
such offer to be made by a licensed broker or dealer, such offer shall
be deemed to be made on behalf of Western Resources, Inc., by Salomon
Brothers, Inc. or at least one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
<page2>
Exhibit No. (a)(132)
The following Third Quarter Financial Update for Western Resources, Inc. will
be distributed to the investment community on or about October 28, 1996:
COVER PAGE:
THIRD QUARTER
PERIOD ENDING SEPTEMBER 30, 1996
1996
FINANCIAL
UPDATE
IN THIS ISSUE
Cooler than normal weather affects earnings.
Exchange offer for KCPL Moves Forward.
Rapid expansion of security business continues.
Company adds to ADT investment.
Westar Gas Marketing's reach broadens.
Company enters markets in China and Turkey.
WESTERN RESOURCES
[LOGO]
INSIDE COVER FRONT PAGE:
FINANCIAL DATA AND RATIOS
For Twelve Months Ended September 30, 1996
(unaudited)
1996 1995
COMMON STOCK DATA:
Average shares outstanding (000's) 63,385 61,874
Earnings per share $2.62 $2.51
Dividends declared per share $2.06 $2.01
Dividends payout ratio 78% 80%
Book value per share, end of period $25.14 $24.51
Closing market price, end of period $29.125 $32.625
Price range, twelve month period
High $34.875 $33.375
Low $28.000 $27.375
Annualized dividend yield 7.0% 6.2%
Price/Earnings ratio 11.1 13.0
Return on average common equity 10.6% 10.5%
Number of common shareholders 64,371 66,273
Average daily volume traded 178,223 116,062
COVERAGE RATIOS:
Interest Coverage (incl. AFUDC)
Pretax 2.9 3.1
After tax 2.3 2.4
Interest Coverage (excl. AFUDC)
Pretax 2.9 3.1
After tax 2.3 2.3
Interest and Preferred
Dividend Coverage (incl. AFUDC) 2.0 2.1
First Second Third Exp. Fourth
Quarter Quarter Quarter Quarter
1996 DIVIDEND INFORMATION
Declaration Date 01/24/96 05/07/96 07/18/96 11/12/96
NYSE Ex-Dividend Date 02/28/96 05/29/96 08/28/96 11/28/96
Record Date 03/04/96 06/04/96 09/04/96 12/03/96
Payment Date 04/01/96 07/01/96 10/01/96 01/02/97
Common Dividend
Declared Per Share $0.515 $0.515 $0.515
WESTERN RESOURCES
[LOGO]
Western Resources (NYSE:WR) is a full-service, diversified energy company with
total assets of more than $6 billion. Its utilities, KPL and KGE, operating in
Kansas and Oklahoma, provide natural gas service to approximately 650,000
customers and electric service to approximately 600,000 customers. Through
its unregulated subsidiaries, Westar Energy, Westar Security, Westar Capital,
and The Wing Group, a full range of energy and energy-related products and
services are developed and marketed in the continental U.S., and offshore.
For more information about Western Resources and its operating companies,
visit us on the Internet at http://www.wstnres.com.
SIDE MARGIN FILLER:
Company Listed on the CBOE
On October 1, the Chicago Board Options Exchange (CBOE) began trading
options on Western Resources stock. The CBOE is the largest options exchange
in the United States. It lists more than 680 domestic and foreign stocks,
including just 13 utilities.
Stocks are selected by the CBOE for trading based on the recommendation
of one or more of the CBOE's research analysts. Selection criteria center on
three main requirements: good trading volume of the stock, a minimum trading
price of $7.50, and minimum of seven million shares held publicly by at least
2,000 shareholders.
PAGE 1:
Cooler Than Normal Weather Affects Earnings
Third quarter 1996 earnings per share at $0.87 were $0.23 below the same
quarter last year. Earnings per share, year-to-date, are running slightly
behind last year, at $1.93 versus $2.02.
Weather, always an important factor in energy sales, was unseasonably
cool during this year's traditional air conditioning period. Cooling degree
days, a measure of air conditioning demand, were 23 percent off last year's
third quarter totals and 17 percent lower than normal. Sales decreased in all
electric retail classes, declining overall six percent.
Wholesale electricity sales, however, continued to show substantial
advances compared to last year. For the third quarter, wholesale electric
volumes are up 42 percent from last year's totals and up 40 percent year to
date from volumes recorded in 1995.
The decrease in electric sales and revenues was offset to some extent by
a two percent increase in natural gas volumes and a 25 percent increase in
natural gas revenues for the three months ended in September, as compared to
1995. The increase in natural gas revenues is primarily the result of sales
under the as-available category.
Operating revenues were $490,172,000 for the quarter versus
$470,289,000 in third quarter 1995, a four percent increase. Operating
expenses rose seven percent from a year ago to $396,585,000, compared to
$370,808,000. Increases in operating expenses occurred to cover amortization
of the adjustment of our company's 1992 acquisition of KGE in the amount of $5
million. Increases in other operations expenses were attributable to
increased activity and expansion in our subsidiaries.
Exchange Offer for KCPL Moves Forward
Encouraged by the momentum we gained when the Kansas City Power & Light
Company (KCPL) shareowners clearly defeated a merger with UtiliCorp United,
our company is moving ahead with our exchange offer.
On September 16, The Corporation Trust Company, the independent,
third-party company hired by KCPL to count votes cast by KCPL shareowners at a
special meeting on August 16, reported that only 38 percent of KCPL common
shares voted for the UtiliCorp/KCPL proposal. A two-thirds vote in favor of
the UtiliCorp proposal was needed to approve that merger. Consequently, KCPL
terminated its merger agreement with UtiliCorp on September 18.
We believe the vote result sends a strong message from KCPL shareowners
to KCPL's senior management and board of directors that our offer -- the only
offer on the table -- should receive true consideration. A recent telephone
poll, conducted by Fleishman-Hillard Opinion Research, reinforces our belief.
A clear majority -- 68 percent -- of KCPL shareowners surveyed say it is time
for KCPL executive management and its board to listen to our merger offer.
We continue our exchange offer, but there are benefits for everyone if
this matter can be concluded promptly and we welcome a chance to talk directly
with the KCPL board.
The expiration date of our offer was extended from September 20 to
October 25, 1996. We may extend the expiration date for the exchange offer.
KCPL shareowners who tender their KCPL shares for $31 worth of Western
Resources common shares will continue to have KCPL voting rights and be paid
the KCPL dividend until the exchange is completed. The $31 per share stock
exchange price per KCPL share (payable in Western Resources common stock)
assumes that Western Resources' average share price is between $28.18 and
$33.23 at the time the merger closes.
SIDE MARGIN FILLER:
BAR GRAPH
COOLING DEGREE DAYS
1995 - 1,390
1996 - 1,068
NORMAL 20-YEAR AVG. - 1,284
CAPTION: The company's service territory experienced a 23% decrease in the
number of cooling degree days during the third quarter of 1996, as compared to
the same quarter in 1995. Cooling degree days were also 17% lower than normal.
The Wing Group Teams with Westcoast Power
The Wing Group, the company's power project development arm, signed a
joint venture with Westcoast Power, Inc. The venture is designed to assist
about 20 communities in upstate New York to purchase, or develop alternative
sources of electricity, at reduced prices.
Westcoast Power is a unit of Westcoast Energy, Inc., a natural gas
company that develops, builds and operates power and cogeneration facilities.
PAGE 2:
Many KCPL shareowners have told us they want KCPL well positioned to be
able to compete in the changing energy environment. We continue to believe
that the combination we offer provides the enhanced value and vision that will
accomplish that positioning while adding to Western Resources' shareowner
value.
Rapid Expansion of Security Business Continues
In addition to pursuing strategic, regulated acquisitions like KCPL, we
are increasing our company's involvement in the energy-related products and
services markets.
In the third quarter, our fast-growing subsidiary, Westar Security,
added more customers through the acquisitions of Safeguard Alarms, Inc. and
Computerized Monitoring Services (CMS).
As one of the nation's fastest growing security companies, Westar
Security has completed five security operation acquisitions in less than one
year. The recent acquisitions place Westar Security as the 10th largest
security services company, by customer count, in the nation.
Westar Security now provides security services to more than 105,000
customers and has offices in Topeka, Kansas City, Wichita, Omaha, Atlanta and
Orlando.
Safeguard has been a family-owned and operated company in Kansas City
for more than 30 years and has a strong reputation for customer service in
Kansas City. Safeguard expands our presence in the Kansas City market and is
the second acquisition of a security service business in that area in the past
three months. We are now the second largest monitored security
provider in Kansas City.
Westar Security also extended its presence in the southeast United
States when it acquired CMS, of Orlando, Florida, in July. CMS is the
preeminent provider of monitoring of security systems for customers in
Florida, Georgia, Tennessee, Louisiana, North Carolina and South Carolina.
We believe the monitored security business is an area that promises
double-digit growth and offers a myriad of opportunities for us to grow our
customer base, establish excellent service relationships and provide
energy-related products to a new group of customers, all in anticipation of
energy deregulation.
Company Adds to ADT Investment
Earlier this year, we completed the acquisition of a 23 percent stake in
ADT Limited. In the third quarter, we added to our holdings to increase our
interest to about 24 percent of the outstanding shares of ADT.
ADT is the largest provider of electronic security systems and services
for homes and businesses. With more than 1.5 million customers, ADT is bigger
than its top three competitors combined.
An affiliation with ADT could strengthen our ability to market energy
and energy-related products and services under an established, recognized
national brand name.
For Western Resources, ADT is a long-term investment in a rapidly
growing, highly fragmented industry. Our investment in ADT has been adding
value: our 34 million share interest cost $504 million, but today is valued at
$650 million.
SIDE MARGIN FILLER:
WESTAR SECURITY
Map of the United States which discloses the states in which Westar Security
conducts operations.
CAPTION: Westar Security is now the 10th largest security company in the
United States, with customers in 11 states.
Freedom Energy Gets Support from Westar
Westar Energy, a subsidiary of Western Resources, has acquired an
interest in marketer-aggregator Freedom Energy to compete for retail
electricity business in New Hampshire.
Freedom is asking the New Hampshire Public Utilities Commission to let
it immediately compete for retail customers. The financial agreement
furnishes Westar access the New England market. New Hampshire and bordering
states have plans to implement full retail choice between 1998 and 2000.
Under the agreement, Westar will issue debt to Freedom and be
compensated by receiving a preferred return up to a specified level. Above
that level, returns would be allocated between Westar and Freedom.
PAGE 3:
Westar Gas Marketing's Reach Broadens
Westar Gas Marketing, another growth subsidiary, expanded customer
contact by opening offices in Omaha, Columbus, and Tulsa during the third
quarter. These new marketing outlets are in addition to branch offices opened
earlier this year in Wichita, Kansas City and St. Louis. Westar Gas Marketing
is headquartered in Topeka.
Westar Gas Marketing is a full service natural gas marketing company
offering the services of natural gas marketing and sales, purchasing and
supply, transportation management, gathering, liquids processing, and liquids
marketing. The subsidiary emphasizes sales of natural gas directly to
end-users and small to mid-size local distribution companies (LDCs) and
municipalities.
About 500 residential natural gas customers were added recently as a
result of winning eight percent of the customers involved in the Wyoming
Retail Option pilot program. This program allowed consumers in 10 towns in
southeast Wyoming to choose, through a referendum, their natural gas supplier.
Westar Gas Marketing also has exhibited steady growth since its
inception in 1988. Revenues total $151 million year to date in 1996, as
compared to $146 million for all of 1995.
Company Enters Markets in China and Turkey
Through The Wing Group, the company announced last quarter expansion
into international power markets in China and Turkey.
In September, we announced plans to partner with China Power
International Holdings. Ltd., in seven coal-fired power development projects
with generating capacities totaling more than 2,000 megawatts. These projects
will be characterized by low-cost power production and are located in the
Central provinces of China. The agreement initially involves an investment of
$50 million, but may eventually entail the investment of $500 million and
gives us interest in seven power plants and the option to expand the capacity
of other existing plants in the People's Republic of China.
In another significant project, The Wing Group also plans to construct a
478 megawatt combined-cycle power project in Marmara, Turkey.
This project should close in the fourth quarter. Other partners include
Enron Corporation, Midlands Electricity of the United Kingdom and GAMA
Industries of Turkey.
Much of the growth in generating facilities and energy consumption
during the next 20 years will take place outside the U.S. Most of that growth
will occur in developing nations, like China. China's electricity demand more
than quadrupled between 1971 and 1990, and is expected to double again by
2010.
Establishing these international relationships gives the company a prime
opportunity to become a leader in meeting the world's energy needs. Our
international investment strategy is governed by three drivers: finding local
partners, seeking the majority of capital from third parties, and positioning
our involvement in infrastructure construction with a view to the eventual
privatization of distribution channels. Our growing presence in the
international market serves well our strategies to broaden our competitive
energy operations, grow the company worldwide, and maximize shareowner value.
The Wing Group, the premier developer of large international power
generation projects, was acquired by Western Resources earlier this year.
Included in the acquisition are options to obtain the rights to operating
income from individual projects for 20 years following their development.
SIDE MARGIN FILLER:
China Power Photo
CAPTION: In September, Western Resources sealed plans to partner with China
Power International Holdings, Ltd., in several power development projects to
be located in the Central provinces of China.
PAGES 4 - 7 CONTAIN THIRD QUARTER FORM 10-Q FINANCIAL STATEMENTS WHICH WERE
FILED WITH THE SEC ON OCTOBER 25, 1996.
PAGE 8:
<TABLE>
FINANCIAL AND OPERATING STATISTICS WESTERN RESOURCES, INC.
THIRD QUARTER
(unaudited)
<CAPTION>
Three Months Ended Twelve Months Ended
September 30, September 30,
1996 1995 %Change 1996 1995 %Change
<S> <C> <C> <C> <C> <C> <C>
REVENUE FROM ELECTRIC SALES (000's):
Residential $ 133,519 $ 149,212 (10.5) $ 400,530 $ 393,702 1.7
Commercial 104,681 109,019 (4.0) 348,394 340,270 2.4
Industrial 68,083 72,763 (6.4) 264,372 267,816 (1.3)
Other 8,611 9,577 (10.1) 33,741 36,208 (6.8)
Total Retail Electric Sales 314,894 340,571 (7.5) 1,047,037 1,037,996 0.9
Wholesale 40,565 30,582 32.6 130,612 101,892 28.2
Total $355,459 $371,153 (4.2) $1,177,649 $1,139,888 3.3
KWH SALES (000's):
Residential 1,643,651 1,832,565 (10.3) 5,200,188 5,048,085 3.0
Commercial 1,647,941 1,709,715 (3.6) 5,595,739 5,456,776 2.5
Industrial 1,465,323 1,519,694 (3.6) 5,653,440 5,567,478 1.5
Other 26,200 27,040 (3.1) 105,091 108,503 (3.1)
Total Retail Electric Sales 4,783,115 5,089,014 (6.0) 16,554,458 16,180,842 2.3
Wholesale 1,593,508 1,123,051 41.9 5,205,923 3,842,761 35.5
Total 6,376,623 6,212,065 2.6 21,760,381 20,023,603 8.7
SYSTEM NET LOAD
MW 4,009 3,979
Date 07/19/96 08/28/95
FUEL-MIX TO TOTAL
Coal 76 % 76 %
Nuclear 20 19
Oil - -
Natural Gas 4 5
100 % 100 %
REVENUE FROM NATURAL GAS SALES ($000's):
Residential $31,575 $26,392 19.6 $328,415 $253,351 29.6
Commercial 11,967 14,248 (16.0) 109,121 91,555 19.2
Industrial 465 771 (39.7) 2,980 3,038 (1.9)
Sales for resale and other 17,095 6,666 * 43,602 24,066 *
Total Gas Service Sales 61,102 48,077 27.1 484,118 372,010 30.1
Transportation 4,771 4,630 3.0 22,113 22,114 0.0
Total $65,873 $52,707 25.0 $506,231 $394,124 28.4
MCF SALES (000's):
Residential 3,957 3,888 1.8 60,325 54,179 11.3
Commercial 1,632 3,160 (48.4) 21,112 21,776 (3.0)
Industrial 76 113 (32.7) 480 567 (15.3)
Sales for resale and other 8,124 4,228 92.1 19,381 12,675 52.9
Total Gas Service Sales 13,789 11,389 21.1 101,298 89,197 13.6
Transportation 11,016 13,050 (15.6) 45,490 50,596 (10.1)
Total 24,805 24,439 1.5 146,788 139,793 5.0
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BACK INSIDE COVER PAGE:
This quarterly financial update is neither an offer to exchange nor a
solicitation of an offer to exchange shares of common stock of KCPL. Such
offer is made solely by the Prospectus dated July 3, 1996, and the related
Letter of Transmittal, and is not being made to, nor will tenders be accepted
from or on behalf of, holders of shares of common stock of KCPL in any
jurisdiction in which the making of such offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. In any jurisdictions
where securities, blue sky or other laws require such offer to be made by a
licensed broker or dealer, such offer shall be deemed to be made on behalf of
Western Resources, Inc. by Salomon Brothers Inc or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
BACK COVER PAGE:
WESTERN RESOURCES, INC.
818 Kansas Avenue
P.O. Box 889
Topeka, Kansas 66601-0889
Please direct inquiries to:
Richard D. Kready
Director, Investor Relations
Home Page: hhtp://www.wstnres.com
E Mail: [email protected]
Phone 913-575-8226
FAX 913-575-8160
This material is not intended to induce or for use in connection with any
sale, offer to sell, or solicitation of an offer to buy any securities of the
company.
WESTERN RESOURCES
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