SCHEDULE 14A INFORMATION
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KANSAS CITY POWER & LIGHT COMPANY
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####
[Cover of Fact Booklet]
Title: KCPL and UtiliCorp
A new world of energy
Vote your proxy to make our vision a reality
[Inside Front Cover]
(Qualifying statement: This Fact Book does not purport to be
complete, and is qualified in its entirety by reference to the
more detailed information appearing in the Joint Proxy
Statement/Prospectus of Kansas City Power & Light Company and
UtiliCorp United (including the Annexes thereto) which
accompanies this Fact Book. In addition, some statements may
represent the opinions of management. Shareholders are urged to
read the Joint Proxy Statement/Prospectus and Annexes in their
entirety.)
Two distinct companies ... One unique vision
[Graphic: Two smaller pie charts, showing stand-alone revenue
breakouts for KCPL's and UtiliCorp's regulated and nonregulated
areas. One larger pie chart depicts proforma combined revenue
numbers for regulated and nonregulated areas.]
Pie Chart One: KCPL
Regulated 100%
Nonregulated 0%
Pie Chart Two: UtiliCorp
Regulated 43%
Nonregulated 57%
Pie Chart Three: Proforma Combined
Regulated 56%
Nonregulated 44%
[Page One]
Our vision for the combined company is to be a full participant
in the global energy marketplace, adding diversified products and
services, entering new markets, and growing revenues, income and
share value for our shareholders.
The energy industry has entered an era of inevitable,
accelerating change. Consumer demand, technological advances,
and legislative and regulatory reforms are leading to
unprecedented competition. As a result, public utilities face
business risks and limits on their ability to grow earnings.
KCPL and UtiliCorp believe that continued growth in the industry
can best be achieved through focused and strategic investment in
primarily energy-related businesses.
We feel strongly that the combined company embodies our shared vision,
embraces the future and creates sustainable, long-term value for
KCPL shareholders through strategic investments in regulated and
nonregulated business opportunities.
[Page Two]
A fit for the future ...
The cornerstone of our proposal is the ability to achieve
sustainable, long-term growth in shareholder value in this
rapidly changing world. As a larger and more diversified
company, we anticipate being able to:
- - -compete more effectively in national and global markets
- - -gain greater access to new customers and markets
- - -use our size and stability to achieve enhanced access to capital
markets
- - -introduce a new array of energy products and services
- - -build on a demonstrated track record in energy-related
nonregulated businesses
[Page Three]
... Starting now
Tomorrow's world of energy begins today with the KCPL/UtiliCorp
merger.
- - -Shared, strategic vision
- - -Opportunities for additional operational benefits and financial
performance enhancements not available to KCPL and UtiliCorp as
separate companies
- - -57% ownership in the new company for KCPL shareholders*
- - -$1.85 recommended annual dividend
- - -Over $600 million in savings over the next 10 years
- - -Additional operational pre-tax benefits of $56.5 million over
four years after the mergers
- - -Financial performance enhancements (pre-tax) of $244 million
over four years after the mergers
- - -Improved competitive position of the combined company through
shared savings from regulated operations
- - -Tax-free transaction
- - -On track in the regulatory approval process, expected completion in
second quarter 1997
- - -Solid support from community, employees, elected officials
The amended merger agreement increases the value of the merger
for KCPL shareholders, facilitates the merger approval process
and improves the likelihood of the merger's success.
*based on number of shares outstanding at the date of the merger
agreement
[Pages Four & Five]
... With the world as our marketplace
Graphic: map of U.S. with arrows depicting international
segments and showing combined territories of KCPL and UtiliCorp,
independent power projects, and energy marketing segments of the
businesses
Increased access to a variety of high-growth national and
international markets means the potential for sustained growth
and risk avoidance.
Regulatory Diversity
- - -operations in eight states and five foreign countries
- - -nonregulated businesses
Revenue Diversity
- - -gas and electric utility, gas gathering and transportation, and
other energy-related services and products
Investment Diversity
- - -nearly half of the combined company's revenues would come from
nonregulated operations
[Page Six]
And results ...
We believe that blending the strengths of KCPL and UtiliCorp and
their subsidiaries will define the successful energy services
provider of the future.
Financial Strengths
- - -From 1985 to 1995, both KCPL and UtiliCorp delivered a total
return to shareholders which exceeded market and industry
averages.*
- - -KCPL has achieved a strong A or above bond rating.
- - -UtiliCorp has increased assets by 431% since 1985 and earnings
before interest, taxes, depreciation and amortization by 425%.
New Products and Services
- - -UtiliCorp has introduced EnergyOne, the first national brand
name in the utility industry.
- - -Through EnergyOne, UtiliCorp provides energy solutions to over
125 of the Fortune 500 companies in the U.S.
- - -New product introductions are planned for 1997.
New Markets
- - -UtiliCorp has proven experience with utility operations in other
countries.
- - -Since 1983, UtiliCorp has:
- - -acquired and merged with ten domestic electric and gas
utilities, investing a total of $858 million.
- - -purchased interests in four international electric utilities,
investing a total of $426 million.
- - -established UtilCo Group and invested $206 million in 17
independent power projects
- - -established Aquila and invested $303 million in natural gas
gathering and transportation assets.
- - -KCPL has become involved in the small power production market in
China, with plans to expand in that area.
- - -KCPL has begun preliminary work on three power projects in the
Pacific Northwest.
*Source: Wall Street Journal Shareholder Scoreboard, February 29,
1996.
[Page Seven]
... That are real.
Graphic: Growth chart
A merger between KCPL and UtiliCorp means Value Now! The
combined company anticipates the following savings and benefits
after the merger.*
Year One Year Two Year Three Year Four
(Per Share)
Synergy Savings $.10 $.16 $.22 $.25
=====================================
Additional Operational Benefits $.08 $.08 $.07 $.06
=====================================
Financial Performance Enhancements $.20 $.25 $.35 $.44
=====================================
Our combined company will be committed to continued growth
through strategic investment in nonregulated and regulated
segments of the energy business. Our goals to shareholders:
- - -total returns consistently above both industry and broad market
averages
- - -an investment with below average market risk
- - -an investment in a company with a diversified base of energy-
related businesses without excess concentration in fuel source,
customer mix or regulatory jurisdiction
*A portion of the savings from regulated operations will be shared with
ratepayers. Estimates of the savings resulting from the mergers are based
on assumptions which KCPL believes to be reasonable, but there can be no
assurances that such assumptions will approximate actual experience, and
in such event actual results could differ materially from the predictions
herein. Shareholders are urged to review the portions of the Joint Proxy
Statement/Prospectus that discuss these savings and their underlying
assumptions in greater detail.
[Page Eight]
Clearing the Confusion
Our vision goes far beyond a traditional focus on cost synergies,
size, concentration of assets and the regulated segment of the
utility business because we believe that's insufficient for long-
term prosperity in a deregulated marketplace. We believe Western
Resources' proposed combination with KCPL would result in concentrated risk
and lack of diversification.
Concentrated Wolf Creek nuclear asset = concentrated business risk
- - -A Western/KCPL combined company would own 94% of the plant,
concentrating a substantial amount of capital and risk in the
nuclear facility.
- - -The KCPL/UtiliCorp merged company will own 47% of the plant.
Threatened rate reductions for Western Resources
- - -The staff of the Kansas Corporation Commission has recommended
a rate reduction of $105 million in the first year of reductions,
representing 34% of Western's and Kansas Gas & Electric's 1995 net income.
- - -On the other hand, Western's proposal filed in August 1995, called
for $8.7 million in cuts per year over seven years.
Greater business risk
- - -less diversification with a Western/KCPL combination
- - -limited ability to grow and enhance earnings
- - -less access to new markets
- - -overlap of geographic, regulatory and climatic conditions
[Inside Back Cover]
Vote the Vision!
Your vote is important in making the KCPL/UtiliCorp vision a
reality. Vote FOR our vision on the white card to secure the benefits of
this merger.
To exercise your right to vote:
- - -Return your white proxy card whether or not you plan to attend
the special shareholders meeting on ______.
- - -Remember - you need to send this new proxy card, even if you
voted on the original merger agreement.
- - -Be sure to sign and date the proxy card.
- - -Return the card in the enclosed, self-addressed envelope, which
requires no postage if mailed in the United States.
Do not sign any proxy card Western Resources may send you. Your
Board of Directors has unanimously concluded that the Western
Resources proposal is NOT in your best interests. Be aware - you
are under no obligation to respond to any solicitation by Western
Resources.
Questions? Call KCPL Investor Relations at 800-245-5275 or D.F.
King, our proxy solicitor, at 800-714-3312.
[Back Cover]
Quotes
"I am confident that the result of the merger will be strong
corporate leadership and a valuable ally in our economic
development efforts. This proposal provides the best future for
Missouri and the Kansas City area." Mel Carnahan, Governor of
Missouri, May 15, 1996, press release
"Increased job opportunities, cost savings in the neighborhood of
$600 million over the next decade, and lower rates than would
otherwise be possible make this merger one of the best business
combinations ever proposed in the state of Missouri." Bob
Holden, Missouri State Treasurer, May 16, 1996, press release
"We believe that our best interest lies with the merger of KCPL
and UtiliCorp.... We believe our new company will rely heavily on
the people they employ to achieve the goals they are setting
forth, and this is music to our ears." Locals 412, 1464 and
1613, The International Brotherhood of Electrical Workers, April
22, 1996, letter to union members
"The tens of thousands of jobs and the hundreds of millions of
dollars of investment that have been created in Kansas City have,
in part, been created because of the critical role that Kansas
City Power & Light and UtiliCorp have played in the economic
development effort of this community." Robert J. Marcusse,
president, Kansas City Area Development Council, May 9, 1996,
letter to Drue Jennings
