<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1 to
the Quarterly Report
Pursuant to Section
13 or 15(d) of the
Securities Exchange
Act of 1934 on
Form 10-Q For the
Quarter Ended
June 30, 1995
UTILICORP UNITED INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 44-0541877
- --------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3000 Commerce Tower, 911 Main, Kansas City, Missouri 64105
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 421-6600
--------------
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at August 3, 1995
- ----------------------------- -----------------------------
Common Stock, $1 par value 45,545,008
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Information regarding the condensed consolidated financial statements is
set forth on pages 3 through 10.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's discussion and analysis of financial condition and results of
operations can be found on pages 11 through 15.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
See information provided in Item 4 of Part II in the Form 10-Q for the
first quarter of 1995.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits and reports on Form 8-K can be found on page 16.
2
<PAGE>
Part 1--Financial Information
Item 1--Financial Statements
<TABLE>
<CAPTION>
UTILICORP UNITED INC.
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended
(Unaudited) June 30
- -------------------------------------------------------------------------------
IN MILLIONS, EXCEPT PER SHARE 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Sales $ 600.8 $ 516.3
Cost of sales 404.2 329.7
- -------------------------------------------------------------------------------
GROSS PROFIT 196.6 186.6
- -------------------------------------------------------------------------------
Operating, administrative & maintenance expense 123.8 118.3
Depreciation, depletion & amortization 37.9 36.9
- -------------------------------------------------------------------------------
INCOME FROM OPERATIONS 34.9 31.5
- -------------------------------------------------------------------------------
Interest expense--long term debt 25.0 21.9
Interest expense--short term debt and
other interest, net 5.1 1.5
Equity in earnings of investments and
partnerships (5.8) (5.0)
Minority interests 0.8 0.7
- -------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 9.9 12.3
- -------------------------------------------------------------------------------
INCOME TAXES 2.6 4.9
- -------------------------------------------------------------------------------
NET INCOME 7.2 7.4
- -------------------------------------------------------------------------------
PREFERENCE DIVIDENDS 0.5 0.8
- -------------------------------------------------------------------------------
EARNINGS AVAILABLE FOR COMMON SHARES $ 6.7 $ 6.6
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
WEIGHED AVERAGE COMMON SHARES OUTSTANDING:
Primary 45.05 44.38
Fully diluted 45.55 44.38
- -------------------------------------------------------------------------------
EARNINGS PER COMMON SHARE:
Primary $ .15 $ .15
Fully diluted .15 .15
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
UTILICORP UNITED INC.
CONSOLIDATED STATEMENTS OF INCOME Six Months Ended
(Unaudited) June 30,
- -------------------------------------------------------------------------------
IN MILLIONS, EXCEPT PER SHARE 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Sales $ 1,327.1 $ 1,289.7
Cost of sales 894.3 878.9
- -------------------------------------------------------------------------------
GROSS PROFIT 432.8 410.8
- -------------------------------------------------------------------------------
Operating, administrative & maintenance expense 240.9 224.0
Depreciation, depletion & amortization 75.4 73.0
- -------------------------------------------------------------------------------
INCOME FROM OPERATIONS 116.5 113.8
- -------------------------------------------------------------------------------
Interest expense--long term debt 49.2 43.9
Interest expense--short term debt
and other interest, net 9.7 3.0
Equity in earnings of investments and partnerships (7.9) (9.1)
Minority interests 1.4 1.6
- -------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 64.1 74.4
- -------------------------------------------------------------------------------
INCOME TAXES 24.7 28.0
- -------------------------------------------------------------------------------
NET INCOME 39.4 46.4
- -------------------------------------------------------------------------------
PREFERENCE DIVIDENDS 1.0 2.4
- -------------------------------------------------------------------------------
EARNINGS AVAILABLE FOR COMMON SHARES $ 38.4 $ 44.0
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Primary 44.93 43.33
Fully diluted 45.43 43.90
- -------------------------------------------------------------------------------
EARNINGS PER COMMON SHARE:
Primary $ .85 $ 1.02
Fully diluted .85 1.01
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
UTILICORP UNITED INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
- ------------------------------------------------------------------------------
DOLLARS IN MILLIONS 1995 1994
- ------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
ASSETS
UTILITY PLANT IN SERVICE:
Electric $ 1,602.3 $ 1,578.7
Gas 1,045.2 954.6
...............................................................................
2,647.5 2,533.3
Less-accumulated depreciation 973.1 923.0
...............................................................................
Net utility plant in service 1,674.4 1,610.3
Construction work in progress 43.8 23.3
...............................................................................
TOTAL UTILITY PLANT, NET 1,718.2 1,633.6
...............................................................................
Non-Regulated Property, Net:
Energy related 597.1 544.5
Non-regulated generating assets and other 341.9 236.8
...............................................................................
TOTAL NON-REGULATED PROPERTY 939.0 781.3
...............................................................................
Current Assets:
Cash and cash equivalents 62.6 67.2
Funds on deposit 39.3 44.8
Accounts receivable, net 143.1 144.1
Accrued utility revenues 38.2 71.5
Fuel inventory, at average cost 58.3 95.0
Materials and supplies, at average cost 40.3 39.3
Assets from price risk management
activities 18.5 --
Prepayments and other 44.3 51.9
...............................................................................
TOTAL CURRENT ASSETS 444.6 513.8
...............................................................................
DEFERRED CHARGES AND ASSETS FROM PRICE RISK
MANAGEMENT ACTIVITIES 259.0 182.4
...............................................................................
TOTAL ASSETS $ 3,360.8 $ 3,111.1
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common shareholders' equity $ 921.9 $ 906.8
Preference and preferred stock 25.4 25.4
Company-obligated mandatorily redeemable
preferred securities of partnership 100.0 -
Long-term debt, net 1,073.7 976.9
...............................................................................
TOTAL CAPITALIZATION 2,121.0 1,909.1
...............................................................................
MINORITY INTERESTS 29.8 28.4
...............................................................................
CURRENT LIABILITIES:
Current maturities of long-term debt 134.7 138.8
Short-term debt 207.9 182.4
Accounts payable 286.3 340.3
Accrued taxes 4.6 21.0
Accrued interest 23.4 22.1
Liabilities from price risk management
activities 34.4 --
Other 69.0 89.0
...............................................................................
TOTAL CURRENT LIABILITIES 760.3 793.6
...............................................................................
DEFERRED CREDITS AND LIABILITIES:
Deferred income tax liabilities 293.5 279.4
Investment tax credits 20.4 21.0
Liabilities from price risk management
activities and other 135.8 79.6
...............................................................................
TOTAL DEFERRED CREDITS AND LIABILITIES 449.7 380.0
...............................................................................
COMMITMENTS AND CONTINGENCIES
...............................................................................
TOTAL CAPITALIZATION AND LIABILITIES $ 3,360.8 $ 3,111.1
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
UTILICORP UNITED INC.
CONDENSED CONSOLIDATED STATEMENTS OF CAPITALIZATION
June 30, December 31,
- -------------------------------------------------------------------------------
DOLLARS IN MILLIONS EXCEPT PER SHARE 1995 1994
- -------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
COMMON SHAREHOLDERS' EQUITY:
Common stock, par value $1 per share, authorized
100,000,000 shares, outstanding 45,344,229 shares
(44,827,135 at December 31, 1994) $ 45.3 $ 44.8
Premium on capital stock 779.6 774.2
Retained earnings 106.1 107.0
Treasury stock, at cost, 227,587 shares
at December 31, 1994 - (6.6)
Currency translation adjustment (9.1) (12.6)
.................................................................................
TOTAL COMMON SHAREHOLDERS' EQUITY 921.9 906.8
.................................................................................
PREFERENCE STOCK, NOT MANDATORILY REDEEMABLE,
$2.05 SERIES, WITHOUT PAR VALUE, AUTHORIZED
10,000,000 SHARES, OUTSTANDING 1,000,000 SHARES 25.0 25.0
.................................................................................
PREFERRED STOCK OF SUBSIDIARY, RETRACTABLE .4 .4
.................................................................................
COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED
SECURITIES OF PARTNERSHIP 100.0 -
.................................................................................
LONG-TERM DEBT, NET 1,073.7 976.9
.................................................................................
TOTAL CAPITALIZATION $ 2,121.0 $ 1,909.1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
UTILICORP UNITED INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
- ----------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 1995 1994
- ----------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7.2 $ 7.4
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation, depletion and amortization 36.8 38.8
Net changes in price risk management activities (2.9) -
Deferred taxes and investment tax credits 5.7 4.2
Changes in certain current assets and liabilities,
net of effects of acquisition:
Accounts receivable and accrued revenues 84.8 100.6
Accounts receivable sold (51.3) (34.0)
Fuel and materials (3.5) (19.3)
Accounts payable (3.6) (28.8)
Accrued taxes (47.4) (8.8)
Other (24.5) (9.2)
Changes in other assets and liabilities, net (17.7) (2.5)
- ----------------------------------------------------------------------------------------
CASH (USED FOR) PROVIDED FROM OPERATING ACTIVITIES (16.4) 48.4
- ----------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to utility plant (30.4) (30.0)
Investments in international businesses (43.2) -
Investments in non-regulated generating assets (59.0) -
Investments in energy related properties (56.1) (28.2)
Other (1.4) (8.4)
- ----------------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES (190.1) (66.6)
- ----------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 9.7 0.2
Treasury stock sold 2.3 -
Retirement of preference stock - (0.9)
Issuance of Company-obligated mandatorily redeemable
preferred securities of partnership 100.0 -
Issuance of long-term debt 104.1 1.4
Retirement of long-term debt (6.0) (9.5)
Short-term borrowings (repayments), net (21.5) 84.9
Cash dividends paid (20.0) (19.7)
- ----------------------------------------------------------------------------------------
CASH PROVIDED FROM FINANCING ACTIVITIES 168.6 56.4
- ----------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents (37.9) 38.2
Cash and cash equivalents at beginning of period 100.5 42.4
- ----------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 62.6 $ 80.6
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for -
Interest, net of amount capitalized" $ 39.1 $ 28.8
Income taxes 7.4 3.5
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
7
<PAGE>
UTILICORP UNITED INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
- -----------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 1995 1994
- -----------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 39.4 $ 46.4
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation, depletion and amortization 73.4 77.0
Net changes in price risk management activities (1.9) -
Deferred taxes and investment tax credits 13.5 2.5
Changes in certain current assets and liabilities:
Accounts receivable and accrued revenues 40.8 83.2
Accounts receivable sold (6.6) (3.4)
Fuel and materials 35.7 8.2
Accounts payable (54.0) (81.2)
Accrued taxes (16.4) 13.0
Other (11.1) 14.9
Changes in other assets and liabilities, net (5.0) (25.1)
- -----------------------------------------------------------------------------------------
CASH PROVIDED FROM OPERATING ACTIVITIES 107.8 135.5
- -----------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTMENT ACTIVITIES:
Additions to utility plant (50.4) (51.2)
Purchase of utility operations (100.9) -
Investments in international businesses (43.2) -
Investment in non-regulated generating assets (59.0) (0.7)
Investments in energy related properties (59.4) (39.2)
Other 2.8 (16.7)
- -----------------------------------------------------------------------------------------
CASH USED FOR INVESTMENT ACTIVITIES (310.1) (107.8)
- -----------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 12.4 0.4
Treasury stock sold 6.6 -
Retirement of preference stock - (0.9)
Issuance of Company-obligated mandatorily redeemable
preferred securities of partnership 100.0 -
Issuance of long-term debt 104.1 5.9
Retirement of long-term debt (11.3) (9.6)
Short-term borrowings (repayments), net 25.6 40.1
Cash dividends paid (39.7) (38.9)
- -----------------------------------------------------------------------------------------
CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES 197.7 (3.0)
- -----------------------------------------------------------------------------------------
Increase in cash and cash equivalents (4.6) 24.7
Cash and cash equivalents at beginning of period 67.2 55.9
- -----------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 62.6 $ 80.6
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for-
Interest, net of amount capitalized $ 61.9 $ 46.2
Income taxes 7.4 4.7
- -----------------------------------------------------------------------------------------
Liabilities Assumed In Acquisition -
Fair value of assets acquired $ 114.0 $ -
Cash paid for acquisition 100.9 -
Liabilities assumed 13.1 -
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
8
<PAGE>
UTILICORP UNITED INC.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(unaudited)
(1) Summary of Significant Accounting Policies: The accompanying unaudited
condensed consolidated financial statements have been prepared in accordance
with the accounting policies described in the consolidated financial statements
and related notes included in the company's 1994 Annual Report to Shareholders
incorporated by reference in the company's 1994 Form 10-K. It is suggested that
those consolidated financial statements be read in conjunction with this report.
The year-end financial statements presented were derived from the company's
audited financial statements, but do not include all disclosures required by
generally accepted accounting principles. In the opinion of management, the
accompanying condensed consolidated financial statements reflect all adjustments
necessary for a fair representation of the financial position of the company and
the results of its operations. Certain estimates and assumptions that affect
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods shown have been made in preparing the consolidated financial
statements. Actual results could differ from these estimates.
(2) Certain reclassifications have been made to prior year amounts to conform
to current year's presentation.
(3) On June 5, 1995, the company issued $100 million of 6.375 percent senior
notes due in 2005. Net proceeds of $99.3 million were used to reduce short-term
debt. This debt is the initial securities issued under a $200 million shelf
registration of debt securities.
(4) On June 5, 1995, UtiliCorp Capital L.P., a limited partnership of which the
company is the general partner, issued 4,000,000 shares of 8.875 percent
Cumulative Monthly Income Preferred Securities, Series A, for $100 million. The
limited partnership interests represented by the preferred securities are
redeemable at the option of UtiliCorp Capital, after June 12, 2000, at $25 per
preferred security plus accrued interest and unpaid dividends. Holders of the
securities are entitled to receive dividends at an annual rate of 8.875 percent
of the liquidation preference value of $25. Dividends are payable monthly, and
in substance are tax deductible by the company. The securities are shown as
Company-obligated mandatorily redeemable preferred securities of a partnership
on the consolidated balance sheet. The net proceeds were used to reduce short-
term debt.
(5) On May 22, 1995, the company purchased a 50 percent ownership interest for
$59 million in cash in a partnership that owns and operates a chemical recovery
and cogeneration facility at the James River Corporation's pulp and paper mill
in Alabama.
(6) In June 1995, the company was named a Potentially Responsible Party (PRP)
at a site where the company legally disposed of automotive waste. The company
expects to enter into a deminimis settlement with the Environmental Protection
Agency (EPA). The company estimates its liability is less than $.1 million.
The United States EPA also indicated that the company is a PRP at a site where
the company legally disposed of PCB, a chemical sometimes used in electric
transformers. The company is one of 1,440 other named parties at this site.
The company estimates its liability is less than $.1 million.
(7) See Management's Discussion and Analysis of Financial Condition and Results
of Operations on page 11 for information relating to the purchase of United
Energy.
(8) Effective January 1, 1995 the company adopted the mark-to-market
method of accounting (MTM) for domestic natural gas trading activities. Under
MTM, natural gas forwards, futures, swaps, options and other financial
instruments are recorded at fair value, net of future servicing costs and
reserves, and recognized as revenue upon contract execution in the Condensed
Consolidated Statements of Income. The resulting unrealized gains and losses
are recorded as Assets and Liabilities from Risk Management Activities in the
accompanying Condensed Consolidated Balance Sheets. This change was made to
more fairly present the current results of the company's operations related
to this business and to recognize that value is created and the earnings
process completed when the contractual commitments are finalized.
9
<PAGE>
Current period changes in the assets and liabilities from risk
management activities are recognized as revenues in the Condensed
Consolidated Statements of Income. The changes in the assets and liabilities
primarily result from newly originated transactions, changes in the price of
natural gas, the timing of settlements related to these contracts and changes
in the various risk reserves. The market prices used to value these
transactions reflect management's best estimate of market prices considering
various factors including closing exchange and over-the-counter quotations.
The risk reserves are established based upon the estimated exposure and costs
associated with the company's future commitments including the credit risks of
its counterparties, the time value of money, the impact of liquidating the
portfolio in an orderly manner over a reasonable period of time under present
market conditions and other identifiable contingencies.
The change to MTM did not have a material impact on the results of
operations for the quarter ended June 30, 1995. The company previously
accounted for this activity on the accrual method of accounting. The company
has not shown the pro forma effect of the adoption of MTM on prior periods
since the cumulative impact on prior period earnings was immaterial.
The company generally attempts to balance its fixed-price physical
and financial purchase and sales contracts both volumetrically and in terms
of future timing of the commitments. However, net open positions may exist
or are established due to the origination of new transactions and the
company's assessment, based upon information gained from its gas marketing
activities, of future price movements. As a result, the company is impacted
by fluctuating market prices.
The change in accounting method does not impact the company's gas
marketing activities in the U.K., its financial instruments associated with
its natural gas liquids hedging or electricity brokering. The company enters
into futures, forwards, swaps and options in order to hedge purchase and
sales commitments, inventories and anticipated production of these products.
Changes in the market value of such transactions are deferred until the gain
or loss is recognized on the hedged commitment.
10
<PAGE>
UTILICORP UNITED INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
UTILICORP UNITED INC. (THE COMPANY) CONTAINS THREE SEGMENTS: ELECTRIC
OPERATIONS, GAS OPERATIONS AND ENERGY RELATED BUSINESSES. EACH SEGMENT IS
DISCUSSED SEPARATELY IN THE RESULTS OF OPERATIONS SECTION. THE LIQUIDITY AND
CAPITAL RESOURCES SECTION IS PREPARED ON A CONSOLIDATED BASIS.
OVERVIEW
EMERGING TRENDS
PURCHASE OF UNITED ENERGY
On August 7, 1995, the company as part of a three-company consortium was
notified that its proposal to purchase United Energy, an Australian electric
distribution utility, from the State of Victoria was accepted. The company's
49.9 percent ownership interest will require a direct cash investment of
approximately $239 million. The majority of the funds for this initial cash
investment are expected to come from a group of Australian-based banks and will
be funded in Australian dollars. The transaction will be finalized in
approximately 30 days. The company will serve as manager of the United Energy's
operations. United Energy serves approximately 520,000 customers with annual
revenues of approximately $510 million.
ORGANIZATION REALIGNMENT AND BRAND LAUNCH
In late 1994, the company announced its plans to become the nation's first
national utility and initiated several programs to reach that goal. To carry
out its plans, the company introduced a unifying brand name, EnergyOne -SM-, to
market its products and services. Consistent with this strategic objective, the
company also realigned its businesses into four groups: Energy Delivery, Power
Services, Energy Resources and Marketing Services.
As part of the operational realignment, the company is currently in the
process of reviewing its key customer and administrative work practices. The
company expects to gradually reduce its current employment level and reallocate
resources to better support the company's strategy. The current estimate of
ultimate employee severance costs is $4.7 million. The company is using a
combination of normal attrition and voluntary and involuntary programs to reduce
employee related costs. For certain costs incurred in regulated utility
businesses, the company deferred costs in anticipation of rate recovery. At
June 30, 1995, approximately $1.3 million was deferred relating to employee
severance.
As part of the EnergyOne brand launch, the company has spent approximately
$4.1 million in building the infrastructure and sales organization to support
EnergyOne products and services. The company anticipates that it will spend
another $5 million for marketing and sales startup activities in 1995.
11
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended June 30, 1995, cash used for operations was
$16.4 million higher than cash generated from operations. This compares to net
cash flow from operations of $48.4 million for the three months ended June 30,
1994. Changes in cash flow from operations relate to many different businesses
factors, such as timing of invoice payments, accounts receivable collections and
selling accounts receivable through the sales program. The variance in cash
flow from operations between second quarter 1995 and 1994 is due primarily to
the following reasons:
* Net repayments on the accounts receivable sales program;
* Timing of payments for income and property taxes;
* Increase in receivables compared to 1994 due to additional businesses
acquired.
Cash from operating activities for the six-month periods in 1995 compared
to 1994 are lower due primarily to the activities that occurred during the
second quarter discussed above.
Cash used for investing activities consisted primarily of purchases of
utility and other businesses, investments in generating assets and investments
in gas and oil reserves.
12
<PAGE>
Cash used for investing activities for the three- and six-month periods ended
June 30, 1995, increased over the comparable 1994 periods. These increases are
due to the acquisition of a pipeline system and two non-regulated companies in
the first quarter of 1995. During the second quarter of 1995, the company
invested in a cogeneration facility and funded common stock purchases in a New
Zealand company through a majority owned subsidiary. In 1994 the company's
investing activities generally were limited to utility capital additions and gas
reserve acquisitions.
Cash provided from and used in financing activities fluctuate as
opportunities arise to purchase businesses and as long-term interest rates
change. During the second quarter of 1995, the company issued $100 million of
senior notes at 6.375 percent and $100 million of 8.875 percent monthly income
preferred securities (through a special purpose subsidiary). The proceeds from
the issuances were used to reduce short-term debt.
The company has two revolving credit agreements (Agreements) with a
consortium of banks aggregating $400 million. The Agreements support the
company's commercial paper program and provide for additional short-term
borrowing capacity. As of June 30, 1995, the company had $75.0 million in
outstanding borrowings under the Agreements. The company had no borrowings
under the Agreements at December 31, 1994. In addition to the Agreements, the
company has arrangements with financial institutions to sell, on a continuing
basis, up to $205 million of eligible accounts receivable on a limited recourse
basis. The amount of accounts receivable sold under these agreements generally
fluctuates with the level of the company's accounts receivable balance.
As of June 30, 1995 and December 31, 1994, the company's cash balance
contained $60.1 million and $57.0 million, respectively, of foreign denominated
currency.
RESULTS OF OPERATIONS
ELECTRIC OPERATIONS
THE COMPANY'S ELECTRIC SEGMENT INCLUDES THE ELECTRIC OPERATIONS OF MISSOURI
PUBLIC SERVICE, WEST KOOTENAY POWER, WESTPLAINS ENERGY, AND WEST VIRGINIA
POWER.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
- ------------------------------------------------------------------------
Dollars in Millions 1995 1994 1995 1994
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $132.9 $137.1 $262.8 $267.9
- ------------------------------------------------------------------------
Expenses:
Fuel and purchased power 43.0 45.7 89.9 93.7
Other operating 26.7 26.5 51.4 49.5
Maintenance 9.7 10.5 18.8 19.8
Depreciation and amortization 13.0 12.3 26.0 24.6
Taxes other than income 11.4 12.3 23.4 24.5
- ------------------------------------------------------------------------
Total expenses 103.8 107.3 209.5 212.1
- ------------------------------------------------------------------------
Income from operations $ 29.1 $ 29.8 53.3 55.8
- ------------------------------------------------------------------------
</TABLE>
Income from operations for each of the 1995 periods presented above was
about the same compared to 1994. Customer growth and cost reductions offset or
substantially offset unfavorable weather patterns experienced in each 1995
period compared to 1994.
13
<PAGE>
For all periods presented, milder weather patterns adversely affected 1995
gross margins (revenue minus fuel costs) compared to 1994. Unfavorable weather
reduced the company's gross margins generated from its Missouri, Kansas and
Colorado operations (approximately 75 percent of total electric operations) by
$4.2 million and $5.3 million for the three- and six-month periods ended
June 30, 1995 compared to the same periods in 1994. Increased numbers of
customers in those same service areas offset or substantially offset unfavorable
weather patterns by increasing gross margins by $1.9 million and $5.4 million
for the three and six months ended June 30, 1995 compared with 1994.
Operating and maintenance expenses were reduced due to cost reductions in
tree trimming and other maintenance areas. Partially offsetting these
reductions were increased employee and related payroll and benefit expenses.
GAS OPERATIONS
THE COMPANY'S GAS SEGMENT INCLUDES GAS OPERATIONS OF KANSAS PUBLIC SERVICE,
MICHIGAN GAS UTILITIES, MISSOURI PUBLIC SERVICE, PEOPLES NATURAL GAS, NORTHERN
MINNESOTA UTILITIES AND WEST VIRGINIA POWER.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
- -----------------------------------------------------------------------
Dollars in Millions 1995 1994 1995 1994
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $101.3 $96.9 $347.3 $381.2
- -----------------------------------------------------------------------
Expenses:
Gas purchased for resale 51.4 53.9 203.1 246.2
Other operating 32.9 28.8 64.4 56.3
Maintenance 2.5 2.2 4.7 4.4
Depreciation & amortization 8.8 7.5 17.4 14.9
Taxes, other than income 6.0 5.6 13.0 12.2
- -----------------------------------------------------------------------
Total expenses 101.6 98.0 302.6 334.0
- -----------------------------------------------------------------------
Income (loss) from operations
$ (.3) $ (1.1) $ 44.7 $ 47.2
- -----------------------------------------------------------------------
</TABLE>
Income from operations for the three months ended June 30, 1995 was $.8
million higher primarily due to the acquisition of a distribution system in
Kansas and a pipeline and distribution system in Missouri. Income from
operations for the six months ended June 30, 1995 compared to the same period in
1994 was $2.5 million lower due to mild winter weather in January and February.
Heating degree days, a temperature benchmark, were 16 percent lower through
February compared to the same period in 1994.
Operating and maintenance expenses increased for the three- and six- month
periods ended June 30, 1995 compared to 1994 due to the acquisition of a
distribution system in Kansas and a pipeline and distribution system in
Missouri. Marketing and sales expenses have increased for the reasons discussed
in the Overview section.
14
<PAGE>
ENERGY RELATED BUSINESSES
THE ENERGY RELATED BUSINESSES SEGMENT INCLUDES THE CONSOLIDATED OPERATIONS OF
THE COMPANY'S AQUILA ENERGY SUBSIDIARY. AQUILA IS INVOLVED IN THE GATHERING,
PROCESSING AND MARKETING OF NATURAL GAS, ACQUISITION AND PRODUCTION OF GAS AND
OIL RESERVES AND EXTRACTION AND SALE OF NATURAL GAS LIQUIDS.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
- ---------------------------------------------------------------------------
Dollars in Millions 1995 1994 1995 1994
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $269.3 $222.0 $510.7 $485.6
- ---------------------------------------------------------------------------
Expenses:
Gas purchases 225.3 180.2 422.5 404.6
Other operating 18.1 19.3 34.8 33.8
Maintenance .7 .9 1.0 1.3
Depreciation, depletion & amortization 14.4 15.6 29.0 30.5
Restructuring charge - - - -
- ---------------------------------------------------------------------------
Total expenses 259.0 216.0 487.3 470.2
- ---------------------------------------------------------------------------
Income (loss) from operations $10.3 $ 6.0 $ 23.4 $ 15.4
- ---------------------------------------------------------------------------
</TABLE>
Income from operations for the three- and six-month periods ended
June 30, 1995, increased $4.3 million and $8.0 million over the prior periods.
Income from operations for 1995 was positively affected by increased gas
throughput on the company's pipelines, increased natural gas liquids (NGL)
prices and a lower depreciation, depletion and amortization rate due to
additional reserve acquisitions. Natural gas throughput increased 40 percent
and 37 percent for the three- and six-month periods ended June 30, 1995,
compared to the same periods in 1994. The increase in throughput is primarily
due to greater volumes on the Southeast Texas pipeline system, Aquila's largest
system, which increased income by $3.2 million and $5.4 million, respectively.
NGL prices increased 7 percent and 11 percent in the 1995 periods compared to
1994, resulting in an increase in NGL related income of $.6 million and $2.3
million in 1995.
Effective January 1, 1995 the company adopted the mark-to-market method of
accounting for its domestic natural gas trading activities. The company has
previously accounted for this activity on the accrual method of accounting.
See Note 8 in the Condensed Consolidated Financial Statements for further
discussion. The change in methods did not have an impact on current or prior
period statements of income.
OTHER BUSINESSES AND INTEREST EXPENSE
The company has several equity investments and partnership interests
including Utilco Group's partnerships and United Kingdom joint ventures. In
order to discuss the full impact of these businesses, the discussion will be
on a net income basis. For the quarter ended June 30, 1995, the company's
subsidiaries and investments in the United Kingdom lost $.3 million compared to
net income of $1.5 million in 1994. This decline is due primarily to volatile
gas prices that resulted in reduced margins.
Net income from UtilCo Group decreased $.3 million or 14 percent and $1.0
million or 36 percent for the three and six months ended June 30, 1995,
respectively, compared to the same periods in 1994. Unusually heavy rains
resulted in excess hydro power availability reducing power demand from a power
project. In addition, reduced project performance related to disputed
curtailment issues adversely affected 1995 results compared to 1994. In May
1995, UtilCo Group acquired an ownership interest in a cogeneration facility in
Alabama for $59 million. The cogeneration project sells all of its output to a
pulp and paper plant.
Interest expense, net increased $6.7 million and $12.0 million for the
three and six months ended June 30, 1995 compared to the same periods in 1994.
The increases were due to the issuances of $300 million of long-term debt and
monthly income preferred securities over the last 8 months, $200 million of
which was issued in May 1995. Short-term debt balances were consistently
higher in each of the 1995 periods than in 1994 due primarily to acquisitions
completed.
15
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) List of Exhibits
4 Seventh Supplemental Indenture, dated as of June 1, 1995, between the
company and First National Bank of Chicago, Trustee
11 Statement regarding Computation of Per Share Earnings
27 Financial Data Schedule - For the Three months Ended June 30, 1995
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three month period
ended June 30, 1995.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UtiliCorp United Inc.
------------------------------------
(Registrant)
February 8, 1996 /S/ Richard C. Green, Jr.
------------------------------------
Richard C. Green, Jr.
Chairman of the Board, President
(Chief Executive Officer)
February 8, 1996 /S/ James S. Brook
-----------------------------
James S. Brook
Vice President
(Principal Accounting Officer)
17
<PAGE>
CONFORMED COPY
____________________________________________________________
____________________________________________________________
UTILICORP UNITED INC.
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
____________________
6 3/8% Senior Notes Due 2005
____________________
SEVENTH SUPPLEMENTAL INDENTURE
Dated as of June 1, 1995
____________________
____________________________________________________________
____________________________________________________________
<PAGE>
SEVENTH SUPPLEMENTAL INDENTURE, dated as of June 1, 1995 (herein
called the "Seventh Supplemental Indenture"), between UTILICORP UNITED INC., a
corporation duly organized and existing under the laws of the State of Delaware
(hereinafter called the "Company"), party of the first part, and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association duly organized and
existing under the laws of the United States, as Trustee under the Original
Indenture referred to below (hereinafter called the "Trustee"), party of the
second part.
WITNESSETH:
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an Indenture, dated as of November 1, 1990 (hereinafter called the
"Original Indenture"), to provide for the issuance from time to time of certain
of its unsecured senior notes (hereinafter called the "Securities"), the form
and terms of which are to be established as set forth in Sections 201 and 301 of
the Original Indenture; and
WHEREAS, Section 901 of the Original Indenture provides, among other
things, that the Company and the Trustee may enter into indentures supplemental
to the Original Indenture for, among other things, the purpose of establishing
the form or terms of the Securities of any series as permitted in Sections 201
and 301 of the Original Indenture; and
<PAGE>
2
WHEREAS, the Company desires to create a series of the Securities in
an aggregate principal amount of $100,000,000 to be designated the "6 3/8%
Senior Notes Due 2005" (the "Senior Notes"), and all action on the part of the
Company necessary to authorize the issuance of the Senior Notes under the
Original Indenture and this Seventh Supplemental Indenture has been duly taken;
and
WHEREAS, all acts and things necessary to make the Senior Notes when
executed by the Company and completed, authenticated and delivered by the
Trustee as in the Original Indenture and this Seventh Supplemental Indenture
provided, the valid and binding obligations of the Company and to constitute
these presents a valid and binding supplemental indenture and agreement
according to its terms, have been done and performed.
WHEREAS, Section 901 of the Original Indenture provides, among other
things, that the Company and the Trustee may enter into indentures supplemental
to the Original Indenture to, among other things, add to the covenants of the
Company for the benefit of the Holders of all or any series of Securities; and
WHEREAS, the Company desires to limit the issuance of Mortgage Bonds
under its General Mortgage (as hereinafter defined) as set forth in Section 204
of this Seventh Supplemental Indenture for the benefit of the Holders of the
Senior Notes;
<PAGE>
3
NOW, THEREFORE, THIS SEVENTH SUPPLEMENTAL INDENTURE WITNESSETH:
That in consideration of the premises, the Company covenants and
agrees with the Trustee, for the equal benefit of holders of the Senior Notes,
as follows:
ARTICLE ONE
DEFINITIONS
The use of the terms and expressions herein is in accordance with the
definitions, uses and constructions contained in the Original Indenture and the
form of Senior Note attached hereto as Exhibit A.
ARTICLE TWO
TERMS AND ISSUANCE OF THE SENIOR NOTES
Section 201. ISSUE OF SENIOR NOTES. A series of Securities which
shall be designated the "6 3/8% Senior Notes Due 2005" shall be executed,
authenticated and delivered in accordance with the provisions of, and shall in
all respects be subject to, the terms, conditions and covenants of the Original
Indenture and this Seventh Supplemental Indenture (including the form of Senior
Note set forth as Exhibit A hereto). The aggregate principal amount of Senior
Notes of the series created hereby which may be authenticated and delivered
under the Original Indenture shall not, except as permitted by the provisions of
the Original Indenture, exceed $100,000,000.
<PAGE>
4
Section 202. FORM OF SENIOR NOTES; INCORPORATION OF TERMS. The form
of the Senior Notes shall be substantially in the form of Exhibit A attached
hereto. The terms of such Senior Notes are herein incorporated by reference and
are part of this Seventh Supplemental Indenture.
Section 203. PLACE OF PAYMENT. The Place of Payment will be
initially the corporate trust offices of the Trustee which, at the date hereof,
are located at The First National Bank of Chicago, One First National Plaza,
Suite 0126, Chicago, Illinois 60670-0126 and The First National Bank of Chicago,
14 Wall Street, 8th Floor, New York, New York 10005.
Section 204. LIMITATION ON ISSUANCE OF MORTGAGE BONDS. The Company
will not issue any Mortgage Bonds under its General Mortgage Indenture and Deed
of Trust, dated September 15, 1988, between the Company and Commerce Bank of
Kansas City, N.A., as Trustee (the "General Mortgage"), without making effective
provision, and the Company covenants that in any such case effective provisions
will be made, whereby the Senior Notes shall be directly secured by the General
Mortgage equally and ratably with any and all other obligations and indebtedness
thereby secured.
ARTICLE THREE
AMENDMENTS TO INDENTURE
Section 301. DEFINITIONS. Section 1.01 of the Indenture shall be
amended by adding the following definitions in their appropriate alphabetic
locations:
<PAGE>
5
"Repayment Date", when used with respect to any Security to be repaid,
means the date fixed for such redemption by or pursuant to this Indenture.
"Repayment Price", when used with respect to any Security to be
repaid, means the price at which it is to be repaid pursuant to this
Indenture, exclusive of accrued and unpaid interest.
Section 302. LEGAL HOLIDAYS. Section 113 of the Indenture shall be
amended to insert the phrase "Repayment Date" immediately following the phrase
"Interest Payment Date," in each place where the latter phrase appears.
Section 303. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The list of
section references in the sixth line of paragraph (2) of Section 301 of the
Indenture shall be amended to read as follows:
"Sections 304, 305, 306, 906, 1107 or 1305".
Section 304. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The list of Section references in the sixth line of the ninth paragraph of
Section 305 of the Indenture shall be amended to read as follows: "Sections 304,
906, 1107 or 1305".
The tenth paragraph of Section 305 of the Indenture shall be amended
by deleting the word "or" in the seventh line thereof and by adding the
following phrase at the end of such paragraph: "or (iii) to issue, register the
transfer of or exchange any Security that has been surrendered for repayment at
the option of the Holder, except the portion, if any, of such Security not to be
so repaid".
<PAGE>
6
Section 305. SATISFACTION, DISCHARGE AND DEFEASANCE OF SECURITIES OF
ANY SERIES. Paragraph (b) of Section 403 of the Indenture shall be amended by
adding at the end thereof, before the semicolon: ", and, if the Securities of
such series provide for any Repayment Date subsequent to the date of any
discharge pursuant to this Section 403, Article Thirteen".
Paragraph (e) of Section 403 of the Indenture shall be amended by adding
the phrase "or repayment" after the phrase "subject to repurchase" in the tenth
line of such paragraph.
Section 306. AUTHENTICATING AGENTS. The list of Section references in
the sixth line of the first paragraph of Section 614 of the Indenture shall be
amended to read as follows: "Sections 304, 305, 306, 1107 and 1305".
Section 307. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. The
parenthetical phrase at the end of paragraph (1) of Section 902 of the Indenture
shall be amended to read as follows: "(or, in the case of repayment at the
option of the Holder or redemption, on or after the Repayment Date or Redemption
Date, as the case may be)".
Section 308. DEFEASANCE OF CERTAIN OBLIGATIONS. The eleventh line of
paragraph (1) of Section 1008 of the Indenture shall be amended by inserting the
phrase "or repayment" after the phrase "subject to repurchase".
Section 309. REPAYMENT OF SECURITIES. A new Article Thirteen shall
be added to the Indenture to provide as follows:
<PAGE>
7
ARTICLE THIRTEEN
REPAYMENT AT OPTION OF HOLDERS
SECTION 1301. APPLICABILITY OF ARTICLE.
Repayment of Securities of any series before their Stated
Maturity at the option of Holders thereof shall be made in
accordance with the terms of such Securities and (except as
otherwise specified as contemplated by Section 301 for Securities
of any series) in accordance with this Article.
SECTION 1302. REPAYMENT OF SECURITIES.
Securities of any series subject to repayment in whole or in
part at the option of the Holders thereof will, unless otherwise
provided in the terms of such Securities, be repaid at a price
equal to the principal amount thereof, together with interest, if
any, thereon accrued to the Repayment Date specified in or
pursuant to the terms of such Securities. The Company covenants
that on or before the Repayment Date it will deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money sufficient to pay the principal
(or, if so provided by the terms of the Securities of any series,
a percentage of the principal) of, and (except if the Repayment
Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof, as the case may be, to be
repaid on such date.
SECTION 1303. EXERCISE OF OPTION.
Securities of any series subject to repayment at the option
of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. For a
security to be repaid at the option of the Holder, the Paying
Agent must receive (a) appropriate wire transfer instructions and
(b) either (i) any Security so providing for such repayment, with
the "Option to Elect Repayment" form on the reverse of such
Security duly completed by the Holder (or by the Holder's
attorney duly authorized in writing), or (ii) a telegram, telex,
facsimile transmission or a
<PAGE>
8
letter from a member of a national securities exchange, or the
National Association of Securities Dealers, Inc. or a commercial
bank or trust company in the United States setting forth the name
of the Holder of the Security, the principal amount of the
Security, the portion of principal amount of the Security to be
repaid, the certificate number or a description of the tenor and
terms of the Security, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the
Security, together with the duly completed form entitled "Option
to Elect Repayment" on the reverse of the Security, will be
received by the Paying Agent not earlier than 60 days nor later
than 30 days prior to the Repayment Date (or such other dates as
the terms of the Securities provide). If less than the entire
principal amount of such Security is to be repaid in accordance
with the terms of such Security, the principal amount of such
Security to be repaid, in increments of the minimum denomination
for Securities of such series, and the denomination or
denominations of the Security or Securities to be issued to the
Holder for the portion of the principal amount of such Security
surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the
option of the Holder thereof may not be repaid in part if,
following such repayment, the unpaid principal amount of such
Security would be less than the minimum authorized denomination
of Securities of the series of which such Security to be repaid
is a part. Except as otherwise may be provided by the terms of
any Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be
irrevocable unless waived by the Company.
SECTION 1304. WHEN SECURITIES PRESENTED FOR REPAYMENT BECOME DUE
AND PAYABLE.
If a valid repayment election with respect to Securities of
any series providing for repayment at the option of the Holders
thereof shall have been received as provided in this Article and
as provided by or pursuant to the terms of such Securities, such
Securities or the portions thereof, as the case may be, to be
repaid shall become due and payable and shall be paid by the
Company on the Repayment Date therein specified,
<PAGE>
9
and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date)
such Securities shall cease to bear interest. Upon the making of
a valid election for repayment by a Holder of any such Security
in accordance with such provisions, the principal amount of such
Security so to be repaid shall be paid by the Company, together
with accrued interest, if any, to the Repayment Date; provided,
however, that installments of interest, if any, whose Stated
Maturity is on or prior to the Repayment Date shall be payable to
the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions
of Section 307.
If the principal amount of any Security received by the
Paying Agent for repayment shall not be so repaid upon such
receipt, the principal amount (together with interest, if any,
thereon accrued to such Repayment Date) shall, until paid, bear
interest from the Repayment Date at the rate of interest set
forth in such Security.
SECTION 1305. SECURITIES REPAID IN PART.
Upon receipt of any Security which is to be repaid in part
only, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without
service charge and at the expense of the Company, a new Security
or Securities of the same series, of any authorized denomination
specified by the Holder, in an aggregate principal amount equal
to and in exchange for the portion of the principal of such
Security so received which is not to be repaid.
ARTICLE FOUR
MISCELLANEOUS
Section 401. EXECUTION OF SUPPLEMENTAL INDENTURE. This Seventh
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Original Indenture
<PAGE>
10
and, as provided in the Original Indenture, this Seventh Supplemental Indenture
forms a part thereof.
Section 402. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Seventh Supplemental Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
Section 403. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 404. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Seventh Supplemental Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
Section 405. SEPARABILITY CLAUSE. In case any provision in this
Seventh Supplemental Indenture or in the Senior Notes shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 406. BENEFITS OF SEVENTH SUPPLEMENTAL INDENTURE. Nothing in
this Seventh Supplemental Indenture or in the Senior Notes, express or implied,
shall give to any person, other than the parties hereto and their successors
hereunder and the holders, any benefit or any legal or equitable right, remedy
or claim under this Seventh Supplemental Indenture.
<PAGE>
11
Section 407. GOVERNING LAW. This Seventh Supplemental Indenture and
each Senior Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be governed by and construed in
accordance with the laws of said State.
Section 408. EXECUTION AND COUNTERPARTS. This Seventh Supplemental
Indenture may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
<PAGE>
12
IN WITNESS WHEREOF, the parties hereto have caused this Seventh
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
UTILICORP UNITED INC.
[Seal] By: /s/ DALE J. WOLF
Name: Dale J. Wolf
Title: Vice President,
Finance
Attest:
RANDAL P. MILLER
Title: Asst. Treasurer
THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
[Seal] By: /s/ STEVEN M. WAGNER
Name: Steven M. Wagner
Title: Vice President
Attest:
T. MARSHALL
Title: Trust Officer
<PAGE>
STATE OF MISSOURI )
) ss.:
COUNTY OF JACKSON )
On the 6th day of June, 1995, before me personally came
Dale J. Wolf, to me known, who, being by me duly sworn, did depose and
say that he is Vice President--Finance of UtiliCorp United Inc., the
corporation described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ Joyce J. Auer
----------------------------------
Notary Public,
State of Missouri
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On the 7th day of June, 1995, before me personally came
Steven M. Wagner, to me known, who, being by me duly sworn, did depose and say
that he is Vice President of The First National Bank of Chicago, the national
banking association described in and which executed the foregoing instrument;
that he knows the seal of said association; that the seal affixed to said
instrument is such association seal; that it was so affixed by authority of the
Board of Directors of said association, and that he signed his name thereto by
like authority.
/s/ Somsri Helmers
----------------------------------
Notary Public,
State of ________
<PAGE>
EXHIBIT A
[FORM OF FACE OF SENIOR NOTE]
REGISTERED REGISTERED
UTILICORP UNITED INC.
6 3/8% SENIOR NOTE DUE 2005
No. $
UTILICORP UNITED INC., a corporation duly organized and existing under
the laws of Delaware (herein called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ____________________, or registered
assigns, the principal sum of __________________________________________ DOLLARS
on June 1, 2005, and to pay interest thereon from June 9, 1995, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on June 1 and December 1 in each year, commencing December 1,
1995, at the rate per annum provided in the title hereof, until the principal
hereof is paid or made available for payment, and, subject to the terms of the
Indenture, at the rate per annum provided in the title hereof on any overdue
principal and premium, if any, and (to the extent that the payment of such
interest shall be legally enforceable) on any overdue instalment of interest.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Holder
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
payment, which shall be the May 15 or November 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date, and may either be paid to the
Holder in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, in which event notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
<PAGE>
- 2 -
Payment of the principal of and premium, if any, and interest on this
Security will be made at the office or agency of the Trustee maintained for that
purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Holder entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, or an Authenticating Agent, by
manual signature of one of its authorized officers, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
<PAGE>
- 3 -
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
UTILICORP UNITED INC.
Dated: By:___________________________
Title:
________________
Attest:
______________________________
[Seal] Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Senior
Notes of the series designated
herein referred to in the
within-mentioned Indenture
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:____________________________
Authorized Officer
<PAGE>
[FORM OF REVERSE OF SENIOR NOTE]
UTILICORP UNITED INC.
6 3/8% SENIOR NOTE DUE 2005
This Senior Note is one of a duly authorized series of securities of
the Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of November 1, 1990, as amended and
supplemented (as amended and supplemented, the "Indenture"), between the Company
and The First National Bank of Chicago, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and the
terms upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof, limited in
aggregate principal amount to $100,000,000.
This Security is not subject to any sinking fund, nor may this
Security be redeemed at the option of the Company prior to the Maturity Date.
This Security may be repaid by the Company at the option of the Holder on June
1, 2000 (the "Repayment Date"). The Repayment Price shall be 100% of the
principal amount of this Security plus accrued interest to the Repayment Date,
but interest installments whose Stated Maturity is prior to the Repayment Date
will be payable to the Holder of this Security, or one or more Predecessor
Securities, of record at the close of business on the relevant Regular or
Special Record Dates, all as provided in the Indenture. For this Security to be
repaid at the option of the Holder, the Paying Agent must receive, during the
period from and including April 1, 2000 to and including the close of business
on May 1, 2000 (or, if May 1, 2000 is not a Business Day, the next succeeding
Business Day) (a) appropriate wire transfer instructions and (b) either (i) this
Security with the form entitled "Option to Elect Repayment" below duly completed
or (ii) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc. or a commercial bank or trust company in the United States setting forth
the name of the Holder of this Security, the principal amount of this Security,
the portion of principal amount of this Security to be repaid, the certificate
number or a description of the tenor and terms of this Security, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that this Security, together with the duly completed form entitled "Option to
Elect Repayment" on this Security, will be
<PAGE>
- 2 -
received by the Paying Agent not later than the fifth Business Day after the
date of such telegram, telex, facsimile transmission or letter, PROVIDED,
HOWEVER, that such Security and form duly completed are received by the Paying
Agent by such fifth Business Day. Exercise of the repayment option by the
Holder shall be irrevocable unless waived by the Company. The repayment option
with respect to this Security may be exercised by the Holder for less than the
entire principal amount hereof, PROVIDED that the principal amount, if any, of
this Security that remains outstanding after such repayment must be an
authorized denomination as defined herein. The Company will not be required to
register the transfer or exchange of any Security following the receipt of a
notice to repay a Security as described above. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Security
for repayment will be determined by the Paying Agent, whose determination will
be final and binding. In the event of repayment of this Security in part only,
a new Security or Securities of this series and of like tenor and for a
principal amount equal to the unrepaid portion will be delivered to the Holder
upon the cancellation hereof.
Interest payments for this Security will be computed and paid on the
basis of a 360-day year of twelve 30-day months. If an Interest Payment Date
falls on a day that is not a Business Day, such Interest Payment Date will be
the following day that is a Business Day.
The Indenture contains provisions for defeasance of (a) the entire
indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than 66 2/3% in principal amount of the
Securities at the time Outstanding of all series to be affected (voting as a
class). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain
<PAGE>
- 3-
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest, if any, on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and premium,
if any, and interest, if any, on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and in integral multiples thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Holder in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company,
<PAGE>
- 4-
the Trustee nor any such agent shall be affected by notice to the contrary.
This Security shall be governed by and construed in accordance with
the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
<PAGE>
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION OF THE HOLDER
AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHTS
The undersigned hereby irrevocably requests and instructs the Company
to repay the attached Security (or portion thereof specified below) pursuant to
its terms at a price equal to 100% of the principal amount thereof together in
the case of any such repayment with interest to the Repayment Date, to the
undersigned at ___________________________________________.
For the Security to be repaid at the option of the Holder, the Paying
Agent must receive as its corporate trust office, at any time from and including
April 1, 2000 to and including the close of business on May 1, 2000 (or if May
1, 2000 is not a Business Day, the next succeeding Business Day), (a)
appropriate wire transfer instructions and (b) either (i) the Security together
with this "Option to Elect Repayment" form duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national securities
exchange, or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States setting forth the name of
the Holder of the Security, the principal amount of the Security, the principal
amount of the Security to be repaid, the certificate number or a description of
the tenor and terms of the Security, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the Security, together
with this duly completed form entitled "Option to Elect Repayment" on the
reverse of the Security, will be received by the Paying Agent not later than the
fifth Business Day after the date of such telegram, telex, facsimile
transmission or letter, provided, however, that such telegram, telex, facsimile
transmission or letter shall be effective only if the Security with such form
duly completed are received by the Paying Agent by such fifth Business Day.
If less than the entire principal amount of the attached Security is
to be repaid, specify the portion thereof which the Holder elects to have
repaid: ____________________; and specify the denomination or denominations
(which shall be an Authorized Denomination) of the Security or Securities to be
issued to the Holder for the portion of the within Security not being repaid (in
the absence of any specification, one such Security will be issued for the
portion not being repaid): ______________________.
Dated:_______________________ ______________________________
NOTICE: The signature to this
Option to Elect Repayment must correspond
with the name as written upon the face of the
within instrument in every particular,
without alteration or enlargement or any
change whatsoever.
<PAGE>
UTILICORP UNITED INC. Exhibit 11
COMPUTATION OF EARNINGS PER SHARE
(in millions, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
------------------- ----------------
Line No.
- --------
<S> <C> <C> <C> <C>
Earnings Available for Common Shares:
(a) Earnings available for common shares as reported 6.72 6.61 38.38 43.99
(b) Elimination of interest on convertible subordinated
debenture, net of tax 0.10 0.14 0.22 0.29
(c) Elimination of dividends on cumulative
convertible preference stock - 0.29 - -
------------------- ----------------
(d) Fully Diluted Earnings Available 6.82 7.04 38.60 44.28
------------------- ----------------
------------------- ----------------
Weighted Average Common Shares Outstanding:
(e) Primary weighted average shares outstanding
as reported 45.05 44.38 44.93 43.33
(f) Assumed conversion of convertible subordinated
debenture 0.50 - 0.50 0.57
(g) Assumed conversion of cumulative convertible
preference shares - - - -
------------------- ----------------
(h) Fully Diluted Weighted Average Shares
Outstanding 45.55 44.38 45.43 43.90
------------------- ----------------
------------------- ----------------
Earnings Per Common Share:
Primary (a/e) $ .15 $ .15 $ .85 $1.02
Fully Diluted (d/h) .15 .15 .85 1.01
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
10-Q FOR THE QUARTER ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1718
<OTHER-PROPERTY-AND-INVEST> 939
<TOTAL-CURRENT-ASSETS> 445
<TOTAL-DEFERRED-CHARGES> 259
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3361
<COMMON> 45
<CAPITAL-SURPLUS-PAID-IN> 780
<RETAINED-EARNINGS> 106
<TOTAL-COMMON-STOCKHOLDERS-EQ> 922
0
25
<LONG-TERM-DEBT-NET> 1074
<SHORT-TERM-NOTES> 208
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 135
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 997
<TOT-CAPITALIZATION-AND-LIAB> 3361
<GROSS-OPERATING-REVENUE> 1,327
<INCOME-TAX-EXPENSE> 25
<OTHER-OPERATING-EXPENSES> 0
<TOTAL-OPERATING-EXPENSES> 1,211
<OPERATING-INCOME-LOSS> 117
<OTHER-INCOME-NET> 0
<INCOME-BEFORE-INTEREST-EXPEN> 123
<TOTAL-INTEREST-EXPENSE> 59
<NET-INCOME> 39
1
<EARNINGS-AVAILABLE-FOR-COMM> 38
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 108
<EPS-PRIMARY> .85
<EPS-DILUTED> .85
</TABLE>
