<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 1-3562
UTILICORP UNITED INC.
(Exact name of registrant as specified in its charter)
Delaware 44-0541877
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
20 West Ninth Street, Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 816-421-6600
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 registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 10, 2000
- -----
Common Stock, $1 par value 93,608,536
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Information regarding the consolidated condensed financial statements is set
forth on pages 3 through 11.
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 12 through 17.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and qualitative disclosures regarding market risk can be found on
page 8.
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
None.
ITEM 5. OTHER INFORMATION
For a discussion with regard to an environmental matter, see page 10.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits and reports on form 8-K can be found on page 18.
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UTILICORP UNITED INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME--UNAUDITED
<TABLE>
<CAPTION>
Three Months Ended
March 31,
- -------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sales $4,749.7 $3,801.0
Cost of sales 4,431.8 3,518.1
- -------------------------------------------------------------------------------------------------------------
GROSS PROFIT 317.9 282.9
- -------------------------------------------------------------------------------------------------------------
Operating, administrative and maintenance expense 161.2 136.4
Depreciation expense 52.7 44.5
OTHER (INCOME) EXPENSE:
Equity in earnings of investments and partnerships (22.6) (11.9)
Other (5.5) 2.3
- -------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE INTEREST AND TAXES 132.1 111.6
- -------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE:
Interest expense 43.4 34.5
Minority interest in income of partnership and trust 8.3 2.2
- -------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 51.7 36.7
- -------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 80.4 74.9
Income taxes 26.0 23.0
- -------------------------------------------------------------------------------------------------------------
NET INCOME $ 54.4 $ 51.9
- -------------------------------------------------------------------------------------------------------------
EARNINGS PER COMMON SHARE:
Basic $ .59 $ .57
Diluted $ .59 $ .57
=============================================================================================================
DIVIDENDS PER COMMON SHARE $ .30 $ .30
=============================================================================================================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
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UTILICORP UNITED INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
DOLLARS IN MILLIONS 2000 1999
- ---------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 224.8 $ 224.9
Funds on deposit 32.4 47.3
Accounts receivable, net 1,485.9 1,446.5
Inventories and supplies 138.1 266.0
Price risk management assets 243.6 198.2
Prepayments and other 137.0 89.3
- ---------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 2,261.8 2,272.2
- ---------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 3,532.7 3,665.1
Investments in subsidiaries and partnerships 1,116.3 1,063.9
Price risk management assets 247.2 206.5
Merchant notes receivable 200.5 179.3
Deferred charges 136.2 151.6
- ---------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $7,494.7 $7,538.6
===============================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Current maturities of long-term debt $ 140.1 $ 42.8
Short-term debt 117.5 248.9
Accounts payable 1,649.8 1,713.1
Accrued liabilities 86.3 59.2
Price risk management liabilities 213.0 181.7
Other 80.3 99.0
- ---------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 2,287.0 2,344.7
- ---------------------------------------------------------------------------------------------------------------
LONG-TERM LIABILITIES:
Long-term debt, net 2,170.3 2,202.3
Deferred income taxes and credits 446.3 434.2
Price risk management liabilities 554.5 520.7
Minority interest 74.4 76.8
Other deferred credits 133.6 84.5
- ---------------------------------------------------------------------------------------------------------------
TOTAL LONG-TERM LIABILITIES 3,379.1 3,318.5
- ---------------------------------------------------------------------------------------------------------------
Company-obligated mandatorily redeemable preferred securities of
partnership 100.0 100.0
Company-obligated mandatorily redeemable security of trust holding
solely parent company senior deferrable notes 250.0 250.0
Common shareholders' equity 1,478.6 1,525.4
- ---------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $7,494.7 $7,538.6
===============================================================================================================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE>
UTILICORP UNITED INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME--UNAUDITED
<TABLE>
<CAPTION>
Three Months Ended
March 31,
- --------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Income $54.4 $51.9
Other comprehensive income (loss):
Unrealized translation adjustments (36.3) 3.7
- ---------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME $18.1 $55.6
===============================================================================================================
</TABLE>
CONSOLIDATED CONDENSED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
DOLLARS IN MILLIONS 2000 1999
- ---------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
Common Stock: authorized 200,000,000 shares, par value $1 per share;
93,605,985 shares outstanding at March 31, 2000 and 93,605,700
shares outstanding at December 31, 1999; authorized 20,000,000
shares of Class A common stock, par value $1 per share,
none issued $ 93.6 $ 93.6
Premium on Capital Stock 1,219.1 1,226.5
Retained Earnings 265.9 239.3
Treasury Stock, at cost (1,753,465 and 282,233 shares at March 31, 2000
and December 31, 1999, respectively) (35.1) (5.4)
Accumulated Other Comprehensive Losses (64.9) (28.6)
- ---------------------------------------------------------------------------------------------------------------
TOTAL COMMON SHAREHOLDERS' EQUITY $1,478.6 $1,525.4
===============================================================================================================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
<PAGE>
UTILICORP UNITED INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS--UNAUDITED
<TABLE>
<CAPTION>
Three Months Ended
March 31,
- ----------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
- ----------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 54.4 $ 51.9
Adjustments to reconcile net income to net cash provided:
Depreciation expense 52.7 44.5
Net changes in price risk management assets and liabilities (21.0) (5.8)
Income taxes and investment tax credits 12.1 4.5
Equity in earnings of investments and partnerships (22.6) (11.9)
Dividends from investments and partnerships --- 3.0
Merchant notes receivable (21.2) (11.7)
Minority interests (2.4) 1.9
Changes in certain assets and liabilities:
Accounts receivable/payable, net (37.5) (38.0)
Inventories and supplies 127.9 73.0
Prepayments and other (14.0) 27.2
Accrued liabilities, net 27.0 9.1
Other (7.5) (1.4)
- ------------------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES 147.9 146.3
- ------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to utility plant (35.6) (25.0)
Investments in international businesses --- (485.0)
Other (26.6) (7.9)
- ------------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES $ (62.2) $(517.9)
- ------------------------------------------------------------------------------------
</TABLE>
6
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UTILICORP UNITED INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS--UNAUDITED, CONTINUED
<TABLE>
<CAPTION>
Three Months Ended
March 31,
- --------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Treasury stock sold (acquired) $ (32.1) $ 13.4
Issuance of long-term debt 112.0 310.7
Retirement of long-term debt (0.5) (0.9)
Short-term borrowings (repayments), net (131.4) 127.4
Cash dividends paid (27.8) (27.6)
Other (6.0) (2.2)
- --------------------------------------------------------------------------------------------------------------
CASH (USED FOR) PROVIDED FROM FINANCING ACTIVITIES (85.8) 420.8
- --------------------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents (0.1) 49.2
Cash and cash equivalents at beginning of period 224.9 120.5
- --------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 224.8 $ 169.7
==============================================================================================================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
7
<PAGE>
UTILICORP UNITED INC.
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with the accounting policies described in the
consolidated financial statements and related notes included in our 1999
Annual Report on Form 10-K. We believe it is best to read our year-end
consolidated financial statements in conjunction with this report. The
year-end financial statements presented were derived from our audited
financial statements, but do not include all disclosures required by
generally accepted accounting principles. In our opinion, the accompanying
consolidated condensed financial statements reflect all adjustments (which
include only normal recurring adjustments) necessary for a fair
representation of our financial position and the results of our 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 sales and expenses during the reporting periods shown have been made in
preparing the consolidated condensed financial statements. Actual results
could differ from these estimates.
Certain prior year amounts in the consolidated financial statements have been
reclassified where necessary to conform to the 2000 presentation.
FINANCIAL INSTRUMENTS
TRADING ACTIVITIES
We trade energy commodity contracts daily. Our trading activities attempt to
match our portfolio of physical and financial contracts to current or
anticipated market conditions. Within the trading portfolio, we take certain
positions to hedge physical sale or purchase contracts and we take certain
positions to take advantage of market trends and conditions. We record most
energy contracts - both physical and financial - at fair market value.
Changes in value are reflected in the consolidated statement of income. We
use all forms of financial instruments including futures, forwards, swaps and
options. Each type of financial instrument involves different risks. We
believe financial instruments help us manage our exposure to changes in
market prices and take advantage of selected arbitrage opportunities.
We refer to these transactions as risk management activities.
NON-TRADING ACTIVITIES--HEDGING INSTRUMENTS
We enter into forwards, futures and other contracts related to our commodity
businesses solely to hedge future production. The estimated fair value and
cash flow requirements for these financial instruments are based on the
market prices in effect at the financial statement date and do not
necessarily reflect our entire trading portfolio.
8
<PAGE>
UTILICORP UNITED INC.
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS--CONTINUED
(UNAUDITED)
2. EARNINGS PER COMMON SHARE
The following table shows the amounts used in computing basic and diluted
earnings per common share and the effect on income and weighted average
number of shares of dilutive potential common stock for the three-month
periods ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>
Three Months Ended
IN MILLIONS, EXCEPT PER SHARE AMOUNTS March 31
- ------------------------------------------------------------------------------------------------------------------
2000 1999
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Earnings available for common shares $54.4 $51.9
Convertible bonds .1 --
- ------------------------------------------------------------------------------------------------------------------
Earnings available for common shares after assumed conversion of dilutive securities
Securities $ 54.5 $ 51.9
- ------------------------------------------------------------------------------------------------------------------
Earnings per share:
Basic $ .59 $ .57
Diluted $ .59 $ .57
- ------------------------------------------------------------------------------------------------------------------
Weighted average number of common shares used in basic earnings per share 92.6 90.8
Per share effect of dilutive securities:
Stock options -- .6
Convertible bonds .3 .3
- ------------------------------------------------------------------------------------------------------------------
Weighted number of common shares and dilutive potential common shares used in diluted
earnings per share 92.9 91.7
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
3. FINANCINGS, MERGERS, ACQUISITIONS AND DIVESTITURES
ORION ACQUISITION
On March 22, 2000, we expanded our presence in the New Zealand energy market
by announcing an agreement to purchase the natural gas distribution network
and North Island contracting business of Orion New Zealand Limited for $268
million. The shareholders of UnitedNetworks approved the transaction at their
April 20, 2000, shareholders' meeting. The transaction has an effective date
of April 1, 2000.
QUANTA SERVICES, INC.
On April 26, 2000, we increased our ownership in Quanta Services through the
purchase of additional common shares and subordinated notes. When combined
with our previous investments, our effective ownership in Quanta now is
approximately 36 percent. We are currently evaluating alternative sources of
financing to permanently fund these recent transactions.
EVEREST COMMUNICATIONS CORP.
On April 18, 2000, we announced a joint venture with GLA New Ventures, L.L.C.
to form Everest Global Technologies Group, L.L.C., which has the intention to
construct and operate broadband fiber-optic networks to homes and businesses
in select U.S. markets. We have also committed, subject to
9
<PAGE>
Everest meeting various performance targets and, if required by the Everest
board, of which we control 50 percent, that we will provide additional
capital funding for expansion purposes.
MULTINET/IKON
During the first quarter of 2000, we entered into an agreement to guarantee a
$210 million bridge facility at Multinet/Ikon. It is intended that the
proceeds from the Pulse Energy transaction, which is expected to close by
June 30, 2000, will be used to repay this debt and eliminate our guarantee.
If the Pulse Energy transaction does not close on or before June 30, 2000, we
could be required to repay this bridge facility by injecting additional
capital into Multinet/Ikon.
NEW ZEALAND
We have announced our intention to enter into a binding agreement to sell a
portion of our New Zealand investments to a private equity investor that will
close before June 30, 2000, reducing our effective ownership in
UnitedNetworks to about 62 percent. As a result of this transaction, we will
no longer control the operations of UnitedNetworks, Ltd. and therefore will
not consolidate its operations for financial statement purposes. An effect of
deconsolidation will be the removal of approximately $435 million in New
Zealand debt from our balance sheet.
We intend to refinance $112 million of our New Zealand short-term debt
utilizing a credit facility with a maturity of at least two years.
Accordingly, we have classified this amount as long-term debt at March 31,
2000.
TRANSALTA ASSETS
On May 10, 2000, the Missouri Public Service Commission staff recommended the
Commission to approve the acquisition of the TransAlta Corporation's
Alberta-based electricity distribution assets for $450 million. The
Commission's decision is expected within two to three weeks.
ST. JOSEPH POWER & LIGHT
The staff of the Missouri Public Service Commission filed comments on May 2,
2000 regarding UtiliCorp United, Inc. and St. Joseph Light & Power Co.'s
merger application. The staff's testimony indicates its opposition to the
approval of the merger under the regulatory plan offered by the applicants.
The applicants will file response comments June 26, 2000 and the formal
hearing date is scheduled for July 11-15, 2000.
SENIOR NOTES
We have been notified by the holders of the $100 million 6.375 percent Senior
Notes that they intend to exercise their option to require us to redeem these
Notes effective June 1, 2000. We have classified these Senior Notes as
current maturities of long-term debt at March 31, 2000.
4. ENVIRONMENTAL MATTER
Federal and state agencies are investigating apparent violations of
environmental laws by employees of a former division, committed while we
owned the division.
Based in Omaha, Nebraska, the division under investigation conducted a water
and wastewater treatment business and was sold by us in January 1997. One
former employee of the division has pleaded guilty to criminal charges
arising out of the investigation. We do not currently know what the outcome
of the investigation or its effect on us may be.
10
<PAGE>
5. REPORTABLE SEGMENT RECONCILIATION
<TABLE>
<CAPTION>
Three Months Ended
March 31
- ------------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SALES:
Networks:
United States $ 525.1 $ 477.4
Canada 25.8 23.2
New Zealand 45.9 52.5
Australia -- --
- ------------------------------------------------------------------------------------------------------------------
Total Networks 596.8 553.1
Energy Merchant:
Commodity Services 4,071.8 3,173.1
Energy Assets:
Capacity Services 80.4 74.6
Capital Services .6 --
Services -- --
Corporate and Other .1 .2
- ------------------------------------------------------------------------------------------------------------------
TOTAL $4,749.7 $3,801.0
==================================================================================================================
EBIT:
Networks:
United States $ 71.4 $ 77.6
Canada 7.2 3.8
New Zealand 16.4 14.5
Australia 4.0 5.2
- ------------------------------------------------------------------------------------------------------------------
Total Networks 99.0 101.1
Energy Merchant:
Commodity Services 21.3 8.8
Energy Assets:
Capacity Services 8.4 3.0
Capital Services 4.5 (0.2)
- ------------------------------------------------------------------------------------------------------------------
Total Energy Merchant 34.2 11.6
Services 10.2 ---
Corporate and Other (11.3) (1.1)
- ------------------------------------------------------------------------------------------------------------------
TOTAL $ 132.1 $ 111.6
==================================================================================================================
</TABLE>
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
UTILICORP UNITED INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
EXCEPT WHERE NOTED, THE FOLLOWING DISCUSSION REFERS TO THE CONSOLIDATED
ENTITY, UTILICORP UNITED INC. OUR BUSINESS SEGMENTS INCLUDE THE FOLLOWING
BUSINESS GROUPS: NETWORKS, CONSISTING PRIMARILY OF DOMESTIC AND INTERNATIONAL
TRANSMISSION, DISTRIBUTION AND GENERATION UTILITY OPERATIONS, ENERGY
MERCHANT, CONSISTING PRIMARILY OF DOMESTIC AND INTERNATIONAL ENERGY MARKETING
(BOTH GAS AND ELECTRIC), SERVICES CONSISTING OF OUR TELECOMMUNICATION EFFORTS
AND VARIOUS EQUITY INVESTMENTS. THE LIQUIDITY AND CAPITAL RESOURCES SECTION
IS PREPARED ON A CONSOLIDATED BASIS.
FORWARD-LOOKING INFORMATION
This report contains forward-looking information. These statements involve
risks and uncertainties, and there are certain important factors that can
cause actual results to differ materially from those anticipated. Some of the
important factors that can cause actual results to differ materially from
those anticipated include:
* Both our Networks and Merchant businesses are weather-sensitive.
Weather can affect results significantly to the extent that
temperatures differ from normal.
* We are exposed to market risk and may incur losses from our
marketing and trading operations.
* We may not be able to implement our strategy if we are unable to
access or generate capital at competitive rates.
* The timing and extent of changes in interest rates can affect
financial results.
* We may not be able to successfully integrate acquired businesses
into our operations.
* The volatility of natural gas and natural gas liquids prices can
significantly affect the earnings contribution from the Energy
Assets capacity and capital segment of our commodity business
group.
* The pace of well connections to our gas gathering system can
affect the earnings contribution from the Energy Assets segment of
our Energy Merchant business group.
* Our development of a merchant power plant may not be successful or
profitable.
* The pace and degree of regulatory changes in the U.S. and abroad
can affect new business opportunities and the intensity of
competition.
* The value of the U.S. dollar relative to the British pound,
Canadian dollar, Australian dollar, and New Zealand dollar can
affect financial results from foreign operations.
* The earnings contribution from our Australian operations may
decrease in the near future due to customers becoming contestable
and rate resets.
* The continued expansion of the electric power markets and
development of liquid term markets.
* Pending rate proceedings will affect future network earnings.
* Expansion of electric markets in the United Kingdom and Europe
will affect the level of marketing and trading activities.
12
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
We believe our liquidity and capital resources are sufficient and provide
adequate financial flexibility to meet our anticipated cash needs. Our
operations have historically generated strong positive cash flow, which,
along with our credit lines, accounts receivable sales programs and access to
capital markets have provided adequate liquidity to meet our short-term and
long-term cash requirements, including requirements for acquisitions.
We utilize accounts receivable sales programs to efficiently manage our
working capital and provide immediate liquidity. In September 1999, due to
growth in the trading business, we increased our total capacity under these
programs by $125 million to $405 million. At March 31, 2000, we had sold
approximately $335.6 million of receivables under these programs. In addition
to the accounts receivable sales program, we can issue up to $150 million of
commercial paper, which is supported by a $250 million revolving credit
agreement. We had no commercial paper borrowings at March 31, 2000.
We have been notified by the holders of the $100 million 6.375 percent Senior
Notes that they intend to exercise their option to require us to redeem these
Notes effective June 1, 2000. We have classified these Senior Notes as
current maturities of long-term debt at March 31, 2000.
SIGNIFICANT BALANCE SHEET MOVEMENTS
Total assets decreased by $43.9 million since December 31, 1999. This
decrease is primarily attributable to the following:
* Inventories and supplies decreased by $127.9 million. This decrease
primarily relates to a seasonal decrease in our storage natural gas.
* Prepayment and other increased $47.7 million due to expansion of our
Energy Merchant businesses.
* Price risk management assets and liabilities changed a net of $21.0
million. Both the assets and liabilities increased primarily due to the
pricing of contracts based on future values of gas and power, which can
fluctuate significantly.
* Investments in subsidiaries and partnerships increased $52.4 million.
Contributing to this increase is the equity in earnings of $22.6
million and $55.0 million associated with our investment in the Aries
plant.
* Net property, plant and equipment decreased $132.4 million. This
decrease is due primarily to the sale of 50 percent of our ownership of
the Aries combined cycle plant to Calpine Corporation. Our investment
is now accounted for using the equity method and is now reflected in
investment in subsidiaries and partnerships.
Total liabilities increased by $2.9 million and common shareholders' equity
decreased by $46.8 million since December 31, 1999. These decreases are
primarily attributable to the following:
* Short-term and long-term debt together decreased $66.1 million. This
decrease is primarily due to currency rate fluctuations in New Zealand
and Australia.
* Accounts payable decreased by $63.3 million. This decrease is primarily
due to the seasonality and price fluctuations of the gas and power
trading business.
* Common shareholders' equity decreased by $46.8 million primarily due
to an increase of $29.7 million in treasury stock, an increase of
$26.6 million in retained earnings, an offsetting decrease of $7.4
million in premium on capital stock, and $36.3 million decrease in
the currency translation adjustment, resulting from a five-to-ten
percent unfavorable change in foreign currency rates. The majority
of the translation adjustment effect related to New Zealand and
Canada.
13
<PAGE>
RESULTS OF OPERATIONS
NETWORKS
The table below summarizes the operations of our domestic and international
networks for the first quarter of each year.
<TABLE>
<CAPTION>
Three Months Ended
March 31
- ----------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Electric $ 231.8 $ 208.0
Gas 257.0 269.3
Other 108.0 75.8
- ----------------------------------------------------------------------------------------------------------------
Total sales 596.8 553.1
- ----------------------------------------------------------------------------------------------------------------
Cost of sales:
Electric 97.7 60.7
Gas 165.0 171.4
Other 104.4 85.0
- ----------------------------------------------------------------------------------------------------------------
Total cost of sales 367.1 317.1
- ----------------------------------------------------------------------------------------------------------------
Gross profit 229.7 236.0
- ----------------------------------------------------------------------------------------------------------------
Operating expenses:
Operation 73.9 71.0
Depreciation 40.2 39.0
Maintenance 12.8 12.6
Taxes, other than income taxes 14.7 17.1
- ----------------------------------------------------------------------------------------------------------------
Total operating expenses 141.6 139.7
- ----------------------------------------------------------------------------------------------------------------
Equity in earnings of investments and partnerships 7.0 4.9
Other income (expense) 3.9 (0.1)
- ----------------------------------------------------------------------------------------------------------------
Earnings before interest and taxes (EBIT) $ 99.0 $ 101.1
================================================================================================================
EBIT by segment subunit:
United States $ 71.4 $ 77.6
Canada 7.2 3.8
New Zealand 16.4 14.5
Australia 4.0 5.2
- ----------------------------------------------------------------------------------------------------------------
Total Networks $ 99.0 $ 101.1
================================================================================================================
</TABLE>
DOMESTIC NETWORKS
Gross profit for our domestic Networks decreased $7.3 million in 2000
compared to the 1999 quarter. This decrease is primarily due to higher
purchase power costs, which were approximately 30 percent higher year to year
due to a change in fuel mix at a power plant. Additionally, in 1999 we used
more pet coke, which is cheaper, however, due to the emission allowance
restrictions that took effect January 1, 2000, we did not continue such
activity this year. Gross profit in the 2000 period was also reduced as a
result of the sale of our West Virginia business that contributed gross
profit of $7.7 million in the first quarter of 1999. Our weather hedge
strategy protected the first quarter 2000 by approximately $5.0 million.
14
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REGULATORY MATTERS
The following is a summary of our pending rate case activity:
<TABLE>
<CAPTION>
RATE CASE DESIGNATION
(IN MILLIONS) TYPE OF SERVICE DATE REQUESTED AMOUNT REQUESTED
<S> <C> <C> <C>
KANSAS Gas October 25, 1999 $6.0
MINNESOTA Gas May 12, 2000 $9.7
</TABLE>
In January 2000, we were ordered to reduce Kansas electric rates by $8.7
million. The order is currently being reconsidered by the Kansas Corporation
Commission. A final order is expected in late May 2000.
ST. JOSEPH LIGHT & POWER COMPANY
The staff of the Missouri Public Service Commission filed comments on May 2,
2000, regarding to UtiliCorp United, Inc. and St. Joseph Light & Power Co.'s
merger application. The staff's testimony indicates its opposition to the
approval of the merger under the regulatory plan offered by the applicants.
The applicants will file response comments June 26, 2000 and the formal
hearing date is scheduled for July 11-15, 2000.
INTERNATIONAL NETWORKS
Our international network operations are managed consistent with the
strategies of our domestic network business segments. We manage our
international businesses with local management that reports separately to our
corporate management.
AUSTRALIA
EBIT for our Australia networks decreased $1.2 million in 2000 compared to
the 1999. The electric distribution business showed improved results over
1999 but this improvement was more than offset by the seasonality of the gas
distribution business, which was purchased in March 1999, and costs
associated with our unsuccessful bid to acquire a utility in South Australia.
NEW ZEALAND
EBIT for our New Zealand networks increased $1.9 million compared to the same
quarter in 1999. We realized a full quarter's EBIT contribution in 2000 from
our TrustPower acquisition, which closed January 31, 1999 and have been able
to continue to reduce costs in the integration of our New Zealand investments.
CANADA
Canadian networks EBIT increased by $3.4 million in the first quarter 2000
compared to the same period in 1999. A 4.9 percent rate increase, coupled
with colder weather in 2000 contributed to this increase.
15
<PAGE>
ENERGY MERCHANT
The table below summarizes the operations of our domestic and international
Energy Merchant businesses for the first quarter of each year.
<TABLE>
<CAPTION>
Three Months Ended
March 31
- -----------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sales $4,152.8 $3,247.7
Cost of sales 4,064.7 3,201.0
- -----------------------------------------------------------------------------------------------------------------
Gross profit 88.1 46.7
- -----------------------------------------------------------------------------------------------------------------
Operating expenses:
Operation 61.8 35.2
Maintenance .2 --
Depreciation 11.1 8.7
- -----------------------------------------------------------------------------------------------------------------
Total operating expenses 73.1 43.9
- -----------------------------------------------------------------------------------------------------------------
Equity earnings of investments and partnerships 4.4 7.0
Other income 14.8 1.8
- -----------------------------------------------------------------------------------------------------------------
Earnings before interest and taxes (EBIT) $ 34.2 $ 11.6
=================================================================================================================
EBIT by segment subunit:
Commodity Services $ 21.3 $ 8.8
Capacity Services 8.4 3.0
Capital Services 4.5 (0.2)
- -----------------------------------------------------------------------------------------------------------------
Total Energy Merchant $ 34.2 $ 11.6
=================================================================================================================
</TABLE>
COMMODITY SERVICES
EBIT for our domestic and international marketing business increased by $12.5
million over the same period in the prior year. This increase is due to
record performance in gas marketing as well as improvements in our carbon and
power marketing business this quarter. The increase in EBIT is also due to
losses in 1999 from our retail business, which was sold in January 2000. We
also settled a long-standing contractual dispute, which favorably impacted
the 2000 first quarter.
CAPACITY SERVICES
The $5.4 million increase in EBIT was due to a 109 percent increase in the
average natural gas liquids (NGLs) prices which increased EBIT by $6.6
million. Operating expenses decreased in 2000 due to the efficiencies gained
from the restructuring completed last year and the non-recurrence of
severance costs from approximately 60 people. Throughput volumes decreased 10
percent and equity earnings decreased due to the loss of the EBIT
contribution of an IPP project sold in late 1999.
CAPITAL SERVICES
EBIT increased $4.7 million in our Capital Services business due to the
continued growth in our structured finance business. We have committed
approximately $275 million in capital as of March 31, 2000.
SERVICES
Our Services segment includes our contracting and telecommunications
businesses. EBIT from our Services business was $10.2 million in the first
quarter of 2000. This business segment primarily consists of our management
fees and equity earnings from our investment in Quanta Services, Inc. This
was a new investment in September 1999.
16
<PAGE>
QUANTA SERVICES, INC.
On April 26, 2000, we increased our ownership in Quanta Services through the
purchase of additional common shares and subordinated notes. When combined
with our previous investments, our effective ownership in Quanta now is
approximately 36 percent. We are currently evaluating alternative sources of
financing to permanently fund these recent transactions.
CORPORATE AND OTHER
The table below summarizes the operations of Corporate and Other for the
quarters.
<TABLE>
<CAPTION>
Three Months Ended
March 31
- --------------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Earnings before interest and taxes (EBIT) $(11.3) $(1.1)
</TABLE>
EBIT for Corporate and Other decreased by $10.2 million when comparing 2000
to 1999. The decrease is attributed to costs associated with our accounts
receivable sales programs and certain other costs related to unsuccessful
acquisition bids.
ENVIRONMENTAL MATTERS
Federal and state agencies are investigating apparent violations of
environmental laws by employees of a former division, committed while we
owned the division.
Based in Omaha, Nebraska, the division under investigation conducted a water
and wastewater treatment business and was sold by us in January 1997. One
former employee of the division has pleaded guilty to criminal charges
arising out of the investigation. We do not currently know what the outcome
of the investigation or its effect on us may be.
ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS 133). In June 1999, the
FASB issued Statement No. 137, "Accounting for Derivative Instruments and
Hedging Activities---Deferral of the Effective Date of FASB Statement No.
133." SFAS 133 establishes accounting and reporting standards for derivative
instruments and hedging activities requiring that every derivative
instrument, including certain derivative instruments embedded in other
contracts, be recorded in the balance sheet as either an asset or liability
measured at its fair value. The statement requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a derivative's gains and losses to offset related results on the
hedged item in the income statement, and requires that the company must
formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. SFAS 133 must be adopted for fiscal years
beginning after June 15, 2000.
A significant portion of the derivatives we use are a component of our price
risk management activities. These derivatives, along with energy commodity
contracts included in our trading activities, are currently reflected on our
balance sheet as assets and liabilities at their fair value. We have not yet
quantified the other effects of adopting SFAS 133 on our financial
statements. We are in the initial phase of projecting the impact of SFAS 133
and expect to have preliminary numbers by September 30, 2000. The new
standards could increase volatility in earnings and other comprehensive
income.
17
<PAGE>
PART II
OTHER INFORMATION
ITEM 5. OTHER INFORMATION
(a) See discussion of environmental matters in Note 4 of our notes to the
consolidated condensed financial statements.
ITEM 6. EXHIBITS
(a) LIST OF EXHIBITS:
10 Transition payment agreement with Charles K. Dempster
27 Financial Data Schedule--Three months ended March 31, 2000.
(b) REPORT ON FORM 8-K
No reports on Form 8-K were filed during the first quarter of 2000.
18
<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, thereunto duly authorized.
UTILICORP UNITED INC.
By: /s/ Peter S. Lowe
-------------------------------
Peter S. Lowe
Senior Vice President and Chief Financial Officer
Date: May 12, 2000
19
<PAGE>
TRANSITION PAYMENT AGREEMENT
RELEASE AND WAIVER OF CLAIMS
UtiliCorp United Inc. ("UtiliCorp") and Charles K. Dempster ("You")
agree as follows:
1. Your active employment status with UtiliCorp will end on March
31, 2000, at which time You will retire from employment with UtiliCorp. In
addition:
(a) You may or may not be required to perform services for
UtiliCorp or its affiliates after March 31, 2000. UtiliCorp
will notify You in writing if You are needed to perform
additional services at any time following March 31, 2000. If
You are so notified, You agree to: (i) cooperate and assist
UtiliCorp and its affiliates in the orderly transition of
management, and (ii) cooperate and assist UtiliCorp and its
affiliates in the investigation and handling of any actual or
threatened court action, arbitration or administrative
proceeding involving any matter that arose during Your
employment (including but not limited to, testifying in
deposition and/or in court and providing information to
UtiliCorp and its affiliates). UtiliCorp agrees to reimburse
You for all out-of-pocket expenses incurred by You in
connection with such cooperation and assistance. Your
obligation to cooperate and assist under this Agreement
terminates on June 30, 2001, or on termination of this
Agreement by uncured breach of this Agreement by UtiliCorp,
whichever occurs first.
(b) In addition to the above, You are available as reasonably
requested by the Chief Executive Officer and/or President of
UtiliCorp, to consult on United States or International
projects, on terms and conditions agreed to by You and
UtiliCorp.
2. You shall be deemed to have voluntarily retired from Your
positions at UtiliCorp and any of UtiliCorp's affiliates, effective the end
of the day March 31, 2000 (Your "Retirement Date"). You further agree to
execute all documents necessary to implement Your retirement effective on or
before Your Retirement Date. There will be a mutually agreed upon internal
and external announcement that will be released following execution of this
Agreement.
3. As consideration for Your execution of this Transition Payment
Agreement, Release and Waiver of Claims ("Agreement"), UtiliCorp agrees to
make payments and provide the benefits set forth in Exhibit A. These payments
and benefits are in addition to any payments or benefits for which You would
be eligible if You did not sign this Agreement, and are the entire payments
and benefits which You will receive pursuant to this Agreement.
4. The benefits provided under any UtiliCorp-sponsored employee
benefit plan will be subject to all terms and conditions set forth therein.
5. In exchange for this Agreement, You (on behalf of You and
anyone claiming through or on behalf of You), release UtiliCorp and
UtiliCorp's affiliates, their successors and assigns, and all of their past
and present employees, officers, directors, and agents from any and all
claims, demands and causes of action You have or may have had against any of
them prior to the date You sign this Agreement, to the maximum extent
permitted by law. This release
<PAGE>
includes, but is not limited to, any and all claims, demands and causes of
action which are related to or concern: Your employment and Your resignation
from employment; attorneys' fees or costs; the UtiliCorp Workforce Transition
Program; discrimination under local, state or federal law; the Missouri
Service Letter Statute; the Age Discrimination in Employment Act; Title VII
of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Americans
With Disabilities Act; the Employee Retirement Income Security Act; and, the
Family and Medical Leave Act, all to the maximum extent permitted by law.
This Release does not include (a) any rights or benefits as set forth in
Exhibit A to this Agreement, or (b) any vested benefits, as of Your
Retirement Date, under any UtiliCorp-sponsored employee benefit plans, in
accordance with the terms of such plans.
6. In exchange for this Agreement, UtiliCorp and UtiliCorp's
affiliates, their successors and assigns, release You, Your heirs, successors
and assigns, from any and all claims, demands and causes of action which they
have or may have against them prior to the date this agreement is signed to
the maximum extent permitted by law. This Release does not include any rights
You or they have under this Agreement.
7. This Agreement is not admission of wrongdoing or liability by
You, UtiliCorp or any of the individuals or entities set forth in Paragraphs
5 and 6, above. Any and all such wrongdoing or liability is expressly denied.
8. You represent that You will have returned all UtiliCorp's and
UtiliCorp's affiliates' files, records, documents, plans, drawings,
specifications, equipment, software, pictures, videotapes, or any property or
other items of UtiliCorp or UtiliCorp's affiliates or concerning the business
of UtiliCorp or UtiliCorp's affiliates, whether prepared by You or otherwise
coming into Your possession or control by March 31, 2000; provided, however,
UtiliCorp will transfer ownership of the Toshiba laptop computer to You
effective on Your Retirement Date.
9. You agree that You shall not at any time, except as authorized
by the Chairman and Chief Executive Officer of UtiliCorp, communicate,
divulge or use, for Your own benefit or for the benefit of any other person,
firm, or corporation, any confidential or proprietary information concerning
UtiliCorp's and UtiliCorp's affiliates' business, including but not limited
to UtiliCorp's and UtiliCorp's affiliates' operations, services, materials,
policies, and the manner in which they are developed, marketed, and provided,
and such other information regarded as trade secrets or confidential or
proprietary information under any applicable law, including without
limitation information that is attorney work product or attorney-client
privileged. These provisions do not apply to data or information that are in
the public domain, or are subsequently released by UtiliCorp to the public
domain.
10. UtiliCorp agrees:
(a) Except as set forth in paragraph 10(b), to the maximum extent
permitted by applicable law, to continue to defend and
indemnify You in any lawsuit and/or administrative proceeding
pending against You as of the date of this Agreement, and to
further defend and indemnify You in any lawsuit and/or
administrative proceeding filed in
2
<PAGE>
the future so long as your actions which are or may be the
subject of litigation and/or administrative proceedings were
taken: (i) within the course and scope of Your employment with
UtiliCorp or as a director with any UtiliCorp affiliate; (ii)
in good faith and in the manner You reasonably believe to be in
or not opposed to the best interests of UtiliCorp; and (iii)
with respect to any criminal action or proceeding, without any
reasonable cause by You to believe Your actions were unlawful.
You must notify UtiliCorp of any written claims made against
You within seven (7) calendar days after You are notified of
such claims and to otherwise cooperate and assist UtiliCorp and
its agents in any defense; and,
(b) To indemnify You as a former member of the Board of Directors
of Aquila Gas Pipeline Corporation ("AQP"), in connection with
the case IN RE: AQUILA GAS PIPELINE CORPORATION SHAREHOLDERS
LITIGATION, CONSOLIDATED CASE NO. 16775 (the "Litigation"), in
accordance with the resolutions passed by the Board of
Directors of UtiliCorp during the May 4 and 5, 1999 meeting
(the "Resolutions"). In accordance with Section 145(e) of the
Delaware Corporation Law, You agree to repay to UtiliCorp any
expenses advanced to You by UtiliCorp in connection with the
Litigation, and all other Indemnified Matters (as defined in
the Resolutions), if it shall ultimately be determined that You
are not entitled to be indemnified against such expenses.
11. The content of this Agreement, and Your discussions with
UtiliCorp pertaining to it, are confidential. You will not communicate or
allow the communication in any manner with respect to the content of this
Agreement, and the discussions pertaining to it, except that the Agreement
may be disclosed by You to Your immediate family members, to Your attorneys
and accountant, tax consultant, financial planner and to governmental taxing
authorities or regulatory agencies, or as may otherwise be required by law.
UtiliCorp agrees that the contents of the Agreement will not be disclosed to
anyone other than those persons and entities with a need to know for
legitimate business purposes, unless otherwise required by a regulatory
agency or by law; disclosure by UtiliCorp to the extent necessary to
implement future obligations of UtiliCorp will not constitute a breach of
this paragraph.
12. If either You or UtiliCorp believe that the other party to this
Agreement has breached its obligations under this Agreement, then the party
claiming a breach will provide notice to the other party, in writing,
including a statement of the specific manner in which the party believes that
this Agreement has been breached. If the breach is not cured, or cannot
reasonably be cured, within thirty (30) days following notice, then the
parties, subject to Paragraph 16, and at their respective options, will be
entitled to proceed as follows:
(a) If UtiliCorp substantially and materially breaches any provision
of this Agreement, payment of any remaining benefits on Exhibit A
shall be accelerated and not be recoverable by UtiliCorp as long
as You have not also substantially breached this Agreement. You
may also pursue any other available remedies for such breach,
including but not limited to recovery of Your costs and attorneys'
fees.
3
<PAGE>
(b) If You substantially and materially breach any provision of
this Agreement, and UtiliCorp has not also substantially and
materially breached this Agreement, then UtiliCorp, at its
option, will be entitled to immediately cease all remaining
payments and benefits under this Agreement. UtiliCorp may also
pursue any other available remedies for such breach, including
but not limited to recovery of its costs and attorneys' fees.
13. You received this version of the Agreement on February 10,
2000. This Agreement has been modified in material respects from the first
date presented to You based on mutual agreement of You and UtiliCorp. You
have been advised in writing to consult with an attorney before signing this
Agreement. You have been provided more than twenty-one (21) calendar days
after initially receiving this Agreement within which to sign it and return
the signed original to UtiliCorp, and You agree that the last day You have to
sign and return this Agreement is March 15, 2000. You may revoke this
Agreement within seven (7) calendar days after You sign it, by providing
written notice of such revocation to UtiliCorp before the expiration of such
seven (7) day period. This Agreement is effective and enforceable on the
eighth (8th) calendar day after You and UtiliCorp have both signed it, if not
revoked prior to that time (the "Effective Date").
14. You acknowledge that no representations have been made to You
by UtiliCorp, UtiliCorp's affiliates, or other agents or legal counsel
regarding the tax implications of any payments made pursuant to this
Agreement. All liability for the employee's share of federal, state, and
local taxes (including FICA) remains with You, unless otherwise agreed to in
writing by UtiliCorp, and UtiliCorp shall deduct all required withholdings
from the consideration payable under this Agreement, giving consideration to
Your current legal residence and employment location in Colorado.
15. This Agreement shall be construed in accordance with the laws
of the State of Missouri.
16. You and the Company agree that if a dispute arises out of or is
related to this Agreement or Your employment by the Company, other than a
dispute regarding the obligations under Paragraphs 8, 9 or 11, such dispute
shall, if not earlier resolved by negotiations of the parties or in
accordance with Paragraph 12, be submitted to binding arbitration under the
Employment Rules of the American Arbitration Association, or the equivalent.
Either party may provide written notice to the other party that the dispute
is not able to be resolved by negotiation and such notifying party shall then
contact the American Arbitration Association for appointment of an arbitrator
to resolve such dispute. Any arbitration hearing shall take place in Jackson
County, Missouri. In addition to all other remedies otherwise available to
the Company, the Company shall have the right to injunctive relief to
restrain and enjoin any actual or threatened breach of the provisions of
Paragraphs 8, 9, or 11.
17. This Agreement, including Exhibit A, contains the entire
agreement of the parties with respect to the matters contemplated by this
Agreement; provided, however, the terms of any employee benefit plan or
insurance contract under which You are receiving benefits or insurance
pursuant to this Agreement will control if there is any inconsistency between
this Agreement and
4
<PAGE>
any employee benefit plan or insurance contract. No change, modification or
waiver of any provisions of this Agreement will be valid unless in writing
and signed by the parties to be bound.
18. You represent and agree that You freely and voluntarily
executed this Agreement, and that no promise, inducement or agreement not
expressed in this Agreement has been made to You by UtiliCorp or any of the
UtiliCorp affiliates.
19. This Agreement is binding on and inures to the benefit of
UtiliCorp's successors and assigns and Your heirs and assigns, except that
any services to be provided by You under this Agreement shall only be
performed by You.
20. Unless either party notifies the other contrary, any notice
required by this Agreement shall be duly given if delivered in person or by
certified, first-class mail (a) if to UtiliCorp, to the Chairman and Chief
Executive Officer at 20 West 9th Street, Kansas City, Missouri 64105, and (b)
if to You, at your current address.
Dated: 3/12/00 /s/ Charles K. Dempster
---------------------- ----------------------------------------
Charles K. Dempster
UTILICORP UNITED INC.
Date: 4/4/00 By: /s/ Richard C. Green, Jr.
----------------------- -------------------------------------
Richard C. Green, Jr.
Chairman and Chief Executive Officer
5
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
EXHIBIT A
CHUCK DEMPSTER
- ----------------------------------------------------------------------------------------------
BENEFIT DESCRIPTION ACTION
- ---------------------------- ----------------------- -----------------------------------------
<S> <C> <C>
TRANSITION PAYMENT $1, 610,477.00, less The lump sum will be paid on April 1,
applicable 2000.
withholdings.
- ---------------------------- ----------------------- -----------------------------------------
1999 ANNUAL INCENTIVE PLAN Per Applicable Annual Paid in restricted stock per prior
Incentive Plan. election. Restrictions will be lifted
immediately following Retirement Date.
- ---------------------------- ----------------------- -----------------------------------------
1999 LONG TERM INCENTIVE Per Applicable Long Paid 50% restricted stock, 50% CAP, per
PLAN Term Incentive Plan. prior election. Restrictions will be
lifted immediately following Retirement
Date.
- ---------------------------- ----------------------- -----------------------------------------
CAP Per election. 15 year distribution with equal
quarterly installments (60 payments
total) @ 130% of Moody's Corporate
Index rate, calculated in accordance
with the CAP terms in effect prior to
October 1, 1999, commencing on or about
60 days following Your Retirement Date.
- ---------------------------- ----------------------- -----------------------------------------
RESTRICTED STOCK Shares held as of Restrictions lifted based on prior
March 31, 2000. elections, or immediately following
Retirement Date if no prior
elections applicable.
- ---------------------------- ----------------------- -----------------------------------------
STOCK OPTIONS 195,102 Shares; Black Fully vested effective April 1, 2000;
Sholes value is UtiliCorp will purchase from You on
$569,697.84. April 1, 2000 in a lump sum (less
applicable tax withholding) at Black
Sholes value.
- ---------------------------- ----------------------- -----------------------------------------
EMPLOYEE STOCK PURCHASE Balance as of March Balance paid to You on April 1, 2000.
PLAN 31, 2000.
- ---------------------------- ----------------------- -----------------------------------------
PENSION Per Plan and Your Commence payments per Plan based on
Election. Retirement Date.
- ---------------------------- ----------------------- -----------------------------------------
401(k) Per Plan and Your Per Your post-Retirement Date election
Election. and Plan provisions.
- ---------------------------- ----------------------- -----------------------------------------
SCRP Per Plan and Your 15 year distribution with quarterly
Election. installments (adjusted quarterly for
investment performance), commencing on
or about 60 days following Retirement
Date.
- ---------------------------- ----------------------- -----------------------------------------
SERP Per Plan. Commence payments per Plan based on
Retirement Date.
- ---------------------------- ----------------------- -----------------------------------------
TAX PREPARATION 1999 tax year. UtiliCorp will pay for Arthur Anderson
to prepare Your individual tax returns
for Federal, State and United Kingdom;
UtiliCorp will also pay for Arthur
Anderson support through any audit that
may arise from Your 1999 or prior year
tax returns prepared by Arthur Anderson.
- ---------------------------- ----------------------- -----------------------------------------
HEALTH AND DENTAL Per Plan. You may elect (a) retiree coverage on
April 1, 2000 if You elect to commence
Pension benefits as of Your Retirement
Date, OR (b) COBRA coverage for 18
months (no option to elect retiree
coverage thereafter), per Plan terms.
- ---------------------------- ----------------------- -----------------------------------------
VISION Per Plan. You may elect COBRA coverage for 18
months, per Plan terms.
- ---------------------------- ----------------------- -----------------------------------------
</TABLE>
6
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 224
<SECURITIES> 0
<RECEIVABLES> 1,486
<ALLOWANCES> 0
<INVENTORY> 138
<CURRENT-ASSETS> 2,262
<PP&E> 5,114
<DEPRECIATION> 1,582
<TOTAL-ASSETS> 7,495
<CURRENT-LIABILITIES> 2,299
<BONDS> 2,158
350
0
<COMMON> 94
<OTHER-SE> 1,391
<TOTAL-LIABILITY-AND-EQUITY> 7,495
<SALES> 4,750
<TOTAL-REVENUES> 4,750
<CGS> 4,432
<TOTAL-COSTS> 214
<OTHER-EXPENSES> (28)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52
<INCOME-PRETAX> 80
<INCOME-TAX> 26
<INCOME-CONTINUING> 54
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54
<EPS-BASIC> .59
<EPS-DILUTED> .59
</TABLE>
