10-Q

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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 June 30, 2001

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 incorporation or organization)	(IRS Employer 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 August 6, 2001
Common Stock, $1 par value	115,274,650

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

    Information regarding the consolidated condensed financial statements is set forth on pages 3 through 13.

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 14 through 22.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    We are subject to market risk as described on pages 32 and 33 of our 2000 Annual Report to Shareholders. There have been no material changes in market risk since December 31, 2000.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

    Not applicable.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

    Information regarding changes in securities can be found on page 22.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

    Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

    Information regarding the submission of matters to a vote of securities holders can be found on page 22.

ITEM 5. OTHER INFORMATION

    Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    Exhibits and reports on Form 8-K can be found on page 23.

2

Part I. Financial Information

Item 1. Financial Statements

UtiliCorp United Inc.
Consolidated Condensed Statements of Income—Unaudited

		Three Months Ended June 30,
Dollars in millions, except per share amounts
		2001			2000
Sales		$	10,441.4		$	5,761.0
Cost of sales			9,882.0			5,437.8
Gross profit			559.4			323.2
Operating and maintenance expense			305.3			186.4
Depreciation and amortization expense			66.4			57.1
Other (income) expense:
Equity in earnings of investments and partnerships			(20.0	)		(16.8	)
Minority interest in income of subsidiaries			15.2			2.0
Other			(24.9	)		(9.4	)
Gain on sale of subsidiary stock			(116.6	)		—
Earnings before interest and taxes			334.0			103.9
Interest expense			50.4			49.2
Minority interest in income of partnership and trusts			8.6			8.3
Earnings before income taxes			275.0			46.4
Income taxes			131.8			17.1
Net income		$	143.2		$	29.3
Earnings per common share:
	Basic	$	1.26		$	.32
	Diluted	$	1.21		$	.31
Dividends per common share		$	.30		$	.30

See accompanying notes to consolidated condensed financial statements.

3

UtiliCorp United Inc.
Consolidated Condensed Statements of Income—Unaudited

		Six Months Ended June 30,
Dollars in millions, except per share amounts
		2001			2000
Sales		$	22,421.4		$	10,370.0
Cost of sales			21,355.8			9,729.0
Gross profit			1,065.6			641.0
Operating and maintenance expense			591.2			347.6
Depreciation and amortization expense			136.0			109.8
Other (income) expense:
Equity in earnings of investments and partnerships			(49.1	)		(44.0	)
Minority interest in income of subsidiaries			13.6			3.3
Other			(34.9	)		(11.6	)
Gain on sale of subsidiary stock			(116.6	)		—
Earnings before interest and taxes			525.4			235.9
Interest expense			105.4			92.5
Minority interest in income of partnership and trusts			17.5			16.6
Earnings before income taxes			402.5			126.8
Income taxes			185.9			43.1
Net income		$	216.6		$	83.7
Earnings per common share:
	Basic	$	1.99		$	.90
	Diluted	$	1.93		$	.90
Dividends per common share		$	.60		$	.60

See accompanying notes to consolidated condensed financial statements.

4

UtiliCorp United Inc.
Consolidated Condensed Balance Sheets

Dollars in millions		June 30, 2001		December 31, 2000
		(Unaudited)
ASSETS
Current Assets:
	Cash and cash equivalents	$	522.7	$	392.6
	Funds on deposit		288.6		154.3
	Accounts receivable, net		3,753.6		4,485.4
	Inventories and supplies		286.1		195.2
	Price risk management assets		930.7		1,454.3
	Prepayments and other		243.9		185.1
Total current assets			6,025.6		6,866.9
Property, plant and equipment, net			3,712.1		3,646.9
Investments in subsidiaries and partnerships			1,972.1		2,018.4
Price risk management assets			561.5		744.5
Merchant notes receivable			295.0		313.2
Deferred charges and other assets			647.0		615.1
Total Assets		$	13,213.3	$	14,205.0
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
	Current maturities of long-term debt	$	244.3	$	51.7
	Short-term debt		151.4		501.0
	Accounts payable		3,983.1		4,850.8
	Accrued liabilities		300.2		184.5
	Price risk management liabilities		629.9		1,296.9
	Customer funds on deposit		284.3		369.4
	Other		380.2		336.8
Total current liabilities			5,973.4		7,591.1
Long-term liabilities:
	Long-term debt, net		2,234.1		2,345.9
	Income taxes and credits		511.1		540.1
	Price risk management liabilities		1,145.2		1,252.4
	Minority interest		152.7		18.1
	Deferred credits		260.1		207.8
Total long-term liabilities			4,303.2		4,364.3
Company-obligated preferred securities			350.0		450.0
Common shareholders' equity			2,586.7		1,799.6
Total Liabilities and Shareholders' Equity		$	13,213.3	$	14,205.0

See accompanying notes to consolidated condensed financial statements.

5

UtiliCorp United Inc.
Consolidated Statements of Comprehensive Income—Unaudited

		Three Months Ended June 30,					Six Months Ended June 30,
Dollars in millions
		2001		2000			2001			2000
Net Income		$	143.2	$	29.3		$	216.6		$	83.7
Other comprehensive income (loss):
	Unrealized translation adjustments		16.7		(9.4	)		(0.1	)		(45.9	)
	Unrealized cash flow hedges		3.1		—			0.3			—
Comprehensive Income		$	163.0	$	19.9		$	216.8		$	37.8

Consolidated Condensed Statements of Common Shareholders' Equity

Dollars in millions	June 30,			December 31,
	2001			2000
	(Unaudited)
Common Stock: authorized 400 million shares at June 30, 2001 and 200 million shares at December 31, 2000, par value $1 per share; 115,241,462 shares issued at June 30, 2001 and 100,350,977 shares issued at December 31, 2000; authorized 20,000,000 shares of Class A common stock, par value $1 per share, none issued	$	115.2		$	100.4
Premium on Capital Stock		2,025.5			1,405.7
Retained Earnings		486.2			334.5
Treasury Stock, at cost (4,785 and 40,441 shares at June 30, 2001 and December 31, 2000, respectively)		(0.2	)		(0.8	)
Accumulated Other Comprehensive Losses		(40.0	)		(40.2	)
Total Common Shareholders' Equity	$	2,586.7		$	1,799.6

See accompanying notes to consolidated condensed financial statements.

6

UtiliCorp United Inc.
Consolidated Condensed Statements of Cash Flows—Unaudited

				Six Months Ended June 30,
Dollars in millions
				2001			2000
Cash Flows From Operating Activities:
	Net income			$	216.6		$	83.7
	Adjustments to reconcile net income to net cash (used) provided by operating activities:
		Depreciation and amortization			136.0			109.8
		Net changes in price risk management assets and liabilities			(67.6	)		(87.9	)
		Income taxes and investment tax credits			0.6			20.1
		Equity in earnings of investments and partnerships			(49.1	)		(44.0	)
		Dividends from investments and partnerships			26.3			15.8
		Minority interest in income of subsidiaries			13.6			3.3
		Changes in certain assets and liabilities, net of effects of acquisitions:
			Accounts receivable/payable, net		(135.8	)		(27.1	)
			Inventories and supplies		(90.9	)		142.0
			Prepayments and other		(81.3	)		(56.8	)
			Accrued and other current liabilities		152.0			25.4
			Other		62.2			(14.1	)
			Sub-total		182.6			170.2
		Funds on deposit, net			(212.3	)		10.1
Cash (used) provided by operating activities					(29.7	)		180.3
Cash Flows From Investing Activities:
	Additions to utility plant				(73.2	)		(85.5	)
	Merchant notes receivable				18.2			(104.7	)
	Investments in international businesses				(34.9	)		(277.5	)
	Investment in communication services				(34.2	)		(360.1	)
	Other				(42.6	)		35.0
Cash used for investing activities					(166.7	)		(792.8	)
Cash Flows From Financing Activities:
	Issuance of common stock				332.6			—
	Issuance of subsidiary common stock				316.0			—
	Issuance of long-term debt				606.0			371.4
	Purchase of common stock under stock option/purchase plans				64.2			—
	Issuance (retirement) of company-obligated preferred securities				(100.0	)		100.0
	Retirement of long-term debt				(478.4	)		(207.5	)
	Short-term borrowings (repayments), net				(349.6	)		321.1
	Treasury stock sold (acquired)				0.6			(16.4	)
	Cash dividends paid				(64.9	)		(55.5	)
	Other				—			(10.2	)
Cash provided from financing activities					326.5			502.9
Increase (decrease) in cash and cash equivalents					130.1			(109.6	)
Cash and cash equivalents at beginning of period					392.6			224.9
Cash and cash equivalents at end of period				$	522.7		$	115.3

See accompanying notes to consolidated condensed financial statements.

7

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 2000 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 accompanying Balance Sheet and Statement of Common Shareholders' Equity as of December 31, 2000, 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 condensed financial statements have been reclassified where necessary to conform to the 2001 presentation.

New Accounting Pronouncements

Accounting for Derivative Instruments and Hedging Activities

    Effective January 1, 2001, we adopted SFAS No. 133 as amended by SFAS No. 137 and SFAS No. 138. These statements require the Company to recognize all derivative instruments on the balance sheet at fair value. These statements also establish new accounting rules for hedging instruments, which depend on the nature of the hedge relationship. A fair value hedge requires that the effective portion of the change in the fair value of a derivative instrument be offset against the change in the fair value of the underlying asset, liability, or firm commitment being hedged through earnings. A cash flow hedge requires that the effective portion of the change in the fair value of a derivative instrument be recognized in Other Comprehensive Income (OCI), a component of Common Shareholders' Equity, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Any ineffective portion of a derivative instrument's change in fair value is immediately recognized in earnings. As disclosed in further detail below, the second quarter 2001 unaudited consolidated condensed financial statements include the provisions required by SFAS No. 133, while the second quarter 2000 unaudited condensed consolidated financial statements were prepared in accordance with the applicable professional literature for derivatives and hedging instruments in effect at that time.

    The adoption of SFAS No. 133 resulted in the Company recording transition adjustments to recognize its derivative instruments at fair value and to recognize the ineffective portion of the change in fair value of its derivatives. The cumulative effect of these transition adjustments at January 1, 2001, was a reduction to OCI of approximately $4.5 million ($2.7 million net of tax). The reduction in OCI was related to cash flow hedges of forecasted foreign currency transactions, future natural gas liquids (NGL) production and variable interest rate obligations. The effect on net income was not significant.

    We use derivative financial instruments primarily to reduce our exposure to adverse fluctuations in interest rates, foreign exchange rates, commodity prices and other market risks. When entered into, the Company formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the

8

hedge transaction. Because of the high degree of effectiveness between the hedging instrument and the underlying exposure being hedged, fluctuations in the value of the derivative instruments are generally offset by changes in the value or cash flows of the underlying exposures being hedged. Derivatives are recorded in the Consolidated Condensed Balance Sheet at fair value in either Price Risk Management Assets or Liabilities. The fair values of derivatives used to hedge or modify our risks fluctuate over time. These fair value amounts should not be viewed in isolation, but rather in relation to the fair values or cash flows of the underlying hedged transactions and other exposures and to the overall reduction in our risk relating to adverse fluctuations in foreign exchange rates, interest rates, commodity prices and other market factors. In addition, the net income effect resulting from our derivative instruments is recorded in the same line item within the Consolidated Condensed Statement of Income as the underlying exposure being hedged. The Company also formally assesses, both at the inception and at least quarterly thereafter, whether the financial instruments that are used in hedging transactions are effective at offsetting changes in either the fair value or cash flows of the related underlying exposures. Any ineffective portion of a financial instrument's change in fair value is immediately recognized in net income.

Interest Rate Management

    We maintain a percentage of fixed and variable rate debt within defined parameters. We enter into interest rate swap agreements that maintain the fixed-to-variable mix within these parameters. These contracts had maturities ranging from two to five years on June 30, 2001. Interest rate swap agreements, which meet the hedge criterion required under SFAS No. 133 for cash flow hedges, are accounted for as such.

Foreign Currency Management

    The purpose of our foreign currency hedging activities is to reduce the risk that our eventual U.S. dollar net cash inflows or outflows resulting from inter-company financing transactions outside the U.S. will be adversely affected by changes in exchange rates.

    We enter into forward exchange contracts and swaps to hedge certain anticipated cash flows denominated in foreign currencies. These contracts, which have been designated as cash flow hedges, had maturities of less than 2 years on June 30, 2001.

Commodity Risk Management

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 price risk management activities.

9

Non-trading Activities—Hedging Instruments

    We enter into swaps related to our commodity businesses solely to hedge future cash flow from our NGL production. These swaps had maturities of less than one year on June 30, 2001.

Impact of Hedging Activities

    We recorded a $3.0 million increase to OCI, net of both income taxes and reclassifications to earnings, which will generally offset cash flow losses relating to the underlying exposures being hedged in future periods. We estimate that we will reclassify gains into earnings during the next six months approximating $0.4 million from the net amount recorded in OCI as of June 30, 2001. We did not discontinue any fair value or cash flow hedge relationships during the quarter ended June 30, 2001. As of June 30, 2001, the fair value of cash flow hedges was $0.6 million ($0.3 million net of tax). The effect on net income was not significant.

Business Combinations

    In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, "Business Combinations" (SFAS 141). SFAS 141 addresses financial accounting and reporting for business combinations and require that all business combinations initiated after June 30, 2001 be accounted for using the purchase method of accounting. The pooling-of-interests method is prohibited. SFAS 141 also requires certain additional disclosures regarding material business combinations. The adoption of this standard is not expected to have a material impact on our financial position or results of operations.

Goodwill and Other Intangible Assets

    In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). SFAS 142 requires that, beginning on January 1, 2002, goodwill no longer be amortized against earnings. This statement will require that, no less than annually, goodwill be tested for impairment and if impaired, be written off against earnings at that time. We are still evaluating the impact on our equity-accounted foreign affiliates and completing the allocations of purchase price on certain acquisitions. Excluding the effect of those evaluations, we estimate the adoption of the standard will result in reduced amortization of at least $18 million on approximately $600 million of goodwill. We are assessing the potential impact, if any, that a goodwill impairment test could have on our financial position or results of operations.

Asset Retirement Obligations

    In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations" (SFAS 143). SFAS 143 requires companies to record the fair value of a liability for an asset retirement obligation in the period in which the asset is acquired. When the liability is initially recorded, the entity will capitalize a cost by increasing the carrying amount of the related long-lived asset. The liability will be accreted to its present value each subsequent period and the capitalized cost will be depreciated over the useful life of the related asset. Upon settlement of the liability, the company will record a gain or loss for the difference between the settled liability and the recorded amount. This standard will become effective for UtiliCorp on January 1, 2003, although earlier application is encouraged. We are in the process of estimating the effect of the adoption of this standard on our financial position or results of operations.

10

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 potential dilutive issuances of common stock for the three- and six-month periods ended June 30, 2001 and 2000.

		Three Months Ended June 30,				Six Months Ended June 30,
In millions, except per share amounts
		2001		2000		2001		2000
Earnings available for common shares		$	143.2	$	29.3	$	216.6	$	83.7
Convertible bonds			0.1		—		0.1		0.1
Earnings available for common shares after assumed conversion of dilutive securities		$	143.3	$	29.3	$	216.7	$	83.8
Earnings per share:
	Basic	$	1.26	$	.32	$	1.99	$	.90
	Diluted	$	1.21	$	.31	$	1.93	$	.90
Weighted average number of common shares used in basic earnings per share			113.8		92.7		108.7		92.8
Per share effect of dilutive securities:
	Company-obligated preferred securities		2.8		—		2.1		—
	Stock options		1.4		—		1.1		.1
	Convertible bonds		.2		.3		.3		.3
Weighted number of common shares and dilutive potential common shares used in diluted earnings per share			118.2		93.0		112.2		93.2

3.  Financings, Mergers, Acquisitions and Divestitures

Equity Offerings

An initial public offering of 19,975,000 Class A Aquila, Inc. common shares, including an over allotment of 2,475,000 shares, closed on April 27, 2001. The offering price was $24.00 per share and raised approximately $446 million in net proceeds. Of the 19,975,000 shares, Aquila sold 14,225,000 new shares and UtiliCorp sold 5,750,000 previously issued shares. A pre-tax gain of approximately $110.8 million, or $.50 per share, was recognized in the second quarter on the shares sold by UtiliCorp. UtiliCorp now owns approximately 80% of Aquila's outstanding shares.

On March 9, 2001, we sold 11,500,000 shares of our common stock, including an over allotment of 1,500,000 shares, to the public, which raised approximately $332 million in net proceeds.

UnitedNetworks Ltd. Stock Sale

On April 9, 2001 shares of UnitedNetworks Ltd. were sold to institutional investors in New Zealand and the United States. This sale reduced UtiliCorp's effective interest in UnitedNetworks to 55.5%. Net proceeds from the sale totaled $41 million, which resulted in a $5.8 million pre-tax gain in the second quarter. The sale is expected to improve the liquidity of UnitedNetworks stock by increasing the number of shares available for public trading.

11

Sale of West Kootenay Generation Assets

On March 26, 2001, we announced that we had filed an application with the British Columbia Utilities Commission for approval to sell our West Kootenay generation assets to Columbia Power Corporation and the Columbia Basin Trust for approximately $77 million. Additionally, it is expected that we would enter into a long-term power purchase agreement with the new owners. The closing of the transaction is subject to regulatory approval and acceptable financing arrangements. Any gain on this transaction would be recognized over the term of the long-term power purchase agreement.

Senior Notes

On February 2, 2001, we issued $250 million of 7.95% senior notes due in February 2011. Net proceeds from the sale were used to reduce short-term debt incurred for acquisitions and general corporate purposes.

Sale of Pipeline Operations

On February 1, 2001, we entered into an agreement to sell our wholly owned subsidiary, UtiliCorp Pipeline Systems, for our book value of approximately $63 million to Gateway Pipeline Company, Inc. The closing of this transaction is subject to regulatory approval.

Retirement/Exchange of Long-Term Debt and Preferred Securities

In June 2001, we exchanged $189.5 million of senior notes with interest rates ranging from 8.0% to 9.0% for $200 million of new senior notes with interest rates at 7.75%, maturing in June 2011. Additionally, during 2001, we retired $204.1 million of senior notes, mortgage bonds and company-obligated preferred securities.

4.  Finance Subsidiaries' Securities

UtiliCorp Canada Finance Corporation and UtiliCorp Capital Trust I are wholly owned finance subsidiaries of UtiliCorp. UtiliCorp has fully and unconditionally guaranteed the $200 million of public long-term debt and $250 million of public company-obligated preferred securities issued by these subsidiaries, respectively.

12

5.  Reportable Segment Reconciliation

		Three Months Ended June 30,						Six Months Ended June 30,
Dollars in Millions
		2001			2000			2001			2000
Sales:
	Energy Merchant	$	9,903.9		$	5,314.1		$	20,884.9		$	9,335.7
	U.S. Networks		454.1			376.9			1,377.1			901.9
	International Networks		83.2			80.2			177.5			151.9
	Services		3.5			—			8.1			—
	Corporate and Other (including eliminations)		(3.3	)		(10.2	)		(26.2	)		(19.5	)
Total		$	10,441.4		$	5,761.0		$	22,421.4		$	10,370.0
EBIT:
	Energy Merchant*	$	283.9		$	40.7		$	373.4		$	64.4
	U.S. Networks		17.6			17.1			91.1			88.6
	International Networks		40.4			34.4			65.6			61.8
	Services		(7.8	)		7.7			(4.4	)		17.9
	Corporate and Other (including eliminations)		(0.1	)		4.0			(0.3	)		3.2
Total		$	334.0		$	103.9		$	525.4		$	235.9

    * Includes $110.8 million gain on the sale of Aquila shares by UtiliCorp in 2001

Dollars in Millions		June 30, 2001		December 31, 2000
Assets:
	Energy Merchant	$	7,137.8	$	7,887.0
	U.S. Networks		2,612.0		2,772.0
	International Networks		2,030.7		2,285.4
	Services		921.1		879.5
	Corporate and Other (including eliminations)		511.7		381.1
Total		$	13,213.3	$	14,205.0

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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 merchant activities; and Services consisting of our broadband business in North America and various equity investments.

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. We generally intend the words "may", "will", "should", "expect", "anticipate", "intend", "plan", "believe", "seek", "estimate", "continue", or the negative of these terms or similar expressions to identify forward-looking statements. Some of the important factors that could cause actual results to differ materially from those anticipated include:

•

Both our Networks and Energy Merchant businesses are weather-sensitive. Weather can affect results significantly to the extent that temperatures differ from normal.



•

We are exposed to market risk, which may cause us to incur losses from our commodity services operations.



•

We may not be able to implement our strategy if we are unable to access or generate capital at competitive rates.



•

The failure to maintain our investment grade bond rating would impair our ability to execute our strategy.



•

The timing and extent of changes in interest rates could affect our 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 capacity services segment of our Energy Merchant group.



•

The pace of well connections to our gas gathering system can affect the earnings contribution from the capacity services segment of our Energy Merchant group.



•

Our development of merchant power plants 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 our foreign operations.



•

The results of operations from our Australian businesses may be affected in the near future by the next phase of deregulation, which makes customers contestable and resets rates.



•

The inability to pass through increased fuel and purchased power costs in certain regulatory jurisdictions may affect the results of operations of our networks. The modification of regulations or historical practices on other jurisdictions in which we rely upon our ability to recover our costs from our customers could adversely affect our earnings.

14

•

The result of pending rate proceedings will affect future earnings of our network business.



•

Expansion of electric markets in the United Kingdom and Europe will increase both opportunity and competition in marketing and trading activities.



•

The construction of broadband fiber optic networks and start-up operations of our communication business will have a negative effect on earnings over the near term.

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. Cash flows from operations were lower in the six months ended June 30, 2001 as compared to the same period in 2000 as $85.1 million of customer deposit refunds were made during the six months ended June 30, 2001 while we were required to post an additional $134.3 million of funds on deposits due to trade positions and the fact that UtiliCorp was removed as guarantor on a number of Aquila's commodity contracts. Since December 2000 we have enhanced our balance sheet through debt reduction and the sale of stock.

    We utilize accounts receivable sales programs totaling $405 million to efficiently manage our working capital and provide immediate liquidity. At June 30, 2001, we had sold approximately $275 million of receivables under these programs. In addition to the accounts receivable sales programs and bank loans, we can issue up to $150 million of commercial paper, which is supported by a $400 million revolving credit agreement. We had no commercial paper borrowings outstanding June 30, 2001. We had $100 million of short-term domestic bank borrowings at June 30, 2001, which we retired on August 9, 2001.

    We have various short-term bank facilities supporting our international operation with outstanding borrowings of $46.5 million at June 30, 2001.

Retirement/Exchange of Long-Term Debt and Preferred Securities

    In June 2001, we exchanged $189.5 million of senior notes with interest rates ranging from 8.0% to 9.0% for $200 million of new senior notes with interest rates at 7.75%, maturing in June 2011. Additionally, during 2001, we retired $204.1 million of senior notes, mortgage bonds and company-obligated preferred securities.

Senior Notes

    On February 2, 2001, we issued $250 million of 7.95% senior notes due in February 2011. Net proceeds from the sale were used to reduce short-term debt incurred for acquisitions and general corporate purposes.

Equity Offerings

    An initial public offering of 19,975,000 Class A Aquila, Inc. common shares, including an over allotment of 2,475,000 shares, closed on April 27, 2001. The offering price was $24.00 per share and raised approximately $446 million in net proceeds. Of the 19,975,000 shares, Aquila sold 14,225,000 new shares and UtiliCorp sold 5,750,000 previously issued shares. A pre-tax gain of approximately $110.8 million, or $.50 per share, was recognized in the second quarter on the shares sold by UtiliCorp. UtiliCorp now owns approximately 80% of Aquila's outstanding shares.

15

    On March 9, 2001, we sold 11,500,000 shares of our common stock, including an over allotment of 1,500,000 shares, to the public, which raised approximately $332 million in net proceeds.

Other

    Aquila has a $125 million letter of credit facility with a group of banks that is used to support its trading and other activities. At June 30, 2001, approximately $58 million was outstanding against this facility that expires in December 2001. We anticipate that this facility will become part of a larger corporate revolver that Aquila plans to put in place in the third quarter.

    Aquila is in the process of completing the financing of a power plant in Clay County, Illinois for approximately $150 million and the financing of ten additional GE turbines secured last January. Our financing strategy with respect to our power plant development program is to first finance these assets using an off-balance sheet structure and then permanently finance the projects with non-recourse project- level debt. We generally do not intend to hold 100% ownership positions in these plants long-term, meaning we intend to monetize or repackage assets to take advantage of market opportunities.

SIGNIFICANT BALANCE SHEET MOVEMENTS

    Total assets decreased by $991.7 million since December 31, 2000. This decrease is primarily attributable to the following:

•

Cash increased by $130.1 million due to the sale of Aquila shares by UtiliCorp and issuance of UtiliCorp common stock, which was offset by reductions of debt.



•

Funds on deposit increased by $134.3 million primarily due to price fluctuations, our over-all position in our gas and power trading business and additional margin requirements at Aquila when we were taken off as a guarantor.



•

Accounts receivable decreased $731.8 million primarily due to the seasonality and price fluctuations of our gas and power trading business.



•

Inventories and supplies increased by $90.9 million primarily due to a seasonal increase in our storage of natural gas and Aquila's replenishment of storage facilities.



•

Price risk management liabilities, net of assets, decreased by $67.6 million. The decrease was primarily due to the pricing of contracts based on future values of gas and power, which can fluctuate significantly.



•

Investments in subsidiaries and partnerships decreased by $46.3 million primarily due to translation adjustments on foreign currency denominated investments.



•

Net property, plant and equipment increased by $65.2 million primarily due to utility plant additions.

    Total liabilities decreased by $1,678.8 million and common shareholders' equity increased by $787.1 million since December 31, 2000. These changes are primarily attributable to the following:

•

Accounts payable decreased by $867.7 million primarily due to the seasonality and price fluctuations of our gas and power trading business.



•

Accrued liabilities increased by $115.7 million due to increased tax liability on higher pre tax income.



•

Customer funds on deposit decreased by $85.1 million due to price fluctuations and our customers' over-all position in our gas and power trading business.

16

•

Minority interest increased by $134.5 million due to the sale of 20% of UtiliCorp's ownership in Aquila.



•

Company-obligated preferred securities decreased by $100 million due to retirement of our Monthly Income Preferred Securities.



•

Short-term and long-term debt, including current maturities of long-term debt, together decreased by $268.8 million due to debt repayments made with the cash proceeds from the sale of Aquila shares by UtiliCorp and the issuance of additional UtiliCorp shares.



•

Common shareholders' equity increased by $787.1 million primarily as a result of the 11.5 million shares of UtiliCorp stock sold in March 2001, the sale of Aquila shares in April 2001, the exercise of stock options and issuance of shares under compensation plans and net income. Net income was partially offset by dividends paid.

RESULTS OF OPERATIONS

ENERGY MERCHANT

    The table below summarizes the operations of our domestic and international Energy Merchant businesses for the three and six-month periods of ended June 30, 2001 and 2000.

		Three Months Ended June 30,					Six Months Ended June 30,
Dollars in millions
		2001			2000		2001			2000
Sales		$	9,903.9		$	5,314.1	$	20,884.9		$	9,335.7
Cost of sales			9,562.5			5,191.2		20,298.4			9,124.7
Gross profit			341.4			122.9		586.5			211.0
Operating expenses:
	Operating and maintenance		158.9			79.2		313.4			141.7
	Depreciation and amortization		13.5			12.9		26.4			24.0
Total operating expenses			172.4			92.1		339.8			165.7
Equity earnings of investments and partnerships			5.5			4.1		11.7			8.5
Minority interest in income of subsidiaries			(16.5	)		—		(16.5	)		—
Gain on sale of subsidiary stock*			110.8			—		110.8			—
Other income			15.1			5.8		20.7			10.6
Earnings before interest and taxes (EBIT)		$	283.9		$	40.7	$	373.4		$	64.4

*

Includes $110.8 million gain on the sale of Aquila shares by UtiliCorp in 2001

Commodity Services

Quarter-to-Quarter

Sales, Cost of Sales, and Gross Profit

    Sales and cost of sales for our merchant operations increased $4.6 billion and $4.4 billion, respectively, in 2001 compared to 2000. These increases were primarily due to higher prices for electricity and natural gas, increased volume of electricity and natural gas marketed and sold resulting from strong client demand and increased term deal flow, the impact of the GPU International acquisition in December 2000 and new generation assets brought on line in 2001.

17

    Gross profit for our merchant operations increased $218.5 million in 2001 compared to 2000. Of these amounts, $175.0 million of the increase came from Wholesale Services and a $43.5 million from Capacity Services.

    Wholesale Services' gross profit increased due to strong wholesale commodity results in our gas and power origination businesses and a favorable market environment.

    Capacity Services' gross profit increased primarily due to the impact of GPUI assets acquired in December 2000, new merchant plants in production in 2001 and stronger natural gas prices which favorably impacted our gas storage operation.

Operating Expenses

    Operating expenses increased $80.3 million due to the expansion of Aquila's business and higher incentive compensation expense resulting from the strong performance.

Minority Interest in Income of Subsidiaries

    Minority interest increased $16.5 million due to UtiliCorp's sale of 20% of its ownership in Aquila.

Year-to-Date

(Factors discussed in the quarter-to-quarter comparison also affect the year-to-date comparisons.)

    EBIT increased by $309.0 million in the first six months of 2001 compared to 2000. Strong performances as discussed above led to this increase.

18

NETWORKS

    The table below summarizes the operations of our domestic and international networks for the three and six month periods of each year.

		Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions
		2001		2000		2001		2000
Sales:
	Electric	$	266.6	$	182.6	$	537.9	$	368.6
	Gas		139.9		112.8		683.7		369.7
	Non-Regulated		130.8		161.6		333.0		315.5
Total sales			537.3		457.0		1,554.6		1,053.8
Cost of sales:
	Electric		115.0		88.6		252.9		186.4
	Gas		95.8		64.1		538.5		229.2
	Non-Regulated		110.8		104.0		289.2		208.3
Total cost of sales			321.6		256.7		1,080.6		623.9
Gross profit			215.7		200.3		474.0		429.9
Operating expenses:
	Operating		106.9		87.4		203.9		161.3
	Depreciation and amortization		47.6		42.1		99.7		82.2
	Maintenance		14.7		12.5		26.6		25.3
	Taxes, other than income taxes		13.2		12.2		26.7		26.8
Total operating expenses			182.4		154.2		356.9		295.6
Equity in earnings of investments and partnerships			10.6		1.9		19.8		14.5
Gain on sale of subsidiary stock			5.8		—		5.8		—
Other income			8.3		3.5		14.0		1.6
Earnings before interest and taxes (EBIT)		$	58.0	$	51.5	$	156.7	$	150.4
EBIT by segment subunit:
	U.S. Networks	$	17.6	$	17.1	$	91.1	$	88.6
	International Networks		40.4		34.4		65.6		61.8
Total Networks		$	58.0	$	51.5	$	156.7	$	150.4

Quarter-to-Quarter

Sales, Cost of Sales and Gross Profit

    Sales and cost of sales for the network businesses increased $80.3 million and $64.9 million, respectively, in 2001 compared to 2000. These increases were primarily due to the acquisition of Alberta electric distribution business on August 31, 2000 and the acquisition of St. Joseph Light & Power Company on December 31, 2000. These increases were offset by the deconsolidation of the New Zealand business effective June 30, 2000.

    Gross profit for networks increased $15.4 million in 2001 compared to 2000. This increase was primarily due to the acquisition of Alberta and St. Joseph networks and growth in customers. These increases were offset in part by the deconsolidation of the New Zealand business.

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Operating Expenses

    Operating expenses increased $28.2 million in 2001 compared to 2000. The addition of the Alberta and St. Joseph networks contributed to a $42.0 million increase in total operating expenses. Bad debt expenses increased as a result of industrial customer bankruptcies and high natural gas costs impacting residential customer payments. Deconsolidation of our New Zealand business decreased total operating expenses by $16.2 million.

Equity in Earnings and Other Income

    Equity in earnings increased $14.5 million in 2001 compared to 2000. After a sale of a portion of our New Zealand business we now use the equity method of accounting to account for our net share of the business, which resulted in the increase.

    Other income increased $4.8 million in 2001 compared to 2000. This increase was primarily due to a gain on the sale of 13 million shares of our New Zealand business.

Year-to-Date

Sales, Cost of Sales and Gross Profit

    Sales and cost of sales for our network businesses increased $500.8 million and $456.7 million, respectively, in 2001 compared to 2000. These increases were primarily due to the acquisition of our Alberta and St. Joseph businesses and increased natural gas prices.

    Gross profit for our networks increased $44.1 million in 2001 compared to 2000. This increase was primarily due to the acquisition of the Alberta and St. Joseph businesses, growth in customers and colder than normal weather.

Operating Expenses

    Operating expenses increased $61.3 million in 2001 compared to 2000. The addition of our Alberta and St. Joseph networks contributed an $83.1 million increase in total operating expenses. Bad debt expenses increased as a result of industrial customer bankruptcies and high natural gas costs impacting residential customer payments. Deconsolidation of our New Zealand business decreased total operating expenses by $29.8 million.

Equity in Earnings and Other Income

    Equity in earnings increased $11.1 million in 2001 compared to 2000. After a sale of a portion of our New Zealand business in June 2000, we now use the equity method of accounting to account for the net share of the business, which resulted in the increase.

    Other income increased $12.4 million in 2001 compared to 2000. This increase was primarily due to a gain on the sale of 13 million shares of our New Zealand business.

Regulatory Matters

    The following is a summary of our pending rate case activity:

Rate Case Designation	Type of service	Date Requested	Amount Requested (In millions)
Missouri	Electric	6/2001	$	49.4
Kansas	Electric	12/2000	$	14.2
Minnesota	Gas	8/2000	$	9.8

20

    We filed a Missouri electric rate case to increase rates $49.4 million in June 2001. We expect hearings to be held in late January 2002.

    We filed a Kansas electric rate case to increase rates $14.2 million in December 2000, later revised to $12.7 million. Hearings were held in June 2001. The commission staff has recommended an increase of $1.1 million. We expect a final order in August 2001.

    We filed a $9.8 million Minnesota rate case and placed the interim rate increase in effect on October 1, 2000. We reached a settlement with the Minnesota Department of Commerce on a $6.2 million increase. The Commission approved a $5.2 million increase. We have requested that the settlement be approved as filed and expect hearings to be held in October 2001.

    We filed for a rate increase in Alberta of about $13 million along with an application for a performance-based rate-setting (PBR) mechanism. We reached a settlement in negotiations with stakeholders, and obtained approval from the Alberta Energy and Utilities Board in June 2001 for a $6.0 million increase of 2000 distribution rates. As a part of the settlement we withdrew the PBR provision of the tariff. A process was agreed upon for the filing of a year 2002 tariff with a multi-year PBR plan.

SERVICES

Quarter-To-Quarter

    Our Services segment includes our investment in Quanta and a broadband business. EBIT from our Services business decreased $15.5 million in 2001 compared to 2000. UtiliCorp's Services segment includes its 35 percent interest in the contracting firm Quanta Services, Inc. (NYSE: PWR) and its broadband networks business. The contribution of the Quanta investment to EBIT decreased compared to the prior year as a result of eliminating UtiliCorp's management fee in the 2000 fourth quarter, and due to Quanta's recent earnings reports that indicate a continuing slowdown in its telecom-related business. Quanta's reduced earnings guidance going forward will result in a decrease in its contribution to UtiliCorp's EBIT during the second half of this year. The 2001 second quarter EBIT contribution from Quanta was offset by costs associated with the build-out of UtiliCorp's broadband networks in two Kansas City suburbs. We continue to focus on only these two suburbs and intend to use these locations to prove out our business models prior to committing significantly more capital to the business; however, we continue to pursue financial partners. We will continue to monitor the broadband network business as compared to our expectations.

Year-to-Date

(Factors discussed in the quarter-to-quarter comparison also affect the year-to-date comparisons.)

    EBIT decreased by $22.3 million in the first six months of 2001 compared to 2000. Performances as discussed above led to this decrease.

INTEREST EXPENSE AND INCOME TAXES

Quarter-To-Quarter

Interest Expense

    Interest expense and minority interest in income of partnership and trusts increased $1.5 million in 2001 compared to 2000. Interest expense was higher due to long-term borrowings to finance acquisitions in 2000, which was offset by earnings on invested cash from the common stock offering and Aquila IPO.

21

Income Taxes

    Income taxes increased $114.7 million in 2001 compared to 2000. The increase was due primarily to the increased earnings before income taxes in 2001 resulting from the factors discussed previously. The increase is also attributed to an increase in the portion of earnings from Canada, which has higher statutory tax rates, provisions for non-deductible expenses and increased minority interest in Aquila. Our overall effective tax rate increased from 36.9% in 2000 to 47.9% in 2001.

Year-to-Date

(Factors discussed in the quarter-to-quarter comparison also affect the year-to-date comparisons.)

Interest Expense

    Interest expense and minority interest in income of partnership and trusts increased $13.8 million in 2001 compared to 2000. Interest expense was higher due to long-term borrowings to finance acquisitions in 2000, which was offset by earnings on invested cash from the common stock offering and Aquila IPO.

Income Taxes

    Income taxes increased $142.8 million in 2001 compared to 2000. The increase was due primarily to the increased earnings before income taxes in 2001 resulting from the factors discussed previously. The increase is also attributed to an increase in the portion of earnings from Canada, which has higher statutory tax rates, provisions for non-deductible expenses and increased minority interest in Aquila. Our overall effective tax rate increased from 34.0% in 2000 to 46.2% in 2001.

Part II
Other Information

Item 2. Changes in Securities and Use of Proceeds

    On May 2, 2001, we amended our Certificate of Incorporation to increase the number of authorized shares of common stock from 200 million shares to 400 million shares.

Item 4. Submission of Matters to a Vote of Security Holders

    We held our annual meeting of shareholders on May 2, 2001. At the meeting, the following matters were voted on by the shareholders:

1.

Election of Directors:

Director	Term	Votes For	Votes Withheld
Dr. Stanley O. Ikenberry	3 years	80,991,718	2,988,953
Irvine O. Hockaday, Jr	3 years	72,492,013	11,488,658
John R. Baker	3 years	81,869,296	2,111,375

Following the election, our Board of Directors consisted of Richard C. Green, Jr.; John R. Baker; Herman Cain; Robert K. Green; Irvine O. Hockaday, Jr.; Dr. Stanley O. Ikenberry, Ph.D.; Robert F. Jackson, Jr.; and L. Patton Kline.

2.

The shareholders voted 75,804,008 For, 7,224,263 Against and 952,400 Abstain to amend the Certificate of Incorporation to increase the number of authorized shares of Common Stock to 400 million.

22

3.

The shareholders voted 74,110,558 For, 8,622,444 Against and 1,247,669 Abstain to amend the Amended and Restated 1986 Stock Incentive Plan to allow the issuance of an additional 2,000,000 shares pursuant to the plan.

Item 6. Exhibits

(a)

List of Exhibits:

10(a)(1)	Amended and Restated UtiliCorp United Inc. Supplemental Executive Retirement Plan
10(a)(2)	First Amendment to UtiliCorp United Inc. Capital Accumulation Plan.

(b)

Report on Form 8-K

No reports on Form 8-K were filed during the second quarter of 2001.

23

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: August 10, 2001

24

QuickLinks

PART I—FINANCIAL INFORMATION
PART II—OTHER INFORMATION
UtiliCorp United Inc. Consolidated Condensed Statements of Income—Unaudited
UtiliCorp United Inc. Consolidated Condensed Statements of Income—Unaudited
UtiliCorp United Inc. Consolidated Condensed Balance Sheets
Consolidated Statements of Comprehensive Income—Unaudited
Consolidated Condensed Statements of Common Shareholders' Equity
Consolidated Condensed Statements of Cash Flows—Unaudited
UTILICORP UNITED INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
Signatures

EX-10.(A)(1)

EXHIBIT 10(a)(1)


                              UTILICORP UNITED INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                (AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)



                               HISTORY AND PURPOSE

The purpose of this Plan is to provide specified benefits to a select group of
management and highly compensated employees of UtiliCorp United Inc., a Delaware
corporation, and its subsidiaries, if any, that sponsor this Plan. This Plan
shall be unfunded for tax purposes and for purposes of Title I of ERISA.

The Plan was originally adopted effective as of July 1, 1986, and was thereafter
amended and restated in its entirety effective as of May 1, 1991, and later
effective as of January 1, 1998. The January 1, 1998 restatement was thereafter
amended by two amendments dated August 4, 1998 and November 29, 2000,
respectively. This amended and restated Plan document is effective as of January
1, 2001.

Participants who terminated employment prior to January 1, 2001, will be
governed by the terms of the Plan document in effect at the time of their
termination of employment.

                             ARTICLE I - DEFINITIONS

Except as specifically provided herein, all capitalized terms used in this Plan
shall have the meaning assigned to them under the UtiliCorp United Inc. Restated
Retirement Income Plan, as amended from time to time.

     1.01 "BASIC SERP BENEFIT" shall mean the benefit determined under Section
          4.01 payable to a Participant under the Plan.

     1.02 "BONUS SERP BENEFIT" shall mean the benefit determined under Section
          4.02 payable to a Participant under the Plan.

     1.03 "BOARD" shall mean the board of directors of the Company.

     1.04 "CHANGE IN CONTROL" shall mean the first to occur of any of the
          following events:

          (1)  any Person is or becomes the Beneficial Owner, directly or
          indirectly, of securities of the Company (not including in the
          securities beneficially owned by such Person any securities acquired
          directly from the Company or its affiliates, other than in connection
          with the acquisition by the Company or its affiliates of a business)
          representing 20% or more of either the then outstanding shares of
          common stock of the Company or the combined voting power of the
          Company's then outstanding securities; or

          (2)  the following individuals cease for any reason to constitute at
          least two-thirds (2/3) of the number of directors then serving:
          individuals who, on August 4, 1998, constituted the Board and any new
          director (other than a director whose initial assumption of office is
          in connection with an actual or threatened election contest,




          including but not limited to a consent solicitation, relating to the
          election of directors of the Company (as such terms are used in Rule
          14A-11 of Regulation 14A under the Exchange Act)) whose appointment or
          election by the Board or nomination of election by the Company's
          shareholders was approved by a vote of at least two-thirds (2/3) of
          the directors then still in office who either were directors on August
          4, 1998, or whose appointment, election or nomination for election was
          previously approved; or

          (3)  the consummation of a merger or consolidation of the Company with
          any other entity, other than (i) a merger or consolidation which would
          result in (A) the voting securities of the Company outstanding
          immediately prior to such merger or consolidation continuing to
          represent (either by remaining outstanding or by being converted into
          voting securities of the surviving entity or any parent thereof), in
          combination with the ownership of any trustee or other fiduciary
          holding securities under an employee benefit plan of the Company,
          greater than 50% of the combined voting power of the voting securities
          of the Company or such surviving entity or any parent thereof
          outstanding immediately after such merger or consolidation, (B) such
          of Richard C. Green, Jr. and Robert K. Green continuing as members of
          the board of directors of the surviving entity or ultimate parent
          thereof as were members of the Board of the Company immediately prior
          to such transaction, and (C) individuals described in paragraph (2)
          above constitute more than one-half of the members of the board of
          directors of the surviving entity or ultimate parent thereof, or (ii)
          a merger or consolidation effected to implement a recapitalization of
          the Company (or similar transaction) in which no Person is or becomes
          the Beneficial Owner, directly or indirectly, of securities of the
          Company (not including in the securities Beneficially Owned by such
          Person any securities acquired directly from the Company or its
          affiliates, other than in connection with the acquisition by the
          Company or its affiliates of a business) representing 20% or more of
          either the then outstanding shares of common stock of the Company or
          the combined voting power of the Company's then outstanding
          securities; or

          (4)  the stockholders of the Company approve a plan of complete
          liquidation or dissolution of the Company or an agreement for the sale
          or disposition by the Company of all or substantially all of the
          Company's assets, other than a sale or disposition by the Company of
          all or substantially all of the Company's assets to an entity, greater
          than 50% of the combined voting power of the voting securities of
          which is owned by Persons in substantially the same proportions as
          their ownership of the Company immediately prior to such sale.

          Notwithstanding the foregoing, no "Change in Control" shall be deemed
          to have occurred if there is consummated any transaction or series of
          integrated transactions immediately following which the record holders
          of the common stock of the Company immediately prior to such
          transaction or series of transactions continue to have substantially
          the same proportionate ownership in an entity which owns all or
          substantially all of the assets of the Company immediately following
          such transaction or series of transactions.

          For purposes of this Section 1.02, the following definitions shall
          apply:

          (a)  "BENEFICIAL OWNER" shall have the meaning set forth in Rule 13d-3
          under the Exchange Act.

          (b)  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
          amended.




          (c)  "PERSON" shall have the meaning given in Section 3(a)(9) of the
          Exchange Act, as modified and used in Sections 13(d) and 14(d)
          thereof, except that such term shall not include (i) the Company or
          any of its affiliates (as defined in Rule 12b-2 promulgated under the
          Exchange Act), (ii) a trustee or other fiduciary holding securities
          under an employee benefit plan of the Company or any of its
          affiliates, (iii) an underwriter temporarily holding securities
          pursuant to an offering of such securities, or (iv) a corporation
          owned, directly or indirectly, by the shareholders of the Company in
          substantially the same proportions as their ownership of stock of the
          Company.

     1.03 "CLAIMANT" shall have the meaning set forth in Section 8.01.

     1.04 "CODE" shall mean the Internal Revenue Code of 1986, as amended from
          time to time.

     1.05 "COMMITTEE" shall mean the Committee described in Article VII.

     1.06 "COMPANY" shall mean UtiliCorp United Inc., a Delaware corporation.

     1.07 "EMPLOYER" shall mean the Company and any subsidiaries of the Company
          that have been selected by the Board to participate in the Plan.

     1.08 "PARTICIPANT" shall mean any employee employed in pay bands I through
          V who is a participant in the Retirement Income Plan and who is
          selected to participate in the Plan by the Committee.

     1.09 "PLAN" shall mean this restated Supplemental Executive Retirement Plan
          (formerly known as the "UtiliCorp United Inc. Excess Benefit Plan").

     1.10 "PROJECTED CREDITED SERVICE" shall mean, for purposes of computing a
          Participant's Supplemental SERP Benefit, the total projected years of
          Credited Service such Participant would have under the Retirement
          Income Plan if he were to continue employment with the Employer
          through age 62, or if such Participant has already attained age 62,
          his actual years of Credited Service under the Retirement Income Plan.

     1.11 "RETIREMENT INCOME PLAN" shall mean the qualified defined benefit
          pension plan, as amended from time to time, maintained by the Company
          and known as the "UtiliCorp United Inc. Restated Retirement Income
          Plan."

     1.12 "SUPPLEMENTAL SERP BENEFIT" shall mean the benefit determined under
          Section 4.03 payable exclusively to Participants employed in pay bands
          I through IVa.

     1.13 "SUPPLEMENTAL SERP EARNINGS" shall mean, for purposes of computing a
          Participant's Supplemental SERP Benefit, the excess (if any) between
          (1) the Participant's Average Monthly Earnings determined under the
          Retirement Income Plan as if (a) the maximum benefit limit under
          Section 415(b)(1)(A) of the Code and the annual compensation limit
          under Section 401(a)(17) of the Code were not applicable, (b) Monthly
          Earnings included the Participant's annual base compensation deferred
          during a Plan Year under any nonqualified deferred compensation plan
          maintained by the Participant's Employer, and (c) Monthly Earnings
          included the Participant's annual bonus payable under the Employer's
          annual incentive plan or policy; and (2) the monthly average annual
          compensation limit under Section 401(a)(17) of the Code for the year
          during which the Participant terminates employment.




     1.14 "TOTAL SERP BENEFIT" means, to the extent applicable, the sum of a
          Participant's Basic SERP Benefit, Bonus SERP Benefit and Supplemental
          SERP Benefit.

                            ARTICLE II - ELIGIBILITY

     2.01 SELECTION BY COMMITTEE. Participation in the Plan shall be limited to
          executives employed in pay bands I-V, all of whom are part of a select
          group of management or highly compensated employees. From that group,
          the Committee, in its sole discretion, shall designate the individuals
          eligible to receive a benefit under this Plan.

                              ARTICLE III - VESTING

     3.01 VESTING.

          (a)  BASIC SERP BENEFIT. Each Participant shall be entitled to 100% of
          his Basic SERP Benefit upon the completion of five (5) years of
          service, or upon termination of employment on or after attaining age
          55. If a Participant separates from service prior to completing five
          (5) years of service and prior to attaining age 55, he shall not be
          entitled to any portion of his Basic SERP Benefit.

          (b)  BONUS SERP BENEFIT. Each Participant shall be entitled to 100% of
          his Bonus SERP Benefit if he retires from employment on or after
          attaining age 55 or terminates employment after completing ten (10) or
          more years of service. If a Participant separates from service for any
          reason prior to attaining age 55 and prior to completing ten (10) or
          more years of service, he shall not be entitled to any portion of his
          Bonus SERP Benefit

          (c)  SUPPLEMENTAL SERP BENEFIT. Each Participant employed in pay
          band I through IVa shall be entitled to 100% of his Supplemental SERP
          Benefit if he retires from employment on or after attaining age 55 or
          terminates employment after completing ten (10) or more years of
          service. If a Participant separates from service for any reason prior
          to attaining age 55 and prior to completing ten (10) or more years of
          service, he shall not be entitled to any portion of his Supplemental
          SERP Benefit.

     3.02 CHANGE IN CONTROL. Notwithstanding Section 3.01 or any other 5
          provision in this Plan, a Participant's Total SERP Benefit shall
          become 100% vested (if it is not already vested in accordance Section
          3.01 above) in the event of a Change in Control.

                                 ARTICLE IV - BENEFITS

     4.01 BASIC SERP BENEFIT. Subject to Section 3.01(a) and Section 6.02, a
          Participant's Basic SERP Benefit, as adjusted pursuant to Section
          4.04, shall be equal to (A) minus (B), where:

               (A)= the benefit that would be payable to the Participant under
                    the Retirement Income Plan if (i) the maximum benefit limit
                    under Section 415(b)(1)(A) of the Code and the annual
                    compensation limit under Section 401(a)(17) of the Code were
                    not applicable, and (ii) for Plan Years beginning after
                    December 31, 1997, Monthly Earnings included the
                    Participant's annual




                    base compensation deferred during a Plan Year under any
                    nonqualified deferred compensation plan maintained by the
                    Participant's Employer; and

               (B)= the benefit actually payable to or on behalf of such
                    Participant under the Retirement Income Plan.

     4.02 BONUS SERP BENEFIT. Subject to Section 3.01(b) and Section 6.02, a
          Participant's Bonus SERP Benefit, as adjusted pursuant to Section
          4.04, shall be equal to (A) minus (B) minus (C), where:

               (A)= the benefit that would be payable to the Participant under
                    the Retirement Income Plan if (i) the maximum benefit limit
                    under Section 415(b)(1)(A) of the Code and the annual
                    compensation limit under Section 401(a)(17) of the Code were
                    not applicable, (ii) for Plan Years beginning after December
                    31, 1997, Monthly Earnings included the Participant's annual
                    base compensation deferred during a Plan Year under any
                    nonqualified deferred compensation plan maintained by the
                    Participant's Employer, and (iii) for Plan Years beginning
                    after December 31, 2000, Monthly Earnings included the
                    Participant's annual bonus (if any) payable under the
                    Employer's annual incentive plan or policy;

               (B)= the benefit actually payable to or on behalf of such
                    Participant under the Retirement Income Plan; and

               (C)= the Participant's Basic SERP Benefit payable under this
                    Plan.

     4.03 SUPPLEMENTAL SERP BENEFIT. Subject to Section 3.01(c) and Section
          6.02, a Participant employed in pay band I-IVa shall have a
          Supplemental SERP Benefit, as adjusted pursuant to Section 4.04, equal
          to the sum of (A) plus (B) plus (C), multiplied by (D), where:

               (A)= Four-tenths percent (.40%) multiplied by the Participant's
                    Supplemental SERP Earnings multiplied by the Participant's
                    Projected Credited Service up to a maximum of ten (10)
                    years;

               (B)= Twenty-five hundredths percent (.25%) multiplied by the
                    Participant's Supplemental SERP Earnings multiplied by the
                    Participant's Projected Credited Service in excess of ten
                    (10) years but not more than twenty (20) years;

               (C)= One-tenth percent (.10%) multiplied by the Participant's
                    Supplemental SERP Earnings multiplied by the Participant's
                    Projected Credited Service in excess of twenty (20) years
                    but not more than thirty (30) years; and

               (D)= The ratio of the Participant's actual years of Credited
                    Service under the Retirement Income Plan to his Projected
                    Credited Service.

     4.04 PAYMENT OF BENEFITS. Subject to Section 4.05, payment of a
          Participant's vested Total SERP Benefit shall be made in the same
          manner and at the same time that benefits under




          the Retirement Income Plan are payable, determined in accordance with
          the elections made by the Participant thereunder and in accordance
          with the early retirement, Actuarial Equivalent, Actuarial Value, and
          other applicable adjustments and assumptions set forth in the
          Retirement Income Plan; provided that if a Participant elects to
          receive his benefits in a form of payment under the Retirement Income
          Plan which provides death benefits to a non-spouse beneficiary, the
          Participant's Total SERP Benefit shall be paid in monthly installments
          for the life of the Participant only and shall terminate upon his
          death.

     4.05 COMMITTEE DISCRETION. Upon the request of a Participant or
          beneficiary, the Committee, in its sole discretion and consistent with
          its established procedures and rules, may consider other forms of
          vested benefit payments, or the timing of vested benefit payments, as
          it deems necessary and prudent under the circumstances. The Committee,
          in its discretion, may also establish a mandatory pay-out policy
          pursuant to which a Participant's (or beneficiary's) Total SERP
          Benefit shall be automatically paid in the form of a single lump sum
          if the actuarial value of such benefit is less than the lump sum
          pay-out amount designated by the Committee from time to time in its
          discretion. For purposes of calculating the actuarial lump sum value
          of a Participant's Total SERP Benefit pursuant to the foregoing, the
          Plan shall use an interest rate of eight percent (8%) and the same
          mortality table assumptions used by the Retirement Income Plan to
          calculate Actuarial Value.

     4.06 WITHHOLDING AND PAYROLL TAXES. The Employers, to the extent required
          by applicable law, shall withhold from any and all benefits made under
          this Article IV, all federal, state and local income, employment and
          other taxes required to be withheld by the Employer in connection with
          the benefits hereunder, in amounts to be determined in the sole
          discretion of the Employer.

     4.07 BENEFITS ON DEATH.

          (a)  BASIC SERP BENEFIT. If a spousal death benefit is payable under
               the Retirement Income Plan with respect to a Participant, a
               spousal death benefit shall also be payable under this Plan equal
               to (A) minus (B), where:

               (A)= the benefit that would be payable to the Participant's
                    spouse under the Retirement Income Plan, determined in
                    accordance with the elections made by the Participant or
                    spouse thereunder and in accordance with the applicable
                    assumptions and actuarial adjustments set forth in that
                    plan, if (i) the maximum benefit limit under Section
                    415(b)(1)(A) of the Code and the annual compensation limit
                    under Section 401(a)(17) of the Code were not applicable,
                    and (ii) for Plan Years beginning after December 31, 1997,
                    Monthly Earnings included the Participant's annual base
                    compensation deferred during a Plan Year under any
                    nonqualified deferred compensation plan maintained by the
                    Participant's Employer; and

               (B)= the benefit actually payable to the Participant's spouse
                    under the Retirement Income Plan.

          (b)  BONUS SERP BENEFIT. If a Participant dies after having satisfying
               the vesting requirements set forth in Section 3.01(b), the
               Participant's surviving spouse shall




               be entitled to a spousal death benefit equal to 50% of the
               Participant's Bonus SERP Benefit as of the date of his death.

          (c)  SUPPLEMENTAL SERP BENEFIT. If a Participant dies after having
               satisfying the vesting requirements set forth in Section 3.01(c),
               the Participant's surviving spouse shall be entitled to a spousal
               death benefit equal to 50% of the Participant's Bonus SERP
               Benefit as of the date of his death.

          (d)  PAYMENT OF BENEFIT. Subject to Section 4.05, any spousal death
               benefits payable under this Section 4.07 shall be paid in the
               same manner and at the same time that death benefits are paid to
               the Participant's spouse under the Retirement Income Plan. If a
               Participant has no surviving spouse, the benefits remaining under
               the Plan shall be forfeited.

                      ARTICLE V - TERMINATION AND AMENDMENT

     5.01 TERMINATION. The Company reserves the right to terminate the Plan at
          any time by action of its board of directors. The termination of the
          Plan shall not adversely affect any Participant or his beneficiary who
          has become entitled to the payment of any benefits under the Plan as
          of the date of termination, provided, however, that the Company shall
          have the right to accelerate payments by paying the Actuarial Value or
          Actuarial Equivalent of such payments. For all other Participants,
          upon the termination of the Plan, the Actuarial Value of each such
          Participant's vested Total SERP Benefit shall be paid out in a lump
          sum.

     5.02 AMENDMENT. The Company may, at any time, amend or modify the Plan in
          whole or in part by action of its board of directors; provided,
          however, that no amendment or modification shall be effective to
          decrease or restrict a Participant's then vested Total SERP Benefit,
          determined on an Actuarial Equivalent basis. The amendment or
          modification of the Plan shall not affect any Participant or his
          beneficiary who has become entitled to the payment of benefits under
          the Plan as of the date of the amendment or modification; provided,
          however, that the Employer shall have the right to accelerate
          installment payments by paying the Actuarial Value of such payments in
          a lump sum or the Actuarial Equivalent in some other accelerated form
          of payment.

                   ARTICLE VI - OTHER BENEFITS AND AGREEMENTS

     6.01 COORDINATION WITH OTHER BENEFITS. Except as provided in Section 6.02
          and except as otherwise expressly provided under any other plan or
          program for employees of the Employer, the benefits provided under
          this Plan to a Participant are in addition to the benefits available
          to such Participant under any other such plan or program. The Plan
          shall supplement and shall not supersede, modify or amend any other
          such plan or program except as my otherwise be expressly provided.

     6.02 REDUCTION IN SERP BENEFITS. Notwithstanding any provision in this Plan
          that may be interpreted to the contrary, the Total SERP Benefit
          payable to any Participant hereunder shall be reduced by the
          equivalent monthly lifetime benefit payable to such Participant under
          any other supplemental retirement agreement or plan with his Employer.
          If the benefit under such other retirement plan or agreement is
          payable in the form of a lump sum, such benefit shall be converted to
          a monthly lifetime benefit in accordance with the




          applicable Actuarial Value assumptions set forth in the Retirement
          Income Plan for purposes of determining the benefit offset under this
          Section 6.02.

                    ARTICLE VII - ADMINISTRATION OF THE PLAN

     7.01 COMMITTEE DUTIES. This Plan shall be administered by a Committee which
          shall consist of the Board, or such committee as the Board shall
          appoint. Members of the Committee may be Participants under this Plan.
          The Committee shall also have the discretion and authority to (i)
          make, amend, interpret and enforce all appropriate rules and
          regulations for the administration of this Plan and (ii) decide or
          resolve any and all questions including interpretations of this Plan,
          as may arise in connection with the Plan.

     7.02 AGENTS. In the administration of this Plan, the Committee may employ
          agents and delegate to them such administrative duties as it sees fit
          (including acting through a duly appointed representative) and may
          from time to time consult with counsel who may be counsel to any
          Employer.

     7.03 BINDING EFFECT OF DECISIONS. The decision or action of the Committee
          with respect to any question arising out of or in connection with the
          administration, interpretation and application of the Plan and the
          rules and regulations promulgated hereunder shall be final and
          conclusive and binding upon all persons having any interest in the
          Plan.

     7.04 INDEMNITY OF COMMITTEE. The Employers shall indemnify and hold
          harmless the members of the Committee against any and all claims,
          losses, damages, expenses or liabilities arising from any action or
          failure to act with respect to this Plan, except in the case of
          willful misconduct by the Committee or any of its members.

     7.05 EMPLOYER INFORMATION. To enable the Committee to perform its
          functions, each Employer shall supply full and timely information to
          the Committee on all matters relating to the compensation of its
          Participants, the date and circumstances of the retirement,
          disability, death or termination of employment of its Participants,
          and such other pertinent information as the Committee may reasonably
          require.

                        ARTICLE VIII - CLAIMS PROCEDURES

     8.01 PRESENTATION OF CLAIM. Any Participant or beneficiary of a deceased
          Participant (such Participant or beneficiary being referred to below
          as a "Claimant") may deliver to the Committee a written claim for a
          determination with respect to the amounts distributable to such
          Claimant from the Plan. If such a claim relates to the contents of a
          notice received by the Claimant, the claim must be made within 60 days
          after such notice was received by the Claimant. The claim must state
          with particularity the determination desired by the Claimant. All
          other claims must be made within 180 days of the date on which the
          event that caused the claim to arise occurred.

     8.02 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
          claim within 90 days (unless special circumstances require additional
          time), and shall notify the Claimant in writing:

          (i)  that the Claimant's requested determination has been made, and
               that the claim has been allowed in full; or




          (ii) that the Committee has reached a conclusion contrary, in whole or
               in part, to the Claimant's requested determination, and such
               notice must set forth in a manner calculated to be understood by
               the Claimant:

               (1)  the specific reason(s) for the denial of the claim, or any
                    part of it;

               (2)  specific reference(s) to pertinent provisions of the Plan
                    upon which such denial was based;

               (3)  a description of any additional material or information
                    necessary for the Claimant to perfect the claim, and an
                    explanation of why such material or information is
                    necessary; and

               (4)  an explanation of the claim review procedure set forth
                    in Section 8.03) below.

     8.03 REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice from
          the Committee that a claim has been denied, in whole or in part, a
          Claimant (or the Claimant's duly authorized representative) may file
          with the Committee a written request for a review of the denial of the
          claim. Thereafter, but not later than 30 days after the review
          procedure began, the Claimant (or the Claimant's duly authorized
          representative):

          (i)   may review pertinent documents;

          (ii)  may submit written comments or other documents; and/or

          (iii) may request a hearing, which the Committee, in its sole
                discretion, may grant.

     8.04 DECISION ON REVIEW. The Committee shall render its decision on review
          promptly, and not later than 60 days after the filing of a written
          request for review of the denial, unless a hearing is held or other
          special circumstances require additional time, in which case the
          Committee's decision must be rendered within 120 days after such date.
          Such decision must be written in a manner calculated to be understood
          by the Claimant, and it must contain:

          (i)   specific reasons for the decision;

          (ii)  specific reference(s) to the pertinent Plan provisions upon
                which the decision was based; and

          (iii) such other matters as the Committee deems relevant.

     8.05 LEGAL ACTION. A Claimant's compliance with the foregoing provisions of
          this Article VIII is a mandatory prerequisite to a Claimant's right to
          commence any legal action with respect to any claim for benefits under
          this Plan.

                           ARTICLE IX - MISCELLANEOUS

     9.01 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries
          successors and assigns shall have no legal or equitable rights,
          interests or claims in any property or assets of an Employer. Any and
          all of an Employer's assets shall be, and remain, the general,




          unpledged, unrestricted assets of the Employer. An Employer's
          obligation under the Plan shall be merely that of an unfunded and
          unsecured promise to pay money in the future.

     9.02 EMPLOYER'S LIABILITY. An Employer's liability for the payment of
          benefits shall be defined only by the Plan. An Employer shall have no
          obligation to a Participant under the Plan except as expressly
          provided in the Plan.

     9.03 NONASSIGNABILITY. Neither a Participant nor any other person shall
          have any right to commute, sell, assign, transfer, pledge, anticipate,
          mortgage or otherwise encumber, transfer, hypothecate or convey in
          advance of actual receipt, the amounts, if any, payable hereunder, or
          any part thereof, which are, and all rights to which are, expressly
          declared to be, unassignable and non-transferable. No part of the
          amounts payable shall, prior to actual payment, be subject to seizure
          or sequestration for the payment of any debts, judgments, alimony or
          separate maintenance owed by a Participant or any other person, nor be
          transferable by operation of law in the event of a Participant's or
          any other person's bankruptcy or insolvency.

     9.04 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan
          shall not be deemed to constitute a contract of employment between any
          Employer and the Participant. Such employment is hereby acknowledged
          to be an "at will" employment relationship that can be terminated at
          any time for any reason, with or without cause, unless expressly
          provided in a written employment agreement. Nothing in this Plan shall
          be deemed to give a Participant the night to be retained in the
          service of any Employer or to interfere with the right of any Employer
          to discipline or discharge the Participant at any time.

     9.05 FURNISHING INFORMATION. A Participant or his beneficiary will
          cooperate with the Committee by furnishing any and all information
          requested by the Committee and take such other actions as may be
          requested in order to facilitate the administration of the Plan and
          the payments of benefits hereunder, including but not limited to
          taking such physical examinations as the Committee may deem necessary.

     9.06 TERMS. Whenever any words are used herein in the masculine, they shall
          be construed as though they were in the feminine in all cases where
          they would so apply: and wherever any words are used herein in the
          singular or in the plural, they shall be construed as though they were
          used in the plural or the singular, as the case may be, in all cases
          where they would so apply.

     9.07 CAPTIONS. The captions of the articles, sections and paragraphs of
          this Plan are for convenience only and shall not control or affect the
          meaning or construction of any of its provisions.

     9.08 GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be
          construed and interpreted according to the internal laws of the State
          of Missouri without regard to its conflict of laws principles.

     9.09 VALIDITY. In case any provision of this Plan shall be illegal or
          invalid for any reason, said illegally or invalidity shall not affect
          the remaining parts hereof, but this Plan shall be construed and
          enforced as if such illegal and invalid provision had never been
          inserted herein.




     9.10 NOTICE. Any notice or filing required or permitted to be given to the
          Committee under this Plan shall be sufficient if in writing and
          hand-delivered, or sent by registered or certified mail, to the
          address below:

               UtiliCorp United Inc.
               Attn:  Director of Benefits
               20 West Ninth Street
               Kansas City, MO 64105-1711

          Such notice shall be deemed given as of the date of delivery or, if
          delivery is made by mail, as of the date shown on the postmark on the
          receipt for registration or certification.

          Any notice or filing required or permitted to be given to a
          Participant under this Plan shall be sufficient if in writing and
          hand-delivered, or sent by mail, to the last known address of the
          Participant.

     9.11 SUCCESSORS. The provisions of this Plan shall bind and inure to the
          benefit of the Participant's Employer and its successors and assigns
          and the Participant and the Participant's beneficiary.

     9.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse
          of a Participant who has predeceased the Participant shall
          automatically pass to the Participant and shall not be transferable by
          such spouse in any manner, including but not limited to such spouse's
          will, nor shall such interest pass under the laws of intestate
          succession.

     9.13 INCOMPETENT. If the Committee determines in its discretion that a
          benefit under this Plan is to be paid to a minor, a person declared
          incompetent or to a person incapable of handling the disposition of
          that person's property, the Committee may direct payment of such
          benefit to the guardian, legal representative or person having the
          care and custody of such minor, incompetent or incapable person. The
          Committee may require proof of minority, incompetency, incapacity or
          guardianship, as it may deem appropriate prior to distribution of the
          benefit. Any payment of a benefit shall be a payment for the account
          of the Participant and the Participant's beneficiary, as the case may
          be, and shall be a complete discharge of any liability under the Plan
          for such payment amount.

     9.14 COURT ORDER. The Committee is authorized to make any payments directed
          by court order in any action in which the Plan or Committee has been
          named as a party.

     9.15 DISTRIBUTION IN THE EVENT OF TAXATION. If, for any reason, all or any
          portion of a Participant's benefit under this Plan becomes taxable to
          the Participant prior to receipt, a Participant may petition the
          Committee for a distribution of that portion of his benefit that has
          become taxable. Upon the grant of such a petition, which grant shall
          not be unreasonably withheld, the Employer shall distribute to the
          Participant immediately available funds in an amount equal to the
          taxable portion of his benefit (which amount shall not exceed a
          Participant's unpaid vested benefit under the Plan). If the petition
          is granted, the tax liability distribution shall be made within 90
          days of the date when the Participant's petition is granted. Such a
          distribution shall affect and reduce the benefits to be paid under
          this Plan.




                                ARTICLE X - TRUST

     10.01 TRUST.

          (a)  ESTABLISHMENT. Each Employer may transfer to the trust created
          pursuant that certain Executive Benefit Security Trust Agreement dated
          as of January 1, 1997 by and between the Company and the trustee named
          therein (hereinafter referred to as the "Trust"), such assets as the
          Employer determines, in its sole discretion, are necessary to fund the
          Trust in accordance with an actuarial funding method and actuarial
          assumptions designed, in the reasonable judgment of an actuary
          appointed by the Company, to replicate the funding policy followed
          with respect to the Retirement Income Plan.

          (b)  CONTRIBUTION FOLLOWING CHANGE OF CONTROL. Notwithstanding Section
          10.01(a) above, in the event of a Change of Control, the Company shall
          as soon as administratively possible, but in no event later than ten
          (10) days following such Change of Control, make an irrevocable
          contribution to the Trust, in cash or other readily marketable
          property acceptable to the Trustee, equal to the sum of (i) an amount
          which, when added to the fair market value of the assets then held in
          the Trust which are attributable to this Plan, shall cause the fair
          market value of such assets to equal the actuarially determined
          present value of the benefits payable under the Plan as of the date of
          such Change of Control, and (ii) an amount equal to a reasonable
          estimate of the present value of the administrative, Trustee's, legal
          and consulting fees to be incurred during the life of the Trust on and
          after the Change of Control. The amount of the Company's contribution
          paid or payable to the Trust pursuant to the foregoing shall be
          determined by a benefits consultant appointed by the Company.

     10.02 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the
           Plan shall govern the rights of a Participant to receive
           distributions pursuant to the Plan. The provisions of the Trust shall
           govern the rights of the Employers, Participants and the creditors of
           the Employers to the assets transferred to the Trust. Each Employer
           shall at all times remain liable to carry out its obligations under
           the Plan.

     10.03 DISTRIBUTIONS FROM THE TRUST. Each Employer's obligations under the
           Plan may be satisfied with Trust assets distributed pursuant to the
           terms of the Trust, and any such distribution shall reduce the
           Employer's obligations under this Plan.



                          ****************************






                                 SIGNATURE PAGE



     IN WITNESS WHEREOF, UtiliCorp United Inc. has caused this Plan document to
be executed this 28th day of June, 2001.

                                        UTILICORP UNITED INC.





                                        By: /s/ Dale J. Wolf
                                            --------------------------





                            SUMMARY OF MODIFICATIONS

          UTILICORP UNITED INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2001)


- -    Executives employed in pay bands I-V are eligible for the SERP.

- -    The SERP was amended to add a new "Bonus SERP Benefit" and "Supplemental
     SERP Benefit."

- -    The Bonus SERP Benefit is designed to provide executives an additional
     retirement benefit based on the executives' annual bonus pay. Bonus pay is
     currently excluded from consideration under UtiliCorp's qualified defined
     benefit pension plan. All SERP participants are eligible for the Bonus SERP
     Benefit. (See SERP sections 1.02 and 4.02)

- -    The Supplemental SERP Benefit is designed to provide executives employed in
     pay bands I - IVa an additional market-based retirement benefit. The
     maximum retirement benefit is generally equal to 7.5% of the executive's
     average total pay in excess of the annual Internal Revenue Code dollar
     limitation. (See SERP sections 1.10, 1.12, 1.13 and 4.03)

- -    In order to receive the Bonus SERP Benefit and Supplemental SERP Benefit,
     an executive must either (i) retire from employment on or after attaining
     age 55, or (ii) separate from service after completing ten (10) or more
     years of service. All SERP benefits are adjusted to take into account early
     retirement and other applicable actuarial adjustments. (See SERP section
     3.01)

- -    If a married executive dies after having satisfied the vesting requirements
     for the Bonus SERP and Supplemental SERP Benefits, the executive's
     surviving spouse will receive a benefit equal to 50% of the benefit that
     would have been paid to the executive. There is no death benefit for
     unmarried executives. (See SERP section 4.07)

- -    The Committee has the discretion to adopt a mandatory pay-out policy
     pursuant to which an executive's SERP benefit would be paid in a single
     lump sum if the actuarial value of such benefit is less than specified
     dollar amount. (See SERP section 4.05)

EX-10.(A)(2)

                                                               Exhibit 10(a)(2)

                                 FIRST AMENDMENT
                              UTILICORP UNITED INC.
                            CAPITAL ACCUMULATION PLAN

     THIS AMENDMENT is made by UtiliCorp United Inc. (the "Company").

     WHEREAS, the Company adopted the UtiliCorp United Inc. Capital Accumulation
Plan (the "Plan") effective as of January 1, 1995, to provided specified
benefits to a select group of management and highly compensated employees; and

     WHEREAS, the Plan was most recently amended and restated in its entirety
effective as of January 1, 2001 (the "Restated Plan"), and the Company desires
to adopt a clarifying amendment as hereinafter set forth.

     NOW, THEREFORE, the Restated Plan is amended as follows:

     A.   Section 4.1 is amended to read in its entirety as follows:

     4.1  SHORT TERM PAY-OUT.

          (a)  In connection with each Participant's deferral election for a
     Plan Year, such Participant may elect to receive a "Short Term Pay-Out" of
     his or her Deferral Contributions attributable to such Plan Year. Subject
     to the Deduction Limitation and the other terms and conditions of this
     Plan, each Short Term Pay-Out benefit shall be paid in a lump sum as soon
     as reasonably practicable (which will normally be within 60 days) after the
     last day of any Plan Year designated by the Participant that is at least
     one (1) Plan Year after the Plan Year during which such Deferral
     Contributions were made. By way of example, if a one (1) year Short Term
     Pay-Out is elected for Deferral Contributions that are deferred during the
     Plan Year commencing January 1, 2001, the one (1) year Short Term Pay-Out
     would become payable as soon as reasonably practicable on or after December
     31, 2002.

          (b)  ELECTION TO DEFER SHORT TERM PAY-OUT. At any time after a Short
     Term Pay-Out is elected, but in no event later than the earlier of (I) six
     (6) months before the scheduled Short Term Pay-Out date or (II) December 31
     of the calendar year preceding the calendar year during which the scheduled
     Short Term Pay-Out date occurs, the Participant may irrevocably elect to
     extend his or her scheduled payment date to a subsequent pay-out date, in
     which case, the Participant's Deferral Contributions attributable to such
     election shall be paid, subject to the Deduction Limitation, in a single
     lump sum as soon as reasonably practicable (which will normally be within
     60 days) after such extended pay-out date.

          (c)  PAYMENT OF HYPOTHETICAL EARNINGS ATTRIBUTABLE TO SHORT TERM
     PAY-OUTS. A Participant's Short Term Pay-Out benefit attributable to any
     Plan Year shall be inclusive of any hypothetical investment gains or losses
     credited in accordance with Section 3.5 on his or her Deferral
     Contributions for such Plan Year.

          (d)  OTHER BENEFITS TAKE PRECEDENCE OVER SHORT TERM PAY-OUTS. Should
     an event occur that triggers a benefit under Article 5, 6, 7 or 8, any
     Deferral Contributions that are subject to a Short Term Pay-Out election
     under this Section 4.1 shall not be paid in accordance with this Section
     4.1 but shall be paid in accordance with the other applicable Article.




     B.   Section 5.2 is amended to read in its entirety as follows:

          5.2  PAYMENT OF RETIREMENT BENEFIT. A Participant in connection with
     his or her commencement of participation in the Plan, shall elect to
     receive his or her Retirement Benefit in a lump sum or pursuant to a
     Quarterly Installment Method over 2 to 15 years. The Participant may
     annually change his or her election to an alternative pay-out method by
     submitting a new election form to the Committee, PROVIDED, HOWEVER, the
     Committee will only honor a Participant's new election if it is submitted
     to the Committee prior to the earlier of (I) six (6) months before the
     Participant's Retirement date or (II) December 31 of the calendar year
     preceding the calendar year during which the Participant Retires. In the
     event that a Participant Retires before his or her attainment of age 62,
     the Participant may file a written request with the Committee requesting
     that a lump sum payment not be made, or installment payments not commence,
     until after the Participant reaches age sixty-five (65), provided that any
     such election form is accepted by the Committee in its sole discretion and
     submitted prior to the earlier of (I) six (6) months before the
     Participant's Retirement date or (II) December 31 of the calendar year
     preceding the calendar year during which the Participant Retires. If a
     Participant does not make any election with respect to the payment of the
     Retirement Benefit, then such benefit shall be payable in a single lump
     sum. The lump sum payment shall be made, or installment payments shall
     commence, as soon as reasonably practicable (which will normally occur
     within 60 days) following the date the Participant Retires. Any payment
     made shall be subject to the Deduction Limitation.

     C.   This Amendment is effective as of January 1, 2001. Except as set forth
herein, all other provisions of the Plan shall remain in effect.

                          ****************************






                                 SIGNATURE PAGE

     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed
this 30th day of January, 2001.

                                       UTILICORP UNITED INC.


                                       By: /s/ Dale J. Wolf

                                       Title: Vice President

ATTEST:

By:  /s/   Nancy J. Browning
     Assistant Secretary