Summary  

On February 6, 2007, we entered into agreements with Aquila, Inc. (“Aquila”) to acquire the gas utilities operated by Aquila in Colorado, Iowa, Kansas and Nebraska, and the electric utility operated by Aquila in Colorado, together with certain related assets, for $940 million in cash. At the same time we entered into our agreements with Aquila, Aquila also entered into an agreement with Great Plains Energy Incorporated (“Great Plains”) for the merger of a subsidiary of Great Plains with and into Aquila. Each transaction is contingent on the completion of the other transaction, meaning that one transaction will not be completed unless the other transaction is completed.

Asset Sale Transactions

On February 6, 2007, Great Plains, Gregory Acquisition Corp., a wholly owned subsidiary of Great Plains, and we entered into (i) an asset purchase agreement with Aquila, and (ii) a partnership interests purchase agreement with Aquila and Aquila Colorado, LLC, a Delaware limited liability company and wholly-owned subsidiary of Aquila, pursuant to which we will acquire from Aquila, immediately before the completion of the merger, the assets and liabilities comprising its Colorado electric utility operations and its gas utility operations in Colorado, Iowa, Kansas and Nebraska.

The agreements provide for the payment in cash of a base purchase price of $940 million, subject to working capital and certain other adjustments. The agreements contain various provisions customary for transactions of this size and type, including representations, warranties and covenants with respect to the Colorado, Iowa, Kansas and Nebraska utility businesses that are subject to usual limitations. Completion of the sale transactions is subject to various conditions, including: (i) approval of the Federal Energy Regulatory Commission; (ii) approval of the Colorado Public Utilities Commission, Iowa Utilities Board, Kansas Corporation Commission, and Nebraska Public Service Commission; (iii) the expiration or early termination of any waiting period under the Hart-Scott-Rodino Antitrust Act of 1976, as amended; (iv) the absence of a material adverse effect on the utility businesses being sold to us; and (v) the ability and readiness of Aquila, Great Plains and Gregory Acquisition Corp. to complete the merger immediately after the completion of the asset sale transactions.

The foregoing descriptions of the asset purchase agreement, partnership interests purchase agreement and merger agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to the asset purchase agreement, partnership interests purchase agreement and merger agreement, copies of which are filed as exhibits to this Form 8-K and incorporated herein by reference. Each agreement contains representations and warranties of the parties made to (and solely for the benefit of) the other parties, and the assertions embodied in those representations and warranties are qualified by confidential information in schedules that the parties have exchanged with each other. Accordingly, investors and security holders should not rely on the representations and warranties as characterizations of the actual state of facts, because they were made as of the date of each agreement and are modified in important part by the disclosure schedules.

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