Great Plains Energy makes quarterly contract adjustment payments at the rate of 2.00% per year of the stated amount of $50 per Equity Unit and interest payments at the rate of 10.00% per year on the subordinated notes. Great Plains Energy must attempt to remarket the subordinated notes, in whole but not in part, by June 12, 2012. In connection with a successful remarketing of the notes, Great Plains Energy may elect, without the consent of any of the holders, to modify the notes’ stated maturity to any date on or after June 15, 2014 and earlier than June 15, 2042. The proceeds from a successful remarketing will be used to satisfy the holders’ obligation under the purchase contract. If the notes have not been successfully remarketed by June 12, 2012, the holders of all notes will have the right to put their notes to Great Plains Energy on June 15, 2012, in satisfaction of the holders’ obligation under the purchase contracts and Great Plains Energy will issue to the holders newly issued shares of the Company’s common stock equal to the settlement rate.
The May 2009 present value of the contract adjustment payments of $15.1 million was recorded as a liability in other current liabilities and other deferred credits and other liabilities with a corresponding amount recorded as capital stock premium and expense on Great Plains Energy’s consolidated balance sheet. The liability is being relieved as Great Plains Energy makes quarterly contract adjustment payments.
Great Plains Energy’s and KCP&L’s long-term debt maturities for the next five years are detailed in the following table.
At December 31, 2011, Great Plains Energy’s current maturities of long-term debt were $801.4 million. In January 2012, KCP&L repaid $12.4 million of 4.00% EIRR bonds at maturity. Great Plains Energy’s $287.5 million of Equity Units subordinated notes mature in 2042 but must be remarketed by June 12, 2012. GMO’s $500.0 million of 11.875% Senior Notes mature in July 2012 and Great Plains Energy is evaluating alternatives to refinance this long-term debt. Based on current market conditions and Great Plains Energy’s unused bank lines of credit, Great Plains Energy expects to have the ability to access the markets to complete the necessary refinancing.
Great Plains Energy has an effective shelf registration statement for the sale of unspecified amounts of securities with the Securities and Exchange Commission (SEC) that was filed and became effective in May 2009.
Great Plains Energy has 5.0 million shares of common stock registered with the SEC for its Dividend Reinvestment and Direct Stock Purchase Plan. The plan allows for the purchase of common shares by reinvestingdividends or making optional cash payments. Great Plains Energy can issue new shares or purchase shares on the open market for the plan. At December 31, 2011, 0.7 million shares remained available for future issuances.
Great Plains Energy has 12.3 million shares of common stock registered with the SEC for a defined contribution savings plan. Shares issued under the plan may be either newly issued shares or shares purchased in the open market. At December 31, 2011, 0.4 million shares remained available for future issuances.
Treasury shares are held for future distribution upon issuance of shares in conjunction with the Company’s Long-Term Incentive Plan.
Great Plains Energy’s articles of incorporation restrict the payment of common stock dividends in the event common equity is 25% or less of total capitalization. In addition, if preferred stock dividends are not declared and paid when scheduled, Great Plains Energy could not declare or pay common stock dividends or purchase any common shares. If the unpaid preferred stock dividends equal four or more full quarterly dividends, the preferred shareholders, voting as a single class, could elect the smallest number of directors necessary to constitute a majority of the full Board. Certain conditions in the MPSC and KCC orders authorizing the holding company structure require Great Plains Energy and KCP&L to maintain consolidated common equity of at least 30% and 35%, respectively, of total capitalization (including only the amount of short-term debt in excess of the amount of construction work in progress). Under the Federal Power Act, KCP&L and GMO generally can pay dividends only out of retained earnings. The revolving credit agreements of Great Plains Energy, KCP&L and GMO contain a covenant requiring each company to maintain a consolidated indebtedness to consolidated total capitalization ratio of not more than 0.65 to 1.00. In addition, Great Plains Energy is prohibited from paying dividends on its common and preferred stock in the event its Equity Unit contract payments or interest payments on the debt underlying the Equity Units are deferred until such deferrals have been paid.
As of December 31, 2011, all of Great Plains Energy’s and KCP&L’s retained earnings and net income were free of restrictions. As a result of the above restrictions, Great Plains Energy’s subsidiaries had restricted net assets of approximately $2.8 billion as of December 31, 2011. The restrictions are not expected to affect the Companies’ ability to pay dividends at the current level in the foreseeable future.
At December 31, 2011, 1.6 million shares of Cumulative No Par Preferred Stock, 390,000 shares of Cumulative Preferred Stock, $100 par value and 11.0 million shares of no par Preference Stock were authorized under Great Plains Energy’s articles of incorporation. All of the 390,000 authorized shares of Cumulative Preferred Stock are issued and outstanding. Great Plains Energy has the option to redeem the $39.0 million of issued Cumulative Preferred Stock at prices ranging from 101% to 103.7% of par value. If Great Plains Energy voluntarily files for dissolution or liquidation, the Cumulative Preferred Stock holders are entitled to receive the redemption prices. If a proceeding for dissolution or liquidation is filed against Great Plains Energy, the Cumulative Preferred Stock holders are entitled to receive the $100 par value per share plus accrued and unpaid dividends.
| 14. | COMMITMENTS AND CONTINGENCIES |
Environmental Matters
Great Plains Energy and KCP&L are subject to extensive federal, state and local environmental laws, regulations and permit requirements relating to air and water quality, waste management and disposal, natural resources and health and safety. In addition to imposing continuing compliance obligations and remediation costs, these laws, regulations and permits authorize the imposition of substantial penalties for noncompliance, including fines, injunctive relief and other sanctions. The cost of complying with current and future environmental requirements is expected to be material to Great Plains Energy and KCP&L. Failure to comply with environmental requirements or to timely recover environmental costs through rates could have a material effect on Great Plains Energy’s and KCP&L’s results of operations, financial position and cash flows.
The following discussion groups environmental and certain associated matters into the broad categories of air and climate change, water, solid waste and remediation.
Air and Climate Change Overview
The Clean Air Act and associated regulations enacted by the Environmental Protection Agency (EPA) form a comprehensive program to preserve air quality. States are required to establish regulations and programs to address all requirements of the Clean Air Act and have the flexibility to enact more stringent requirements. All of Great Plains Energy’s and KCP&L’s generating facilities, and certain of their other facilities, are subject to the Clean Air Act.
Great Plains Energy’s and KCP&L’s current estimate of capital expenditures (exclusive of AFUDC and property taxes) to comply with the currently-effective Clean Air Interstate Rule (CAIR), the replacement to CAIR or the Cross-State Air Pollution Rule (CSAPR), the best available retrofit technology (BART) rule, the SO2 National Ambient Air Quality Standard (NAAQS), the industrial boiler rule and the Mercury and Air Toxics Standards (MATS) rule that would reduce emissions of toxic air pollutants, (all of which are discussed below) is approximately $1 billion. The actual cost of compliance with any existing, proposed or future rules may be significantly different from the cost estimate provided.
The approximate $1 billion current estimate of capital expenditures reflects the following capital projects:
| · | KCP&L’s La Cygne No. 1 scrubber and baghouse installed by June 2015; |
| · | KCP&L’s La Cygne No. 2 full air quality control system (AQCS) installed by June 2015; |
| · | KCP&L’s Montrose No. 3 full AQCS installed by approximately 2017; and |
| · | GMO’s Sibley No. 3 scrubber and baghouse installed by approximately 2017. |
In September 2011, KCP&L commenced construction of the La Cygne project. Other capital projects at KCP&L’s Montrose Nos. 1 and 2 and GMO’s Sibley Nos. 1 and 2 and Lake Road Nos. 4 and 6 are possible but are currently considered less likely. Any capacity and energy requirements resulting from a decision not to proceed with these less likely projects is currently expected to be met through renewable energy additions required under Missouri and Kansas renewable energy standards, demand side management programs, construction of combustion turbines and/or combined cycle units, and/or power purchase agreements.
The estimate does not reflect the non-capital costs the Companies incur on an ongoing basis to comply with environmental laws, which may increase in the future due to the Companies’ ongoing compliance with current or future environmental laws. The Companies expect to seek recovery of the costs associated with environmental requirements through rate increases; however, there can be no assurance that such rate increases would be granted. The Companies may be subject to materially adverse rate treatment in response to competitive, economic, political, legislative or regulatory pressures and/or public perception of the Companies’ environmental reputation.
Clean Air Interstate Rule (CAIR) and Cross-State Air Pollution Rule (CSAPR)
The CAIR requires reductions in SO2 and NOx emissions in 28 states, including Missouri. The reductions in SO2 and NOx emissions are accomplished through statewide caps for NOx and SO2. Great Plains Energy’s and KCP&L’s fossil fuel-fired plants located in Missouri are subject to CAIR, while their fossil fuel-fired plants in Kansas are not.
On July 11, 2008, the D.C. Circuit Court of Appeals vacated CAIR in its entirety and remanded the matter to the EPA to promulgate a new rule consistent with its opinion. On December 23, 2008, the Court issued an order remanding CAIR to the EPA to revise the rule consistent with its July 2008 order.
In July 2011, the EPA finalized the CSAPR to replace the currently-effective CAIR. The CSAPR requires the states within its scope to reduce power plant SO2 and NOx emissions that contribute to ozone and fine particle nonattainment in other states. The geographical scope of the CSAPR includes Kansas, Missouri and other states. Kansas and Missouri are included in the annual SO2 and NOx programs for the control of fine particulate matter in the CSAPR. In December 2011, the EPA finalized a rulemaking to include Missouri for ozone season control but not Kansas. The EPA will address the inclusion of Kansas in a separate action and revisit Kansas’ status in the CSAPR at that time. In the CSAPR, the EPA set an emissions budget for each of the affected states. The CSAPR allows limited interstate emissions allowance trading among power plants; however, it does not permit trading of SO2 allowances between the Companies’ Kansas and Missouri power plants. There would be additional reductions in SO2 allowances allocable to the Companies’ Missouri power plants taking effect in 2014. There is no such 2014 additional reduction in SO2 allowances allocable to the Companies’ Kansas power plants. In February 2012, the EPA finalized technical adjustments to the final CSAPR. The rules amend the assurance penalty provisions, which would further restrict interstate trading of emission allowances, to start in 2014 instead of 2012. The EPA revised certain unit-level allocations in certain states, including Kansas and Missouri, which would re-allocate allowances to assist KCP&L in compliance with the CSAPR.
Compliance with the CSAPR was to begin in 2012. Multiple states, utilities and other parties, including KCP&L, filed requests for reconsideration and stays with the EPA and/or the D.C. Circuit Court. In December 2011, the D.C. Circuit Court issued an order staying the CSAPR pending the Court's resolution of the petitions for review of the rule. The order requires the EPA to continue administering the CAIR while the CSAPR is stayed.
The CSAPR is complex and Great Plains Energy and KCP&L are evaluating its impacts. The Companies project that they may not be allocated sufficient SO2 or NOX emissions allowances to cover their currently expected operations when the rule becomes effective. Any shortfall in allocated allowances is anticipated to be addressed through a combination of permissible allowance trading, installing additional emission control equipment, changes in plant processes, or purchasing additional power in the wholesale market.
Best Available Retrofit Technology (BART) Rule
The EPA BART rule directs state air quality agencies to identify whether visibility-reducing emissions from sources subject to BART are below limits set by the state or whether retrofit measures are needed to reduce emissions. BART applies to specific eligible facilities including KCP&L’s La Cygne Nos. 1 and 2 in Kansas, KCP&L’s Iatan No. 1, in which GMO has an 18% interest, KCP&L’s Montrose No. 3 in Missouri, GMO’s Sibley Unit No. 3 and Lake Road Unit No. 6 in Missouri and Westar Energy, Inc.’s (Westar) Jeffrey Unit Nos. 1 and 2 in Kansas, in which GMO has an 8% interest. Both Missouri and Kansas have submitted BART plans to the EPA. In December 2011, the EPA issued a proposal that would approve the CSAPR as an alternative to determining BART. As a result, states in the CSAPR would be able to substitute participation in the CSAPR for source-specific BART. In December 2011, the EPA approved the Kansas BART plan.
Mercury and Air Toxics Standards (MATS) Rule
In January 2009, the EPA issued a memorandum stating that new electric steam generating units (EGUs) that began construction while the Clean Air Mercury Rule (CAMR) was effective are subject to a new source maximum achievable control technology (MACT) determination on a case-by-case basis. In July 2009, the EPA sent a letter notifying KCP&L that a MACT determination and schedule of compliance is required for coal and oil-fired EGUs that began actual construction or reconstruction after December 15, 2000, and identified Iatan No. 2 as an affected EGU. This was an outcome of the D.C. Circuit Court of Appeals’ vacatur of both the CAMR and the contemporaneously promulgated rule removing EGUs from MACT requirements. It is not currently known how the MACT determination and schedule of
compliance will impact the permitting or operating requirements for Iatan No. 2, but it is possible a MACT determination may ultimately require additional emission control equipment and permit limits.
In December 2011, the EPA finalized the Mercury and Air Toxics Standards (MATS) Rule that will reduce emissions of toxic air pollutants, also known as hazardous air pollutants, from new and existing coal- and oil-fired EGUs with a capacity of greater than 25 MWs. The rule establishes numerical emission limits for mercury, particulate matter (a surrogate for non-mercury metals), and hydrochloric acid (a surrogate for acid gases). The rule establishes work practices, instead of numerical emission limits, for organic air toxics, including dioxin/furan. Compliance with the rule would need to be addressed by installing additional emission control equipment, changes in plant operation, purchasing additional power in the wholesale market or a combination of these and other alternatives. The rule allows three years for compliance with authority for state permitting authorities to grant an additional year as needed for technology installation. The EPA indicated that it expects this option to be broadly available.
Industrial Boiler Rule
In February 2011, the EPA issued a final rule that would reduce emissions of hazardous air pollutants from new and existing industrial boilers. In May 2011, the EPA announced it would stay the effective date of the final rule during reconsideration; although in January 2012, the D.C. Circuit Court vacated the stay and remanded the stay to the EPA. In December 2011, the EPA issued a proposed revised rule and intends to issue a final rule in the spring of 2012. The proposed revised rule establishes numeric emission limits for mercury, particulate matter (as a surrogate for non-mercury metals), hydrogen chloride (as a surrogate for acid gases), and carbon monoxide (as a surrogate for non-dioxin organic hazardous air pollutants). The final rule establishes emission limits for KCP&L’s and GMO’s existing units that produce steam other than for the generation of electricity. The existing boiler rule and its proposed revisions do not apply to KCP&L’s and GMO’s electricity generating boilers, but would apply to most of GMO’s Lake Road boilers, which also serve steam customers, and to auxiliary boilers at other generating facilities.
New Source Review
The Clean Air Act requires companies to obtain permits and, if necessary, install control equipment to reduce emissions when making a major modification or a change in operation if either is expected to cause a significant net increase in regulated emissions.
In March 2010, the U.S. District Court in the District of Kansas approved a settlement agreement between Westar and the parties of a lawsuit filed by the Department of Justice on behalf of the EPA. The lawsuit asserted that certain projects completed at the Jeffrey Energy Center violated certain requirements of the EPA’s New Source Review program. The Jeffrey Energy Center consists of three coal-fired units located in Kansas that is 92% owned by Westar and operated exclusively by Westar. GMO has an 8% interest in the Jeffrey Energy Center and is generally responsible for its 8% share of the facility’s operating costs and capital expenditures. The settlement agreement required, among other things, the installation of a selective catalytic reduction (SCR) system at one of the Jeffrey Energy Center units by the end of 2014 and the payment of a $3 million civil penalty. Westar has estimated the cost of this SCR at approximately $240 million. Depending on the NOx emission reductions attained by that SCR and attainable through the installation of other controls at the other two units, the settlement agreement may require the installation of a second SCR system on one of the other two units by the end of 2016. There is no assurance that GMO’s share of these costs would be recovered in rates and failure to recover such costs could have a significant effect on Great Plains Energy’s results of operations, financial position and cash flows.
KCP&L has received requests for information from the Kansas Department of Health and Environment (KDHE) pertaining to a past La Cygne No. 1 scrubber project. KCP&L is working with the KDHE to resolve this issue and management currently believes the outcome will not have a significant impact on Great Plains Energy’s and KCP&L’s results of operations, financial position and cash flows.
Collaboration Agreement
In March 2007, KCP&L, the Sierra Club and the Concerned Citizens of Platte County entered into a Collaboration Agreement under which KCP&L agreed to pursue a set of initiatives including energy efficiency, additional wind generation, lower emission permit levels at its Iatan and La Cygne generating stations and other initiatives designed to offset CO2 emissions. Full implementation of the terms of the Collaboration Agreement will necessitate approval from the appropriate authorities, as some of the initiatives in the agreement require regulatory approval.
In 2006, KCP&L installed 100 MWs of wind generation at its Spearville wind site. KCP&L agreed in the Collaboration Agreement to pursue increasing its wind generation capacity to 500 MWs in total by the end of 2012 with 100 MWs to be added by the end of 2010 and the remainder added by the end of 2012, subject to regulatory approval. In 2010, KCP&L completed a 48 MWs wind project adjacent to its existing Spearville wind site with wind turbines it already owned and also secured 52 MWs of renewable energy credits. During 2011, KCP&L entered into long-term power purchase agreements for approximately 231 MWs of wind generation beginning in 2012 and GMO entered into a long-term power purchase agreement for approximately 100 MWs of wind generation beginning in 2012, which expire in 2032.
KCP&L has a consent agreement with the KDHE incorporating limits for stack particulate matter emissions, as well as limits for NOx and SO2 emissions, at its La Cygne Station that, consistent with the Collaboration Agreement, will be below the presumptive limits under BART. KCP&L further agreed to use its best efforts to install emission control technologies to reduce those emissions from the La Cygne Station prior to the required compliance date under BART, but in no event later than June 1, 2015. In August 2011, KCC issued its order on KCP&L’s predetermination request that would apply to the recovery of costs for its 50% share of the environmental equipment required to comply with BART at the La Cygne Station. In the order, KCC stated that KCP&L’s decision to retrofit La Cygne was reasonable, reliable, efficient and prudent and the $1.23 billion cost estimate is reasonable. If the cost for the project is at or below the $1.23 billion estimate, absent a showing of fraud or other intentional imprudence, KCC stated that it will not re-evaluate the prudency of the cost of the project. If the cost of the project exceeds the $1.23 billion estimate and KCP&L seeks to recover amounts exceeding the estimate, KCP&L will bear the burden of proving that any additional costs were prudently incurred. KCP&L’s 50% share of the estimated cost is $615 million. KCP&L began the project in September 2011.
In the Collaboration Agreement, KCP&L also agreed to offset an additional 711,000 tons of CO2 by the end of 2012. KCP&L currently expects to achieve this offset through a number of alternatives, including improving the efficiency of its coal-fired units, equipping certain gas-fired units for winter operation and, if necessary, possibly reducing output of, or retiring, one or more coal-fired units.
Climate Change
The Companies are subject to existing greenhouse gas reporting regulations and certain greenhouse gas permitting requirements. Management believes it is possible that additional federal or relevant state or local laws or regulations could be enacted to address global climate change. At the international level, while the United States is not a current party to the international Kyoto Protocol, it has agreed to undertake certain voluntary actions under the non-binding Copenhagen Accord and pursuant to subsequent international discussions relating to climate change, including the establishment of a goal to reduce greenhouse gas emissions. International agreements legally binding on the United States may be
reached in the future. Such new laws or regulations could mandate new or increased requirements to control or reduce the emission of greenhouse gases, such as CO2, which are created in the combustion of fossil fuels. The Companies’ current generation capacity is primarily coal-fired and is estimated to produce about one ton of CO2 per MWh, or approximately 25 million tons and 18 million tons per year for Great Plains Energy and KCP&L, respectively.
Laws have recently been passed in Missouri and Kansas, the states in which the Companies’ retail electric businesses are operated, setting renewable energy standards, and management believes that national clean or renewable energy standards are also possible. While management believes additional requirements addressing these matters will probably be enacted, the timing, provisions and impact of such requirements, including the cost to obtain and install new equipment to achieve compliance, cannot be reasonably estimated at this time. In addition, certain federal courts have held that state and local governments and private parties have standing to bring climate change tort suits seeking company-specific emission reductions and monetary or other damages. While the Companies are not a party to any climate change tort suit, there is no assurance that such suits may not be filed in the future or as to the outcome if such suits are filed. Such requirements or litigation outcomes could have the potential for a significant financial and operational impact on Great Plains Energy and KCP&L. The Companies would likely seek recovery of capital costs and expenses for compliance through rate increases; however, there can be no assurance that such rate increases would be granted.
Legislation concerning the reduction of emissions of greenhouse gases, including CO2, is being considered at the federal and state levels. The timing and effects of any such legislation cannot be determined at this time. In the absence of new Congressional mandates, the EPA is proceeding with the regulation of greenhouse gases under the existing Clean Air Act.
In March 2011, the EPA announced it finalized a settlement agreement to issue a rule that will address greenhouse gas emissions from EGUs. The rule would establish new source performance standards for new and modified EGUs and emission guidelines for existing EGUs. Under the settlement agreement, the EPA committed to issuing proposed regulations by September 2011, although the EPA did not meet that date, and final regulations by May 2012.
At the state level, a Kansas law enacted in May 2009 required Kansas public electric utilities, including KCP&L, to have renewable energy generation capacity equal to at least 10% of their three-year average Kansas peak retail demand by 2011. The percentage increases to 15% by 2016 and 20% by 2020. A Missouri law enacted in November 2008 required at least 2% of the electricity provided by Missouri investor-owned utilities (including KCP&L and GMO) to their Missouri retail customers to come from renewable resources, including wind, solar, biomass and hydropower, by 2011, increasing to 5% in 2014, 10% in 2018, and 15% in 2021, with a small portion (estimated to be about 2MW in 2011 for each of KCP&L and GMO) required to come from solar resources.
KCP&L and GMO project that they will be compliant with the Missouri renewable requirements, exclusive of the solar requirement, through 2023 for KCP&L and 2018 for GMO. KCP&L and GMO project that the purchase of solar renewable energy credits will be sufficient for compliance with the Missouri solar requirements for the foreseeable future. KCP&L also projects that it will be compliant with the Kansas renewable requirements through 2016.
Greenhouse gas legislation or regulation has the potential of having significant financial and operational impacts on Great Plains Energy and KCP&L, including the potential costs and impacts of achieving compliance with limits that may be established. However, the ultimate financial and operational consequences to Great Plains Energy and KCP&L cannot be determined until such legislation is passed and/or regulations are issued. Management will continue to monitor the progress of relevant legislation and regulations.
SO2 NAAQS
In June 2010, the EPA strengthened the primary NAAQS for SO2. The EPA revised the primary SO2 standard by establishing a new 1-hour standard at a level of 0.075 ppm. The EPA revoked the two existing primary standards of 0.140 ppm evaluated over 24 hours and 0.030 ppm evaluated over an entire year. In July 2011, the MDNR recommended to the EPA that part of Jackson County, Missouri, which is in the Companies’ service territory, be designated a nonattainment area for the new 1-hour SO2 standard.
Montrose Station Notice of Violation
In June 2009, KCP&L received notification from the MDNR alleging that its Montrose Station had excess particulate matter emissions in 2008. In November 2011, KCP&L and MDNR Executed an Abatement Order on Consent that resolved all claims for the violations alleged without KCP&L admitting the validity or accuracy of such claims. KCP&L agreed in compromise and satisfaction of MDNR’s claims to complete a supplemental environmental project in the amount of $150,000.
Water
The Clean Water Act and associated regulations enacted by the EPA form a comprehensive program to preserve water quality. Like the Clean Air Act, states are required to establish regulations and programs to address all requirements of the Clean Water Act, and have the flexibility to enact more stringent requirements. All of Great Plains Energy’s and KCP&L’s generating facilities, and certain of their other facilities, are subject to the Clean Water Act.
In March 2011, the EPA proposed regulations pursuant to Section 316(b) of the Clean Water Act regarding cooling water intake structures pursuant to a court approved settlement. KCP&L generation facilities with cooling water intake structures would be subject to a limit on how many fish can be killed by being pinned against intake screens (impingement) and would be required to conduct studies to determine whether and what site-specific controls, if any, would be required to reduce the number of aquatic organisms drawn into cooling water systems (entrainment). The EPA agreed to finalize the rule by July 2012. Although the impact on Great Plains Energy’s and KCP&L’s operations will not be known until after the rule is finalized, it could have a significant effect on Great Plains Energy’s and KCP&L’s results of operations, financial position and cash flows.
KCP&L holds a permit from the MDNR covering water discharge from its Hawthorn Station. The permit authorizes KCP&L to, among other things, withdraw water from the Missouri river for cooling purposes and return the heated water to the Missouri river. KCP&L has applied for a renewal of this permit and the EPA has submitted an interim objection letter regarding the allowable amount of heat that can be contained in the returned water. Until this matter is resolved, KCP&L continues to operate under its current permit. KCP&L cannot predict the outcome of this matter; however, while less significant outcomes are possible, this matter may require KCP&L to reduce its generation at Hawthorn Station, install cooling towers or both, any of which could have a significant impact on KCP&L. The outcome could also affect the terms of water permit renewals at KCP&L’s Iatan Station and at GMO’s Sibley and Lake Road Stations.Additionally, in September 2009, the EPA announced plans to revise the existing standards for water discharges from coal-fired power plants. In November 2010, the EPA filed a motion requesting court approval of a consent agreement in which the EPA agreed to propose a rule in July 2012 and to finalize it in January 2014. Until a rule is proposed and finalized, the financial and operational impacts to Great Plains Energy and KCP&L cannot be determined.
Solid Waste
Solid and hazardous waste generation, storage, transportation, treatment and disposal is regulated at the federal and state levels under various laws and regulations. In May 2010, the EPA proposed to regulate coal combustion residuals (CCRs) under the Resource Conservation and Recovery Act (RCRA) to address the risks from the disposal of CCRs generated from the combustion of coal at electric generating facilities. The EPA is considering two options in this proposal. Under the first option, the EPA would regulate CCRs as special wastes subject to regulation under subtitle C of RCRA (hazardous), when they are destined for disposal in landfills or surface impoundments. Under the second option, the EPA would regulate disposal of CCRs under subtitle D of RCRA (non-hazardous). The Companies principally use coal in generating electricity and dispose of the CCRs in both on-site facilities and facilities owned by third parties. The proposed CCR rule has the potential of having a significant financial and operational impact on Great Plains Energy and KCP&L in connection with achieving compliance with the proposed requirements. However, the financial and operational consequences to Great Plains Energy and KCP&L cannot be determined until an option is selected by the EPA and the final regulation is enacted.
Remediation
Certain federal and state laws, including the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) hold current and previous owners or operators of real property, and any person who arranges for the disposal or treatment of hazardous substances at a property, liable on a joint and several basis for the costs of cleaning up contamination at or migrating from such real property, even if they did not know of and were not responsible for such contamination. CERCLA and other laws also authorize the EPA and other agencies to issue orders compelling potentially responsible parties to clean up sites that are determined to present an actual or potential threat to human health or the environment. GMO is named as a potentially responsible party at two disposal sites for polychlorinated biphenyl (PCB) contamination, and retains some environmental liability for several operations and investments it no longer owns. In addition, GMO also owns, or has acquired liabilities from companies that once owned or operated, former manufactured gas plant (MGP) sites, which are subject to the supervision of the EPA and various state environmental agencies.
At December 31, 2011 and 2010, KCP&L had $0.3 million accrued for environmental remediation expenses, which covers ground water monitoring at a former MGP site. At December 31, 2011 and 2010, Great Plains Energy had $0.4 million accrued for environmental remediation expenses, which includes the $0.3 million at KCP&L, and additional potential remediation and ground water monitoring costs relating to two GMO sites. The amounts accrued were established on an undiscounted basis and Great Plains Energy and KCP&L do not currently have an estimated time frame over which the accrued amounts may be paid.
In addition to the $0.4 million accrual above, at December 31, 2011 and 2010, Great Plains Energy had $2.1 million accrued for the future investigation and remediation of certain additional GMO identified MGP sites, PCB contaminated sites and retained liabilities. This estimate was based upon review of the potential costs associated with conducting investigative and remedial actions at identified sites, as well as the likelihood of whether such actions will be necessary. This estimate could change materially after further investigation, and could also be affected by the actions of environmental agencies and the financial viability of other potentially responsible parties; however, given the uncertainty of these items the possible loss or range of loss in excess of the amount accrued is not estimable.
GMO has pursued recovery of remediation costs from insurance carriers and other potentially responsible parties. As a result of a settlement with an insurance carrier, approximately $2.4 million in insurance proceeds less an annual deductible is available to GMO to recover qualified MGP remediation expenses. GMO would seek recovery of additional remediation costs and expenses through rate increases; however, there can be no assurance that such rate increases would be granted.
Contractual Commitments
Great Plains Energy’s and KCP&L’s expenses related to lease commitments are detailed in the following table.
| | | | | | | |
| | 2011 | 2010 | 2009 |
| | (millions) |
| Great Plains Energy | $ | 20.9 | | $ | 17.2 | | $ | 23.4 | |
| KCP&L | | 17.0 | | | 13.2 | | | 19.3 | |
| | | | | | | | | | |
Great Plains Energy’s and KCP&L’s contractual commitments at December 31, 2011, excluding pensions and long-term debt, are detailed in the following tables.
| | | | | | | | | | | | | | | |
| Great Plains Energy | | | | | | | | | | | | | | |
| | 2012 | 2013 | 2014 | 2015 | 2016 | After 2016 | Total |
| Lease commitments | (millions) |
| Operating lease | $ | 19.7 | | $ | 16.3 | | $ | 14.8 | | $ | 13.6 | | $ | 9.8 | | $ | 119.2 | | $ | 193.4 | |
| Capital lease | | 0.4 | | | 0.4 | | | 0.4 | | | 0.4 | | | 0.4 | | | 4.7 | | | 6.7 | |
| Purchase commitments | | | | | | | | | | | | | | | | | | | |
| Fuel | | 397.4 | | | 360.5 | | | 202.0 | | | 103.9 | | | 83.2 | | | 94.1 | | | 1,241.1 | |
| Power | | 8.5 | | | 29.2 | | | 34.8 | | | 34.8 | | | 34.8 | | | 686.3 | | | 828.4 | |
| Capacity | | 13.4 | | | 12.4 | | | 4.5 | | | 4.2 | | | 2.4 | | | - | | | 36.9 | |
| La Cygne environmental project | | 376.6 | | | 300.2 | | | 125.4 | | | 5.5 | | | - | | | - | | | 807.7 | |
| Non-regulated natural gas | | | | | | | | | | | | | | | | | | | |
| transportation | | 2.8 | | | 3.6 | | | 3.6 | | | 3.6 | | | 3.6 | | | 0.9 | | | 18.1 | |
| Other | | 54.4 | | | 101.7 | | | 21.0 | | | 25.4 | | | 3.7 | | | 49.8 | | | 256.0 | |
| Total contractual commitments | $ | 873.2 | | $ | 824.3 | | $ | 406.5 | | $ | 191.4 | | $ | 137.9 | | $ | 955.0 | | $ | 3,388.3 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| KCP&L | | | | | | | | | | | | | | |
| | 2012 | 2013 | 2014 | 2015 | 2016 | After 2016 | Total |
| Lease commitments | (millions) |
| Operating lease | $ | 16.0 | | $ | 14.0 | | $ | 13.0 | | $ | 12.2 | | $ | 9.7 | | $ | 119.2 | | $ | 184.1 | |
| Capital lease | | 0.2 | | | 0.2 | | | 0.2 | | | 0.2 | | | 0.2 | | | 2.6 | | | 3.6 | |
| Purchase commitments | | | | | | | | | | | | | | | | | | | |
| Fuel | | 336.0 | | | 298.8 | | | 169.1 | | | 91.5 | | | 79.1 | | | 94.1 | | | 1,068.6 | |
| Power | | 8.5 | | | 29.2 | | | 34.8 | | | 34.8 | | | 34.8 | | | 499.1 | | | 641.2 | |
| Capacity | | 4.7 | | | 3.7 | | | 2.9 | | | 3.0 | | | 1.2 | | | - | | | 15.5 | |
| La Cygne environmental project | | 376.6 | | | 300.2 | | | 125.4 | | | 5.5 | | | - | | | - | | | 807.7 | |
| Other | | 40.3 | | | 100.9 | | | 20.2 | | | 24.6 | | | 2.9 | | | 39.5 | | | 228.4 | |
| Total contractual commitments | $ | 782.3 | | $ | 747.0 | | $ | 365.6 | | $ | 171.8 | | $ | 127.9 | | $ | 754.5 | | $ | 2,949.1 | |
| | | | | | | | | | | | | | | | | | | | | | |
Great Plains Energy has expected sublease income of $1.2 million for the years 2012-2013. Lease commitments end in 2048. Operating lease commitments include rail cars to serve jointly-owned generating units where KCP&L is the managing partner. Of the amounts included in the table above, KCP&L will be reimbursed by the other owners for approximately $2.2 million per year from 2012 to 2015 and then $0.4 million per year from 2016 to 2025, for a total of $13.0 million.Fuel commitments consist of commitments for nuclear fuel, coal and coal transportation. Power commitments consist of commitments for renewable energy under power purchase agreements. KCP&L and GMO purchase capacity from other utilities and nonutility suppliers. Purchasing capacity provides the option to purchase energy if needed or when market prices are favorable. KCP&L has capacity sales agreements not included above that total $3.8 million for 2012 and $1.6 million for 2013. La Cygne environmental project represents contractual commitments related to environmental upgrades at KCP&L’s La Cygne station. KCP&L owns 50% of the La Cygne station and expects to be reimbursed by the other owner for its 50% share of the costs. Non-regulated natural gas transportation consists of MPS Merchant’s commitments. Other represents individual commitments entered into in the ordinary course of business.
KCP&L Spent Nuclear Fuel and Radioactive Waste
In January 2004, KCP&L and the other two Wolf Creek owners filed a lawsuit against the United States in the U.S. Court of Federal Claims seeking $14.1 million of damages resulting from the government’s failure to begin accepting spent nuclear fuel for disposal in January 1998, as the government was required to do by the Nuclear Waste Policy Act of 1982. The Wolf Creek case was tried before a U.S. Court of Federal Claims judge in June 2010, and a decision was issued in November 2010, granting KCP&L and the other two Wolf Creek owners $10.6 million ($5.0 million KCP&L share) in damages. In January 2011, KCP&L and the other two Wolf Creek owners as well as the United States filed appeals of the decision to the U.S. Court of Appeals for the Federal Circuit. Briefing to the Court was completed in December 2011, and oral argument has been scheduled for March 7, 2012.
GMO Price Reporting Litigation
In response to complaints of manipulation of the California energy market FERC issued an order in July 2001 requiring net sellers of power in the California markets from October 2, 2000, through June 20, 2001, at prices above a FERC determined competitive market clearing price to make refunds to net purchasers of power in the California market during that time period. Because MPS Merchant was a net purchaser of power during the refund period, it has received approximately $8 million in refunds through settlements with certain sellers of power. MPS Merchant estimates that it is entitled to approximately $12 million in additional refunds under the standards FERC has used in this case. FERC has stated that interest will be applied to the refunds but the amount of interest has not yet been determined. However, in December 2001, various parties appealed the FERC order to the United States Court of Appeals for the Ninth Circuit seeking review of a number of issues, including changing the refund period to include periods prior to October 2, 2000. MPS Merchant was a net seller of power during the period prior to October 2, 2000. On August 2, 2006, the U.S. Court of Appeals for the Ninth Circuit issued an order finding, among other things, that FERC did not provide a sufficient justification for refusing to exercise its remedial authority under the Federal Power Act to determine whether market participants violated FERC-approved tariffs during the period prior to October 2, 2000, and imposing a remedy for any such violations. The court remanded the matter to FERC for further consideration. In May 2011, FERC issued an order which clarified the scope of the hearing in the refund proceeding and ruled on requests for rehearing and motions to dismiss. A hearing is set for April 2012. If FERC ultimately includes the period prior to October 2, 2000, MPS Merchant could be found to owe refunds.
FERC initiated a separate docket, generally referred to as the Pacific Northwest refund proceeding, to determine if any refunds were warranted related to the potential impact of the California market issues on buyers in the Pacific Northwest between December 25, 2000, and June 20, 2001. FERC rejected the refund requests, but its decision was remanded by the Court of Appeals for FERC to consider whether any acts of market manipulation support the imposition of refunds. Claims against MPS Merchant total $5.1 million for the period addressed under the Pacific Northwest refund proceedings.
In the ordinary course of business, Great Plains Energy and certain of its subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for example, guarantees and letters of credit. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiaries’ intended business purposes. The majority of these agreements guarantee the Company’s own future performance, so a liability for the fair value of the obligation is not recorded.
At December 31, 2011, Great Plains Energy has provided $666.0 million of credit support for GMO as follows:
| · | Great Plains Energy direct guarantees to GMO counterparties totaling $40.7 million, which expire in 2012, |
| · | Great Plains Energy letters of credit to GMO counterparties totaling $11.6 million, which expire in 2012, and |
| · | Great Plains Energy guarantee of GMO long-term debt totaling $613.7 million, which includes debt with maturity dates ranging from 2012-2023. |
Great Plains Energy has also guaranteed GMO’s $450 million revolving line of credit with a group of banks as amended December 2011 and expiring in December 2016. At December 31, 2011, GMO had $40.0 million of commercial paper outstanding, had issued letters of credit totaling $13.2 million and had no outstanding cash borrowings under this credit facility.
| 17. | RELATED PARTY TRANSACTIONS AND RELATIONSHIPS |
KCP&L employees manage GMO’s business and operate its facilities at cost. These costs totaled $108.4 million for 2011, $100.9 million for 2010 and $102.7 million for 2009. Additionally, KCP&L and GMO engage in wholesale electricity transactions with each other. KCP&L and GMO are also authorized to participate in the Great Plains Energy money pool, an internal financing arrangement in which funds may be lent on a short-term basis to KCP&L and GMO. The following table summarizes KCP&L’s related party receivables and payables.
| | | | | |
| | December 31 |
| | 2011 | 2010 |
| | (millions) |
| Net receivable from GMO | $ | 24.1 | | $ | 29.9 | |
| Net receivable from Great Plains Energy | | 9.5 | | | 13.3 | |
| | | | | | | |
| 18. | DERIVATIVE INSTRUMENTS |
Great Plains Energy and KCP&L are exposed to a variety of market risks including interest rates and commodity prices. Management has established risk management policies and strategies to reduce the potentially adverse effects that the volatility of the markets may have on Great Plains Energy’s and KCP&L’s operating results. Commodity risk management activities, including the use of certain derivative instruments, are subject to the management, direction and control of an internal risk management committee. Management’s interest rate risk management strategy uses derivative instruments to adjust Great Plains Energy’s and KCP&L’s liability portfolio to optimize the mix of fixed and floating rate debt within an established range. In addition, Great Plains Energy and KCP&L use derivative instruments to hedge against future interest rate fluctuations on anticipated debt issuances. Management maintains commodity price risk management strategies that use derivative instruments to reduce the effects of fluctuations in fuel expense caused by commodity price volatility. Counterparties to commodity derivatives and interest rate swap agreements expose Great Plains Energy and KCP&L to credit loss in the event of nonperformance. This credit loss is limited to the cost of replacing these contracts at currentmarket rates. Derivative instruments, excluding those instruments that qualify for the NPNS election, which are accounted for by accrual accounting, are recorded on the balance sheet at fair value as an asset or liability. Changes in the fair value of derivative instruments are recognized currently in net income unless specific hedge accounting criteria are met, except GMO utility operations hedges that are recorded to a regulatory asset or liability consistent with MPSC regulatory orders, as discussed below.
Great Plains Energy and KCP&L have posted collateral, in the ordinary course of business, for the aggregate fair value of all derivative instruments with credit risk-related contingent features that are in a liability position. At December 31, 2011, Great Plains Energy and KCP&L have posted collateral in excess of the aggregate fair value of its derivative instruments; therefore, if the credit risk-related contingent features underlying these agreements were triggered, Great Plains Energy and KCP&L would not be required to post additional collateral to its counterparties.
Interest Rate Risk Management
In May 2011, Great Plains Energy issued $350.0 million of long-term debt and settled six FSS simultaneously with the issuance of this long-term fixed rate debt. Great Plains Energy had entered into the six FSS with notional amounts totaling $350.0 million to hedge against interest rate variability on the debt issuance. The six FSS were treated as cash flow hedges with no ineffectiveness recorded in 2011 or 2010. A pre-tax loss of $26.1 million was recorded to OCI and is being reclassified to interest expense over the first three years of the ten-year debt. In 2011, a $5.4 million loss has been reclassified from OCI to interest expense.
Commodity Risk Management
KCP&L’s risk management policy is to use derivative instruments to mitigate its exposure to market price fluctuations on a portion of its projected natural gas purchases to meet generation requirements for retail and firm wholesale sales. At December 31, 2011, KCP&L had hedged 66%, 56% and 13%, respectively, of the 2012, 2013 and 2014 projected natural gas usage for retail load and firm MWh sales by utilizing futures contracts. KCP&L has designated the natural gas hedges as cash flow hedges. The fair values of these instruments are recorded as derivative assets or liabilities with an offsetting entry to OCI for the effective portion of the hedge. To the extent the hedges are not effective, any ineffective portion of the change in fair market value would be recorded currently in fuel expense. KCP&L has not recorded any ineffectiveness on natural gas hedges in 2011, 2010 or 2009.
GMO’s risk management policy is to use derivative instruments to mitigate price exposure to natural gas price volatility in the market. The fair value of the portfolio relates to financial contracts that will settle against actual purchases of natural gas and purchased power. At December 31, 2011, GMO had financial contracts in place to hedge approximately 45%, 38% and 38%, respectively, of the expected on-peak natural gas and natural gas equivalent purchased power price exposure for 2012, 2013 and 2014. GMO has designated its natural gas hedges as economic hedges (non-hedging derivatives). In connection with GMO’s 2005 Missouri electric rate case, it was agreed that the settlement costs of these contracts would be recognized in fuel expense. The settlement cost is included in GMO’s FAC. A regulatory asset has been recorded to reflect the change in the timing of recognition authorized by the MPSC. To the extent recovery of actual costs incurred is allowed, amounts will not impact earnings, but will impact cash flows due to the timing of the recovery mechanism.
MPS Merchant, which has certain long-term natural gas contracts remaining from its former non-regulated trading operations, manages the daily delivery of its remaining contractual commitments with economic hedges (non-hedging derivatives) to reduce its exposure to changes in market prices. Within the trading portfolio, MPS Merchant takes certain positions to hedge physical sale or purchase contracts. MPS Merchant records the fair value of physical trading energy contracts as derivative assets or liabilities with an offsetting entry to the consolidated statements of income.The notional and recorded fair values of open positions for derivative instruments are summarized in the following table. The fair values of these derivatives are recorded on the consolidated balance sheets. The fair values below are gross values before netting agreements and netting of cash collateral.
| | | | | | | | | | |
| | December 31 | | December 31 |
| | 2011 | | 2010 |
| | Notional | | | | | Notional | | | |
| | Contract | | Fair | | | Contract | | Fair | |
| | Amount | | Value | | | Amount | | Value | |
| Great Plains Energy | (millions) |
| Futures contracts | | | | | | | | | |
| Cash flow hedges | $ | 2.0 | | $ | (0.5 | ) | | $ | 4.0 | | $ | - | |
| Non-hedging derivatives | | 23.6 | | | (5.0 | ) | | | 59.5 | | | (2.5 | ) |
| Forward contracts | | | | | | | | | | | | | |
| Non-hedging derivatives | | 97.3 | | | 7.8 | | | | 202.8 | | | 8.9 | |
| Option contracts | | | | | | | | | | | | | |
| Non-hedging derivatives | | 0.4 | | | - | | | | 0.2 | | | - | |
| Anticipated debt issuance | | | | | | | | | | | | | |
| Forward starting swaps | | - | | | - | | | | 350.0 | | | (20.8 | ) |
| KCP&L | | | | | | | | | | | | | |
| Futures contracts | | | | | | | | | | | | | |
| Cash flow hedges | | 2.0 | | | (0.5 | ) | | | 4.0 | | | - | |
| | | | | | | | | | | | | | |
The fair values of Great Plains Energy’s and KCP&L’s open derivative positions are summarized in the following tables. The tables contain both derivative instruments designated as hedging instruments as well as non-hedging derivatives under GAAP. The fair values below are gross values before netting agreements and netting of cash collateral.
| | | | | | |
| Great Plains Energy | | | | | |
| | Balance Sheet | Asset Derivatives | Liability Derivatives |
| December 31, 2011 | Classification | Fair Value | Fair Value |
| Derivatives Designated as Hedging Instruments | | (millions) |
| Commodity contracts | Derivative instruments | $ | - | | $ | 0.5 | |
| Derivatives Not Designated as Hedging Instruments | | | | | | | |
| Commodity contracts | Derivative instruments | | 7.8 | | | 5.0 | |
| Total Derivatives | | $ | 7.8 | | $ | 5.5 | |
| | | | | | | | |
| December 31, 2010 | | | | | | | |
| Derivatives Designated as Hedging Instruments | | | | | | | |
| Commodity contracts | Derivative instruments | $ | 0.1 | | $ | 0.1 | |
| Interest rate contracts | Derivative instruments | | - | | | 20.8 | |
| Derivatives Not Designated as Hedging Instruments | | | | | | | |
| Commodity contracts | Derivative instruments | | 9.4 | | | 3.0 | |
| Total Derivatives | | $ | 9.5 | | $ | 23.9 | |
| | | | | | | | |
| | | | | | |
| KCP&L | | | | | |
| | Balance Sheet | Asset Derivatives | Liability Derivatives |
| December 31, 2011 | Classification | Fair Value | Fair Value |
| Derivatives Designated as Hedging Instruments | | (millions) |
| Commodity contracts | Derivative instruments | $ | - | | $ | 0.5 | |
| | | | | | | | |
| December 31, 2010 | | | | | | | |
| Derivatives Designated as Hedging Instruments | | | | | | | |
| Commodity contracts | Derivative instruments | $ | 0.1 | | $ | 0.1 | |
| | | | | | | | |
The following tables summarize the amount of gain (loss) recognized in OCI or earnings for interest rate and commodity hedges.
| | | | | | | | |
| Great Plains Energy | | | | | | | |
| Derivatives in Cash Flow Hedging Relationship | | | |
| | | | | Gain (Loss) Reclassified from | |
| | | | | Accumulated OCI into Income | |
| | | | | (Effective Portion) | |
| | | | |
| | Amount of Gain | | |
| | (Loss) Recognized | | |
| | in OCI on Derivatives | Income Statement | | | |
| | (Effective Portion) | Classification | | Amount | |
| 2011 | (millions) | | (millions) |
| Interest rate contracts | $ | (5.3 | ) | Interest charges | $ | (16.9 | ) |
| Commodity contracts | | (0.6 | ) | Fuel | | (0.1 | ) |
| Income tax benefit | | 2.3 | | Income tax benefit | | 6.6 | |
| Total | $ | (3.6 | ) | Total | $ | (10.4 | ) |
| | | | | | | | |
| 2010 | | | | | | | |
| Interest rate contracts | $ | (27.1 | ) | Interest charges | $ | (10.1 | ) |
| Commodity contracts | | (0.9 | ) | Fuel | | (0.5 | ) |
| Income tax benefit | | 10.8 | | Income tax benefit | | 4.0 | |
| Total | $ | (17.2 | ) | Total | $ | (6.6 | ) |
| | | | | | | | |
| | | | | | | | |
| KCP&L | | | | | | | |
| Derivatives in Cash Flow Hedging Relationship | | | |
| | | | | Gain (Loss) Reclassified from | |
| | | | | Accumulated OCI into Income | |
| | | | | (Effective Portion) | |
| | | | |
| | Amount of Gain | | |
| | (Loss) Recognized | | |
| | in OCI on Derivatives | Income Statement | | | |
| | (Effective Portion) | Classification | | Amount | |
| 2011 | (millions) | | (millions) |
| Interest rate contracts | $ | - | | Interest charges | $ | (8.7 | ) |
| Commodity contracts | | (0.6 | ) | Fuel | | (0.1 | ) |
| Income tax benefit | | 0.2 | | Income tax benefit | | 3.4 | |
| Total | $ | (0.4 | ) | Total | $ | (5.4 | ) |
| | | | | | | | |
| 2010 | | | | | | | |
| Interest rate contracts | $ | - | | Interest charges | $ | (8.8 | ) |
| Commodity contracts | | (0.9 | ) | Fuel | | (0.5 | ) |
| Income tax benefit | | 0.3 | | Income tax benefit | | 3.6 | |
| Total | $ | (0.6 | ) | Total | $ | (5.7 | ) |
| | | | | | | | |
The following table summarizes the amount of gain (loss) recognized in a regulatory balance sheet account or earnings for GMO utility commodity hedges. GMO utility commodity derivatives fair value changes are recorded to either a regulatory asset or liability consistent with MPSC regulatory orders.
| | | | | | |
| Great Plains Energy | | | | | |
| Derivatives in Regulatory Account Relationship | | | | | |
| | | | Gain (Loss) Reclassified from |
| | | | Regulatory Account |
| | Amount of Gain (Loss) | | | |
| | Recognized on Regulatory | | | |
| | Account on Derivatives | Income Statement | | |
| | (Effective Portion) | Classification | Amount |
| | (millions) | | (millions) |
| 2011 | | | | | |
| Commodity contracts | $ | (8.3 | ) | Fuel | $ | (3.8 | ) |
| Total | $ | (8.3 | ) | Total | $ | (3.8 | ) |
| | | | | | | | |
| 2010 | | | | | | | |
| Commodity contracts | $ | (8.2 | ) | Fuel | $ | (7.2 | ) |
| Total | $ | (8.2 | ) | Total | $ | (7.2 | ) |
| | | | | | | | |
Great Plains Energy’s income statement reflects losses for the change in fair value of the MPS Merchant commodity contract derivatives not designated as hedging instruments of $1.1 million for 2011 and $0.2 million for 2010.
The amounts recorded in accumulated OCI related to the cash flow hedges are summarized in the following table.
| | | | | | | | | |
| | Great Plains Energy | KCP&L |
| | December 31 | December 31 |
| | 2011 | 2010 | 2011 | 2010 |
| | (millions) |
| Current assets | $ | 11.3 | | $ | 12.0 | | $ | 11.3 | | $ | 12.0 | |
| Current liabilities | | (89.5 | ) | | (101.5 | ) | | (62.5 | ) | | (71.6 | ) |
| Noncurrent liabilities | | (0.2 | ) | | - | | �� | (0.2 | ) | | - | |
| Deferred income taxes | | 30.5 | | | 34.8 | | | 20.0 | | | 23.2 | |
| Total | $ | (47.9 | ) | $ | (54.7 | ) | $ | (31.4 | ) | $ | (36.4 | ) |
| | | | | | | | | | | | | |
Great Plains Energy’s accumulated OCI in the table above at December 31, 2011, includes $20.5 million that is expected to be reclassified to expenses over the next twelve months. KCP&L’s accumulated OCI includes $9.1 million that is expected to be reclassified to expense over the next twelve months.
| 19. | FAIR VALUE MEASUREMENTS |
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad categories, giving the highest priority to quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. A definition of the various levels, as well as discussion of the various measurements within the levels, is as follows:
Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets that Great Plains Energy and KCP&L have access to at the measurement date. Assets categorized within this level consist of Great Plains Energy’s and KCP&L’s various exchange traded derivative instruments and equity and U.S. Treasury securities that are actively traded within KCP&L’s decommissioning trust fund and GMO’s SERP rabbi trust fund.
Level 2 – Market-based inputs for assets or liabilities that are observable (either directly or indirectly) or inputs that are not observable but are corroborated by market data. Assets and liabilities categorized within this level consist of Great Plains Energy’s and KCP&L’s various non-exchange traded derivative instruments traded in over-the-counter markets and certain debt securities within KCP&L’s decommissioning trust fund and GMO’s SERP rabbi trust fund.
Level 3 – Unobservable inputs, reflecting Great Plains Energy’s and KCP&L’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Assets categorized within this level consist of Great Plains Energy’s various non-exchange traded derivative instruments traded in over-the-counter markets for which sufficiently observable market data is not available to corroborate the valuation inputs.The following tables include Great Plains Energy’s and KCP&L’s balances of financial assets and liabilities measured at fair value on a recurring basis at December 31, 2011 and 2010.
| | | | | | | | | | | |
| | | | | | Fair Value Measurements Using |
| Description | December 31 2011 | Netting(d) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) |
| KCP&L | (millions) |
| Assets | | | | | | | | | | |
Nuclear decommissioning trust (b) | | | | | | | | | | |
| Equity securities | $ | 84.3 | | $ | - | | $ | 84.3 | | $ | - | | $ | - | |
| Debt securities | | | | | | | | | | | | | | | |
| U.S. Treasury | | 15.3 | | | - | | | 15.3 | | | - | | | - | |
| U.S. Agency | | 3.6 | | | - | | | - | | | 3.6 | | | - | |
| State and local obligations | | 2.6 | | | - | | | - | | | 2.6 | | | - | |
| Corporate bonds | | 26.4 | | | - | | | - | | | 26.4 | | | - | |
| Foreign governments | | 0.7 | | | - | | | - | | | 0.7 | | | - | |
| Other | | (0.6 | ) | | - | | | - | | | (0.6 | ) | | - | |
| Total nuclear decommissioning trust | | 132.3 | | | - | | | 99.6 | | | 32.7 | | | - | |
| Total | | 132.3 | | | - | | | 99.6 | | | 32.7 | | | - | |
| Liabilities | | | | | | | | | | | | | | | |
Derivative instruments (a) | | - | | | (0.5 | ) | | 0.5 | | | - | | | - | |
| Total | $ | - | | $ | (0.5 | ) | $ | 0.5 | | $ | - | | $ | - | |
| Other Great Plains Energy | | | | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | |
Derivative instruments (a) | $ | 7.8 | | $ | - | | $ | - | | $ | 4.7 | | $ | 3.1 | |
SERP rabbi trust (c) | | | | | | | | | | | | | | | |
| Equity securities | | 0.2 | | | - | | | 0.2 | | | - | | | - | |
| Debt securities | | 0.1 | | | - | | | - | | | 0.1 | | | - | |
| Total SERP rabbi trust | | 0.3 | | | - | | | 0.2 | | | 0.1 | | | - | |
| Total | | 8.1 | | | - | | | 0.2 | | | 4.8 | | | 3.1 | |
| Liabilities | | | | | | | | | | | | | | | |
Derivative instruments (a) | | - | | | (5.0 | ) | | 5.0 | | | - | | | - | |
| Total | $ | - | | $ | (5.0 | ) | $ | 5.0 | | $ | - | | $ | - | |
| Great Plains Energy | | | | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | |
Derivative instruments (a) | $ | 7.8 | | $ | - | | $ | - | | $ | 4.7 | | $ | 3.1 | |
Nuclear decommissioning trust (b) | | 132.3 | | | - | | | 99.6 | | | 32.7 | | | - | |
SERP rabbi trust (c) | | 0.3 | | | - | | | 0.2 | | | 0.1 | | | - | |
| Total | | 140.4 | | | - | | | 99.8 | | | 37.5 | | | 3.1 | |
| Liabilities | | | | | | | | | | | | | | | |
Derivative instruments (a) | | - | | | (5.5 | ) | | 5.5 | | | - | | | - | |
| Total | $ | - | | $ | (5.5 | ) | $ | 5.5 | | $ | - | | $ | - | |
| | | | | | | | | | | | | | | | |
| | | | | | | |
| | | | | | Fair Value Measurements Using |
| Description | December 31 2010 | Netting(d) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) |
| KCP&L | (millions) |
| Assets | | | | | | | | | | |
Derivative instruments (a) | $ | - | | $ | (0.1 | ) | $ | 0.1 | | $ | - | | $ | - | |
Nuclear decommissioning trust (b) | | | | | | | | | | | | | |
| Equity securities | | 85.5 | | | - | | | 85.5 | | | - | | | - | |
| Debt securities | | | | | | | | | | | | | | | |
| U.S. Treasury | | 8.9 | | | - | | | 8.9 | | | - | | | - | |
| U.S. Agency | | 4.8 | | | - | | | - | | | 4.8 | | | - | |
| State and local obligations | | 2.5 | | | - | | | - | | | 2.5 | | | - | |
| Corporate bonds | | 23.7 | | | - | | | - | | | 23.7 | | | - | |
| Foreign governments | | 0.7 | | | - | | | - | | | 0.7 | | | - | |
| Other | | 0.4 | | | - | | | - | | | 0.4 | | | - | |
| Total nuclear decommissioning trust | | 126.5 | | | - | | | 94.4 | | | 32.1 | | | - | |
| Total | | 126.5 | | | (0.1 | ) | | 94.5 | | | 32.1 | | | - | |
| Liabilities | | | | | | | | | | | | | | | |
Derivative instruments (a) | | - | | | (0.1 | ) | | 0.1 | | | - | | | - | |
| Total | $ | - | | $ | (0.1 | ) | $ | 0.1 | | $ | - | | $ | - | |
| Other Great Plains Energy | | | | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | |
Derivative instruments (a) | $ | 8.9 | | $ | (0.5 | ) | $ | 0.5 | | $ | 5.2 | | $ | 3.7 | |
SERP rabbi trust (c) | | | | | | | | | | | | | | | |
| Equity securities | | 0.2 | | | - | | | 0.2 | | | - | | | - | |
| Debt securities | | 7.0 | | | - | | | - | | | 7.0 | | | - | |
| Total SERP rabbi trust | | 7.2 | | | - | | | 0.2 | | | 7.0 | | | - | |
| Total | | 16.1 | | | (0.5 | ) | | 0.7 | | | 12.2 | | | 3.7 | |
| Liabilities | | | | | | | | | | | | | | | |
Derivative instruments (a) | | 20.8 | | | (3.0 | ) | | 3.0 | | | 20.8 | | | - | |
| Total | $ | 20.8 | | $ | (3.0 | ) | $ | 3.0 | | $ | 20.8 | | $ | - | |
| Great Plains Energy | | | | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | |
Derivative instruments (a) | $ | 8.9 | | $ | (0.6 | ) | $ | 0.6 | | $ | 5.2 | | $ | 3.7 | |
Nuclear decommissioning trust (b) | | 126.5 | | | - | | | 94.4 | | | 32.1 | | | - | |
SERP rabbi trust (c) | | 7.2 | | | - | | | 0.2 | | | 7.0 | | | - | |
| Total | | 142.6 | | | (0.6 | ) | | 95.2 | | | 44.3 | | | 3.7 | |
| Liabilities | | | | | | | | | | | | | | | |
Derivative instruments (a) | | 20.8 | | | (3.1 | ) | | 3.1 | | | 20.8 | | | - | |
| Total | $ | 20.8 | | $ | (3.1 | ) | $ | 3.1 | | $ | 20.8 | | $ | - | |
| | | | | | | | | | | | | | | | |
| (a) | The fair value of derivative instruments is estimated using market quotes, over-the-counter forward price and volatility curves and correlations among fuel prices, net of estimated credit risk. |
| (b) | Fair value is based on quoted market prices of the investments held by the fund and/or valuation models. The total does not include $3.0 million and $2.7 million at December 31, 2011 and 2010, respectively, of cash and cash equivalents, which are not subject to the fair value requirements. |
| (c) | Fair value is based on quoted market prices of the investments held by the fund and/or valuation models. The total does not include $20.3 million and $14.6 million at December 31, 2011 and 2010, respectively, of cash and cash equivalents, which are not subject to the fair value requirements. |
| (d) | Represents the difference between derivative contracts in an asset or liability position presented on a net basis by counterparty on the consolidated balance sheet where a master netting agreement exists between the Company and the counterparty. At December 31, 2011 and 2010, Great Plains Energy netted $5.5 million and $2.5 million, respectively, of cash collateral posted with counterparties. |
The following tables reconcile the beginning and ending balances for all Level 3 assets and liabilities, net measured at fair value on a recurring basis for 2011 and 2010.
| | | |
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3) |
| | Other |
| | Great |
| | Plains |
| | Energy |
| | Derivative |
| | Instruments |
| | (millions) |
| Balance January 1, 2011 | $ | 3.7 | |
| Total realized/unrealized gains | | | |
| included in non-operating income | | 10.9 | |
| Settlements | | (11.5 | ) |
| Balance December 31, 2011 | $ | 3.1 | |
| | | | |
| Total unrealized losses included in non-operating | | | |
| income relating to assets and liabilities still on the | | | |
| consolidated balance sheet at December 31, 2011 | $ | (0.2 | ) |
| | | | |
| | | | | | | |
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | | | | | |
| | | | Other | | |
| | | | Great | Great |
| | | | Plains | Plains |
| | KCP&L | Energy | Energy |
| | State & Local | Derivative | |
| | Obligations | Instruments | Total |
| | (millions) |
| Balance January 1, 2010 | $ | 0.2 | | $ | 4.1 | | $ | 4.3 | |
| Total realized/unrealized losses | | | | | | | | | |
| included in non-operating income | | - | | | (12.5 | ) | | (12.5 | ) |
| Sales | | (0.2 | ) | | - | | | (0.2 | ) |
| Settlements | | - | | | 12.1 | | | 12.1 | |
| Balance December 31, 2010 | $ | - | | $ | 3.7 | | $ | 3.7 | |
| | | | | | | | | | |
| Total unrealized gains included in non-operating | | | | | | | | | |
| income relating to assets and liabilities still | | | | | | | | | |
| on the consolidated balance sheet at December 31, 2010 | $ | - | | $ | 0.1 | | $ | 0.1 | |
| | | | | | | | | | |
Investments in Affordable Housing Limited Partnerships
Nearly all of Great Plains Energy’s investments in affordable housing limited partnerships were recorded at cost; the equity method was used for the remainder. Accounting guidance requires entities to evaluate whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment (an impairment indicator). During 2010, an impairment indicator occurred, which required Great Plains Energy to evaluate if its cost method investments in affordable housing limited partnerships were impaired. The value of these investments was derived from tax credits and potential cash distributions from the partnerships upon sales of the underlying properties. All of the tax credits had been received and management did not anticipate receiving any cash distributions from the partnerships; therefore, management concluded that the investments were impaired and that the impairment was other than temporary since the partnerships were in the process of liquidating over the next 2 – 3 years. As a result of the evaluation, management concluded that the cost method investments had no value and accordingly, Great Plains Energy recorded an $11.2 million pre-tax impairment loss in non-operating expense on the consolidated income statement in 2010.
Components of income tax expense (benefit) are detailed in the following tables.
| | | | | | | |
| Great Plains Energy | 2011 | 2010 | 2009 |
| Current income taxes | (millions) |
| Federal | $ | 2.9 | | $ | (7.4 | ) | $ | (11.1 | ) |
| State | | (6.0 | ) | | (4.3 | ) | | (0.9 | ) |
| Foreign | | (0.4 | ) | | 0.1 | | | 1.3 | |
| Total | | (3.5 | ) | | (11.6 | ) | | (10.7 | ) |
| Deferred income taxes | | | | | | | | | |
| Federal | | 90.5 | | | 99.8 | | | (13.6 | ) |
| State | | 20.7 | | | 24.0 | | | 10.0 | |
| Total | | 111.2 | | | 123.8 | | | (3.6 | ) |
| Noncurrent income taxes | | | | | | | | | |
| Federal | | (18.0 | ) | | (4.8 | ) | | 8.3 | |
| State | | (2.1 | ) | | (1.8 | ) | | 1.1 | |
| Foreign | | (0.6 | ) | | 0.5 | | | (1.5 | ) |
| Total | | (20.7 | ) | | (6.1 | ) | | 7.9 | |
| Investment tax credit | | | | | | | | | |
| Deferral | | - | | | (4.2 | ) | | 37.2 | |
| Amortization | | (2.2 | ) | | (2.9 | ) | | (2.2 | ) |
| Total | | (2.2 | ) | | (7.1 | ) | | 35.0 | |
| Total income tax expense | | 84.8 | | | 99.0 | | | 28.6 | |
| Less: taxes on discontinued operations | | | | | | | | | |
| Current tax benefit | | - | | | - | | | (1.1 | ) |
| Deferred tax expense | | - | | | - | | | 0.2 | |
| Income tax expense on continuing operations | $ | 84.8 | | $ | 99.0 | | $ | 29.5 | |
| | | | | | | | | | |
| | | | | | | |
| KCP&L | 2011 | 2010 | 2009 |
| Current income taxes | (millions) |
| Federal | $ | 1.0 | | $ | 5.5 | | $ | 41.2 | |
| State | | (0.6 | ) | | 1.1 | | | 4.8 | |
| Total | | 0.4 | | | 6.6 | | | 46.0 | |
| Deferred income taxes | | | | | | | | | |
| Federal | | 66.0 | | | 69.8 | | | (41.7 | ) |
| State | | 14.6 | | | 13.4 | | | 3.5 | |
| Total | | 80.6 | | | 83.2 | | | (38.2 | ) |
| Noncurrent income taxes | | | | | | | | | |
| Federal | | (9.3 | ) | | (1.6 | ) | | 3.4 | |
| State | | (1.1 | ) | | (0.3 | ) | | (0.1 | ) |
| Total | | (10.4 | ) | | (1.9 | ) | | 3.3 | |
| Investment tax credit | | | | | | | | | |
| Deferral | | - | | | (4.2 | ) | | 37.2 | |
| Amortization | | (1.5 | ) | | (2.1 | ) | | (1.4 | ) |
| Total | | (1.5 | ) | | (6.3 | ) | | 35.8 | |
| Total | $ | 69.1 | | $ | 81.6 | | $ | 46.9 | |
| | | | | | | | | | |
Income Tax Expense and Effective Income Tax Rates
Income tax expense and the effective income tax rates reflected in continuing operations in the financial statements and the reasons for their differences from the statutory federal rates are detailed in the following tables.
| | | | | | | | | | | | | | | | |
| | Income Tax Expense | Income Tax Rate |
| Great Plains Energy | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 |
| | (millions) | | | | | | | | | |
| Federal statutory income tax | $ | 90.7 | | $ | 108.7 | | $ | 63.4 | | | 35.0 | % | | 35.0 | % | | 35.0 | % |
| Differences between book and tax | | | | | | | | | | | | | | | | | | |
| depreciation not normalized | | 4.0 | | | (5.2 | ) | | (9.9 | ) | | 1.5 | | | (1.7 | ) | | (5.5 | ) |
| Amortization of investment tax credits | | (2.2 | ) | | (2.9 | ) | | (2.2 | ) | | (0.8 | ) | | (0.9 | ) | | (1.2 | ) |
| Federal income tax credits | | (13.1 | ) | | (12.5 | ) | | (8.0 | ) | | (5.0 | ) | | (4.1 | ) | | (4.4 | ) |
| State income taxes | | 10.5 | | | 11.4 | | | 7.9 | | | 4.0 | | | 3.7 | | | 4.4 | |
| Medicare Part D subsidy legislation | | - | | | 2.8 | | | - | | | - | | | 0.9 | | | - | |
| Changes in uncertain tax positions, net | | (4.4 | ) | | 0.3 | | | (72.1 | ) | | (1.7 | ) | | 0.1 | | | (39.8 | ) |
| Valuation allowance | | (2.2 | ) | | (2.7 | ) | | 55.8 | | | (0.8 | ) | | (0.9 | ) | | 30.8 | |
| Other | | 1.5 | | | (0.9 | ) | | (5.4 | ) | | 0.5 | | | (0.3 | ) | | (3.0 | ) |
| Total | $ | 84.8 | | $ | 99.0 | | $ | 29.5 | | | 32.7 | % | | 31.8 | % | | 16.3 | % |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Income Tax Expense | Income Tax Rate |
| KCP&L | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 |
| | (millions) | | | | | | |
| Federal statutory income tax | $ | 71.6 | | $ | 85.7 | | $ | 61.5 | | | 35.0 | % | | 35.0 | % | | 35.0 | % |
| Differences between book and tax | | | | | | | | | | | | | | | | | | |
| depreciation not normalized | | 3.4 | | | (4.5 | ) | | (7.7 | ) | | 1.6 | | | (1.8 | ) | | (4.4 | ) |
| Amortization of investment tax credits | | (1.5 | ) | | (2.1 | ) | | (1.4 | ) | | (0.7 | ) | | (0.9 | ) | | (0.8 | ) |
| Federal income tax credits | | (13.0 | ) | | (8.5 | ) | | (7.8 | ) | | (6.3 | ) | | (3.5 | ) | | (4.4 | ) |
| State income taxes | | 8.1 | | | 8.9 | | | 5.8 | | | 3.9 | | | 3.6 | | | 3.3 | |
| Medicare Part D subsidy legislation | | - | | | 2.8 | | | - | | | - | | | 1.1 | | | - | |
| Changes in uncertain tax positions, net | | 0.3 | | | - | | | (0.5 | ) | | 0.1 | | | - | | | (0.3 | ) |
| Other | | 0.2 | | | (0.7 | ) | | (3.0 | ) | | 0.2 | | | (0.2 | ) | | (1.7 | ) |
| Total | $ | 69.1 | | $ | 81.6 | | $ | 46.9 | | | 33.8 | % | | 33.3 | % | | 26.7 | % |
| | | | | | | | | | | | | | | | | | | |
Deferred Income Taxes
The tax effects of major temporary differences resulting in deferred income tax assets (liabilities) in the consolidated balance sheets are in the following tables.
| | | | | | | | | |
| | Great Plains Energy | KCP&L |
| December 31 | 2011 | 2010 | 2011 | 2010 |
| Current deferred income tax asset (liability) | (millions) |
| Other | $ | 7.9 | | $ | 14.7 | | $ | (0.1 | ) | $ | 5.6 | |
| Net current deferred income tax asset (liability) before | | | | | | | | | | | | |
| valuation allowance | | 7.9 | | | 14.7 | | | (0.1 | ) | | 5.6 | |
| Valuation allowance | | (0.4 | ) | | (0.4 | ) | | - | | | - | |
| Net current deferred income tax asset (liability) | | 7.5 | | | 14.3 | | | (0.1 | ) | | 5.6 | |
| Noncurrent deferred income taxes | | | | | | | | | | | | |
| Plant related | | (1,193.6 | ) | | (975.5 | ) | | (861.6 | ) | | (711.5 | ) |
| Income taxes on future regulatory recoveries | | (144.3 | ) | | (142.6 | ) | | (119.6 | ) | | (117.2 | ) |
| Derivative instruments | | 43.3 | | | 46.0 | | | 31.1 | | | 34.4 | |
| Pension and postretirement benefits | | (34.2 | ) | | (16.3 | ) | | (11.7 | ) | | 2.0 | |
SO2 emission allowance sales | | 31.1 | | | 30.8 | | | 31.9 | | | 33.4 | |
| Fuel clause adjustments | | (17.2 | ) | | (16.6 | ) | | (5.4 | ) | | (3.2 | ) |
| Transition costs | | (17.4 | ) | | (20.0 | ) | | (9.6 | ) | | (11.4 | ) |
| Tax credit carryforwards | | 213.7 | | | 204.3 | | | 116.8 | | | 101.5 | |
| Long-term debt fair value adjustment | | 6.3 | | | 19.2 | | | - | | | - | |
| Customer demand programs | | (26.4 | ) | | (23.3 | ) | | (18.6 | ) | | (17.3 | ) |
| Net operating loss carryforward | | 543.7 | | | 409.2 | | | 77.9 | | | 1.1 | |
| Other | | (10.1 | ) | | (7.3 | ) | | (3.9 | ) | | (3.8 | ) |
| Net noncurrent deferred income tax liability before | | | | | | | | | | | | |
| valuation allowance | | (605.1 | ) | | (492.1 | ) | | (772.7 | ) | | (692.0 | ) |
| Valuation allowance | | (23.5 | ) | | (26.2 | ) | | - | | | - | |
| Net noncurrent deferred income tax liability | | (628.6 | ) | | (518.3 | ) | | (772.7 | ) | | (692.0 | ) |
| Net deferred income tax liability | $ | (621.1 | ) | $ | (504.0 | ) | $ | (772.8 | ) | $ | (686.4 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | |
| | Great Plains Energy | KCP&L |
| December 31 | 2011 | 2010 | 2011 | 2010 |
| | (millions) |
| Gross deferred income tax assets | $ | 1,203.6 | | $ | 1,140.7 | | $ | 618.7 | | $ | 602.4 | |
| Gross deferred income tax liabilities | | (1,824.7 | ) | | (1,644.7 | ) | | (1,391.5 | ) | | (1,288.8 | ) |
| Net deferred income tax liability | $ | (621.1 | ) | $ | (504.0 | ) | $ | (772.8 | ) | $ | (686.4 | ) |
| | | | | | | | | | | | | |
Tax Credit Carryforwards
At December 31, 2011 and 2010, Great Plains Energy had $118.0 million and $102.6 million, respectively, of federal general business income tax credit carryforwards. At December 31, 2011 and 2010, KCP&L had $116.8 million and $101.5 million, respectively, of federal general business income tax credit carryforwards. The carryforwards for both Great Plains Energy and KCP&L relate primarily to Advanced Coal Investment Tax Credits and Wind Production tax credits and expire in the years 2028 to 2031. Approximately $0.5 million of Great Plains Energy’s credits are related to Low Income Housing credits that were acquired in the GMO acquisition. Due to federal limitations on the utilization of income tax attributes acquired in the GMO acquisition, management expects these credits to expire unutilized and has provided a valuation allowance against $0.4 million of the federal income tax benefit.
At December 31, 2011 and 2010, Great Plains Energy had $91.0 million and $90.0 million, respectively, of federal alternative minimum tax credit carryforwards. Of this amount, $89.8 million was acquired in the GMO acquisition. These credits do not expire and can be used to reduce taxes paid in the future.
At December 31, 2011 and 2010, Great Plains Energy had $4.7 million and $11.8 million, respectively, of state income tax credit carryforwards. The state income tax credits relate primarily to the Company’s Missouri affordable housing investment portfolio, and the carryforwards expire in the years 2012 to 2016. Management expects that a portion of these credits will expire unutilized and has provided a valuation allowance against $0.3 million of the state income tax benefit.
Net Operating Loss Carryforwards
At December 31, 2011 and 2010, Great Plains Energy had $473.1 million and $353.0 million, respectively, of tax benefits related to federal net operating loss (NOL) carryforwards. Approximately $315.7 million and $317.5 million, at December 31, 2011 and 2010, respectively, are tax benefits related to NOLs that were acquired in the GMO acquisition. The tax benefits for NOLs are $32.6 million originating in 2003, $152.4 million originating in 2004, $74.1 million originating in 2005, $53.3 million originating in 2006, $1.3 million originating in 2007, $2.4 million originating in 2008, $23.4 million originating in 2009, $11.6 million originating in 2010, and $122.0 million originating in 2011. The federal NOL carryforwards expire in years 2023 to 2031.
In addition, Great Plains Energy also had deferred tax benefits of $70.6 million and $56.2 million related to state NOLs as of December 31, 2011 and 2010, respectively. Approximately $49.9 million and $49.4 million at December 31, 2011 and 2010, respectively, were acquired in the GMO acquisition. Management does not expect to utilize $23.2 million of NOLs in state tax jurisdictions where the Company does not expect to operate in the future. Therefore, a valuation allowance has been provided against $23.2 million of state tax benefits.
Valuation Allowances
Great Plains Energy is required to assess the ultimate realization of deferred tax assets using a “more likely than not” assessment threshold. This assessment takes into consideration tax planning strategies within Great Plains Energy’s control. As a result of this assessment, Great Plains Energy has established a partial valuation allowance for federal and state tax NOL carryforwards, and tax credit carryforwards.
During 2011 and 2010, $2.7 million and $3.2 million, respectively, of tax benefit was recorded in continuing operations. These adjustments are primarily related to a portion of the valuation allowance against federal and state NOL carryforwards.
Uncertain Tax Positions
At December 31, 2011 and 2010, Great Plains Energy had $24.0 million and $42.0 million, respectively, of liabilities related to unrecognized tax benefits. Of these amounts, $11.8 million and $17.3 million at December 31, 2011 and 2010, respectively, are expected to impact the effective tax rate if recognized. The $18.0 million decrease in unrecognized tax benefits in 2011 is primarily due to a decrease of $18.4 million of unrecognized tax benefits related to the settlement of the IRS audit for Great Plains Energy’s 2006-2008 tax years. The $18.4 million tax benefit recognized related to the 2006-2008 audit was offset by an increase of $16.4 million in deferred income tax liabilities since a significant portion of the unrecognized tax benefits were related to temporary tax differences, which resulted in an increase to net income of $2.0 million.
At December 31, 2009, Great Plains Energy had $51.4 million of liabilities related to unrecognized tax benefits of which $17.3 million was expected to impact the effective rate if recognized. The $9.4 million decrease in unrecognized tax benefits in 2010 was primarily due to a decrease of $8.6 million of unrecognized tax benefits related to the sale of certain GMO property during 2010.
At December 31, 2011 and 2010, KCP&L had $8.7 million and $19.1 million, respectively, of liabilities related to unrecognized tax benefits. Of these amounts, $0.2 million and $0.3 million at December 31, 2011 and 2010, respectively, are expected to impact the effective tax rate if recognized. The $10.4 million decrease in unrecognized tax benefits in 2011 is primarily due to a decrease of $12.1 million related to the settlements of the IRS audit for Great Plains Energy’s 2006-2008 tax years. The tax benefit recognized related to the 2006-2008 audit was offset by an increase of deferred income tax liabilities which resulted in an insignificant impact to net income. At December 31, 2009, KCP&L had $20.9 million of liabilities related to unrecognized tax benefits of which $0.4 million was expected to impact the effective rate if recognized.
The following table reflects activity for Great Plains Energy and KCP&L related to the liability for unrecognized tax benefits.
| | | | | | | | | | | | | |
| | Great Plains Energy | KCP&L |
| | 2011 | 2010 | 2009 | 2011 | 2010 | 2009 |
| | (millions) |
| Balance at January 1 | $ | 42.0 | | $ | 51.4 | | $ | 97.3 | | $ | 19.1 | | $ | 20.9 | | $ | 17.6 | |
| Additions for current year tax positions | | 1.4 | | | 2.7 | | | 13.2 | | | - | | | 1.3 | | | 3.9 | |
| Additions for prior year tax positions | | 2.4 | | | 2.1 | | | 8.2 | | | 2.3 | | | 1.5 | | | 3.0 | |
| Additions for GMO prior year tax positions | | - | | | - | | | 11.6 | | | - | | | - | | | - | |
| Reductions for prior year tax positions | | (20.9 | ) | | (10.6 | ) | | (1.3 | ) | | (12.6 | ) | | (1.6 | ) | | (0.8 | ) |
| Settlements | | - | | | (3.8 | ) | | (76.7 | ) | | - | | | (2.9 | ) | | (2.2 | ) |
| Statute expirations | | (0.7 | ) | | (0.3 | ) | | (0.7 | ) | | (0.1 | ) | | (0.1 | ) | | (0.6 | ) |
| Foreign currency translation adjustments | | (0.2 | ) | | 0.5 | | | (0.2 | ) | | - | | | - | | | - | |
| Balance at December 31 | $ | 24.0 | | $ | 42.0 | | $ | 51.4 | | $ | 8.7 | | $ | 19.1 | | $ | 20.9 | |
| | | | | | | | | | | | | | | | | | | |
Great Plains Energy and KCP&L recognize interest related to unrecognized tax benefits in interest expense and penalties in non-operating expenses. At December 31, 2011, 2010 and 2009, accrued interest related to unrecognized tax benefits for Great Plains Energy was $5.7 million, $6.7 million and $5.9 million, respectively. Amounts accrued for penalties with respect to unrecognized tax benefits was $1.1 million at December 31, 2011, 2010 and 2009. In 2011, Great Plains Energy recognized a decrease of $0.9 million of interest expense related to unrecognized tax benefits. In 2010 and 2009, Great Plains Energy recognized an increase of interest expense related to unrecognized tax benefits of $0.5 million and $1.4 million, respectively.
KCP&L had accrued interest related to unrecognized tax benefits of $0.2 million, $1.4 million and $1.7 million, at December 31, 2011, 2010 and 2009, respectively. Amounts accrued for penalties with respect to unrecognized tax benefits for KCP&L are insignificant. In 2011 and 2010, KCP&L recognized a reduction of $1.2 million and $0.3 million of interest expense, respectively.
The IRS is currently auditing Great Plains Energy and its subsidiaries for the 2009-2010 tax years. The Company estimates that it is reasonably possible that $4.7 million for Great Plains Energy and $0.2 million for KCP&L of unrecognized tax benefits may be recognized in the next twelve months due to statute expirations or settlement agreements with tax authorities.
Great Plains Energy files a consolidated federal income tax return as well as unitary and combined income tax returns in several state jurisdictions with Kansas and Missouri being the most significant. The Company also files separate company returns in Canada and certain other states.
| 21. | SEGMENTS AND RELATED INFORMATION |
Great Plains Energy has one reportable segment based on its method of internal reporting, which segregates reportable segments based on products and services, management responsibility and regulation. The one reportable business segment is electric utility, consisting of KCP&L and GMO’s regulated utility operations. Other includes GMO activity other than its regulated utility operations, unallocated corporate charges, consolidating entries and intercompany eliminations. Intercompany eliminations include insignificant amounts of intercompany financing-related activities. The summary of significant accounting policies applies to the reportable segment. Segment performance is evaluated based on net income attributable to Great Plains Energy.
The following tables reflect summarized financial information concerning Great Plains Energy’s reportable segment.
| | | | | | | |
| | Electric | | Great Plains |
| 2011 | Utility | Other | Energy |
| | (millions) |
| Operating revenues | $ | 2,318.0 | | $ | - | | $ | 2,318.0 | |
| Depreciation and amortization | | (273.1 | ) | | - | | | (273.1 | ) |
| Interest charges | | (176.9 | ) | | (41.5 | ) | | (218.4 | ) |
| Income tax (expense) benefit | | (109.3 | ) | | 24.5 | | | (84.8 | ) |
| Net income (loss) attributable to Great Plains Energy | | 199.9 | | | (25.5 | ) | | 174.4 | |
| | | | | | | | | | |
| | | | | | | |
| | Electric | | Great Plains |
| 2010 | Utility | Other | Energy |
| | (millions) |
| Operating revenues | $ | 2,255.5 | | $ | - | | $ | 2,255.5 | |
| Depreciation and amortization | | (331.6 | ) | | - | | | (331.6 | ) |
| Interest charges | | (143.1 | ) | | (41.7 | ) | | (184.8 | ) |
| Income tax (expense) benefit | | (123.3 | ) | | 24.3 | | | (99.0 | ) |
| Net income (loss) attributable to Great Plains Energy | | 235.3 | | | (23.6 | ) | | 211.7 | |
| | | | | | | | | | |
| | | | | | | |
| | Electric | | Great Plains |
| 2009 | Utility | Other | Energy |
| | (millions) |
| Operating revenues | $ | 1,965.0 | | $ | - | | $ | 1,965.0 | |
| Depreciation and amortization | | (302.2 | ) | | - | | | (302.2 | ) |
| Interest charges | | (151.0 | ) | | (29.9 | ) | | (180.9 | ) |
| Income tax (expense) benefit | | (63.6 | ) | | 34.1 | | | (29.5 | ) |
| Discontinued operations | | - | | | (1.5 | ) | | (1.5 | ) |
| Net income (loss) attributable to Great Plains Energy | | 157.8 | | | (7.7 | ) | | 150.1 | |
| | | | | | | | | | |
| | | | | | | | | |
| | Electric | | | Great Plains |
| | Utility | Other | Eliminations | Energy |
| 2011 | (millions) |
| Assets | $ | 9,483.4 | | $ | 51.9 | | $ | (417.3 | ) | $ | 9,118.0 | |
| Capital expenditures | | 456.6 | | | - | | | - | | | 456.6 | |
| 2010 | | | | | | | | | | | | |
| Assets | $ | 9,152.7 | | $ | 66.3 | | $ | (400.8 | ) | $ | 8,818.2 | |
| Capital expenditures | | 618.1 | | | - | | | - | | | 618.1 | |
| 2009 | | | | | | | | | | | | |
| Assets | $ | 8,765.3 | | $ | 152.5 | | $ | (435.0 | ) | $ | 8,482.8 | |
| Capital expenditures | | 841.3 | | | - | | | - | | | 841.3 | |
| | | | | | | | | | | | | |
| 22. | DISCONTINUED OPERATIONS |
On June 2, 2008, Great Plains Energy completed the sale of Strategic Energy, LLC, to Direct Energy Services, LLC, a subsidiary of Centrica plc. In 2009, Great Plains Energy had a loss from discontinued operations of Strategic Energy before income taxes of $2.4 million and a loss net of income taxes of $1.5 million relating to gross receipt taxes for periods prior to the sale and the reversal of a reserve that had been established for certain indemnification obligations.
| 23. | JOINTLY-OWNED ELECTRIC UTILITY PLANTS |
Great Plains Energy’s and KCP&L’s share of jointly-owned electric utility plants at December 31, 2011, are detailed in the following tables.
| | | | | | | | | | | | | |
| Great Plains Energy | | | | | | | | | | | | |
| | Wolf Creek | La Cygne | Iatan No. 1 | Iatan No. 2 | Iatan | Jeffrey |
| | Unit | Units | Unit | Unit | Common | Energy Center |
| | (millions, except MW amounts) |
| Great Plains Energy's share | | 47 | % | | 50 | % | | 88 | % | | 73 | % | | 79 | % | | 8 | % |
| | | | | | | | | | | | | | | | | | | |
| Utility plant in service | $ | 1,473.8 | | $ | 493.6 | | $ | 667.9 | | $ | 1,293.0 | | $ | 364.4 | | $ | 158.4 | |
| Accumulated depreciation | | 776.3 | | | 303.1 | | | 252.8 | | | 270.0 | | | 30.4 | | | 75.5 | |
| Nuclear fuel, net | | 76.6 | | | - | | | - | | | - | | | - | | | - | |
| Construction work in progress | | 39.4 | | | 79.1 | | | 6.5 | | | 5.9 | | | 30.2 | | | 5.3 | |
| 2012 accredited capacity-MWs | | 547 | | | 711 | | | 620 | | | 641 | | NA | | | 174 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| KCP&L | | | | | | | | | | |
| | Wolf Creek | La Cygne | Iatan No. 1 | Iatan No. 2 | Iatan |
| | Unit | Units | Unit | Unit | Common |
| | (millions, except MW amounts) |
| KCP&L's share | | 47 | % | | 50 | % | | 70 | % | | 55 | % | | 61 | % |
| | | | | | | | | | | | | | | | |
| Utility plant in service | $ | 1,473.8 | | $ | 493.6 | | $ | 542.3 | | $ | 985.1 | | $ | 287.5 | |
| Accumulated depreciation | | 776.3 | | | 303.1 | | | 207.9 | | | 261.3 | | | 26.0 | |
| Nuclear fuel, net | | 76.6 | | | - | | | - | | | - | | | - | |
| Construction work in progress | | 39.4 | | | 79.1 | | | 2.6 | | | 4.4 | | | 9.3 | |
| 2012 accredited capacity-MWs | | 547 | | | 711 | | | 493 | | | 482 | | NA | |
| | | | | | | | | | | | | | | | |
Each owner must fund its own portion of the plant's operating expenses and capital expenditures. KCP&L’s and GMO’s share of direct expenses are included in the appropriate operating expense classifications in Great Plains Energy’s and KCP&L’s financial statements.
| 24. | QUARTERLY OPERATING RESULTS (UNAUDITED) |
| | | | | | | | | |
| | Quarter |
| Great Plains Energy | 1st | 2nd | 3rd | 4th |
| 2011 | (millions, except per share amounts) |
| Operating revenue | $ | 492.9 | | $ | 565.1 | | $ | 773.7 | | $ | 486.3 | |
| Operating income | | 41.2 | | | 115.6 | | | 262.7 | | | 60.3 | |
| Net income | | 2.3 | | | 43.4 | | | 126.6 | | | 1.9 | |
| Net income attributable to Great Plains Energy | | 2.4 | | | 43.4 | | | 126.5 | | | 2.1 | |
| Basic earnings per common share | | 0.02 | | | 0.32 | | | 0.93 | | | 0.01 | |
| Diluted earnings per common share | | 0.01 | | | 0.31 | | | 0.91 | | | 0.01 | |
| 2010 | | | | | | | | | | | | |
| Operating revenue | $ | 506.9 | | $ | 552.0 | | $ | 728.8 | | $ | 467.8 | |
| Operating income | | 62.0 | | | 134.9 | | | 243.8 | | | 31.6 | |
| Net income (loss) | | 20.3 | | | 64.4 | | | 132.0 | | | (4.8 | ) |
| Net income (loss) attributable to Great Plains Energy | | 20.3 | | | 64.3 | | | 132.0 | | | (4.9 | ) |
| Basic earnings (loss) per common share | | 0.15 | | | 0.47 | | | 0.97 | | | (0.04 | ) |
| Diluted earnings (loss) per common share | | 0.15 | | | 0.47 | | | 0.96 | | | (0.04 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | |
| | Quarter |
| KCP&L | 1st | 2nd | 3rd | 4th |
| 2011 | (millions) |
| Operating revenue | $ | 330.8 | | $ | 383.4 | | $ | 506.3 | | $ | 337.8 | |
| Operating income | | 26.5 | | | 77.8 | | | 169.2 | | | 47.7 | |
| Net income | | 4.0 | | | 33.4 | | | 85.4 | | | 12.7 | |
| 2010 | | | | | | | | | | | | |
| Operating revenue | $ | 335.6 | | $ | 372.6 | | $ | 486.5 | | $ | 322.4 | |
| Operating income | | 40.5 | | | 84.7 | | | 163.6 | | | 22.6 | |
| Net income | | 19.2 | | | 48.2 | | | 92.6 | | | 3.2 | |
| | | | | | | | | | | | | |
Quarterly data is subject to seasonal fluctuations with peak periods occurring in the summer months. In the third and fourth quarters of 2010, Great Plains Energy recorded a $4.0 million and $12.8 million, respectively, pre-tax loss for KCP&L’s and GMO’s combined share of certain Iatan construction costs. In the fourth quarter of 2010,
Great Plains Energy recorded an $11.2 million pre-tax impairment loss related to its investments in affordable housing limited partnerships.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Great Plains Energy Incorporated
Kansas City, Missouri
We have audited the accompanying consolidated balance sheets of Great Plains Energy Incorporated and subsidiaries (the "Company") as of December 31, 2011 and 2010, and the related consolidated statements of income, comprehensive income, common shareholders' equity and noncontrolling interest, and cash flows for each of the three years in the period ended December 31, 2011. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Great Plains Energy Incorporated and subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2011, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2012 expressed an unqualified opinion on the Company's internal control over financial reporting.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 28, 2012
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Kansas City Power & Light Company
Kansas City, Missouri
We have audited the accompanying consolidated balance sheets of Kansas City Power & Light Company and subsidiaries (the "Company") as of December 31, 2011 and 2010, and the related consolidated statements of income, comprehensive income, common shareholder’s equity and cash flows for each of the three years in the period ended December 31, 2011. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Kansas City Power & Light Company and subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2011, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2012 expressed an unqualified opinion on the Company's internal control over financial reporting.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 28, 2012
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
GREAT PLAINS ENERGY
Disclosure Controls and Procedures
Great Plains Energy carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). This evaluation was conducted under the supervision, and with the participation, of Great Plains Energy’s management, including the chief executive officer and chief financial officer, and Great Plains Energy’s disclosure committee. Based upon this evaluation, the chief executive officer and chief financial officer of Great Plains Energy have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Great Plains Energy were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There has been no change in Great Plains Energy’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended December 31, 2011, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) for Great Plains Energy. Under the supervision and with the participation of Great Plains Energy’s chief executive officer and chief financial officer, management evaluated the effectiveness of Great Plains Energy’s internal control over financial reporting as of December 31, 2011. Management used for this evaluation the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
Management has concluded that, as of December 31, 2011, Great Plains Energy’s internal control over financial reporting is effective based on the criteria set forth in the COSO framework. Deloitte & Touche LLP, the independent registered public accounting firm that audited the financial statements included in this annual report on Form 10-K, has issued its attestation report on Great Plains Energy’s internal control over financial reporting, which is included below.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Great Plains Energy Incorporated
Kansas City, Missouri
We have audited the internal control over financial reporting of Great Plains Energy Incorporated and subsidiaries (the "Company") as of December 31, 2011, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2011, of the Company and our report dated February 28, 2012 expressed an unqualified opinion on those financial statements and financial statement schedules.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 28, 2012
KCP&L
Disclosure Controls and Procedures
KCP&L carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act). This evaluation was conducted under the supervision, and with the participation, of KCP&L’s management, including the chief executive officer and chief financial officer, and KCP&L’s disclosure committee. Based upon this evaluation, the chief executive officer and chief financial officer of KCP&L have concluded as of the end of the period covered by this report that the disclosure controls and procedures of KCP&L were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There has been no change in KCP&L’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended December 31, 2011, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) for KCP&L. Under the supervision and with the participation of KCP&L’s chief executive officer and chief financial officer, management evaluated the effectiveness of KCP&L’s internal control over financial reporting as of December 31, 2011. Management used for this evaluation the framework in Internal Control – Integrated Framework issued by the COSO of the Treadway Commission.
Management has concluded that, as of December 31, 2011, KCP&L’s internal control over financial reporting is effective based on the criteria set forth in the COSO framework. Deloitte & Touche LLP, the independent registered public accounting firm that audited the financial statements included in this annual report on Form 10-K, has issued its attestation report on KCP&L’s internal control over financial reporting, which is included below.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Kansas City Power & Light Company
Kansas City, Missouri
We have audited the internal control over financial reporting of Kansas City Power & Light Company and subsidiaries (the "Company") as of December 31, 2011, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2011, of the Company and our report dated February 28, 2012 expressed an unqualified opinion on those financial statements and financial statement schedule.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 28, 2012
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Great Plains Energy Directors
The information required by this item is incorporated by reference from the Great Plains Energy 2012 Proxy Statement (Proxy Statement), which will be filed with the SEC no later than April 30, 2012:
| · | Information regarding the directors of Great Plains Energy required by this item is contained in the Proxy Statement section titled “Election of Directors.” |
| · | Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 required by this item is contained in the Proxy Statement section titled “Security Ownership of Certain Beneficial Owners, Directors and Officers - Section 16(a) Beneficial Ownership Reporting Compliance.” |
| · | Information regarding the Audit Committee of Great Plains Energy required by this item is contained in the Proxy Statement section titled “Corporate Governance – Committees of the Board.” |
Great Plains Energy and KCP&L Executive Officers
Information required by this item regarding the executive officers of Great Plains Energy and KCP&L is contained in this report in the Part I, Item 1 section titled “Executive Officers.”
Great Plains Energy and KCP&L Code of Ethical Business Conduct
The Company has adopted a Code of Ethical Business Conduct (Code), which applies to all directors, officers and employees of Great Plains Energy, KCP&L and their subsidiaries. The Code is posted on the corporate governance page of the Internet websites at www.greatplainsenergy.com and www.kcpl.com. A copy of the Code is available, without charge, upon written request to Corporate Secretary, Great Plains Energy Incorporated, 1200 Main St., Kansas City, Missouri 64105. Great Plains Energy and KCP&L intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of the Code that applies to the principal executive officer, principal financial officer, principal accounting officer or controller of those companies by posting such information on the corporate governance page of the Internet websites.
Other KCP&L Information
The other information required by this item regarding KCP&L has been omitted in reliance on General Instruction (I).
ITEM 11. EXECUTIVE COMPENSATION
Great Plains Energy
The information required by this item contained in the sections titled “Executive Compensation,” “Director Compensation,” “Compensation Discussion and Analysis”, “Compensation Committee Report” and “Director Independence – Compensation Committee Interlocks and Insider Participation” of the Proxy Statement is incorporated by reference.
KCP&L
The other information required by this item regarding KCP&L has been omitted in reliance on General Instruction (I).
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Great Plains Energy
The information required by this item regarding security ownership of the directors and executive officers of Great Plains Energy contained in the section titled “Security Ownership of Certain Beneficial Owners, Directors and Officers” of the Proxy Statement is incorporated by reference.
KCP&L
The information required by this item regarding KCP&L has been omitted in reliance on General Instruction (I).
Equity Compensation Plans
Great Plains Energy’s Long-Term Incentive Plan is an equity compensation plan approved by its shareholders. The Long-Term Incentive Plan permits the grant of restricted stock, restricted stock units, bonus shares, stock options, stock appreciation rights, limited stock appreciation rights, director shares, director deferred share units and performance shares to directors, officers and other employees of Great Plains Energy and KCP&L.
KCP&L does not have an equity compensation plan; however, KCP&L officers and certain employees participate in Great Plains Energy’s Long-Term Incentive Plan.
The following table provides information, as of December 31, 2011, regarding the number of common shares to be issued upon exercise of outstanding options, warrants and rights, their weighted average exercise price, and the number of shares of common stock remaining available for future issuance. The table excludes shares issued or issuable under Great Plains Energy’s defined contribution savings plans.
| | | | | | | | | | | | | |
| | | | | | | | | | | Number of securities |
| | | | | | | remaining available |
| | | Number of securities | | | | for future issuance |
| | | to be issued upon | | | | under equity |
| | | exercise of | | | | compensation plans |
| | | outstanding options, | | | | (excluding securities |
| | | warrants and rights | | warrants and rights | | reflected in column (a)) |
| Plan Category | | (a) | | (b) | | (c) |
| Equity compensation plans approved by security holders | | | | | | | | | | | |
Great Plains Energy Long-Term Incentive Plan | | | 505,626 | | (1) | | $ | 25.91 | | (2) | | | 5,528,707 | | |
| Equity compensation plans not approved by security holders | | - | | | | | - | | | | | - | | |
| Total | | | 505,626 | | (1) | | $ | 25.91 | | (2) | | | 5,528,707 | | |
| (1) | Includes 442,042 performance shares at target performance levels, options for 9,353 shares of Great Plains Energy common |
| | stock and director deferred share units for 54,231 shares of Great Plains Energy common stock outstanding at December 31, 2011. |
| (2) | The 442,042 performance shares and director deferred share units for 54,231 shares of Great Plains Energy common stock have |
| | no exercise price and therefore are not reflected in the weighted average exercise price. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Great Plains Energy
The information required by this item contained in the section titled “Director Independence” and “Related Party Transactions” of the Proxy Statement is incorporated by reference.
KCP&L
The information required by this item regarding KCP&L has been omitted in reliance on General Instruction (I).
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Great Plains Energy
The information required by this item regarding the independent auditors of Great Plains Energy and its subsidiaries contained in the section titled “Ratification of Appointment of Independent Auditors” of the Proxy Statement is incorporated by reference.
KCP&L
The Audit Committee of the Great Plains Energy Board functions as the Audit Committee of KCP&L. The following table sets forth the aggregate fees billed by Deloitte & Touche LLP for audit services rendered in connection with the consolidated financial statements and reports for 2011 and 2010 and for other services rendered during 2011 and 2010 on behalf of KCP&L, as well as all out-of-pocket costs incurred in connection with these services:
| Fee Category | 2011 | 2010 |
| Audit Fees | $ | 1,125,215 | | $ | 1,098,722 | |
| Audit-Related Fees | | 70,750 | | | 104,169 | |
| Tax Fees | | 231,643 | | | 112,058 | |
| All Other Fees | | 91,975 | | | - | |
| Total Fees | $ | 1,519,583 | | $ | 1,314,949 | |
Audit Fees: Consists of fees billed for professional services rendered for the audits of the annual consolidated financial statements of KCP&L and reviews of the interim condensed consolidated financial statements included in quarterly reports. Audit fees also include: services provided by Deloitte & Touche LLP in connection with statutory and regulatory filings or engagements; audit reports on audits of the effectiveness of internal control over financial reporting and other attest services, except those not required by statute or regulation; services related to filings with the SEC, including comfort letters, consents and assistance with and review of documents filed with the SEC; and accounting research in support of the audit.
Audit-Related Fees: Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of consolidated financial statements of KCP&L and are not reported under “Audit Fees”. These services include consultation concerning financial accounting and reporting standards.
Tax Fees: Consists of fees billed for tax compliance and related support of tax returns and other tax services, including assistance with tax audits, and tax research and planning.
All Other Fees: Consists of fees for all other services other than those described above. In 2011, these fees included a pension plan review.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
The Audit Committee pre-approves all audit and permissible non-audit services provided by the independent registered public accounting firm to KCP&L. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has adopted for KCP&L policies and procedures for the pre-approval of services provided by the independent registered public accounting firm. Under these policies and procedures, the Audit Committee may pre-approve certain types of services, up to aggregate fee levels established by the Audit Committee. Any proposed service within a pre-approved type of service that would cause the applicable fee level to be exceeded cannot be provided unless the Audit Committee either amends the applicable fee level or specifically approves the proposed service. Pre-approval is generally provided for up to one year,
unless the Audit Committee specifically provides for a different period. The Audit Committee receives reports at each regular meeting regarding the pre-approved services performed by the independent auditor. The Chairman of the Audit Committee may between meetings pre-approve audit and non-audit services provided by the independent auditor, and report such pre-approval at the next Audit Committee meeting.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
| Financial Statements | |
| Great Plains Energy | Page No. |
| a. | Consolidated Statements of Income for the years ended December 31, 2011, 2010 and 2009 | 56 |
| b. | Consolidated Balance Sheets - December 31, 2011 and 2010 | 57 |
| c. | Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009 | 59 |
| d. | Consolidated Statements of Common Shareholders’ Equity and Noncontrolling Interest for the years ended December 31, 2011, 2010 and 2009 | 60 |
| e. | Consolidated Statements of Comprehensive Income for the years ended December 31, 2011, 2010 and 2009 | 61 |
| f. | Notes to Consolidated Financial Statements | 68 |
| g. | Report of Independent Registered Public Accounting Firm | 132 |
| | | |
| KCP&L | |
| h. | Consolidated Statements of Income for the years ended December 31, 2011, 2010 and 2009 | 62 |
| i. | Consolidated Balance Sheets - December 31, 2011 and 2010 | 63 |
| j. | Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009 | 65 |
| k. | Consolidated Statements of Common Shareholder’s Equity for the years ended December 31, 2011, 2010 and 2009 | 66 |
| l. | Consolidated Statements of Comprehensive Income for the years ended December 31, 2011, 2010 and 2009 | 67 |
| m. | Notes to Consolidated Financial Statements | 68 |
| n. | Report of Independent Registered Public Accounting Firm | 133 |
| | | |
| Financial Statement Schedules |
| | Great Plains Energy | |
| a. | Schedule I – Parent Company Financial Statements | 157 |
| b. | Schedule II – Valuation and Qualifying Accounts and Reserves | 160 |
| | KCP&L | |
| c. | Schedule II – Valuation and Qualifying Accounts and Reserves | 161 |
Exhibits
Exhibit Number | | Description of Document | Registrant |
| 2.1 | * | Agreement and Plan of Merger among Aquila, Inc., Great Plains Energy Incorporated, Gregory Acquisition Corp., and Black Hills Corporation dated as of February 6, 2007 (Exhibit 2.1 to Form 8-K filed on February 8, 2007). | Great Plains Energy |
| 2.2 | * | Mutual Notice of Extension among Aquila, Inc., Great Plains Energy Incorporated, Gregory Acquisition Corp., and Black Hills Corporation dated as of January 31, 2008 (Exhibit 2.1.2 to Form 10-K for the year ended December 31, 2007). | Great Plains Energy |
| 2.3 | * | Mutual Notice of Extension among Aquila, Inc., Great Plains Energy Incorporated, Gregory Acquisition Corp., and Black Hills Corporation dated as of April 29, 2008 (Exhibit 10.1 to Form 8-K filed on April 30, 2008). | Great Plains Energy |
| 3.1 | * | Articles of Incorporation of Great Plains Energy Incorporated, as amended effective May 7, 2009 (Exhibit 3.1.1 to Form 10-Q for the quarter ended March 31, 2009). | Great Plains Energy |
| 3.2 | * | By-laws of Great Plains Energy Incorporated, as amended May 4, 2010 (Exhibit 3.1 to Form 8-K filed on May 5, 2010). | Great Plains Energy |
| 3.3 | * | Restated Articles of Consolidation of Kansas City Power & Light Company, restated as of October 26, 2010. (Exhibit 3.3 to Form 10-K for the year ended December 31, 2010) | KCP&L |
| 3.4 | * | By-laws of Kansas City Power & Light Company, as amended April 1, 2008 (Exhibit 3.2 to Form 8-K filed on April 7, 2008). | KCP&L |
| 4.1 | * | Indenture, dated June 1, 2004, between Great Plains Energy Incorporated and BNY Midwest Trust Company, as Trustee (Exhibit 4.4 to Form 8-A/A filed on June 14, 2004). | Great Plains Energy |
| 4.2 | * | First Supplemental Indenture, dated June 14, 2004, between Great Plains Energy Incorporated and BNY Midwest Trust Company, as Trustee (Exhibit 4.5 to Form 8-A/A filed on June 14, 2004). | Great Plains Energy |
| 4.3 | * | Second Supplemental Indenture dated as of September 25, 2007, between Great Plains Energy Incorporated and The Bank of New York Trust Company, N.A., as trustee (Exhibit 4.1 to Form 8-K filed on September 26, 2007). | Great Plains Energy |
| 4.4 | * | Third Supplemental Indenture dated as of August 13, 2010 between Great Plains Energy Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (Exhibit 4.1 to Form 8-K filed on August 13, 2010). | Great Plains Energy |
| 4.5 | * | Fourth Supplemental Indenture dated as of May 19, 2011 between Great Plains Energy Incorporated and The Bank of New York Mellon Trust Company, N.A., as Trustee (Exhibit 4.1 to Form 8-K filed on May 19, 2011). | Great Plains Energy |
| 4.6 | * | Subordinated Indenture dated as of May 18, 2009 between Great Plains Energy Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (Exhibit 4.1 to Form 8-K filed on May 19, 2009). | Great Plains Energy |
| 4.7 | * | Supplemental Indenture No. 1 dated as of May 18, 2009 between Great Plains Energy Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (Exhibit 4.2 to Form 8-K filed on May 19, 2009). | Great Plains Energy |
| 4.8 | * | Purchase Contract and Pledge Agreement dated as of May 18, 2009 among Great Plains Energy Incorporated, The Bank of New York Mellon Trust Company, N.A., as purchase contract agent and The Bank of New York Mellon Trust Company, N.A., as collateral agent, custodial agent and securities intermediary (Exhibit 4.3 to Form 8-K filed on May 19, 2009). | Great Plains Energy |
| 4.9 | * | Indenture, dated as of August 24, 2001, between Aquila, Inc. and BankOne Trust Company, N.A., as Trustee (Exhibit 4(d) to Registration Statement on Form S-3 (File No. 333-68400) filed by Aquila, Inc. on August 27, 2001). | Great Plains Energy |
| 4.10 | * | Second Supplemental Indenture, dated as of July 3, 2002, between Aquila, Inc. and BankOne Trust Company, N.A., as Trustee related to 11.875% Senior Notes due July 1, 2012 (Exhibit 4(c) to Form S-4 (File No. 333-100204) filed by Aquila, Inc. on September 30, 2002). | Great Plains Energy |
| 4.11 | * | General Mortgage and Deed of Trust dated as of December 1, 1986, between Kansas City Power & Light Company and UMB Bank, n.a. (formerly United Missouri Bank of Kansas City, N.A.), Trustee (Exhibit 4-bb to Form 10-K for the year ended December 31, 1986). | Great Plains Energy KCP&L |
| 4.12 | * | Fifth Supplemental Indenture dated as of September 15, 1992, to Indenture dated as of December 1, 1986 (Exhibit 4-a to Form 10-Q for the quarter ended September 30, 1992). | Great Plains Energy KCP&L |
| 4.13 | * | Seventh Supplemental Indenture dated as of October 1, 1993, to Indenture dated as of December 1, 1986 (Exhibit 4-a to Form 10-Q for the quarter ended September 30, 1993). | Great Plains Energy KCP&L |
| 4.14 | * | Eighth Supplemental Indenture dated as of December 1, 1993, to Indenture dated as of December 1, 1986 (Exhibit 4 to Registration Statement, Registration No. 33-51799). | Great Plains Energy KCP&L |
| 4.15 | * | Eleventh Supplemental Indenture dated as of August 15, 2005, to the General Mortgage and Deed of Trust dated as of December 1, 1986, between Kansas City Power & Light Company and UMB Bank, N.A. (formerly United Missouri Bank of Kansas City, N.A.), Trustee (Exhibit 4.2 to Form 10-Q for the quarter ended September 30, 2005). | Great Plains Energy KCP&L |
| 4.16 | * | Twelfth Supplemental Indenture, dated as of March 1, 2009, to the General Mortgage and Deed of Trust dated as of December 1, 1986, between Kansas City Power & Light Company and UMB Bank, N.A. (formerly United Missouri Bank of Kansas City, N.A.), Trustee (Exhibit 4.2 to Form 8-K filed on March 24, 2009). | Great Plains Energy KCP&L |
| 4.17 | * | Thirteenth Supplemental Indenture, dated as of March 1, 2009, to the General Mortgage and Deed of Trust dated as of December 1, 1986, between Kansas City Power & Light Company and UMB Bank, N.A. (formerly United Missouri Bank of Kansas City, N.A.), Trustee (Exhibit 4.3 to Form 8-K filed on March 24, 2009). | Great Plains Energy KCP&L |
| 4.18 | * | Fourteenth Supplemental Indenture, dated as of March 1, 2009, to the General Mortgage and Deed of Trust dated as of December 1, 1986, between Kansas City Power & Light Company and UMB Bank, N.A. (formerly United Missouri Bank of Kansas City, N.A.), Trustee (Exhibit 4.4 to Form 8-K filed on March 24, 2009). | Great Plains Energy KCP&L |
| 4.19 | * | Fifteenth Supplemental Indenture, dated as of June 30, 2011, to the General Mortgage and Deed of Trust dated as of December 1, 1986, between Kansas City Power & Light Company and UMB Bank, N.A. (formerly United Missouri Bank of Kansas City, N.A.), Trustee (Exhibit 4.1 to Form 10-Q for the quarter ended June 30, 2011). | Great Plains Energy KCP&L |
| 4.20 | * | Indenture dated as of December 1, 2000, between Kansas City Power & Light Company and The Bank of New York (Exhibit 4-a to Form 8-K filed on December 18, 2000). | Great Plains Energy KCP&L |
| 4.21 | * | Term sheet for $150 million aggregate principal amount of 6.50% Senior Notes due November 15, 2011 (Exhibit 4-b to Form 8-K filed on November 19, 2001). | Great Plains Energy KCP&L |
| 4.22 | * | Indenture dated March 1, 2002 between The Bank of New York and Kansas City Power & Light Company (Exhibit 4.1.b. to Form 10-Q for the quarter ended March 31, 2002). | Great Plains Energy KCP&L |
| 4.23 | * | Supplemental Indenture No. 1 dated as of November 15, 2005, to Indenture dated March 1, 2002 between The Bank of New York and Kansas City Power & Light Company (Exhibit 4.2.j to Form 10-K for the year ended December 31, 2005). | Great Plains Energy KCP&L |
| 4.24 | * | Indenture dated as of May 1, 2007, between Kansas City Power & Light Company and The Bank of New York Trust Company, N.A., as trustee (Exhibit 4.1 to Form 8-K filed on June 4, 2007). | Great Plains Energy KCP&L |
| 4.25 | * | Supplemental Indenture No. 1 dated as of June 4, 2007 between Kansas City Power & Light Company and The Bank of New York Trust Company, N.A., as trustee (Exhibit 4.2 to Form 8-K filed on June 4, 2007). | Great Plains Energy KCP&L |
| 4.26 | * | Supplemental Indenture No. 2 dated as of March 11, 2008, between Kansas City Power & Light Company and The Bank of New York Trust Company, N.A., as trustee (Exhibit 4.2 to Form 8-K filed on March 11, 2008). | Great Plains Energy KCP&L |
| 4.27 | *+ | Supplemental Indenture No. 3 dated as of September 20, 2011 between Kansas City Power & Light Company and The Bank of New York Mellon Trust Company, N.A., Trustee (Exhibit 4.1 to Form 8-K filed on September 20, 2011). | Great Plains Energy KCP&L |
| 10.1 | *+ | Amended Long-Term Incentive Plan, effective as of May 7, 2002 (Exhibit 10.1.a to Form 10-K for the year ended December 31, 2002). | Great Plains Energy KCP&L |
| 10.2 | *+ | Great Plains Energy Incorporated Long-Term Incentive Plan as amended May 1, 2007 (Exhibit 10.1 to Form 8-K filed on May 4, 2007). | Great Plains Energy KCP&L |
| 10.3 | *+ | Great Plains Energy Incorporated Amended Long-Term Incentive Plan adopted as of May 3, 2011 (Exhibit 10.1 to Form 8-K filed on May 6, 2011). | Great Plains Energy KCP&L |
| 10.4 | *+ | Great Plains Energy Incorporated Long-Term Incentive Plan Awards Standards and Performance Criteria Effective as of May 6, 2008 (Exhibit 10.1.25 to Form 10-Q for the quarter ended June 30, 2008). | Great Plains Energy KCP&L |
| 10.5 | *+ | Great Plains Energy Incorporated Long-Term Incentive Plan awards Standards and Performance Criteria effective as of January 1, 2009 (Exhibit 10.1.6 to Form 10-Q for the quarter ended June 30, 2009). | Great Plains Energy KCP&L |
| 10.6 | *+ | Great Plains Energy Incorporated Long-Term Incentive Plan Awards Standards and Performance Criteria Effective as of January 1, 2010 (Exhibit 10.1.3 to Form 10-Q for the quarter ended March 31, 2010). | Great Plains Energy KCP&L |
| 10.7 | *+ | Great Plains Energy Incorporated Long-Term Incentive Plan Awards Standards and Performance Criteria Effective as of January 1, 2011 (Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2011). | Great Plains Energy KCP&L |
| 10.8 | *+ | Form of Restricted Stock Agreement Pursuant to the Great Plains Energy Incorporated Long-Term Incentive Plan Effective May 7, 2002 (Exhibit 10.1.6 to Form 10-K for the year ended December 31, 2006). | Great Plains Energy KCP&L |
| 10.9 | *+ | Form of 2008 Restricted Stock Agreement (Exhibit 10.1.20 to Form 10-Q for the quarter ended June 30, 2008). | Great Plains Energy KCP&L |
| 10.10 | *+ | Form of Restricted Stock Agreement between Great Plains Energy Incorporated and grantee dated May 5, 2009 (Exhibit 10.1.5 to Form 10-Q for the quarter ended June 30, 2009). | Great Plains Energy KCP&L |
| 10.11 | *+ | Form of Performance Share Agreement between Great Plains Energy Incorporated and grantee dated May 5, 2009 (Exhibit 10.1.4 to Form 10-Q for the quarter ended March 31, 2009). | Great Plains Energy KCP&L |
| 10.12 | *+ | Form of 2001 and 2002 Nonqualified Stock Option Agreement (Exhibit 10.1.13 to Form 10-K for the year ended December 31, 2009). | Great Plains Energy KCP&L |
| 10.13 | *+ | Form of 2003 Nonqualified Stock Option Agreement (Exhibit 10.1.14 to Form 10-K for the year ended December 31, 2009). | Great Plains Energy KCP&L |
| 10.14 | *+ | Form of Amendment to 2003 Stock Option Grants (Exhibit 10.1.9 to Form 10-Q for the quarter ended September 30, 2007). | Great Plains Energy KCP&L |
| 10.15 | *+ | Form of 2010 three-year Performance Share Agreement (Exhibit 10.1.1 to Form 10-Q for the quarter ended March 31, 2010). | Great Plains Energy KCP&L |
| 10.16 | *+ | Form of 2010 Restricted Stock Agreement (Exhibit 10.1.2 to Form 10-Q for the quarter ended March 31, 2010). | Great Plains Energy KCP&L |
| 10.17 | *+ | Form of 2011 three-year Performance Share Agreement (Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2011). | Great Plains Energy KCP&L |
| 10.18 | *+ | Form of 2011 Restricted Stock Agreement (Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2011). | Great Plains Energy KCP&L |
| 10.19 | *+ | Aquila, Inc. 2002 Omnibus Incentive Compensation Plan (Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2002, filed by Aquila, Inc.). | Great Plains Energy |
| 10.20 | *+ | Great Plains Energy Incorporated, Kansas City Power & Light Company and KCP&L Greater Missouri Operations Company Annual Incentive Plan amended effective as of January 1, 2011 (Exhibit 10.4 to Form 10-Q for the quarter ended March 31, 2011). | Great Plains Energy KCP&L |
| 10.21 | *+ | Form of Indemnification Agreement with each officer and director (Exhibit 10-f to Form 10-K for year ended December 31, 1995). | Great Plains Energy KCP&L |
| 10.22 | *+ | Form of Conforming Amendment to Indemnification Agreement with each officer and director (Exhibit 10.1.a to Form 10-Q for the quarter ended March 31, 2003). | Great Plains Energy KCP&L |
| 10.23 | *+ | Form of Indemnification Agreement with each director and officer (Exhibit 10.1 to Form 8-K filed on December 8, 2008). | Great Plains Energy KCP&L |
| 10.24 | *+ | Form of Indemnification Agreement with officers and directors (Exhibit 10.1.p to Form 10-K for the year ended December 31, 2005). | Great Plains Energy KCP&L |
| 10.25 | *+ | Form of Change in Control Severance Agreement with Michael J. Chesser (Exhibit 10.1.a to Form 10-Q for the quarter ended September 30, 2006). | Great Plains Energy KCP&L |
| 10.26 | *+ | Form of Change in Control Severance Agreement with William H. Downey (Exhibit 10.1.b to Form 10-Q for the quarter ended September 30, 2006). | Great Plains Energy KCP&L |
| 10.27 | *+ | Form of Change in Control Severance Agreement with other executive officers of Great Plains Energy Incorporated and Kansas City Power & Light Company (Exhibit 10.1.e to Form 10-Q for the quarter ended September 30, 2006). | Great Plains Energy KCP&L |
| 10.28 | *+ | Great Plains Energy Incorporated Supplemental Executive Retirement Plan (As Amended and Restated for I.R.C. §409A) (Exhibit 10.1.10 to Form 10-Q for the quarter ended September 30, 2007). | Great Plains Energy KCP&L |
| 10.29 | *+ | Great Plains Energy Incorporated Supplemental Executive Retirement Plan (As Amended and Restated for I.R.C. §409A), as amended February 10, 2009 (Exhibit 10.1.29 to Form 10-K for the year ended December 31, 2008). | Great Plains Energy KCP&L |
| 10.30 | *+ | Great Plains Energy Incorporated Supplemental Executive Retirement Plan (As Amended and Restated for I.R.C. §409A), as amended December 8, 2009 (Exhibit 10.1.27 to Form 10-K for the year ended December 31, 2009). | Great Plains Energy KCP&L |
| 10.31 | *+ | Great Plains Energy Incorporated Nonqualified Deferred Compensation Plan (As Amended and Restated for I.R.C. §409A) (Exhibit 10.1.11 to Form 10-Q for the quarter ended September 30, 2007). | Great Plains Energy KCP&L |
| 10.32 | *+ | Great Plains Energy Incorporated Nonqualified Deferred Compensation Plan (As Amended and Restated for I.R.C. §409A), amended effective January 1, 2010 (Exhibit 10.1.5 to Form 10-Q for the quarter ended March 31, 2010). | Great Plains Energy KCP&L |
| 10.33 | *+ | Letter regarding enhanced supplemental retirement and severance benefit for William H. Downey, dated August 5, 2008 (Exhibit 10.1.23 to Form 10-Q for the quarter ended June 30, 2008). | Great Plains Energy KCP&L |
| 10.34 | *+ | Employment offer letters to Michael J. Chesser dated September 10 and September 16, 2003 (Exhibit 10.1.35 to Form 10-K for the year ended December 31, 2008). | Great Plains Energy KCP&L |
| 10.35 | *+ | Bonus Agreement dated as of May 5, 2009 between Great Plains Energy Incorporated and Michael J. Chesser (Exhibit 10.1.10 to Form 10-Q for the quarter ended June 30, 2009). | Great Plains Energy KCP&L |
| 10.36 | *+ | Discretionary Bonus Agreement dated as of May 5, 2009 between Great Plains Energy Incorporated and Terry Bassham (Exhibit 10.1.11 to Form 10-Q for the quarter ended June 30, 2009). | Great Plains Energy KCP&L |
| 10.37 | *+ | Retirement and Consulting Agreement among Great Plains Energy Incorporated, Kansas City Power & Light Company, KCP&L Greater Missouri Operations Company and John R. Marshall (Exhibit 10.1 to Form 8-K filed on May 5, 2010). | Great Plains Energy KCP&L |
| 10.38 | *+ | Consulting Services Assignment and Assumption Agreement between John R. Marshall and Coastal Partners Inc. (Exhibit 10.2 to Form 10-Q for the quarter ended June 30, 2010). | Great Plains Energy KCP&L |
| 10.39 | *+ | Retirement and Consulting Agreement among Great Plains Energy Incorporated, Kansas City Power & Light Company, KCP&L Greater Missouri Operations Company and Barbara B. Curry (Exhibit 10.1 to Form 8-K filed on May 5, 2010). | Great Plains Energy KCP&L |
| 10.40 | *+ | Retirement and Consulting Agreement dated May 20, 2011 between Great Plains Energy Incorporated, Kansas City Power & Light Company, KCP&L Greater Missouri Operations Company and William H. Downey (Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2011). | Great Plains Energy KCP&L |
| 10.41 | *+ | Agreement among Great Plains Energy Incorporated, Kansas City Power & Light Company, KCP&L Greater Missouri Operations Company and William G. Riggins dated as of October 26, 2010. (Exhibit 10.45 to Form 10-K for the year ended December 31, 2010) | Great Plains Energy KCP&L |
| 10.42 | * | Asset Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated, and Gregory Acquisition Corp., dated February 6, 2007 (Exhibit 10.1 to Form 8-K filed on February 8, 2007). | Great Plains Energy |
| 10.43 | * | Partnership Interests Purchase Agreement by and among Aquila, Inc., Aquila Colorado, LLC, Black Hills Corporation, Great Plains Energy Incorporated, and Gregory Acquisition Corp., dated February 6, 2007 (Exhibit 10.2 to Form 8-K filed on February 8, 2007). | Great Plains Energy |
| 10.44 | * | Letter Agreement dated as of June 29, 2007 to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated, and Gregory Acquisition Corp., dated February 6, 2007 (Exhibit 10.1.1 to Form 10-Q for the quarter ended June 30, 2007). | Great Plains Energy |
| 10.45 | * | Letter Agreement dated as of August 31, 2007, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.4 to Form 10-Q for the quarter ended September 30, 2007). | Great Plains Energy |
| 10.46 | * | Letter Agreement dated as of September 28, 2007, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.5 to Form 10-Q for the quarter ended September 30, 2007). | Great Plains Energy |
| 10.47 | * | Letter Agreement dated as of October 3, 2007, to Agreement and Plan of Merger, Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.6 to Form 10-Q for the quarter ended September 30, 2007). | Great Plains Energy |
| 10.48 | * | Letter Agreement dated as of November 30, 2007, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.40 to Form 10-K for the year ended December 31, 2007). | Great Plains Energy |
| 10.49 | * | Letter Agreement dated as of January 30, 2008, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.41 to Form 10-K for the year ended December 31, 2007). | Great Plains Energy |
| 10.50 | * | Letter Agreement dated as of February 28, 2008, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.3 to Form 10-Q for the quarter ended March 31, 2008). | Great Plains Energy |
| 10.51 | * | Letter Agreement dated as of March 28, 2008, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.4 to Form 10-Q for the quarter ended March 31, 2008). | Great Plains Energy |
| 10.52 | * | Letter Agreement dated as of April 28, 2008, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.5 to Form 10-Q for the quarter ended March 31, 2008). | Great Plains Energy |
| 10.53 | * | Letter Agreement dated as of May 29, 2008, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.5 to Form 10-Q for the quarter ended June 30, 2008). | Great Plains Energy |
| 10.54 | * | Letter Agreement dated as of June 19, 2008, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.6 to Form 10-Q for the quarter ended June 30, 2008). | Great Plains Energy |
| 10.55 | * | Letter Agreement dated as of June 27, 2008, to Asset Purchase Agreement and Partnership Interests Purchase Agreement by and among Aquila, Inc., Black Hills Corporation, Great Plains Energy Incorporated and Gregory Acquisition Corp. (Exhibit 10.1.7 to Form 10-Q for the quarter ended June 30, 2008). | Great Plains Energy |
| 10.56 | * | Joint Motion and Settlement Agreement dated as of February 26, 2008, among Great Plains Energy Incorporated, Kansas City Power & Light Company, the Kansas Corporation Commission Staff, the Citizens’ Utility Ratepayers Board, Aquila, Inc. d/b/a Aquila Networks, Black Hills Corporation, and Black Hills/Kansas Gas Utility Company, LLC (Exhibit 10.1.7 to Form 10-Q for the quarter ended March 31, 2008). | Great Plains Energy KCP&L |
| 10.57 | * | Purchase Agreement, dated as of April 1, 2008, by and among Custom Energy Holdings, L.L.C., Direct Energy Services, LLC and Great Plains Energy Incorporated (Exhibit 10.1 to Form 8-K filed on April 2, 2008). | Great Plains Energy |
| 10.58 | * | Credit Agreement dated as of August 9, 2010 among Great Plains Energy Incorporated, Certain Lenders, Bank of America, N.A., as Administrative Agent, and Union Bank, N.A. and Wells Fargo Bank, National Association, as Syndication Agents, Barclays Bank PLC and U.S. Bank National Association, as Documentation Agents, Banc of America Securities LLC, Union Bank, N.A. and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2010). | Great Plains Energy |
| 10.59 | | First Amendment to Credit Agreement dated as of December 9, 2011 among Great Plains Energy Incorporated, Certain Lenders, Union Bank, N.A. and Wells Fargo Bank, National Association, as Syndication Agents, Bank of America, N.A., as Administrative Agent, Barclays Bank PLC and U.S. Bank National Association, as Documentation Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Union Bank, N.A. and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Book Managers. | Great Plains Energy |
| 10.60 | * | Credit Agreement dated as of August 9, 2010 among Kansas City Power & Light Company, Certain Lenders, Bank of America, N.A., as Administrative Agent, and Union Bank, N.A. and Wells Fargo Bank, National Association, as Syndication Agents, The Royal Bank of Scotland PLC and BNP Paribas , as Documentation Agents, Banc of America Securities LLC, Union Bank, N.A. and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 2010). | Great Plains Energy KCP&L |
| 10.61 | | First Amendment to Credit Agreement dated as of December 9, 2011 among Kansas City Power & Light Company, Certain Lenders, Union Bank, N.A. and Wells Fargo Bank, National Association, as Syndication Agents, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A. and The Bank of Nova Scotia, as Documentation Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Union Bank, N.A. and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Book Managers. | Great Plains Energy KCP&L |
| 10.62 | * | Credit Agreement dated as of August 9, 2010 among KCP&L Greater Missouri Operations Company, Certain Lenders, Bank of America, N.A., as Administrative Agent, and Union Bank, N.A. and Wells Fargo Bank, National Association, as Syndication Agents, The Royal Bank of Scotland PLC and BNP Paribas , as Documentation Agents, Banc of America Securities LLC, Union Bank, N.A. and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2010). | Great Plains Energy |
| 10.63 | | First Amendment to Credit Agreement dated as of December 9, 2011 among KCP&L Greater Missouri Operations Company, Great Plains Energy Incorporated, Certain Lenders, Union Bank, N.A. and Wells Fargo Bank, National Association, as Syndication Agents, Bank of America, N.A., as Administrative Agent, The Royal Bank of Scotland PLC and BNP Paribas, as Documentation Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Union Bank, N.A. and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Book Managers. | Great Plains Energy |
| 10.64 | * | Guaranty dated as of July 15, 2008, issued by Great Plains Energy Incorporated in favor of Union Bank of California, N.A., as successor trustee, and the holders of the Aquila, Inc., 7.75% Senior Notes due June 15, 2011 (Exhibit 10.4 to Form 8-K filed on July 18, 2008). | Great Plains Energy |
| 10.65 | * | Guaranty dated as of July 15, 2008, issued by Great Plains Energy Incorporated in favor of Union Bank of California, N.A., as successor trustee, and the holders of the Aquila, Inc., 7.95% Senior Notes due February 1, 2011 (Exhibit 10.5 to Form 8-K filed on July 18, 2008). | Great Plains Energy |
| 10.66 | * | Guaranty dated as of July 15, 2008, issued by Great Plains Energy Incorporated in favor of Union Bank of California, N.A., as successor trustee, and the holders of the Aquila, Inc., 8.27% Senior Notes due November 15, 2021 (Exhibit 10.6 to Form 8-K filed on July 18, 2008). | Great Plains Energy |
| 10.67 | * | Sales Agency Financing Agreement dated August 14, 2008 between Great Plains Energy Incorporated and BNY Mellon Capital Markets, LLC (Exhibit 1.1 to Form 8-K filed on August 14, 2008). | Great Plains Energy |
| 10.68 | * | Insurance agreement between Kansas City Power & Light Company and XL Capital Assurance Inc., dated December 5, 2002 (Exhibit 10.2.f to Form 10-K for the year ended December 31, 2002). | Great Plains Energy KCP&L |
| 10.69 | * | Insurance Agreement dated as of August 1, 2004, between Kansas City Power & Light Company and XL Capital Assurance Inc. (Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 2004). | Great Plains Energy KCP&L |
| 10.70 | * | Insurance Agreement dated as of September 1, 2005, between Kansas City Power & Light Company and XL Capital Assurance Inc. (Exhibit 10.2.e to Form 10-K for the year ended December 31, 2005). | Great Plains Energy KCP&L |
| 10.71 | * | Insurance Agreement dated as of September 1, 2005, between Kansas City Power & Light Company and XL Capital Assurance Inc. (Exhibit 10.2.f to Form 10-K for the year ended December 31, 2005). | Great Plains Energy KCP&L |
| 10.72 | * | Insurance Agreement dated as of September 19, 2007, by and between Financial Guaranty Insurance Company and Kansas City Power & Light Company (Exhibit 10.2.2 to Form 10-Q for the quarter ended September 30, 2007). | Great Plains Energy KCP&L |
| 10.73 | * | Purchase and Sale Agreement dated as of July 1, 2005, between Kansas City Power & Light Company, as Originator, and Kansas City Power & Light Receivables Company, as Buyer (Exhibit 10.2.b to Form 10-Q for the quarter ended June 30, 2005). | Great Plains Energy KCP&L |
| 10.74 | * | Receivables Sale Agreement dated as of July 1, 2005, among Kansas City Power & Light Receivables Company, as the Seller, Kansas City Power & Light Company, as the Initial Collection Agent, The Bank of Tokyo-Mitsubishi, Ltd., New York Branch, as the Agent, and Victory Receivables Corporation (Exhibit 10.2.c to Form 10-Q for the quarter ended June 30, 2005). | Great Plains Energy KCP&L |
| 10.75 | * | Amendment No. 1 dated as of April 2, 2007, among Kansas City Power & Light Receivables Company, Kansas City Power & Light Company, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Victory Receivables Corporation to the Receivables Sale Agreement dated as of July 1, 2005 (Exhibit 10.2.2 to Form 10-Q for the quarter ended March 31, 2007). | Great Plains Energy KCP&L |
| 10.76 | * | Amendment No. 2 dated as of July 11, 2008, among Kansas City Power & Light Receivables Company, Kansas City Power & Light Company, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Victory Receivables Corporation to the Receivables Sale Agreement dated as of July 1, 2005 (Exhibit 10.2.2 to Form 10-Q for the quarter ended June 30, 2008). | Great Plains Energy KCP&L |
| 10.77 | * | Amendment dated as of July 9, 2009 to Receivables Sale Agreement dated as of July 1, 2005 among Kansas City Power & Light Receivables Company, Kansas City Power & Light Company, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Victory Receivables Corporation (Exhibit 10.4 to Form 8-K filed on July 13, 2009). | Great Plains Energy KCP&L |
| 10.78 | * | Amendment and Waiver dated as of September 25, 2009 to the Receivables Sale Agreement dated as of July 1, 2005 among Kansas City Power & Light Receivables Company, Kansas City Power & Light Company, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Victory Receivables Corporation (Exhibit 10.2.2 to Form 10-Q for the quarter ended September 30, 2009). | Great Plains Energy KCP&L |
| 10.79 | * | Amendment dated as of May 5, 2010 to Receivables Sale Agreement dated as of July 1, 2005 among Kansas City Power & Light Receivables Company, Kansas City Power & Light Company, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Victory Receivables Corporation (Exhibit 10.2.2 to Form 10-Q for the quarter ended March 31, 2010). | Great Plains Energy KCP&L |
| 10.80 | * | Amendment dated as of February 23, 2011 to Receivables Sale Agreement dated as of July 1, 2005 among Kansas City Power & Light Receivables Company, Kansas City Power & Light Company, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Victory Receivables Corporation. (Exhibit 10.5 to Form 10-Q for the quarter ended March 31, 2011). | Great Plains Energy KCP&L |
| 10.81 | * | Amendment dated as of September 9, 2011 to Receivables Sale Agreement dated as of July 1, 2005, among Kansas City Power & Light Receivables Company, Kansas City Power & Light Company, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Victory Receivables Corporation (Exhibit 10.1 to Form 8-K filed on September 13, 2011). | Great Plains Energy KCP&L |
| 10.82 | * | Iatan Unit 2 and Common Facilities Ownership Agreement, dated as of May 19, 2006, among Kansas City Power & Light Company, Aquila, Inc., The Empire District Electric Company, Kansas Electric Power Cooperative, Inc., and Missouri Joint Municipal Electric Utility Commission (Exhibit 10.2.a to Form 10-Q for the quarter ended June 30, 2006). | Great Plains Energy KCP&L |
| 10.83 | * | Stipulation and Agreement dated March 28, 2005, among Kansas City Power & Light Company, Staff of the Missouri Public Service Commission, Office of the Public Counsel, Missouri Department of Natural Resources, Praxair, Inc., Missouri Independent Energy Consumers, Ford Motor Company, Aquila, Inc., The Empire District Electric Company, and Missouri Joint Municipal Electric Utility Commission (Exhibit 10.2 to Form 10-Q for the quarter ended March 31, 2005). | Great Plains Energy KCP&L |
| 10.84 | * | Stipulation and Agreement filed April 27, 2005, among Kansas City Power & Light Company, the Staff of the State Corporation Commission of the State of Kansas, Sprint, Inc., and the Kansas Hospital Association (Exhibit 10.2.a to Form 10-Q for the quarter ended June 30, 2005). | Great Plains Energy KCP&L |
| 10.85 | * | Joint Motion and Settlement Agreement dated as of February 26, 2008, among Great Plains Energy Incorporated, Kansas City Power & Light Company, the Kansas Corporation Commission Staff, the Citizens’ Utility Ratepayers Board, Aquila, Inc. d/b/a Aquila Networks, Black Hills Corporation, and Black Hills/Kansas Gas Utility Company, LLC (Exhibit 10.1.7 to Form 10-Q for the quarter ended March 31, 2008). | Great Plains Energy KCP&L |
| 10.86 | * | Stipulation and Agreement dated April 24, 2009, among Kansas City Power & Light Company, Staff of the Missouri Public Service Commission, Office of Public Counsel, Praxair, Inc., Midwest Energy Users Association, U.S. Department of Energy and the U.S. Nuclear Security Administration, Ford Motor Company, Missouri Industrial Energy Consumers and Missouri Department of Natural Resources (Exhibit 10.1 to Form 8-K filed April 30, 2009). | Great Plains Energy KCP&L |
| 10.87 | * | Non-Unanimous Stipulation and Agreement dated May 22, 2009 among KCP&L Greater Missouri Operations Company, the Staff of the Missouri Public Service Commission, the Office of the Public Counsel, Missouri Department of Natural Resources and Dogwood Energy, LLC (Exhibit 10.1 to Form 8-K filed on May 27, 2009). | Great Plains Energy |
| 10.88 | * | Collaboration Agreement dated as of March 19, 2007, among Kansas City Power & Light Company, Sierra Club and Concerned Citizens of Platte County, Inc. (Exhibit 10.1 to Form 8-K filed on March 20, 2007). | Great Plains Energy KCP&L |
| 10.89 | * | Amendment to the Collaboration Agreement effective as of September 5, 2008 among Kansas City Power & Light Company, Sierra Club and Concerned Citizens of Platte County, Inc. (Exhibit 10.2.20 to Form 10-K for the year ended December 31, 2009). | Great Plains Energy KCP&L |
| 10.90 | * | Joint Operating Agreement between Kansas City Power & Light Company and Aquila, Inc., dated as of October 10, 2008 (Exhibit 10.2.2 to Form 10-Q for the quarter ended September 30, 2008). | Great Plains Energy KCP&L |
| 12.1 | | Computation of Ratio of Earnings to Fixed Charges. | Great Plains Energy |
| 12.2 | | Computation of Ratio of Earnings to Fixed Charges. | KCP&L |
| 21.1 | | List of Subsidiaries of Great Plains Energy Incorporated. | Great Plains Energy |
| 23.1 | | Consent of Independent Registered Public Accounting Firm. | Great Plains Energy |
| 23.2 | | Consent of Independent Registered Public Accounting Firm. | KCP&L |
| 24.1 | | Powers of Attorney. | Great Plains Energy |
| 24.2 | | Powers of Attorney. | KCP&L |
| 31.1 | | Rule 13a-14(a)/15d-14(a) Certification of Michael J. Chesser. | Great Plains Energy |
| 31.2 | | Rule 13a-14(a)/15d-14(a) Certification of James C. Shay. | Great Plains Energy |
| 31.3 | | Rule 13a-14(a)/15d-14(a) Certification of Michael J. Chesser. | KCP&L |
| 31.4 | | Rule 13a-14(a)/15d-14(a) Certification of James C. Shay. | KCP&L |
| 32.1 | ** | Section 1350 Certifications. | Great Plains Energy |
| 32.2 | ** | Section 1350 Certifications. | KCP&L |
| 101.INS | ** | XBRL Instance Document. | Great Plains Energy KCP&L |
| 101.SCH | ** | XBRL Taxonomy Extension Schema Document. | Great Plains Energy KCP&L |
| 101.CAL | ** | XBRL Taxonomy Extension Calculation Linkbase Document. | Great Plains Energy KCP&L |
| 101.DEF | ** | XBRL Taxonomy Extension Definition Linkbase Document. | Great Plains Energy KCP&L |
| 101.LAB | ** | XBRL Taxonomy Extension Labels Linkbase Document. | Great Plains Energy KCP&L |
| 101.PRE | ** | XBRL Taxonomy Extension Presentation Linkbase Document. | Great Plains Energy KCP&L |
* Filed with the SEC as exhibits to prior SEC filings and are incorporated herein by reference and made a part hereof. The SEC filings and the exhibit number of the documents so filed, and incorporated herein by reference, are stated in parenthesis in the description of such exhibit.
** Furnished and shall not be deemed filed for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act). Such document shall not be incorporated by reference into any registration statement or other document pursuant to the Exchange Act or the Securities Act of 1933, as amended, unless otherwise indicated in such registration statement or other document.
+ Indicates management contract or compensatory plan or arrangement.
Copies of any of the exhibits filed with the SEC in connection with this document may be obtained from KCP&L upon written request.
The registrants agree to furnish to the SEC upon request any instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of total assets of such registrant and its subsidiaries on a consolidated basis.
Schedule I – Parent Company Financial Statements
| GREAT PLAINS ENERGY INCORPORATED | |
| Income Statements of Parent Company | |
| | | | | | | |
| | | | | | | |
| Year Ended December 31 | 2011 | 2010 | 2009 |
| Operating Expenses | (millions, except per share amounts) |
| Selling, general and administrative | $ | 0.8 | | $ | 1.2 | | $ | 8.8 | |
| Maintenance | | - | | | - | | | 0.2 | |
| General taxes | | 0.9 | | | 0.9 | | | 1.1 | |
| Total | | 1.7 | | | 2.1 | | | 10.1 | |
| Operating loss | | (1.7 | ) | | (2.1 | ) | | (10.1 | ) |
| Equity in earnings from subsidiaries | | 200.8 | | | 239.3 | | | 174.7 | |
| Non-operating income | | 24.7 | | | 3.4 | | | - | |
| Interest charges | | (66.5 | ) | | (44.7 | ) | | (28.2 | ) |
| Income from continuing operations before income taxes | | 157.3 | | | 195.9 | | | 136.4 | |
| Income tax benefit | | 17.1 | | | 15.8 | | | 15.2 | |
| Income from continuing operations | | 174.4 | | | 211.7 | | | 151.6 | |
| Equity in loss from discontinued subsidiary | | - | | | - | | | (1.5 | ) |
| Net income | | 174.4 | | | 211.7 | | | 150.1 | |
| Preferred stock dividend requirements | | 1.6 | | | 1.6 | | | 1.6 | |
| Earnings available for common shareholders | $ | 172.8 | | $ | 210.1 | | $ | 148.5 | |
| | | | | | | | | | |
| Average number of basic common shares outstanding | | 135.6 | | | 135.1 | | | 129.3 | |
| Average number of diluted common shares outstanding | | 138.7 | | | 136.9 | | | 129.8 | |
| | | | | | | | | | |
| Basic earnings (loss) per common share | | | | | | | | | |
| Continuing operations | $ | 1.27 | | $ | 1.55 | | $ | 1.16 | |
| Discontinued operations | | - | | | - | | | (0.01 | ) |
| Basic earnings per common share | $ | 1.27 | | $ | 1.55 | | $ | 1.15 | |
| | | | | | | | | | |
| Diluted earnings (loss) per common share | | | | | | | | | |
| Continuing operations | $ | 1.25 | | $ | 1.53 | | $ | 1.15 | |
| Discontinued operations | | - | | | - | | | (0.01 | ) |
| Diluted earnings per common share | $ | 1.25 | | $ | 1.53 | | $ | 1.14 | |
| | | | | | | | | | |
| Cash dividends per common share | $ | 0.835 | | $ | 0.83 | | $ | 0.83 | |
| | | | | | | | | | |
| The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements. | |
| GREAT PLAINS ENERGY INCORPORATED |
| Balance Sheets of Parent Company |
| | | | | |
| December 31 | 2011 | 2010 |
| ASSETS | (millions, except share amounts) |
| Current Assets | | | | |
| Cash and cash equivalents | $ | - | | $ | 0.3 | |
| Notes receivable from subsidiaries | | 0.6 | | | 249.4 | |
| Money pool receivable | | 0.9 | | | 2.0 | |
| Taxes receivable | | 0.9 | | | 7.2 | |
| Other | | 0.6 | | | 0.7 | |
| Total | | 3.0 | | | 259.6 | |
| Investments and Other Assets | | | | | | |
| Investment in KCP&L | | 2,045.5 | | | 2,005.0 | |
| Investments in other subsidiaries | | 1,377.0 | | | 1,360.2 | |
| Note receivable from subsidiaries | | 596.2 | | | - | |
| Deferred income taxes | | 33.7 | | | 7.2 | |
| Other | | 6.4 | | | 6.2 | |
| Total | | 4,058.8 | | | 3,378.6 | |
| Total | $ | 4,061.8 | | $ | 3,638.2 | |
| | | | | | | |
| LIABILITIES AND CAPITALIZATION | | | | | | |
| Current Liabilities | | | | | | |
| Notes payable | $ | 22.0 | | $ | 9.5 | |
| Current maturities of long-term debt | | 287.5 | | | - | |
| Accounts payable to subsidiaries | | 31.8 | | | 31.1 | |
| Accrued taxes | | 5.1 | | | - | |
| Accrued interest | | 7.6 | | | 6.4 | |
| Derivative instruments | | - | | | 20.8 | |
| Other | | 2.9 | | | 7.1 | |
| Total | | 356.9 | | | 74.9 | |
| Deferred Credits and Other Liabilities | | | | | | |
| Other | | 6.7 | | | 1.4 | |
| Total | | 6.7 | | | 1.4 | |
| Capitalization | | | | | | |
| Common shareholders' equity | | | | | | |
| Common stock - 250,000,000 shares authorized without par value | | | | | | |
| 136,406,306 and 136,113,954 shares issued, stated value | | 2,330.6 | | | 2,324.4 | |
| Retained earnings | | 684.7 | | | 626.5 | |
| Treasury stock - 264,567 and 400,889 shares, at cost | | (5.6 | ) | | (8.9 | ) |
| Accumulated other comprehensive loss | | (49.8 | ) | | (56.1 | ) |
| Total | | 2,959.9 | | | 2,885.9 | |
| Cumulative preferred stock $100 par value | | | | | | |
| 3.80% - 100,000 shares issued | | 10.0 | | | 10.0 | |
| 4.50% - 100,000 shares issued | | 10.0 | | | 10.0 | |
| 4.20% - 70,000 shares issued | | 7.0 | | | 7.0 | |
| 4.35% - 120,000 shares issued | | 12.0 | | | 12.0 | |
| Total | | 39.0 | | | 39.0 | |
| Long-term debt | | 699.3 | | | 637.0 | |
| Total | | 3,698.2 | | | 3,561.9 | |
| Commitments and Contingencies | | | | | | |
| Total | $ | 4,061.8 | | $ | 3,638.2 | |
| | | | | | | |
| The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements. | |
| GREAT PLAINS ENERGY INCORPORATED |
| Statements of Cash Flows of Parent Company |
| | | | | | | |
| Year Ended December 31 | 2011 | 2010 | 2009 |
| Cash Flows from Operating Activities | (millions) |
| Net income | $ | 174.4 | | $ | 211.7 | | $ | 150.1 | |
| Adjustments to reconcile income to net cash from operating activities: | | | | | | | |
| Amortization | | 11.2 | | | 3.9 | | | 1.9 | |
| Deferred income taxes, net | | (18.6 | ) | | 13.9 | | | (6.1 | ) |
| Equity in earnings from subsidiaries | | (200.8 | ) | | (239.3 | ) | | (174.7 | ) |
| Equity in (earnings) loss from discontinued subsidiary | | - | | | - | | | 1.5 | |
| Cash flows affected by changes in: | | | | | | | | | |
| Accounts receivable from subsidiaries | | - | | | (2.6 | ) | | 3.7 | |
| Taxes receivable | | 6.3 | | | - | | | 4.8 | |
| Accounts payable to subsidiaries | | (0.3 | ) | | 2.2 | | | 0.2 | |
| Other accounts payable | | - | | | (0.1 | ) | | 0.1 | |
| Accrued taxes | | 5.2 | | | - | | | - | |
| Accrued interest | | 1.2 | | | 2.7 | | | 1.4 | |
| Cash dividends from subsidiaries | | 148.0 | | | 138.6 | | | 94.0 | |
| Interest hedge settlement | | (26.1 | ) | | (6.9 | ) | | - | |
| Other | | 2.1 | | | (0.9 | ) | | 8.8 | |
| Net cash from operating activities | | 102.6 | | | 123.2 | | | 85.7 | |
| Cash Flows from Investing Activities | | | | | | | | | |
| Equity contributions to subsidiaries | | - | | | - | | | (455.0 | ) |
| Intercompany lending | | (347.4 | ) | | (248.8 | ) | | - | |
| Net money pool lending | | 1.1 | | | (1.1 | ) | | (0.9 | ) |
| Net cash from investing activities | | (346.3 | ) | | (249.9 | ) | | (455.9 | ) |
| Cash Flows from Financing Activities | | | | | | | | | |
| Issuance of common stock | | 5.9 | | | 6.2 | | | 219.9 | |
| Issuance of long-term debt | | 349.7 | | | 249.9 | | | 287.5 | |
| Issuance fees | | (3.2 | ) | | (3.2 | ) | | (18.8 | ) |
| Net change in short-term borrowings | | 12.5 | | | (10.5 | ) | | (10.0 | ) |
| Dividends paid | | (115.1 | ) | | (114.2 | ) | | (110.5 | ) |
| Other financing activities | | (6.4 | ) | | (7.3 | ) | | (3.8 | ) |
| Net cash from financing activities | | 243.4 | | | 120.9 | | | 364.3 | |
| Net Change in Cash and Cash Equivalents | | (0.3 | ) | | (5.8 | ) | | (5.9 | ) |
| Cash and Cash Equivalents at Beginning of Year | | 0.3 | | | 6.1 | | | 12.0 | |
| Cash and Cash Equivalents at End of Year | $ | - | | $ | 0.3 | | $ | 6.1 | |
| | | | | | | | | | |
| The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements. | |
GREAT PLAINS ENERGY INCORPORATED
Statements of Common Shareholders’ Equity of Parent Company
Statements of Comprehensive Income of Parent Company
Incorporated by reference is Great Plains Energy Consolidated Statements of Common Shareholders’ Equity and Consolidated Statements of Comprehensive Income.
GREAT PLAINS ENERGY INCORPORATED
NOTES TO FINANCIAL STATEMENTS OF PARENT COMPANY
The Great Plains Energy Incorporated Notes to Consolidated Financial Statements in Part II, Item 8 should be read in conjunction with the Great Plains Energy Incorporated Parent Company Financial Statements.
Schedule II – Valuation and Qualifying Accounts and Reserves
| | | | | | | | | | | | | | |
| Great Plains Energy Incorporated |
| Valuation and Qualifying Accounts |
| Years Ended December 31, 2011, 2010 and 2009 |
| | | | | | | | | | | | | | |
| | | | | Additions | | | | | |
| | | | | Charged | | | | | | | | |
| | | Balance At | To Costs | Charged | | | | Balance |
| | | Beginning | And | To Other | | | | At End |
| | Description | Of Period | Expenses | Accounts | Deductions | Of Period |
| Year Ended December 31, 2011 | (millions) |
| | Allowance for uncollectible accounts | $ | 7.0 | | $ | 13.7 | | $ | 6.9 | | (a) | $ | 20.8 | | (b) | $ | 6.8 | |
| | Legal reserves | | 10.2 | | | (0.1 | ) | | - | | | | 3.4 | | (c) | | 6.7 | |
| | Environmental reserves | | 2.5 | | | - | | | - | | | | - | | | | 2.5 | |
| | Tax valuation allowance | | 26.6 | | | 0.1 | | | - | | | | 2.8 | | (d) | | 23.9 | |
| Year Ended December 31, 2010 | | | | | | | | | | | | | | | | | |
| | Allowance for uncollectible accounts | $ | 7.1 | | $ | 9.7 | | $ | 6.9 | | (a) | $ | 16.7 | | (b) | $ | 7.0 | |
| | Legal reserves | | 5.1 | | | 7.0 | | | - | | | | 1.9 | | (c) | | 10.2 | |
| | Environmental reserves | | 2.4 | | | 0.1 | | | - | | | | - | | | | 2.5 | |
| | Tax valuation allowance | | 29.8 | | | 0.2 | | | - | | | | 3.4 | | (d) | | 26.6 | |
| Year Ended December 31, 2009 | | | | | | | | | | | | | | | | | |
| | Allowance for uncollectible accounts | $ | 6.8 | | $ | 8.7 | | $ | 6.0 | | (a) | $ | 14.4 | | (b) | $ | 7.1 | |
| | Legal reserves | | 10.2 | | | 2.6 | | | - | | | | 7.7 | | (c) | | 5.1 | |
| | Environmental reserves | | 0.5 | | | 2.0 | | | - | | | | 0.1 | | | | 2.4 | |
| | Tax valuation allowance | | 75.8 | | | 57.0 | | | - | | | | 103.0 | | (d) | | 29.8 | |
| (a) | Recoveries. | | | | | | | | | | | | | | | | | |
| (b) | Uncollectible accounts charged off. | | | | | | | | | | | | | | | | | |
| (c) | Payment of claims. | | | | | | | | | | | | | | | | | |
| (d) | Reversal of tax valuation allowance. | | | | | | | | | | | | | | | | | |
| Kansas City Power & Light Company |
| Valuation and Qualifying Accounts |
| Years Ended December 31, 2011, 2010 and 2009 |
| | | | | | | | | | | | | | |
| | | | | Additions | | | | | |
| | | | | Charged | | | | | | | | |
| | | Balance At | To Costs | Charged | | | | Balance |
| | | Beginning | And | To Other | | | | At End |
| | Description | Of Period | Expenses | Accounts | Deductions | Of Period |
| Year Ended December 31, 2011 | (millions) |
| | Allowance for uncollectible accounts | $ | 1.5 | | $ | 8.8 | | $ | 4.5 | | (a) | $ | 13.4 | | (b) | $ | 1.4 | |
| | Legal reserves | | 3.0 | | | 1.3 | | | - | | | | 0.4 | | (c) | | 3.9 | |
| | Environmental reserves | | 0.3 | | | - | | | - | | | | - | | | | 0.3 | |
| Year Ended December 31, 2010 | | | | | | | | | | | | | | | | | |
| | Allowance for uncollectible accounts | $ | 1.7 | | $ | 6.2 | | $ | 4.3 | | (a) | $ | 10.7 | | (b) | $ | 1.5 | |
| | Legal reserves | | 2.3 | | | 1.9 | | | - | | | | 1.2 | | (c) | | 3.0 | |
| | Environmental reserves | | 0.3 | | | - | | | - | | | | - | | | | 0.3 | |
| Year Ended December 31, 2009 | | | | | | | | | | | | | | | | | |
| | Allowance for uncollectible accounts | $ | 1.2 | | $ | 5.5 | | $ | 3.9 | | (a) | $ | 8.9 | | (b) | $ | 1.7 | |
| | Legal reserves | | 2.4 | | | 1.2 | | | - | | | | 1.3 | | (c) | | 2.3 | |
| | Environmental reserves | | 0.3 | | | - | | | - | | | | - | | | | 0.3 | |
| (a) | Recoveries. | | | | | | | | | | | | | | | | | |
| (b) | Uncollectible accounts charged off. | | | | | | | | | | | | | | | | | |
| (c) | Payment of claims. | | | | | | | | | | | | | | | | | |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GREAT PLAINS ENERGY INCORPORATED
Date: February 28, 2012 By: /s/Michael J. Chesser
Michael J. Chesser
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date |
/s/Michael J. Chesser Michael J. Chesser | Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | ) ) ) |
| | | ) |
/s/James C. Shay James C. Shay | Senior Vice President – Finance and Strategic Development and Chief Financial Officer (Principal Financial Officer) | ) ) ) ) |
| | | ) |
/s/Lori A. Wright Lori A. Wright | Vice President – Business Planning and Controller (Principal Accounting Officer) | ) ) ) |
| | | ) |
/s/Terry Bassham Terry Bassham | Director, President and Chief Operating Officer | ) ) ) |
| | | ) |
| David L. Bodde* | Director | ) February 28, 2012 |
| | | ) |
| Randall C. Ferguson, Jr.* | Director | ) |
| | | ) |
| Gary D. Forsee* | Director | ) |
| | | ) |
| Thomas D. Hyde* | Director | ) |
| | | ) |
| James A. Mitchell* | Director | ) |
| | | ) |
| William C. Nelson* | Director | ) |
| | | ) |
| John J. Sherman* | Director | ) |
| | | ) |
| Linda H. Talbott* | Director | ) |
| | | ) |
| Robert H. West* | Director | ) |
*By /s/Michael J. Chesser
Michael J. Chesser
Attorney-in-Fact*
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
KANSAS CITY POWER & LIGHT COMPANY
Date: February 28, 2012 By: /s/Michael J. Chesser
Michael J. Chesser
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date |
/s/Michael J. Chesser Michael J. Chesser | Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | ) ) ) |
| | | ) |
/s/James C. Shay James C. Shay | Senior Vice President – Finance and Strategic Development and Chief Financial Officer (Principal Financial Officer) | ) ) ) ) |
| | | ) |
/s/Lori A. Wright Lori A. Wright | Vice President – Business Planning and Controller (Principal Accounting Officer) | ) ) ) |
| | | ) |
/s/Terry Bassham Terry Bassham | Director, President and Chief Operating Officer | ) ) ) |
| | | ) |
| David L. Bodde* | Director | ) February 28, 2012 |
| | | ) |
| Randall C. Ferguson, Jr.* | Director | ) |
| | | ) |
| Gary D. Forsee* | Director | ) |
| | | ) |
| Thomas D. Hyde* | Director | ) |
| | | ) |
| James A. Mitchell* | Director | ) |
| | | ) |
| William C. Nelson* | Director | ) |
| | | ) |
| John J. Sherman* | Director | ) |
| | | ) |
| Linda H. Talbott* | Director | ) |
| | | ) |
*By /s/Michael J. Chesser
Michael J. Chesser
Attorney-in-Fact*
