10-Q 1 gxp-03312015x10q.htm 10-Q GXP-03/31/2015-10Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

or
  
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _______to_______

 
 
Exact name of registrant as specified in its charter,
 
 
Commission
 
state of incorporation, address of principal
 
I.R.S. Employer
File Number
 
executive offices and telephone number
 
Identification Number
 
 
 
 
 
001-32206
 
GREAT PLAINS ENERGY INCORPORATED
 
43-1916803
 
 
(A Missouri Corporation)
 
 
 
 
1200 Main Street
 
 
 
 
Kansas City, Missouri  64105
 
 
 
 
(816) 556-2200
 
 
 
 
 
 
 
000-51873
 
KANSAS CITY POWER & LIGHT COMPANY
 
44-0308720
 
 
(A Missouri Corporation)
 
 
 
 
1200 Main Street
 
 
 
 
Kansas City, Missouri  64105
 
 
 
 
(816) 556-2200
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Great Plains Energy Incorporated
Yes
X
No
_
 
Kansas City Power & Light Company
Yes
X
No
_
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Great Plains Energy Incorporated
Yes
X
No
_
 
Kansas City Power & Light Company
Yes
X
No
_
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Great Plains Energy Incorporated
 
Large accelerated filer
X
Accelerated filer
_
 
 
 
 
 
 
Non-accelerated filer
_
Smaller reporting company
_
 
 
 
 
Kansas City Power & Light Company
 
Large accelerated filer
_
Accelerated filer
_
 
 
 
 
 
 
Non-accelerated filer
X
Smaller reporting company
_
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Great Plains Energy Incorporated
Yes
_
No
X
 
Kansas City Power & Light Company
Yes
_
No
X
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On May 4, 2015, Great Plains Energy Incorporated had 154,289,410 shares of common stock outstanding.  On May 4, 2015, Kansas City Power & Light Company had one share of common stock outstanding and held by Great Plains Energy Incorporated.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kansas City Power & Light Company meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.



This combined Quarterly Report on Form 10-Q is being filed by Great Plains Energy Incorporated (Great Plains Energy) and Kansas City Power & Light Company (KCP&L).  KCP&L is a wholly owned subsidiary of Great Plains Energy and represents a significant portion of its assets, liabilities, revenues, expenses and operations.  Thus, all information contained in this report relates to, and is filed by, Great Plains Energy.  Information that is specifically identified in this report as relating solely to Great Plains Energy, such as its financial statements and all information relating to Great Plains Energy's other operations, businesses and subsidiaries, including KCP&L Greater Missouri Operations Company (GMO), does not relate to, and is not filed by, KCP&L.  KCP&L makes no representation as to that information.  Neither Great Plains Energy nor its other subsidiaries have any obligation in respect of KCP&L's debt securities and holders of such securities should not consider Great Plains Energy's or its other subsidiaries' financial resources or results of operations in making a decision with respect to KCP&L's debt securities.  Similarly, KCP&L has no obligation in respect of securities of Great Plains Energy or its other subsidiaries.
This report should be read in its entirety.  No one section of the report deals with all aspects of the subject matter.  It should be read in conjunction with the consolidated financial statements and related notes and with the management's discussion and analysis included in the 2014 Form 10-K for each of Great Plains Energy and KCP&L.




TABLE OF CONTENTS
 
 
 
Page Number
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 1:
 
Note 2:
 
Note 3:
 
Note 4:
 
Note 5:
 
Note 6:
 
Note 7:
 
Note 8:
 
Note 9:
 
Note 10:
 
Note 11:
 
Note 12:
 
Note 13:
 
Note 14:
 
Note 15:
 
Note 16:
 
Note 17:
Item 2.
Item 3.
Item 4.
 
 
 
 
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 
 
 
 
 
 


3


CAUTIONARY STATEMENTS REGARDING CERTAIN FORWARD-LOOKING INFORMATION
Statements made in this report that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, the outcome of regulatory proceedings, cost estimates of capital projects and other matters affecting future operations. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Great Plains Energy and KCP&L are providing a number of important factors that could cause actual results to differ materially from the provided forward-looking information. These important factors include: future economic conditions in regional, national and international markets and their effects on sales, prices and costs; prices and availability of electricity in regional and national wholesale markets; market perception of the energy industry, Great Plains Energy and KCP&L; changes in business strategy, operations or development plans; the outcome of contract negotiations for goods and services; effects of current or proposed state and federal legislative and regulatory actions or developments, including, but not limited to, deregulation, re-regulation and restructuring of the electric utility industry; decisions of regulators regarding rates the Companies can charge for electricity; adverse changes in applicable laws, regulations, rules, principles or practices governing tax, accounting and environmental matters including, but not limited to, air and water quality; financial market conditions and performance including, but not limited to, changes in interest rates and credit spreads and in availability and cost of capital and the effects on nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of terrorist acts, including, but not limited to, cyber terrorism; ability to carry out marketing and sales plans; weather conditions including, but not limited to, weather-related damage and their effects on sales, prices and costs; cost, availability, quality and deliverability of fuel; the inherent uncertainties in estimating the effects of weather, economic conditions and other factors on customer consumption and financial results; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution or other projects; Great Plains Energy's ability to successfully manage transmission joint venture; the inherent risks associated with the ownership and operation of a nuclear facility including, but not limited to, environmental, health, safety, regulatory and financial risks; workforce risks, including, but not limited to, increased costs of retirement, health care and other benefits; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Part II Item 1A Risk Factors included in this report, together with the risk factors included in the 2014 Form 10-K for each of Great Plains Energy and KCP&L under Part I Item 1A, should be carefully read for further understanding of potential risks for each of Great Plains Energy and KCP&L. Other sections of this report and other periodic reports filed by each of Great Plains Energy and KCP&L with the Securities and Exchange Commission (SEC) should also be read for more information regarding risk factors. Each forward-looking statement speaks only as of the date of the particular statement. Great Plains Energy and KCP&L undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.


4


GLOSSARY OF TERMS 
The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report.
Abbreviation or Acronym
 
Definition
 
 
 
AEPTHC
 
AEP Transmission Holding Company, LLC, a wholly owned subsidiary of American Electric Power Company, Inc.
AFUDC
 
Allowance for Funds Used During Construction
ARO
 
Asset Retirement Obligation
ASU
 
Accounting Standard Update
BART
 
Best available retrofit technology
Board
 
Great Plains Energy Board of Directors
CAIR
 
Clean Air Interstate Rule
CAMR
 
Clean Air Mercury Rule
CCRs
 
Coal combustion residuals
Clean Air Act
 
Clean Air Act Amendments of 1990
CO2
 
Carbon dioxide
Company
 
Great Plains Energy Incorporated and its consolidated subsidiaries
Companies
 
Great Plains Energy Incorporated and its consolidated subsidiaries and KCP&L and its consolidated subsidiaries
CSAPR
 
Cross-State Air Pollution Rule
DOE
 
Department of Energy
EBITDA
 
Earnings before interest, income taxes, depreciation and amortization
ECA
 
Energy Cost Adjustment
EIRR
 
Environmental Improvement Revenue Refunding
EPA
 
Environmental Protection Agency
EPS
 
Earnings per common share
ERISA
 
Employee Retirement Income Security Act of 1974, as amended
FAC
 
Fuel Adjustment Clause
FASB
 
Financial Accounting Standards Board
FERC
 
The Federal Energy Regulatory Commission
GAAP
 
Generally Accepted Accounting Principles
GMO
 
KCP&L Greater Missouri Operations Company, a wholly owned subsidiary of Great Plains Energy
GPETHC
 
GPE Transmission Holding Company LLC, a wholly owned subsidiary of Great Plains Energy
Great Plains Energy
 
Great Plains Energy Incorporated and its consolidated subsidiaries
IRS
 
Internal Revenue Service
ISO
 
Independent System Operator
KCC
 
The State Corporation Commission of the State of Kansas
KCP&L
 
Kansas City Power & Light Company, a wholly owned subsidiary of Great Plains Energy, and its consolidated subsidiaries
KCP&L Receivables Company
 
Kansas City Power & Light Receivables Company, a wholly owned subsidiary of KCP&L
KDHE
 
Kansas Department of Health and Environment
kV
 
Kilovolt
KW
 
Kilowatt
kWh
 
Kilowatt hour
MACT
 
Maximum achievable control technology
MATS
 
Mercury and Air Toxics Standards

5


Abbreviation or Acronym
 
Definition
 
 
 
MD&A
 
Management's Discussion and Analysis of Financial Condition and Results of Operations
MDNR
 
Missouri Department of Natural Resources
MEEIA
 
Missouri Energy Efficiency Investment Act
MGP
 
Manufactured gas plant
MPS Merchant
 
MPS Merchant Services, Inc., a wholly owned subsidiary of GMO
MPSC
 
Public Service Commission of the State of Missouri
MW
 
Megawatt
MWh
 
Megawatt hour
NAAQS
 
National Ambient Air Quality Standard
NERC
 
North American Electric Reliability Corporation
NEIL
 
Nuclear Electric Insurance Limited
NOL
 
Net operating loss
NOx
 
Nitrogen oxide
NPNS
 
Normal purchases and normal sales
NRC
 
Nuclear Regulatory Commission
OCI
 
Other Comprehensive Income
PCB
 
Polychlorinated biphenyls
ppm
 
Parts per million
PRB
 
Powder River Basin
QCA
 
Quarterly Cost Adjustment
RTO
 
Regional Transmission Organization
SCR
 
Selective catalytic reduction
SEC
 
Securities and Exchange Commission
SERP
 
Supplemental Executive Retirement Plan
SO2
 
Sulfur dioxide
SPP
 
Southwest Power Pool, Inc.
Syncora
 
Syncora Guarantee, Inc.
TCR
 
Transmission Congestion Right
Transource
 
Transource Energy, LLC and its subsidiaries, 13.5% owned by GPETHC
Transource Missouri
 
Transource Missouri, LLC, a wholly owned subsidiary of Transource
WCNOC
 
Wolf Creek Nuclear Operating Corporation
Westar
 
Westar Energy, Inc., an unrelated Kansas utility company
Wolf Creek
 
Wolf Creek Generating Station


6


PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

GREAT PLAINS ENERGY INCORPORATED
Consolidated Balance Sheets
(Unaudited)
 
 
 
 
 
March 31
 
December 31
 
2015
 
2014
ASSETS
(millions, except share amounts)
Current Assets
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
12.2

 
 
 
$
13.0

 
Funds on deposit
 
4.6

 
 
 
1.2

 
Receivables, net
 
142.5

 
 
 
160.3

 
Accounts receivable pledged as collateral
 
171.0

 
 
 
171.0

 
Fuel inventories, at average cost
 
102.2

 
 
 
90.1

 
Materials and supplies, at average cost
 
151.7

 
 
 
152.7

 
Deferred refueling outage costs
 
28.1

 
 
 
12.5

 
Refundable income taxes
 
3.2

 
 
 
3.1

 
Deferred income taxes
 
74.5

 
 
 
78.1

 
Prepaid expenses and other assets
 
33.1

 
 
 
36.9

 
Total
 
723.1

 
 
 
718.9

 
Utility Plant, at Original Cost
 
 

 
 
 
 

 
Electric
 
12,652.2

 
 
 
12,128.7

 
Less - accumulated depreciation
 
4,834.8

 
 
 
4,828.3

 
Net utility plant in service
 
7,817.4

 
 
 
7,300.4

 
Construction work in progress
 
510.2

 
 
 
900.0

 
Nuclear fuel, net of amortization of $192.4 and $187.5
 
75.8

 
 
 
79.2

 
Total
 
8,403.4

 
 
 
8,279.6

 
Investments and Other Assets
 
 

 
 
 
 

 
Nuclear decommissioning trust fund
 
203.5

 
 
 
199.0

 
Regulatory assets
 
1,018.7

 
 
 
1,034.6

 
Goodwill
 
169.0

 
 
 
169.0

 
Other
 
76.7

 
 
 
74.6

 
Total
 
1,467.9

 
 
 
1,477.2

 
Total
 
$
10,594.4

 
 
 
$
10,475.7

 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.










7


GREAT PLAINS ENERGY INCORPORATED
Consolidated Balance Sheets
(Unaudited)
 
 
March 31
 
December 31
 
2015
 
2014
LIABILITIES AND CAPITALIZATION
(millions, except share amounts)
Current Liabilities
 
 
 
 
 
 
 
Notes payable
 
$
10.0

 
 
 
$
4.0

 
Collateralized note payable
 
171.0

 
 
 
171.0

 
Commercial paper
 
536.0

 
 
 
358.3

 
Current maturities of long-term debt
 
1.1

 
 
 
15.1

 
Accounts payable
 
281.0

 
 
 
388.0

 
Accrued taxes
 
64.9

 
 
 
30.4

 
Accrued interest
 
57.9

 
 
 
41.3

 
Accrued compensation and benefits
 
40.4

 
 
 
35.2

 
Pension and post-retirement liability
 
2.8

 
 
 
2.8

 
Other
 
32.2

 
 
 
24.7

 
Total
 
1,197.3

 
 
 
1,070.8

 
Deferred Credits and Other Liabilities
 
 

 
 
 
 

 
Deferred income taxes
 
1,092.7

 
 
 
1,089.7

 
Deferred tax credits
 
125.6

 
 
 
126.0

 
Asset retirement obligations
 
198.8

 
 
 
195.9

 
Pension and post-retirement liability
 
510.8

 
 
 
508.6

 
Regulatory liabilities
 
292.9

 
 
 
282.7

 
Other
 
80.5

 
 
 
88.9

 
Total
 
2,301.3

 
 
 
2,291.8

 
Capitalization
 
 

 
 
 
 

 
Great Plains Energy common shareholders' equity
 
 

 
 
 
 

 
Common stock - 250,000,000 shares authorized without par value
 
 

 
 
 
 

 
154,376,457 and 154,254,037 shares issued, stated value
 
2,641.3

 
 
 
2,639.3

 
Retained earnings
 
948.3

 
 
 
967.8

 
Treasury stock - 95,095 and 91,281 shares, at cost
 
(2.4
)
 
 
 
(2.3
)
 
Accumulated other comprehensive loss
 
(17.2
)
 
 
 
(18.7
)
 
Total
 
3,570.0

 
 
 
3,586.1

 
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 (Note 9)
 
3,486.8

 
 
 
3,488.0

 
Total
 
7,095.8

 
 
 
7,113.1

 
Commitments and Contingencies (Note 10)
 


 
 
 


 
Total
 
$
10,594.4

 
 
 
$
10,475.7

 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

8


GREAT PLAINS ENERGY INCORPORATED
Consolidated Statements of Comprehensive Income
(Unaudited)
 
 
Three Months Ended March 31
2015
 
2014
Operating Revenues
(millions, except per share amounts)
Electric revenues
$
549.1

 
$
585.1

Operating Expenses
 

 
 

Fuel
107.6

 
135.2

Purchased power
45.4

 
45.4

Transmission
20.9

 
17.6

Utility operating and maintenance expenses
171.5

 
180.7

Depreciation and amortization
79.8

 
74.5

General taxes
52.7

 
52.8

Other
1.1

 
1.0

Total
479.0

 
507.2

Operating income
70.1

 
77.9

Non-operating income
6.0

 
6.4

Non-operating expenses
(3.7
)
 
(3.1
)
Interest charges
(47.3
)
 
(49.4
)
Income before income tax expense and income from equity investments
25.1

 
31.8

Income tax expense
(6.5
)
 
(8.1
)
Income from equity investments, net of income taxes
0.3

 
0.1

Net income
18.9

 
23.8

Preferred stock dividend requirements
0.4

 
0.4

Earnings available for common shareholders
$
18.5

 
$
23.4

 
 
 
 
Average number of basic common shares outstanding
154.0

 
153.7

Average number of diluted common shares outstanding
154.4

 
154.0

 
 
 
 
Basic and diluted earnings per common share
$
0.12

 
$
0.15

 
 
 
 
Cash dividends per common share
$
0.245

 
$
0.23

Comprehensive Income
 
 
 
Net income
$
18.9

 
$
23.8

Other comprehensive income
 

 
 

Derivative hedging activity
 

 
 

Reclassification to expenses, net of tax
1.4

 
2.8

Derivative hedging activity, net of tax
1.4

 
2.8

Defined benefit pension plans
 
 
 
Amortization of net losses included in net periodic benefit costs, net of tax
0.1

 
0.2

Change in unrecognized pension expense, net of tax
0.1

 
0.2

Total other comprehensive income
1.5

 
3.0

Comprehensive income
$
20.4

 
$
26.8

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


9



GREAT PLAINS ENERGY INCORPORATED
Consolidated Statements of Cash Flows
(Unaudited)
 
 
 
 
 
 
 
 
Three Months Ended March 31
 
2015
 
 
 
2014
 
Cash Flows from Operating Activities
(millions)
Net income
 
$
18.9

 
 
 
$
23.8

 
Adjustments to reconcile income to net cash from operating activities:
 
 

 
 
 
 

 
Depreciation and amortization
 
79.8

 
 
 
74.5

 
Amortization of:
 
 

 
 
 
 

 
Nuclear fuel
 
4.9

 
 
 
5.9

 
Other
 
12.4

 
 
 
14.0

 
Deferred income taxes, net
 
6.5

 
 
 
8.3

 
Investment tax credit amortization
 
(0.4
)
 
 
 
(0.4
)
 
Income from equity investments, net of income taxes
 
(0.3
)
 
 
 
(0.1
)
 
Other operating activities (Note 2)
 
(22.4
)
 
 
 
(18.7
)
 
Net cash from operating activities
 
99.4

 
 
 
107.3

 
Cash Flows from Investing Activities
 
 

 
 
 
 

 
Utility capital expenditures
 
(217.9
)
 
 
 
(185.2
)
 
Allowance for borrowed funds used during construction
 
(2.7
)
 
 
 
(3.5
)
 
Purchases of nuclear decommissioning trust investments
 
(11.8
)
 
 
 
(8.5
)
 
Proceeds from nuclear decommissioning trust investments
 
11.0

 
 
 
7.6

 
Proceeds from sale of transmission assets
 

 
 
 
37.7

 
Other investing activities
 
(9.1
)
 
 
 
(8.4
)
 
Net cash from investing activities
 
(230.5
)
 
 
 
(160.3
)
 
Cash Flows from Financing Activities
 
 

 
 
 
 

 
Issuance of common stock
 
0.8

 
 
 
1.3

 
Repayment of long-term debt
 
(15.1
)
 
 
 
(13.4
)
 
Net change in short-term borrowings
 
183.7

 
 
 
105.6

 
Dividends paid
 
(38.2
)
 
 
 
(35.8
)
 
Other financing activities
 
(0.9
)
 
 
 
(1.7
)
 
Net cash from financing activities
 
130.3

 
 
 
56.0

 
Net Change in Cash and Cash Equivalents
 
(0.8
)
 
 
 
3.0

 
Cash and Cash Equivalents at Beginning of Year
 
13.0

 
 
 
10.6

 
Cash and Cash Equivalents at End of Period
 
$
12.2

 
 
 
$
13.6

 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

10


GREAT PLAINS ENERGY INCORPORATED
Consolidated Statements of Common Shareholders' Equity
(Unaudited)
 
 
 
 
 
Three Months Ended March 31
2015
 
2014
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Common Stock
(millions, except share amounts)
Beginning balance
154,254,037

 
$
2,639.3

 
153,995,621

 
$
2,631.1

 
Issuance of common stock
44,483

 
1.2

 
48,945

 
1.3

 
Issuance of restricted common stock
77,937

 
2.0

 
71,860

 
1.8

 
Equity compensation expense, net of forfeitures
 

 
0.3

 
 

 
0.1

 
Unearned Compensation
 

 
 

 
 

 
 

 
Issuance of restricted common stock
 

 
(2.0
)
 
 

 
(1.8
)
 
Compensation expense recognized
 

 
0.5

 
 

 
0.5

 
Other
 

 

 
 

 
0.9

 
Ending balance
154,376,457

 
2,641.3

 
154,116,426

 
2,633.9

 
Retained Earnings
 

 
 

 
 

 
 

 
Beginning balance
 

 
967.8

 
 

 
871.4

 
Net income
 

 
18.9

 
 

 
23.8

 
Dividends:
 

 
 

 
 

 
 

 
Common stock ($0.245 and $0.23 per share)
 
 
(37.8
)
 
 

 
(35.4
)
 
Preferred stock - at required rates
 

 
(0.4
)
 
 

 
(0.4
)
 
Performance shares
 

 
(0.2
)
 
 

 
(0.3
)
 
Ending balance
 

 
948.3

 
 

 
859.1

 
Treasury Stock
 

 
 

 
 

 
 

 
Beginning balance
(91,281
)
 
(2.3
)
 
(129,290
)
 
(2.8
)
 
Treasury shares acquired
(50,899
)
 
(1.3
)
 
(69,129
)
 
(1.8
)
 
Treasury shares reissued
47,085

 
1.2

 
109,057

 
2.4

 
Ending balance
(95,095
)
 
(2.4
)
 
(89,362
)
 
(2.2
)
 
Accumulated Other Comprehensive Income (Loss)
 
 
 

 
 

 
 

 
Beginning balance
 

 
(18.7
)
 
 

 
(25.3
)
 
Derivative hedging activity, net of tax
 

 
1.4

 
 

 
2.8

 
Change in unrecognized pension expense, net of tax
 
 
0.1

 
 

 
0.2

 
Ending balance
 

 
(17.2
)
 
 

 
(22.3
)
 
Total Great Plains Energy Common Shareholders' Equity
 
 
$
3,570.0

 
 

 
$
3,468.5

 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

11


KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
(Unaudited)
 
 
March 31
 
December 31
 
2015
 
2014
ASSETS
(millions, except share amounts)
Current Assets
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
2.8

 
 
 
$
2.7

 
Funds on deposit
 
0.9

 
 
 
0.6

 
Receivables, net
 
116.5

 
 
 
128.9

 
Related party receivables
 
51.5

 
 
 
68.8

 
Accounts receivable pledged as collateral
 
110.0

 
 
 
110.0

 
Fuel inventories, at average cost
 
70.4

 
 
 
58.8

 
Materials and supplies, at average cost
 
109.2

 
 
 
110.1

 
Deferred refueling outage costs
 
28.1

 
 
 
12.5

 
Refundable income taxes
 
7.9

 
 
 
57.5

 
Deferred income taxes
 
0.8

 
 
 
5.0

 
Prepaid expenses and other assets
 
29.5

 
 
 
32.7

 
Total
 
527.6

 
 
 
587.6

 
Utility Plant, at Original Cost
 
 

 
 
 
 

 
Electric
 
9,211.6

 
 
 
8,737.3

 
Less - accumulated depreciation
 
3,647.8

 
 
 
3,658.7

 
Net utility plant in service
 
5,563.8

 
 
 
5,078.6

 
Construction work in progress
 
421.1

 
 
 
791.2

 
Nuclear fuel, net of amortization of $192.4 and $187.5
 
75.8

 
 
 
79.2

 
Total
 
6,060.7

 
 
 
5,949.0

 
Investments and Other Assets
 
 

 
 
 
 

 
Nuclear decommissioning trust fund
 
203.5

 
 
 
199.0

 
Regulatory assets
 
740.2

 
 
 
745.7

 
Other
 
30.3

 
 
 
29.5

 
Total
 
974.0

 
 
 
974.2

 
Total
 
$
7,562.3

 
 
 
$
7,510.8

 
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

12


KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
(Unaudited)
 
 
 
 
 
March 31
 
December 31
 
2015
 
2014
LIABILITIES AND CAPITALIZATION
(millions, except share amounts)
Current Liabilities
 
 
 
 
 
 
 
Collateralized note payable
 
$
110.0

 
 
 
$
110.0

 
Commercial paper
 
424.0

 
 
 
358.3

 
Current maturities of long-term debt
 

 
 
 
14.0

 
Accounts payable
 
246.6

 
 
 
305.2

 
Related party payables
 

 
 
 
12.6

 
Accrued taxes
 
47.3

 
 
 
23.6

 
Accrued interest
 
41.1

 
 
 
29.0

 
Accrued compensation and benefits
 
40.4

 
 
 
35.2

 
Pension and post-retirement liability
 
1.5

 
 
 
1.5

 
Other
 
13.1

 
 
 
12.4

 
Total
 
924.0

 
 
 
901.8

 
Deferred Credits and Other Liabilities
 
 

 
 
 
 

 
Deferred income taxes
 
1,022.7

 
 
 
1,016.9

 
Deferred tax credits
 
124.1

 
 
 
124.3

 
Asset retirement obligations
 
180.3

 
 
 
177.7

 
Pension and post-retirement liability
 
487.8

 
 
 
485.4

 
Regulatory liabilities
 
176.2

 
 
 
172.0

 
Other
 
59.1

 
 
 
59.2

 
Total
 
2,050.2

 
 
 
2,035.5

 
Capitalization
 
 

 
 
 
 

 
Common shareholder's equity
 
 

 
 
 
 

 
Common stock - 1,000 shares authorized without par value
 
 

 
 
 
 

 
1 share issued, stated value
 
1,563.1

 
 
 
1,563.1

 
Retained earnings
 
740.0

 
 
 
726.8

 
Accumulated other comprehensive loss
 
(13.5
)
 
 
 
(14.9
)
 
Total
 
2,289.6

 
 
 
2,275.0

 
Long-term debt (Note 9)
 
2,298.5

 
 
 
2,298.5

 
Total
 
4,588.1

 
 
 
4,573.5

 
Commitments and Contingencies (Note 10)
 


 
 
 


 
Total
 
$
7,562.3

 
 
 
$
7,510.8

 
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

13


KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Comprehensive Income
(Unaudited)
 
 
Three Months Ended March 31
2015
 
2014
Operating Revenues
(millions)
Electric revenues
$
370.4

 
$
391.0

Operating Expenses
 

 
 

Fuel
74.8

 
93.6

Purchased power
21.9

 
18.9

Transmission
13.4

 
10.6

Operating and maintenance expenses
118.3

 
127.2

Depreciation and amortization
56.5

 
51.7

General taxes
40.2

 
41.5

Total
325.1

 
343.5

Operating income
45.3

 
47.5

Non-operating income
4.4

 
6.0

Non-operating expenses
(1.7
)
 
(1.6
)
Interest charges
(31.5
)
 
(30.7
)
Income before income tax expense
16.5

 
21.2

Income tax expense
(3.3
)
 
(4.0
)
Net income
$
13.2

 
$
17.2

Comprehensive Income
 

 
 

Net income
$
13.2

 
$
17.2

Other comprehensive income
 

 
 

Derivative hedging activity
 

 
 

Reclassification to expenses, net of tax
1.4

 
1.3

Derivative hedging activity, net of tax
1.4

 
1.3

Total other comprehensive income
1.4

 
1.3

Comprehensive income
$
14.6

 
$
18.5

The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.


14


KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Cash Flows
(Unaudited)
 
 
 
 
 
 
 
 
Three Months Ended March 31
 
2015
 
 
 
2014
 
Cash Flows from Operating Activities
(millions)
Net income
 
$
13.2

 
 
 
$
17.2

 
Adjustments to reconcile income to net cash from operating activities:
 
 
 
 
 
 

 
Depreciation and amortization
 
56.5

 
 
 
51.7

 
Amortization of:
 
 

 
 
 
 

 
Nuclear fuel
 
4.9

 
 
 
5.9

 
Other
 
7.4

 
 
 
8.2

 
Deferred income taxes, net
 
10.3

 
 
 
1.0

 
Investment tax credit amortization
 
(0.2
)
 
 
 
(0.2
)
 
Other operating activities (Note 2)
 
60.2

 
 
 
26.6

 
Net cash from operating activities
 
152.3

 
 
 
110.4

 
Cash Flows from Investing Activities
 
 

 
 
 
 

 
Utility capital expenditures
 
(181.8
)
 
 
 
(160.5
)
 
Allowance for borrowed funds used during construction
 
(2.1
)
 
 
 
(3.2
)
 
Purchases of nuclear decommissioning trust investments
 
(11.8
)
 
 
 
(8.5
)
 
Proceeds from nuclear decommissioning trust investments
 
11.0

 
 
 
7.6

 
Proceeds from sale of transmission assets
 

 
 
 
4.7

 
Other investing activities
 
(6.6
)
 
 
 
(4.0
)
 
Net cash from investing activities
 
(191.3
)
 
 
 
(163.9
)
 
Cash Flows from Financing Activities
 
 

 
 
 
 

 
Repayment of long-term debt
 
(14.0
)
 
 
 

 
Net change in short-term borrowings
 
65.7

 
 
 
73.5

 
Net money pool borrowings
 
(12.6
)
 
 
 
(0.2
)
 
Dividends paid to Great Plains Energy
 

 
 
 
(18.0
)
 
Net cash from financing activities
 
39.1

 
 
 
55.3

 
Net Change in Cash and Cash Equivalents
 
0.1

 
 
 
1.8

 
Cash and Cash Equivalents at Beginning of Year
 
2.7

 
 
 
4.0

 
Cash and Cash Equivalents at End of Period
 
$
2.8

 
 
 
$
5.8

 
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

15


KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Common Shareholder's Equity
(Unaudited)
 
 
 
 
 
Three Months Ended March 31
2015
 
2014
 
 
Shares
 
Amount
 
Shares
 
Amount
 
 
(millions, except share amounts)
Common Stock
1

 
$
1,563.1

 
1

 
$
1,563.1

 
Retained Earnings
 

 
 

 
 

 
 

 
Beginning balance
 

 
726.8

 
 

 
636.4

 
Net income
 

 
13.2

 
 

 
17.2

 
Dividends:
 

 
 

 
 

 
 

 
Common stock held by Great Plains Energy
 

 

 
 

 
(18.0
)
 
Ending balance
 

 
740.0

 
 

 
635.6

 
Accumulated Other Comprehensive Income (Loss)
 
 
 

 
 

 
 

 
Beginning balance
 

 
(14.9
)
 
 

 
(20.2
)
 
Derivative hedging activity, net of tax
 

 
1.4

 
 

 
1.3

 
Ending balance
 

 
(13.5
)
 
 

 
(18.9
)
 
Total Common Shareholder's Equity
 

 
$
2,289.6

 
 

 
$
2,179.8

 
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

16


GREAT PLAINS ENERGY INCORPORATED
KANSAS CITY POWER & LIGHT COMPANY
Notes to Unaudited Consolidated Financial Statements
The notes to unaudited consolidated financial statements that follow are a combined presentation for Great Plains Energy Incorporated and Kansas City Power & Light Company, both registrants under this filing.  The terms "Great Plains Energy," "Company," "KCP&L" and "Companies" are used throughout this report.  "Great Plains Energy" and the "Company" refer to Great Plains Energy Incorporated and its consolidated subsidiaries, unless otherwise indicated.  "KCP&L" refers to Kansas City Power & Light Company and its consolidated subsidiaries. "Companies" refers to Great Plains Energy Incorporated and its consolidated subsidiaries and KCP&L and its consolidated subsidiaries. The Companies' interim financial statements reflect all adjustments (which include normal, recurring adjustments) that are necessary, in the opinion of management, for a fair presentation of the results for the interim periods presented.  
 
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Great Plains Energy, a Missouri corporation incorporated in 2001, is a public utility holding company and does not own or operate any significant assets other than the stock of its subsidiaries.  Great Plains Energy's wholly owned direct subsidiaries with significant operations are as follows:
KCP&L is an integrated, regulated electric utility that provides electricity to customers primarily in the states of Missouri and Kansas.  KCP&L has one active wholly owned subsidiary, Kansas City Power & Light Receivables Company (KCP&L Receivables Company).
KCP&L Greater Missouri Operations Company (GMO) is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.  GMO also provides regulated steam service to certain customers in the St. Joseph, Missouri area.  GMO has two active wholly owned subsidiaries, GMO Receivables Company and MPS Merchant Services, Inc. (MPS Merchant).  MPS Merchant has certain long-term natural gas contracts remaining from its former non-regulated trading operations.
Great Plains Energy also wholly owns GPE Transmission Holding Company, LLC (GPETHC). GPETHC owns 13.5% of Transource Energy, LLC (Transource) with the remaining 86.5% owned by AEP Transmission Holding Company, LLC (AEPTHC), a subsidiary of American Electric Power Company, Inc. GPETHC accounts for its investment in Transource under the equity method. Transource is focused on the development of competitive electric transmission projects.
Each of Great Plains Energy's and KCP&L's consolidated financial statements includes the accounts of their subsidiaries.  Intercompany transactions have been eliminated.
Great Plains Energy's sole reportable business segment is electric utility.  See Note 17 for additional information.
Basic and Diluted Earnings per Common Share Calculation
To determine basic earnings per common share (EPS), preferred stock dividend requirements are deducted from net income before dividing by the average number of common shares outstanding.  The effect of dilutive securities, calculated using the treasury stock method, assumes the issuance of common shares applicable to performance shares and restricted stock.

17


The following table reconciles Great Plains Energy's basic and diluted EPS.
Three Months Ended March 31
 
2015
 
2014
 
Income
(millions, except per share amounts)
Net income
 
$
18.9

 
$
23.8

 
Less: preferred stock dividend requirements
 
0.4

 
0.4

 
Earnings available for common shareholders
 
$
18.5

 
$
23.4

 
Common Shares Outstanding
 
 

 
 

 
Average number of common shares outstanding
 
154.0

 
153.7

 
Add: effect of dilutive securities
 
0.4

 
0.3

 
Diluted average number of common shares outstanding
 
154.4

 
154.0

 
Basic and diluted EPS
 
$
0.12

 
$
0.15

 
Anti-dilutive shares excluded from the computation of diluted EPS are detailed in the following table.
Three Months Ended March 31
2015
 
2014
Performance shares

 
495,619

Restricted stock shares

 
71,573

Dividends Declared
In May 2015, Great Plains Energy's Board of Directors (Board) declared a quarterly dividend of $0.245 per share on Great Plains Energy's common stock.  The common dividend is payable June 19, 2015, to shareholders of record as of May 29, 2015.  The Board also declared regular dividends on Great Plains Energy's preferred stock, payable September 1, 2015, to shareholders of record as of August 11, 2015.
New Accounting Standards
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles (GAAP) when it becomes effective. The new standard is effective for the Companies on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Companies are evaluating the effect that ASU No. 2014-09 will have on their consolidated financial statements and related disclosures. The Companies have not yet selected a transition method nor have they determined the effect of the standard on their ongoing financial reporting.
In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Great Plains Energy and KCP&L currently include debt issuance costs in Other - Investments and Other Assets on their consolidated balance sheets. The new guidance is effective for interim and annual periods beginning after December 15, 2015 with early adoption permitted. The Companies intend to early adopt ASU No. 2015-03 for the 2015 Form 10-K.

18


2. SUPPLEMENTAL CASH FLOW INFORMATION
Great Plains Energy Other Operating Activities
Three Months Ended March 31
2015
 
2014
Cash flows affected by changes in:
(millions)
Receivables
$
17.8

 
$
10.9

Fuel inventories
(12.1
)
 
4.8

Materials and supplies
1.0

 
0.9

Accounts payable
(88.0
)
 
(77.9
)
Accrued taxes
34.5

 
34.6

Accrued interest
16.6

 
16.4

Deferred refueling outage costs
(15.6
)
 
4.1

Pension and post-retirement benefit obligations
16.0

 
22.4

Allowance for equity funds used during construction
(3.3
)
 
(4.7
)
Fuel recovery mechanism
8.7

 
(6.6
)
Solar rebates paid
(2.8
)
 
(12.2
)
Other
4.8

 
(11.4
)
Total other operating activities
$
(22.4
)
 
$
(18.7
)
Cash paid during the period:
 

 
 

Interest
$
27.4

 
$
26.8

Income taxes
$
0.1

 
$
0.1

Non-cash investing activities:
 
 
 

Liabilities accrued for capital expenditures
$
38.7

 
$
37.7

KCP&L Other Operating Activities
Three Months Ended March 31
2015
 
2014
Cash flows affected by changes in:
(millions)
Receivables
$
29.7

 
$
13.7

Fuel inventories
(11.6
)
 
1.8

Materials and supplies
0.9

 
0.5

Accounts payable
(43.3
)
 
(45.3
)
Accrued taxes
73.3

 
38.1

Accrued interest
12.1

 
12.1

Deferred refueling outage costs
(15.6
)
 
4.1

Pension and post-retirement benefit obligations
16.2

 
22.0

Allowance for equity funds used during construction
(2.7
)
 
(4.7
)
Fuel recovery mechanism
(2.2
)
 
4.6

Solar rebates paid
(2.3
)
 
(2.7
)
Other
5.7

 
(17.6
)
Total other operating activities
$
60.2

 
$
26.6

Cash paid during the period:
 

 
 

Interest
$
16.4

 
$
15.5

Non-cash investing activities:
 
 
 

Liabilities accrued for capital expenditures
$
34.8

 
$
29.4


19


3. RECEIVABLES
Great Plains Energy's and KCP&L's receivables are detailed in the following table.
 
March 31
December 31
 
 
2015
 
 
2014
 
Great Plains Energy
 
(millions)
 
Customer accounts receivable - billed
 
$
0.9

 
 
$
1.1

 
Customer accounts receivable - unbilled
 
64.1

 
 
75.3

 
Allowance for doubtful accounts - customer accounts receivable
 
(4.3
)
 
 
(2.8
)
 
Other receivables
 
81.8

 
 
86.7

 
Total
 
$
142.5

 
 
$
160.3

 
KCP&L
 
 

 
 
 

 
Customer accounts receivable - billed
 
$
0.1

 
 
$
0.6

 
Customer accounts receivable - unbilled
 
43.0

 
 
49.7

 
Allowance for doubtful accounts - customer accounts receivable
 
(2.0
)
 
 
(1.2
)
 
Other receivables
 
75.4

 
 
79.8

 
Total
 
$
116.5

 
 
$
128.9

 
Great Plains Energy's and KCP&L's other receivables at March 31, 2015, and December 31, 2014, consisted primarily of receivables from partners in jointly owned electric utility plants and wholesale sales receivables.
Sale of Accounts Receivable – KCP&L and GMO
KCP&L and GMO sell all of their retail electric accounts receivable to their wholly owned subsidiaries, KCP&L Receivables Company and GMO Receivables Company, respectively, which in turn sell an undivided percentage ownership interest in the accounts receivable to Victory Receivables Corporation, an independent outside investor. Each of KCP&L Receivables Company's and GMO Receivables Company's sale of the undivided percentage ownership interest in accounts receivable to Victory Receivables Corporation is accounted for as a secured borrowing with accounts receivable pledged as collateral and a corresponding short-term collateralized note payable recognized on the balance sheets.  At March 31, 2015, and December 31, 2014, Great Plains Energy's accounts receivable pledged as collateral and the corresponding short-term collateralized note payable were $171.0 million. At March 31, 2015, and December 31, 2014, KCP&L's accounts receivable pledged as collateral and the corresponding short-term collateralized note payable were $110.0 million.
KCP&L and GMO each sell their receivables at a fixed price based upon the expected cost of funds and charge-offs.  These costs comprise KCP&L's and GMO's loss on the sale of accounts receivable.  KCP&L and GMO service the receivables and receive annual servicing fees of 1.5% and 1.25%, respectively, of the outstanding principal amount of the receivables sold to KCP&L Receivables Company and GMO Receivables Company. KCP&L and GMO do not recognize a servicing asset or liability because management determined the collection agent fees earned by KCP&L and GMO approximate market value.  KCP&L's agreement expires in September 2015 and allows for $110 million in aggregate outstanding principal amount at any time.  GMO's agreement expires in September 2015 and allows for $65 million in aggregate outstanding principal from mid-November 2014 through mid-June 2015 and then increases to $80 million through September 2015.

20


Information regarding KCP&L's sale of accounts receivable to KCP&L Receivables Company and GMO's sale of accounts receivable to GMO Receivables Company is reflected in the following tables.
Three Months Ended March 31, 2015
KCP&L
 
KCP&L
Receivables
Company
 
Consolidated
KCP&L
 
GMO
 
GMO
Receivables
Company
 
Consolidated Great Plains Energy
 
(millions)
Receivables (sold) purchased
 
$
(349.8
)
 
 
 
$
349.8

 
 
 
$

 
 
 
$
(188.7
)
 
 
 
$
188.7

 
 
 
$

 
Gain (loss) on sale of accounts receivable (a)
 
(4.4
)
 
 
 
4.5

 
 
 
0.1

 
 
 
(2.4
)
 
 
 
2.4

 
 
 
0.1

 
Servicing fees received (paid)
 
0.6

 
 
 
(0.6
)
 
 
 

 
 
 
0.3

 
 
 
(0.3
)
 
 
 

 
Fees paid to outside investor
 

 
 
 
(0.2
)
 
 
 
(0.2
)
 
 
 

 
 
 
(0.1
)
 
 
 
(0.3
)
 
Cash from customers (transferred) received
 
(359.8
)
 
 
 
359.8

 
 
 

 
 
 
(194.8
)
 
 
 
194.8

 
 
 

 
Cash received from (paid for) receivables purchased
 
355.3

 
 
 
(355.3
)
 
 
 

 
 
 
192.3

 
 
 
(192.3
)
 
 
 

 
Interest on intercompany note received (paid)
 
0.1

 
 
 
(0.1
)
 
 
 

 
 
 

 
 
 

 
 
 

 
Three Months Ended March 31, 2014
KCP&L
 
KCP&L
Receivables
Company
 
Consolidated
KCP&L
 
GMO
 
GMO
Receivables
Company
 
Consolidated Great Plains Energy
 
(millions)
Receivables (sold) purchased
 
$
(353.1
)
 
 
 
$
353.1

 
 
 
$


 
 
$
(193.8
)
 
 
 
$
193.8

 
 
 
$

 
Gain (loss) on sale of accounts receivable (a)
 
(4.5
)
 
 
 
4.6

 
 
 
0.1


 
 
(2.5
)
 
 
 
2.5

 
 
 
0.1

 
Servicing fees received (paid)
 
0.6

 
 
 
(0.6
)
 
 
 


 
 
0.3

 
 
 
(0.3
)
 
 
 

 
Fees paid to outside investor
 

 
 
 
(0.3
)
 
 
 
(0.3
)

 
 

 
 
 
(0.2
)
 
 
 
(0.5
)
 
Cash from customers (transferred) received
 
(367.6
)
 
 
 
367.6

 
 
 


 
 
(200.8
)
 
 
 
200.8

 
 
 

 
Cash received from (paid for) receivables purchased
 
363.0

 
 
 
(363.0
)