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Great Plains Energy 10-Q 2006
Unassociated Document
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 June 30, 2006

or

[ ] TRANSITION REPORT PURSUANT 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)
   
   
1201 Walnut Street
   
   
Kansas City, Missouri 64106
   
   
(816) 556-2200
   
   
www.greatplainsenergy.com
   
         
000-51873
 
KANSAS CITY POWER & LIGHT COMPANY
 
44-0308720
   
(A Missouri Corporation)
   
   
1201 Walnut Street
   
   
Kansas City, Missouri 64106
   
   
(816) 556-2200
   
   
www.kcpl.com
   
 
 
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 is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
Great Plains Energy Incorporated
Large accelerated filer
  X
Accelerated filer
  _
Non-accelerated filer
_
Kansas City Power & Light Company
Large accelerated filer
  _
Accelerated filer
  _
Non-accelerated filer
X
                               
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 August 1, 2006, Great Plains Energy Incorporated had 80,238,266 shares of common stock outstanding.
On August 1, 2006, Kansas City Power & Light Company had one share of common stock outstanding, which was held by
Great Plains Energy Incorporated.
 
Great Plains Energy Incorporated and Kansas City Power & Light Company (KCP&L) separately file this combined Quarterly Report on Form 10-Q. Information contained herein relating to an individual registrant and its subsidiaries is filed by such registrant on its own behalf. Each registrant makes representations only as to information relating to itself and its subsidiaries.

In March 2006, KCP&L filed a registration statement to register its common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (Exchange Act). This registration statement became effective in April 2006 and KCP&L is now required to file reports, including quarterly reports on Form 10-Q, under Section 13(a) of the Exchange Act.

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 companies’ 2005 Form 10-K.

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, statements regarding projected delivered volumes and margins, the outcome of regulatory proceedings, cost estimates of the comprehensive energy plan and other matters affecting future operations. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the registrants 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 the regional, national and international markets, including but not limited to regional and national wholesale electricity markets; market perception of the energy industry and Great Plains Energy; changes in business strategy, operations or development plans; 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 KCP&L 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 in availability and cost of capital and the effects on pension plan assets and costs; 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; increased competition including, but not limited to, retail choice in the electric utility industry and the entry of new competitors; ability to carry out marketing and sales plans; weather conditions including weather-related damage; cost, availability, quality and deliverability of fuel; ability to achieve generation planning goals and the occurrence and duration of unplanned generation outages; delays in the anticipated in-service dates and cost increases of additional generating capacity; nuclear operations; ability to enter new markets successfully and capitalize on growth opportunities in non-regulated businesses and the effects of competition; application of critical accounting policies, including, but not limited to, those related to derivatives and pension liabilities; workforce risks including compensation and benefits costs; performance of projects undertaken by non-regulated businesses and the success of efforts to invest in and develop new opportunities 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 should be carefully read for further understanding of potential risks to the companies. Other sections of this report and other periodic reports filed by the companies with the Securities and Exchange Commission (SEC) should also be read for more information regarding risk factors.
 
2

GLOSSARY OF TERMS
 
The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report.
 

Abbreviation or Acronym
 
Definition
     
BART
 
Best available retrofit technology
CAIR
 
Clean Air Interstate Rule
CAMR
 
Clean Air Mercury Rule
CO2
 
Carbon Dioxide
Company
 
Great Plains Energy Incorporated and its subsidiaries
Consolidated KCP&L
 
KCP&L and its wholly owned subsidiaries
Digital Teleport
 
Digital Teleport, Inc.
DOE
 
Department of Energy
DTI
 
DTI Holdings, Inc. and its subsidiaries, Digital Teleport, Inc.
     and Digital Teleport of Virginia, Inc.
EBITDA
 
Earnings before interest, income taxes, depreciation and amortization
EEI
 
Edison Electric Institute
EIRR
 
Environmental Improvement Revenue Refunding
EPA
 
Environmental Protection Agency
EPS
 
Earnings per common share
FASB
 
Financial Accounting Standards Board
FELINE PRIDESSM
 
Flexible Equity Linked Preferred Increased Dividend Equity Securities,
   
a service mark of Merrill Lynch & Co., Inc.
FERC
 
The Federal Energy Regulatory Commission
FIN
 
Financial Accounting Standards Board Interpretation
FSS
 
Forward Starting Swap
Great Plains Energy
 
Great Plains Energy Incorporated and its subsidiaries
HSS
 
Home Service Solutions Inc., a wholly owned subsidiary of KCP&L
IEC
 
Innovative Energy Consultants Inc., a wholly owned subsidiary
of Great Plains Energy
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
KLT Gas
 
KLT Gas Inc., a wholly owned subsidiary of KLT Inc.
KLT Inc.
 
KLT Inc., a wholly owned subsidiary of Great Plains Energy
KLT Investments
 
KLT Investments Inc., a wholly owned subsidiary of KLT Inc.
KLT Telecom
 
KLT Telecom Inc., a wholly owned subsidiary of KLT Inc.
KW
 
Kilowatt
kWh
 
Kilowatt hour
MAC
 
Material Adverse Change
MD&A
 
Management’s Discussion and Analysis of Financial Condition and
   
Results of Operations
MISO
 
Midwest Independent Transmission System Operator, Inc.
MPSC
 
Public Service Commission of the State of Missouri
MW
 
Megawatt
3
 
Abbreviation or Acronym
 
Definition
     
MWh
 
Megawatt hour
NEIL
 
Nuclear Electric Insurance Limited
NOx
 
Nitrogen Oxide
NPNS
 
Normal Purchases and Normal Sales
NRC
 
Nuclear Regulatory Commission
OCI
 
Other Comprehensive Income
PJM
 
PJM Interconnection
PRB
 
Powder River Basin
Receivables Company
 
Kansas City Power & Light Receivables Company, a wholly owned
     subsidiary of KCP&L
RTO
 
Regional Transmission Organization
SEC
 
Securities and Exchange Commission
SECA
 
Seams Elimination Charge Adjustment
SE Holdings
 
SE Holdings, L.L.C.
Services
 
Great Plains Energy Services Incorporated
SFAS
 
Statement of Financial Accounting Standards
SIP
 
State Implementation Plan
SO2
 
Sulfur Dioxide
SPP
 
Southwest Power Pool, Inc.
STB
 
Surface Transportation Board
Strategic Energy
 
Strategic Energy, L.L.C., a subsidiary of KLT Energy Services
T - Locks
 
Treasury Locks
Union Pacific
 
Union Pacific Railroad Company
WCNOC
 
Wolf Creek Nuclear Operating Corporation
Wolf Creek
 
Wolf Creek Generating Station
Worry Free
 
Worry Free Service, Inc., a wholly owned subsidiary of HSS
 
4
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 
GREAT PLAINS ENERGY
Consolidated Balance Sheets
(Unaudited)
         
 
June 30
 
December 31
 
 
2006
 
2005
 
ASSETS
(thousands)
 
Current Assets
       
Cash and cash equivalents
$
96,176
 
$
103,068
 
Restricted cash
 
-
   
1,900
 
Receivables, net
 
290,330
   
259,043
 
Fuel inventories, at average cost
 
29,912
   
17,073
 
Materials and supplies, at average cost
 
58,193
   
57,017
 
Deferred income taxes
 
31,469
   
-
 
Assets of discontinued operations
 
-
   
627
 
Derivative instruments
 
14,944
   
39,189
 
Other
 
18,184
   
13,001
 
Total
 
539,208
   
490,918
 
Nonutility Property and Investments
           
Affordable housing limited partnerships
 
25,440
   
28,214
 
Nuclear decommissioning trust fund
 
94,991
   
91,802
 
Other
 
16,284
   
17,291
 
Total
 
136,715
   
137,307
 
Utility Plant, at Original Cost
           
Electric
 
5,049,618
   
4,959,539
 
Less-accumulated depreciation
 
2,392,022
   
2,322,813
 
Net utility plant in service
 
2,657,596
   
2,636,726
 
Construction work in progress
 
219,646
   
100,952
 
Nuclear fuel, net of amortization of $123,062 and $115,240
 
41,355
   
27,966
 
Total
 
2,918,597
   
2,765,644
 
Deferred Charges and Other Assets
           
Regulatory assets
 
205,195
   
179,922
 
Prepaid pension costs
 
83,514
   
98,295
 
Goodwill
 
88,139
   
87,624
 
Derivative instruments
 
4,281
   
21,812
 
Other
 
45,526
   
52,204
 
Total
 
426,655
   
439,857
 
Total
$
4,021,175
 
$
3,833,726
 
             
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
 
5
 
GREAT PLAINS ENERGY
Consolidated Balance Sheets
(Unaudited)
         
 
June 30
 
December 31
 
 
2006
 
2005
 
LIABILITIES AND CAPITALIZATION
(thousands)
 
Current Liabilities
       
Notes payable
$
-
 
$
6,000
 
Commercial paper
 
82,400
   
31,900
 
Current maturities of long-term debt
 
389,902
   
1,675
 
Accounts payable
 
215,926
   
231,496
 
Accrued taxes
 
61,458
   
37,140
 
Accrued interest
 
13,680
   
13,329
 
Accrued payroll and vacations
 
29,385
   
36,024
 
Accrued refueling outage costs
 
14,996
   
8,974
 
Deferred income taxes
 
-
   
1,351
 
Supplier collateral
 
-
   
1,900
 
Liabilities of discontinued operations
 
-
   
64
 
Derivative instruments
 
50,067
   
7,411
 
Other
 
24,601
   
25,658
 
Total
 
882,415
   
402,922
 
Deferred Credits and Other Liabilities
           
Deferred income taxes
 
608,070
   
621,359
 
Deferred investment tax credits
 
28,175
   
29,698
 
Asset retirement obligations
 
153,697
   
145,907
 
Pension liability
 
89,667
   
87,355
 
Regulatory liabilities
 
73,899
   
69,641
 
Derivative instruments
 
27,127
   
7,750
 
Other
 
63,602
   
65,787
 
Total
 
1,044,237
   
1,027,497
 
Capitalization
           
Common shareholders' equity
           
Common stock-150,000,000 shares authorized without par value
           
80,267,216 and 74,783,824 shares issued, stated value
 
890,425
   
744,457
 
Retained earnings
 
458,291
   
488,001
 
Treasury stock-45,680 and 43,376 shares, at cost
 
(1,367
)
 
(1,304
)
Accumulated other comprehensive loss
 
(43,020
)
 
(7,727
)
Total
 
1,304,329
   
1,223,427
 
Cumulative preferred stock $100 par value
           
3.80% - 100,000 shares issued
 
10,000
   
10,000
 
4.50% - 100,000 shares issued
 
10,000
   
10,000
 
4.20% - 70,000 shares issued
 
7,000
   
7,000
 
4.35% - 120,000 shares issued
 
12,000
   
12,000
 
Total
 
39,000
   
39,000
 
Long-term debt (Note 8)
 
751,194
   
1,140,880
 
Total
 
2,094,523
   
2,403,307
 
Commitments and Contingencies (Note 13)
 
 
   
 
 
Total
$
4,021,175
 
$
3,833,726
 
             
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
 
6
 
 
GREAT PLAINS ENERGY
Consolidated Statements of Income
(Unaudited)
                 
 
Three Months Ended
 
Year to Date
 
 
June 30
 
June 30
 
 
2006
 
2005
 
2006
 
2005
 
Operating Revenues
(thousands, except per share amounts)
 
Electric revenues - KCP&L
$
290,891
 
$
272,083
 
$
531,281
 
$
505,298
 
Electric revenues - Strategic Energy
 
350,506
   
359,172
   
668,518
   
670,488
 
Other revenues
 
707
   
466
   
1,490
   
1,049
 
Total
 
642,104
   
631,721
   
1,201,289
   
1,176,835
 
Operating Expenses
                       
Fuel
 
56,197
   
44,803
   
103,597
   
86,293
 
Purchased power - KCP&L
 
8,570
   
16,797
   
13,687
   
28,287
 
Purchased power - Strategic Energy
 
329,347
   
338,836
   
655,105
   
616,702
 
Skill set realignment costs (Note 9)
 
5,123
   
-
   
14,516
   
-
 
Other
 
79,650
   
84,375
   
155,885
   
164,270
 
Maintenance
 
24,899
   
20,552
   
47,489
   
49,910
 
Depreciation and amortization
 
39,250
   
38,241
   
78,196
   
76,103
 
General taxes
 
27,764
   
26,566
   
55,408
   
52,422
 
Gain on property
 
(696
)
 
(994
)
 
(597
)
 
(1,513
)
Total
 
570,104
   
569,176
   
1,123,286
   
1,072,474
 
Operating income
 
72,000
   
62,545
   
78,003
   
104,361
 
Non-operating income
 
3,904
   
9,847
   
6,889
   
11,771
 
Non-operating expenses
 
(1,311
)
 
(9,657
)
 
(3,452
)
 
(10,972
)
Interest charges
 
(17,816
)
 
(18,386
)
 
(35,139
)
 
(35,873
)
Income from continuing operations before income
                       
taxes, minority interest in subsidiaries and loss
                       
from equity investments
 
56,777
   
44,349
   
46,301
   
69,287
 
Income taxes
 
(18,831
)
 
(9,805
)
 
(10,201
)
 
(15,096
)
Minority interest in subsidiaries
 
-
   
(8,693
)
 
-
   
(7,805
)
Loss from equity investments, net of income taxes
 
(289
)
 
(344
)
 
(579
)
 
(689
)
Income from continuing operations
 
37,657
   
25,507
   
35,521
   
45,697
 
Discontinued operations, net of income taxes (Note 11)
 
-
   
(3,606
)
 
-
   
(3,606
)
Net income
 
37,657
   
21,901
   
35,521
   
42,091
 
Preferred stock dividend requirements
 
412
   
412
   
823
   
823
 
Earnings available for common shareholders
$
37,245
 
$
21,489
 
$
34,698
 
$
41,268
 
                         
Average number of common shares outstanding
 
76,997
   
74,592
   
75,834
   
74,515
 
                         
Basic and diluted earnings (loss) per common share
                       
Continuing operations
$
0.48
 
$
0.34
 
$
0.46
 
$
0.60
 
Discontinued operations
 
-
   
(0.05
)
 
-
   
(0.05
)
Basic and diluted earnings per common share
$
0.48
 
$
0.29
 
$
0.46
 
$
0.55
 
                         
Cash dividends per common share
$
0.415
 
$
0.415
 
$
0.83
 
$
0.83
 
                         
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
   
 
7
 
GREAT PLAINS ENERGY
Consolidated Statements of Cash Flows
(Unaudited)
     
Revised
 
Year to Date June 30
2006
 
2005
 
Cash Flows from Operating Activities
(thousands)
 
Net income
$
35,521
 
$
42,091
 
Adjustments to reconcile income to net cash from operating activities:
           
Depreciation and amortization
 
78,196
   
76,103
 
Amortization of:
           
Nuclear fuel
 
7,822
   
5,418
 
Other
 
4,666
   
5,374
 
Deferred income taxes, net
 
(16,804
)
 
4,682
 
Investment tax credit amortization
 
(1,523
)
 
(1,944
)
Loss from equity investments, net of income taxes
 
579
   
689
 
Gain on property
 
(597
)
 
(1,611
)
Minority interest in subsidiaries
 
-
   
7,805
 
Fair value impacts from energy contracts
 
37,925
   
(7,785
)
Other operating activities (Note 4)
 
(33,419
)
 
(68,013
)
Net cash from operating activities
 
112,366
   
62,809
 
Cash Flows from Investing Activities
           
Utility capital expenditures
 
(229,910
)
 
(224,496
)
Allowance for borrowed funds used during construction
 
(2,549
)
 
(767
)
Purchases of investments
 
(700
)
 
(14,976
)
Purchases of nonutility property
 
(2,805
)
 
(2,886
)
Proceeds from sale of assets and investments
 
206
   
15,739
 
Purchases of nuclear decommissioning trust investments
 
(26,387
)
 
(16,197
)
Proceeds from nuclear decommissioning trust investments
 
24,574
   
14,421
 
Hawthorn No. 5 partial insurance recovery
 
-
   
10,000
 
Other investing activities
 
(818
)
 
(2,269
)
Net cash from investing activities
 
(238,389
)
 
(221,431
)
Cash Flows from Financing Activities
           
Issuance of common stock
 
149,363
   
5,724
 
Issuance fees
 
(5,728
)
 
(8
)
Repayment of long-term debt
 
(872
)
 
(2,495
)
Net change in short-term borrowings
 
44,500
   
169,775
 
Dividends paid
 
(65,197
)
 
(62,677
)
Other financing activities
 
(2,935
)
 
(2,820
)
Net cash from financing activities
 
119,131
   
107,499
 
Net Change in Cash and Cash Equivalents
 
(6,892
)
 
(51,123
)
Less:  Net Change in Cash and Cash Equivalents from
           
Discontinued Operations
 
-
   
(537
)
Cash and Cash Equivalents at Beginning of Year
 
103,068
   
127,129
 
Cash and Cash Equivalents at End of Period
$
96,176
 
$
76,543
 
         
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
 
8
 
GREAT PLAINS ENERGY
Consolidated Statements of Common Shareholders' Equity
(Unaudited)
                 
Year to Date June 30
2006
 
2005
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Common Stock
(thousands, except share amounts)
 
Beginning balance
 
74,783,824
 
$
744,457
   
74,394,423
 
$
731,977
 
Issuance of common stock
 
5,436,566
   
149,363
   
200,848
   
6,007
 
Issuance of restricted common stock
 
46,826
   
1,320
   
76,375
   
2,334
 
Common stock issuance fees
       
(5,190
)
       
-
 
Equity compensation expense
       
1,103
         
879
 
Unearned Compensation
                       
Issuance of restricted common stock
       
(1,355
)
       
(2,334
)
Forfeiture of restricted common stock
       
56
         
106
 
Compensation expense recognized
       
640
         
731
 
Other
 
 
   
31
         
(174
)
Ending balance
 
80,267,216
   
890,425
   
74,671,646
   
739,526
 
Retained Earnings
                       
Beginning balance
       
488,001
         
451,491
 
Net income
       
35,521
         
42,091
 
Dividends:
                       
Common stock
       
(64,326
)
       
(61,854
)
Preferred stock - at required rates
       
(823
)
       
(823
)
Performance shares
       
(82
)
       
-
 
Ending balance
 
 
   
458,291
   
 
   
430,905
 
Treasury Stock
                       
Beginning balance
 
(43,376
)
 
(1,304
)
 
(28,488
)
 
(856
)
Treasury shares acquired
 
(3,519
)
 
(99
)
 
(3,596
)
 
(109
)
Treasury shares reissued
 
1,215
   
36
   
-
   
-
 
Ending balance
 
(45,680
)
 
(1,367
)
 
(32,084
)
 
(965
)
Accumulated Other Comprehensive Loss
                       
Beginning balance
       
(7,727
)
       
(41,018
)
Derivative hedging activity, net of tax
       
(35,293
)
       
7,347
 
Minimum pension obligation, net of tax
        
-
         
(37
)
Ending balance
 
 
   
(43,020
)
 
 
   
(33,708
)
Total Common Shareholders' Equity
 
 
 
$
1,304,329
   
 
 
$
1,135,758
 
                         
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
   
 
9
 
GREAT PLAINS ENERGY
Consolidated Statements of Comprehensive Income
(Unaudited)
                 
 
Three Months Ended
 
Year to Date
 
 
June 30
 
June 30
 
 
2006
 
2005
 
2006
 
2005
 
 
(thousands)
 
Net income
$
37,657
 
$
21,901
 
$
35,521
 
$
42,091
 
Other comprehensive income
                       
Gain (loss) on derivative hedging instruments
 
(36,461
)
 
367
   
(77,164
)
 
19,223
 
Income taxes
 
15,052
   
(324
)
 
32,335
   
(8,371
)
Net gain (loss) on derivative hedging instruments
 
(21,409
)
 
43
   
(44,829
)
 
10,852
 
Reclassification to expenses, net of tax
 
4,314
   
(1,420
)
 
9,536
   
(3,505
)
Derivative hedging activity, net of tax
 
(17,095
)
 
(1,377
)
 
(35,293
)
 
7,347
 
Change in minimum pension obligation
 
-
   
-
   
-
   
(60
)
Income taxes
 
-
   
-
   
-
   
23
 
Net change in minimum pension obligation
 
-
   
-
   
-
   
(37
)
Comprehensive income
$
20,562
 
$
20,524
 
$
228
 
$
49,401
 
                         
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
   
 
10
 
KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
(Unaudited)
         
 
June 30
 
December 31
 
 
2006
 
2005
 
ASSETS
(thousands)
 
Current Assets
       
Cash and cash equivalents
$
3,854
 
$
2,961
 
Receivables, net
 
97,777
   
70,264
 
Fuel inventories, at average cost
 
29,912
   
17,073
 
Materials and supplies, at average cost
 
58,193
   
57,017
 
Deferred income taxes
 
12,635
   
8,944
 
Prepaid expenses
 
12,721
   
11,292
 
Derivative instruments
 
8,787
   
-
 
Total
 
223,879
   
167,551
 
Nonutility Property and Investments
           
Nuclear decommissioning trust fund
 
94,991
   
91,802
 
Other
 
6,825
   
7,694
 
Total
 
101,816
   
99,496
 
Utility Plant, at Original Cost
           
Electric
 
5,049,618
   
4,959,539
 
Less-accumulated depreciation
 
2,392,022
   
2,322,813
 
Net utility plant in service
 
2,657,596
   
2,636,726
 
Construction work in progress
 
219,646
   
100,952
 
Nuclear fuel, net of amortization of $123,062 and $115,240
 
41,355
   
27,966
 
Total
 
2,918,597
   
2,765,644
 
Deferred Charges and Other Assets
           
Regulatory assets
 
205,195
   
179,922
 
Prepaid pension costs
 
83,514
   
98,002
 
Other
 
29,023
   
27,905
 
Total
 
317,732
   
305,829
 
Total
$
3,562,024
 
$
3,338,520
 
             
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
           
 
11
 
KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
(Unaudited)
         
 
June 30
 
December 31
 
 
2006
 
2005
 
LIABILITIES AND CAPITALIZATION
(thousands)
 
Current Liabilities
       
Notes payable to Great Plains Energy
$
500
 
$
500
 
Commercial paper
 
82,400
   
31,900
 
Current maturities of long-term debt
 
225,500
   
-
 
Accounts payable
 
93,052
   
106,040
 
Accrued taxes
 
57,817
   
27,448
 
Accrued interest
 
11,872
   
11,549
 
Accrued payroll and vacations
 
24,866
   
27,520
 
Accrued refueling outage costs
 
14,996
   
8,974
 
Derivative instruments
 
3,494
   
-
 
Other
 
8,313
   
8,600
 
Total
 
522,810
   
222,531
 
Deferred Credits and Other Liabilities
           
Deferred income taxes
 
628,929
   
627,048
 
Deferred investment tax credits
 
28,175
   
29,698
 
Asset retirement obligations
 
153,697
   
145,907
 
Pension liability
 
86,228
   
85,301
 
Regulatory liabilities
 
73,899
   
69,641
 
Derivative instruments
 
3,267
   
2,601
 
Other
 
42,109
   
38,387
 
Total
 
1,016,304
   
998,583
 
Capitalization
       
Common shareholder's equity
           
Common stock-1,000 shares authorized without par value
           
1 share issued, stated value
 
1,021,656
   
887,041
 
Retained earnings
 
277,646
   
283,850
 
Accumulated other comprehensive loss
 
(26,731
)
 
(29,909
)
Total
 
1,272,571
   
1,140,982
 
Long-term debt (Note 8)
 
750,339
   
976,424
 
Total
 
2,022,910
   
2,117,406
 
Commitments and Contingencies (Note 13)
 
  
   
 
 
Total
$
3,562,024
 
$
3,338,520
 
             
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 Statements of Income
(Unaudited)
                 
 
Three Months Ended
 
Year to Date
 
 
June 30
 
June 30
 
 
2006
 
2005
 
2006
 
2005
 
Operating Revenues
(thousands)
 
Electric revenues
$
290,891
 
$
272,083
 
$
531,281
 
$
505,298
 
Other revenues
 
-
   
-
   
-
   
113
 
Total
 
290,891
   
272,083
   
531,281
   
505,411
 
Operating Expenses
                       
Fuel
 
56,197
   
44,803
   
103,597
   
86,293
 
Purchased power
 
8,570
   
16,797
   
13,687
   
28,287
 
Skill set realignment costs (Note 9)
 
4,937
   
-
   
14,230
   
-
 
Other
 
64,808
   
68,863
   
127,366
   
134,826
 
Maintenance
 
24,900
   
20,540
   
47,478
   
49,886
 
Depreciation and amortization
 
37,346
   
36,665
   
74,346
   
73,060
 
General taxes
 
26,875
   
25,454
   
53,164
   
50,009
 
(Gain) loss on property
 
(695
)
 
3
   
(598
)
 
(513
)
Total
 
222,938
   
213,125
   
433,270
   
421,848
 
Operating income
 
67,953
   
58,958
   
98,011
   
83,563
 
Non-operating income
 
2,822
   
9,346
   
4,535
   
10,843
 
Non-operating expenses
 
(1,235
)
 
(627
)
 
(2,292
)
 
(1,780
)
Interest charges
 
(15,046
)
 
(15,482
)
 
(29,904
)
 
(30,101
)
Income before income taxes and
                       
minority interest in subsidiaries
 
54,494
   
52,195
   
70,350
   
62,525
 
Income taxes
 
(18,680
)
 
(14,466
)
 
(22,553
)
 
(15,431
)
Minority interest in subsidiaries
 
-
   
(8,693
)
 
-
   
(7,805
)
Net income
$
35,814
 
$
29,036
 
$
47,797
 
$
39,289
 
                         
The disclosures regarding consolidated 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 Cash Flows
(Unaudited)
         
Year to Date June 30
2006
 
2005
 
Cash Flows from Operating Activities
(thousands)
 
Net income
$
47,797
 
$
39,289
 
Adjustments to reconcile income to net cash from operating activities:
           
Depreciation and amortization
 
74,346
   
73,060
 
Amortization of:
           
Nuclear fuel
 
7,822
   
5,418
 
Other
 
3,302
   
3,900
 
Deferred income taxes, net
 
(2,159
)
 
(3,334
)
Investment tax credit amortization
 
(1,523
)
 
(1,944
)
Gain on property
 
(598
)
 
(513
)
Minority interest in subsidiaries
 
-
   
7,805
 
Other operating activities (Note 4)
 
(23,813
)
 
(65,568
)
Net cash from operating activities
 
105,174
   
58,113
 
Cash Flows from Investing Activities
         
Utility capital expenditures
 
(229,910
)
 
(226,247
)
Allowance for borrowed funds used during construction
 
(2,549
)
 
(767
)
Purchases of nonutility property
 
(42
)
 
(117
)
Proceeds from sale of assets
 
206
   
173
 
Purchases of nuclear decommissioning trust investments
 
(26,387
)
 
(16,197
)
Proceeds from nuclear decommissioning trust investments
 
24,574
   
14,421
 
Hawthorn No. 5 partial insurance recovery
 
-
   
10,000
 
Other investing activities
 
(818
)
 
(2,739
)
Net cash from investing activities
 
(234,926
)
 
(221,473
)
Cash Flows from Financing Activities
         
Net change in short-term borrowings
 
50,500
   
174,100
 
Dividends paid to Great Plains Energy
 
(54,001
)
 
(61,700
)
Equity contribution from Great Plains Energy
 
134,615
   
-
 
Issuance fees
 
(469