Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017
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 | | |
|
| | | | | | |
Each of the following classes or series of securities registered pursuant to Section 12(b) of the Act is registered on the New York Stock Exchange: |
| | | | | | |
Registrant | | Title of each class | | | | |
Great Plains Energy Incorporated | | Common Stock, without par value | | | | |
| | | | | | |
Securities registered pursuant to Section 12(g) of the Act: Kansas City Power & Light Company Common Stock without par value. |
| | | | | | |
| | | | | | |
|
| | | | | | | | | | | | | |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. |
Great Plains Energy Incorporated | Yes | X | No | _ | | Kansas City Power & Light Company | Yes | _ | No | X | |
| | | | | | | | | | | | | |
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
|
Great Plains Energy Incorporated | Yes | _ | No | X | | Kansas City Power & Light Company | Yes | _ | No | X | |
| | | | | | | | | | | | | |
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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. |
Great Plains Energy Incorporated | X | | | | | Kansas City Power & Light Company | X | | | | |
| | | | | | | | | | | | | |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth 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 | _ | | | | |
| | | | Emerging growth company | _ | | | | |
Kansas City Power & Light Company | | Large accelerated filer | _ | Accelerated filer | _ | | | | |
| | Non-accelerated filer | X | Smaller reporting company | _ | | | | |
| | | | | | | | Emerging growth company | _ | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
Great Plains Energy Incorporated | Yes | _ | No | _ | | Kansas City Power & Light Company | Yes | _ | No | _ | |
| | | | | | | | | | | | | |
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 | |
| | | | | | | | | | | | | |
The aggregate market value of the voting and non-voting common equity held by non-affiliates of Great Plains Energy Incorporated (based on the closing price of its common stock on the New York Stock Exchange on June 30, 2017) was approximately $6,311,042,442. All of the common equity of Kansas City Power & Light Company is held by Great Plains Energy Incorporated, an affiliate of Kansas City Power & Light Company. |
| | | | | | | | | | | | | |
On February 16, 2018, Great Plains Energy Incorporated had 215,665,193 shares of common stock outstanding. |
On February 16, 2018, 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 (I)(1)(a) and (b) of Form 10-K and is therefore filing this Form 10-K with the reduced disclosure format. |
| | | | | | | | | | | | | |
Documents Incorporated by Reference |
Portions of the 2018 annual meeting proxy statement of Great Plains Energy Incorporated to be filed with the Securities and Exchange Commission are incorporated by reference in Part III of this report. |
|
| | |
TABLE OF CONTENTS |
| | Page Number |
| | |
| | |
| |
|
Item 1. | | |
Item 1A. | | |
Item 1B. | | |
Item 2. | | |
Item 3. | | |
Item 4. | | |
|
Item 5. | | |
Item 6. | | |
Item 7. | | |
Item 7A. | | |
Item 8. | | |
Item 9. | | |
Item 9A. | | |
Item 9B. | | |
|
Item 10. | | |
Item 11. | | |
Item 12. | | |
Item 13. | | |
Item 14. | | |
|
Item 15. | | |
| | |
| | |
This combined annual report on Form 10-K 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 where required 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.
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 relating to the anticipated merger transaction of Great Plains Energy and Westar Energy, Inc. (Westar), including those that relate to the expected financial and operational benefits of the merger to the companies and their shareholders (including cost savings, operational efficiencies and the impact of the anticipated merger on earnings per share), the expected timing of closing, the outcome of regulatory proceedings, cost estimates of capital projects, dividend growth, share repurchases, balance sheet and credit ratings, rebates to customers, employee issues 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, KCP&L and Westar; 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 that 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 derivatives and hedges, 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 and Westar's ability to successfully manage and integrate their respective transmission joint ventures; 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; the ability of Great Plains Energy and Westar to obtain the regulatory approvals necessary to complete the anticipated merger or the imposition of adverse conditions or costs in connection with obtaining regulatory approvals; the risk that a condition to the closing of the anticipated merger may not be satisfied or that the anticipated merger may fail to close; the outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted relating to the anticipated merger; the costs incurred to consummate the anticipated merger; the possibility that the expected value creation from the anticipated merger will not be realized, or will not be realized within the expected time period; difficulties related to the integration of the two companies; the credit ratings of the combined company
following the anticipated merger; disruption from the anticipated merger making it more difficult to maintain relationships with customers, employees, regulators or suppliers; the diversion of management time and attention on the anticipated merger; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Part I Item 1A Risk Factors included in this report 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.
GLOSSARY OF TERMS
The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report.
|
| | |
Abbreviation or Acronym | | Definition |
| | |
AFUDC | | Allowance for Funds Used During Construction |
Amended Merger Agreement | | Amended and Restated Agreement and Plan of Merger dated as of July 9, 2017 by and among Great Plains Energy, Westar, Monarch Energy Holding, Inc. and King Energy, Inc. |
ARO | | Asset Retirement Obligation |
ASU | | Accounting Standards Update |
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 |
DOE | | Department of Energy |
DOJ | | Department of Justice |
ECA | | Energy Cost Adjustment |
EIRR | | Environmental Improvement Revenue Refunding |
Electric Utility | | Electric utility segment |
EPA | | Environmental Protection Agency |
EPS | | Earnings (loss) per common share |
ERISA | | Employee Retirement Income Security Act of 1974, as amended |
Exchange Act | | The Securities Exchange Act of 1934, as amended |
FASB | | Financial Accounting Standards Board |
FERC | | The Federal Energy Regulatory Commission |
FCC | | The Federal Communications Commission |
GAAP | | Generally Accepted Accounting Principles |
GMO | | KCP&L Greater Missouri Operations Company, a wholly owned subsidiary of Great Plains Energy |
GP Star | | GP Star, Inc. |
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 |
Great Plains Energy Board | | Great Plains Energy Board of Directors |
HSR | | Hart-Scott-Rodino |
Holdco | | Monarch Energy Holding, Inc., a Missouri corporation |
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 |
kWh | | Kilowatt hour |
MEEIA | | Missouri Energy Efficiency Investment Act |
Merger Sub | | King Energy, Inc., a Kansas corporation and wholly owned subsidiary of Holdco |
MGP | | Manufactured gas plant |
MPS Merchant | | MPS Merchant Services, Inc., a wholly owned subsidiary of GMO |
|
| | |
Abbreviation or Acronym | | Definition |
| | |
MPSC | | Public Service Commission of the State of Missouri |
MW | | Megawatt |
MWh | | Megawatt hour |
NAV | | Net asset value |
NERC | | North American Electric Reliability Corporation |
NOL | | Net operating loss |
NRC | | Nuclear Regulatory Commission |
OMERS | | OCM Credit Portfolio LP |
Original Merger Agreement | | Agreement and Plan of Merger dated as of May 29, 2016, by and among Great Plains Energy, Westar and GP Star, Inc. |
RTO | | Regional Transmission Organization |
SEC | | Securities and Exchange Commission |
Series A Preferred Stock | | 7.25% Mandatory Convertible Preferred Stock, Series A |
Series B Preferred Stock | | 7.00% Series B Mandatory Convertible Preferred Stock |
SPP | | Southwest Power Pool, Inc. |
Transource | | Transource Energy, LLC and its subsidiaries, 13.5% owned by GPETHC |
WCNOC | | Wolf Creek Nuclear Operating Corporation |
Westar | | Westar Energy, Inc. |
Westar Board | | Westar Board of Directors |
Wolf Creek | | Wolf Creek Generating Station |
PART I
ITEM 1. BUSINESS
General
Great Plains Energy Incorporated and Kansas City Power & Light Company are separate registrants filing this combined annual report on Form 10-K. 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.
Information in other Items of this report as to which reference is made in this Item 1 is hereby incorporated by reference in this Item 1. The use of terms such as "see" or "refer to" shall be deemed to incorporate into this Item 1 the information to which such reference is made.
GREAT PLAINS ENERGY INCORPORATED
Great Plains Energy, a Missouri corporation incorporated in 2001 and headquartered in Kansas City, Missouri, is a public utility holding company and does not own or operate any significant assets other than the stock of its subsidiaries and cash and cash equivalents. 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). |
| |
• | 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.
Great Plains Energy's sole reportable business segment is the electric utility segment (Electric Utility). For information regarding the revenues, income and assets attributable to Electric Utility, see Note 22 to the consolidated financial statements. Comparative financial information and discussion regarding Electric Utility can be found in Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A).
Electric Utility consists of KCP&L, a regulated utility, GMO's regulated utility operations and GMO Receivables Company. Electric Utility serves approximately 867,100 customers located in western Missouri and eastern Kansas. Customers include approximately 764,200 residences, 100,400 commercial firms and 2,500 industrials, municipalities and other electric utilities. Electric Utility's retail revenues averaged approximately 93% of its total operating revenues over the last three years. Wholesale firm power, bulk power sales and miscellaneous electric revenues accounted for the remainder of Electric Utility's revenues. Electric Utility is significantly impacted by seasonality with approximately one-third of its retail revenues recorded in the third quarter. Electric Utility's total electric revenues were 100% of Great Plains Energy's revenues over the last three years. Electric Utility's net income accounted for approximately (242)% of Great Plains Energy's net loss in 2017 and 101% and 105% of Great Plains Energy's net income in 2016 and 2015, respectively.
Anticipated Merger with Westar Energy, Inc.
In May 2016, Great Plains Energy and Westar entered into an Agreement and Plan of Merger dated as of May 29, 2016, by and among Great Plains Energy, Westar and GP Star, Inc. (GP Star) (Original Merger Agreement) in which Great Plains Energy would have acquired Westar for a combination of cash and shares of Great Plains Energy common stock. In April 2017, The State Corporation Commission of the State of Kansas (KCC) issued an order denying Great Plains Energy's, KCP&L's and Westar's joint application for the approval of the acquisition citing concerns with the purchase price, Great Plains Energy's capital structure, quantifiable and demonstrable customer benefits and staffing levels in Westar's service territory, among other items.
In July 2017, Great Plains Energy entered into an Amended and Restated Agreement and Plan of Merger dated as of July 9, 2017 by and among Great Plains Energy, Westar, Monarch Energy Holding, Inc., a Missouri corporation (Holdco), and King Energy, Inc., a Kansas corporation and wholly owned subsidiary of Holdco (Merger Sub) (Amended Merger Agreement). Pursuant to the Amended Merger Agreement, subject to the satisfaction or waiver of certain conditions, Great Plains Energy will merge with and into Holdco, with Holdco surviving such merger, and Merger Sub will merge with and into Westar, with Westar surviving such merger. Pursuant to the Amended Merger Agreement, at closing each outstanding share of Great Plains Energy's and Westar's common stock will be converted into the right to receive 0.5981 and 1.0, respectively, of validly issued, fully paid and nonassessable shares of common stock, no par value, of Holdco. Following the mergers, Holdco, with a new name that has yet to be established, will be the parent of Great Plains Energy's direct subsidiaries, including KCP&L, and Westar.
The anticipated merger with Westar has been structured as a merger of equals in a tax-free exchange of shares that involves no premium paid or received with respect to either Great Plains Energy or Westar. Following the completion of the anticipated merger, Westar shareholders will own approximately 52.5 percent and Great Plains Energy shareholders will own approximately 47.5 percent of the combined company. See Note 2 to the consolidated financial statements for additional information concerning the anticipated merger with Westar.
Regulation
KCP&L and GMO are regulated by the Public Service Commission of the State of Missouri (MPSC) and KCP&L is also regulated by KCC with respect to retail rates, certain accounting matters, standards of service and, in certain cases, the issuance of securities, certification of facilities and service territories. KCP&L and GMO are also subject to regulation by The Federal Energy Regulatory Commission (FERC) with respect to transmission, wholesale sales and rates, and other matters. KCP&L has a 47% ownership interest in Wolf Creek Generating Station (Wolf Creek), which is subject to regulation by the Nuclear Regulatory Commission (NRC) with respect to licensing, operations and safety-related requirements.
The table below summarizes the rate orders in effect for KCP&L's and GMO's retail rate jurisdictions.
|
| | | | | |
| Regulator | Allowed Return on Equity | Rate-Making Equity Ratio | Rate Base (in billions) | Effective Date |
KCP&L Missouri | MPSC | 9.5% | 49.2% | $2.5 | June 2017 |
KCP&L Kansas | KCC | 9.3% | 50.5% | $2.1 | October 2015 |
GMO | MPSC | 9.5% - 9.75%(a) | (a) | (a) | February 2017 |
(a) GMO's current rate order reflects a global settlement with an implied return on equity range of 9.5% - 9.75% and does not contain an agreed upon rate-making equity ratio or rate base.
Missouri and Kansas jurisdictional retail revenues averaged approximately 70% and 30%, respectively, of Electric Utility's total retail revenues over the last three years.
See Item 7 MD&A, Critical Accounting Policies section, and Note 6 to the consolidated financial statements for additional information concerning regulatory matters.
Competition
Missouri and Kansas continue on the fully integrated and regulated retail utility model. As a result, KCP&L and GMO do not compete with others to supply and deliver electricity in its franchised service territory, although other sources of energy can provide alternatives to retail electric utility customers. If Missouri or Kansas were to pass and implement legislation authorizing or mandating retail choice, Electric Utility may no longer be able to apply regulated utility accounting principles to deregulated portions of its operations and may be required to write off certain regulatory assets and liabilities.
Electric Utility competes in the wholesale market to sell power in circumstances when the power it generates is not required for customers in its service territory. This competition primarily occurs within the Southwest Power Pool, Inc. (SPP) Integrated Marketplace, in which KCP&L and GMO are participants. Similar to other Regional Transmission Organization (RTO) or Independent System Operator (ISO) markets currently operating, this marketplace determines which generating units among market participants should run, within the operating constraints of a unit, at any given time for maximum regional cost-effectiveness.
In this regard, Electric Utility competes with other regional power suppliers, principally other utilities within the SPP Integrated Marketplace, on the basis of availability and price. Electric Utility's wholesale revenues averaged approximately 5% of its total revenues over the last three years.
Power Supply
Electric Utility has approximately 6,500 MWs of total owned generating capacity and also purchases power to meet its customers' needs, to satisfy firm power commitments or to meet renewable energy standards. Electric Utility's purchased power from others, as a percentage of total MWhs generated and purchased, averaged approximately 26% over the last three years. Management believes Electric Utility will be able to obtain enough power to meet its future demands due to the coordination of planning and operations in the SPP region and existing power purchase agreements; however, price and availability of power purchases may be impacted during periods of high demand.
Electric Utility's total capacity by fuel type, including both owned generating capacity and power purchase agreements, is detailed in the table below.
|
| | | | | |
Fuel Type | Estimated 2018 MW Capacity | Percent of Total Capacity |
Coal | 3,433 |
| 44 |
| % |
Nuclear | 552 |
| 7 |
| |
Natural gas and oil | 2,342 |
| 30 |
| |
Wind (a) | 1,389 |
| 18 |
| |
Solar, landfill gas and hydroelectric (b) | 65 |
| 1 |
| |
Total capacity | 7,781 |
| 100 |
| % |
(a) MWs are based on nameplate capacity of the wind facility. Includes owned generating capacity of 149 MWs and long-term power purchase agreements of approximately 1,240 MWs of wind generation which expire in 2032 through 2037.
(b) Includes a long-term power purchase agreement for approximately 60 MWs of hydroelectric generation which expires in 2023.
Electric Utility's projected peak summer demand for 2018 is approximately 5,200 MWs. Electric Utility expects to meet its projected capacity requirements for the foreseeable future with its existing generation assets and power and capacity purchases.
KCP&L and GMO are members of the SPP. The SPP is a FERC-approved RTO with the responsibility to ensure reliable power supply, adequate transmission infrastructure and ensure competitive wholesale electricity prices in the region. As SPP members, KCP&L and GMO are required to maintain a minimum reserve margin of 12%. This net positive supply of capacity is maintained through generation asset ownership, capacity agreements, power purchase agreements and peak demand reduction programs. The reserve margin is designed to support reliability of the region's electric supply.
Fuel
The principal fuel sources for Electric Utility's owned generation are coal and nuclear fuel. It is expected, with normal weather, that approximately 98% of 2018 net MWhs generated will come from these sources with the remainder provided by wind, natural gas and oil. The actual 2017 and estimated 2018 fuel mix and delivered cost in cents per net kilowatt hour (kWh) generated are outlined in the following table.
|
| | | | | | | | | | | | | |
| | | | | | | Fuel cost in cents per |
| Fuel Mix (a) | | net kWh generated |
| Estimated | | Actual | | Estimated | Actual |
Fuel | 2018 | | 2017 | | | 2018 | | 2017 |
Coal | 77 |
| % | | 75 | % | | | 1.84 |
| | 1.81 |
|
Nuclear | 21 |
| | | 23 | | | | 0.62 |
| | 0.69 |
|
Natural gas and oil | <1 |
| | | 1 | | | | 7.46 |
| | 15.19 |
|
Wind | 2 |
| | | 1 | | | | — |
| | — |
|
Total owned generation | 100 |
| % | | 100 | % | | | 1.42 |
| | 1.62 |
|
(a) Fuel mix based on percent of net MWhs generated. |
Coal
During 2018, Electric Utility's generating units, including jointly owned units, are projected to burn approximately 11 million tons of coal. KCP&L and GMO have entered into coal-purchase contracts with various suppliers in Wyoming's Powder River Basin (PRB), the nation's principal supply region of low-sulfur coal, and with local suppliers. The coal to be provided under these contracts is expected to satisfy approximately 95% of the projected coal requirements for 2018 and approximately 40% for 2019. The remainder of the coal requirements is expected to be fulfilled through additional contracts or spot market purchases.
KCP&L and GMO have also entered into rail transportation contracts with various railroads to transport coal from the PRB to their generating units. The transportation services to be provided under these contracts are expected to satisfy almost all of the projected transportation requirements for 2018. The contract rates adjust for changes in railroad costs.
Nuclear Fuel
KCP&L owns 47% of Wolf Creek Nuclear Operating Corporation (WCNOC), the operating company for Wolf Creek, which is Electric Utility's only nuclear generating unit. Wolf Creek purchases uranium and has it processed for use as fuel in its reactor. This process involves conversion of uranium concentrates to uranium hexafluoride, enrichment of uranium hexafluoride and fabrication of nuclear fuel assemblies. The owners of Wolf Creek have on hand or under contract all of the uranium and conversion services needed to operate Wolf Creek through March 2027. The owners also have under contract all of the uranium enrichment and fabrication required to operate Wolf Creek through March 2027 and September 2025, respectively.
See Note 5 to the consolidated financial statements for additional information regarding nuclear plant.
Environmental Matters
See Note 15 to the consolidated financial statements for information regarding environmental matters.
KANSAS CITY POWER & LIGHT COMPANY
KCP&L, a Missouri corporation incorporated in 1922 and headquartered in Kansas City, Missouri, is an integrated, regulated electric utility that engages in the generation, transmission, distribution and sale of electricity. KCP&L serves approximately 542,500 customers located in western Missouri and eastern Kansas. Customers include approximately 479,300 residences, 61,200 commercial firms, and 2,000 industrials, municipalities and other electric
utilities. KCP&L's retail revenues averaged approximately 92% of its total operating revenues over the last three years. Wholesale firm power, bulk power sales and miscellaneous electric revenues accounted for the remainder of KCP&L's revenues. KCP&L is significantly impacted by seasonality with approximately one-third of its retail revenues recorded in the third quarter. Missouri and Kansas jurisdictional retail revenues averaged approximately 57% and 43%, respectively, of total retail revenues over the last three years.
Great Plains Energy and KCP&L Employees
At December 31, 2017, Great Plains Energy and KCP&L had 2,709 employees, including 1,664 represented by three local unions of the International Brotherhood of Electrical Workers (IBEW). KCP&L has labor agreements with Local 1613, representing clerical employees (expires March 31, 2018), with Local 1464, representing transmission and distribution workers (expires February 28, 2018), and with Local 412, representing power plant workers (expires February 28, 2021).
Executive Officers
All of the individuals in the following table have been officers or employees in the responsible positions with the Company noted below for the past five years unless otherwise indicated in the footnotes. The executive officers were reappointed to the indicated positions by the respective boards of directors, effective January 1, 2018, to hold such positions until their resignation, removal or the appointment of their successors. There are no family relationships between any of the executive officers, nor any arrangement or understanding between any executive officer and any other person involved in officer selection. Each executive officer holds the same position with GMO as he or she does with KCP&L.
|
| | | |
Name | Age | Current Position(s) | Year First Assumed an Officer Position |
Terry Bassham (a) | 57 | Chairman of the Board, President and Chief Executive Officer - Great Plains Energy and KCP&L | 2005 |
Kevin E. Bryant (b) | 42 | Senior Vice President - Finance and Strategy and Chief Financial Officer - Great Plains Energy and KCP&L | 2006 |
Steven P. Busser (c) | 49 | Vice President - Risk Management and Controller - Great Plains Energy and KCP&L | 2014 |
Charles A. Caisley (d) | 45 | Vice President - Marketing and Public Affairs - Great Plains Energy and KCP&L | 2011 |
Ellen E. Fairchild (e) | 56 | Vice President, Chief Compliance Officer and Corporate Secretary - Great Plains Energy and KCP&L | 2010 |
Heather A. Humphrey (f) | 47 | Senior Vice President - Corporate Services and General Counsel - Great Plains Energy and KCP&L | 2010 |
Darrin R. Ives (g) | 48 | Vice President - Regulatory Affairs - KCP&L | 2013 |
Lori A. Wright (h) | 55 | Vice President - Corporate Planning, Investor Relations and Treasurer - Great Plains Energy and KCP&L | 2002 |
| |
(a) | Mr. Bassham was appointed Chairman of the Board in May 2013 and has served as Chief Executive Officer of Great Plains Energy, KCP&L and GMO since 2012. He has served as President of each company since 2011. He previously served as President and Chief Operating Officer of Great Plains Energy, KCP&L and GMO (2011-2012) and as Executive Vice President - Utility Operations of KCP&L and GMO (2010-2011). He was Executive Vice President - Finance and Strategic Development and Chief Financial Officer of Great Plains Energy (2005-2010) and of KCP&L and GMO (2009-2010). |
| |
(b) | Mr. Bryant was appointed Senior Vice President - Finance and Strategy and Chief Financial Officer of Great Plains Energy, KCP&L and GMO in 2015. He previously served as Vice President - Strategic Planning of Great Plains Energy, KCP&L and GMO (2014). He served as Vice President - Investor Relations and Strategic Planning and Treasurer of Great Plains Energy, KCP&L and GMO (2013). He served as Vice President - Investor Relations and Treasurer of Great Plains Energy, KCP&L and GMO (2011-2013). He was Vice President - Strategy and Risk Management of KCP&L and GMO (2011) and Vice President - Energy Solutions (2006-2011) of KCP&L and GMO. |
| |
(c) | Mr. Busser was appointed Vice President - Risk Management and Controller of Great Plains Energy, KCP&L and GMO in 2016. He previously served as Vice President - Business Planning and Controller of Great Plains Energy, KCP&L and GMO (2014-2016). He served as Vice President - Treasurer of El Paso Electric Company (2011-2014). Prior to that, he served as Vice President - Treasurer and Chief Risk Officer (2006-2011) and Vice President - Regulatory Affairs and Treasurer (2004-2006) of El Paso Electric Company. |
| |
(d) | Mr. Caisley was appointed Vice President - Marketing and Public Affairs of Great Plains Energy, KCP&L and GMO in 2011. He was Senior Director of Public Affairs (2008-2011) and Director of Governmental Affairs of KCP&L (2007-2008). |
| |
(e) | Ms. Fairchild was appointed Vice President, Chief Compliance Officer and Corporate Secretary of Great Plains Energy, KCP&L and GMO in 2010. She was Senior Director of Investor Relations and Assistant Secretary (2010) and Director of Investor Relations (2008-2010) of Great Plains Energy, KCP&L and GMO. |
| |
(f) | Ms. Humphrey was appointed Senior Vice President - Corporate Services and General Counsel of Great Plains Energy, KCP&L and GMO in 2016. She previously served as General Counsel (2010-2016) and Senior Vice President - Human Resources of Great Plains Energy, KCP&L and GMO (2012-2016). She served as Vice President - Human Resources of Great Plains Energy, KCP&L and GMO (2010-2012). She was Senior Director of Human Resources and Interim General Counsel of Great Plains Energy, KCP&L and GMO (2010) and Managing Attorney of KCP&L (2007-2010). |
| |
(g) | Mr. Ives was appointed Vice President - Regulatory Affairs of KCP&L and GMO in 2013. He previously served as Senior Director - Regulatory Affairs of KCP&L and GMO (2011-2013). He was Assistant Controller of Great Plains Energy, KCP&L and GMO (2008 - 2011). |
| |
(h) | Ms. Wright was appointed Vice President - Corporate Planning, Investor Relations and Treasurer of Great Plains Energy, KCP&L and GMO in 2016. She previously served as Vice President - Investor Relations and Treasurer of Great Plains Energy, KCP&L and GMO (2014-2016). She served as Vice President - Business Planning and Controller of Great Plains Energy, KCP&L and GMO (2009-2014). She was Controller of Great Plains Energy and KCP&L (2002-2008) and GMO (2008). |
Available Information
Great Plains Energy's website is www.greatplainsenergy.com and KCP&L's website is www.kcpl.com. Information contained on these websites is not incorporated herein. The Companies make available, free of charge, on or through their websites, their annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), as soon as reasonably practicable after the companies electronically file such material with, or furnish it to, the SEC. In addition, the Companies make available on or through their websites all other reports, notifications and certifications filed electronically with the SEC.
The public may read and copy any materials that the Companies file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. For information on the operation of the Public Reference Room, please call the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site at http://www.sec.gov that contains reports, proxy statements and other information regarding the Companies.
Investors should note that the Companies announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, the Companies may use the Investor Relations section of Great Plains Energy's website (www.greatplainsenergy.com) to communicate with investors about Great Plains Energy and KCP&L. It is possible that the financial and other information posted there could be deemed to be material information. The information on Great Plains Energy's website is not part of this document.
ITEM 1A. RISK FACTORS
Risks Relating to the Anticipated Merger with Westar:
The value of the shares of Holdco common stock that Great Plains Energy's shareholders receive upon the consummation of the anticipated merger may be less than the value of the shares of Great Plains Energy
common stock as of the date of the Amended Merger Agreement, the date of this report or the date of the shareholders' meeting.
The exchange ratio for Great Plains Energy in the Amended Merger Agreement is fixed and will not be adjusted in the event of any change in the stock price of Great Plains Energy prior to the anticipated merger. A significant amount of time will have elapsed between the dates when the shareholders of Great Plains Energy voted to approve the Amended Merger Agreement at the shareholders' meeting on November 21, 2017, and the date when the anticipated merger is completed. The absolute and relative price of shares of Great Plains Energy common stock may vary significantly between the date of the meetings, the date of this report and the date of the completion of the anticipated merger. These variations may be caused by, among other things, changes in the businesses, operations, results or prospects of Great Plains Energy and Westar, market expectations of the likelihood that the anticipated merger will be completed and the timing of completion, the prospects of post-merger operations, general market and economic conditions and other factors. In addition, it is impossible to predict accurately the market price of the Holdco common stock to be received by Great Plains Energy shareholders after the completion of the anticipated merger. Accordingly, the price of Great Plains Energy common stock on the date of this report and on the date of the meetings may not be indicative of the price immediately prior to completion of the anticipated merger and the price of Holdco common stock after the anticipated merger is completed.
The ability of Great Plains Energy and Westar to complete the anticipated merger is subject to various closing conditions, including the receipt of consents and approvals from governmental authorities, which may impose conditions that could adversely affect Great Plains Energy or cause the anticipated merger to be abandoned.
To complete the anticipated merger, (1) each of Great Plains Energy and Westar must also make certain filings with and obtain certain consents and approvals from various governmental and regulatory authorities, (2) the listing on the New York Stock Exchange of the shares of Holdco common stock to be issued to Great Plains Energy and Westar shareholders in the anticipated merger must be approved, (3) there cannot be any material adverse effect with respect to Great Plains Energy, Westar and their respective subsidiaries, (4) there cannot be any laws or judgments, whether preliminary, temporary or permanent, which may prevent, make illegal or prohibit the completion of the anticipated merger, (5) subject to certain materiality exceptions, the representations and warranties made by Great Plains Energy and Westar, respectively, must be accurate and the parties must comply with their respective obligations under the Amended Merger Agreement, (6) Great Plains Energy and Westar must receive certain tax opinions, (7) there cannot be any shares of Great Plains Energy preference stock outstanding and (8) Great Plains Energy must have not less than $1.25 billion in cash or cash equivalents on its balance sheet. If the foregoing conditions are not satisfied or waived, one or both of Great Plains Energy and Westar would not be required to complete the merger.
Great Plains Energy and Westar have not yet obtained the regulatory consents and approvals required to complete the anticipated merger. Governmental or regulatory agencies could seek to block or challenge the anticipated merger or could impose restrictions they deem necessary or desirable in the public interest as a condition to approving the anticipated merger. Great Plains Energy and Westar will be unable to complete the anticipated merger until the consents and approvals have been received from KCC, the MPSC, the NRC, FERC and The Federal Communication Commission (FCC) (collectively referred to as the “required governmental approvals”). Regulatory authorities may impose certain requirements or obligations as conditions for their approval. The Amended Merger Agreement may require Great Plains Energy and/or Westar to accept conditions from these regulators that could adversely impact the combined company. If the required governmental approvals are not received, or they are not received on terms that satisfy the conditions set forth in the Amended Merger Agreement, then neither Great Plains Energy nor Westar will be obligated to complete the anticipated merger.
In December 2017, the Federal Trade Commission (FTC) granted Great Plains Energy's request for early termination of the waiting period under the Hart-Scott-Rodino (HSR) Act.
Even after the statutory waiting period under the antitrust laws and even after completion of the anticipated merger, governmental authorities could seek to block or challenge the anticipated merger as they deem necessary or desirable in the public interest. In addition, in some jurisdictions, a private party could initiate an action under the antitrust laws challenging or seeking to enjoin the anticipated merger, before or after it is completed. Great Plains
Energy or Westar may not prevail and may incur significant costs in defending or settling any action under the antitrust laws.
The shareholders' meetings at which the Great Plains Energy shareholders and the Westar shareholders voted to approve the transactions contemplated by the Amended Merger Agreement took place before all such approvals have been obtained and before the terms of any conditions to obtain such approvals that may be imposed are known. As a result, Great Plains Energy and Westar may make decisions after the meetings to waive a condition or approve certain actions required to obtain necessary approvals without seeking further shareholder approval. Such actions could have an adverse effect on the combined company.
In addition, the Amended Merger Agreement contains other customary closing conditions, which may not be satisfied or waived.
If Great Plains Energy and Westar are unable to complete the anticipated merger, Great Plains Energy would be subject to a number of risks, including the following:
| |
• | Great Plains Energy would not realize the anticipated benefits of the anticipated merger, including, among other things, increased operating efficiencies and future cost savings; |
| |
• | the attention of management of Great Plains Energy may have been diverted to the anticipated merger rather than to its own operations and the pursuit of other opportunities that could have been beneficial; |
| |
• | the potential loss of key personnel during the pendency of the anticipated merger as employees may experience uncertainty about their future roles with the combined company; |
| |
• | Great Plains Energy will have been subject to certain restrictions on the conduct of their businesses, which may prevent Great Plains Energy from making certain acquisitions or dispositions or pursuing certain business opportunities while the anticipated merger is pending; and |
| |
• | the trading price of Great Plains Energy common stock may decline to the extent that the current market price reflects a market assumption that the anticipated merger will be completed. |
Great Plains Energy can provide no assurance that the various closing conditions will be satisfied and that the required governmental approvals and other approvals will be obtained, or that any required conditions will not materially adversely affect the combined company following the anticipated merger. In addition, Great Plains Energy can provide no assurance that these conditions will not result in the abandonment or delay of the anticipated merger. The occurrence of any of these events individually or in combination could have a material adverse effect on the companies' results of operations and the trading price of Great Plains Energy common stock.
The Amended Merger Agreement contains provisions that limit Great Plains Energy's ability to pursue alternatives to the anticipated merger, could discourage a potential acquirer of Great Plains Energy from making a favorable alternative transaction proposal and, in certain circumstances, could require Great Plains Energy to pay a termination fee to the other party.
Under the Amended Merger Agreement, Great Plains Energy and Westar each are restricted from entering into alternative transactions. Unless and until the Amended Merger Agreement is terminated, subject to specified exceptions, each party is restricted from soliciting, initiating or knowingly encouraging, inducing or facilitating, or participating in any discussions or negotiations with any person regarding, or cooperating in any way with any person with respect to, any alternative proposal or any inquiry or proposal that would reasonably be expected to lead to an alternative proposal. Great Plains Energy and Westar each may terminate the Amended Merger Agreement and enter into an agreement with respect to a superior proposal only if specified conditions have been satisfied, including compliance with the provisions of the Amended Merger Agreement restricting solicitation of alternative proposals and requiring payment of a termination fee in certain circumstances. These provisions could discourage a third party that may have an interest in acquiring all or a significant part of Great Plains Energy from considering or proposing that acquisition, even if such third party were prepared to pay consideration with a higher market value
than the market value proposed to be received or realized in the anticipated merger, or might result in a potential acquirer proposing to pay a lower price than it would otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances. As a result of these restrictions, Great Plains Energy may not be able to enter into an agreement with respect to a more favorable alternative transaction without incurring potentially significant liability to Westar.
The Amended Merger Agreement provides that in connection with the termination of the Amended Merger Agreement under specified circumstances relating to a failure to obtain regulatory approvals, a final and nonappealable order enjoining the consummation of the anticipated merger in connection with regulatory approvals or failure by Great Plains Energy to comply with its obligations under the Amended Merger Agreement to consummate the closing of the anticipated merger once all of the conditions have been satisfied, Great Plains Energy may be required to pay Westar a termination fee of $190 million. In addition, in the event that the Amended Merger Agreement is terminated by Westar under certain circumstances to enter into a definitive acquisition agreement with respect to a superior proposal, Westar may be required to pay Great Plains Energy a termination fee of $190 million. Similarly, in the event that the Amended Merger Agreement is terminated by Great Plains Energy under certain circumstances to enter into a definitive acquisition agreement with respect to a superior proposal, Great Plains Energy may be required to pay Westar a termination fee of $190 million.
Great Plains Energy will be subject to various uncertainties while the anticipated merger is pending that may cause disruption and may make it more difficult to maintain relationships with employees, suppliers, or customers.
Uncertainty about the effect of the anticipated merger on employees, suppliers and customers may have an adverse effect on Great Plains Energy. These uncertainties may impair the ability of Great Plains Energy to attract, retain and motivate key personnel until the anticipated merger is completed and for a period of time thereafter, and could cause customers, suppliers and others that deal with Great Plains Energy to seek to change or terminate existing business relationships with Great Plains Energy or not enter into new relationships or transactions.
Employee retention and recruitment may be particularly challenging prior to the completion of the anticipated merger, as employees and prospective employees may experience uncertainty about their future roles with the combined company. If, despite Great Plains Energy's retention and recruiting efforts, key employees depart or fail to continue employment because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company, Great Plains Energy's financial results could be adversely affected. Furthermore, the combined company's operational and financial performance following the anticipated merger could be adversely affected if it is unable to retain key employees and skilled workers of Great Plains Energy. The loss of the services of key employees and skilled workers and their experience and knowledge regarding Great Plains Energy's businesses could adversely affect the combined company's future operating results and the successful ongoing operation of its businesses.
Great Plains Energy is subject to contractual restrictions in the Amended Merger Agreement that may hinder its operations pending the anticipated merger.
The Amended Merger Agreement restricts Great Plains Energy, without Westar's consent, from making certain acquisitions and taking other specified actions until the anticipated merger occurs or the Amended Merger Agreement terminates. These restrictions may prevent Great Plains Energy from pursuing otherwise attractive business opportunities and making other changes to its business prior to completion of the anticipated merger or termination of the Amended Merger Agreement.
Failure to complete the anticipated merger, or significant delays in completing the anticipated merger, could negatively affect the trading price of Great Plains Energy common stock and the future business and financial results of Great Plains Energy.
Completion of the anticipated merger is not assured and is subject to risks, including the risks that approval of the anticipated merger by governmental agencies is not obtained or that other closing conditions are not satisfied. If the anticipated merger is not completed, or if there are significant delays in completing the anticipated merger, it could negatively affect the trading price of Great Plains Energy common stock and its future business and financial results, and Great Plains Energy will be subject to several risks, including the following:
| |
• | Great Plains Energy may be liable for damages to Westar under the terms and conditions of the Amended Merger Agreement; |
| |
• | negative reactions from the financial markets, including declines in the price of Great Plains Energy common stock due to the fact that current prices may reflect a market assumption that the anticipated merger will be completed; and |
| |
• | having to pay certain significant costs relating to the anticipated merger, including, in certain circumstances, a termination fee. |
Failure to successfully combine the businesses of Great Plains Energy and Westar in the expected time frame may adversely affect the future results of the combined company, and, consequently, the value of the Holdco common stock that Great Plains Energy shareholders receive as the merger consideration.
The success of the anticipated merger will depend, in part, on the ability of the combined company to realize the anticipated benefits and efficiencies from combining the businesses of Great Plains Energy and Westar. To realize these anticipated benefits, the businesses must be successfully combined. If the combined company is not able to achieve these objectives, or is not able to achieve these objectives on a timely basis, the anticipated benefits of the transactions may not be realized fully or at all. In addition, the actual integration may result in additional and unforeseen expenses, which could reduce the anticipated benefits of the anticipated merger. These integration difficulties could result in a decline in the market value of Holdco common stock and, consequently, result in a decline in the market value of the Holdco common stock that Great Plains Energy shareholders receive as part of the merger consideration and continue to hold following consummation of the anticipated merger.
Great Plains Energy will incur significant transaction and other merger-related costs in connection with the anticipated merger.
Great Plains Energy has incurred and expects to incur additional costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the anticipated merger. Additional unanticipated costs may also be incurred in the integration of the businesses of Great Plains Energy and Westar. Any net benefit from the anticipated elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may not be achieved in the near term or at all. Transaction costs could have a material adverse impact on the results of Great Plains Energy, and the failure to achieve the anticipated benefits and efficiencies from the merger, or the incurrence of additional expenses, could have a material adverse impact on the results of operations of the combined company and its ability to pay dividends after closing. In turn, the current market value of Great Plains Energy common stock, or the future market value of Holdco common stock that Great Plains Energy shareholders receive as merger consideration, could be adversely impacted.
The market price of Holdco's common stock after the anticipated merger may be affected by factors different from those affecting the shares of Great Plains Energy or Westar currently.
Upon completion of the anticipated merger, the businesses of the combined company will differ from those of Great Plains Energy and Westar prior to the anticipated merger in important respects and, accordingly, the results of operations of the combined company and the market price of Holdco's shares of common stock following the anticipated merger may be affected by factors different from those currently affecting the independent results of operations of Great Plains Energy and Westar.
Each of Westar and Great Plains Energy and their respective subsidiaries has substantial amounts of indebtedness. Consequently, the combined company will have substantial indebtedness following the anticipated merger. As a result, it may be difficult for the combined company to pay or refinance its debts or take other actions, and the combined company may need to divert its cash flow from operations to debt service payments.
The combined company's debt service obligations with respect to this indebtedness could have an adverse impact on its earnings and cash flows for as long as the indebtedness is outstanding.
The combined company's indebtedness could also have important consequences to holders of Holdco common stock. For example, it could:
| |
• | make it more difficult for the combined company to pay or refinance its debts as they become due during adverse economic and industry conditions because any decrease in revenues could cause the combined company to not have sufficient cash flows from operations to make its scheduled debt payments; |
| |
• | require a substantial portion of the combined company's cash flows from operations to be used for debt service payments, thereby reducing the availability of its cash flow to fund working capital, capital expenditures, acquisitions, dividend payments and other general corporate purposes; |
| |
• | result in a downgrade in the rating of the combined company's indebtedness, which could limit its ability to borrow additional funds or increase the interest rates applicable to its indebtedness; or |
| |
• | require that additional terms, conditions or covenants be placed on Holdco. |
Based upon current levels of operations, Holdco expects to be able to generate sufficient cash on a consolidated basis to make all of the principal and interest payments when such payments are due under the combined company's existing credit facilities, indentures and other instruments governing its outstanding indebtedness, but there can be no assurance that the combined company will be able to repay or refinance such borrowings and obligations.
The anticipated benefits of combining the companies may not be realized.
Great Plains Energy entered into the Amended Merger Agreement with the expectation that the anticipated merger would result in various benefits, including, among other things, increased operating efficiencies and future cost savings that cannot be quantified with certainty at this time. Although Great Plains Energy expects to achieve the anticipated benefits of the anticipated merger, achieving them is subject to a number of uncertainties, including:
| |
• | whether U.S. federal and state public utility, antitrust and other regulatory authorities whose approval is required to complete the anticipated merger impose conditions on the merger, which may have an adverse effect on the combined company, including its ability to achieve the anticipated benefits of the merger; |
| |
• | the ability of the two companies to combine certain of their operations or take advantage of expected growth opportunities; |
| |
• | general market and economic conditions; |
| |
• | general competitive factors in the marketplace; and |
| |
• | higher than expected costs required to achieve the anticipated benefits of the merger. |
No assurance can be given that these benefits will be achieved or, if achieved, the timing of their achievement. Failure to achieve these anticipated benefits could result in increased costs and decreases in the amount of expected revenues or net income of the combined company.
The anticipated merger may not be accretive to Great Plains Energy's earnings and may cause dilution to Great Plains Energy's earnings per share, which may negatively affect the market price of Holdco common stock that Great Plains Energy's shareholders receive upon the consummation of the anticipated merger.
Great Plains Energy currently anticipates that the anticipated merger will be accretive to Great Plains Energy's forecasted earnings per share on a standalone basis. This expectation is based on preliminary estimates, including with respect to the anticipated timing and amount of common stock repurchases following the closing of the merger, any of which may materially change. Great Plains Energy may encounter additional transaction and integration-related costs than it currently anticipates, may fail to realize all of the benefits anticipated in the merger or may be subject to other factors that affect preliminary estimates or its ability to realize operational efficiencies. Any of these factors could cause a decrease in the combined company's earnings per share or decrease or delay the expected accretive effect of the anticipated merger and contribute to a decrease in the price of Holdco common stock.
The anticipated merger will combine two companies that are currently affected by developments in the electric utility industry, including changes in regulation and increased competition. A failure to adapt to the changing regulatory environment after the anticipated merger could adversely affect the stability of the combined company's earnings and could result in the erosion of its market positions, revenues and profits.
Because Great Plains Energy, Westar and their respective subsidiaries are regulated in the U.S. at the federal level and in several states, the two companies have been and will continue to be affected by legislative and regulatory developments. After the anticipated merger, the combined company and/or its subsidiaries will be subject in the U.S. to extensive federal regulation as well as to state regulation in Missouri and Kansas. Each of these jurisdictions has implemented, is in the process of implementing or possibly will implement changes to the regulatory and legislative framework applicable to the electric utility industry. These changes could have a material adverse effect on the combined company.
The costs and burdens associated with complying with these regulatory jurisdictions may have a material adverse effect on the combined company. Moreover, potential legislative changes, regulatory changes or otherwise may create greater risks to the stability of utility earnings generally. If the combined company is not responsive to these changes, it could suffer erosion in market position, revenues and profits as competitors gain access to the service territories of its utility subsidiaries.
The price of Holdco common stock that Great Plains Energy's shareholders receive upon the consummation of the anticipated merger may experience volatility.
Following the consummation of the anticipated merger, the price of Holdco common stock may be volatile. Some of the factors that could affect the price of Holdco common stock are quarterly increases or decreases in revenue or earnings, changes in revenue or earnings estimates by the investment community, the ability of Holdco to implement its integration strategy and to realize the expected synergies and other benefits from the anticipated merger and speculation in the press or investment community about Holdco's financial condition or results of operations. General market conditions and U.S. economic factors and political events unrelated to the performance of Holdco may also affect its stock price. For these reasons, shareholders should not rely on recent trends in the price of Great Plains Energy common stock to predict the future price of Holdco's common stock or its financial results.
Utility Regulatory Risks:
Complex utility regulation could adversely affect the Companies' results of operations, financial position and cash flows.
The Companies are subject to, or affected by, extensive federal and state utility regulation, including regulation by the MPSC, KCC, FERC, NRC, North American Electric Reliability Corporation (NERC) and SPP. The Companies must address in their business planning and management of operations the effects of existing and proposed laws and regulations and potential changes in the regulatory framework, including initiatives by federal and state legislatures, RTOs, utility regulators and taxing authorities. Failure of the Companies to obtain adequate rates or regulatory approvals in a timely manner, new or changed laws, regulations, standards, interpretations or other legal requirements, deterioration of the Companies' relationship with regulators and increased compliance costs and potential non-compliance consequences may materially affect the Companies' results of operations, financial
position and cash flows. Additionally, regulators may impose burdensome restrictions and conditions on the Companies' transactions and ventures, rendering them less attractive from a financial or operational perspective. Certain of these risks are addressed in greater detail below.
The outcome of retail rate proceedings could have a material impact on the business and is largely outside the Companies' control.
The rates that KCP&L and GMO are allowed to charge their customers significantly influence the Companies' results of operations, financial position and cash flows. These rates are subject to the determination, in large part, of governmental entities outside of the Companies' control, including the MPSC, KCC and FERC.
The utility rate-setting principle generally applicable to KCP&L and GMO is that rates should provide a reasonable opportunity to recover expenses and investments prudently incurred to provide utility service plus a reasonable return on such investments. Various expenses incurred by KCP&L and GMO have been excluded from rates by the MPSC and KCC in past rate cases as not being prudently incurred or not providing utility customer benefit, and there is a risk that certain expenses incurred in the future may not be recovered in rates. Third-parties often intervene in the utilities' rate cases and argue that certain costs have not been prudently incurred or are otherwise not recoverable in rates. The MPSC and KCC also have in the past and may in the future exclude from rates all or a portion of investments in various facilities as not being prudently incurred or not being useful in providing utility service.
As discussed in the "Environmental Risks" and "Financial Risks" sections below, the Companies' capital expenditures are substantial and there is a risk that a portion of the capital costs could be excluded from rates in future rate cases.
The Companies are also exposed to cost-recovery shortfalls due to the inherent "regulatory lag" in the rate-setting process, especially during periods of significant cost inflation or declining retail usage, as KCP&L's and GMO's utility rates are generally based on historical information and are not subject to adjustment between rate cases, other than principally for fuel, purchased power, transmission and property taxes for KCP&L in Kansas; fuel, purchased power, certain transmission costs and demand-side investments for KCP&L in Missouri; and fuel, purchased power, certain transmission costs, demand-side investments and renewable energy (solar rebates) for GMO. These and other factors may result in under-recovery of costs, failure to earn the authorized return on investment, or both.
Failure to timely recover the full investment costs of capital projects, the impact of renewable energy and energy efficiency programs, other utility costs and expenses due to regulatory disallowances, regulatory lag or other factors could lead to lowered credit ratings, reduced access to capital markets, increased financing costs, lower flexibility due to constrained financial resources and increased collateral security requirements, or reductions or delays in planned capital expenditures. In response to competitive, economic, political, legislative, public perception (including, but not limited to, the Companies' environmental reputation) and regulatory pressures, the Companies may be subject to rate moratoriums, rate refunds, limits on rate increases, lower allowed returns on investments or rate reductions, including phase-in plans designed to spread the impact of rate increases over an extended period of time for the benefit of customers.
Regulatory requirements regarding utility operations may increase costs and may expose the Companies to compliance penalties or adverse rate consequences.
The FERC, NERC and SPP have implemented and enforce an extensive set of transmission system reliability, cybersecurity and critical infrastructure protection standards that apply to public utilities, including KCP&L and GMO. The MPSC and KCC have the authority to implement utility operational standards and requirements, such as vegetation management standards, facilities inspection requirements and quality of service standards. In addition, the Companies are also subject to health, safety and other requirements enacted by the Occupational Safety and Health Administration, the Department of Transportation, the Department of Labor and other federal and state agencies. As discussed more fully under "Operational Risks," the NRC extensively regulates nuclear power plants, including Wolf Creek. The costs of existing, new or modified regulations, standards and other requirements could have an adverse effect on the
Companies' results of operations, financial position and cash flows as a result of increased operations or maintenance and capital expenditures for new facilities or to repair or improve existing facilities. In addition, failure to meet quality of service, reliability, cybersecurity, critical infrastructure protection, operational or other standards and requirements could expose the Companies to penalties, additional compliance costs, or adverse rate consequences.
Environmental Risks:
The Companies are subject to current and potential environmental requirements and the incurrence of environmental liabilities, any or all of which may adversely affect their business and financial results.
The Companies 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 for historical and pre-existing conditions, these laws, regulations and permits authorize the imposition of substantial penalties for noncompliance, including fines, injunctive relief and other sanctions. There is also a risk that new environmental laws and regulations, new administrative or judicial interpretations of environmental laws and regulations, or the requirements in new or renewed environmental permits could adversely affect the Companies' operations. In addition, there is also a risk of lawsuits brought by third parties alleging violations of environmental commitments or requirements, claiming creation of a public nuisance or other matters, and seeking injunctions or monetary damages or other damages. 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 damages.
Environmental permits are subject to periodic renewal, which may result in more stringent permit conditions and limits. New facilities, or modifications of existing facilities, may require new environmental permits or amendments to existing permits. Delays in the environmental permitting process, public opposition and challenges, denials of permit applications, limits or conditions imposed in permits and the associated uncertainty may materially adversely affect the cost and timing of projects, and thus materially adversely affect the Companies' results of operations, financial position and cash flows.
KCP&L and GMO periodically seek recovery of capital costs and expenses for environmental compliance and remediation through rate increases; however, there can be no assurance that recovery of these costs would be granted. KCP&L and GMO may be subject to material adverse rate treatment in response to competitive, economic, political, legislative or regulatory pressures and/or public perception of the Companies' environmental reputation. The costs of compliance or noncompliance with environmental requirements, remediation costs, adverse outcomes of lawsuits, or failure to timely recover environmental costs could have a material adverse effect on the Companies' results of operations, financial position and cash flows. Certain of these matters are discussed in more detail below. See Note 15 to the consolidated financial statements for additional information regarding certain significant environmental matters and Great Plains Energy's and KCP&L's current estimates of capital expenditures to comply with environmental regulations.
Air and Climate Change
The Companies' current generation capacity is primarily coal-fired, and is estimated to produce about one ton of carbon dioxide (CO2) per MWh, or approximately 17 million tons and 13 million tons of CO2 per year for Great Plains Energy and KCP&L, respectively. 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, the Paris Agreement was adopted in December 2015 by nearly 200 countries and became effective in November 2016. The Paris Agreement does not result in any new, legally binding obligations on the U.S. to meet a particular greenhouse gas emissions target, but establishes a framework for international cooperation on climate change. In June 2017, U.S. President Donald Trump announced the U.S. would withdraw from the Paris Agreement. Under the rules of the Paris Agreement, the earliest any country can withdraw is November 2020. Other international agreements legally binding on the U.S. may be reached in the future. Greenhouse gas legislation has the potential of having significant financial and operational impacts on Great Plains Energy and KCP&L; however, the ultimate financial and operational consequences to Great Plains Energy and KCP&L cannot be determined until such legislation is passed. In
the absence of new Congressional mandates, the EPA is proceeding with regulation of greenhouse gases under the existing Clean Air Act.
In August 2015, the EPA finalized CO2 emission standards for new, modified and reconstructed affected fossil-fuel-fired electric utility generating units. The standards would not apply to Great Plains Energy's and KCP&L's existing units unless the units were modified or reconstructed in the future. Also in August 2015, the EPA finalized its Clean Power Plan which sets CO2 emission performance rates for existing affected fossil-fuel-fired electric generating units. Nationwide, by 2030, the EPA projects the Clean Power Plan would achieve CO2 emission reductions from the power sector of approximately 32% from CO2 emission levels in 2005.
In February 2016, the U.S. Supreme Court granted a stay of the Clean Power Plan putting the rule on hold pending review in the U.S. Court of Appeals for the District of Columbia Circuit and any subsequent review by the U.S. Supreme Court if such review is sought. In October 2017, the EPA proposed to repeal the Clean Power Plan on the basis that it exceeded the EPA's statutory authority. In December 2017, the EPA issued an advance notice of proposed rulemaking (ANPRM) to solicit comments as the agency considers proposing a future rule to replace the Clean Power Plan. In the ANPRM, the EPA is considering proposing emission guidelines to limit greenhouse gas emissions from existing electric utility generating units. Compliance with the Clean Power Plan or any replacement rule has the potential of having significant financial and operational impacts on Great Plains Energy and KCP&L; however, the ultimate financial and operational consequences to Great Plains Energy and KCP&L cannot be determined until the outcome of the EPA's proposal to repeal the Clean Power Plan and pending litigation is known.
Water
The Clean Water Act and associated regulations enacted by the EPA form a comprehensive program to restore and preserve water quality. All of the Companies' generating facilities, and certain of their other facilities, are subject to the Clean Water Act.
In May 2014, the EPA finalized 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 are subject to the best technology available standards based on studies completed to comply with such standards. The rule provides flexibility to work with the states to develop the best technology available to minimize aquatic species impacted by being pinned against intake screens (impingement) or drawn into cooling water systems (entrainment).
KCP&L holds a permit from the Missouri Department of Natural Resources (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. Great Plains Energy and KCP&L cannot predict the outcome of this matter; however, while less significant outcomes are possible, this matter may require a reduction in generation, installation of cooling towers or other technology to cool the water, or both, any of which could have a significant impact on Great Plains Energy's and KCP&L's results of operations, financial position and cash flows.
Further, the possible effects of climate change, including potentially increased temperatures and reduced precipitation, could make it more difficult and costly to comply with the current and final permit requirements.
Solid Waste
Solid and hazardous waste generation, storage, transportation, treatment and disposal are regulated at the federal and state levels under various laws and regulations. In April 2015, the EPA published final regulations to regulate coal combustion residuals (CCRs) under the Resource Conservation and Recovery
Act (RCRA) Subtitle D to address the risks from the disposal of CCRs generated from the combustion of coal at electric generating facilities. In September 2017, the EPA granted industry petitions to reconsider certain provisions of the CCR rule. The Companies use coal in generating electricity and dispose of CCRs in both on-site facilities and facilities owned by third parties. Current and future EPA and state regulations regarding the handling, disposal and remediation of CCRs could have a material adverse effect on the Companies' results of operations, financial position and cash flows.
Remediation
Under current law, the Companies are also generally responsible for any liabilities associated with the environmental condition of their properties and other properties at which the Companies arranged for the disposal or treatment of hazardous substances, including properties that they have previously owned or operated, such as manufactured gas plants (MGP), regardless of whether they were responsible for the contamination or whether the liabilities arose before, during or after the time they owned or operated the properties or arranged for the disposal or treatment of hazardous substances.
Due to all of the above, the Companies' projected capital and other expenditures for environmental compliance are subject to significant uncertainties, including the timing of implementation of any new or modified environmental requirements, the limits imposed by such requirements and the types and costs of the compliance alternatives selected by the Companies. As a result, costs to comply with environmental requirements cannot be estimated with certainty, and actual costs could be significantly higher than projections. New environmental laws and regulations affecting the operations of the Companies may be adopted, and new interpretations of existing laws and regulations could be adopted or become applicable to the Companies or their facilities, any of which may materially adversely affect the Companies' business, adversely affect the Companies' ability to continue operating its power plants as currently done and substantially increase environmental expenditures or liabilities in the future.
Financial Risks:
Financial market disruptions and declines in credit ratings may increase financing costs and/or limit access to the credit markets, which may adversely affect liquidity and results.
The Companies rely on access to short-term money markets, revolving credit facilities provided by financial institutions and long-term capital markets as significant sources of liquidity for capital requirements not satisfied by cash flows from operations. The Companies also rely on bank-provided credit facilities for credit support, such as letters of credit, to support operations. The amount of credit support required for operations varies and is impacted by a number of factors.
Great Plains Energy, KCP&L, GMO and certain of their securities are rated by Moody's Investors Service and S&P Global Ratings. These ratings impact the Companies' cost of funds and Great Plains Energy's ability to provide credit support for its subsidiaries. The interest rates on borrowings under the Companies' revolving credit agreements are subject to increase as their respective credit ratings decrease. The amount of collateral or other credit support required under power supply and certain other agreements is also dependent on credit ratings.
Conditions in the U.S. capital and credit markets may deteriorate in the future for a variety of reasons, including, among others: instability in global markets, political uncertainty in the U.S. or abroad, fluctuations in the price of oil, geopolitical instability or other unforeseen events both in the U.S. and around the world. Adverse market conditions or decreases in Great Plains Energy's, KCP&L's or GMO's credit ratings could have material adverse effects on the Companies. These effects could include, among others: reduced access to capital and increased cost of funds; dilution resulting from equity issuances at reduced prices; changes in the type and/or increases in the amount of collateral or other credit support obligations required to be posted with contractual counterparties; increased nuclear decommissioning trust and pension and other post-retirement benefit plan funding requirements; rate case disallowance of KCP&L's or GMO's costs of capital; reductions in or delays of capital expenditures; or reductions in Great Plains Energy's ability to provide credit support for its subsidiaries. Any of these results could adversely affect the Companies' results of operations, financial position and cash flows. In addition, market disruption and volatility could have an adverse impact on the Companies' lenders, suppliers and other counterparties or customers, causing them to fail to meet their obligations.
Great Plains Energy has guaranteed some of GMO's long-term and short-term debt and payments under these guarantees may adversely affect Great Plains Energy's liquidity.
Great Plains Energy has issued guarantees covering $95.5 million of GMO's long-term debt. Great Plains Energy also guarantees GMO's commercial paper program. At December 31, 2017, GMO had $209.3 million of commercial paper outstanding. The guarantees obligate Great Plains Energy to pay amounts owed by GMO directly to the holders of the guaranteed debt in the event GMO defaults on its payment obligations. Great Plains Energy may also guarantee debt that GMO may issue in the future. Any guarantee payments could adversely affect Great Plains Energy's liquidity.
The inability of Great Plains Energy's subsidiaries to provide sufficient dividends to Great Plains Energy, or the inability otherwise of Great Plains Energy to pay dividends to its shareholders and meet its financial obligations would have an adverse effect.
Great Plains Energy is a holding company with no significant operations of its own. The primary source of funds for payment of dividends to its shareholders and its other financial obligations is dividends paid to it by its subsidiaries, particularly KCP&L and GMO. The ability of Great Plains Energy's subsidiaries to pay dividends or make other distributions, and accordingly, Great Plains Energy's ability to pay dividends on its common stock and meet its financial obligations principally depends on the actual and projected earnings and cash flow, capital requirements and general financial position of its subsidiaries, as well as regulatory factors, financial covenants, general business conditions and other matters.
In addition, Great Plains Energy, KCP&L and GMO are subject to certain corporate and regulatory restrictions and financial covenants that could affect their ability to pay dividends. 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. 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 and the note purchase agreement for GMO's Series A, B and C Senior Notes 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 at all times. Under the Amended Merger Agreement, Great Plains Energy is also restricted from paying a quarterly common stock dividend in excess of $0.275 per share without the consent of Westar. See Note 11 to the consolidated financial statements for additional information. The Great Plains Energy Board of Directors (Great Plains Energy Board) regularly evaluates the common stock dividend policy and determines an appropriate dividend each quarter, after taking into account such factors as, among other things, earnings, financial condition and cash flows from KCP&L and GMO, as well as general economic conditions. Great Plains Energy cannot assure common shareholders that the dividend will be paid in the future or that, if paid, dividends will be at the same amount or with the same frequency as in the past.
Market performance, increased employee retirements and retirement plan regulations could significantly impact retirement plan funding requirements and associated cash needs and expenses.
Substantially all of the Companies' and WCNOC's employees participate in defined benefit retirement and other post-retirement plans. Former employees also have accrued benefits in defined benefit retirement and other post-retirement plans. The costs of these plans depend on a number of factors, including the rates of return on plan assets, the level and nature of the provided benefits, discount rates, the interest rates used to measure required minimum funding levels, changes in benefit design, changes in laws or regulations, and the Companies' required or voluntary contributions to the plans. The Companies currently have substantial unfunded liabilities under these plans. Also, if the rate of retirements exceeds planned levels, or if these plans experience adverse market returns on investments, or if interest rates materially fall, the Companies' contributions to the plans could rise substantially over historical levels. In addition, changes in accounting rules and assumptions related to future costs, returns on investments, interest rates and other actuarial assumptions, including projected retirements, could have a significant impact on the Companies' results of operations, financial position and cash flows.
The use of derivative contracts in the normal course of business could result in losses that could negatively impact the Companies' results of operations, financial position and cash flows.
The Companies use derivative instruments, such as swaps, options, futures and forwards, to manage commodity and financial risks. Losses could be recognized as a result of volatility in the market values of these contracts, if a counterparty fails to perform, or if the underlying transactions which the derivative instruments are intended to
hedge fail to materialize. In the absence of actively quoted market prices and pricing information from external sources, the valuation of these financial instruments can involve management's judgment or the use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the reported fair value of these contracts.
As a service provider to GMO, KCP&L may have exposure to GMO's financial performance and operations.
GMO has no employees of its own. KCP&L employees operate and manage GMO's properties, and KCP&L charges GMO for the cost of these services. These arrangements may pose risks to KCP&L, including possible claims arising from actions of KCP&L employees in operating GMO's properties and providing other services to GMO. KCP&L's claims for reimbursement for services provided to GMO are unsecured and rank equally with other unsecured obligations of GMO. KCP&L's ability to be reimbursed for the costs incurred for the benefit of GMO depends on the financial ability of GMO to make such payments.
Customer and Weather-Related Risks:
The results of operations, financial position and cash flows of the Companies can be materially affected by changes in customer electricity consumption.
Changes in customer electricity consumption due to sustained financial market disruptions, downturns or sluggishness in the economy, technological advances, energy efficiency or other factors may adversely affect the Companies' results of operations, financial position and cash flows.
Technological advances, energy efficiency, or other energy conservation measures could reduce customer electricity consumption. KCP&L and GMO generate electricity at central station power plants to achieve economies of scale and produce electricity at a competitive cost. There are distributed generation technologies that produce electricity, including microturbines, wind turbines, fuel cells and solar cells, that have recently become more cost competitive. If this trend continues, the Companies' customer electricity consumption could be reduced. Changes in technology could also alter the channels through which the Companies' customers purchase or use electricity, which could reduce the Companies' customer electricity consumption.
Weather is a major driver of the Companies' results of operations, financial position and cash flow.
Weather conditions directly influence the demand for electricity and natural gas and affect the price of energy commodities. Great Plains Energy and KCP&L are significantly impacted by seasonality, with approximately one-third of their retail electric revenues recorded in the third quarter. Unusually mild winter or summer weather can adversely affect sales. In addition, severe weather, including but not limited to tornados, snow, rain, flooding and ice storms can be destructive causing outages and property damage that can potentially result in additional expenses, lower revenues and additional capital restoration costs. KCP&L's and GMO's rates may not always be adjusted timely and adequately to reflect these increased costs. Some of the Companies' generating stations utilize water from the Missouri River for cooling purposes. Low water and flow levels can increase maintenance costs at these stations and, if these levels were to get low enough, could require modifications to plant operations. The possible effects of climate change (such as increased temperatures, increased occurrence of severe weather or reduced precipitation, among other possible results) could potentially increase the volatility of demand and prices for energy commodities, increase the frequency and impact of severe weather, increase the frequency of flooding or decrease water and flow levels. To the extent the frequency of extreme weather events increases, this could increase the Companies' cost in providing service.
Operational Risks:
Operational risks may adversely affect the Companies' results of operations, financial position and cash flows.
The operation of the Companies' electric generation, transmission, distribution and information systems involves many risks, including breakdown or failure of equipment, aging infrastructure, processes and personnel performance; problems that delay or increase the cost of returning facilities to service after outages; limitations that may be imposed by equipment conditions or environmental, safety or other regulatory requirements; fuel supply or fuel transportation reductions or interruptions; labor disputes; difficulties with the implementation or continued operation of information systems; transmission scheduling constraints; and catastrophic events such as fires, floods, droughts, explosions, terrorism, cyber threats, severe weather or other similar occurrences. Furthermore, to the extent that a cyber attack was successful, customer and employee information may be stolen, equipment may be destroyed or damaged and operations may be disrupted. Any such equipment or system outage or constraint can, among other things:
| |
• | in the case of generation equipment, affect operating costs, increase capital requirements and costs, increase purchased power volumes and costs and reduce wholesale sales opportunities; |
| |
• | in the case of transmission equipment, affect operating costs, increase capital requirements and costs, require changes in the source of generation and affect wholesale sales opportunities and the ability to meet regulatory reliability and security requirements; |
| |
• | in the case of distribution systems, affect revenues and operating costs, increase capital requirements and costs, and affect the ability to meet regulatory service metrics and customer expectations; and |
| |
• | in the case of information systems, affect the control and operations of generation, transmission, distribution, customer information and other business operations and processes, increase operating costs, increase capital requirements and costs, and affect the ability to meet regulatory reliability and security requirements and customer expectations. |
With the exception of Hawthorn No. 5, which was substantially rebuilt in 2001, and Iatan No. 2, which was completed in 2010, all of KCP&L's and GMO's coal-fired generating units and its nuclear generating unit were constructed prior to 1986. The age of these generating units increases the risk of unplanned outages, reduced generation output and higher maintenance expense. Training, preventive maintenance and other programs have been implemented, but there is no assurance that these programs will prevent or minimize future breakdowns or failures of the Companies' generation facilities or increased maintenance expense. Furthermore, aging transmission and distribution facilities are more prone to failure than new facilities, which results in higher maintenance expense and the need to replace these facilities with new infrastructure. The higher maintenance costs and capital expenditures for new replacement infrastructure could cause additional rate volatility for the Companies' customers, resistance by the Companies' regulators to allow customer rate increases and/or regulatory lag.
The Companies currently have general liability and property insurance in place to cover their facilities in amounts that management considers appropriate. These policies, however, do not cover the Companies' transmission or distribution systems, and the cost of repairing damage to these systems may adversely affect the Companies' results of operations, financial position and cash flows. Such policies are subject to certain limits and deductibles and do not include business interruption coverage. Insurance coverage may not be available in the future at reasonable costs or on commercially reasonable terms, and the insurance proceeds received for any loss of, or any damage to, any of the Companies' facilities may not be sufficient to restore the loss or damage.
These and other operating events may reduce the Companies' revenues, increase their costs, or both, and may materially affect their results of operations, financial position and cash flows.
Cyber attacks and other disruptions to facilities could interfere with operations, expose the Companies, customers or employees to a risk of loss and could cause reputational and financial harm.
Electric utilities and other operators of critical energy infrastructure, like KCP&L and GMO, may face a heightened risk of cyber attack. The Companies' facilities could be direct targets or indirect casualties of any such cyber attacks. The Companies' business relies on information technology for the generation, transmission and distribution of electricity, their primary business, as well as in secondary operational functions, including supply chain, and invoicing and collecting payments from customers. In the ordinary course of business, the Companies collect, store and transmit sensitive data including operating information, proprietary business information belonging to the Companies and third parties and personal information belonging to customers and employees. To the extent that a cyber attack was successful, customer and employee information may be stolen, equipment may be destroyed or damaged and operations of the generation fleet and/or reliability of the transmission and distribution system may be disrupted. In such an event, the Companies may experience substantial loss of revenues, material response costs and other financial loss, including the increased cost of insurance coverage. The Companies could also be subject to litigation, increased regulation and reputational damage. Any of the foregoing could have a material adverse impact on the Companies' results of operations, financial position and cash flows.
The Companies are subject to information security risks and risks of unauthorized access to their systems.
In the course of their businesses, the Companies handle a range of system security and sensitive customer information. KCP&L and GMO are subject to laws and rules issued by different agencies concerning safeguarding and maintaining the confidentiality of this information. A security breach of the utilities' information systems such as theft or the inappropriate release of certain types of information, including confidential customer information or system operating information, could have a material adverse impact on the results of operations, financial position and cash flows of the Companies.
KCP&L and GMO operate in a highly regulated industry that requires the continued operation of sophisticated information technology systems and network infrastructures. Despite implementation of security measures, the technology systems are vulnerable to disability, failures, employee error or malfeasance, or unauthorized access. Such failures or breaches of the systems could impact the reliability of generation, transmission and distribution systems, result in legal claims and proceedings, damage the Companies' reputation and also subject the Companies to financial harm. If the technology systems were to fail or be breached and not able to be recovered in a timely manner, critical business functions could be impaired and sensitive confidential data could be compromised, which could have a material adverse impact on the Companies' results of operations, financial position and cash flows.
The cost and schedule of capital projects may materially change and expected performance may not be achieved.
Great Plains Energy's and KCP&L's businesses are capital intensive. The Companies currently have significant capital projects pending and may also have significant capital projects in the future. The risks of any capital project include: that actual costs may exceed estimated costs due to inflation or other factors; risks associated with the incurrence of additional debt or the issuance of additional equity to fund such projects; delays that may occur in obtaining permits and materials; the failure of suppliers and contractors to perform as required under their contracts; inadequate availability or increased cost of equipment, materials or qualified craft labor; delays related to inclement weather; the scope, cost and timing of projects may change due to new or changed environmental requirements, health and safety laws or other factors; and other events beyond the Companies' control may occur that may materially affect the schedule, cost and performance of these projects.
These and other risks could materially increase the estimated costs of capital projects, delay the in-service dates of projects, adversely affect the performance of the projects, and/or require the Companies to purchase additional electricity to supply their respective retail customers until the projects are completed. Thus, these risks may significantly affect the Companies' results of operations, financial position and cash flows.
Failure of one or more generation plant co-owners to pay their share of construction or operations and maintenance costs could increase the Companies' costs and capital requirements.
KCP&L owns 47% of Wolf Creek, 50% of La Cygne Station, 70% of Iatan No. 1 and 55% of Iatan No. 2. GMO owns 18% of both Iatan units and 8% of Jeffrey Energy Center. The remaining portions of these facilities are owned by other utilities that are contractually obligated to pay their proportionate share of capital and other costs.
While the ownership agreements provide that a defaulting co-owner's share of the electricity generated can be sold by the non-defaulting co-owners, there is no assurance that the revenues received will recover the increased costs borne by the non-defaulting co-owners. Occurrence of these or other events could materially increase the Companies' costs and capital requirements.
KCP&L is exposed to risks associated with the ownership and operation of a nuclear generating unit, which could result in an adverse effect on the Companies' business and financial results.
KCP&L owns 47% of Wolf Creek. The NRC has broad authority under federal law to impose licensing and safety-related requirements for the operation of nuclear generation facilities, including Wolf Creek. In the event of non-compliance, the NRC has the authority to impose fines, shut down the facilities, or both, depending upon its assessment of the severity of the situation, until compliance is achieved. Additionally, the non-compliance of other nuclear facility operators with applicable regulations or the occurrence of a serious nuclear incident anywhere in the world could result in increased regulation of the nuclear industry as a whole. Any revised safety requirements promulgated by the NRC could result in substantial capital expenditures at Wolf Creek.
Wolf Creek has the lowest fuel cost per MWh of any of KCP&L's generating units, excluding renewable generation. An extended outage of Wolf Creek, whether resulting from NRC action, an incident at the plant or otherwise, could have a material adverse effect on KCP&L's results of operations, financial position and cash flows in the event KCP&L incurs higher replacement power and other costs that are not recovered through rates or insurance. If a long-term outage occurred, the state regulatory commissions could reduce rates by excluding the Wolf Creek investment from rate base. Wolf Creek was constructed prior to 1986 and the age of Wolf Creek increases the risk of unplanned outages and results in higher maintenance costs.
Ownership and operation of a nuclear generating unit exposes KCP&L to risks regarding decommissioning costs at the end of the unit's life. KCP&L contributes annually based on estimated decommissioning costs to a tax-qualified trust fund to be used to decommission Wolf Creek. The funding level assumes a projected level of return on trust assets. If the actual return on trust assets is below the projected level or actual decommissioning costs are higher than estimated, KCP&L could be responsible for the balance of funds required and may not be allowed to recover the balance through rates.
KCP&L is also exposed to other risks associated with the ownership and operation of a nuclear generating unit, including, but not limited to, (i) potential liability associated with the potential harmful effects on the environment and human health resulting from the operation of a nuclear generating unit, (ii) the storage, handling, disposal and potential release (by accident, through third-party actions or otherwise) of radioactive materials and (iii) uncertainties with respect to contingencies and assessments if insurance coverage is inadequate. Under the structure for insurance among owners of nuclear generating units, KCP&L is also liable for potential retrospective premium assessments (subject to a cap) per incident at any commercial reactor in the country and losses in excess of insurance coverage.
On March 29, 2017, Westinghouse Electric Company, LLC (Westinghouse) filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code. Wolf Creek contracts with Westinghouse for nuclear fuel fabrications and reactor services. Westinghouse has stated that it intends to continue normal business operations. However, if Westinghouse did not perform under its contracts with Wolf Creek it could result in an extended outage at Wolf Creek. An extended outage of Wolf Creek could have a material adverse effect on Great Plains Energy's and KCP&L's results of operations, financial position and cash flows in the event KCP&L incurs higher replacement power and other costs that are not recovered through rates. In January 2018, Westinghouse issued a news release stating that it would sell its global business to an unaffiliated third party. This transaction must be approved by the bankruptcy court and applicable regulators. The process has not yet begun, but Westinghouse stated it plans to close
the transaction in the third quarter of 2018. It is not yet known at this time if Wolf Creek's contracts will be impacted.
The structure of the regional power market in which the Companies operate could have an adverse effect on the Companies' results of operations, financial position and cash flows.
In March 2014, the SPP launched its Integrated Marketplace. Similar to other RTO or ISO markets, this marketplace determines which generating units among market participants should run, within the operating constraints of a unit, at any given time for maximum cost-effectiveness. In the event that KCP&L's and GMO's generating units are not among the lowest cost generating units operating within the market, KCP&L and GMO could experience decreased levels of wholesale electricity sales.
A market for Transmission Congestion Rights (TCR) is also included as part of the Integrated Marketplace. TCRs are financial instruments used to hedge transmission congestion charges. Both KCP&L and GMO acquire TCRs for the purpose of hedging against transmission congestion charges. There is a risk that KCP&L and GMO could incorrectly model the amount of TCRs needed, or that the TCRs acquired could be ineffective in hedging against transmission congestion charges which could lead to increased purchased power costs.
The rules governing the various regional power markets may change from time to time and such changes could impact the Companies' costs and revenues. Because the manner in which RTOs or ISOs will evolve is unclear, the Companies are unable to assess fully the impact of these changes.
Litigation Risks:
The outcome of legal proceedings cannot be predicted. An adverse finding could have a material adverse effect on the Companies' results of operations, financial position and cash flows.
The Companies are party to various material litigation and regulatory matters arising out of their business operations. The ultimate outcome of these matters cannot presently be determined, nor, in many cases, can the liability that could potentially result from a negative outcome in each case be reasonably estimated. The liability that the Companies may ultimately incur with respect to any of these cases in the event of a negative outcome may be in excess of amounts currently reserved and insured against with respect to such matters.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Electric Utility Generation Resources
|
| | | | | | | | | | | |
| | | | Year | | Estimated 2018 | | Primary |
| Unit | Location | | Completed | | MW Capacity | | Fuel |
Base Load | Iatan No. 2 | Missouri | | 2010 | | | 482 |
| (a) | | Coal |
| Wolf Creek | Kansas | | 1985 | | | 552 | (a) | | Nuclear |
| Iatan No. 1 | Missouri | | 1980 | | | 490 | (a) | | Coal |
| La Cygne Nos. 1 and 2 | Kansas | | 1973, 1977 | | | 699 | (a) | | Coal |
| Hawthorn No. 5 (b) | Missouri | | 1969 | | | 564 | | | Coal |
| Montrose Nos. 2 and 3 | Missouri | 1960, 1964 | | 334 | | | Coal |
Peak Load | West Gardner Nos. 1, 2, 3 and 4 | Kansas | | 2003 | | | 314 | | | Natural Gas |
| Osawatomie | Kansas | | 2003 | | | 76 | | | Natural Gas |
| Hawthorn Nos. 6 and 9 | Missouri | | 2000 | | | 235 | | | Natural Gas |
| Hawthorn No. 8 | Missouri | | 2000 | | | 79 | | | Natural Gas |
| Hawthorn No. 7 | Missouri | | 2000 | | | 78 | | | Natural Gas |
| Northeast Black Start Unit | Missouri | | 1985 | | | 2 | | | Oil |
| Northeast Nos. 17 and 18 | Missouri | | 1977 | | | 105 | | | Oil |
| Northeast Nos. 13 and 14 | Missouri | | 1976 | | | 95 | | | Oil |
| Northeast Nos. 15 and 16 | Missouri | | 1975 | | | 106 | | | Oil |
| Northeast Nos. 11 and 12 | Missouri | | 1972 | | | 88 | | | Oil |
Wind | Spearville 2 Wind Energy Facility (c) | Kansas | | 2010 | | | 48 | | | Wind |
| Spearville 1 Wind Energy Facility (d) | Kansas | | 2006 | | | 101 | | | Wind |
Total KCP&L | | | | | | 4,448 |
| | | |
Base Load | Iatan No. 2 | Missouri | | 2010 | | | 159 | (a) | | Coal |
| Iatan No. 1 | Missouri | | 1980 | | | 126 | (a) | | Coal |
| Jeffrey Energy Center Nos. 1, 2 and 3 | Kansas | 1978, 1980, 1983 | | 173 | (a) | | Coal |
| Sibley Nos. 2 and 3 | Missouri | 1962, 1969 | | 406 | | | Coal |
Peak Load | Lake Road Nos. 2 and 4 | Missouri | | 1957, 1967 | | | 115 | | | Natural Gas |
| South Harper Nos. 1, 2 and 3 | Missouri | | 2005 | | | 303 | | | Natural Gas |
| Crossroads Energy Center | Mississippi | | 2002 | | | 292 | | | Natural Gas |
| Ralph Green No. 3 | Missouri | | 1981 | | | 71 | | | Natural Gas |
| Greenwood Nos. 1, 2, 3 and 4 | Missouri | | 1975-1979 | | | 242 | | | Natural Gas/Oil |
| Lake Road No. 5 | Missouri | | 1974 | | | 62 | | | Natural Gas/Oil |
| Lake Road Nos. 1 and 3 | Missouri | | 1951, 1962 | | | 24 | | | Natural Gas/Oil |
| Lake Road Nos. 6 and 7 | Missouri | | 1989, 1990 | | | 42 | | | Oil |
| Nevada | Missouri | | 1974 | | | 18 | | | Oil |
Total GMO | | | | | | 2,033 |
| | | |
Total Great Plains Energy | | | | | | 6,481 |
| | | |
(a) Share of a jointly owned unit.
| |
(b) | In 2001, a new boiler, air quality control equipment and an uprated turbine was placed in service at the Hawthorn Generating Station. |
| |
(c) | Accredited capacity is 16 MW pursuant to SPP reliability standards. |
| |
(d) | Accredited capacity is 31 MW pursuant to SPP reliability standards. |
KCP&L owns 50% of La Cygne No. 1 and No. 2 Units, 70% of Iatan No. 1 Unit, 55% of Iatan No. 2 Unit and 47% of Wolf Creek. GMO owns 18% of each of Iatan No. 1 and No. 2 Units and 8% of Jeffrey Energy Center No. 1, No. 2 and No. 3 Units.
Electric Utility Transmission and Distribution Resources
Electric Utility's electric transmission system interconnects with systems of other utilities for reliability and to permit wholesale transactions with other electricity suppliers. Electric Utility has approximately 3,600 circuit miles of transmission lines, 15,600 circuit miles of overhead distribution lines and 7,400 circuit miles of underground distribution lines in Missouri and Kansas. Electric Utility has all material franchise rights necessary to sell electricity within its retail service territory. Electric Utility's transmission and distribution systems are routinely monitored for adequacy to meet customer needs. Management believes the current systems are adequate to serve customers.
Electric Utility General
Electric Utility's generating plants are located on property owned (or co-owned) by KCP&L or GMO, except the Spearville Wind Energy Facilities which are located on easements, and the Crossroads Energy Center and the South Harper Facility which are contractually controlled. Electric Utility's service centers, electric substations and a portion of its transmission and distribution systems are located on property owned or leased by Electric Utility. Electric Utility's transmission and distribution systems are for the most part located above or underneath highways, streets, other public places or property owned by others. Electric Utility believes that it has satisfactory rights to use those places or properties in the form of permits, grants, easements, licenses or franchise rights; however, it has not necessarily undertaken efforts to examine the underlying title to the land upon which the rights rest. Great Plains Energy's and KCP&L's headquarters are located in leased office space.
Substantially all of the fixed property and franchises of KCP&L, which consist principally of electric generating stations, electric transmission and distribution lines and systems, and buildings (subject to exceptions, reservations and releases), are subject to a General Mortgage Indenture and Deed of Trust dated as of December 1, 1986, as supplemented (Indenture). Mortgage bonds totaling $479.5 million were outstanding at December 31, 2017.
A portion of the fixed property and franchises of GMO are subject to a General Mortgage Indenture and Deed of Trust dated as of April 1, 1946, as supplemented. Mortgage bonds totaling $4.6 million were outstanding at December 31, 2017.
ITEM 3. LEGAL PROCEEDINGS
Other Proceedings
The Companies are parties to various lawsuits and regulatory proceedings in the ordinary course of their respective businesses. For information regarding material lawsuits and proceedings, see Notes 2, 6, 15 and 16 to the consolidated financial statements. Such information is incorporated herein by reference.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
GREAT PLAINS ENERGY
Great Plains Energy's common stock is listed on the New York Stock Exchange under the symbol "GXP". At February 16, 2018, Great Plains Energy's common stock was held by 13,952 shareholders of record. Information relating to market prices and cash dividends on Great Plains Energy's common stock is set forth in the following table.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock Price Range (a) | | Common Stock |
| 2017 | | 2016 | | Dividends Declared |
Quarter | High | | Low | | High | | Low | | 2018 | | | 2017 | | 2016 |
First | $ | 29.24 |
| | $ | 26.87 |
| | $ | 32.26 |
| | $ | 26.34 |
| | $ | 0.275 |
| (b) | | $ | 0.275 |
| | $ | 0.2625 |
|
Second | 29.92 |
| | 27.86 |
| | 32.68 |
| | 28.35 |
| | | | | 0.275 |
| | 0.2625 |
|
Third | 31.58 |
| | 29.14 |
| | 31.22 |
| | 26.53 |
| | | | | 0.275 |
| | 0.2625 |
|
Fourth | 34.70 |
| | 30.55 |
| | 28.60 |
| | 26.20 |
| | | | | 0.275 |
| | 0.275 |
|
(a) Based on closing stock prices.
(b) Declared February 13, 2018, and payable March 20, 2018, to shareholders of record as of February 27, 2018.
Dividend Restrictions
For information regarding dividend restrictions, see Note 13 to the consolidated financial statements.
Purchases of Equity Securities
The following table provides information regarding purchases by Great Plains Energy for the three months ended December 31, 2017.
|
| | | | | | | | | |
Issuer Purchases of Equity Securities |
Month | | Total Number of Shares (or Units) Purchased (a) | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
October 1 - 31 | | 2,981 |
| $ | 31.54 |
| — |
| N/A |
November 1 - 30 | | 2,421 |
| 33.63 |
| — |
| N/A |
December 1 - 31 | | 17,424 |
| 32.53 |
| — |
| N/A |
Total | | 22,826 |
| $ | 32.52 |
| — |
| N/A |
(a) Represents open market purchases for the Company's Dividend Reinvestment and Direct Stock Purchase Plan and defined contribution savings plan (401(k)).
KCP&L
KCP&L is a wholly owned subsidiary of Great Plains Energy, which holds the one share of issued and outstanding KCP&L common stock.
Dividend Restrictions
For information regarding dividend restrictions, see Note 13 to the consolidated financial statements.
ITEM 6. SELECTED FINANCIAL DATA
|
| | | | | | | | | | | | | | | | | | | | |
Year Ended December 31 | | 2017 | | 2016 | | 2015 | | 2014(a) | | 2013(a) |
Great Plains Energy | | (dollars in millions except per share amounts) |
Operating revenues | | $ | 2,708 |
| | $ | 2,676 |
| | $ | 2,502 |
| | $ | 2,568 |
| | $ | 2,446 |
|
Net income (loss) | | $ | (106 | ) | | $ | 290 |
| | $ | 213 |
| | $ | 243 |
| | $ | 250 |
|
Basic and diluted earnings (loss) per common share | | $ | (0.67 | ) | | $ | 1.61 |
| | $ | 1.37 |
| | $ | 1.57 |
| | $ | 1.62 |
|
Total assets at year end (a) | | $ | 12,458 |
| | $ | 13,570 |
| | $ | 10,739 |
| | $ | 10,453 |
| | $ | 9,770 |
|
Total redeemable preferred stock, mandatorily | | | | | | | | | | |
redeemable preferred securities and long- | | | | | | | | | | |
term debt (including current maturities) (a) | | $ | 3,664 |
| | $ | 3,747 |
| | $ | 3,746 |
| | $ | 3,481 |
| | $ | 3,492 |
|
Cash dividends per common share | | $ | 1.10 |
| | $ | 1.0625 |
| | $ | 0.9975 |
| | $ | 0.935 |
| | $ | 0.8825 |
|
SEC ratio of earnings to combined fixed charges and | | | | | | | | | | |
preferred dividend requirements | | 1.66 | | 2.54 | | 2.58 | | 2.72 | | 2.75 |
| | | | | | | | | | |
KCP&L | | | | | | | | | | |
Operating revenues | | $ | 1,891 |
| | $ | 1,875 |
| | $ | 1,714 |
| | $ | 1,731 |
| | $ | 1,671 |
|
Net income | | $ | 180 |
| | $ | 225 |
| | $ | 153 |
| | $ | 162 |
| | $ | 169 |
|
Total assets at year end (a) | | $ | 8,124 |
| | $ | 8,058 |
| | $ | 7,815 |
| | $ | 7,495 |
| | $ | 6,821 |
|
Total redeemable preferred stock, mandatorily | | | | | | | | | | |
redeemable preferred securities and long- | | | | | | | | | | |
term debt (including current maturities) (a) | | $ | 2,582 |
| | $ | 2,565 |
| | $ | 2,563 |
| | $ | 2,297 |
| | $ | 2,294 |
|
SEC ratio of earnings to fixed charges | | 3.05 | | 3.30 | | 2.57 | | 2.69 | | 2.76 |
(a) Applicable balances for the years ended December 31, 2014 and 2013 have been adjusted for the adoption of Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GREAT PLAINS ENERGY INCORPORATED
EXECUTIVE SUMMARY
Description of Business
Great Plains Energy is a public utility holding company and does not own or operate any significant assets other than the stock of its subsidiaries and cash and cash equivalents.
Great Plains Energy's sole reportable business segment is Electric Utility. Electric Utility consists of KCP&L, a regulated utility, GMO's regulated utility operations and GMO Receivables Company. Electric Utility has approximately 6,500 MWs of owned generating capacity and engages in the generation, transmission, distribution and sale of electricity to approximately 867,100 customers in the states of Missouri and Kansas. Electric Utility's retail electricity rates are comparable to the national average of investor-owned utilities.
Great Plains Energy's corporate and other activities not included in the sole reportable business segment includes GMO activity other than its regulated utility operations, GPETHC and unallocated corporate charges including certain costs to achieve the anticipated merger with Westar.
Anticipated Merger with Westar Energy, Inc.
On July 9, 2017, Great Plains Energy entered into an Amended Merger Agreement by and among Great Plains Energy, Westar, Holdco, and Merger Sub. Pursuant to the Amended Merger Agreement, subject to the satisfaction or waiver of certain conditions, Great Plains Energy will merge with and into Holdco, with Holdco surviving such
merger, and Merger Sub will merge with and into Westar, with Westar surviving such merger. Upon closing, pursuant to the Amended Merger Agreement, each outstanding share of Great Plains Energy's and Westar's common stock will be converted into the right to receive 0.5981 and 1.0, respectively, of validly issued, fully paid and nonassessable shares of common stock, no par value, of Holdco. Following the mergers, Holdco, with a new name that has yet to be established, will be the parent of Great Plains Energy's direct subsidiaries, including KCP&L, and Westar.
The anticipated merger has been structured as a merger of equals in a tax-free exchange of shares that involves no premium paid or received with respect to either Great Plains Energy or Westar. Following the completion of the anticipated merger, Westar shareholders will own approximately 52.5 percent and Great Plains Energy shareholders will own approximately 47.5 percent of the combined company.
Great Plains Energy's anticipated merger with Westar was unanimously approved by the Great Plains Energy Board and Westar Board of Directors, has received the approvals of each of Great Plains Energy's and Westar's shareholders and has received early termination of the waiting period under the HSR Act with respect to antitrust review. The anticipated merger remains subject to regulatory approvals from KCC, the MPSC, NRC, FERC and FCC; as well as other contractual conditions.
See Note 2 to the consolidated financial statements for more information regarding the anticipated merger and redemption of acquisition financing associated with the Original Merger Agreement.
Expected Plant Retirements
In June 2017, Great Plains Energy and KCP&L announced plans to retire KCP&L's Montrose Station and GMO's Sibley Station by December 31, 2018 and GMO's Lake Road No. 4/6 Unit by December 31, 2019. The decision to retire these generating units, which represent approximately 900 MWs of generating capacity, was primarily driven by the age of the plants, expected environmental compliance costs and expected future generation capacity needs. See Note 1 to the consolidated financial statements for more information regarding the retirement of Sibley No. 3 Unit.
Tax Reform
In December 2017, the U.S. Congress passed and President Donald Trump signed Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (Tax Act). The Tax Act represents the first major reform in U.S. income tax law since 1986. Most notably, the Tax Act reduces the current top corporate income tax rate from 35% to 21% beginning in 2018, repeals the corporate Alternative Minimum Tax (AMT), makes existing AMT tax credit carryforwards refundable, and changes the deductibility and taxability of certain items, among other things. See Note 21 to the consolidated financial statements for more information regarding the impact of tax reform on Great Plains Energy and KCP&L.
Earnings Overview
Great Plains Energy had a loss available for common shareholders of $143.5 million or $0.67 per share in 2017 compared to earnings of $273.5 million or $1.61 per share in 2016. This decrease in earnings was largely driven by a number of non-recurring impacts due to the anticipated merger with Westar and the impacts of U.S. federal income tax reform. The specific drivers of the decrease in earnings were lower gross margin; higher depreciation expense; a loss on the settlement of the 7.00% Series B Mandatory Convertible Preferred Stock (Series B Preferred Stock) dividend make-whole provisions; a loss on extinguishment of debt related to the redemption of Great Plains Energy's $4.3 billion senior notes; an increase in interest charges; higher income tax expense and increased preferred stock dividend requirements and redemption premium; partially offset by a decrease in injuries and damages expense due to settled litigation and an increase in interest income.
In addition, a higher number of average shares outstanding due to Great Plains Energy's registered public offering of 60.5 million shares of common stock in October 2016 diluted the 2017 loss per share by $0.26.
For additional information regarding the change in earnings (loss), refer to the Great Plains Energy Results of Operations and the Electric Utility Results of Operations sections within this Management's Discussion and
Analysis of Financial Condition and Results of Operations. Gross margin is a non-GAAP financial measure. See the explanation of gross margin under Great Plains Energy's Results of Operations.
Adjusted Earnings (Non-GAAP) and Adjusted Earnings Per Share (Non-GAAP)
Great Plains Energy's adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) for 2017 were $269.4 million or $1.74 per share, respectively. Great Plains Energy's adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) for 2016 were $286.0 million and $1.85, respectively. For 2015, adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) were the same as GAAP earnings and GAAP earnings per share at $211.4 million and $1.37, respectively. In addition to earnings (loss) available for common shareholders and diluted earnings (loss) per common share, Great Plains Energy's management uses adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) to evaluate earnings and earnings per share without the impact of the anticipated merger with Westar and the initial impact of U.S. federal income tax reform.
Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) excludes certain costs, expenses, gains, losses and the per share dilutive effect of equity issuances resulting from the anticipated merger and the previous plan to acquire Westar and the income tax expense associated with the revaluation of deferred income taxes and other initial effects resulting from the enactment of U.S. federal income tax reform. This information is intended to enhance an investor's overall understanding of results. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) are used internally to measure performance against budget and in reports for management and the Great Plains Energy Board. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) are financial measures that are not calculated in accordance with GAAP and may not be comparable to other companies' presentations or more useful than the GAAP information provided elsewhere in this report.
The following table provides a reconciliation between earnings (loss) available for common shareholders and diluted earnings (loss) per common share as determined in accordance with GAAP and adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP):
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Reconciliation of GAAP to Non-GAAP | Earnings (Loss) | | Earnings (Loss) per Diluted Share |
| 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| (millions, except per share amounts) |
Earnings (loss) available for common shareholders | $ | (143.5 | ) | | $ | 273.5 |
| | $ | 211.4 |
| | $ | (0.67 | ) | | $ | 1.61 |
| | $ | 1.37 |
|
Costs to achieve the anticipated merger with Westar: | | | | | | | | | | | |
Operating expense, pre-tax (a) | 31.8 |
| | 34.2 |
| | — |
| | 0.21 |
| | 0.22 |
| | — |
|
Financing, pre-tax (b) | 85.5 |
| | 35.9 |
| | — |
| | 0.55 |
| | 0.24 |
| | — |
|
Mark-to-market impacts of interest rate swaps, pre-tax (c) | (12.1 | ) | | (79.3 | ) | | — |
| | (0.08 | ) | | (0.51 | ) | | — |
|
Interest income, pre-tax (d) | (22.8 | ) | | (3.2 | ) | | — |
| | (0.15 | ) | | (0.02 | ) | | — |
|
Loss on Series B Preferred Stock dividend make-whole provisions, pre-tax (e) | 124.8 |
| | — |
| | — |
| | 0.80 |
| | — |
| | — |
|
Loss on extinguishment of debt, pre-tax (f) | 82.8 |
| | — |
| | — |
| | 0.53 |
| | — |
| | — |
|
Write-off of Series A deferred offering expenses, pre-tax (g) | 15.0 |
| | — |
| | — |
| | 0.10 |
| | — |
| | — |
|
Income tax expense (benefit) (h) | (59.7 | ) | | 9.5 |
| | — |
| | (0.37 | ) | | 0.06 |
| | — |
|
Preferred stock (i) | 37.3 |
| | 15.4 |
| | — |
| | 0.24 |
| | 0.10 |
| | — |
|
Impact of October 2016 share issuance (j) | N/A |
| | N/A |
| | N/A |
| | (0.26 | ) | | 0.15 |
| | — |
|
Impact of U.S. federal income tax reform: | | | | | | | | | | | |
Income tax expense (k) | 130.3 |
| | — |
| | — |
| | 0.84 |
| | — |
| | — |
|
Adjusted earnings (non-GAAP) | $ | 269.4 |
| | $ | 286.0 |
| | $ | 211.4 |
| | $ | 1.74 |
| | $ | 1.85 |
| | $ | 1.37 |
|
Average Shares Outstanding | | | | | | | | | | | |
Shares used in calculating diluted earnings (loss) per common share | | | | | | | 215.5 | | 169.8 | | 154.8 |
Adjustment for October 2016 share issuance (j) | | | | | | | (60.5) | | (14.9) | | — |
Shares used in calculating adjusted earnings per share (non-GAAP) | | | | | | | 155.0 | | 154.9 | | 154.8 |
(a) Reflects legal, advisory and consulting fees and certain severance expenses and are included in Costs to achieve the anticipated merger with Westar on the consolidated statements of comprehensive income (loss).
(b) Reflects fees for a bridge term loan facility and interest on Great Plains Energy's $4.3 billion senior notes and are included in Interest charges on the consolidated statements of comprehensive income (loss).
(c) Reflects the mark-to-market impacts of interest rate swaps and is included in Interest charges and Non-operating income on the consolidated statements of comprehensive income (loss).
(d) Reflects interest income earned on the proceeds from Great Plains Energy's October 2016 equity offerings and March 2017 issuance of $4.3 billion senior notes and is included in Non-operating income on the consolidated statements of comprehensive income (loss).
(e) Reflects the loss on the settlement of the Series B Preferred Stock dividend make-whole provisions and is included within Loss on Series B Preferred Stock dividend make-whole provisions on the consolidated statements of comprehensive income (loss).
(f) Reflects the loss on extinguishment of debt due to Great Plains Energy's redemption of its $4.3 billion senior notes and is included within Loss on extinguishment of debt on the consolidated statements of comprehensive income (loss).
(g) Reflects the write-off of deferred offering fees as a result of the termination of the stock purchase agreement for $750 million of 7.25% Mandatory Convertible Preferred Stock, Series A (Series A Preferred Stock) and is included within Non-operating expenses on the consolidated statements of comprehensive income (loss).
(h) Reflects an income tax effect calculated at a 38.9% statutory rate, with the exception of certain non-deductible legal and financing fees.
(i) Reflects reductions to earnings available for common shareholders related to preferred stock dividend requirements for Great Plains Energy's Series B Preferred Stock and redemption premiums associated with Series B Preferred Stock and cumulative preferred stock and are included in Preferred stock dividend requirements and redemption premium on the consolidated statements of comprehensive income (loss).
(j) Reflects the average share impact of Great Plains Energy's issuance of 60.5 million shares of common stock in October 2016.
(k) Reflects income tax expense associated with the revaluation of deferred income taxes and other initial impacts resulting from the enactment of U.S. federal income tax reform.
Regulatory Proceedings
See Note 6 to the consolidated financial statements for information regarding regulatory proceedings.
Impact of Recently Issued Accounting Standards
See Note 1 to the consolidated financial statements for information regarding the impact of recently issued accounting standards.
Wolf Creek Refueling Outage
Wolf Creek's latest refueling outage began on September 10, 2016 and ended on November 21, 2016. Wolf Creek's next refueling outage is planned to begin in March of 2018.
ENVIRONMENTAL MATTERS
See Note 15 to the consolidated financial statements for information regarding environmental matters.
RELATED PARTY TRANSACTIONS
See Note 18 to the consolidated financial statements for information regarding related party transactions.
CRITICAL ACCOUNTING POLICIES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. Management considers an accounting estimate to be critical if it requires assumptions to be made that were uncertain at the time the estimate was made and changes in the estimate or different estimates that could have been used could have a material impact on Great Plains Energy's results of operations and financial position. Management has identified the following accounting policies as critical to the understanding of Great Plains Energy's results of operations and financial position. Management has discussed the development and selection of these critical accounting policies with the Audit Committee of the Great Plains Energy Board of Directors.
Pensions
Great Plains Energy incurs significant costs in providing non-contributory defined pension benefits. The costs are measured using actuarial valuations that are dependent upon numerous factors derived from actual plan experience and assumptions of future plan experience.
Pension costs are impacted by actual employee demographics (including age, life expectancies, compensation levels and employment periods), earnings on plan assets, the level of contributions made to the plan, and plan amendments. In addition, pension costs are also affected by changes in key actuarial assumptions, including anticipated rates of return on plan assets and the discount rates used in determining the projected benefit obligation and pension costs.
The assumed rate of return on plan assets was developed based on the weighted-average of long-term returns forecast for the expected portfolio mix of investments held by the plan. The assumed discount rate was selected based on the prevailing market rate of fixed income debt instruments with maturities matching the expected timing of the benefit obligation. These assumptions, updated annually at the measurement date, are based on management's best estimates and judgment; however, material changes may occur if these assumptions differ from actual events. See Note 9 to the consolidated financial statements for information regarding the assumptions used to determine benefit obligations and net costs.
The following table reflects the sensitivities associated with a 0.5% increase or a 0.5% decrease in key actuarial assumptions. Each sensitivity reflects the impact of the change based on a change in that assumption only.
|
| | | | | | | | | | | | | |
| | | Impact on | Impact on |
| | | Projected | 2017 |
| Change in | Benefit | Pension |
Actuarial assumption | Assumption | Obligation | Expense |
| | | (millions) |
Discount rate | 0.5 | % | increase | | $ | (97.4 | ) | | | $ | (6.3 | ) | |
Rate of return on plan assets | 0.5 | % | increase | | — |
| | | (3.7 | ) | |
Discount rate | 0.5 | % | decrease | | 110.1 |
| | | 7.0 |
| |
Rate of return on plan assets | 0.5 | % | decrease | | — |
| | | 3.7 |
| |
Pension expense for KCP&L and GMO is recorded in accordance with rate orders from the MPSC and KCC. The orders allow the difference between pension costs under GAAP and pension costs for ratemaking to be recorded as a regulatory asset or liability with future ratemaking recovery or refunds, as appropriate.
In 2017, Great Plains Energy's pension expense was $113.2 million under GAAP and $99.4 million for ratemaking. The impact on 2017 pension expense in the table above reflects the impact on GAAP pension costs. Under the Companies' rate agreements, any increase or decrease in GAAP pension expense would be deferred in a regulatory asset or liability for future ratemaking treatment. See Note 9 to the consolidated financial statements for additional information regarding the accounting for pensions.
Market conditions and interest rates significantly affect the future assets and liabilities of the plan. It is difficult to predict future pension costs, changes in pension liability and cash funding requirements due to the inherent uncertainty of market conditions.
Regulatory Assets and Liabilities
The Company has recorded assets and liabilities on its consolidated balance sheets resulting from the effects of the ratemaking process, which would not otherwise be recorded under GAAP. Regulatory assets represent incurred costs that are probable of recovery from future revenues. Regulatory liabilities represent future reductions in revenues or refunds to customers.
Management regularly assesses whether regulatory assets and liabilities are probable of future recovery or refund by considering factors such as decisions by the MPSC, KCC or FERC in Electric Utility's rate case filings; decisions in other regulatory proceedings, including decisions related to other companies that establish precedent on matters applicable to Electric Utility; and changes in laws and regulations. If recovery or refund of regulatory assets or liabilities is not approved by regulators or is no longer deemed probable, these regulatory assets or liabilities are recognized in the current period results of operations. Electric Utility's continued ability to meet the criteria for recording regulatory assets and liabilities may be affected in the future by restructuring and deregulation in the electric industry or changes in accounting rules. In the event that the criteria no longer applied to all or a portion of Electric Utility's operations, the related regulatory assets and liabilities would be written off unless an appropriate regulatory recovery mechanism were provided. Additionally, these factors could result in an impairment on utility plant assets. See Note 6 to the consolidated financial statements for additional information.
Impairments of Assets, Intangible Assets and Goodwill
Long-lived assets and intangible assets subject to amortization are required to be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed under GAAP.
Accounting rules require goodwill to be tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount, including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting unit and its fair value. Great Plains Energy's regulated electric utility operations are considered one reporting unit for assessment of impairment, as they are included within the same operating segment and have similar economic characteristics.
The annual impairment test for the $169.0 million of GMO acquisition goodwill was conducted on September 1, 2017. Fair value of the reporting unit substantially exceeded the carrying amount, including goodwill; therefore, there was no impairment of goodwill.
The determination of fair value of the reporting unit consisted of two valuation techniques: an income approach consisting of a discounted cash flow analysis and a market approach consisting of a determination of reporting unit invested capital using market multiples derived from the historical revenue, earnings before interest, income taxes, depreciation and amortization, net utility asset values and market prices of stock of peer companies. The results of the two techniques were evaluated and weighted to determine a point within the range that management considered representative of fair value for the reporting unit, which involves a significant amount of management judgment.
The discounted cash flow analysis is most significantly impacted by two assumptions: estimated future cash flows and the discount rate applied to those cash flows. Management determined the appropriate discount rate to be based on the reporting unit's weighted average cost of capital (WACC). The WACC takes into account both the return on equity authorized by the MPSC and KCC and after-tax cost of debt. Estimated future cash flows are based on Great Plains Energy's internal business plan, which assumes the occurrence of certain events in the future, such as the outcome of future rate filings, future approved rates of return on equity, anticipated earnings/returns related to future capital investments, continued recovery of cost of service and the renewal of certain contracts. Management also makes assumptions regarding the run rate of operations, maintenance and general and administrative costs based on the expected outcome of the aforementioned events. Should the actual outcome of some or all of these assumptions differ significantly from the current assumptions, revisions to current cash flow assumptions could cause the fair value of Great Plains Energy's reporting unit under the income approach to be significantly different in future periods and could result in a future impairment charge to goodwill.
The market approach analysis is most significantly impacted by management's selection of relevant peer companies as well as the determination of an appropriate control premium to be added to the calculated invested capital of the reporting unit, as control premiums associated with a controlling interest are not reflected in the quoted market price of a single share of stock. Management determined an appropriate control premium by using an average of control premiums for recent acquisitions in the industry. Changes in results of peer companies, selection of different peer companies and future acquisitions with significantly different control premiums could result in a significantly different fair value of Great Plains Energy's reporting unit.
Income Taxes
Income taxes are accounted for using the asset/liability approach. Deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the differences are expected to reverse. Deferred investment tax credits are amortized ratably over the life of the related property. Deferred tax assets are also recorded for net operating losses, capital losses and tax credit carryforwards. The Company is required to estimate the amount of taxes payable or refundable for the current year and the deferred tax liabilities and assets for future tax consequences of events reflected in the Company's consolidated financial statements or tax returns. Actual results could differ from these estimates for a variety of reasons including changes in income tax laws, enacted tax rates and results of audits by taxing authorities. This process also requires management to make assessments regarding the timing and probability of the ultimate tax impact from which actual results may differ. The Company records valuation allowances on deferred tax assets if it is determined that it is more likely than not that the asset will not be realized. See Note 21 to the consolidated financial statements for additional information.
GREAT PLAINS ENERGY RESULTS OF OPERATIONS
The following table summarizes Great Plains Energy's comparative results of operations.
|
| | | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 |
| (millions) |
Operating revenues | | $ | 2,708.2 |
| | $ | 2,676.0 |
| | $ | 2,502.2 |
|
Fuel and purchased power | | (608.6 | ) | | (590.1 | ) | | (608.7 | ) |
Transmission | | (105.7 | ) | | (84.8 | ) | | (89.1 | ) |
Other operating expenses | | (987.4 | ) | | (1,003.2 | ) | | (943.9 | ) |
Costs to achieve the anticipated merger with Westar | | (31.8 | ) | | (34.2 | ) | | — |
|
Depreciation and amortization | | (371.1 | ) | | (344.8 | ) | | (330.4 | ) |
Operating income | | 603.6 |
| | 618.9 |
| | 530.1 |
|
Non-operating income and expenses | | 19.3 |
| | 2.8 |
| | 3.7 |
|
Loss on Series B Preferred Stock dividend make-whole provisions | | (124.8 | ) | | — |
| | — |
|
Loss on extinguishment of debt | | (82.8 | ) | | — |
| | — |
|
Interest charges | | (290.7 | ) | | (161.5 | ) | | (199.3 | ) |
Income tax expense | | (233.3 | ) | | (172.2 | ) | | (122.7 | ) |
Income from equity investments | | 2.5 |
| | 2.0 |
| | 1.2 |
|
Net income (loss) | | (106.2 | ) | | 290.0 |
| | 213.0 |
|
Preferred dividends and redemption premium | | (37.3 | ) | | (16.5 | ) | | (1.6 | ) |
Earnings (loss) available for common shareholders | | $ | (143.5 | ) | | $ | 273.5 |
| | $ | 211.4 |
|
Reconciliation of gross margin to operating revenues: | | | | | | |
Operating revenues | | $ | 2,708.2 |
| | $ | 2,676.0 |
| | $ | 2,502.2 |
|
Fuel and purchased power | | (608.6 | ) | | (590.1 | ) | | (608.7 | ) |
Transmission | | (105.7 | ) | | (84.8 | ) | | (89.1 | ) |
Gross margin (a) | | $ | 1,993.9 |
| | $ | 2,001.1 |
| | $ | 1,804.4 |
|
| |
(a) | Gross margin is a non-GAAP financial measure. See explanation of gross margin below. |
2017 Compared to 2016
Electric Utility Segment
Electric Utility's net income decreased $35.2 million in 2017 compared to 2016 primarily due to:
| |
• | a $7.2 million decrease in gross margin driven by cooler weather and a performance incentive for energy efficiency programs under the Missouri Energy Efficiency Investment Act (MEEIA), primarily recognized in 2016; partially offset by an increase in weather-normalized retail demand, an increase in the recovery of program costs for energy efficiency programs under MEEIA, favorable arbitration and insurance settlements in 2017 and an increase in other margin items; |
| |
• | an $8.2 million decrease in other operating expense primarily driven by a decrease in plant operating and maintenance expense and a decrease in injuries and damages expense primarily due to settled litigation; partially offset by an increase in program costs for energy efficiency programs under MEEIA; |
| |
• | a $26.3 million increase in depreciation and amortization expense primarily driven by capital additions; and |
| |
• | a $5.1 million increase in income tax expense primarily driven by the revaluation of KCP&L's and GMO's deferred income taxes not included in rate base as a result of the enactment of U.S. federal income tax reform in December 2017 and decreased wind production tax credits in 2017; partially offset by decreased pre-tax income. |
Corporate and Other Activities
Great Plains Energy's corporate and other activities net loss increased $381.8 million in 2017 compared to 2016 primarily due to:
| |
• | $7.5 million of other operating expenses for the settlement of litigation at MPS Merchant in 2016; |
| |
• | a $2.3 million decrease in operating expenses for costs to achieve the anticipated merger with Westar; |
| |
• | a $130.8 million increase in interest charges due to: |
| |
◦ | an $81.2 million decrease in the mark-to-market gain on deal contingent interest rate swaps entered into in June 2016 to hedge against interest rate fluctuations prior to Great Plains Energy's issuance of $4.3 billion senior notes in March 2017; and |
| |
◦ | a $49.6 million increase in costs incurred to finance the acquisition of Westar under the Original Merger Agreement including $59.1 million of interest on Great Plains Energy's $4.3 billion senior notes issued in March 2017 and redeemed in July 2017 and a decrease of $9.2 million of fees and expenses for a bridge term loan facility; |
| |
• | a $33.6 million increase in non-operating income due to $14.0 million of mark-to-market gains on deal contingent interest rate swaps and an increase of $19.6 million of interest income earned on increased cash and cash equivalents at Great Plains Energy in 2017 related to the proceeds from Great Plains Energy's October 2016 common stock and Series B Preferred Stock offerings and March 2017 issuance of $4.3 billion of senior notes; |
| |
• | a $15.0 million increase in non-operating expenses due to the write-off of previously deferred offering fees as a result of the termination of the stock purchase agreement for $750 million of Series A Preferred Stock between Great Plains Energy and OCM Credit Portfolio LP (OMERS) in July 2017; |
| |
• | a $124.8 million loss on the settlement of the Series B Preferred Stock dividend make-whole provisions in connection with the redemption of Great Plains Energy's Series B Preferred Stock in August 2017; |
| |
• | an $82.8 million loss on extinguishment of debt due to Great Plains Energy's redemption of its $4.3 billion senior notes in July 2017; |
| |
• | a $66.2 million increase in income tax expense related to these items; |
| |
• | a $21.9 million increase in reductions to earnings available for common shareholders primarily due to preferred stock dividend requirements and the redemption premium for Great Plains Energy's Series B Preferred Stock issued in October 2016 and redeemed in August 2017; and |
| |
• | a $119.2 million increase in income tax expense due to the enactment of U.S. federal income tax reform in December 2017, consisting of $110.1 million related to the revaluation of GMO's non-regulated deferred income tax assets and $9.1 million of income tax expense related to the reassessment of the valuation allowance needed for the realization of refundable AMT credits and state net operating loss (NOL) carryforwards. |
2016 Compared to 2015
Electric Utility Segment
Electric Utility's net income increased $68.3 million in 2016 compared to 2015 primarily due to:
| |
• | a $196.7 million increase in gross margin driven by new retail rates and cost recovery mechanisms, warmer weather and an increase in the recovery of program costs and throughput disincentive as well as a performance incentive for energy efficiency programs under MEEIA, partially offset by a decrease in weather-normalized retail demand; |
| |
• | a $50.0 million increase in other operating expenses driven by an increase in pension expense, an increase in program costs for energy efficiency programs under MEEIA, an increase in plant operating and maintenance expense, an increase in injuries and damages expense and an increase in general taxes driven by higher property taxes and higher gross receipts taxes due to an increase in retail revenues; |
| |
• | $15.9 million of operating expenses for costs to achieve the anticipated merger with Westar; |
| |
• | a $14.4 million increase in depreciation and amortization expense driven by capital additions; |
| |
• | a $5.2 million increase in interest charges primarily due to an increase in interest expense in 2016 related to KCP&L's issuance of $350 million of 3.65% Senior Notes in August 2015; partially offset by a decrease in interest expense due to KCP&L's purchase in lieu of redemption of its $50.0 million and $21.9 million Environmental Improvement Revenue Refunding (EIRR) Series 2005 bonds in September 2015; and |
| |
• | a $43.5 million increase in income tax expense driven by an increase in pre-tax income. |
Corporate and Other Activities
Great Plains Energy's corporate and other activities net loss increased $6.2 million in 2016 compared to 2015 primarily due to:
| |
• | $7.5 million of other operating expenses for the settlement of litigation at MPS Merchant in 2016; |
| |
• | $18.3 million of operating expenses for costs to achieve the anticipated merger with Westar; |
| |
• | $35.9 million of interest charges for fees incurred for a bridge term loan facility; |
| |
• | a $79.3 million mark-to-market gain on interest rate swaps entered into in June 2016 to hedge against interest rate fluctuations on future issuances of long-term debt expected to be issued to finance a portion of the cash consideration for the acquisition of Westar under the Original Merger Agreement; |
| |
• | $3.2 million of interest income earned on the proceeds from Great Plains Energy's October 2016 common stock and depositary share offerings; |
| |
• | $12.7 million of income tax expense related to these items; and |
| |
• | $15.4 million of reductions to earnings available for common shareholders consisting of $14.8 million of dividends on Great Plains Energy's Series B Preferred Stock issued in October 2016 and $0.6 million related to the redemption of Great Plains Energy's cumulative preferred stock in August 2016. |
Gross Margin
Gross margin is a financial measure that is not calculated in accordance with GAAP. Gross margin, as used by Great Plains Energy and KCP&L, is defined as operating revenues less fuel and purchased power and transmission. Expenses for fuel and purchased power and certain transmission costs, offset by wholesale sales margin, are subject to recovery through cost adjustment mechanisms. As a result, operating revenues increase or decrease in relation to a significant portion of these expenses. Management believes that gross margin provides a meaningful basis for evaluating Electric Utility's operations across periods because gross margin excludes the revenue effect of fluctuations in these expenses. Gross margin is used internally to measure performance against budget and in reports for management and the Great Plains Energy Board. The Companies' definition of gross margin may differ from similar terms used by other companies.
ELECTRIC UTILITY RESULTS OF OPERATIONS
The following table summarizes Electric Utility's results of operations.
|
| | | | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 | |
| (millions) |
Operating revenues | | $ | 2,708.2 |
| | $ | 2,676.0 |
| | $ | 2,502.2 |
| |
Fuel and purchased power | | (608.6 | ) | | (590.1 | ) | | (608.7 | ) | |
Transmission | | (105.7 | ) | | (84.8 | ) | | (89.1 | ) | |
Other operating expenses | | (982.0 | ) | | (990.2 | ) | | (940.2 | ) | |
Costs to achieve the anticipated merger with Westar | | (15.7 | ) | | (15.9 | ) | | — |
| |
Depreciation and amortization | | (371.1 | ) | | (344.8 | ) | | (330.4 | ) | |
Operating income | | 625.1 |
| | 650.2 |
| | 533.8 |
| |
Non-operating income and expenses | | (1.9 | ) | | 2.3 |
| | 1.7 |
| |
Interest charges | | (196.9 | ) | | (196.1 | ) | | (190.9 | ) | |
Income tax expense | | (169.4 | ) | | (164.3 | ) | | (120.8 | ) | |
Net income | | $ | 256.9 |
| | $ | 292.1 |
| | $ | 223.8 |
| |
Reconciliation of gross margin to operating revenue: | | | | | | | |
Operating revenues | | $ | 2,708.2 |
| | $ | 2,676.0 |
| | $ | 2,502.2 |
| |
Fuel and purchased power | | (608.6 | ) | | (590.1 | ) | | (608.7 | ) | |
Transmission | | (105.7 | ) | | (84.8 | ) | | (89.1 | ) | |
Gross margin (a) | | $ | 1,993.9 |
| | $ | 2,001.1 |
| | $ | 1,804.4 |
| |
| |
(a) | Gross margin is a non-GAAP financial measure. See explanation of gross margin under Great Plains Energy's Results of Operations. |
Electric Utility Gross Margin and MWh Sales
The following tables summarize Electric Utility's gross margin and MWhs sold.
|
| | | | | | | | | | | | | | | | | | |
| | | % | | | | % | | | |
Gross Margin (a) | 2017 | | Change(c) | | 2016 | | Change(c) | | 2015 | |
Retail revenues | (millions) | |
Residential | $ | 1,088.5 |
| | — |
| | $ | 1,092.5 |
| | 9 |
| | $ | 1,006.2 |
| |
Commercial | 1,092.6 |
| | 2 |
| | 1,066.0 |
| | 6 |
| | 1,001.0 |
| |
Industrial | 238.3 |
| | 4 |
| | 229.6 |
| | 3 |
| | 222.3 |
| |
Other retail revenues | 18.7 |
| | (10 | ) | | 20.9 |
| | 3 |
| | 20.4 |
| |
Provision for rate refund | 10.7 |
| | N/M |
| | (9.6 | ) | | N/M |
| | — |
| |
Energy efficiency (MEEIA)(b) | 66.4 |
| | (17 | ) | | 80.0 |
| | 55 |
| | 51.5 |
| |
Total retail | 2,515.2 |
| | 1 |
| | 2,479.4 |
| | 8 |
| | 2,301.4 |
|
|
Wholesale revenues | 131.8 |
| | (7 | ) | | 142.0 |
| | (3 | ) | | 147.1 |
| |
Other revenues | 61.2 |
| | 12 |
| | 54.6 |
| | 2 |
| | 53.7 |
| |
Operating revenues | 2,708.2 |
| | 1 |
| | 2,676.0 |
| | 7 |
| | 2,502.2 |
|
|
Fuel and purchased power | (608.6 | ) | | 3 |
| | (590.1 | ) | | (3 | ) | | (608.7 | ) | |
Transmission | (105.7 | ) | | 25 |
| | (84.8 | ) | | (5 | ) | | (89.1 | ) | |
Gross margin | $ | 1,993.9 |
| | — |
| | $ | 2,001.1 |
| | 11 |
| | $ | 1,804.4 |
|
|
| |
(a) | Gross margin is a non-GAAP financial measure. See explanation of gross margin under Great Plains Energy's Results of Operations. |
| |
(b) | Consists of recovery of program costs of $55.0 million, $49.3 million and $42.9 million for 2017, 2016 and 2015, respectively, that have a direct offset in utility operating and maintenance expenses, recovery of throughput disincentive of $11.2 million, $15.1 million and $8.6 million for 2017, 2016 and 2015, respectively, and a performance incentive of $0.2 million and $15.6 million for 2017 and 2016, respectively. |
|
| | | | | | | | | | | | | | | |
| | | % | | | | % | | | |
MWh Sales | 2017 | | Change | | 2016 | | Change | | 2015 | |
Retail MWh sales | (thousands) | |
Residential | 8,564 |
| | (2 | ) | | 8,774 |
| | 2 |
| | 8,585 |
| |
Commercial | 10,695 |
| | (1 | ) | | 10,796 |
| | — |
| | 10,777 |
| |
Industrial | 3,105 |
| | (1 | ) | | 3,149 |
| | (1 | ) | | 3,191 |
| |
Other retail MWh sales | 102 |
| | (11 | ) | | 115 |
| | (1 | ) | | 116 |
| |
Total retail | 22,466 |
| | (2 | ) | | 22,834 |
| | 1 |
| | 22,669 |
| |
Wholesale MWh sales | 7,241 |
| | 3 |
| | 7,063 |
| | 9 |
| | 6,512 |
| |
Total MWh sales | 29,707 |
| | (1 | ) | | 29,897 |
| | 3 |
| | 29,181 |
| |
Electric Utility's residential customers' usage is significantly affected by weather. Bulk power sales, the major component of wholesale sales, vary with system requirements, generating unit availability, transmission availability, fuel costs, and requirements of other electric systems. Electric Utility's revenues contain certain recovery mechanisms as follows:
| |
• | KCP&L's Kansas retail rates contain an Energy Cost Adjustment (ECA) tariff. The ECA tariff reflects the projected annual amounts of fuel, purchased power, emission allowances and asset-based off-system sales margin. These projected amounts are subject to quarterly re-forecasts. Any difference between the ECA revenue collected and the actual ECA amounts for a given year (which may be positive or negative) is recorded either as a reduction of fuel and purchased power expense (for under-recoveries) or a reduction of retail revenues (for over-recoveries) and deferred as a regulatory asset or liability to be recovered from or refunded to Kansas electric retail customers over twelve months beginning April 1 of the succeeding year. |
| |
• | KCP&L's Kansas retail rates contain a Transmission Delivery Charge (TDC) rider. The TDC tariff reflects a mixture of historical and projected costs related to transmission service, certain RTO fees, transmission rate base, and transmission operating and maintenance expense. These costs are subject to an annual true-up with a twelve month recovery period. The TDC true-up is recorded either as a reduction of transmission expense (for under-recoveries) or a reduction of retail revenues (for over-recoveries) and deferred as a regulatory asset or liability to be recovered from or refunded to KCP&L's Kansas electric retail customers. The TDC became effective in conjunction with new retail rates on October 1, 2015. |
| |
• | KCP&L's Missouri retail rates contain a Fuel Adjustment Clause (FAC) tariff under which 95% of the difference between actual fuel cost, purchased power costs, certain transmission costs and off-system sales margin and the amount provided in base rates for these costs is passed along to KCP&L's customers. The FAC cycle consists of an accumulation period of six months beginning in January and July with FAC rate approval requested every six months for a twelve month recovery period. The FAC is recorded either as a reduction of fuel and purchased power expense (for under-recoveries) or a reduction of retail revenues (for over-recoveries) and deferred as a regulatory asset or liability to be recovered from or refunded to KCP&L's electric retail customers. The FAC became effective in conjunction with new retail rates on September 29, 2015. |
| |
• | GMO's electric retail rates contain a FAC tariff under which 95% of the difference between actual fuel cost, purchased power costs, certain transmission costs and off-system sales margin and the amount provided in base rates for these costs is passed along to GMO's customers. The FAC cycle consists of an accumulation period of six months beginning in June and December with FAC rate approval requested every six months for a twelve month recovery period. The FAC is recorded either as a reduction of fuel and purchased power expense (for under-recoveries) or a reduction of retail revenues (for over-recoveries) and deferred as a regulatory asset or liability to be recovered from or refunded to GMO's electric retail customers. |
| |
• | GMO's steam rates contain a Quarterly Cost Adjustment (QCA) under which 85% of the difference between actual fuel costs and base fuel costs is passed along to GMO's steam customers. The QCA is recorded either as a reduction of fuel and purchased power expense (for under-recoveries) or a reduction of retail revenues (for over-recoveries) and deferred as a regulatory asset or liability to be recovered from or refunded to GMO's steam customers. |
Both KCP&L and GMO offer energy efficiency and demand side management programs to their Missouri retail customers under MEEIA and recover program costs, throughput disincentive and as applicable, certain performance incentives in retail rates. KCP&L and GMO recover these items through a rider mechanism. For program costs, the difference between the amount collected and actual program costs is recorded either as a reduction to utility operating and maintenance expense (for under-recoveries) or a reduction to retail revenues (for over-recoveries) and is deferred as a regulatory asset or liability to be recovered from or refunded to customers. For throughput disincentive, the difference between the amount collected and the actual throughput disincentive is recorded as an increase to or reduction of retail revenues and is deferred as a regulatory asset or liability to be recovered from or refunded to customers. The performance incentive is recorded as an increase to retail revenues and a receivable to be recovered from customers.
Electric Utility's gross margin decreased $7.2 million in 2017 compared to 2016 driven by:
| |
• | an estimated $53 million decrease due to cooler weather driven by a 16% decrease in cooling degree days (CDD); |
| |
• | a $15.4 million decrease in MEEIA performance incentive related to the achievement of certain energy savings levels in the first cycle of KCP&L's and GMO's MEEIA programs, which was primarily recognized in 2016; |
| |
• | an estimated $33 million increase due to weather-normalized retail demand; |
| |
• | a $5.7 million increase for recovery of program costs for energy efficiency programs under MEEIA, which have a direct offset in utility operating and maintenance expense; |
| |
• | $6.3 million of favorable arbitration and insurance settlements in 2017 that did not pass through KCP&L's fuel recovery mechanism in Missouri; and |
| |
• | an estimated $16 million increase in other margin items. |
Electric Utility's gross margin increased $196.7 million in 2016 compared to 2015 primarily driven by:
| |
• | an estimated $111 million increase due to new retail rates and an estimated $37 million increase due to new cost recovery mechanisms for KCP&L in Missouri effective September 29, 2015, and in Kansas effective October 1, 2015; |
| |
• | an estimated $38 million increase due to warmer weather with a 16% increase in CDD in 2016; |
| |
• | a $6.4 million increase for recovery of program costs for energy efficiency programs under MEEIA, which have a direct offset in utility operating and maintenance expense; |
| |
• | a $6.5 million increase in MEEIA throughput disincentive; |
| |
• | a $15.6 million MEEIA performance incentive recognized in 2016 related to the achievement of certain energy savings levels in the first cycle of KCP&L's and GMO's MEEIA programs; and |
| |
• | an estimated $9 million decrease due to a decrease in weather-normalized retail demand. |
The following table provides CDD and heating degree days (HDD) for the last three years at the Kansas City International Airport. CDD and HDD are used to reflect the demand for energy to cool or heat homes and buildings.
|
| | | | | | | | | |
| | | % | | | | % | | |
| 2017 | | Change | | 2016 | | Change | | 2015 |
| | | | | | | | | |
CDD | 1,325 | | (16) | | 1,585 | | 16 | | 1,370 |
| | | | | | | | | |
HDD | 4,381 | | 2 | | 4,296 | | (6) | | 4,578 |
| | | | | | | | | |
Electric Utility Other Operating Expenses (including utility operating and maintenance expenses, general taxes and other)
Electric Utility's other operating expenses decreased $8.2 million in 2017 compared to 2016 primarily driven by:
| |
• | a $6.2 million decrease in plant operating and maintenance expense; |
| |
• | a $10.5 million decrease in injuries and damages expense primarily due to settled litigation in 2017 in which actual losses were less than estimated; and |
| |
• | a $5.7 million increase in program costs for energy efficiency programs under MEEIA, which have a direct offset in revenue. |
Electric Utility's other operating expenses increased $50.0 million in 2016 compared to 2015 primarily driven by:
| |
• | a $4.8 million increase in pension expense corresponding to the resetting of pension expense trackers with the effective date of new retail rates; |
| |
• | a $6.4 million increase in program costs for energy efficiency programs under MEEIA, which have a direct offset in revenue; |
| |
• | a $4.9 million increase in plant operating and maintenance expense; |
| |
• | a $7.9 million increase in injuries and damages expense primarily due to an increase in estimated losses from an unfavorable judgment in ongoing litigation; and |
| |
• | a $13.7 million increase in general taxes driven by higher property taxes and higher gross receipts taxes due to an increase in retail revenues. |
Electric Utility Depreciation and Amortization
Electric Utility's depreciation and amortization expense increased $26.3 million and $14.4 million in 2017 compared to 2016 and 2016 compared to 2015, respectively, primarily due to capital additions.
Electric Utility Interest Charges
Electric Utility's interest charges increased $5.2 million in 2016 compared to 2015 primarily due to a $7.9 million increase in interest expense related to KCP&L's issuance of $350 million of 3.65% Senior Notes in August 2015; partially offset by a $2.2 million decrease in interest expense due to KCP&L's purchase in lieu of redemption of its $50.0 million and $21.9 million EIRR Series 2005 bonds in September 2015.
Electric Utility Income Tax Expense
Electric Utility's income tax expense increased $5.1 million in 2017 compared to 2016 primarily due to an increase of $11.1 million related to the revaluation of KCP&L's and GMO's deferred income taxes not included in rate base as a result of the enactment of U.S. federal income tax reform in December 2017 and an increase of $4.5 million due to decreased wind production tax credits in 2017; partially offset by a decrease of $11.8 million due to decreased pre-tax income.
Electric Utility's income tax expense increased $43.5 million in 2016 compared to 2015 due to increased pre-tax income.
GREAT PLAINS ENERGY SIGNIFICANT BALANCE SHEET CHANGES
(December 31, 2017 compared to December 31, 2016)
| |
• | Great Plains Energy's cash and cash equivalents decreased $167.7 million primarily due to the redemption of Great Plains Energy's $4.3 billion senior notes for $4,400.1 million in July 2017, the redemption of Great Plains Energy's Series B Preferred Stock in August 2017 for $963.4 million and the maturity of Great Plains Energy's $100.0 million of 6.875% Senior Notes in September 2017; partially offset by the issuance of Great Plains Energy's $4.3 billion senior notes and the maturity of a $1.0 billion time deposit in March 2017. |
| |
• | Great Plains Energy's time deposit decreased $1.0 billion due to its maturity in March 2017. |
| |
• | Great Plains Energy's plant to be retired, net increased $143.6 million in connection with the expected retirement of GMO's Sibley No. 3 Unit. See Note 1 to the consolidated financial statements for additional information. |
| |
• | Great Plains Energy's regulatory assets decreased $134.1 million and regulatory liabilities increased $796.4 million primarily due to an $868.3 million decrease in net deferred income tax liabilities due to the revaluation and restatement of deferred income tax assets and liabilities included in rate base and a tax gross-up adjustment for ratemaking purposes in December 2017 as a result of the change in corporate income tax rate from U.S. federal income tax reform. See Note 6 and Note 21 to the consolidated financial statements for additional information. |
| |
• | Great Plains Energy's deferred income taxes decreased $708.0 million primarily due to the revaluation and restatement of deferred income tax assets and liabilities and a tax gross-up adjustment for ratemaking purposes in December 2017 as a result of the change in corporate income tax rate from U.S. federal income tax reform. |
| |
• | Great Plains Energy's preference stock without par value decreased $836.2 million due to the redemption of Great Plains Energy's Series B Preferred Stock in August 2017. |
CAPITAL REQUIREMENTS AND LIQUIDITY
Great Plains Energy operates through its subsidiaries and has no material assets other than the stock of its subsidiaries and cash and cash equivalents. Great Plains Energy's ability to make payments on its debt securities and its ability to pay dividends is dependent on its receipt of dividends or other distributions from its subsidiaries, proceeds from the issuance of its securities and borrowing under its revolving credit facility.
Great Plains Energy's capital requirements are principally comprised of debt maturities and Electric Utility's construction and other capital expenditures. These items as well as additional cash and capital requirements, including requirements related to the anticipated merger with Westar, are discussed below.
Great Plains Energy's liquid resources at December 31, 2017, consisted of $1.1 billion of cash and cash equivalents on hand and $856.4 million of available borrowing capacity from unused bank lines of credit and receivable sale agreements. The available borrowing capacity consisted of $188.0 million from Great Plains Energy's revolving credit facility, $429.8 million from KCP&L's credit facilities and $238.6 million from GMO's credit facilities. See Notes 4 and 11 to the consolidated financial statements for more information regarding the receivable sale agreements and revolving credit facilities, respectively. Generally, Great Plains Energy uses these liquid resources to meet its day-to-day cash flow requirements, and from time to time issues equity and/or long-term debt to repay short-term debt or increase cash balances.
The $1.1 billion of cash and cash equivalents on hand at December 31, 2017, is primarily the result of Great Plains Energy's common stock offering in October 2016, the proceeds of which were to be used to fund a portion of the cash consideration for the acquisition of Westar under the Original Merger Agreement. Great Plains Energy also expects to receive $140.6 million in proceeds from its deal contingent interest rate swaps upon the closing of the anticipated merger with Westar. Under the Amended Merger Agreement, Great Plains Energy is required to have not less than $1.25 billion in cash and cash equivalents on its balance sheet at the closing of the anticipated merger with Westar. It is expected that this excess cash will be returned to shareholders of the combined company through the repurchase of common stock over time after the closing of the anticipated merger.
Great Plains Energy intends to meet day-to-day cash flow requirements including interest payments, retirement of maturing debt, construction requirements, dividends and pension benefit plan funding requirements with a combination of internally generated funds and proceeds from short-term debt. From time to time, Great Plains Energy issues equity and/or long-term debt to repay short-term debt or increase cash balances. Great Plains Energy's intention to meet a portion of these requirements with internally generated funds may be impacted by the effect of inflation on operating expenses, the level of MWh sales, regulatory actions, compliance with
environmental regulations and the availability of generating units. In addition, Great Plains Energy may issue equity, equity-linked securities and/or debt to finance growth.
Cash Flows from Operating Activities
Great Plains Energy generated positive cash flows from operating activities for the periods presented. The $26.5 million increase in cash flows from operating activities for Great Plains Energy in 2017 compared to 2016 was primarily driven by a $35.5 million decrease in the under recovery of costs subject to fuel recovery mechanisms partially offset by an increase in Great Plains Energy's pension funding contributions of $7.1 million. Other changes in working capital are detailed in Note 3 to the consolidated financial statements. The individual components of working capital vary with normal business cycles and operations.
The $30.9 million increase in cash flows from operating activities for Great Plains Energy in 2016 compared to 2015 was primarily driven by new retail rates for KCP&L and warmer weather.
Cash Flows from Investing Activities
Great Plains Energy's cash used for investing activities varies with the timing of utility capital expenditures and purchases of investments and nonutility property.
In 2017, Great Plains Energy received $1.0 billion for proceeds from the maturity of a time deposit.
In 2016, Great Plains Energy purchased a $1.0 billion time deposit with a portion of the proceeds from its October 2016 common stock and depositary share offerings.
Great Plains Energy's utility capital expenditures decreased $67.7 million in 2016 compared to 2015 primarily due to a decrease in cash utility capital expenditures related to infrastructure and system improvements.
Cash Flows from Financing Activities
Great Plains Energy's cash flows from financing activities in 2017 reflects gross proceeds of $4.6 billion from the issuance of Great Plains Energy's $4.3 billion senior notes in March 2017 and KCP&L's issuance of $300.0 million of 4.20% unsecured Senior Notes in June 2017; $38.3 million in issuance fees related to the issuance of senior notes; $4.7 billion of long-term debt repayments from the maturity of KCP&L's $250.0 million of 5.85% unsecured Senior Notes in June 2017, the redemption of Great Plains Energy's $4.3 billion senior notes and a $43.0 million redemption premium in July 2017, the maturity of KCP&L's $31.0 million secured Series 1992 EIRR in July 2017 and the maturity of Great Plains Energy's $100.0 million of 6.875% unsecured Senior Notes in September 2017; a $78.0 million increase in dividends paid in 2017 compared to 2016 primarily due to Great Plains Energy's October 2016 common stock and depositary share offerings; and the $963.4 million redemption of Series B Preferred Stock in August 2017.
Great Plains Energy's cash flows from financing activities in 2016 reflect gross proceeds of $1.6 billion from the issuance of 60.5 million shares of common stock at a public offering price of $26.45 per share and gross proceeds of $862.5 million from the issuance of 17.3 million depositary shares each representing a 1/20th interest in a share of Great Plains Energy's Series B Preferred Stock at $50 per depositary share. Great Plains Energy paid $40.1 million for the redemption of its 390,000 shares of cumulative preferred stock and $143.6 million in issuance fees related to common stock and depositary share issuances, establishing Great Plains Energy's bridge term loan facility and a payment to OMERS pursuant to a stock purchase agreement.
Impact of Credit Ratings on Liquidity
The ratings of Great Plains Energy's, KCP&L's and GMO's securities by the credit rating agencies impact their liquidity, including the cost of borrowings under their revolving credit agreements and in the capital markets. The Companies view maintenance of strong credit ratings as extremely important to their access to and cost of debt financing and to that end maintain an active and ongoing dialogue with the agencies with respect to results of operations, financial position and future prospects. While a decrease in these credit ratings would not cause any acceleration of Great Plains Energy's, KCP&L's or GMO's debt, it could increase interest charges under Great Plains Energy's, KCP&L's and GMO's revolving credit agreements. A decrease in credit ratings could also have,
among other things, an adverse impact, which could be material, on Great Plains Energy's, KCP&L's and GMO's access to capital, the cost of funds, the ability to recover actual interest costs in state regulatory proceedings, the type and amounts of collateral required under supply agreements and Great Plains Energy's ability to provide credit support for its subsidiaries.
As of February 21, 2018, the major credit rating agencies rated Great Plains Energy's, KCP&L's and GMO's securities as detailed in the following table.
|
| | | | | | | |
| Moody's | | S&P Global |
| Investors Service | | Ratings |
Great Plains Energy | | | | | | | |
Outlook | | Stable | | | | Positive | |
Corporate Credit Rating | | - | | | | BBB+ | |
Senior Unsecured Debt | | Baa2 | | | | BBB | |
| | | | | | | |
KCP&L | | | | | | | |
Outlook | | Stable | | | | Positive | |
Senior Secured Debt | | A2 | | | | A | |
Senior Unsecured Debt | | Baa1 | | | | BBB+ | |
Commercial Paper | | P-2 | | | | A-2 | |
| | | | | | | |
GMO | | | | | | | |
Outlook | | Stable | | | | Positive | |
Senior Unsecured Debt | | Baa2 | | | | BBB+ | |
Commercial Paper | | P-2 | | | | A-2 | |
A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.
Financing Authorization
Under stipulations with the MPSC and KCC, Great Plains Energy and KCP&L maintain common equity at not less than 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).
KCP&L's long-term financing activities are subject to the authorization of the MPSC. In May 2017, the MPSC authorized KCP&L to issue up to $350.0 million of long-term debt through December 31, 2017. At December 31, 2017, KCP&L had utilized $300.0 million of this authorization. In February 2018, the MPSC authorized KCP&L to issue up to $750.0 million of long-term debt through September 30, 2019, to replace the authorization which expired on December 31, 2017.
KCP&L's and GMO's short-term financing activities are subject to the authorization of FERC. In November 2016, FERC authorized KCP&L to have outstanding at any one time up to a total of $1.0 billion in short-term debt instruments through December 2018. At December 31, 2017, there was $832.5 million available under this authorization. In February 2016, FERC authorized GMO to have outstanding at any one time up to a total of $750.0 million in short-term debt instruments through March 2018. At December 31, 2017, there was $540.7 million available under this authorization. In December 2017, GMO filed a request with FERC to have outstanding at any one time up to $750.0 million in short-term debt instruments through March 2020.
KCP&L and GMO are also authorized by FERC 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. At December 31, 2017, there were no outstanding payables under the money pool.
Significant Financing Activities
Great Plains Energy
Great Plains Energy has an effective shelf registration statement for the sale of unlimited amounts of securities with the SEC that became effective in March 2015 and expires in March 2018. Great Plains Energy does not expect to replace this shelf registration statement prior to the closing of the anticipated merger with Westar.
In March 2017, Great Plains Energy issued $4.3 billion of senior notes and as a result of the Amended Merger Agreement, redeemed the senior notes in July 2017. See Note 12 to the consolidated financial statements for more information on the redemption of the senior notes.
In August 2017, as a result of the Amended Merger Agreement, Great Plains Energy redeemed its Series B Preferred Stock. See Note 14 to the consolidated financial statements for more information on the redemption of the Series B Preferred Stock.
In September 2017, Great Plains Energy repaid its $100.0 million of 6.875% unsecured Senior Notes at maturity.
KCP&L
KCP&L has an effective shelf registration statement providing for the sale of unlimited amounts of notes and mortgage bonds with the SEC that was filed and became effective in March 2015 and expires in March 2018. Upon expiration of this registration statement, KCP&L intends to file a new shelf registration statement with the SEC providing for the sale of up to $1.1 billion in aggregate principal amount of notes and mortgage bonds.
In June 2017, KCP&L issued, at a discount, $300.0 million of 4.20% unsecured Senior Notes, maturing in 2047, with proceeds used to repay $250.0 million of 5.85% Senior Notes that matured in June 2017 and $31.0 million of secured Series 1992 EIRR bonds that matured in July 2017.
Debt Agreements
See Note 11 to the consolidated financial statements for information regarding revolving credit facilities.
Projected Utility Capital Expenditures
Great Plains Energy's cash utility capital expenditures, excluding Allowance for Funds Used During Construction (AFUDC) to finance construction, were $573.5 million, $609.4 million and $677.1 million in 2017, 2016 and 2015, respectively. Utility capital expenditures represent a significant portion of Great Plains Energy's capital requirements. Utility capital expenditures projected for the next five years include improvements to generating, distribution and transmission facilities, software upgrades and expenditures for environmental projects at coal-fired power plants. Great Plains Energy intends to meet these capital requirements with a combination of internally generated funds and proceeds from short-term and long-term debt.
Utility capital expenditures projected for the next five years, excluding AFUDC, are detailed in the following table. This utility capital expenditure plan is subject to continual review and change.
|
| | | | | | | | | | | | | | | | | | | | | |
| | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | |
| (millions) |
Generating facilities | | $ | 165.8 |
| | $ | 170.2 |
| | $ | 151.4 |
| | $ | 139.8 |
| | $ | 151.7 |
| |
Distribution and transmission facilities | | 246.7 |
| | 256.6 |
| | 245.7 |
| | 284.7 |
| | 235.2 |
| |
General facilities | | 100.2 |
| | 108.8 |
| | 93.4 |
| | 87.5 |
| | 71.0 |
| |
Nuclear fuel | | 21.4 |
| | 24.7 |
| | 43.8 |
| | 25.4 |
| | 24.8 |
| |
Environmental | | 14.6 |
| | 2.8 |
| | 7.7 |
| | 20.1 |
| | 63.1 |
| |
Total utility capital expenditures | | $ | 548.7 |
| | $ | 563.1 |
| | $ | 542.0 |
| | $ | 557.5 |
| | $ | 545.8 |
| |
Pensions
The Company incurs significant costs in providing defined benefit plans for substantially all active and inactive employees of KCP&L and GMO and its 47% ownership share of WCNOC's defined benefit plans. Funding of the
plans follows legal and regulatory requirements with funding equaling or exceeding the minimum requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
In 2017 and 2016, the Company contributed $76.9 million and $69.8 million to the pension plans, respectively, and expects to contribute $84.0 million in 2018 to satisfy ERISA funding requirements and the MPSC and KCC rate orders, the majority of which is expected to be paid by KCP&L. Additional contributions to the plans are expected beyond 2018 in amounts at least sufficient to meet the greater of ERISA or regulatory funding requirements; however, these amounts have not yet been determined.
Additionally, the Company provides post-retirement health and life insurance benefits for certain retired employees and expects to make benefit contributions of $4.6 million under the provisions of these plans in 2018, the majority of which is expected to be paid by KCP&L.
Management believes the Company has adequate access to capital resources through cash flows from operations or through existing lines of credit to support these funding requirements.
Supplemental Capital Requirements and Liquidity Information
The information in the following table is provided to summarize Great Plains Energy's cash obligations and commercial commitments.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Payment due by period | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | After 2022 | Total |
Long-term debt | (millions) |
Principal | $ | 351.1 |
| | $ | 401.1 |
| | $ | 1.1 |
| | $ | 432.0 |
| | $ | 287.5 |
| | $ | 2,209.6 |
| | $ | 3,682.4 |
|
Interest | 170.3 |
| | 144.9 |
| | 130.5 |
| | 121.9 |
| | 99.0 |
| | 1,180.7 |
| | 1,847.3 |
|
Lease commitments | | | | | | | | | | | | | |
Operating leases | 12.1 |
| | 9.3 |
| | 9.7 |
| | 9.7 |
| | 9.5 |
| | 101.0 |
| | 151.3 |
|
Capital leases | 0.4 |
| | 0.4 |
| | 0.4 |
| | 0.4 |
| | 0.4 |
| | 2.7 |
| | 4.7 |
|
Pension and other post-retirement plans (a) | 88.6 |
| | 88.6 |
| | 88.6 |
| | 88.6 |
| | 88.6 |
| | (a) |
| | 443.0 |
|
Purchase commitments | | | | | | | | | | | | | |
Fuel | 210.4 |
| | 180.1 |
| | 67.3 |
| | 5.1 |
| | 37.4 |
| | 80.7 |
| | 581.0 |
|
Power | 47.3 |
| | 47.3 |
| | 47.3 |
| | 47.4 |
| | 47.6 |
| | 414.6 |
| | 651.5 |
|
Other | 20.9 |
| | 14.7 |
| | 6.7 |
| | 5.5 |
| | 2.4 |
| | 35.9 |
| | 86.1 |
|
Total contractual commitments (a) | $ | 901.1 |
| | $ | 886.4 |
| | $ | 351.6 |
| | $ | 710.6 |
| | $ | 572.4 |
| | $ | 4,025.2 |
| | $ | 7,447.3 |
|
| |
(a) | The Company expects to make contributions to the pension and other post-retirement plans beyond 2022 but the amounts are not yet determined. Amounts for years after 2018 are estimates based on information available in determining the amount for 2018. Actual amounts for years after 2018 could be significantly different than the estimated amounts in the table above. |
Long-term debt includes current maturities. Long-term debt principal excludes $18.7 million of net discounts on senior notes and debt issuance costs. Variable rate interest obligations are based on rates as of December 31, 2017.
Lease commitments end in 2048. Operating lease commitments include railcars 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 $1.2 million in 2018 and approximately $0.4 million per year from 2019 to 2025, for a total of $4.0 million.
The Company expects to contribute $88.6 million to the pension and other post-retirement plans in 2018, of which the majority is expected to be paid by KCP&L. Additional contributions to the plans are expected beyond 2022 in amounts at least sufficient to meet the greater of ERISA or regulatory funding requirements; however, these amounts have not yet been determined. Amounts for years after 2018 are estimates based on information available in determining the amount for 2018. Actual amounts for years after 2018 could be significantly different than the estimated amounts in the table above.
Fuel commitments consist of commitments for nuclear fuel, coal and coal transportation costs. Power commitments consist of commitments for renewable energy under power purchase agreements. Other represents individual commitments entered into in the ordinary course of business.
Great Plains Energy has other insignificant long-term liabilities recorded on its consolidated balance sheet at December 31, 2017, which do not have a definitive cash payout date and are not included in the table above.
Off-Balance Sheet Arrangements
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 subsidiary's 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, 2017, Great Plains Energy has provided $133.5 million of credit support for GMO as follows:
| |
• | Great Plains Energy direct guarantees to GMO counterparties totaling $38.0 million, which expire in 2018 and |
| |
• | Great Plains Energy guarantees of GMO long-term debt totaling $95.5 million, which includes debt with maturity dates ranging from 2018 to 2023. |
Great Plains Energy has also guaranteed GMO's commercial paper program. At December 31, 2017, GMO had $209.3 million commercial paper outstanding. None of the guaranteed obligations are subject to default or prepayment if GMO's credit ratings were downgraded.
At December 31, 2017, KCP&L had issued letters of credit totaling $5.2 million as credit support to certain counterparties that expire in 2018. KCP&L has also issued $148.1 million of letters of credit as credit support for its variable rate EIRR Bond Series 2007A and B that expire in 2018.
At December 31, 2017, GMO had issued letters of credit totaling $2.1 million as credit support to certain counterparties that expire in 2018.
KANSAS CITY POWER & LIGHT COMPANY
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
The following table summarizes KCP&L's consolidated comparative results of operations.
|
| | | | | | | | | |
| | 2017 | | 2016 | |
| (millions) |
Operating revenues | | $ | 1,890.7 |
| | $ | 1,875.4 |
| |
Fuel and purchased power | | (412.1 | ) | | (372.7 | ) | |
Transmission | | (68.6 | ) | | (56.4 | ) | |
Other operating expenses | | (689.5 | ) | | (705.8 | ) | |
Costs to achieve the anticipated merger with Westar | | (10.5 | ) | | (10.9 | ) | |
Depreciation and amortization | | (266.3 | ) | | (247.5 | ) | |
Operating income | | 443.7 |
| | 482.1 |
| |
Non-operating income and expenses | | 3.1 |
| | 4.2 |
| |
Interest charges | | (138.8 | ) | | (139.4 | ) | |
Income tax expense | | (128.2 | ) | | (121.9 | ) | |
Net income | | $ | 179.8 |
| | $ | 225.0 |
| |
Reconciliation of gross margin to operating revenues: | | | | | |
Operating revenues | | $ | 1,890.7 |
| | $ | 1,875.4 |
| |
Fuel and purchased power | | (412.1 | ) | | (372.7 | ) | |
Transmission | | (68.6 | ) | | (56.4 | ) | |
Gross margin (a) | | $ | 1,410.0 |
| | $ | 1,446.3 |
| |
| |
(a) | Gross margin is a non-GAAP financial measure. See explanation of gross margin under Great Plains Energy's Results of Operations. |
KCP&L Gross Margin and MWh Sales
The following table summarizes KCP&L's gross margin and MWhs sold.
|
| | | | | | | | | | | | | | | | | | | |
| Revenues and Costs | | % | | MWhs Sold | | % |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Retail revenues | (millions) | | | | (thousands) | | |
Residential | $ | 715.6 |
| | $ | 713.0 |
| | — |
| | 5,182 |
| | 5,330 |
| | (3 | ) |
Commercial | 826.5 |
| | 798.5 |
| | 4 |
| | 7,466 |
| | 7,553 |
| | (1 | ) |
Industrial | 157.7 |
| | 147.4 |
| | 7 |
| | 1,815 |
| | 1,839 |
| | (1 | ) |
Other retail revenues | 11.1 |
| | 13.1 |
| | (15 | ) | | 72 |
| | 83 |
| | (14 | ) |
Provision for rate refund | 0.9 |
| | 0.8 |
| | 16 |
| | N/A |
| | N/A |
| | N/A |
|
Energy efficiency (MEEIA)(a) | 30.1 |
| | 50.9 |
| | (41) |
| | N/A |
| | N/A |
| | N/A |
|
Total retail | 1,741.9 |
| | 1,723.7 |
| | 1 |
| | 14,535 |
| | 14,805 |
| | (2 | ) |
Wholesale revenues | 122.9 |
| | 128.9 |
| | (5 | ) | | 6,788 |
| | 6,629 |
| | 2 |
|
Other revenues | 25.9 |
| | 22.8 |
| | 13 |
| | N/A |
| | N/A |
| | N/A |
|
Operating revenues | 1,890.7 |
| | 1,875.4 |
| | 1 |
| | 21,323 |
| | 21,434 |
| | (1 | ) |
Fuel and purchased power | (412.1 | ) | | (372.7 | ) | | 11 |
| | | | | | |
Transmission | (68.6 | ) | | (56.4 | ) | | 22 |
| | | | | | |
Gross margin (b) | $ | 1,410.0 |
| | $ | 1,446.3 |
| | (3 | ) | |
|
| |
|
| | |
| |
(a) | Consists of recovery of program costs of $24.1 million and $31.0 million for 2017 and 2016, respectively, that have a direct offset in operating and maintenance expenses and recovery of throughput disincentive of $6.0 million and $9.5 million for 2017 and 2016, respectively, and a performance incentive of $10.4 million for 2016. |
| |
(b) | Gross margin is a non-GAAP financial measure. See explanation of gross margin under Great Plains Energy's Results of Operations. |
KCP&L's gross margin decreased $36.3 million in 2017 compared to 2016 primarily driven by:
| |
• | an estimated $42 million decrease due to cooler weather driven by a 16% decrease in CDD; |
| |
• | a $6.9 million decrease for recovery of program costs for energy efficiency programs under MEEIA, which have a direct offset in utility operating and maintenance expense; |
| |
• | a $10.4 million MEEIA performance incentive related to the achievement of certain energy savings levels in the first cycle of KCP&L's MEEIA program, which was recognized in 2016; |
| |
• | $6.3 million of favorable arbitration and insurance settlements in 2017 that did not pass through KCP&L's fuel recovery mechanism in Missouri; and |
| |
• | an estimated $14 million increase due to weather-normalized retail demand. |
KCP&L Other Operating Expenses (including utility operating and maintenance expenses, general taxes and other)
KCP&L's other operating expenses decreased $16.3 million in 2017 compared to 2016 primarily driven by:
| |
• | a $6.9 million decrease in program costs for energy efficiency programs under MEEIA, which have a direct offset in revenue; |
| |
• | a $3.7 million decrease in plant operating and maintenance expense; and |
| |
• | a $10.6 million decrease in injuries and damages expense primarily due to settled litigation in 2017 in which actual losses were less than estimated. |
KCP&L Depreciation and Amortization
KCP&L's depreciation and amortization expense increased $18.8 million in 2017 compared to 2016 primarily due to capital additions.
KCP&L Income Tax Expense
KCP&L's income tax expense increased $6.3 million in 2017 compared to 2016 primarily due to an increase of $16.5 million related to the revaluation of KCP&L's deferred income taxes not included in rate base as a result of the enactment of U.S. federal income tax reform in December 2017 and an increase of $4.5 million due to decreased wind production tax credits in 2017; partially offset by a decrease of $15.1 million due to decreased pre-tax income.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the ordinary course of business, Great Plains Energy and KCP&L face risks that are either non-financial or non-quantifiable. Such risks principally include business, legal, operational and credit risks and are not represented in the following analysis. See Item 1A Risk Factors and Item 7 MD&A for further discussion of risk factors.
Great Plains Energy and KCP&L are exposed to market risks associated with commodity price and supply, interest rates and equity prices. Management has established risk management policies and strategies to reduce the potentially adverse effects that the volatility of the markets may have on its operating results. During the ordinary course of business, under the direction and control of an internal commodity risk committee, Great Plains Energy's and KCP&L's hedging strategies are reviewed to determine the hedging approach deemed appropriate based upon the circumstances of each situation. Though management believes its risk management practices are effective, it is not possible to identify and eliminate all risk. Great Plains Energy and KCP&L could experience losses, which could have a material adverse effect on their results of operations or financial position, due to many factors, including unexpectedly large or rapid movements or disruptions in the energy markets, from regulatory-driven market rule changes and/or bankruptcy or non-performance of customers or counterparties, and/or failure of underlying transactions that have been hedged to materialize.
Hedging Strategies
Great Plains Energy and KCP&L, from time to time, utilize derivative instruments to execute risk management and hedging strategies. Derivative instruments, such as futures, forward contracts, swaps or options, derive their value
from underlying assets, indices, reference rates or a combination of these factors. These derivative instruments include negotiated contracts, which are referred to as over-the-counter derivatives, and instruments listed and traded on an exchange.
Interest Rate Risk
Great Plains Energy and KCP&L manage interest expense and short- and long-term liquidity through a combination of fixed and variable rate debt. Generally, the amount of each type of debt is managed through market issuance, but interest rate swap and cap agreements with highly rated financial institutions may also be used to achieve the desired combination. At December 31, 2017, 4% and 7%, respectively, of Great Plains Energy's and KCP&L's long-term debt was variable rate debt. Interest rates impact the fair value of long-term debt. A change in interest rates would impact Great Plains Energy and KCP&L to the extent they redeemed any of their outstanding long-term debt. Great Plains Energy's and KCP&L's book values of long-term debt were below fair value by 7% at December 31, 2017.
Great Plains Energy and KCP&L had $376.8 million and $167.5 million, respectively, of commercial paper outstanding at December 31, 2017. The principal amount of the commercial paper, which will vary during the year, drives Great Plains Energy's and KCP&L's commercial paper interest expense. Assuming $376.8 million and $167.5 million of commercial paper was outstanding for all of 2018 for Great Plains Energy and KCP&L, respectively, a hypothetical 10% increase in commercial paper rates would result in an increase in interest expense of $0.5 million for Great Plains Energy and $0.2 million for KCP&L in 2018. Assuming $376.8 million and $167.5 million of commercial paper was outstanding for all of 2018 for Great Plains Energy and KCP&L, respectively, a hypothetical 100 basis point increase in commercial paper rates would result in an increase in interest expense of $3.8 million for Great Plains Energy and $1.7 million for KCP&L in 2018.
Commodity Risk
Great Plains Energy and KCP&L engage in the wholesale and retail marketing of electricity and are exposed to risk associated with the price of electricity. Exposure to these risks is affected by a number of factors including the quantity and availability of fuel used for generation and the quantity of electricity customers consume. Customers' electricity usage could also vary from year to year based on the weather or other factors. Quantities of fossil fuel used for generation vary from year to year based on the availability, price and deliverability of a given fuel type as well as planned and unplanned outages at facilities that use fossil fuels.
KCP&L's wholesale operations include the physical delivery and marketing of power obtained through its generation capacity. KCP&L is required to maintain a minimum reserve margin of 12%. This net positive supply of capacity is maintained through KCP&L's generation assets, capacity agreements, power purchase agreements and peak demand reduction programs to protect KCP&L from the potential operational failure of one of its power generating units. KCP&L continually evaluates the need for additional risk mitigation measures in order to minimize its financial exposure to, among other things, spikes in wholesale power prices during periods of high demand.
KCP&L's sales include the sale of electricity to its retail customers and bulk power sales of electricity in the wholesale market. KCP&L is a member of SPP Consolidated Balancing Authority (CBA) and Integrated Marketplace (IM), which are largely responsible for the dispatch of member generating facilities and the resulting supply of energy to fulfill member load obligations. KCP&L's Kansas ECA allows for the recovery of increased fuel and purchased power costs from Kansas retail customers. KCP&L’s Missouri FAC allows for KCP&L Missouri retail electric rates to be adjusted based on 95% of the difference between actual fuel and purchased power costs and the amount of fuel and purchased power costs provided in base rates. Most of the change in market prices for fuel and purchased power is recovered through the ECA or FAC, which mitigates KCP&L’s commodity price exposure.
GMO is also a member of SPP’s CBA and IM. GMO has an FAC that allows GMO to adjust retail electric rates based on 95% of the difference between actual fuel and purchased power costs and the amount of fuel and purchased power costs provided in base rates. Most of the change in market prices for fuel and purchased power is recovered through the FAC, which mitigates GMO's commodity price exposure.
Credit Risk - MPS Merchant
MPS Merchant is exposed to credit risk. Credit risk is measured by the loss that would be recorded if counterparties failed to perform pursuant to the terms of the contractual obligations less the value of any collateral held. MPS Merchant's counterparties are not externally rated. Credit exposure to counterparties at December 31, 2017, was $4.5 million.
Investment Risk
KCP&L maintains trust funds, as required by the NRC, to fund its share of decommissioning the Wolf Creek nuclear power plant. As of December 31, 2017, these funds were invested primarily in domestic equity securities and fixed income securities and are reflected at fair value on KCP&L's balance sheets. The mix of securities is designed to provide returns to be used to fund decommissioning and to compensate for inflationary increases in decommissioning costs; however, the equity securities in the trusts are exposed to price fluctuations in equity markets and the value of fixed rate fixed income securities are exposed to changes in interest rates. A hypothetical increase in interest rates resulting in a hypothetical 10% decrease in the value of the fixed income securities would have resulted in a $7.2 million reduction in the value of the decommissioning trust funds at December 31, 2017. A hypothetical 10% decrease in equity prices would have resulted in an $18.2 million reduction in the fair value of the equity securities at December 31, 2017. KCP&L's exposure to investment risk associated with the decommissioning trust funds is in large part mitigated due to the fact that KCP&L is currently allowed to recover its decommissioning costs in its rates. If the actual return on trust assets is below the anticipated level, KCP&L could be responsible for the balance of funds required to decommission Wolf Creek; however, while there can be no assurances, management believes a rate increase would be allowed to recover decommissioning costs over the remaining life of the unit.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
| | |
| | |
Report of Independent Registered Public Accounting Firm | |
| |
| |
| | |
Great Plains Energy Incorporated | |
| |
| |
| |
| |
| | |
Kansas City Power & Light Company | |
| |
| |
| |
| |
| | |
| |
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: | | |
Note 18: | | |
Note 19: | | |
Note 20: | | |
Note 21: | | |
Note 22: | | |
Note 23: | | |
Note 24: | | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Great Plains Energy Incorporated
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Great Plains Energy Incorporated and subsidiaries (the "Company") as of December 31, 2017 and 2016, and the related consolidated statements of comprehensive income (loss), shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and the financial statement schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2018, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 21, 2018
We have served as the Company's auditor since 2002.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and the Board of Directors of Kansas City Power & Light Company
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Kansas City Power & Light Company and subsidiaries (the "Company") as of December 31, 2017 and 2016, the related consolidated statements of comprehensive income, common shareholder's equity, and cash flows, for each of the three years in the period ended December 31, 2017, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2018, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 21, 2018
We have served as the Company's auditor since 2002.
|
| | | | | | | | | | | | |
GREAT PLAINS ENERGY INCORPORATED |
Consolidated Statements of Comprehensive Income (Loss) |
| | | | |
Year Ended December 31 | | 2017 | | 2016 | | 2015 |
Operating Revenues | (millions, except per share amounts) |
Electric revenues | | $ | 2,708.2 |
| | $ | 2,676.0 |
| | $ | 2,502.2 |
|
Operating Expenses | | |
| | |
| | |
Fuel and purchased power | | 608.6 |
| | 590.1 |
| | 608.7 |
|
Transmission | | 105.7 |
| | 84.8 |
| | 89.1 |
|
Utility operating and maintenance expenses | | 754.2 |
| | 759.5 |
| | 724.8 |
|
Costs to achieve the anticipated merger with Westar Energy, Inc. | | 31.8 |
| | 34.2 |
| | — |
|
Depreciation and amortization | | 371.1 |
| | 344.8 |
| | 330.4 |
|
General taxes | | 229.2 |
| | 226.7 |
| | 213.2 |
|
Other | | 4.0 |
| | 17.0 |
| | 5.9 |
|
Total | | 2,104.6 |
| | 2,057.1 |
| | 1,972.1 |
|
Operating income | | 603.6 |
| | 618.9 |
| | 530.1 |
|
Other Income (Expense) | | | | | | |
Non-operating income | | 50.7 |
| | 17.1 |
| | 11.7 |
|
Non-operating expenses | | (31.4 | ) | | (14.3 | ) | | (8.0 | ) |
Loss on Series B Preferred Stock dividend make-whole provisions (Note 14) | | (124.8 | ) | | — |
| | — |
|
Loss on extinguishment of debt (Note 12) | | (82.8 | ) | | — |
| | — |
|
Total | | (188.3 | ) | | 2.8 |
| | 3.7 |
|
Interest charges | | (290.7 | ) | | (161.5 | ) | | (199.3 | ) |
Income before income tax expense and income from equity investments | | 124.6 |
| | 460.2 |
| | 334.5 |
|
Income tax expense | | (233.3 | ) | | (172.2 | ) | | (122.7 | ) |
Income from equity investments, net of income taxes | | 2.5 |
| | 2.0 |
| | 1.2 |
|
Net income (loss) | | (106.2 | ) | | 290.0 |
| | 213.0 |
|
Preferred stock dividend requirements and redemption premium | | 37.3 |
| | 16.5 |
| | 1.6 |
|
Earnings (loss) available for common shareholders | | $ | (143.5 | ) | | $ | 273.5 |
| | $ | 211.4 |
|
| | | | | | |
Average number of basic common shares outstanding | | 215.5 |
| | 169.4 |
| | 154.2 |
|
Average number of diluted common shares outstanding | | 215.5 |
| | 169.8 |
| | 154.8 |
|
| | | | | | |
Basic and diluted earnings (loss) per common share
| | $ | (0.67 | ) | | $ | 1.61 |
| | $ | 1.37 |
|
Comprehensive Income (Loss) | | | | | | |
Net income (loss) | | $ | (106.2 | ) | | $ | 290.0 |
| | $ | 213.0 |
|
Other comprehensive income | | |
| | |
| | |
Derivative hedging activity | | |
| | |
| | |
Reclassification to expenses, net of tax | | 4.9 |
| | 5.6 |
| | 5.7 |
|
Derivative hedging activity, net of tax | | 4.9 |
| | 5.6 |
| | 5.7 |
|
Defined benefit pension plans | | | | | | |
Net gain (loss) arising during period | | (0.7 | ) | | (1.1 | ) | | 1.0 |
|
Income tax (expense) benefit | | (0.2 | ) | | 0.4 |
| | (0.4 | ) |
Net gain (loss) arising during period, net of tax | | (0.9 | ) | | (0.7 | ) | | 0.6 |
|
Amortization of net losses included in net periodic benefit costs, net of tax | | 0.4 |
| | 0.5 |
| | 0.4 |
|
Change in unrecognized pension expense, net of tax | | (0.5 | ) | | (0.2 | ) | | 1.0 |
|
Total other comprehensive income | | 4.4 |
| | 5.4 |
| | 6.7 |
|
Comprehensive income (loss) | | $ | (101.8 | ) | | $ | 295.4 |
| | $ | 219.7 |
|
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
|
| | | | | | | | | | | |
GREAT PLAINS ENERGY INCORPORATED |
Consolidated Balance Sheets |
| | | |
| December 31 |
| 2017 | | 2016 |
ASSETS | (millions, except share amounts) |
Current Assets | | | | | | | |
Cash and cash equivalents | | $ | 1,125.4 |
| | | | $ | 1,293.1 |
| |
Time deposit | | — |
| | | | 1,000.0 |
| |
Receivables, net | | 151.7 |
| | | | 166.0 |
| |
Accounts receivable pledged as collateral | | 180.0 |
| | | | 172.4 |
| |
Fuel inventories, at average cost | | 103.2 |
| | | | 108.8 |
| |
Materials and supplies, at average cost | | 171.2 |
| | | | 162.2 |
| |
Deferred refueling outage costs | | 6.8 |
| | | | 22.3 |
| |
Interest rate derivative instruments | | 91.4 |
| | | | 79.3 |
| |
Prepaid expenses and other assets | | 33.4 |
| | | | 55.4 |
| |
Total | | 1,863.1 |
| | | | 3,059.5 |
| |
Utility Plant, at Original Cost | | |
| | | | |
| |
Electric | | 13,674.1 |
| | | | 13,597.7 |
| |
Less - accumulated depreciation | | 5,224.0 |
| | | | 5,106.9 |
| |
Net utility plant in service | | 8,450.1 |
| | | | 8,490.8 |
| |
Construction work in progress | | 458.6 |
| | | | 403.9 |
| |
Plant to be retired, net | | 143.6 |
| | | | — |
| |
Nuclear fuel, net of amortization of $204.2 and $172.1 | | 72.4 |
| | | | 62.0 |
| |
Total | | 9,124.7 |
| | | | 8,956.7 |
| |
Investments and Other Assets | | |
| | | | |
| |
Nuclear decommissioning trust fund | | 258.4 |
| | | | 222.9 |
| |
Regulatory assets | | 913.9 |
| | | | 1,048.0 |
| |
Goodwill | | 169.0 |
| | | | 169.0 |
| |
Other | | 128.8 |
| | | | 113.9 |
| |
Total | | 1,470.1 |
| | | | 1,553.8 |
| |
Total | | $ | 12,457.9 |
| | | | $ | 13,570.0 |
| |
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
|
| | | | | | | | | | | |
GREAT PLAINS ENERGY INCORPORATED |
Consolidated Balance Sheets |
|
| December 31 |
| 2017 | | 2016 |
LIABILITIES AND CAPITALIZATION | (millions, except share amounts) |
Current Liabilities | | | | | | | |
Notes payable | | $ | 11.0 |
| | | | $ | — |
| |
Collateralized note payable | | 180.0 |
| | | | 172.4 |
| |
Commercial paper | | 376.8 |
| | | | 334.8 |
| |
Current maturities of long-term debt | | 351.1 |
| | | | 382.1 |
| |
Accounts payable | | 340.0 |
| | | | 323.7 |
| |
Accrued taxes | | 35.1 |
| | | | 33.3 |
| |
Accrued interest | | 42.8 |
| | | | 50.8 |
| |
Accrued compensation and benefits | | 50.1 |
| | | | 52.1 |
| |
Pension and post-retirement liability | | 2.7 |
| | | | 3.0 |
| |
Other | | 59.2 |
| | | | 32.6 |
| |
Total | | 1,448.8 |
| | | | 1,384.8 |
| |
Deferred Credits and Other Liabilities | | |
| | | | |
| |
Deferred income taxes | | 621.7 |
| | | | 1,329.7 |
| |
Deferred tax credits | | 124.8 |
| | | | 126.2 |
| |
Asset retirement obligations | | 262.5 |
| | | | 316.0 |
| |
Pension and post-retirement liability | | 535.0 |
| | | | 488.3 |
| |
Regulatory liabilities | | 1,106.3 |
| | | | 309.9 |
| |
Other | | 81.4 |
| | | | 87.9 |
| |
Total | | 2,731.7 |
| | | | 2,658.0 |
| |
Capitalization | | |
| | | | |
| |
Great Plains Energy shareholders' equity | | |
| | | | |
| |
Common stock - 600,000,000 shares authorized without par value 215,801,723 and 215,479,105 shares issued, stated value | | 4,233.1 |
| | | | 4,217.0 |
| |
Preference stock - 11,000,000 shares authorized without par value 7.00% Series B Mandatory Convertible Preferred Stock $1,000 per share liquidation preference, 0 and 862,500 shares issued and outstanding | | — |
| | | | 836.2 |
| |
Retained earnings | | 737.9 |
| | | | 1,119.2 |
| |
Treasury stock - 137,589 and 128,087 shares, at cost | | (4.0 | ) | | | | (3.8 | ) | |
Accumulated other comprehensive loss | | (2.2 | ) | | | | (6.6 | ) | |
Total shareholders' equity | | 4,964.8 |
| | | | 6,162.0 |
| |
Long-term debt (Note 12) | | 3,312.6 |
| | | | 3,365.2 |
| |
Total | | 8,277.4 |
| | | | 9,527.2 |
| |
Commitments and Contingencies (Note 15) | |
|
| | | |
|
| |
Total | | $ | 12,457.9 |
| | | | $ | 13,570.0 |
| |
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
|
| | | | | | | | | | | | | | |
GREAT PLAINS ENERGY INCORPORATED |
Consolidated Statements of Cash Flows |
|
| | | | | | | | |
Year Ended December 31 | 2017 | | | 2016 | | | 2015 | |
Cash Flows from Operating Activities | (millions) |
Net income (loss) | $ | (106.2 | ) | | | $ | 290.0 |
| | | $ | 213.0 |
| |
Adjustments to reconcile income (loss) to net cash from operating activities: | |
| | | |
| | | | |
Depreciation and amortization | 371.1 |
| | | 344.8 |
| | | 330.4 |
| |
Amortization of: | |
| | | |
| | | | |
Nuclear fuel | 32.1 |
| | | 26.6 |
| | | 26.8 |
| |
Other | 63.9 |
| | | 77.5 |
| | | 47.7 |
| |
Deferred income taxes, net | 235.4 |
| | | 170.1 |
| | | 124.9 |
| |
Investment tax credit amortization | (1.4 | ) | | | (1.4 | ) | | | (1.4 | ) | |
Income from equity investments, net of income taxes | (2.5 | ) | | | (2.0 | ) | | | (1.2 | ) | |
Fair value impacts of interest rate swaps | (12.1 | ) | | | (79.3 | ) | | | — |
| |
Loss on Series B Preferred Stock dividend make-whole provisions (Note 14) | 124.8 |
| | | — |
| | | — |
| |
Loss on extinguishment of debt (Note 12) | 82.8 |
| | | — |
| | | — |
| |
Other operating activities (Note 3) | 22.6 |
| | | (42.3 | ) | | | 12.9 |
| |
Net cash from operating activities | 810.5 |
| | | 784.0 |
| | | 753.1 |
| |
Cash Flows from Investing Activities | |
| | | |
| | | | |
Utility capital expenditures | (573.5 | ) | | | (609.4 | ) | | | (677.1 | ) | |
Allowance for borrowed funds used during construction | (7.4 | ) | | | (6.8 | ) | | | (5.8 | ) | |
Purchases of nuclear decommissioning trust investments | (33.6 | ) | | | (31.9 | ) | | | (50.9 | ) | |
Proceeds from nuclear decommissioning trust investments | 30.3 |
| | | 28.6 |
| | | 47.6 |
| |
Purchase of time deposit | — |
| | | (1,000.0 | ) | | | — |
| |
Proceeds from time deposit | 1,000.0 |
| | | — |
| | | — |
| |
Other investing activities | (45.6 | ) | | | (64.0 | ) | | | (48.2 | ) | |
Net cash from investing activities | 370.2 |
| | | (1,683.5 | ) | | | (734.4 | ) | |
Cash Flows from Financing Activities | |
| | | |
| | | | |
Issuance of common stock | 2.9 |
| | | 1,603.7 |
| | | 3.0 |
| |
Issuance of preferred stock | — |
| | | 862.5 |
| | | — |
| |
Issuance of long-term debt | 4,591.1 |
| | | — |
| | | 348.8 |
| |
Issuance of long-term debt from remarketing | — |
| | | — |
| | | 146.5 |
| |
Repayment of long-term debt from remarketing | — |
| | | — |
| | | (146.5 | ) | |
Issuance fees | (38.3 | ) | | | (143.6 | ) | | | (3.0 | ) | |
Repayment of long-term debt, including redemption premium | (4,725.1 | ) | | | (1.1 | ) | | | (87.0 | ) | |
Net change in short-term borrowings | 53.0 |
| | | 100.8 |
| | | (128.3 | ) | |
Net change in collateralized short-term borrowings | 7.6 |
| | | (2.6 | ) | | | 4.0 |
| |
Dividends paid | (272.0 | ) | | | (194.0 | ) | | | (155.5 | ) | |
Redemption of preferred stock | (963.4 | ) | | | (40.1 | ) | | | — |
| |
Other financing activities | (4.2 | ) | | | (4.3 | ) | | | (2.4 | ) | |
Net cash from financing activities | (1,348.4 | ) | | | 2,181.3 |
| | | (20.4 | ) | |
Net Change in Cash and Cash Equivalents | (167.7 | ) | | | 1,281.8 |
| | | (1.7 | ) | |
Cash and Cash Equivalents at Beginning of Year | 1,293.1 |
| | | 11.3 |
| | | 13.0 |
| |
Cash and Cash Equivalents at End of Year | $ | 1,125.4 |
| | | $ | 1,293.1 |
| | | $ | 11.3 |
| |
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
|
| | | | | | | | | | | | | | | | | | |
GREAT PLAINS ENERGY INCORPORATED |
Consolidated Statements of Shareholders' Equity |
|
| | | | | |
Year Ended December 31 | 2017 | | 2016 | 2015 |
| Shares | | Amount | | Shares | | Amount | Shares | Amount |
Common Stock | (millions, except share amounts) |
Beginning balance | 215,479,105 |
| | $ | 4,217.0 |
| | 154,504,900 |
| | $ | 2,646.7 |
| 154,254,037 |
| $ | 2,639.3 |
|
Issuance of common stock | 322,618 |
| | 11.7 |
| | 60,974,205 |
| | 1,565.3 |
| 250,863 |
| 6.6 |
|
Equity compensation expense, net of forfeitures | | | 5.4 |
| | |
| | 4.3 |
| | 1.9 |
|
Unearned Compensation | |
| | |
| | |
| | |
| | |
Issuance of restricted common stock | |
| | (2.3 | ) | | |
| | (2.8 | ) | | (2.4 | ) |
Forfeiture of restricted common stock | | | 0.7 |
| | | | — |
| | 0.5 |
|
Compensation expense recognized | |
| | 2.1 |
| | |
| | 2.7 |
| | 1.8 |
|
Other | |
| | (1.5 | ) | | |
| | 0.8 |
| | (1.0 | ) |
Ending balance | 215,801,723 |
| | 4,233.1 |
| | 215,479,105 |
| | 4,217.0 |
| 154,504,900 |
| 2,646.7 |
|
Cumulative Preferred Stock | | | | | | | | | |
Beginning balance | — |
| | — |
| | 390,000 |
| | 39.0 |
| 390,000 |
| 39.0 |
|
Redemption of cumulative preferred stock | — |
| | — |
| | (390,000 | ) | | (39.0 | ) | — |
| — |
|
Ending balance | — |
| | — |
| | — |
| | — |
| 390,000 |
| 39.0 |
|
Preference Stock | | | | | | | | | |
Beginning balance | 862,500 |
| | 836.2 |
| | — |
| | — |
| — |
| — |
|
Issuance of Series B Preferred Stock | — |
| | — |
| | 862,500 |
| | 836.2 |
| — |
| — |
|
Redemption of Series B Preferred Stock | (862,500 | ) | | (836.2 | ) | | — |
| | — |
| — |
| — |
|
Ending balance | — |
| | — |
| | 862,500 |
| | 836.2 |
| — |
| — |
|
Retained Earnings | |
| | |
| | |
| | |
| | |
Beginning balance | |
| | 1,119.2 |
| | |
| | 1,024.4 |
| | 967.8 |
|
Net income (loss) | |
| | (106.2 | ) | | |
| | 290.0 |
| | 213.0 |
|
Redemption premium on preferred stock | | | (2.4 | ) | | | | (0.6 | ) | | — |
|
Dividends: | |
| | |
| | |
| | |
| | |
Common stock ($1.10, $1.0625 and $0.9975 per share) | | (237.1 | ) | | |
| | (181.0 | ) | | (153.9 | ) |
Preferred stock - at required rates | |
| | (34.9 | ) | | |
| | (13.0 | ) | | (1.6 | ) |
Performance shares | |
| | (0.7 | ) | | |
| | (0.6 | ) | | (0.9 | ) |
Ending balance | |
| | 737.9 |
| | |
| | 1,119.2 |
| | 1,024.4 |
|
Treasury Stock | |
| | |
| | |
| | |
| | |
Beginning balance | (128,087 | ) | | (3.8 | ) | | (101,229 | ) | | (2.6 | ) | (91,281 | ) | (2.3 | ) |
Treasury shares acquired | (149,544 | ) | | (4.3 | ) | | (138,021 | ) | | (4.1 | ) | (76,468 | ) | (2.0 | ) |
Treasury shares reissued | 140,042 |
| | 4.1 |
| | 111,163 |
| | 2.9 |
| 66,520 |
| 1.7 |
|
Ending balance | (137,589 | ) | | (4.0 | ) | | (128,087 | ) | | (3.8 | ) | (101,229 | ) | (2.6 | ) |
Accumulated Other Comprehensive Income (Loss) | | |
| | |
| | |
| | |
Beginning balance | |
| | (6.6 | ) | | |
| | (12.0 | ) | | (18.7 | ) |
Derivative hedging activity, net of tax | |
| | 4.9 |
| | |
| | 5.6 |
| | 5.7 |
|
Change in unrecognized pension expense, net of tax | | (0.5 | ) | | |
| | (0.2 | ) | | 1.0 |
|
Ending balance | |
| | (2.2 | ) | | |
| | (6.6 | ) | | (12.0 | ) |
Total Great Plains Energy Shareholders' Equity | | $ | 4,964.8 |
| | |
| | $ | 6,162.0 |
| | $ | 3,695.5 |
|
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
|
| | | | | | | | | | | | |
KANSAS CITY POWER & LIGHT COMPANY |
Consolidated Statements of Comprehensive Income |
| | | | |
Year Ended December 31 | | 2017 | | 2016 | | 2015 |
Operating Revenues | | (millions) |
Electric revenues | | $ | 1,890.7 |
| | $ | 1,875.4 |
| | $ | 1,713.8 |
|
Operating Expenses | | |
| | |
| | |
|
Fuel and purchased power | | 412.1 |
| | 372.7 |
| | 397.1 |
|
Transmission | | 68.6 |
| | 56.4 |
| | 58.4 |
|
Operating and maintenance expenses | | 506.4 |
| | 525.8 |
| | 494.2 |
|
Costs to achieve the anticipated merger with Westar Energy, Inc. | | 10.5 |
| | 10.9 |
| | — |
|
Depreciation and amortization | | 266.3 |
| | 247.5 |
| | 235.7 |
|
General taxes | | 182.5 |
| | 177.5 |
| | 163.5 |
|
Other | | 0.6 |
| | 2.5 |
| | 0.9 |
|
Total | | 1,447.0 |
| | 1,393.3 |
| | 1,349.8 |
|
Operating income | | 443.7 |
| | 482.1 |
| | 364.0 |
|
Other Income (Expense) | | | | | | |
Non-operating income | | 11.2 |
| | 11.8 |
| | 8.4 |
|
Non-operating expenses | | (8.1 | ) | | (7.6 | ) | | (7.2 | ) |
Total | | 3.1 |
| | 4.2 |
| | 1.2 |
|
Interest charges | | (138.8 | ) | | (139.4 | ) | | (135.6 | ) |
Income before income tax expense | | 308.0 |
| | 346.9 |
| | 229.6 |
|
Income tax expense | | (128.2 | ) | | (121.9 | ) | | (76.8 | ) |
Net income | | $ | 179.8 |
| | $ | 225.0 |
| | $ | 152.8 |
|
Comprehensive Income | | |
| | |
| | |
|
Net income | | $ | 179.8 |
| | $ | 225.0 |
| | $ | 152.8 |
|
Other comprehensive income | | |
| | |
| | |
|
Derivative hedging activity | | |
| | |
| | |
|
Reclassification to expenses, net of tax | | 4.6 |
| | 5.4 |
| | 5.3 |
|
Derivative hedging activity, net of tax | | 4.6 |
| | 5.4 |
| | 5.3 |
|
Total other comprehensive income | | 4.6 |
| | 5.4 |
| | 5.3 |
|
Comprehensive income | | $ | 184.4 |
| | $ | 230.4 |
| | $ | 158.1 |
|
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
|
| | | | | | | | | | | |
KANSAS CITY POWER & LIGHT COMPANY |
Consolidated Balance Sheets |
|
| December 31 |
| 2017 | 2016 |
ASSETS | (millions, except share amounts) |
Current Assets | | | | | | | |
Cash and cash equivalents | | $ | 2.2 |
| | | | $ | 4.5 |
| |
Receivables, net | | 106.3 |
| | | | 139.1 |
| |
Related party receivables | | 84.7 |
| | | | 67.2 |
| |
Accounts receivable pledged as collateral | | 130.0 |
| | | | 110.0 |
| |
Fuel inventories, at average cost | | 71.0 |
| | | | 72.9 |
| |
Materials and supplies, at average cost | | 126.0 |
| | | | 118.9 |
| |
Deferred refueling outage costs | | 6.8 |
| | | | 22.3 |
| |
Refundable income taxes | | 5.4 |
| | | | 12.7 |
| |
Prepaid expenses and other assets | | 27.6 |
| | | | 27.9 |
| |
Total | | 560.0 |
| | | | 575.5 |
| |
Utility Plant, at Original Cost | | |
| | | | |
| |
Electric | | 10,213.2 |
| | | | 9,925.1 |
| |
Less - accumulated depreciation | | 4,070.3 |
| | | | 3,858.4 |
| |
Net utility plant in service | | 6,142.9 |
| | | | 6,066.7 |
| |
Construction work in progress | | 350.3 |
| | | | 300.4 |
| |
Nuclear fuel, net of amortization of $204.2 and $172.1 | | 72.4 |
| | | | 62.0 |
| |
Total | | 6,565.6 |
| | | | 6,429.1 |
| |
Investments and Other Assets | | |
| | | | |
| |
Nuclear decommissioning trust fund | | 258.4 |
| | | | 222.9 |
| |
Regulatory assets | | 691.9 |
| | | | 801.8 |
| |
Other | | 48.0 |
| | | | 29.1 |
| |
Total | | 998.3 |
| | | | 1,053.8 |
| |
Total | | $ | 8,123.9 |
| | | | $ | 8,058.4 |
| |
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
|
| | | | | | | | | | | |
KANSAS CITY POWER & LIGHT COMPANY |
Consolidated Balance Sheets |
| | | |
| December 31 |
| 2017 | | 2016 |
LIABILITIES AND CAPITALIZATION | (millions, except share amounts) |
Current Liabilities | | | | | | | |
Collateralized note payable | | $ | 130.0 |
| | | | $ | 110.0 |
| |
Commercial paper | | 167.5 |
| | | | 132.9 |
| |
Current maturities of long-term debt | | 350.0 |
| | | | 281.0 |
| |
Accounts payable | | 249.0 |
| | | | 231.6 |
| |
Accrued taxes | | 29.0 |
| | | | 27.0 |
| |
Accrued interest | | 32.4 |
| | | | 32.4 |
| |
Accrued compensation and benefits | | 50.1 |
| | | | 52.1 |
| |
Pension and post-retirement liability | | 1.4 |
| | | | 1.6 |
| |
Other | | 46.8 |
| | | | 11.4 |
| |
Total | | 1,056.2 |
| | | | 880.0 |
| |
Deferred Credits and Other Liabilities | | |
| | | | |
| |
Deferred income taxes | | 616.1 |
| | | | 1,228.3 |
| |
Deferred tax credits | | 121.8 |
| | | | 122.8 |
| |
Asset retirement obligations | | 231.4 |
| | | | 278.0 |
| |
Pension and post-retirement liability | | 512.2 |
| | | | 465.8 |
| |
Regulatory liabilities | | 779.2 |
| | | | 187.4 |
| |
Other | | 61.6 |
| | | | 70.6 |
| |
Total | | 2,322.3 |
| | | | 2,352.9 |
| |
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 | | 949.7 |
| | | | 982.6 |
| |
Accumulated other comprehensive income (loss) | | 0.4 |
| | | | (4.2 | ) | |
Total | | 2,513.2 |
| | | | 2,541.5 |
| |
Long-term debt (Note 12) | | 2,232.2 |
| | | | 2,284.0 |
| |
Total | | 4,745.4 |
| | | | 4,825.5 |
| |
Commitments and Contingencies (Note 15) | |
|
| | | |
|
| |
Total | | $ | 8,123.9 |
| | | | $ | 8,058.4 |
| |
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
|
| | | | | | | | | | | | | | |
KANSAS CITY POWER & LIGHT COMPANY |
Consolidated Statements of Cash Flows |
|
| | | | | | | | |
Year Ended December 31 | | 2017 | | | 2016 | | | 2015 |
Cash Flows from Operating Activities | (millions) |
Net income | | $ | 179.8 |
| | | $ | 225.0 |
| | | $ | 152.8 |
|
Adjustments to reconcile income to net cash from operating activities: | | | | | |
| | | |
Depreciation and amortization | | 266.3 |
| | | 247.5 |
| | | 235.7 |
|
Amortization of: | | |
| | | |
| | | |
Nuclear fuel | | 32.1 |
| | | 26.6 |
| | | 26.8 |
|
Other | | 30.2 |
| | | 33.9 |
| | | 29.1 |
|
Deferred income taxes, net | | 83.5 |
| | | 93.4 |
| | | 99.4 |
|
Investment tax credit amortization | | (1.0 | ) | | | (1.0 | ) | | | (1.0 | ) |
Other operating activities (Note 3) | | 20.0 |
| | | (2.1 | ) | | | (61.5 | ) |
Net cash from operating activities | | 610.9 |
| | | 623.3 |
| | | 481.3 |
|
Cash Flows from Investing Activities | | |
| | | |
| | | |
Utility capital expenditures | | (437.7 | ) | | | (418.8 | ) | | | (518.3 | ) |
Allowance for borrowed funds used during construction | | (6.1 | ) | | | (5.6 | ) | | | (3.9 | ) |
Purchases of nuclear decommissioning trust investments | | (33.6 | ) | | | (31.9 | ) | | | (50.9 | ) |
Proceeds from nuclear decommissioning trust investments | | 30.3 |
| | | 28.6 |
| | | 47.6 |
|
Other investing activities | | (23.9 | ) | | | (23.8 | ) | | | (25.5 | ) |
Net cash from investing activities | | (471.0 | ) | | | (451.5 | ) | | | (551.0 | ) |
Cash Flows from Financing Activities | | |
| | | |
| | | |
Issuance of long-term debt | | 299.2 |
| | | — |
| | | 348.8 |
|
Issuance of long-term debt from remarketing | | — |
| | | — |
| | | 146.5 |
|
Repayment of long-term debt from remarketing | | — |
| | | — |
| | | (146.5 | ) |
Issuance fees | | (3.0 | ) | | | (0.2 | ) | | | (3.0 | ) |
Repayment of long-term debt | | (281.0 | ) | | | — |
| | | (85.9 | ) |
Net change in short-term borrowings | | 34.6 |
| | | (47.4 | ) | | | (178.0 | ) |
Net change in collateralized short-term borrowings | | 20.0 |
| | | — |
| | | — |
|
Net money pool borrowings | | — |
| | | — |
| | | (12.6 | ) |
Dividends paid to Great Plains Energy | | (212.0 | ) | | | (122.0 | ) | | | — |
|
Net cash from financing activities | | (142.2 | ) | | | (169.6 | ) | | | 69.3 |
|
Net Change in Cash and Cash Equivalents | | (2.3 | ) | | | 2.2 |
| | | (0.4 | ) |
Cash and Cash Equivalents at Beginning of Year | | 4.5 |
| | | 2.3 |
| | | 2.7 |
|
Cash and Cash Equivalents at End of Year | | $ | 2.2 |
| | | $ | 4.5 |
| | | $ | 2.3 |
|
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
|
| | | | | | | | | | | | | | | | | | | | |
KANSAS CITY POWER & LIGHT COMPANY |
Consolidated Statements of Common Shareholder's Equity |
| | | |
| | | | | | | |
Year Ended December 31 | 2017 | | 2016 | | 2015 |
| Shares | | Amount | | Shares | | Amount | | Shares | | Amount |
| (millions, except share amounts) |
Common Stock | 1 |
| | $ | 1,563.1 |
| | 1 |
| | $ | 1,563.1 |
| | 1 |
| | $ | 1,563.1 |
|
Retained Earnings | |
| | |
| | |
| | |
| | | | |
Beginning balance | |
| | 982.6 |
| | |
| | 879.6 |
| | | | 726.8 |
|
Net income | |
| | 179.8 |
| | |
| | 225.0 |
| | | | 152.8 |
|
Cumulative effect of adoption of ASU 2016-09 (Note 1) | | | (0.7 | ) | | | | — |
| | | | — |
|
Dividends: | |
| | |
| | |
| | |
| | | | |
Common stock held by Great Plains Energy | |
| | (212.0 | ) | | |
| | (122.0 | ) | | | | — |
|
Ending balance | |
| | 949.7 |
| | |
| | 982.6 |
| | | | 879.6 |
|
Accumulated Other Comprehensive Income (Loss) | | | |
| | |
| | |
| | | | |
Beginning balance | |
| | (4.2 | ) | | |
| | (9.6 | ) | | | | (14.9 | ) |
Derivative hedging activity, net of tax | |
| | 4.6 |
| | |
| | 5.4 |
| | | | 5.3 |
|
Ending balance | |
| | 0.4 |
| | |
| | (4.2 | ) | | | | (9.6 | ) |
Total Common Shareholder's Equity | |
| | $ | 2,513.2 |
| | |
| | $ | 2,541.5 |
| | | | $ | 2,433.1 |
|
The disclosures regarding KCP&L included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
GREAT PLAINS ENERGY INCORPORATED
KANSAS CITY POWER & LIGHT COMPANY
Notes to Consolidated Financial Statements
The notes to 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.
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 and cash and cash equivalents. 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 the electric utility segment (Electric Utility). See Note 22 for additional information.
Use of Estimates
The process of preparing financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the use of estimates and assumptions that affect the reported amounts of certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.
Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments with original maturities of three months or less at acquisition.
Time Deposit
Consists of a non-negotiable fixed rate investment in a time deposit with an original maturity of greater than three months and is recorded on the balance sheet at cost. The Company estimates the fair value of the time deposit, which approximates its carrying value, using Level 2 inputs based on current interest rates for similar investments with comparable credit risk and time to maturity.
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value.
Nuclear decommissioning trust fund - KCP&L's nuclear decommissioning trust fund assets are recorded at fair value based on quoted market prices of the investments held by the fund and/or valuation models.
Pension plans - For financial reporting purposes, the market value of plan assets is the fair value. For regulatory reporting purposes, a five-year smoothing of assets is used to determine fair value.
Derivative Instruments
The Company records derivative instruments on the balance sheet at fair value in accordance with GAAP. Great Plains Energy and KCP&L enter into derivative contracts to manage exposure to commodity price and interest rate fluctuations. Derivative instruments are entered into solely for hedging purposes and are not issued or held for speculative reasons.
The Company considers various qualitative factors, such as contract and market place attributes, in designating derivative instruments at inception. Great Plains Energy and KCP&L may elect the normal purchases and normal sales (NPNS) exception, which requires the effects of the derivative to be recorded when the underlying contract settles. Great Plains Energy and KCP&L account for derivative instruments that are not designated as NPNS as non-hedging derivatives, which are recorded as assets or liabilities on the consolidated balance sheets at fair value.
Great Plains Energy and KCP&L offset fair value amounts recognized for derivative instruments under master netting arrangements, which include rights to reclaim cash collateral (a receivable), or the obligation to return cash collateral (a payable).
Utility Plant
Great Plains Energy's and KCP&L's utility plant is stated at historical cost. These costs include taxes, an allowance for the cost of borrowed and equity funds used to finance construction and payroll-related costs, including pensions and other fringe benefits. Replacements, improvements and additions to units of property are capitalized. Repairs of property and replacements of items not considered to be units of property are expensed as incurred (except as discussed under Deferred Refueling Outage Costs). When property units are retired or otherwise disposed, the original cost, net of salvage, is charged to accumulated depreciation. Substantially all of KCP&L's utility plant is pledged as collateral for KCP&L's mortgage bonds under the General Mortgage Indenture and Deed of Trust dated December 1, 1986, as supplemented (Indenture). A portion of GMO's utility plant is pledged as collateral for GMO's mortgage bonds under the General Mortgage Indenture and Deed of Trust dated April 1, 1946, as supplemented.
As prescribed by The Federal Energy Regulatory Commission (FERC), Allowance for Funds Used During Construction (AFUDC) is charged to the cost of the plant during construction. AFUDC equity funds are included as a non-cash item in non-operating income and AFUDC borrowed funds are a reduction of interest charges. The rates used to compute gross AFUDC are compounded semi-annually. The rates used to compute gross AFUDC for KCP&L averaged 4.9% in 2017, 5.7% in 2016 and 3.0% in 2015. The rates used to compute gross AFUDC for GMO averaged 1.9% in 2017, 1.6% in 2016 and 4.2% in 2015.
Great Plains Energy's and KCP&L's balances of utility plant, at original cost, with a range of estimated useful lives are listed in the following tables.
|
| | | | | | | | |
Great Plains Energy | | | | |
December 31 | | 2017 | | 2016 |
Utility plant, at original cost | | (millions) |
Generation (20 - 60 years) | | $ | 7,930.8 |
| | $ | 8,106.4 |
|
Transmission (15 - 70 years) | | 912.3 |
| | 886.3 |
|
Distribution (8 - 66 years) | | 3,789.0 |
| | 3,629.1 |
|
General (5 - 50 years) | | 1,042.0 |
| | 975.9 |
|
Total (a) | | $ | 13,674.1 |
| | $ | 13,597.7 |
|
(a) Includes $265.0 million and $261.2 million at December 31, 2017 and 2016, respectively, of land and other assets that are not depreciated. |
| | | | | | | | |
KCP&L | | | | |
December 31 | | 2017 | | 2016 |
Utility plant, at original cost | | (millions) |
Generation (20 - 60 years) | | $ | 6,471.5 |
| | $ | 6,350.7 |
|
Transmission (15 - 70 years) | | 500.4 |
| | 484.1 |
|
Distribution (8 - 55 years) | | 2,389.4 |
| | 2,298.4 |
|
General (5 - 50 years) | | 851.9 |
| | 791.9 |
|
Total (a) | | $ | 10,213.2 |
| | $ | 9,925.1 |
|
(a) Includes $176.0 million and $178.0 million at December 31, 2017 and 2016, respectively, of land and other assets that are not depreciated.
Plant to be Retired, Net
When Great Plains Energy and KCP&L retire utility plant, the original cost, net of salvage, is charged to accumulated depreciation. However, when it becomes probable an asset will be retired significantly in advance of its original expected useful life and in the near term, the cost of the asset and related accumulated depreciation is recognized as a separate asset as a probable abandonment. If the asset is still in service, the net amount is classified as plant to be retired, net on the consolidated balance sheets. If the asset is no longer in service, the net amount is classified in regulatory assets on the consolidated balance sheets.
Great Plains Energy and KCP&L must also assess the probability of full recovery of the remaining net book value of the abandonment. The net book value that may be retained as an asset on the balance sheet for the abandonment is dependent upon amounts that may be recovered through regulated rates, including any return. An impairment charge, if any, would equal the difference between the remaining net book value of the asset and the present value of the future revenues expected from the asset.
In June 2017, Great Plains Energy and KCP&L announced the expected retirement of certain older generating units, including GMO's Sibley No. 3 Unit, over the next several years. As of December 31, 2017, Great Plains Energy has determined that Sibley No. 3 Unit meets the criteria to be considered probable of abandonment and has classified its remaining net book value of $143.6 million within plant to be retired, net on its consolidated balance sheet. The Company is currently allowed a full recovery of and a full return on Sibley No. 3 Unit in rates and has concluded that no impairment is required as of December 31, 2017.
Depreciation and Amortization
Depreciation and amortization of utility plant other than nuclear fuel is computed using the straight-line method over the estimated lives of depreciable property based on rates approved by state regulatory authorities. Annual depreciation rates average approximately 3%. Nuclear fuel is amortized to fuel expense based on the quantity of heat produced during the generation of electricity.
Great Plains Energy's depreciation expense was $330.8 million, $308.8 million and $299.4 million for 2017, 2016 and 2015, respectively. KCP&L's depreciation expense was $228.4 million, $215.4 million and $208.5 million for 2017, 2016 and 2015, respectively.
Nuclear Plant Decommissioning Costs
Nuclear plant decommissioning cost estimates are based on the immediate dismantlement method and include the costs of decontamination, dismantlement and site restoration. Based on these cost estimates, KCP&L contributes to a tax-qualified trust fund to be used to decommission Wolf Creek Generating Station (Wolf Creek). Related liabilities for decommissioning are included on Great Plains Energy's and KCP&L's balance sheets in Asset Retirement Obligations (AROs).
As a result of the authorized regulatory treatment and related regulatory accounting, differences between the decommissioning trust fund asset and the related ARO are recorded as a regulatory asset or liability. See Note 8 for discussion of AROs including those associated with nuclear plant decommissioning costs.
Deferred Refueling Outage Costs
KCP&L uses the deferral method to account for operations and maintenance expenses incurred in support of Wolf Creek's scheduled refueling outages and amortizes them evenly (monthly) over the unit's operating cycle, which is approximately 18 months, until the next scheduled outage. Replacement power costs during an outage are expensed as incurred.
Regulatory Matters
KCP&L and GMO defer items on the balance sheet resulting from the effects of the ratemaking process, which would not be recorded if KCP&L and GMO were not regulated. See Note 6 for additional information concerning regulatory matters.
Revenue Recognition
Great Plains Energy and KCP&L recognize revenues on sales of electricity when the service is provided. Revenues recorded include electric services provided but not yet billed by KCP&L and GMO. Unbilled revenues are recorded for kWh usage in the period following the customers' billing cycle to the end of the month. KCP&L's and GMO's estimate is based on net system kWh usage less actual billed kWhs. KCP&L's and GMO's estimated unbilled kWhs are allocated and priced by regulatory jurisdiction across the rate classes based on actual billing rates.
KCP&L and GMO collect from customers gross receipts taxes levied by state and local governments. These taxes from KCP&L's Missouri customers are recorded gross in operating revenues and general taxes on Great Plains Energy's and KCP&L's statements of comprehensive income. KCP&L's gross receipts taxes collected from Missouri customers were $72.9 million, $70.3 million and $62.0 million in 2017, 2016 and 2015, respectively. These taxes from KCP&L's Kansas customers and GMO's customers are recorded net in operating revenues on Great Plains Energy's and KCP&L's statements of comprehensive income (loss).
Great Plains Energy and KCP&L collect sales taxes from customers and remit to state and local governments. These taxes are presented on a net basis on Great Plains Energy's and KCP&L's statements of comprehensive income (loss).
Great Plains Energy and KCP&L record sale and purchase activity on a net basis in wholesale revenue or purchased power when transacting with Regional Transmission Organization (RTO)/Independent System Operator (ISO) markets.
Allowance for Doubtful Accounts
This reserve represents estimated uncollectible accounts receivable and is based on management's judgment considering historical loss experience and the characteristics of existing accounts. Provisions for losses on receivables are expensed to maintain the allowance at a level considered adequate to cover expected losses. Receivables are charged off against the reserve when they are deemed uncollectible.
Property Gains and Losses
Net gains and losses from the sale of assets and businesses and from asset impairments are recorded in operating expenses.
Asset Impairments
Long-lived assets and finite-lived intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the undiscounted expected future cash flows from an asset to be held and used is less than the carrying value of the asset, an asset impairment must be recognized in the financial statements. The amount of impairment recognized is the excess of the carrying value of the asset over its fair value.
Goodwill and indefinite lived intangible assets are tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. The annual test must be performed at the same time each year. The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount, including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting unit and its fair value.
Income Taxes
Income taxes are accounted for using the asset/liability approach. Deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized.
Great Plains Energy and KCP&L recognize tax benefits based on a “more-likely-than-not” recognition threshold. In addition, Great Plains Energy and KCP&L recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in non-operating expenses.
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. Income taxes for consolidated or combined subsidiaries are allocated to the subsidiaries based on separate company computations of income or loss. KCP&L's income tax provision includes taxes allocated based on its separate company income or loss.
As of December 31, 2017, Great Plains Energy and KCP&L have established a net regulatory liability for the additional future refunds to be made to customers for the over collection of income taxes in rates. Tax credits are recognized in the year generated except for certain KCP&L and GMO investment tax credits that have been deferred and amortized over the remaining service lives of the related properties.
Environmental Matters
Environmental costs are accrued when it is probable a liability has been incurred and the amount of the liability can be reasonably estimated.
Non-Operating Income and Expenses
In 2017, Great Plains Energy's non-operating income included $22.8 million of interest income earned on increased cash and cash equivalents at Great Plains Energy in 2017 related to the proceeds from Great Plains Energy's October 2016 common stock and Series B Preferred Stock offerings and March 2017 issuance of $4.3 billion of senior notes and $14.0 million of mark-to-market gains on deal contingent interest rate swaps.
In 2017, Great Plains Energy's non-operating expenses included $15.0 million due to the write-off of previously deferred offering fees as a result of the termination of the stock purchase agreement for $750 million of Series A Preferred Stock between Great Plains Energy and OCM Credit Portfolio LP (OMERS) in July 2017.
Basic and Diluted Earnings (Loss) per Common Share Calculation
To determine basic earnings (loss) per common share (EPS), preferred stock dividend requirements and redemption premium are deducted from net income (loss) before dividing by the average number of common shares outstanding. To determine diluted EPS, preferred stock dividend requirements and redemption premium are added to earnings available for common shareholders for the periods in which the assumed conversion of Great Plains Energy's 7.00% Series B Mandatory Convertible Preferred Stock (Series B Preferred Stock) has a dilutive effect before dividing by the diluted average number of common shares outstanding. See Note 14 for additional information regarding Series B Preferred Stock. The effect of dilutive securities assumes the issuance of common shares applicable to performance shares and restricted stock calculated using the treasury stock method and the number of common shares that would be issued under an assumed conversion of Series B Preferred Stock using the if-converted method.
The following table reconciles Great Plains Energy's basic and diluted EPS.
|
| | | | | | | | | | | |
| 2017 | | 2016 | | 2015 |
| (millions, except per share amounts) |
Income (Loss) | | | | | |
Net income (loss) | $ | (106.2 | ) | | $ | 290.0 |
| | $ | 213.0 |
|
Less: preferred stock dividend requirements and redemption premium | 37.3 |
| | 16.5 |
| | 1.6 |
|
Earnings (loss) available for common shareholders | $ | (143.5 | ) | | $ | 273.5 |
| | $ | 211.4 |
|
Common Shares Outstanding | |
| | |
| | |
|
Average number of common shares outstanding | 215.5 |
| | 169.4 |
| | 154.2 |
|
Add: effect of dilutive securities | — |
| | 0.4 |
| | 0.6 |
|
Diluted average number of common shares outstanding | 215.5 |
| | 169.8 |
| | 154.8 |
|
Basic and Diluted EPS | $ | (0.67 | ) | | $ | 1.61 |
| | $ | 1.37 |
|
Anti-dilutive shares excluded from the computation of diluted EPS for 2017 were 226,958 performance shares and 144,989 restricted stock shares. Anti-dilutive shares excluded from the computation of diluted EPS for 2016 were 7,805,460 shares of Series B Preferred Stock assumed to be converted. Anti-dilutive shares excluded from the computation of diluted EPS for 2015 were 900 restricted stock shares.
Dividends Declared
In February 2018, Great Plains Energy's Board of Directors (Great Plains Energy Board) declared a quarterly dividend of $0.275 per share on Great Plains Energy's common stock. The common dividend is payable March 20, 2018, to shareholders of record as of February 27, 2018.
In February 2018, KCP&L's Board of Directors declared a cash dividend payable to Great Plains Energy of $60 million payable on March 19, 2018.
New Accounting Standards
In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09, Compensation-Stock Compensation, which is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The Companies adopted ASU No. 2016-09 on January 1, 2017. The cumulative effect from the adoption of ASU No. 2016-09 was insignificant to Great Plains Energy's consolidated financial statements and resulted in a reduction to retained earnings of $0.7 million for KCP&L. The Companies have elected to adopt the cash flow presentation of the excess tax benefits as an operating activity prospectively and no prior periods have been adjusted.
In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits, which requires an employer to disaggregate the service cost component from the other components of net benefit cost. The service cost component is to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The non-service cost components are to be reported
separately from service costs and outside of a subtotal of income from operations. The amendments in this update allow only the service cost component to be eligible for capitalization as part of utility plant. The non-service cost components that are no longer eligible for capitalization as part of utility plant will be recorded as a regulatory asset. The new guidance is to be applied retrospectively for the presentation of service cost and non-service cost components in the income statement and prospectively for the capitalization of the service cost component. The Companies adopted ASU No. 2017-07 on January 1, 2018, and it will not have a material impact on their consolidated financial statements as the impacts of adoption are limited to changes in the classification of non-service cost.
In May 2014, the FASB issued 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. In August 2015, the FASB issued ASU No. 2015-14, deferring the effective date of ASU No. 2014-09 one year, from January 1, 2017, to January 1, 2018. The ASU replaced most existing revenue recognition guidance in GAAP when it became effective. The Companies adopted ASU No. 2014-09 on January 1, 2018 using the modified retrospective transition method. The adoption of the standard did not have a material impact on the Companies' amount or timing of revenue recognition. The Companies will include additional disclosures regarding the nature, amount and timing of their revenues from contracts with customers, including disaggregated revenue by customer type, in their first quarter 2018 notes to financial statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires an entity that is a lessee to record a right-of-use asset and a lease liability for lease payments on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new guidance is effective for interim and annual periods beginning after December 15, 2018, and is required to be applied using a modified retrospective approach. Great Plains Energy and KCP&L plan to adopt the new guidance on January 1, 2019. The Companies expect that the new guidance will affect the balance sheet by increasing the assets and liabilities recorded related to operating leases and continue to evaluate the effect that ASU No. 2016-02 will have on their income statement, statement of cash flows and related disclosures.
2. ANTICIPATED MERGER WITH WESTAR ENERGY, INC.
In May 2016, Great Plains Energy entered into an Agreement and Plan of Merger dated as of May 29, 2016, by and among Great Plains Energy, Westar Energy, Inc. (Westar) and GP Star, Inc. (GP Star) (Original Merger Agreement). Pursuant to the Original Merger Agreement, Great Plains Energy would have acquired Westar for (i) $51.00 in cash and (ii) a number of shares of Great Plains Energy common stock, equal to an exchange ratio for each share of Westar common stock issued and outstanding immediately prior to the effective time of the merger, with Westar becoming a wholly owned subsidiary of Great Plains Energy. The acquisition was subject to various shareholder and regulatory approvals, including from The State Corporation Commission of the State of Kansas (KCC), the Public Service Commission of the State of Missouri (MPSC) and FERC.
In April, 2017, KCC issued an order denying Great Plains Energy's, KCP&L's and Westar's joint application for approval of the acquisition of Westar by Great Plains Energy citing concerns with the purchase price, Great Plains Energy's capital structure, quantifiable and demonstrable customer benefits and staffing levels in Westar's service territory, among other items.
In July 2017, Great Plains Energy entered into an Amended and Restated Agreement and Plan of Merger dated as of July 9, 2017 by and among Great Plains Energy, Westar, Monarch Energy Holding, Inc., a Missouri corporation (Holdco), and King Energy, Inc., a Kansas corporation and wholly owned subsidiary of Holdco (Merger Sub) (Amended Merger Agreement). Pursuant to the Amended Merger Agreement, subject to the satisfaction or waiver of certain conditions, Great Plains Energy will merge with and into Holdco, with Holdco surviving such merger, and Merger Sub will merge with and into Westar, with Westar surviving such merger. Pursuant to the Amended Merger Agreement, at closing each outstanding share of Great Plains Energy's and Westar's common stock will be converted into the right to receive 0.5981 and 1.0, respectively, of validly issued, fully paid and nonassessable
shares of common stock, no par value, of Holdco. Following the mergers, Holdco, with a new name that has yet to be established, will be the parent of Great Plains Energy's direct subsidiaries, including KCP&L, and Westar.
The anticipated merger with Westar has been structured as a merger of equals in a tax-free exchange of shares that involves no premium paid or received with respect to either Great Plains Energy or Westar. Following the completion of the anticipated merger, Westar shareholders will own approximately 52.5 percent and Great Plains Energy shareholders will own approximately 47.5 percent of the combined company.
Regulatory and Shareholder Approvals
Great Plains Energy's anticipated merger with Westar was unanimously approved by the Great Plains Energy Board and Westar's Board of Directors (Westar Board). In November 2017, shareholders of Great Plains Energy and Westar approved all proposals necessary for the merger of Great Plains Energy and Westar at each company's respective shareholder meeting. The anticipated merger remains subject to regulatory approvals from KCC, the MPSC, the Nuclear Regulatory Commission (NRC), FERC and The Federal Communications Commission (FCC); as well as other contractual conditions.
KCC Approval
In August 2017, Great Plains Energy, KCP&L and Westar filed a joint application with KCC for approval of the anticipated merger with Westar. An evidentiary hearing is expected to occur in March 2018 and a decision from KCC on the joint application is expected by June 5, 2018.
MPSC Approval
In August 2017, Great Plains Energy, KCP&L, GMO and Westar filed a joint application with the MPSC for approval of the anticipated merger with Westar. In January 2018, Great Plains Energy, KCP&L, GMO and Westar reached a stipulation and agreement with the MPSC staff and certain other intervenors in the case settling all issues in the joint application except for the assignment of bill credit amounts to retail electric customers at KCP&L and GMO. The stipulation and agreement imposes certain conditions on Holdco, KCP&L and GMO in the areas of financing, ratemaking, customer service, corporate social responsibility and also includes other general provisions. The stipulation and agreement with the MPSC staff, among other things, provides that retail rates for KCP&L Missouri and GMO customers will not increase as a result of the merger and that in the event KCP&L's or GMO's credit ratings are downgraded below investment grade as a result of their affiliation with Holdco or any of Holdco's affiliates, KCP&L and GMO will be restricted from paying a dividend unless approved by the MPSC or until their credit ratings are restored to investment grade. The stipulation and agreement must still be approved by the MPSC. An evidentiary hearing in the case is expected to occur in March 2018. While there is not a statutory deadline for an MPSC ruling on the joint application, a decision from the MPSC is expected in the second quarter of 2018.
Other Approvals
In September 2017, Great Plains Energy and Westar filed applications with FERC and the NRC for approval of the merger. In October 2017, the Securities and Exchange Commission (SEC) declared effective a registration statement on Form S-4 of Holdco including a joint proxy statement of Great Plains Energy and Westar that was used in connection with Great Plains Energy's and Westar's special shareholder meetings on November 21, 2017, and the registration of shares of Holdco common stock to be issued to Great Plains Energy's and Westar's shareholders at the closing of the anticipated merger. In November 2017, Great Plains Energy and Westar filed their respective Pre-Merger Notification and Report forms with the Federal Trade Commission (FTC) and the Department of Justice (DOJ) under the Hart-Scott-Rodino (HSR) Act. In December 2017, the FTC granted Great Plains Energy's request for early termination of the waiting period under the HSR Act with respect to the anticipated merger. In February 2018, Great Plains Energy, KCP&L, GMO and Westar filed Transfer of Control applications with FCC.
Termination Fees
The Amended Merger Agreement provides that in connection with a termination of the agreement under specified circumstances relating to a failure to obtain regulatory approvals by July 9, 2018 (which date may be extended to January 9, 2019), a final and nonappealable order enjoining the consummation of the anticipated merger in connection with regulatory approvals or failure by Great Plains Energy to comply with its obligations under the
Amended Merger Agreement to consummate the closing of the anticipated merger once all of the conditions have been satisfied, Great Plains Energy may be required to pay Westar a termination fee of $190 million. In addition, in the event that the Amended Merger Agreement is terminated by Westar under certain circumstances to enter into a definitive acquisition agreement with respect to a superior proposal, Westar may be required to pay Great Plains Energy a termination fee of $190 million. Similarly, in the event that the Amended Merger Agreement is terminated by Great Plains Energy under certain circumstances to enter into a definitive acquisition agreement with respect to a superior proposal, Great Plains Energy may be required to pay Westar a termination fee of $190 million.
Shareholder Lawsuits
Following the announcement of the Original Merger Agreement in May 2016, two putative class action complaints (which were consolidated and superseded by a consolidated complaint) were filed in the District Court of Shawnee County, Kansas. On October 20, 2017, the lead plaintiff in that consolidated putative class action filed an amended class action petition. The amended petition named as defendants Westar, the Westar Board, Great Plains Energy, Holdco and Merger Sub. The amended petition challenged the proposed merger and alleged breaches of fiduciary duties against the Westar Board in connection with the proposed merger, including the duty of candor, and that Westar, Great Plains Energy, Holdco and Merger Sub aided and abetted such breaches of fiduciary duties.
On September 21, 2017, a putative class action lawsuit was filed in the U.S. District Court for the District of Kansas. The federal class action complaint named as defendants Westar, the Westar Board, Great Plains Energy, Holdco and Merger Sub. The complaint challenged the merger and alleged violations of section 14(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) against all of the defendants and violations of section 20(a) of the Exchange Act against the Westar Board.
On October 6, 2017, a putative class action lawsuit was filed in the U.S. District Court for the District of Kansas. The federal class action complaint named as defendants Westar, the Westar Board, Great Plains Energy, Holdco and Merger Sub. The complaint challenged the proposed merger and alleged violations of section 14(a) of the Exchange Act against Westar and the Westar Board and violations of section 20(a) of the Exchange Act against the Westar Board, Great Plains Energy, Holdco and Merger Sub.
On October 13, 2017, a putative class action lawsuit was filed in the U.S. District Court for the Western District of Missouri, Western Division. The federal class action complaint named as defendants Great Plains Energy and the Great Plains Energy Board. The complaint challenged the proposed merger and alleged violations of section 14(a) of the Exchange Act against all of the defendants and violations of section 20(a) of the Exchange Act against the Great Plains Energy Board.
On October 18, 2017, a putative derivative complaint was filed in Shawnee County, Kansas. This putative derivative action named as defendants the Westar Board, Great Plains Energy, Holdco and Merger Sub, with Westar named as a nominal defendant. The complaint challenged the proposed merger and alleged that the Westar Board determined to forego a $380 million break-up fee allegedly payable to Westar associated with the Original Merger Agreement, breached their fiduciary duties to Westar shareholders in connection with the proposed merger, and that Great Plains Energy, Holdco and Merger Sub aided and abetted such breaches of fiduciary duties.
On November 16, 2017, the plaintiffs in these lawsuits agreed in principle to dismiss the lawsuits and, in exchange, Great Plains Energy, Westar Energy and Holdco agreed, solely in order to avoid the risk that litigation might delay or otherwise adversely affect the consummation of the proposed merger under the Amended Merger Agreement and to minimize the expense of defending such actions, to make supplemental disclosures to the Joint Proxy Statement/Prospectus, which were made on Forms 8-K dated November 16, 2017. The lawsuits have been dismissed. These dismissals do not release or otherwise prejudice any potential claims of any member of the putative class, other than for the plaintiffs in these lawsuits, and do not constitute any admission by any of the defendants as to the merits of any claims.
Redemption of Acquisition Financing
In order to fund the cash portion of the acquisition under the Original Merger Agreement, Great Plains Energy completed registered public offerings of 60.5 million shares of common stock for total net proceeds of $1.55 billion
and 17.3 million depositary shares each representing a 1/20th interest in a share of Series B Preferred Stock for total net proceeds of $836.2 million in October 2016 and issued, at a discount, $4.3 billion of senior notes in March 2017. Great Plains Energy also entered into a stock purchase agreement with OMERS, pursuant to which Great Plains Energy would issue and sell to OMERS 750,000 shares of preferred stock of Great Plains Energy designated as 7.25% Mandatory Convertible Preferred Stock, Series A (Series A Preferred Stock), without par value, for an aggregate purchase price equal to $750 million at the closing of the acquisition.
In addition to the financings discussed above, Great Plains Energy also entered into a senior unsecured bridge term loan facility in connection with the Original Merger Agreement in an aggregate principal amount of $8.017 billion (which was subsequently reduced to $864.5 million as a result of the completed financings noted above) to support the anticipated transaction and provide flexibility for the timing of long-term financing.
As a result of the Amended Merger Agreement, the following occurred with regards to Great Plains Energy's acquisition financing arrangements:
| |
• | In July 2017, Great Plains Energy redeemed its $4.3 billion of senior notes at a redemption price of 101% of the aggregate principle amount, plus accrued and unpaid interest. See Note 12 for additional information; |
| |
• | In August 2017, Great Plains Energy redeemed its Series B Preferred Stock at a redemption price that was equal to a make-whole formula set forth in the terms of the Series B Preferred Stock. See Note 14 for additional information; |
| |
• | In July 2017, Great Plains Energy and OMERS terminated their stock purchase agreement for $750 million of Series A Preferred Stock. As a result of this termination, Great Plains Energy recorded $15 million of previously deferred offering fees to non-operating expenses in the third quarter of 2017; and |
| |
• | In July 2017, Great Plains Energy terminated its $864.5 million unsecured bridge term loan facility. |
Under the Amended Merger Agreement, Great Plains Energy is required to have not less than $1.25 billion in cash and cash equivalents on its balance sheet at the closing of the anticipated merger with Westar. It is expected that this excess cash will be returned to shareholders of the combined company through the repurchase of common stock over time after the closing of the anticipated merger.
3. SUPPLEMENTAL CASH FLOW INFORMATION
|
| | | | | | | | | | | |
Great Plains Energy Other Operating Activities | | |
Year Ended December 31 | 2017 | | 2016 | | 2015 |
Cash flows affected by changes in: | (millions) |
Receivables | $ | 14.8 |
| | $ | (18.3 | ) | | $ | 12.5 |
|
Accounts receivable pledged as collateral | (7.6 | ) | | 2.6 |
| | (4.0 | ) |
Fuel inventories | 5.6 |
| | 9.6 |
| | (28.3 | ) |
Materials and supplies | (9.0 | ) | | (6.5 | ) | | (3.0 | ) |
Accounts payable | 9.0 |
| | (25.4 | ) | | (11.4 | ) |
Accrued taxes | 1.5 |
| | 8.1 |
| | 1.1 |
|
Accrued interest | (8.0 | ) | | 6.1 |
| | 3.4 |
|
Deferred refueling outage costs | 15.5 |
| | (3.1 | ) | | (6.7 | ) |
Pension and post-retirement benefit obligations | 26.1 |
| | 27.4 |
| | 18.5 |
|
Allowance for equity funds used during construction | (6.0 | ) | | (6.6 | ) | | (4.8 | ) |
Fuel recovery mechanisms | (11.4 | ) | | (46.9 | ) | | 47.5 |
|
ARO settlements | (28.5 | ) | | (17.4 | ) | | (4.1 | ) |
Other | 20.6 |
| | 28.1 |
| | (7.8 | ) |
Total other operating activities | $ | 22.6 |
| | $ | (42.3 | ) | | $ | 12.9 |
|
Cash paid during the period: | |
| | |
| | |
Interest | $ | 258.9 |
| | $ | 191.2 |
| | $ | 182.2 |
|
Income taxes | $ | — |
| | $ | 0.1 |
| | $ | 0.1 |
|
Non-cash investing activities: | | | |
| | |
Liabilities accrued for capital expenditures | $ | 39.8 |
| | $ | 32.4 |
| | $ | 35.7 |
|
|
| | | | | | | | | | | |
KCP&L Other Operating Activities | | |
Year Ended December 31 | 2017 | | 2016 | | 2015 |
Cash flows affected by changes in: | (millions) |
Receivables | $ | 13.8 |
| | $ | (12.4 | ) | | $ | 2.6 |
|
Accounts receivable pledged as collateral | (20.0 | ) | | — |
| | — |
|
Fuel inventories | 1.9 |
| | 10.6 |
| | (24.7 | ) |
Materials and supplies | (7.1 | ) | | (4.3 | ) | | (4.5 | ) |
Accounts payable | 11.7 |
| | (30.5 | ) | | (18.0 | ) |
Accrued taxes | 9.1 |
| | 67.9 |
| | (19.0 | ) |
Accrued interest | — |
| | — |
| | 3.4 |
|
Deferred refueling outage costs | 15.5 |
| | (3.1 | ) | | (6.7 | ) |
Pension and post-retirement benefit obligations | 27.3 |
| | 28.6 |
| | 18.4 |
|
Allowance for equity funds used during construction | (6.0 | ) | | (6.6 | ) | | (3.8 | ) |
Fuel recovery mechanisms | 8.3 |
| | (53.7 | ) | | 3.5 |
|
ARO settlements | (25.5 | ) | | (15.0 | ) | | (4.1 | ) |
Other | (9.0 | ) | | 16.4 |
| | (8.6 | ) |
Total other operating activities | $ | 20.0 |
| | $ | (2.1 | ) | | $ | (61.5 | ) |
Cash paid during the period: | |
| | |
| | |
Interest | $ | 128.0 |
| | $ | 127.0 |
| | $ | 120.2 |
|
Income taxes | $ | 38.8 |
| | $ | — |
| | $ | — |
|
Non-cash investing activities: | | | |
| | |
Liabilities accrued for capital expenditures | $ | 32.9 |
| | $ | 27.2 |
| | $ | 23.9 |
|
4. RECEIVABLES
Great Plains Energy's and KCP&L's receivables are detailed in the following table.
|
| | | | | | | | | | |
| December 31 |
| | 2017 | | | 2016 | |
Great Plains Energy | | (millions) | |
Customer accounts receivable - billed | | $ | 3.7 |
| | | $ | 26.2 |
| |
Customer accounts receivable - unbilled | | 103.2 |
| | | 79.1 |
| |
Allowance for doubtful accounts - customer accounts receivable | | (4.7 | ) | | | (4.0 | ) | |
Other receivables | | 49.5 |
| | | 64.7 |
| |
Total | | $ | 151.7 |
| | | $ | 166.0 |
| |
KCP&L | | |
| | | |
| |
Customer accounts receivable - billed | | $ | 1.6 |
| | | $ | 25.5 |
| |
Customer accounts receivable - unbilled | | 67.6 |
| | | 63.7 |
| |
Allowance for doubtful accounts - customer accounts receivable | | (2.2 | ) | | | (1.8 | ) | |
Other receivables | | 39.3 |
| | | 51.7 |
| |
Total | | $ | 106.3 |
| | | $ | 139.1 |
| |
Great Plains Energy's and KCP&L's other receivables at December 31, 2017 and 2016, 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 December 31, 2017 and 2016, Great Plains Energy's accounts receivable pledged as collateral and the corresponding short-term collateralized note payable were $180.0 million and $172.4 million, respectively. At December 31, 2017 and 2016, KCP&L's accounts receivable pledged as collateral and the corresponding short-term collateralized note payable were $130.0 million and $110.0 million, respectively. In September 2017, KCP&L and GMO amended their respective receivable sale agreements with Victory Receivables Corporation to extend the termination date to September 2018 and to allow for $130 million in aggregate outstanding principal amount of borrowings at any time for KCP&L and $50 million in aggregate outstanding principal amount of borrowings from mid-November through mid-June and then $65 million from mid-June through mid-November for GMO.
5. NUCLEAR PLANT
KCP&L owns 47% of Wolf Creek, its only nuclear generating unit. Wolf Creek is located in Coffey County, Kansas, just northeast of Burlington, Kansas. Wolf Creek's operating license expires in 2045. Wolf Creek is regulated by the NRC with respect to licensing, operations and safety-related requirements.
Spent Nuclear Fuel and High-Level Radioactive Waste
Under the Nuclear Waste Policy Act of 1982, the Department of Energy (DOE) is responsible for the permanent disposal of spent nuclear fuel. Wolf Creek historically paid the DOE a quarterly fee of one-tenth of a cent for each kWh of net nuclear generation delivered and sold for the future disposal of spent nuclear fuel. In May 2014, this fee was set to zero.
In 2010, the DOE filed a motion with the NRC to withdraw its then pending application to the NRC to construct a national repository for the disposal of spent nuclear fuel and high-level radioactive waste at Yucca Mountain, Nevada. An NRC board denied the DOE's motion to withdraw its application. In 2011, the NRC announced that it
was evenly divided on whether to take affirmative action to overturn or uphold the board's decision and ordered the licensing board, consistent with budgetary limitations, to close out its work on the DOE's application. In August 2013, a federal court of appeals ruled that the NRC must resume its review of the DOE's application to the extent of appropriated funds. With the available funds, the NRC was able to complete its technical review of the Yucca Mountain application but was not able to resume the licensing hearing.
Wolf Creek is currently evaluating alternatives for expanding its existing on-site spent nuclear fuel storage to provide additional capacity prior to 2025. Management cannot predict when, or if, an off-site storage site or alternative disposal site will be available to receive Wolf Creek's spent nuclear fuel and will continue to monitor this activity.
Low-Level Radioactive Waste
Wolf Creek disposes of most of its low-level radioactive waste (Class A waste) at an existing third-party repository in Utah. Management expects that the site located in Utah will remain available to Wolf Creek for disposal of its Class A waste. Wolf Creek has contracted with a waste processor that will process, take title and dispose in another state most of the remainder of Wolf Creek's low-level radioactive waste (Classes B and C waste, which is higher in radioactivity but much lower in volume). Should on-site waste storage be needed in the future, Wolf Creek has current storage capacity on site for about four years' generation of Classes B and C waste and believes it will be able to expand that storage capacity as needed if it becomes necessary to do so.
Nuclear Plant Decommissioning Costs
The MPSC and KCC require KCP&L and the other owners of Wolf Creek to submit an updated decommissioning cost study every three years and to propose funding levels. The most recent study was submitted to the MPSC and KCC in September 2017 and is the basis for the current cost of decommissioning estimates in the following table. Funding levels included in KCP&L retail rates have not changed. The actual nuclear decommissioning costs may vary from these estimates because of changes in regulations and technologies as well as changes in costs for labor, materials and equipment.
|
| | | | | | | | | |
| | KCC | | MPSC | |
| (millions) |
Current cost of decommissioning (in 2017 dollars) | | | | | |
Total Station | | $ | 813.7 |
| | $ | 813.7 |
| |
KCP&L's 47% Share | | 382.5 |
| | 382.5 |
| |
| | | | | |
Future cost of decommissioning (in 2045-2053 dollars) (a) | | | | | |
Total Station | | $ | 1,982.4 |
| | $ | 2,137.8 |
| |
KCP&L's 47% Share | | 931.7 |
| | 1,004.8 |
| |
| | | | | |
Annual escalation factor | | 2.91 | % | | 3.16 | % | |
Annual return on trust assets (b) | | 5.64 | % | | 5.46 | % | |
(a)Total future cost over an eight year decommissioning period
(b)The 5.64% KCC rate of return is through 2029 and then systematically decreases through 2053 to 0.32%. The 5.46% MPSC rate of return is through 2027 and then systematically decreases through 2053 to 2.22%. The KCC and MPSC rates of return systematically decrease based on the assumption that the fund's investment mix will become increasingly conservative as the decommissioning period approaches.
Nuclear Decommissioning Trust Fund
In 2017 and 2016, KCP&L contributed approximately $3.3 million to a tax-qualified trust fund to be used to decommission Wolf Creek. Amounts funded are charged to other operating expense and recovered in customers' rates. The funding level assumes a projected level of return on trust assets. If the actual return on trust assets is below the projected level or actual decommissioning costs are higher than estimated, KCP&L could be responsible for the balance of funds required; however, while there can be no assurances, management believes a rate increase would be allowed to recover decommissioning costs over the remaining life of the unit.
The following table summarizes the change in Great Plains Energy's and KCP&L's nuclear decommissioning trust fund.
|
| | | | | | | | | | | |
| 2017 | 2016 |
Decommissioning Trust | | (millions) | |
Beginning balance January 1 | | $ | 222.9 |
| | | | $ | 200.7 |
| |
Contributions | | 3.3 |
| | | | 3.3 |
| |
Earned income, net of fees | | 4.3 |
| | | | 4.1 |
| |
Net realized gains | | 0.7 |
| | | | 0.3 |
| |
Net unrealized gains | | 27.2 |
| | | | 14.5 |
| |
Ending balance December 31 | | $ | 258.4 |
| | | | $ | 222.9 |
| |
The nuclear decommissioning trust is reported at fair value on the balance sheets and is invested in assets as detailed in the following table.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31 |
| 2017 | | | 2016 | |
| Cost Basis | | Unrealized Gains | | Unrealized Losses | | Fair Value | | Cost Basis | | | Unrealized Gains | | Unrealized Losses | | Fair Value |
| (millions) |
Equity securities | $ | 96.5 |
| | | $ | 88.3 |
| | | | $ | (1.0 | ) | | | | $ | 183.8 |
| | | | $ | 93.3 |
| | | | $ | 62.1 |
| | | | $ | (1.5 | ) | | | | $ | 153.9 |
| |
Debt securities | 69.7 |
| | | 2.7 |
| | | | (0.4 | ) | | | | 72.0 |
| | | | 63.4 |
| | | | 2.3 |
| | | | (0.5 | ) | | | | 65.2 |
| |
Other | 2.6 |
| | | — |
| | | | — |
| | | | 2.6 |
| | | | 3.8 |
| | | | — |
| | | | — |
| | | | 3.8 |
| |
Total | $ | 168.8 |
| | | $ | 91.0 |
| | | | $ | (1.4 | ) | | | | $ | 258.4 |
| | | | $ | 160.5 |
| | | | $ | 64.4 |
| | | | $ | (2.0 | ) | | | | $ | 222.9 |
| |
The weighted average maturity of debt securities held by the trust at December 31, 2017, was approximately 9 years. The costs of securities sold are determined on the basis of specific identification. The following table summarizes the realized gains and losses from the sale of securities in the nuclear decommissioning trust fund.
|
| | | | | | | | | | | |
| 2017 | | 2016 | | 2015 |
| (millions) |
Realized gains | $ | 2.5 |
| | $ | 1.6 |
| | $ | 5.3 |
|
Realized losses | (1.8 | ) | | (1.3 | ) | | (4.6 | ) |
Nuclear Insurance
The owners of Wolf Creek (Owners) maintain nuclear insurance for Wolf Creek for nuclear liability, nuclear property and accidental outage. These policies contain certain industry standard exclusions, including, but not limited to, ordinary wear and tear, and war. The nuclear property insurance programs subscribed to by members of the nuclear power generating industry include industry aggregate limits for acts of terrorism and related losses, including replacement power costs. There is no industry aggregate limit for liability claims related to terrorism, regardless of the number of acts of terrorism affecting Wolf Creek or any other nuclear energy liability policy or the number of policies in place. An industry aggregate limit of $3.2 billion plus any reinsurance recoverable by Nuclear Electric Insurance Limited (NEIL), the Owners' insurance provider, exists for property claims related to nuclear acts of terrorism, including accidental outage power costs for nuclear acts of terrorism affecting Wolf Creek or any other nuclear energy facility property policy within twelve months from the date of the first act. An industry
aggregate limit of $1.8 billion exists for property claims related to non-nuclear acts of terrorism. These limits plus any recoverable reinsurance are the maximum amount to be paid to members who sustain losses or damages from these types of terrorist acts. In addition, industry-wide retrospective assessment programs (discussed below) can apply once these insurance programs have been exhausted.
In the event of a catastrophic loss at Wolf Creek, the insurance coverage may not be adequate to cover property damage and extra expenses incurred. Uninsured losses, to the extent not recovered through rates, would be assumed by KCP&L and the other owners and could have a material effect on Great Plains Energy's and KCP&L's results of operations, financial position and cash flows.
Nuclear Liability Insurance
Pursuant to the Price-Anderson Act, which was reauthorized through December 31, 2025, by the Energy Policy Act of 2005, the Owners are required to insure against public liability claims resulting from nuclear incidents to the full limit of public liability, which is currently $13.5 billion. This limit of liability consists of the maximum available commercial insurance of $0.5 billion and the remaining $13.0 billion is provided through an industry-wide retrospective assessment program mandated by law, known as the Secondary Financial Protection (SFP) program. Under the SFP program, the Owners can be assessed up to $127.3 million ($59.8 million, KCP&L's 47% share) per incident at any commercial reactor in the country, payable at no more than $19.0 million ($8.9 million, KCP&L's 47% share) per incident per year. This assessment is subject to an inflation adjustment based on the Consumer Price Index and applicable premium taxes. In addition, the U.S. Congress could impose additional revenue-raising measures to pay claims.
Nuclear Property Insurance
The Owners carry decontamination liability, premature decommissioning liability and property damage insurance from NEIL for Wolf Creek totaling approximately $2.8 billion ($1.3 billion, KCP&L's 47% share). In the event of an accident, insurance proceeds must first be used for reactor stabilization and site decontamination in accordance with a plan mandated by the NRC. KCP&L's share of any remaining proceeds can be used for further decontamination, property damage restoration and premature decommissioning costs. Premature decommissioning coverage applies only if an accident at Wolf Creek exceeds $500 million in property damage and decontamination expenses, and only after trust funds have been exhausted.
Accidental Nuclear Outage Insurance
The Owners also carry additional insurance from NEIL to cover costs of replacement power and other extra expenses incurred in the event of a prolonged outage resulting from accidental property damage at Wolf Creek.
Under all NEIL policies, the Owners are subject to retrospective assessments if NEIL losses, for each policy year, exceed the accumulated funds available to the insurer under that policy. The estimated maximum amount of retrospective assessments under the current policies could total approximately $37.4 million ($17.6 million, KCP&L's 47% share) per policy year.
6. REGULATORY MATTERS
KCP&L Missouri 2018 Rate Case Proceedings
In January 2018, KCP&L filed an application with the MPSC to request an increase to its retail revenues of $8.9 million before rebasing fuel and purchased power expense, with a return on equity of 9.85% and a rate-making equity ratio of 50.03%. The request reflects the impact of the Tax Cut and Jobs Act and increases in infrastructure investment costs, transmission related costs and property tax costs. KCP&L also requested an additional $7.5 million increase associated with rebasing fuel and purchased power expense.
GMO Missouri 2018 Rate Case Proceedings
In January 2018, GMO filed an application with the MPSC to request a decrease to its retail revenues of $2.4 million before rebasing fuel and purchased power expense, with a return on equity of 9.85% and a rate-making equity ratio of 54.4%. The request reflects the impact of the Tax Cut and Jobs Act and increases in infrastructure
investment costs and transmission related costs. GMO also requested a $21.7 million increase associated with rebasing fuel and purchased power expense.
KCP&L Kansas 2016 Abbreviated Rate Case Proceedings
In November 2016, KCP&L filed an abbreviated application with KCC to request a decrease to its retail revenues of $2.8 million, reflecting the true-up to actuals of construction and environmental upgrade costs at the La Cygne Station and Wolf Creek capital addition costs and the removal of certain regulatory asset and liability amortizations. The previously approved return on equity and rate-making ratio for KCP&L was not addressed in this case. In April 2017, KCP&L, KCC staff and the Citizens' Utility Ratepayer Board filed a joint motion to approve a unanimous settlement agreement with KCC that requested a decrease in retail revenues of $3.6 million. In June 2017, KCC issued an order approving the unanimous settlement agreement. The rates established by the order took effect on June 28, 2017.
KCP&L Missouri 2016 Rate Case Proceedings
In July 2016, KCP&L filed an application with the MPSC to request an increase to its retail revenues of $62.9 million before rebasing fuel and purchased power expense, with a return on equity of 9.9% and a rate-making equity ratio of 49.88%. The request reflects increases in infrastructure investment costs, costs for regional transmission lines, property tax costs and costs to comply with environmental and cybersecurity mandates. KCP&L also requested an additional $27.2 million increase associated with rebasing fuel and purchased power expense.
In May 2017, the MPSC issued an order for KCP&L authorizing an increase in retail revenues of $5.4 million before rebasing fuel and purchased power expense, a return on equity of 9.5% and a rate-making equity ratio of approximately 49.2%. The order also authorized a $27.1 million revenue increase associated with rebasing fuel and purchased power expense. The rates established by the order took effect on June 8, 2017.
Regulatory Assets and Liabilities
Great Plains Energy and KCP&L have recorded assets and liabilities on their consolidated balance sheets resulting from the effects of the ratemaking process, which would not otherwise be recorded if the Companies were not regulated. Regulatory assets represent incurred costs that are probable of recovery from future revenues. Regulatory liabilities represent future reductions in revenues or refunds to customers.
Management regularly assesses whether regulatory assets and liabilities are probable of future recovery or refund by considering factors such as decisions by the MPSC, KCC or FERC in KCP&L's and GMO's rate case filings; decisions in other regulatory proceedings, including decisions related to other companies that establish precedent on matters applicable to the Companies; and changes in laws and regulations. If recovery or refund of regulatory assets or liabilities is not approved by regulators or is no longer deemed probable, these regulatory assets or liabilities are recognized in the current period results of operations. The Companies' continued ability to meet the criteria for recording regulatory assets and liabilities may be affected in the future by restructuring and deregulation in the electric industry or changes in accounting rules. In the event that the criteria no longer applied to any or all of the Companies' operations, the related regulatory assets and liabilities would be written off unless an appropriate regulatory recovery mechanism were provided. Additionally, these factors could result in an impairment on utility plant assets.
Great Plains Energy's and KCP&L's regulatory assets and liabilities are detailed in the following table.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31 |
| | 2017 | | 2016 |
| | KCP&L | | GMO | | Great Plains Energy | | KCP&L | | GMO | | Great Plains Energy |
Regulatory Assets | | (millions) |
Taxes recoverable through future rates | | $ | — |
| | $ | — |
| | $ | — |
| | $ | 123.9 |
| | $ | 24.8 |
| | $ | 148.7 |
|
Loss on reacquired debt | | 8.7 |
| (a) | 1.2 |
| (a) | 9.9 |
| | 10.0 |
| | 1.7 |
| | 11.7 |
|
Cost of removal | | 30.3 |
| | — |
| | 30.3 |
| | 28.6 |
| | — |
| | 28.6 |
|
Asset retirement obligations | | 94.3 |
| | 24.2 |
| | 118.5 |
| | 69.6 |
| | 24.9 |
| | 94.5 |
|
Pension and post-retirement costs | | 379.7 |
| (b) | 108.2 |
| (b) | 487.9 |
| | 367.9 |
| | 104.7 |
| | 472.6 |
|
Deferred customer programs | | 40.9 |
| (c) | 19.4 |
| (d) | 60.3 |
| | 45.9 |
| | 27.4 |
| | 73.3 |
|
Fuel recovery mechanism | | 61.7 |
| (e) | 12.0 |
| (e) | 73.7 |
| | 69.9 |
| | — |
| | 69.9 |
|
Iatan No. 1 and common facilities depreciation and carrying costs | | 12.9 |
| (f) | 4.7 |
| (g) | 17.6 |
| | 13.6 |
| | 5.0 |
| | 18.6 |
|
Iatan No. 2 construction accounting costs | | 25.0 |
| (h) | 13.7 |
| (h) | 38.7 |
| | 26.9 |
| | 16.1 |
| | 43.0 |
|
Kansas property tax surcharge | | 6.6 |
| (e) | — |
| | 6.6 |
| | 3.6 |
| | — |
| | 3.6 |
|
Solar rebates | | 22.6 |
| (i) | 37.0 |
| (e) | 59.6 |
| | 29.2 |
| | 41.6 |
| | 70.8 |
|
Transmission delivery charge | | 3.2 |
| (e) | — |
| | 3.2 |
| | 3.1 |
| | — |
| | 3.1 |
|
La Cygne deferred depreciation | | 2.7 |
| (j) | — |
| | 2.7 |
| | 2.8 |
| | — |
| | 2.8 |
|
Other | | 3.3 |
| (e) | 1.6 |
| | 4.9 |
| | 6.8 |
| | — |
| | 6.8 |
|
Total | | $ | 691.9 |
| | $ | 222.0 |
| | $ | 913.9 |
| | $ | 801.8 |
| | $ | 246.2 |
| | $ | 1,048.0 |
|
Regulatory Liabilities | | | | | | | | | | | | |
Taxes refundable through future rates | | $ | 574.0 |
| | $ | 220.6 |
| | $ | 794.6 |
| | $ | — |
| | $ | — |
| | $ | — |
|
Emission allowances | | 58.1 |
| | — |
| | 58.1 |
| | 62.1 |
| | — |
| | 62.1 |
|
Asset retirement obligations | | 126.0 |
| | — |
| | 126.0 |
| | 99.7 |
| | — |
| | 99.7 |
|
Cost of removal | | — |
| | 57.4 |
| | 57.4 |
| | — |
| | 65.1 |
| | 65.1 |
|
Fuel recovery mechanism | | — |
| | 3.9 |
| | 3.9 |
| | — |
| | 11.6 |
| | 11.6 |
|
Pension and post-retirement costs | | 12.0 |
| | 8.2 |
| | 20.2 |
| | 15.3 |
| | 7.4 |
| | 22.7 |
|
Other | | 9.1 |
| | 37.0 |
| | 46.1 |
| | 10.3 |
| | 38.4 |
| | 48.7 |
|
Total | | $ | 779.2 |
| | $ | 327.1 |
| | $ | 1,106.3 |
| | $ | 187.4 |
| | $ | 122.5 |
| | $ | 309.9 |
|
(a) Amortized over the life of the related new debt issuances or the remaining lives of the old debt issuances if no new debt was issued.
(b) Represents unrecognized gains and losses, prior service and transition costs that will be recognized in future net periodic pension and post-retirement costs, pension settlements amortized over various periods and financial and regulatory accounting method differences that will be eliminated over the life of the pension plans. Of these amounts, $366.3 million and $61.4 million for KCP&L and GMO, respectively, are not included in rate base and are amortized over various periods.
(c) $16.1 million not included in rate base and amortized over various periods.
(d) $10.9 million not included in rate base and amortized over various periods.
(e) Not included in rate base and amortized over various periods.
(f) Included in rate base and amortized over various periods.
| |
(g) | Included in rate base and amortized through 2038. |
(h) Included in rate base and amortized through 2059.
(i) Not included in rate base and amortized through 2020.
(j) Included in rate base and amortized through 2040.
7. GOODWILL AND INTANGIBLE ASSETS
Accounting rules require goodwill to be tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. The annual impairment test for the $169.0 million of GMO acquisition goodwill was conducted on September 1, 2017. The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount, including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting unit and its fair value. Great Plains Energy's regulated electric utility operations are considered one reporting unit for assessment of impairment, as they are included within the same operating segment and have similar economic characteristics. The determination of fair value of the reporting unit consisted of two valuation techniques: an income approach consisting of a discounted cash flow analysis and a market approach consisting of a determination of reporting unit invested capital using market multiples derived from the historical revenue; earnings before interest, income taxes, depreciation and amortization; net utility asset values and market prices of stock of peer companies. The results of the two techniques were evaluated and weighted to determine a point within the range that management considered representative of fair value for the reporting unit. Fair value of the reporting unit exceeded the carrying amount, including goodwill; therefore, there was no impairment of goodwill.
Great Plains Energy's and KCP&L's intangible assets are included in electric utility plant on the consolidated balance sheets and are detailed in the following table.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31 |
| | | 2017 | | | | 2016 | |
| | Gross Carrying Amount | | Accumulated Amortization | | Gross Carrying Amount | | Accumulated Amortization |
Great Plains Energy | | (millions) |
Computer software | | | $ | 386.8 |
| | | | $ | (251.2 | ) | | | | $ | 355.2 |
| | | | $ | (219.1 | ) | |
Asset improvements | | | 30.3 |
| | | | (8.0 | ) | | | | 28.8 |
| | | | (6.7 | ) | |
| | | | | | | | | | | | | | | | |
KCP&L | | | | | | | | | | | | | | | | |
Computer software | | | $ | 368.7 |
| | | | $ | (234.3 | ) | | | | $ | 338.3 |
| | | | $ | (203.1 | ) | |
Asset improvements | | | 15.1 |
| | | | (2.7 | ) | | | | 13.6 |
| | | | (1.8 | ) | |
Great Plains Energy's and KCP&L's amortization expense related to intangible assets is detailed in the following table.
|
| | | | | | | | |
| | 2017 | | 2016 |
| | (millions) |
Great Plains Energy | | $ | 33.7 |
| | $ | 29.1 |
|
KCP&L | | 32.1 |
| | 25.7 |
|
The following table provides the estimated amortization expense related to Great Plains Energy's and KCP&L's intangible assets for 2018 through 2022 for the intangible assets included in the consolidated balance sheets at December 31, 2017.
|
| | | | | | | | | | | | | | | | | | | | |
| | 2018 | | 2019 | | 2020 | | 2021 | | 2022 |
| | (millions) |
Great Plains Energy | | $ | 30.5 |
| | $ | 25.7 |
| | $ | 24.5 |
| | $ | 20.0 |
| | $ | 14.9 |
|
KCP&L | | 29.7 |
| | 25.0 |
| | 23.8 |
| | 19.5 |
| | 14.5 |
|
8. ASSET RETIREMENT OBLIGATIONS
AROs associated with tangible long-lived assets are legal obligations that exist under enacted laws, statutes and written or oral contracts, including obligations arising under the doctrine of promissory estoppel. These liabilities are recognized at estimated fair value as incurred with a corresponding amount capitalized as part of the cost of the related long-lived assets and depreciated over their useful lives. Accretion of the liabilities due to the passage of time is recorded to a regulatory asset and/or liability. Changes in the estimated fair values of the liabilities are recognized when known. Great Plains Energy and KCP&L record the current portion of AROs within other current liabilities on their consolidated balance sheets.
KCP&L has AROs related to decommissioning Wolf Creek, site remediation of its Spearville Wind Energy Facilities, asbestos abatement, removal of storage tanks and closure and post-closure of ponds and landfills containing coal combustion residuals (CCRs). GMO has AROs related to asbestos abatement, removal of storage tanks and closure and post-closure of ponds and landfills containing CCRs.
Additionally, certain wiring used in Great Plains Energy's and KCP&L's generating stations include asbestos insulation, which would require special handling if disturbed. Due to the inability to reasonably estimate the quantities or the amount of disturbance that will be necessary during dismantlement at the end of the life of a plant, the fair value of this ARO cannot be reasonably estimated at this time. Management will continue to monitor the obligation and will recognize a liability in the period in which sufficient information becomes available to reasonably estimate its fair value.
On April 17, 2015, the Environmental Protection Agency (EPA) published new regulations to regulate the disposal of CCRs at electric generation facilities. The CCR rule represents legal obligations of Great Plains Energy and KCP&L as to the closure and post-closure of its ponds and landfills containing CCRs. In 2016, Great Plains Energy and KCP&L revised their AROs by $42.1 million and $40.1 million, respectively, due to an increase in cost estimates for the closure of ponds and landfills containing CCRs at KCP&L's electric generating facilities.
The following table summarizes the change in Great Plains Energy's and KCP&L's AROs.
|
| | | | | | | | | | | | | | | | | | | | |
| | Great Plains Energy | | | KCP&L | |
| | 2017 | | | 2016 | | | 2017 | | | 2016 | |
| | (millions) | |
Beginning balance | | $ | 316.0 |
| | | $ | 275.9 |
| | | $ | 278.0 |
| | | $ | 239.3 |
| |
Additions | | — |
| | | 1.6 |
| | | — |
| | | 1.3 |
| |
Revision in timing and/or estimates | | (1.3 | ) | | | 42.1 |
| | | 0.3 |
| | | 40.1 |
| |
Settlements | | (28.5 | ) | | | (17.4 | ) | | | (25.5 | ) | | | (15.0 | ) | |
Accretion | | 14.9 |
| | | 13.8 |
| | | 13.5 |
| | | 12.3 |
| |
Total | | $ | 301.1 |
| | | $ | 316.0 |
| | | $ | 266.3 |
| | | $ | 278.0 |
| |
Less: current portion | | (38.6 | ) | | | — |
| | | (34.9 | ) | | | — |
| |
Total noncurrent asset retirement obligation | | $ | 262.5 |
| | | $ | 316.0 |
| | | $ | 231.4 |
| | | $ | 278.0 |
| |
ARO settlement activity in 2017 and 2016 primarily consists of the remediation of AROs for the closure of ponds and landfills containing CCRs at KCP&L and GMO.
9. PENSION PLANS AND OTHER EMPLOYEE BENEFITS
Great Plains Energy maintains defined benefit pension plans for the majority of KCP&L's and GMO's active and inactive employees, including officers, and its 47% ownership share of Wolf Creek Nuclear Operating Corporation (WCNOC) defined benefit plans. For the majority of employees, pension benefits under these plans reflect the employees' compensation, years of service and age at retirement. Effective in 2014, Great Plains Energy's non-union plan was closed to future employees. Great Plains Energy also provides certain post-retirement health care and life insurance benefits for substantially all retired employees of KCP&L, GMO and its 47% ownership share of WCNOC.
KCP&L and GMO record pension and post-retirement expense in accordance with rate orders from the MPSC and KCC that allow the difference between pension and post-retirement costs under GAAP and costs for ratemaking to be recognized as a regulatory asset or liability. This difference between financial and regulatory accounting methods is due to timing and will be eliminated over the life of the plans.
In 2017, Great Plains Energy incurred pension settlement charges of $15.9 million as a result of accelerated pension distributions.
The following pension benefits tables provide information relating to the funded status of all defined benefit pension plans on an aggregate basis as well as the components of net periodic benefit costs. For financial reporting purposes, the market value of plan assets is the fair value. For regulatory reporting purposes, a five-year smoothing of assets is used to determine fair value. Net periodic benefit costs reflect total plan benefit costs prior to the effects of capitalization and sharing with joint owners of power plants.
|
| | | | | | | | | | | | | | | |
| | Pension Benefits | | Other Benefits |
| | 2017 | | 2016 | | 2017 | 2016 |
Change in projected benefit obligation (PBO) | | (millions) |
PBO at January 1 | | $ | 1,244.6 |
| | $ | 1,154.8 |
| | $ | 130.1 |
| $ | 137.5 |
|
Service cost | | 44.2 |
| | 42.0 |
| | 2.1 |
| 2.6 |
|
Interest cost | | 53.5 |
| | 52.9 |
| | 5.4 |
| 6.1 |
|
Contribution by participants | | — |
| | — |
| | 6.0 |
| 5.3 |
|
Amendments | | — |
| | — |
| | — |
| (10.1 | ) |
Actuarial (gain) loss | | 135.6 |
| | 65.5 |
| | 2.1 |
| 0.6 |
|
Benefits paid | | (36.8 | ) | | (70.6 | ) | | (12.5 | ) | (11.9 | ) |
Settlements and special termination benefits | | (85.2 | ) | | — |
| | — |
| — |
|
PBO at December 31 | | $ | 1,355.9 |
| | $ | 1,244.6 |
| | $ | 133.2 |
| $ | 130.1 |
|
Change in plan assets | | | | | | | |
Fair value of plan assets at January 1 | | $ | 776.8 |
| | $ | 723.9 |
| | $ | 115.6 |
| $ | 114.3 |
|
Actual return on plan assets | | 114.8 |
| | 51.1 |
| | 1.8 |
| 2.6 |
|
Contributions by employer and participants | | 76.9 |
| | 69.8 |
| | 10.4 |
| 10.2 |
|
Benefits paid | | (34.5 | ) | | (68.0 | ) | | (12.0 | ) | (11.5 | ) |
Settlements | | (85.6 | ) | | — |
| | — |
| — |
|
Fair value of plan assets at December 31 | | $ | 848.4 |
| | $ | 776.8 |
| | $ | 115.8 |
| $ | 115.6 |
|
Funded status at December 31 | | $ | (507.5 | ) | | $ | (467.8 | ) | | $ | (17.4 | ) | $ | (14.5 | ) |
Amounts recognized in the consolidated balance sheets | | | | | | | |
Non-current asset | | $ | — |
| | $ | — |
| | $ | 12.8 |
| $ | 9.0 |
|
Current pension and other post-retirement liability | | (1.9 | ) | | (2.2 | ) | | (0.8 | ) | (0.8 | ) |
Noncurrent pension liability and other post-retirement liability | | (505.6 | ) | | (465.6 | ) | | (29.4 | ) | (22.7 | ) |
Net amount recognized before regulatory treatment | | (507.5 | ) | | (467.8 | ) | | (17.4 | ) | (14.5 | ) |
Accumulated OCI or regulatory asset/liability | | 492.2 |
| | 476.9 |
| | (21.1 | ) | (23.6 | ) |
Net amount recognized at December 31 | | $ | (15.3 | ) | | $ | 9.1 |
| | $ | (38.5 | ) | $ | (38.1 | ) |
Amounts in accumulated OCI or regulatory asset/liability not yet recognized as a component of net periodic benefit cost: | | | | | | | |
Actuarial (gain) loss | | $ | 248.9 |
| | $ | 242.5 |
| | $ | 2.8 |
| $ | (0.7 | ) |
Prior service cost | | 2.5 |
| | 3.2 |
| | (8.0 | ) | (8.0 | ) |
Other | | 240.8 |
| | 231.2 |
| | (15.9 | ) | (14.9 | ) |
Net amount recognized at December 31 | | $ | 492.2 |
| | $ | 476.9 |
| | $ | (21.1 | ) | $ | (23.6 | ) |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Pension Benefits | | Other Benefits |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
Components of net periodic benefit costs | | (millions) |
Service cost | | $ | 44.2 |
| | $ | 42.0 |
| | $ | 45.3 |
| | $ | 2.1 |
| | $ | 2.6 |
| | $ | 3.3 |
|
Interest cost | | 53.5 |
| | 52.9 |
| | 50.3 |
| | 5.4 |
| | 6.1 |
| | 6.8 |
|
Expected return on plan assets | | (51.2 | ) | | (49.2 | ) | | (51.7 | ) | | (2.6 | ) | | (3.1 | ) | | (2.9 | ) |
Prior service cost | | 0.7 |
| | 0.7 |
| | 0.8 |
| | — |
| | 1.2 |
| | 3.1 |
|
Recognized net actuarial (gain) loss | | 49.7 |
| | 51.8 |
| | 51.4 |
| | (0.5 | ) | | (1.5 | ) | | 0.2 |
|
Transition obligation | | — |
| | — |
| | — |
| | — |
| | — |
| | 0.2 |
|
Settlement and special termination benefits | | 16.3 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Net periodic benefit costs before regulatory adjustment | | 113.2 |
| | 98.2 |
| | 96.1 |
| | 4.4 |
| | 5.3 |
| | 10.7 |
|
Regulatory adjustment | | (13.8 | ) | | (4.9 | ) | | (9.8 | ) | | 1.9 |
| | 6.0 |
| | 4.4 |
|
Net periodic benefit costs | | 99.4 |
| | 93.3 |
| | 86.3 |
| | 6.3 |
| | 11.3 |
| | 15.1 |
|
Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities | | | | | | | | | | | | |
Current year net (gain) loss | | 72.0 |
| | 63.6 |
| | 8.6 |
| | 3.0 |
| | 1.1 |
| | (20.6 | ) |
Amortization of gain (loss) | | (65.6 | ) | | (51.8 | ) | | (51.4 | ) | | 0.5 |
| | 1.5 |
| | (0.2 | ) |
Prior service cost | | — |
| | — |
| | — |
| | — |
| | (10.2 | ) | | (7.0 | ) |
Amortization of prior service cost | | (0.7 | ) | | (0.7 | ) | | (0.8 | ) | | — |
| | (1.2 | ) | | (3.1 | ) |
Amortization of transition obligation | | — |
| | — |
| | — |
| | — |
| | — |
| | (0.2 | ) |
Other regulatory activity | | 9.6 |
| | 4.6 |
| | 4.3 |
| | (1.0 | ) | | (5.4 | ) | | (4.4 | ) |
Total recognized in OCI or regulatory asset/liability | | 15.3 |
| | 15.7 |
| | (39.3 | ) | | 2.5 |
| | (14.2 | ) | | (35.5 | ) |
Total recognized in net periodic benefit costs and OCI or regulatory asset/liability | | $ | 114.7 |
| | $ | 109.0 |
| | $ | 47.0 |
| | $ | 8.8 |
| | $ | (2.9 | ) | | $ | (20.4 | ) |
For financial reporting purposes, the estimated prior service cost and net loss for the defined benefit plans that will be amortized from accumulated other comprehensive income (OCI) or a regulatory asset into net periodic benefit cost in 2018 are $0.7 million and $45.7 million, respectively. For financial reporting purposes, net actuarial gains and losses are recognized on a rolling five-year average basis. For regulatory reporting purposes, net actuarial gains and losses are amortized over ten years. The estimated net gain for the other post-retirement benefit plans that will be amortized from accumulated OCI or a regulatory asset into net periodic benefit cost in 2018 is $0.2 million.
The accumulated benefit obligation (ABO) for all defined benefit pension plans was $1,169.8 million and $1,090.2 million at December 31, 2017, and 2016, respectively. Pension and other post-retirement benefit plans with the PBO, ABO or accumulated other post-retirement benefit obligation (APBO) in excess of the fair value of plan assets at year-end are detailed in the following table.
|
| | | | | | | | |
| | 2017 | | 2016 |
Pension plans with the PBO in excess of plan assets | | (millions) |
Projected benefit obligation | | $ | 1,355.9 |
| | $ | 1,244.6 |
|
Fair value of plan assets | | 848.4 |
| | 776.8 |
|
Pension plans with the ABO in excess of plan assets | | | | |
Accumulated benefit obligation | | $ | 1,169.8 |
| | $ | 1,090.2 |
|
Fair value of plan assets | | 848.4 |
| | 776.8 |
|
Other post-retirement benefit plans with the APBO in excess of plan assets | | | | |
Accumulated other post-retirement benefit obligation | | $ | 111.6 |
| | $ | 61.7 |
|
Fair value of plan assets | | 81.5 |
| | 38.3 |
|
The GMO Supplemental Executive Retirement Plan (SERP) is reflected as an unfunded ABO of $24.0 million. Great Plains Energy has approximately $14.7 million of assets in a non-qualified trust for this plan as of December 31, 2017, and expects to fund future benefit payments from these assets.
The expected long-term rate of return on plan assets represents Great Plains Energy's estimate of the long-term return on plan assets and is based on historical and projected rates of return for current and planned asset classes in the plans' investment portfolios. Assumed projected rates of return for each asset class were selected after analyzing historical experience and future expectations of the returns of various asset classes. Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolios was developed and adjusted for the effect of projected benefits paid from plan assets and future plan contributions. The following tables provide the weighted-average assumptions used to determine benefit obligations and net costs.
|
| | | | | | | | | | | | | | | | | | | |
Weighted-average assumptions used to determine the benefit obligation at December 31 | | Pension Benefits | | | | Other Benefits | |
| 2017 | | | | 2016 | | | | 2017 | | | | 2016 | |
Discount rate | | 3.72 | % | | | | 4.31 | % | | | | 3.64 | % | | | | 4.20 | % | |
Rate of compensation increase | | 3.62 | % | | | | 3.62 | % | | | | 3.50 | % | | | | 3.50 | % | |
|
| | | | | | | | | | | | | | | | | | | |
Weighted-average assumptions used to determine net costs for years ended December 31 | | Pension Benefits | | | | Other Benefits | |
| 2017 | | | | 2016 | | | | 2017 | | | | 2016 | |
Discount rate | | 4.31 | % | | | | 4.54 | % | | | | 4.20 | % | | | | 4.47 | % | |
Expected long-term return on plan assets | | 6.73 | % | | | | 7.14 | % | | | | 2.00 | % | * | | | 2.54 | % | * |
Rate of compensation increase | | 3.62 | % | | | | 3.62 | % | | | | 3.50 | % | | | | 3.50 | % | |
*after tax
Great Plains Energy expects to contribute $84.0 million to the pension plans in 2018 to meet Employee Retirement Income Security Act of 1974, as amended (ERISA) funding requirements and regulatory orders, the majority of which is expected to be paid by KCP&L. Great Plains Energy's funding policy is to contribute amounts sufficient to meet the ERISA funding requirements and MPSC and KCC rate orders plus additional amounts as considered appropriate; therefore, actual contributions may differ from expected contributions. Great Plains Energy also expects to contribute $4.6 million to other post-retirement benefit plans in 2018, the majority of which is expected to be paid by KCP&L.
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid through 2027.
|
| | | | | | | | |
| | Pension Benefits | | Other Benefits |
| | (millions) |
2018 | | $ | 79.3 |
| | $ | 9.2 |
|
2019 | | 82.2 |
| | 9.2 |
|
2020 | | 84.7 |
| | 9.6 |
|
2021 | | 86.0 |
| | 10.1 |
|
2022 | | 86.5 |
| | 10.4 |
|
2023-2027 | | 459.9 |
| | 55.6 |
|
Pension plan assets are managed in accordance with prudent investor guidelines contained in the ERISA requirements. The investment strategy supports the objective of the fund, which is to earn the highest possible return on plan assets within a reasonable and prudent level of risk. The portfolios are invested, and periodically rebalanced, to achieve targeted allocations of approximately 33% U.S. large cap and small cap equity securities, 21% international equity securities, 36% fixed income securities, 7% real estate, 1% commodities and 2% hedge funds. Fixed income securities include domestic and foreign corporate bonds, collateralized mortgage obligations and asset-backed securities, U.S. government agency, state and local obligations, U.S. Treasury notes and money market funds.
The fair values of Great Plains Energy's pension plan assets at December 31, 2017 and 2016, by asset category are in the following tables.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Fair Value Measurements Using |
Description | December 31 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Assets measured at NAV |
| | (millions) | |
Pension Plans | | | | | | | | | | | | | | | | | |
Equity securities | | | | | | | | | | | | | | | | | |
U.S. (a) | | $ | 279.8 |
| | | $ | 236.4 |
| | | | $ | — |
| | | | $ | — |
| | | $ | 43.4 |
| |
International (b) | | 176.0 |
| | | 123.5 |
| | | | — |
| | | | — |
| | | 52.5 |
| |
Real estate (c) | | 46.4 |
| | | 13.6 |
| | | | — |
| | | | — |
| | | 32.8 |
| |
Commodities (d) | | 17.0 |
| | | — |
| | | | — |
| | | | — |
| | | 17.0 |
| |
Fixed income securities | |
| | | | | | | | | | | | | | | |
Fixed income funds (e) | | 71.8 |
| | | 21.4 |
| | | | — |
| | | | — |
| | | 50.4 |
| |
U.S. Treasury | | 51.5 |
| | | 51.5 |
| | | | — |
| | | | — |
| | | — |
| |
U.S. Agency, state and local obligations | | 18.3 |
| | | — |
| | | | 18.3 |
| | | | — |
| | | — |
| |
U.S. corporate bonds (f) | | 119.2 |
| | | — |
| | | | 119.2 |
| | | | — |
| | | — |
| |
Foreign corporate bonds | | 12.5 |
| | | — |
| | | | 12.5 |
| | | | — |
| | | — |
| |
Hedge funds (g) | | 15.7 |
| | | — |
| | | | — |
| | | | — |
| | | 15.7 |
| |
Cash equivalents | | 35.6 |
| | | 35.6 |
| | | | — |
| | | | — |
| | | — |
| |
Other | | 4.6 |
| | | — |
| | | | 4.6 |
| | | | — |
| | | — |
| |
Total | | $ | 848.4 |
| | | $ | 482.0 |
| | | | $ | 154.6 |
| | | | $ | — |
| | | $ | 211.8 |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Fair Value Measurements Using |
Description | December 31 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Assets measured at NAV |
Pension Plans | | (millions) | |
Equity securities | | | | | | | | | | | | | | | | | |
U.S. (a) | | $ | 247.6 |
| | | $ | 213.0 |
| | | | $ | — |
| | | | $ | — |
| | | $ | 34.6 |
| |
International (b) | | 163.7 |
| | | 120.4 |
| | | | — |
| | | | — |
| | | 43.3 |
| |
Real estate (c) | | 42.7 |
| | | 12.4 |
| | | | — |
| | | | — |
| | | 30.3 |
| |
Commodities (d) | | 14.1 |
| | | — |
| | | | — |
| | | | — |
| | | 14.1 |
| |
Fixed income securities | |
| | | | | | | | | | | | | | | |
Fixed income funds (e) | | 65.1 |
| | | 20.9 |
| | | | — |
| | | | — |
| | | 44.2 |
| |
U.S. Treasury | | 52.2 |
| | | 52.2 |
| | | | — |
| | | | — |
| | | — |
| |
U.S. Agency, state and local obligations | | 17.9 |
| | | — |
| | | | 17.9 |
| | | | — |
| | | — |
| |
U.S. corporate bonds (f) | | 120.2 |
| | | — |
| | | | 120.2 |
| | | | — |
| | | — |
| |
Foreign corporate bonds | | 9.3 |
| | | — |
| | | | 9.3 |
| | | | — |
| | | — |
| |
Hedge funds (g) | | 15.6 |
| | | — |
| | | | — |
| | | | — |
| | | 15.6 |
| |
Cash equivalents | | 31.7 |
| | | 31.7 |
| | | | — |
| | | | — |
| | | — |
| |
Other | | (3.3 | ) | | | — |
| | | | (3.3 | ) | | | | — |
| | | — |
| |
Total | | $ | 776.8 |
| | | $ | 450.6 |
| | | | $ | 144.1 |
| | | | $ | — |
| | | $ | 182.1 |
| |
(a) At December 31, 2017 and 2016, this category is comprised of $75.5 million and $128.8 million, respectively, of traded mutual funds valued at daily listed prices and $160.9 million and $84.2 million, respectively, of traded common stocks and exchange traded funds. At December 31, 2017 and 2016, this category also includes $43.4 million and $34.6 million, respectively, of institutional common/collective trust funds valued at net asset value (NAV) per share (or its equivalent) and is not categorized in the fair value hierarchy.
(b) At December 31, 2017 and 2016, this category is comprised of $95.6 million and $92.8 million, respectively, of traded mutual funds valued at daily listed prices and $27.9 million and $27.6 million, respectively, of traded American depository receipts, global depository receipts and ordinary shares. At December 31, 2017 and 2016, this category also includes $52.5 million and $43.3 million, respectively, of institutional common/collective trust funds valued at NAV per share (or its equivalent) and is not categorized in the fair value hierarchy.
(c) At December 31, 2017 and 2016, this category is comprised of $13.6 million and $12.4 million, respectively, of traded real estate investment trusts. At December 31, 2017 and 2016, this category also includes $32.8 million and $30.3 million, respectively, of institutional common/collective trust funds and a limited partnership valued at NAV per share (or its equivalent) and is not categorized in the fair value hierarchy.
(d) Consists of institutional common/collective trust funds valued at NAV per share (or its equivalent) and is not categorized in the fair value hierarchy.
(e) At December 31, 2017 and 2016, this category is comprised of $21.4 million and $20.9 million, respectively, of traded mutual funds valued at daily listed prices. At December 31, 2017 and 2016, this category also includes $50.4 million and $44.2 million, respectively, of institutional common/collective trust funds valued at NAV per share (or its equivalent) and is not categorized in the fair value hierarchy.
(f) At December 31, 2017 and 2016, this category is comprised of $113.3 million and $115.7 million, respectively, of corporate bonds. At December 31, 2017 and 2016, there were also $3.2 million and $2.3 million, respectively, of collateralized mortgage obligations and $2.7 million and $2.2 million, respectively, of other asset-backed securities.
(g) Consists of closely-held limited partnerships valued at NAV per share (or its equivalent) and is not categorized in the fair value hierarchy.
Other post-retirement plan assets are also managed in accordance with prudent investor guidelines contained in the ERISA requirements. The investment strategy supports the objective of the funds, which is to preserve capital, maintain sufficient liquidity and earn a consistent rate of return. Other post-retirement plan assets are invested primarily in fixed income securities, which may include domestic and foreign corporate bonds, collateralized mortgage obligations and asset-backed securities, U.S. government agency, state and local obligations, U.S. Treasury notes and money market funds, as well as domestic and international equity funds.
The fair values of Great Plains Energy's other post-retirement plan assets at December 31, 2017 and 2016, by asset category are in the following tables.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Fair Value Measurements Using |
Description | December 31 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Assets measured at NAV |
Other Post-Retirement Benefit Plans | | (millions) | |
Equity securities | | $ | 3.7 |
| | | $ | 3.7 |
| | | | $ | — |
| | | | $ | — |
| | | $ | — |
| |
Fixed income securities | |
| | | | | | | | | | | | | | | |
Fixed income fund(a) | | 56.4 |
| | | — |
| | | | — |
| | | | — |
| | | 56.4 |
| |
U.S. Treasury | | 3.0 |
| | | 3.0 |
| | | | — |
| | | | — |
| | | — |
| |
U.S. Agency, state and local obligations | | 5.5 |
| | | — |
| | | | 5.5 |
| | | | — |
| | | — |
| |
U.S. corporate bonds(b) | | 18.7 |
| | | — |
| | | | 18.7 |
| | | | — |
| | | — |
| |
Foreign corporate bonds | | 1.6 |
| | | — |
| | | | 1.6 |
| | | | — |
| | | — |
| |
Cash equivalents | | 25.3 |
| | | 25.3 |
| | | | — |
| | | | — |
| | | — |
| |
Mutual funds | | 0.2 |
| | | 0.2 |
| | | | — |
| | | | — |
| | | — |
| |
Other | | 1.4 |
| | | — |
| | | | 1.4 |
| | | | — |
| | | — |
| |
Total | | $ | 115.8 |
| | | $ | 32.2 |
| | | | $ | 27.2 |
| | | | $ | — |
| | | $ | 56.4 |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Fair Value Measurements Using |
Description | December 31 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Assets measured at NAV |
Other Post-Retirement Benefit Plans | | (millions) | |
Equity securities | | $ | 4.1 |
| | | $ | 4.1 |
| | | | $ | — |
| | | | $ | — |
| | | $ | — |
| |
Fixed income securities | |
| | | | | | | | | | | | | | | |
Fixed income fund(a) | | 62.7 |
| | | — |
| | | | — |
| | | | — |
| | | 62.7 |
| |
U.S. Treasury | | 3.9 |
| | | 3.9 |
| | | | — |
| | | | — |
| | | — |
| |
U.S. Agency, state and local obligations | | 4.3 |
| | | — |
| | | | 4.3 |
| | | | — |
| | | — |
| |
U.S. corporate bonds(b) | | 17.8 |
| | | — |
| | | | 17.8 |
| | | | — |
| | | — |
| |
Foreign corporate bonds | | 1.6 |
| | | — |
| | | | 1.6 |
| | | | — |
| | | — |
| |
Cash equivalents | | 19.5 |
| | | 19.5 |
| | | | — |
| | | | — |
| | | — |
| |
Other | | 1.7 |
| | | 0.2 |
| | | | 1.5 |
| | | | — |
| | | — |
| |
Total | | $ | 115.6 |
| | | $ | 27.7 |
| | |
| $ | 25.2 |
| | | | $ | — |
| | | $ | 62.7 |
| |
(a) At December 31, 2017 and 2016, this category includes $56.4 million and $62.7 million, respectively, of an institutional common/collective trust fund valued at NAV per share (or its equivalent) and is not categorized in the fair value hierarchy.
(b) At December 31, 2017 and 2016, this category is comprised of $15.1 million and $14.0 million, respectively, of corporate bonds, $0.5 million and $0.5 million, respectively, of collateralized mortgage obligations and $3.1 million and $3.3 million, respectively, of other asset-backed securities.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The cost trend assumed for 2017 and 2018 was 6.5% and 6.8%, respectively, with the rate declining through 2027 to the ultimate cost trend rate of 4.5%.
The effects of a one-percentage point change in the assumed health care cost trend rates, holding all other assumptions constant, at December 31, 2017, are detailed in the following table.
|
| | | | | | | | |
| | Increase | | Decrease |
| | (millions) |
Effect on total service and interest component | | $ | 0.2 |
| | $ | (0.2 | ) |
Effect on post-retirement benefit obligation | | 0.4 |
| | (0.3 | ) |
Employee Savings Plans
Great Plains Energy has defined contribution savings plans (401(k)) that cover substantially all employees. Great Plains Energy matches employee contributions, subject to limits. The annual cost of the plans was approximately $10.9 million in 2017, $11.5 million in 2016 and $10.6 million in 2015. KCP&L's annual cost of the plans was approximately $7.7 million in 2017, $8.0 million in 2016 and $7.9 million in 2015.
10. EQUITY COMPENSATION
Great Plains Energy's Long-Term Incentive Plan is an equity compensation plan approved by Great Plains Energy's shareholders. The Long-Term Incentive Plan permits the grant of restricted stock, restricted stock units, bonus shares, stock options, stock appreciation rights, director shares, director deferred share units, performance shares and other stock-based awards to directors, officers and other employees of Great Plains Energy and KCP&L. The maximum number of shares of Great Plains Energy common stock that can be issued under the plan is 8.0 million. Common stock shares delivered by Great Plains Energy under the Long-Term Incentive Plan may be authorized but unissued, held in the treasury or purchased on the open market (including private purchases) in accordance with applicable securities laws. Great Plains Energy expects to purchase common stock on the open market during 2018 to satisfy performance share payments and director deferred share unit conversion. Forfeiture rates are based on historical forfeitures and future expectations and are reevaluated annually.
The following table summarizes Great Plains Energy's and KCP&L's equity compensation expense and the associated income tax benefit.
|
| | | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 |
Great Plains Energy | | (millions) | | |
Equity compensation expense | | $ | 6.3 |
| | $ | 5.0 |
| | $ | 4.0 |
|
Income tax benefit | | 2.4 |
| | 1.6 |
| | 1.4 |
|
KCP&L | | |
| | |
| | |
|
Equity compensation expense | | $ | 4.2 |
| | $ | 3.2 |
| | $ | 2.6 |
|
Income tax benefit | | 1.6 |
| | 1.0 |
| | 0.9 |
|
Performance Shares
The payment of performance shares is contingent upon achievement of specific performance goals over a stated period of time as approved by the Compensation and Development Committee of the Board. The number of performance shares ultimately paid can vary from the number of shares initially granted depending on Great Plains Energy's performance over stated performance periods. Compensation expense for performance shares is calculated by recognizing the portion of the fair value for each reporting period for which the requisite service has been rendered. Dividends are accrued over the vesting period and paid in cash based on the number of performance shares ultimately paid.
The fair value of performance share awards is estimated using the market value of the Company's stock at the valuation date and a Monte Carlo simulation technique that incorporates assumptions for inputs of expected volatilities, dividend yield and risk-free rates. Expected volatility is based on daily stock price change during a historical period commensurate with the remaining term of the performance period of the grant. The risk-free rate is based upon the rate at the time of the evaluation for zero-coupon government bonds with a maturity consistent with the remaining performance period of the grant. The dividend yield is based on the most recent dividends paid and
the actual closing stock price on the valuation date. For shares granted in 2017, inputs for expected volatility, dividend yield and risk-free rates were 18%, 3.8% and 1.58%, respectively.
Performance share activity is summarized in the following table. Performance adjustment represents the number of shares of common stock related to performance shares ultimately issued that can vary from the number of performance shares initially granted depending on Great Plains Energy's performance over a stated period of time.
|
| | | | | | | | | | |
| Performance Shares | | Grant Date Fair Value* |
Beginning balance January 1, 2017 | | 625,100 |
| | | | $ | 28.13 |
| |
Granted | | 236,433 |
| | | | 31.26 |
| |
Earned | | (212,992 | ) | | | | 28.48 |
| |
Forfeited | | (103,454 | ) | | | | 29.24 |
| |
Ending balance December 31, 2017 | | 545,087 |
| | | | 29.12 |
| |
* weighted-average
At December 31, 2017, the remaining weighted-average contractual term was 1.1 years. The weighted-average grant-date fair value of shares granted was $31.26, $31.41 and $24.03 in 2017, 2016 and 2015, respectively. At December 31, 2017, there was $6.1 million of total unrecognized compensation expense, net of forfeiture rates, related to performance shares granted under the Long-Term Incentive Plan, which will be recognized over the remaining weighted-average contractual term. The total fair value of performance shares earned and paid was $6.1 million, $7.4 million and $0.5 million in 2017, 2016 and 2015, respectively.
Restricted Stock
Restricted stock cannot be sold or otherwise transferred by the recipient prior to vesting and has a value equal to the fair market value of the shares on the issue date. Restricted stock shares vest over a stated period of time with accruing reinvested dividends subject to the same restrictions. Compensation expense, calculated by multiplying shares by the grant-date fair value related to restricted stock, is recognized over the stated vesting period. Restricted stock activity is summarized in the following table.
|
| | | | | | | | | | |
| Nonvested Restricted Stock | | Grant Date Fair Value* |
Beginning balance January 1, 2017 | | 249,672 |
| | | | $ | 27.20 |
| |
Granted and issued | | 81,040 |
| | | | 28.68 |
| |
Vested | | (112,813 | ) | | | | 26.92 |
| |
Forfeited | | (25,497 | ) | | | | 28.10 |
| |
Ending balance December 31, 2017 | | 192,402 |
| | | | 27.87 |
| |
* weighted-average
At December 31, 2017, the remaining weighted-average contractual term was 1.2 years. The weighted-average grant-date fair value of shares granted was $28.68, $29.41 and $25.89 in 2017, 2016 and 2015, respectively. At December 31, 2017, there was $2.1 million of total unrecognized compensation expense, net of forfeiture rates, related to nonvested restricted stock granted under the Long-Term Incentive Plan, which will be recognized over the remaining weighted-average contractual term. Total fair value of shares vested was $3.0 million, $1.8 million and $2.2 million in 2017, 2016 and 2015, respectively.
Director Deferred Share Units
Non-employee directors receive shares of Great Plains Energy's common stock as part of their annual retainer. Each director may elect to defer receipt of their shares by receiving Director Deferred Share Units that convert to shares of Great Plains Energy's common stock at the end of January in the year after departure from the Board or such other time as elected by each director. Director Deferred Share Units have a value equal to the market value of Great Plains Energy's common stock on the grant date with accruing dividends. Compensation expense, calculated by multiplying the director deferred share units by the related grant-date fair value, is recognized at the grant date.
The total fair value of shares of Director Deferred Share Units issued was insignificant for 2017 and 2016. Director Deferred Share Units activity is summarized in the following table.
|
| | | | | | | | | | | |
| | Share Units | | Grant Date Fair Value* |
Beginning balance January 1, 2017 | | | 138,587 |
| | | | $ | 23.96 |
| |
Issued | | | 23,435 |
| | | | 30.09 |
| |
Converted | | | (22,871 | ) | | | | 21.81 |
| |
Ending balance December 31, 2017 | | | 139,151 |
| | | | 25.35 |
| |
* weighted-average
11. SHORT-TERM BORROWINGS AND SHORT-TERM BANK LINES OF CREDIT
Great Plains Energy's $200 Million Revolving Credit Facility
Great Plains Energy's $200 million revolving credit facility with a group of banks expires in October 2019. The facility's terms permit transfers of unused commitments between this facility and the KCP&L and GMO facilities discussed below, with the total amount of the facility not exceeding $400 million at any one time. A default by Great Plains Energy or any of its significant subsidiaries on other indebtedness totaling more than $50.0 million is a default under the facility. Under the terms of this facility, Great Plains Energy is required to maintain a consolidated indebtedness to consolidated capitalization ratio, as defined in the facility, not greater than 0.65 to 1.00 at all times. At December 31, 2017, Great Plains Energy was in compliance with this covenant. At December 31, 2017, Great Plains Energy had $11.0 million of outstanding cash borrowings at a weighted-average interest rate of 2.94% and had issued $1.0 million in letters of credit under the credit facility. At December 31, 2016, Great Plains Energy had no outstanding cash borrowings and had issued $1.0 million in letters of credit under the credit facility.
KCP&L's $600 Million Revolving Credit Facility and Commercial Paper
KCP&L's $600 million revolving credit facility with a group of banks provides support for its issuance of commercial paper and other general corporate purposes and expires in October 2019. Great Plains Energy and KCP&L may transfer up to $200 million of unused commitments between Great Plains Energy's and KCP&L's facilities. A default by KCP&L on other indebtedness totaling more than $50.0 million is a default under the facility. Under the terms of this facility, KCP&L is required to maintain a consolidated indebtedness to consolidated capitalization ratio, as defined in the facility, not greater than 0.65 to 1.00 at all times. At December 31, 2017, KCP&L was in compliance with this covenant. At December 31, 2017, KCP&L had $167.5 million of commercial paper outstanding at a weighted-average interest rate of 1.95%, had issued letters of credit totaling $2.7 million and had no outstanding cash borrowings under the credit facility. At December 31, 2016, KCP&L had $132.9 million of commercial paper outstanding at a weighted-average interest rate of 0.98%, had issued letters of credit totaling $2.8 million and had no outstanding cash borrowings under the credit facility.
GMO's $450 Million Revolving Credit Facility and Commercial Paper
GMO's $450 million revolving credit facility with a group of banks provides support for its issuance of commercial paper and other general corporate purposes and expires in October 2019. Great Plains Energy and GMO may transfer up to $200 million of unused commitments between Great Plains Energy's and GMO's facilities. A default by GMO or any of its significant subsidiaries on other indebtedness totaling more than $50.0 million is a default under the facility. Under the terms of this facility, GMO is required to maintain a consolidated indebtedness to consolidated capitalization ratio, as defined in the facility, not greater than 0.65 to 1.00 at all times. At December 31, 2017, GMO was in compliance with this covenant. At December 31, 2017, GMO had $209.3 million of commercial paper outstanding at a weighted-average interest rate of 1.85%, had issued letters of credit totaling $2.1 million and had no outstanding cash borrowings under the credit facility. At December 31, 2016, GMO had $201.9 million of commercial paper outstanding at a weighted-average interest rate of 1.02%, had issued letters of credit totaling $1.9 million and had no outstanding cash borrowings under the credit facility.
Great Plains Energy's $864.5 Million Term Loan Facility
In connection with the Original Merger Agreement, Great Plains Energy entered into a commitment letter for a 364-day senior unsecured bridge term loan facility, originally for an aggregate principal amount of $8.017 billion to support the anticipated transaction and provide flexibility for the timing of long-term financing. Following Great Plains Energy's completed acquisition financings, the aggregate principal amount of the facility was subsequently reduced to $864.5 million and the expiration date of the facility was extended to November 30, 2017. The remaining commitment of $864.5 million was terminated in July 2017 in connection with the Amended Merger Agreement.
12. LONG-TERM DEBT
Great Plains Energy's and KCP&L's long-term debt is detailed in the following table.
|
| | | | | | | | | | | | |
| | | December 31 |
| Year Due | | 2017 | | 2016 |
KCP&L | | | | (millions) |
General Mortgage Bonds | | | | | | | | |
2.95% EIRR bonds | 2023 | | | $ | 79.5 |
| | | | $ | 110.5 |
|
7.15% Series 2009A (8.59% rate)(a) | 2019 | | | 400.0 |
| | | | 400.0 |
|
Senior Notes | | | | |
| | | | |
|
5.85% Series (5.72% rate)(a) |
| | | — |
| | | | 250.0 |
|
6.375% Series (7.49% rate)(a) | 2018 | | | 350.0 |
| | | | 350.0 |
|
3.15% Series | 2023 | | | 300.0 |
| | | | 300.0 |
|
3.65% Series | 2025 | | | 350.0 |
| | | | 350.0 |
|
6.05% Series (5.78% rate)(a) | 2035 | | | 250.0 |
| | | | 250.0 |
|
5.30% Series | 2041 | | | 400.0 |
| | | | 400.0 |
|
4.20% Series | 2047 | | | 300.0 |
| | | | — |
|
EIRR Bonds | | | | | | | | |
1.329% Series 2007A and 2007B(b) | 2035 | | | 146.5 |
| | | | 146.5 |
|
2.875% Series 2008 | 2038 | | | 23.4 |
| | | | 23.4 |
|
Current maturities | | | | (350.0 | ) | | | | (281.0 | ) |
Unamortized discount and debt issuance costs | | | | (17.2 | ) | | | | (15.4 | ) |
Total KCP&L excluding current maturities(c) | | | | 2,232.2 |
| | | | 2,284.0 |
|
Other Great Plains Energy | | | | |
| | | | |
|
GMO First Mortgage Bonds 9.44% Series | 2018-2021 | | | 4.6 |
| | | | 5.7 |
|
GMO Senior Notes | | | | | | | | |
8.27% Series | 2021 | | | 80.9 |
| | | | 80.9 |
|
3.49% Series A | 2025 | | | 125.0 |
| | | | 125.0 |
|
4.06% Series B | 2033 | | | 75.0 |
| | | | 75.0 |
|
4.74% Series C | 2043 | | | 150.0 |
| | | | 150.0 |
|
GMO Medium Term Notes | | | | |
| | | | |
|
7.33% Series | 2023 | | | 3.0 |
| | | | 3.0 |
|
7.17% Series | 2023 | | | 7.0 |
| | | | 7.0 |
|
Great Plains Energy Senior Notes | | | | | | | | |
6.875% Series (7.33% rate)(a) |
| | | — |
| | | | 100.0 |
|
4.85% Series | 2021 | | | 350.0 |
| | | | 350.0 |
|
5.292% Series | 2022 | | | 287.5 |
| | | | 287.5 |
|
Current maturities | | | | (1.1 | ) | | | | (101.1 | ) |
Unamortized discount and premium, net and debt issuance costs | | | | (1.5 | ) | | | | (1.8 | ) |
Total Great Plains Energy excluding current maturities(c) | | | | $ | 3,312.6 |
| | | | $ | 3,365.2 |
|
| |
(a) | Rate after amortizing gains/losses recognized in other comprehensive income (OCI) on settlements of interest rate hedging instruments |
| |
(c) | At December 31, 2017 and 2016, does not include $50.0 million and $21.9 million of secured Series 2005 Environmental Improvement Revenue Refunding (EIRR) bonds because the bonds were repurchased in September 2015 and are held by KCP&L |
Amortization of Debt Expense
Great Plains Energy's and KCP&L's amortization of debt expense is detailed in the following table.
|
| | | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 |
| | (millions) |
KCP&L | | $ | 3.0 |
| | $ | 3.2 |
| | $ | 3.0 |
|
Other Great Plains Energy | | 26.9 |
| | 30.6 |
| | 1.1 |
|
Total Great Plains Energy | | $ | 29.9 |
| | $ | 33.8 |
| | $ | 4.1 |
|
In 2017 and 2016, Other Great Plains Energy includes $23.6 million and $29.6 million, respectively, of amortization of debt expense related to Great Plains Energy's bridge term loan facility. Fees related to this facility were amortized over the term of the facility.
KCP&L General Mortgage Bonds
KCP&L has issued mortgage bonds under the Indenture. The Indenture creates a mortgage lien on substantially all of KCP&L's utility plant. Mortgage bonds totaling $479.5 million and $510.5 million were outstanding at December 31, 2017 and 2016, respectively. KCP&L repaid its $31.0 million secured Series 1992 EIRR bonds at maturity in July 2017.
KCP&L Senior Notes
In June 2017, KCP&L issued, at a discount, $300.0 million of 4.20% unsecured Senior Notes, maturing in 2047. KCP&L also repaid its $250.0 million of 5.85% unsecured Senior Notes at maturity in June 2017.
KCP&L Municipal Bond Insurance Policies
KCP&L's secured Series 2005 EIRR bonds totaling $50.0 million and $21.9 million, respectively, are covered by a municipal bond insurance policy between KCP&L and Syncora Guarantee, Inc. (Syncora). The insurance agreements between KCP&L and Syncora provide for reimbursement by KCP&L for any amounts that Syncora pays under the municipal bond insurance policies. The insurance agreements contain a covenant that the indebtedness to total capitalization ratio of KCP&L and its consolidated subsidiaries will not be greater than 0.68 to 1.00. At December 31, 2017, KCP&L was in compliance with this covenant. KCP&L is also restricted from issuing additional bonds under its General Mortgage Indenture if, after giving effect to such additional bonds, the proportion of secured debt to total indebtedness would be more than 75%, or more than 50% if the long term rating for such bonds by S&P Global Ratings or Moody's Investors Service would be at or below A- or A3, respectively. The insurance agreement covering the unsecured Series 2005 EIRR bonds also required KCP&L to provide collateral to Syncora in the form of $50.0 million of Mortgage Bonds Series 2005 EIRR Insurer due 2035 for KCP&L's obligations under the insurance agreement as a result of KCP&L issuing general mortgage bonds in 2009 (other than refunding of outstanding general mortgage bonds) that resulted in the aggregate amount of outstanding general mortgage bonds exceeding 10% of total capitalization. The bonds are not incremental debt for KCP&L but collateralize Syncora's claim on KCP&L if Syncora was required to meet its obligation under the insurance agreement. In the event of a default under the insurance agreements, Syncora may take any available legal or equitable action against KCP&L, including seeking specific performance of the covenants.
GMO First Mortgage Bonds
GMO has issued mortgage bonds under the General Mortgage Indenture and Deed of Trust dated April 1, 1946, as supplemented. The Indenture creates a mortgage lien on a portion of GMO's utility plant. Mortgage bonds totaling $4.6 million and $5.7 million, respectively, were outstanding at December 31, 2017 and 2016.
GMO Senior Notes
Under the terms of the note purchase agreement for GMO's Series A, B and C Senior Notes, GMO is required to maintain a consolidated indebtedness to consolidated capitalization ratio, as defined in the agreement, not greater than 0.65 to 1.00 at all times. In addition, GMO's priority debt, as defined in the agreement, cannot exceed 15% of consolidated tangible net worth, as defined in the agreement. At December 31, 2017, GMO was in compliance with these covenants.
Great Plains Energy Senior Notes
In March 2017, Great Plains Energy issued $4.3 billion of senior notes in order to fund the majority of the cash portion of the acquisition of Westar under the Original Merger Agreement.
In July 2017, as a result of the Amended Merger Agreement, Great Plains Energy determined in its reasonable judgment that the acquisition of Westar would not close prior to November 30, 2017 and exercised its special optional redemption right to redeem the senior notes issued in March 2017. The redemption price was equal to 101% of the principle amount of the senior notes, including accrued and unpaid interest, for a total redemption cost of $4,400.1 million. As a result of the redemption, Great Plains Energy recorded a loss on extinguishment of debt of $82.8 million in July 2017.
Great Plains Energy repaid its $100.0 million of 6.875% unsecured Senior Notes at maturity in September 2017.
Scheduled Maturities
Great Plains Energy's and KCP&L's long-term debt maturities for the next five years are detailed in the following table.
|
| | | | | | | | | | | | | | | | | | | | |
| | 2018 | | 2019 | | 2020 | | 2021 | | 2022 |
| | (millions) |
Great Plains Energy | | $ | 351.1 |
| | $ | 401.1 |
| | $ | 1.1 |
| | $ | 432.0 |
| | $ | 287.5 |
|
KCP&L | | 350.0 |
| | 400.0 |
| | — |
| | — |
| | — |
|
13. COMMON STOCK
Great Plains Energy has an effective shelf registration statement for the sale of unlimited amounts of securities with the SEC that became effective in March 2015 and expires in March 2018. In September 2016, Great Plains Energy filed a post-effective amendment to its shelf registration statement to register depositary shares and preference stock among the types of securities that Great Plains Energy may offer and sell. Great Plains Energy does not expect to replace this shelf registration statement prior to the closing of the anticipated merger with Westar.
In September 2016, Great Plains Energy shareholders approved an amendment to Great Plains Energy's articles of incorporation, increasing the authorized number of shares of common stock, without par value, to 600 million shares from 250 million shares.
In October 2016, Great Plains Energy completed a registered public offering of 60.5 million shares of common stock, without par value, at a public offering price of $26.45 per share, for total gross proceeds of approximately $1.6 billion (net proceeds of approximately $1.55 billion after issuance costs). Great Plains Energy planned to use proceeds from the offering to finance a portion of the cash consideration for the acquisition of Westar under the Original Merger Agreement.
Great Plains Energy has 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 reinvesting dividends 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, 2017, 0.9 million shares remained available for future issuances.
Great Plains Energy has shares of common stock registered with the SEC for a defined contribution savings plan (401(k)). Shares issued under the plan may be either newly issued shares or shares purchased in the open market. At December 31, 2017, 0.5 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. 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 and the note purchase agreement for GMO's Series A, B and C Senior Notes contain a covenant requiring the respective company to maintain a consolidated indebtedness to consolidated total capitalization ratio of not more than 0.65 to 1.00 at all times. Under the Amended Merger Agreement, Great Plains Energy is also restricted from paying a quarterly common stock dividend in excess of $0.275 per share without the consent of Westar.
As of December 31, 2017, 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, 2017. The restrictions are not expected to affect the Companies' ability to pay dividends at the current level in the foreseeable future.
14. PREFERRED STOCK
At December 31, 2017, 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.
Series A Mandatory Convertible Preferred Stock
On May 29, 2016, Great Plains Energy entered into a stock purchase agreement with OMERS, pursuant to which Great Plains Energy would issue and sell to OMERS 750,000 shares of Series A Preferred Stock, for an aggregate purchase price equal to $750 million at the closing of the Original Merger Agreement.
In July 2017, as a result of the Amended Merger Agreement, Great Plains Energy and OMERS terminated their stock purchase agreement for the Series A Preferred Stock. As a result of this termination, Great Plains Energy recorded $15 million of previously deferred offering fees to non-operating expenses in the third quarter of 2017.
Series B Mandatory Convertible Preferred Stock
In October 2016, Great Plains Energy completed a registered public offering of 17.3 million depositary shares, each representing a 1/20th interest in a share of Great Plains Energy's Series B Preferred Stock, without par value, at a public offering price of $50 per depositary share for total gross proceeds of $862.5 million (net proceeds of approximately $836.2 million after issuance costs). Great Plains Energy planned to use proceeds from the offering to fund a portion of the cash consideration for the acquisition of Westar under the Original Merger Agreement.
Each depositary share entitled the holder of such depositary share, through the bank depositary, to a 1/20th interest in the rights and preferences of the Series B Preferred Stock, including conversion, dividend, liquidation and voting rights, subject to the terms of the deposit agreement.
Unless previously converted or redeemed, on or around September 15, 2019, each outstanding share of Series B Preferred Stock would automatically convert into a number of shares of Great Plains Energy common stock equal to a conversion rate.
Dividends on the Series B Preferred Stock were payable on a cumulative basis when, as and if declared by Great Plains Energy's Board of Directors, and subject to Missouri law, at an annual rate of 7.00% on the liquidation preference of $1,000 per share of Series B Preferred Stock (or $50 per depositary share), payable in cash, Great Plains Energy common stock or a combination thereof.
Great Plains Energy's Series B Preferred Stock also contained an acquisition termination redemption option whereby in the event that the Original Merger Agreement was terminated or if Great Plains Energy determined in its reasonable judgment that the acquisition of Westar would not close or if the acquisition of Westar had not closed by November 30, 2017, then Great Plains Energy could at its sole option (but was not required to) redeem all of the Series B Preferred Stock. If exercised, the redemption price would be equal to either:
(a) $1,000 per share plus accumulated and unpaid dividends up to the redemption date; or
(b) if the average price of Great Plains Energy's common stock exceeded a certain threshold amount, then a repurchase price that is equal to a make-whole formula.
The Series B Preferred Stock also contained a fundamental change conversion option whereby upon the occurrence of certain events deemed to be a fundamental change, including an acquisition, liquidation, or delisting of Great Plains Energy common stock, holders of the Series B Preferred Stock could:
(a) convert their existing shares into shares of Great Plains Energy common stock; and
(b) receive a dividend make-whole payment.
As a result of the Amended Merger Agreement, Great Plains Energy determined in its reasonable judgment that the acquisition of Westar under the Original Merger Agreement would not close and exercised its acquisition termination redemption option and redeemed the Series B Preferred Stock in August 2017. The Series B Preferred Stock was redeemed at a redemption price that was equal to a make-whole formula set forth in the terms of the Series B Preferred Stock. The total cost of the redemption was $963.4 million. Great Plains Energy made the entire redemption payment in cash.
The dividend make-whole provisions within both the acquisition termination redemption and fundamental change conversion options discussed above represented embedded derivatives that in accordance with GAAP, were accounted for on a combined basis separately from the Series B Preferred Stock and reported at fair value. The fair value of the Series B Preferred Stock dividend make-whole provisions at inception and December 31, 2016 was insignificant. As part of the $963.4 million redemption of the Series B Preferred Stock, the Series B Preferred Stock dividend make-whole provisions liability was settled in August 2017. In 2017, Great Plains Energy recognized a loss of $124.8 million for the settlement of these provisions, which is recorded within loss on Series B Preferred Stock dividend make-whole provisions on the consolidated statements of comprehensive income (loss).
Great Plains Energy also recognized a redemption premium of $2.4 million in connection with the redemption of the Series B Preferred Stock in 2017. This premium is represented as the difference between the redemption cost of $963.4 million and the $836.2 million carrying value of the Series B Preferred Stock, less the $124.8 million paid to settle the Series B Preferred Stock dividend make-whole provisions. The redemption premium is recorded as a reduction to earnings (loss) available for common shareholders and is recorded within preferred stock dividend requirements and redemption premium on the consolidated statements of comprehensive income (loss).
15. 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.
Great Plains Energy's and KCP&L's current estimates of capital expenditures (exclusive of AFUDC and property taxes) over the next five years to comply with environmental regulations are in the following table. The total cost of compliance with any existing, proposed or future laws and regulations may be significantly different from these cost estimates provided. |
| | | | | | | | | | | | | | | |
| 2018 | 2019 | 2020 | 2021 | 2022 |
| (millions) |
Great Plains Energy | $ | 14.6 |
| $ | 2.8 |
| $ | 7.7 |
| $ | 20.1 |
| $ | 63.1 |
|
KCP&L | 14.5 |
| 2.8 |
| 7.7 |
| 20.1 |
| 63.1 |
|
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 factors and/or public perception of the Companies' environmental reputation.
The following discussion groups environmental and certain associated matters into the broad categories of air and climate change, water, solid waste and remediation.
Clean Air Act and Climate Change Overview
The Clean Air Act Amendments of 1990 (Clean Air Act) and associated regulations enacted by the EPA form a comprehensive program to preserve and enhance 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.
Climate Change
The Companies' current generation capacity is primarily coal-fired and is estimated to produce about one ton of carbon dioxide (CO2) per MWh, or approximately 17 million tons and 13 million tons per year for Great Plains Energy and KCP&L, respectively. The Companies are subject to existing greenhouse gas reporting regulations and certain greenhouse gas requirements. Federal or state legislation concerning the reduction of emissions of greenhouse gases, including CO2, could be enacted in the future. At the international level, the Paris Agreement was adopted in December 2015 by nearly 200 countries and became effective in November 2016. The Paris Agreement does not result in any new, legally binding obligations on the U.S. to meet a particular greenhouse gas emissions target, but establishes a framework for international cooperation on climate change. In June 2017, U.S. President Donald Trump announced the U.S. would withdraw from the Paris Agreement. Under the rules of the Paris Agreement, the earliest any country can withdraw is November 2020. Other international agreements legally binding on the U.S. may be reached in the future. Greenhouse gas legislation has the potential of having significant financial and operational impacts on Great Plains Energy and KCP&L; however, the ultimate financial and operational consequences to Great Plains Energy and KCP&L cannot be determined until such legislation is passed. In the absence of new Congressional mandates, the EPA is proceeding with the regulation of greenhouse gases under the existing Clean Air Act.
In August 2015, the EPA finalized CO2 emission standards for new, modified and reconstructed affected fossil-fuel-fired electric utility generating units. The standards would not apply to Great Plains Energy's and KCP&L's existing units unless the units were modified or reconstructed in the future. Also in August 2015, the EPA finalized its Clean Power Plan which sets CO2 emission performance rates for existing affected fossil-fuel-fired electric generating units. Nationwide, by 2030, the EPA projects the Clean Power Plan would achieve CO2 emission reductions from the power sector of approximately 32% from CO2 emission levels in 2005.
In February 2016, the U.S. Supreme Court granted a stay of the Clean Power Plan putting the rule on hold pending review in the U.S. Court of Appeals for the District of Columbia Circuit and any subsequent review by the U.S. Supreme Court if such review is sought. In October 2017, the EPA proposed to repeal
the Clean Power Plan on the basis that it exceeded the EPA’s statutory authority. In December 2017, the EPA issued an advance notice of proposed rulemaking (ANPRM) to solicit comments as the agency considers proposing a future rule to replace the Clean Power Plan. In the ANPRM, the EPA is considering proposing emission guidelines to limit greenhouse gas emissions from existing electric utility generating units. Compliance with the Clean Power Plan or any replacement rule has the potential of having significant financial and operational impacts on Great Plains Energy and KCP&L; however, the ultimate financial and operational consequences to Great Plains Energy and KCP&L cannot be determined until the outcome of the EPA's proposal to repeal the Clean Power Plan and pending litigation is known.
Clean Water Act
The Clean Water Act and associated regulations enacted by the EPA form a comprehensive program to restore and 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 May 2014, the EPA finalized 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 are subject to the best technology available standards based on studies completed to comply with such standards. The rule provides flexibility to work with the states to develop the best technology available to minimize aquatic species impacted by being pinned against intake screens (impingement) or drawn into cooling water systems (entrainment). Estimated costs to comply with Section 316(b) of the Clean Water Act are included in the estimated capital expenditures table above.
KCP&L holds a permit from the Missouri Department of Natural Resources (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. Great Plains Energy and KCP&L cannot predict the outcome of this matter; however, while less significant outcomes are possible, this matter may require a reduction in generation, installation of cooling towers or other technology to cool the water, or both, any of which could have a significant impact on Great Plains Energy's and KCP&L's results of operations, financial position and cash flows.
Solid Waste
Solid and hazardous waste generation, storage, transportation, treatment and disposal are regulated at the federal and state levels under various laws and regulations. In December 2014, the EPA finalized regulations to regulate coal combustion residuals (CCRs) under the Resource Conservation and Recovery Act (RCRA) subtitle D to address the risks from the disposal of CCRs generated from the combustion of coal at electric generating facilities. The Companies use coal in generating electricity and dispose of the CCRs in both on-site facilities and facilities owned by third parties. KCP&L's Iatan, La Cygne, and Montrose Stations and GMO's Sibley Station have on-site facilities affected by the rule. The rule requires periodic assessments; groundwater monitoring; location restrictions; design and operating requirements; recordkeeping and notifications; and closure, among other requirements, for CCR units. The rule was promulgated in the Federal Register on April 17, 2015, and became effective six months after promulgation with various obligations effective at specified times within the rule. Estimated capital costs to comply with the CCR rule are included in the estimated capital expenditures table above. Certain requirements of the rule would require Great Plains Energy or KCP&L to expedite or incur additional capital expenditures in the future.
Great Plains Energy and KCP&L have AROs on their balance sheets for closure and post-closure of ponds and landfills containing CCRs. Certain requirements of the rule could in the future require further evaluation of the expected method of compliance and refinement of assumptions underlying the cost estimates for closure and post-closure. Great Plains Energy's and KCP&L's AROs could increase from the amounts presently recorded.
Remediation
Certain federal and state laws, including the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), hold current and previous owners or operators of contaminated facilities and persons who arranged for the disposal or treatment of hazardous substances liable for the cost of investigation and cleanup. 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 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, 2017 and 2016, KCP&L had $0.3 million accrued for environmental remediation expenses, which covers ground water monitoring at a former MGP site. The amount accrued was established on an undiscounted basis and KCP&L does not currently have an estimated time frame over which the accrued amount may be paid.
In addition to the $0.3 million accrual above, at December 31, 2017 and 2016, Great Plains Energy had $1.5 million and $1.4 million, respectively, accrued for the future investigation and remediation of certain additional GMO identified MGP 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 $1.6 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.
|
| | | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 |
| | (millions) |
Great Plains Energy | | $ | 14.2 |
| | $ | 15.0 |
| | $ | 16.8 |
|
KCP&L | | 13.1 |
| | 13.7 |
| | 15.0 |
|
Great Plains Energy's and KCP&L's contractual commitments at December 31, 2017, excluding pensions and long-term debt, are detailed in the following tables.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Great Plains Energy | | | | | | | | | | | | | | | | | | | | |
| | 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | After 2022 | Total |
Lease commitments | | (millions) |
Operating lease | | $ | 12.1 |
| | | $ | 9.3 |
| | | $ | 9.7 |
| | | $ | 9.7 |
| | | $ | 9.5 |
| | | $ | 101.0 |
| | | $ | 151.3 |
|
Capital lease | | 0.4 |
| | | 0.4 |
| | | 0.4 |
| | | 0.4 |
| | | 0.4 |
| | | 2.7 |
| | | 4.7 |
|
Purchase commitments | | | | | | | | | | | | | | | | | | | | |
Fuel | | 210.4 |
| | | 180.1 |
| | | 67.3 |
| | | 5.1 |
| | | 37.4 |
| | | 80.7 |
| | | 581.0 |
|
Power | | 47.3 |
| | | 47.3 |
| | | 47.3 |
| | | 47.4 |
| | | 47.6 |
| | | 414.6 |
| | | 651.5 |
|
Other | | 20.9 |
| | | 14.7 |
| | | 6.7 |
| | | 5.5 |
| | | 2.4 |
| | | 35.9 |
| | | 86.1 |
|
Total contractual commitments | | $ | 291.1 |
| | | $ | 251.8 |
| | | $ | 131.4 |
| | | $ | 68.1 |
| | | $ | 97.3 |
| | | $ | 634.9 |
| | | $ | 1,474.6 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
KCP&L | | | | | | | | | | | | | | | | | | | | |
| | 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | After 2022 | Total |
Lease commitments | | (millions) |
Operating lease | | $ | 11.3 |
| | | $ | 9.3 |
| | | $ | 9.7 |
| | | $ | 9.7 |
| | | $ | 9.5 |
| | | $ | 101.0 |
| | | $ | 150.5 |
|
Capital lease | | 0.2 |
| | | 0.2 |
| | | 0.2 |
| | | 0.2 |
| | | 0.2 |
| | | 1.4 |
| | | 2.4 |
|
Purchase commitments | | | | | | | | | | | | | | | | | | | | |
Fuel | | 177.5 |
| | | 159.8 |
| | | 51.8 |
| | | 5.1 |
| | | 37.4 |
| | | 80.7 |
| | | 512.3 |
|
Power | | 34.8 |
| | | 34.8 |
| | | 34.8 |
| | | 34.9 |
| | | 35.1 |
| | | 289.8 |
| | | 464.2 |
|
Other | | 20.0 |
| | | 12.7 |
| | | 5.8 |
| | | 4.6 |
| | | 1.6 |
| | | 31.4 |
| | | 76.1 |
|
Total contractual commitments | | $ | 243.8 |
| | | $ | 216.8 |
| | | $ | 102.3 |
| | | $ | 54.5 |
| | | $ | 83.8 |
| | | $ | 504.3 |
| | | $ | 1,205.5 |
|
Great Plains Energy's and KCP&L's 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 $1.2 million in 2018 and approximately $0.4 million per year from 2019 to 2025, for a total of $4.0 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. Other represents individual commitments entered into in the ordinary course of business.
16. LEGAL PROCEEDINGS
GMO Western Energy Crisis
In response to complaints of excessive prices in the California energy markets, 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. MPS Merchant was a net purchaser of power during the refund period.
In November 2014, FERC issued an order finding that MPS Merchant engaged in tariff violations during the periods prior to October 2, 2000 (the Summer Period) and ordered refunds in the form of disgorgement of certain revenues. In November 2015 and February 2016, FERC issued additional orders regarding the refunds MPS Merchant owed.
In October 2016, MPS Merchant reached a settlement agreement, which was subsequently revised in February 2017, with certain California utilities and governmental agencies that would settle all issues in the case in exchange for $7.5 million of cash consideration as well as MPS Merchant's interest in additional funds it was entitled to during the refund period discussed above. In September 2017, the settlement agreement was approved by FERC and the settlement payment was made by MPS Merchant in October 2017. In accordance with the terms of the settlement agreement, the $7.5 million of cash consideration accrued interest at the FERC interest rate beginning on January 1, 2017, until the date of the payment of the settlement. At December 31, 2016, Great Plains Energy had accrued for the cash consideration pursuant to the settlement agreement.
17. GUARANTEES
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 subsidiary's 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, 2017, Great Plains Energy has provided $133.5 million of credit support for GMO as follows:
| |
• | Great Plains Energy direct guarantees to GMO counterparties totaling $38.0 million, which expire in 2018 and |
| |
• | Great Plains Energy guarantee of GMO long-term debt totaling $95.5 million, which includes debt with maturity dates ranging from 2018 to 2023. |
Great Plains Energy has also guaranteed GMO's commercial paper program. At December 31, 2017, GMO had $209.3 million commercial paper outstanding.
18. RELATED PARTY TRANSACTIONS AND RELATIONSHIPS
KCP&L employees manage GMO's business and operate its facilities at cost, including GMO's 18% ownership interest in KCP&L's Iatan Nos. 1 and 2. The operating expenses and capital costs billed from KCP&L to GMO were $196.3 million for 2017, $194.4 million for 2016 and $183.6 million for 2015.
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 from Great Plains Energy and between KCP&L and GMO. At December 31, 2017 and 2016, KCP&L had no outstanding receivables or payables under the money pool.
The following table summarizes KCP&L's related party net receivables.
|
| | | | | | | | | | |
| | December 31 |
| | 2017 | | | 2016 | |
| | (millions) | |
Net receivable from GMO | | $ | 65.8 |
| | | $ | 64.6 |
| |
Net receivable from Great Plains Energy | | 18.9 |
| | | 2.6 |
| |
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.
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.
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.
Great Plains Energy and KCP&L record cash and cash equivalents and short-term borrowings on the balance sheet at cost, which approximates fair value due to the short-term nature of these instruments.
Interest Rate Derivatives
In June 2016, Great Plains Energy entered into four interest rate swaps, with a total notional amount of $4.4 billion, to hedge against interest rate fluctuations on future issuances of long-term debt expected to be issued to finance a portion of the cash consideration for the acquisition of Westar under the Original Merger Agreement. The interest rate swaps were designated as economic hedges (non-hedging derivatives). Settlement of the interest rate swaps was contingent on the consummation of the acquisition of Westar. In March 2017, in connection with Great Plains Energy's $4.3 billion senior note issuance, the settlement value of the interest rate swaps to Great Plains Energy of $140.6 million was fixed.
In July 2017, the interest rate swap agreements were amended to make their cash settlement contingent on the consummation of the anticipated merger with Westar under the Amended Merger Agreement by November 30, 2018. Also in July 2017, Great Plains Energy redeemed its $4.3 billion senior notes that the interest rate swaps were entered into to hedge.
The fair value of the interest rate swaps recorded on Great Plains Energy's balance sheets reflects a contingency factor that management believes is representative of what a market participant would use in valuing these instruments in order to account for the contingent nature of the cash settlement of the interest rate swaps. The contingency factor was 0.35 at December 31, 2017 and 2016. At December 31, 2017 and 2016, the fair value of the interest rate swaps was $91.4 million and $79.3 million, respectively, and was recorded on the consolidated balance sheets in interest rate derivative instruments.
Due to the redemption of Great Plains Energy’s $4.3 billion senior notes in July 2017 and the fact that the interest rate swaps no longer serve as economic hedges, Great Plains Energy recorded changes in the fair value of the interest rate swaps after July 2017 in non-operating income on Great Plains Energy’s consolidated statements of comprehensive income (loss). All changes in the fair value of the interest rate swaps prior to July 2017 were recorded in interest charges. For 2017 and 2016, Great Plains Energy recognized gains of $12.1 million and $79.3 million, respectively, for the change in fair value of the interest rate swaps. Of these amounts, $14.0 million of gains were recorded in non-operating income in 2017.
Fair Value of Long-Term Debt
Great Plains Energy and KCP&L record long-term debt on the balance sheet at amortized cost. The fair value of long-term debt is measured as a Level 2 liability and is based on quoted market prices, with the incremental borrowing rate for similar debt used to determine fair value if quoted market prices are not available. At December 31, 2017, the book value and fair value of Great Plains Energy's long-term debt, including current maturities, were $3.7 billion and $4.0 billion, respectively. At December 31, 2016, the book value and fair value of Great Plains Energy's long-term debt, including current maturities, were $3.8 billion and $4.0 billion, respectively. At December 31, 2017, the book value and fair value of KCP&L's long-term debt, including current maturities, were $2.6 billion and $2.8 billion, respectively. At December 31, 2016, the book value and fair value of KCP&L's long-term debt, including current maturities, were $2.6 billion and $2.7 billion, respectively.
Supplemental Executive Retirement Plan
At December 31, 2017 and 2016, GMO's SERP rabbi trusts included $14.7 million and $16.0 million, respectively, of fixed income funds valued at net asset value per share (or its equivalent) that are not categorized in the fair value hierarchy. The fixed income fund invests primarily in intermediate and long-term debt securities, can be redeemed immediately and is not subject to any restrictions on redemptions.
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.
|
| | | | | | | | | | | | | | | | | | | | | | | |
Description | December 31 2017 | | | Level 1 | | | Level 2 | | Level 3 |
KCP&L | | (millions) | |
Assets | | | | | | | | | | | | | | | |
Nuclear decommissioning trust (a) | | | | | | | | | | | | | | | |
Equity securities | | $ | 183.8 |
| | | | $ | 183.8 |
| | | | $ | — |
| | | | $ | — |
| |
Debt securities | | |
| | | | |
| | | | |
| | | | |
| |
U.S. Treasury | | 35.3 |
| | | | 35.3 |
| | | | — |
| | | | — |
| |
U.S. Agency | | 0.4 |
| | | | — |
| | | | 0.4 |
| | | | — |
| |
State and local obligations | | 2.1 |
| | | | — |
| | | | 2.1 |
| | | | — |
| |
Corporate bonds | | 34.1 |
| | | | — |
| | | | 34.1 |
| | | | — |
| |
Foreign governments | | 0.1 |
| | | | — |
| | | | 0.1 |
| | | | — |
| |
Cash equivalents | | 2.5 |
| | | | 2.5 |
| | | | — |
| | | | — |
| |
Other | | 0.1 |
| | | | 0.1 |
| | | | — |
| | | | — |
| |
Total nuclear decommissioning trust | | 258.4 |
| | | | 221.7 |
| | | | 36.7 |
| | | | — |
| |
Self-insured health plan trust (b) | | | | | | | | | | | | | | | |
Equity securities | | 0.5 |
| | | | 0.5 |
| | | | — |
| | | | — |
| |
Debt securities | | 2.7 |
| | | | 0.3 |
| | | | 2.4 |
| | | | — |
| |
Cash and cash equivalents | | 7.7 |
| | | | 7.7 |
| | | | — |
| | | | — |
| |
Total self-insured health plan trust | | 10.9 |
| | | | 8.5 |
| | | | 2.4 |
| | | | — |
| |
Total | | $ | 269.3 |
| | | | $ | 230.2 |
| | | | $ | 39.1 |
| | | | $ | — |
| |
Other Great Plains Energy | | |
| | | | |
| | | | |
| | | | |
| |
Assets | | |
| | | | |
| | | | |
| | | | |
| |
Interest rate derivative instruments (c) | | $ | 91.4 |
| | | | $ | — |
| | | | $ | — |
| | | | $ | 91.4 |
| |
Total | | $ | 91.4 |
| | | | $ | — |
| | | | $ | — |
| | | | $ | 91.4 |
| |
Great Plains Energy | | |
| | | | |
| | | | |
| | | | |
| |
Assets | | |
| | | | |
| | | | |
| | | | |
| |
Nuclear decommissioning trust (a) | | $ | 258.4 |
| | | | $ | 221.7 |
| | | | $ | 36.7 |
| | | | $ | — |
| |
Self-insured health plan trust (b) | | 10.9 |
| | | | 8.5 |
| | | | 2.4 |
| | | | — |
| |
Interest rate derivative instruments (c) | | 91.4 |
| | | | — |
| | | | — |
| | | | 91.4 |
| |
Total | | $ | 360.7 |
| | | | $ | 230.2 |
| | | | $ | 39.1 |
| | | | $ | 91.4 |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | |
Description | December 31 2016 | | Level 1 | | Level 2 | | Level 3 |
KCP&L | | (millions) | |
Assets | | | | | | | | | | | | | | | |
Nuclear decommissioning trust (a) | | | | | | | | | | | | | | | |
Equity securities | | $ | 153.9 |
| | | | $ | 153.9 |
| | | | $ | — |
| | | | $ | — |
| |
Debt securities | | |
| | | | |
| | | | |
| | | | |
| |
U.S. Treasury | | 27.8 |
| | | | 27.8 |
| | | | — |
| | | | — |
| |
U.S. Agency | | 1.7 |
| | | | — |
| | | | 1.7 |
| | | | — |
| |
State and local obligations | | 3.2 |
| | | | — |
| | | | 3.2 |
| | | | — |
| |
Corporate bonds | | 32.4 |
| | | | — |
| | | | 32.4 |
| | | | — |
| |
Foreign governments | | 0.1 |
| | | | — |
| | | | 0.1 |
| | | | — |
| |
Cash equivalents | | 3.8 |
| | | | 3.8 |
| | | | — |
| | | | — |
| |
Total nuclear decommissioning trust | | 222.9 |
| | | | 185.5 |
| | | | 37.4 |
| | | | — |
| |
Self-insured health plan trust (b) | | | | | | | | | | | | | | | |
Equity securities | | 0.9 |
| | | | 0.9 |
| | | | — |
| | | | — |
| |
Debt securities | | 4.8 |
| | | | 0.1 |
| | | | 4.7 |
| | | | — |
| |
Cash and cash equivalents | | 5.6 |
| | | | 5.6 |
| | | | — |
| | | | — |
| |
Total self-insured health plan trust | | 11.3 |
| | | | 6.6 |
| | | | 4.7 |
| | | | — |
| |
Total | | $ | 234.2 |
| | | | $ | 192.1 |
| | | | $ | 42.1 |
| | | | $ | — |
| |
Other Great Plains Energy | | |
| | | | |
| | | | |
| | | | |
| |
Assets | | |
| | | | |
| | | | |
| | | | |
| |
Interest rate derivative instruments (c) | | $ | 79.3 |
| | | | $ | — |
| | | | $ | — |
| | | | $ | 79.3 |
| |
Total | | $ | 79.3 |
| | | | $ | — |
| | | | $ | — |
| | |
| $ | 79.3 |
| |
Great Plains Energy | | |
| | | | |
| | | | |
| | | | |
| |
Assets | | |
| | | | |
| | | | |
| | | | |
| |
Nuclear decommissioning trust (a) | | $ | 222.9 |
| | | | $ | 185.5 |
| | | | $ | 37.4 |
| | | | $ | — |
| |
Self-insured health plan trust (b) | | 11.3 |
| | | | 6.6 |
| | | | 4.7 |
| | | | — |
| |
Interest rate derivative instruments (c) | | 79.3 |
| | | | — |
| | | | — |
| | | | 79.3 |
| |
Total | | $ | 313.5 |
| | | | $ | 192.1 |
| | | | $ | 42.1 |
| | | | $ | 79.3 |
| |
| |
(a) | Fair value is based on quoted market prices of the investments held by the fund and/or valuation models. |
| |
(b) | Fair value is based on quoted market prices of the investments held by the trust. Debt securities classified as Level 1 are comprised of U.S. Treasury securities. Debt securities classified as Level 2 are comprised of corporate bonds, U.S. Agency, state and local obligations, and other asset-backed securities. |
| |
(c) | At December 31, 2017, the fair value of interest rate derivative instruments is based on the settlement value of $140.6 million discounted by a contingency factor of 0.35 that management believes is representative of what a market participant would use in valuing these instruments in order to account for the contingent nature of the cash settlement of these instruments. At December 31, 2016, the fair value of interest rate derivative instruments is determined by calculating the net present value of expected payments and receipts under the interest rate swaps using observable market inputs including interest rates and London Interbank Offered Rate swap rates discounted by a contingency factor of 0.35. A decrease in the contingency factor would result in a higher fair value measurement. The contingency factor will increase or decrease in response to facts and circumstances that in the view of a market participant, would increase or decrease the likelihood that the merger with Westar is not consummated. Because of the unobservable nature of the contingency factor, the interest rate derivatives have been classified as Level 3. |
The following table reconciles the beginning and ending balances for all Level 3 assets measured at fair value on a recurring basis.
|
| | | | | | | |
Great Plains Energy | | | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | | | |
| Derivative Instruments |
| 2017 | | 2016 |
| (millions) |
Net asset at January 1 | $ | 79.3 |
| | $ | — |
|
Total realized/unrealized gains (losses): | |
| | |
|
included in interest charges | (1.9 | ) | | 79.3 |
|
included in non-operating income | 14.0 |
| | — |
|
included in loss on Series B Preferred Stock dividend make-whole provisions | (124.8 | ) | | — |
|
Settlements | 124.8 |
| | — |
|
Net asset at December 31 | $ | 91.4 |
| | $ | 79.3 |
|
Total unrealized gains (losses) relating to assets still on the consolidated balance sheet at December 31: | | | |
|
included in interest charges | $ | (1.9 | ) | | $ | 79.3 |
|
included in non-operating income | $ | 14.0 |
| | $ | — |
|
See Note 14 for additional information concerning the Series B Preferred Stock dividend make-whole provisions.
20. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following tables reflect the change in the balances of each component of accumulated other comprehensive income (loss) for Great Plains Energy and KCP&L.
|
| | | | | | | | | | | | | | | | | | |
Great Plains Energy | | | | | | | | | | | | |
| | Gains and Losses on Cash Flow Hedges(a) | | Defined Benefit Pension Items(a) | | | Total(a) | |
| | (millions) |
2017 | | | | | | | | | | | | |
Beginning balance January 1 | | | $ | (4.5 | ) | | | | $ | (2.1 | ) | | | | $ | (6.6 | ) | |
Other comprehensive loss before reclassification | | | — |
| | | | (0.9 | ) | | | | (0.9 | ) | |
Amounts reclassified from accumulated other comprehensive loss | | | 4.9 |
| | | | 0.4 |
| | | | 5.3 |
| |
Net current period other comprehensive income (loss) | | | 4.9 |
| | | | (0.5 | ) | | | | 4.4 |
| |
Ending balance December 31 | | | $ | 0.4 |
| | | | $ | (2.6 | ) | | | | $ | (2.2 | ) | |
2016 | | | | | | | | | | | | |
Beginning balance January 1 | | | $ | (10.1 | ) | | | | $ | (1.9 | ) | | | | $ | (12.0 | ) | |
Other comprehensive loss before reclassifications | | | — |
| | | | (0.7 | ) | | | | (0.7 | ) | |
Amounts reclassified from accumulated other comprehensive loss | | | 5.6 |
| | | | 0.5 |
| | | | 6.1 |
| |
Net current period other comprehensive income (loss) | | | 5.6 |
| | | | (0.2 | ) | | | | 5.4 |
| |
Ending balance December 31 | | | $ | (4.5 | ) | | | | $ | (2.1 | ) | | | | $ | (6.6 | ) | |
(a) Net of tax
|
| | | | | | |
KCP&L | | | | |
| | Gains and Losses on Cash Flow Hedges(a) |
| | (millions) |
2017 | | | | |
Beginning balance January 1 | | | $ | (4.2 | ) | |
Amounts reclassified from accumulated other comprehensive loss | | | 4.6 |
| |
Net current period other comprehensive income | | | 4.6 |
| |
Ending balance December 31 | | | $ | 0.4 |
| |
2016 | | | | |
Beginning balance January 1 | | | $ | (9.6 | ) | |
Amounts reclassified from accumulated other comprehensive loss | | | 5.4 |
| |
Net current period other comprehensive income | | | 5.4 |
| |
Ending balance December 31 | | | $ | (4.2 | ) | |
(a) Net of taxThe following tables reflect the effect on certain line items of net income from amounts reclassified out of each component of accumulated other comprehensive income (loss) for Great Plains Energy and KCP&L.
|
| | | | | | | | | | |
Great Plains Energy | | | | | | |
Details about Accumulated Other Comprehensive Loss Components | | Amount Reclassified from Accumulated Other Comprehensive Loss | | Affected Line Item in the Income Statement |
| | 2017 | | 2016 | | |
| | (millions) | | |
Gains (losses) on cash flow hedges (effective portion) | | | | | | |
Interest rate contracts | | $ | (7.9 | ) | | $ | (9.2 | ) | | Interest charges |
| | (7.9 | ) | | (9.2 | ) | | Income before income tax expense and income from equity investments |
| | 3.0 |
| | 3.6 |
| | Income tax benefit |
| | $ | (4.9 | ) | | $ | (5.6 | ) | | Net income (loss) |
Amortization of defined benefit pension items | | | | | | |
Net losses included in net periodic benefit costs | | $ | (0.7 | ) | | $ | (0.8 | ) | | Utility operating and maintenance expenses |
| | (0.7 | ) | | (0.8 | ) | | Income before income tax expense and income from equity investments |
| | 0.3 |
| | 0.3 |
| | Income tax benefit |
| | $ | (0.4 | ) | | $ | (0.5 | ) | | Net income (loss) |
| | | | | | |
Total reclassifications, net of tax | | $ | (5.3 | ) | | $ | (6.1 | ) | | Net income (loss) |
|
| | | | | | | | | | |
KCP&L | | | | | | |
Details about Accumulated Other Comprehensive Loss Components | | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | | Affected Line Item in the Income Statement |
| | 2017 | | 2016 | | |
| | (millions) | | |
Gains (losses) on cash flow hedges (effective portion) | | | | | | |
Interest rate contracts | | $ | (7.5 | ) | | $ | (8.8 | ) | | Interest charges |
| | (7.5 | ) | | (8.8 | ) | | Income before income tax expense |
| | 2.9 |
| | 3.4 |
| | Income tax benefit |
Total reclassifications, net of tax | | $ | (4.6 | ) | | $ | (5.4 | ) | | Net income |
21. TAXES
Components of income tax expense are detailed in the following tables.
|
| | | | | | | | | | | |
Great Plains Energy | 2017 | | 2016 | | 2015 |
Current income taxes | (millions) |
Federal | $ | (1.7 | ) | | $ | 0.3 |
| | $ | (0.2 | ) |
State | 1.0 |
| | 0.7 |
| | (1.1 | ) |
Total | (0.7 | ) | | 1.0 |
| | (1.3 | ) |
Deferred income taxes | |
| | |
| | |
|
Federal | 223.5 |
| | 140.6 |
| | 96.9 |
|
State | 11.9 |
| | 29.5 |
| | 28.0 |
|
Total | 235.4 |
| | 170.1 |
| | 124.9 |
|
Investment tax credit | | | | | |
Deferral | — |
| | 2.5 |
| | 0.5 |
|
Amortization | (1.4 | ) | | (1.4 | ) | | (1.4 | ) |
Total | (1.4 | ) | | 1.1 |
| | (0.9 | ) |
Income tax expense | $ | 233.3 |
| | $ | 172.2 |
| | $ | 122.7 |
|
Great Plains Energy's 2017 federal deferred income tax expense includes $130.3 million of additional income tax expense due to the impacts of U.S. federal income tax reform, discussed further below.
|
| | | | | | | | | | | |
KCP&L | 2017 | | 2016 | | 2015 |
Current income taxes | (millions) |
Federal | $ | 37.4 |
| | $ | 24.8 |
| | $ | (18.7 | ) |
State | 8.3 |
| | 4.7 |
| | (3.4 | ) |
Total | 45.7 |
| | 29.5 |
| | (22.1 | ) |
Deferred income taxes | |
| | |
| | |
|
Federal | 74.7 |
| | 76.4 |
| | 81.9 |
|
State | 8.8 |
| | 17.0 |
| | 17.5 |
|
Total | 83.5 |
| | 93.4 |
| | 99.4 |
|
Investment tax credit | | | | | |
Deferral | — |
| | — |
| | 0.5 |
|
Amortization | (1.0 | ) | | (1.0 | ) | | (1.0 | ) |
Total | (1.0 | ) | | (1.0 | ) | | (0.5 | ) |
Income tax expense | $ | 128.2 |
| | $ | 121.9 |
| | $ | 76.8 |
|
Effective Income Tax Rates
Effective income tax rates reflected in the financial statements and the reasons for their differences from the statutory federal rates are detailed in the following tables.
|
| | | | | | | | |
Great Plains Energy | 2017 | | 2016 | | 2015 |
Federal statutory income tax rate | 35.0 | % | | 35.0 | % | | 35.0 | % |
Differences between book and tax depreciation not normalized | 0.1 |
| | (0.1 | ) | | — |
|
Amortization of investment tax credits | (1.1 | ) | | (0.3 | ) | | (0.4 | ) |
Federal income tax credits | (5.8 | ) | | (2.6 | ) | | (4.1 | ) |
State income taxes | 8.3 |
| | 4.2 |
| | 4.0 |
|
Transaction-related costs | 42.5 |
| | 0.9 |
| | — |
|
Valuation allowance | 8.9 |
| | — |
| | 1.5 |
|
Federal tax rate change | 95.3 |
| | — |
| | — |
|
Other | 0.3 |
| | 0.2 |
| | 0.5 |
|
Effective income tax rate | 183.5 | % | | 37.3 | % | | 36.5 | % |
The increase in Great Plains Energy's effective income tax rate for 2017 is driven by significant transaction-related costs incurred in connection with the anticipated merger with Westar that are not deductible for tax purposes and the impacts of U.S. federal income tax reform, discussed further below.
|
| | | | | | | | |
KCP&L | 2017 | | 2016 | | 2015 |
Federal statutory income tax rate | 35.0 | % | | 35.0 | % | | 35.0 | % |
Differences between book and tax depreciation not normalized | (0.1 | ) | | (0.3 | ) | | — |
|
Amortization of investment tax credits | (0.3 | ) | | (0.3 | ) | | (0.5 | ) |
Federal income tax credits | (2.4 | ) | | (3.1 | ) | | (5.6 | ) |
State income taxes | 3.8 |
| | 4.1 |
| | 4.0 |
|
Valuation allowance | 0.4 |
| | — |
| | 0.3 |
|
Federal tax rate change | 5.3 |
| | — |
| | — |
|
Other | (0.1 | ) | | (0.2 | ) | | 0.3 |
|
Effective income tax rate | 41.6 | % | | 35.2 | % | | 33.5 | % |
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 | | 2017 | | 2016 | | 2017 | | 2016 |
Noncurrent deferred income taxes | | (millions) |
Plant related | | $ | (1,549.0 | ) | | $ | (2,107.6 | ) | | $ | (1,114.9 | ) | | $ | (1,492.2 | ) |
Income taxes on future regulatory refunds (recoveries) | | 236.0 |
| | (148.7 | ) | | 179.1 |
| | (123.9 | ) |
Derivative instruments | | (19.2 | ) | | (17.0 | ) | | 1.6 |
| | 8.5 |
|
Pension and post-retirement benefits | | 9.4 |
| | 10.5 |
| | 28.6 |
| | 38.6 |
|
SO2 emission allowance sales | | 14.9 |
| | 24.1 |
| | 15.0 |
| | 24.1 |
|
Fuel recovery mechanisms | | (17.9 | ) | | (22.3 | ) | | (15.9 | ) | | (27.2 | ) |
Tax credit carryforwards | | 279.8 |
| | 271.1 |
| | 185.8 |
| | 177.4 |
|
Customer demand programs | | (17.4 | ) | | (34.3 | ) | | (11.7 | ) | | (21.8 | ) |
Solar rebates | | (15.2 | ) | | (27.3 | ) | | (5.8 | ) | | (11.4 | ) |
Net operating loss carryforward | | 473.0 |
| | 718.0 |
| | 131.2 |
| | 198.3 |
|
Other | | 6.9 |
| | 20.2 |
| | (9.1 | ) | | 1.3 |
|
Net noncurrent deferred income tax liability before valuation allowance | | (598.7 | ) | | (1,313.3 | ) | | (616.1 | ) | | (1,228.3 | ) |
Valuation allowance | | (23.0 | ) | | (16.4 | ) | | — |
| | — |
|
Net noncurrent deferred income tax liability | | $ | (621.7 | ) | | $ | (1,329.7 | ) | | $ | (616.1 | ) | | $ | (1,228.3 | ) |
|
| | | | | | | | | | | | | | | | |
| | Great Plains Energy | | KCP&L |
December 31 | | 2017 | | 2016 | | 2017 | | 2016 |
| | (millions) |
Gross deferred income tax assets | | $ | 2,017.4 |
| | $ | 1,360.9 |
| | $ | 1,261.5 |
| | $ | 747.7 |
|
Gross deferred income tax liabilities | | (2,639.1 | ) | | (2,690.6 | ) | | (1,877.6 | ) | | (1,976.0 | ) |
Net deferred income tax liability | | $ | (621.7 | ) | | $ | (1,329.7 | ) | | $ | (616.1 | ) | | $ | (1,228.3 | ) |
Tax Credit Carryforwards
At December 31, 2017 and 2016, Great Plains Energy had $191.0 million and $183.5 million, respectively, of federal general business income tax credit carryforwards. At December 31, 2017 and 2016, KCP&L had $184.6 million and $177.4 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 2037. 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 a portion of these credits to expire unutilized and has provided a valuation allowance against $0.4 million of the federal income tax benefit.
At December 31, 2017 and 2016, Great Plains Energy had $87.6 million of federal alternative minimum tax credit carryforwards, all of which were acquired in the GMO acquisition. These credits do not expire and can be used to reduce taxes paid in the future or become refundable starting in 2018. Due to potential federal budget sequestration reductions for refundable income tax credits, management expects a portion of these credits will not be refunded and has provided a valuation allowance against $5.8 million of the federal income tax benefit.
At December 31, 2017, Great Plains Energy and KCP&L had $1.2 million of state income tax credit carryforwards. The state income tax credits relate primarily to the Company's Kansas research and development tax credits, which do not expire.
Net Operating Loss Carryforwards
At December 31, 2017 and 2016, Great Plains Energy had $382.0 million and $643.8 million, respectively, of tax benefits related to federal net operating loss (NOL) carryforwards. Approximately $179.3 million and $306.2 million at December 31, 2017 and 2016, respectively, are tax benefits related to NOLs that were acquired in the GMO acquisition. The federal NOL carryforwards expire in years 2023 to 2036. The year of origin of Great Plains Energy's related tax benefit amounts for federal NOL carryforwards as of December 31, 2017 are detailed in the following table.
|
| | | | | |
| | Amount of | |
Year of Origin | | Benefit | |
| | (millions) | |
2003 | | $ | 9.5 |
| |
2004 | | 91.4 |
| |
2005 | | 44.4 |
| |
2006 | | 32.0 |
| |
2007 | | 0.8 |
| |
2008 | | 1.4 |
| |
2009 | | 21.9 |
| |
2010 | | 2.5 |
| |
2011 | | 65.3 |
| |
2012 | | 0.2 |
| |
2013 | | 0.8 |
| |
2014 | | 52.0 |
| |
2015 | | 59.2 |
| |
2016 | | 0.6 |
| |
| | $ | 382.0 |
| |
In addition, Great Plains Energy also had deferred tax benefits of $91.0 million and $74.2 million related to state NOLs as of December 31, 2017 and 2016, respectively. Of these amounts, approximately $42.1 million and $36.1 million at December 31, 2017 and 2016, respectively, were acquired in the GMO acquisition. Management does not expect to utilize $16.8 million of NOLs before the expiration date of the carryforwards of NOLs in certain states. Therefore, a valuation allowance has been provided against $16.8 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 state tax NOL carryforwards and tax credit carryforwards. During 2017, $6.6 million of tax expense was recorded in continuing operations primarily related to a reduction in the refundable portion of federal Alternative Minimum Tax (AMT) credits.
Tax Reform
In December 2017, the U.S. Congress passed and President Donald Trump signed Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (Tax Act). The Tax Act represents the first major reform in U.S. income tax law since 1986. Most notably, the Tax Act reduces the current top corporate income tax rate from 35% to 21% beginning in 2018, repeals the corporate AMT, makes existing AMT tax credit carryforwards refundable, and changes the deductibility and taxability of certain items, among other things.
In December 2017, the SEC staff issued Staff Accounting Bulletin (SAB) 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740,
Income Taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. Great Plains Energy’s and KCP&L’s accounting for the Tax Act under ASC 740 as of December 31, 2017 is complete and is detailed further below.
As a result of the change in the corporate income tax rate, Great Plains Energy and KCP&L revalued and restated their deferred income tax assets and liabilities in December 2017. Great Plains Energy decreased its net deferred income tax liabilities by $814.5 million, primarily consisting of a $645.5 million adjustment for the revaluation and restatement of deferred income tax assets and liabilities included in rate base and a $222.8 million tax gross-up adjustment for ratemaking purposes. KCP&L decreased its net deferred income tax liabilities by $682.8 million, primarily consisting of a $471.8 million adjustment for the revaluation and restatement of deferred income tax assets and liabilities included in rate base and a $163.6 million tax gross-up adjustment for ratemaking purposes. The decreases to Great Plains Energy's and KCP&L's net deferred income tax liabilities included in rate base were offset by a corresponding increase in regulatory liabilities. The net regulatory liabilities will be refunded to customers in future rates by amortizing the amounts related to plant assets over the remaining useful life of the assets, and amortizing the amounts related to other items over a period to be determined in a future rate case.
Great Plains Energy recognized $130.3 million of income tax expense consisting of $110.1 million primarily related to the revaluation of GMO’s non-regulated deferred income tax assets, $9.1 million related to the reassessment of the valuation allowance needed for the realization of refundable AMT credits and state NOLs and $11.1 million related to KCP&L and GMO deferred income taxes not included in rate base. KCP&L recognized $16.5 million of income tax expense related to deferred income taxes not included in rate base.
KCP&L and GMO currently recover the cost of income taxes in rates from their customers based on the 35% federal corporate income tax rate. Both KCP&L and GMO have announced their intentions to pass the income tax savings generated by the tax rate change, currently estimated at approximately $100 million annually, through to customers as part of upcoming general rate cases, including applications filed by KCP&L and GMO in Missouri in January 2018. However, both the MPSC and KCC have also initiated investigatory dockets regarding the impact of the Tax Act on customer rates and the actual rate treatment of tax reform will not be known until orders specifying that treatment are received from the MPSC and KCC. In January 2018, KCC issued an order requiring certain regulated public utilities, including KCP&L, to begin recording a regulatory liability for the difference between the new corporate tax rate and amounts currently collected in rates. The treatment of the regulatory liability will be addressed by KCC in future orders.
22. 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, GMO's regulated utility operations and GMO Receivables Company. Other includes GMO activity other than its regulated utility operations, GPETHC and unallocated corporate charges, including certain costs to achieve the anticipated merger with Westar. The summary of significant accounting policies applies to the reportable segment. Segment performance is evaluated based on net income (loss).
The following tables reflect summarized financial information concerning Great Plains Energy's reportable segment.
|
| | | | | | | | | | | | | | | | | | | | | | | |
2017 | Electric Utility | | Other | | Eliminations | | Great Plains Energy |
| | (millions) |
Operating revenues | | $ | 2,708.2 |
| | | | $ | — |
| | | | $ | — |
| | | | $ | 2,708.2 |
| |
Depreciation and amortization | | (371.1 | ) | | | | — |
| | | | — |
| | | | (371.1 | ) | |
Interest charges | | (196.9 | ) | | | | (125.9 | ) | | | | 32.1 |
| | | | (290.7 | ) | |
Income tax expense | | (169.4 | ) | | | | (63.9 | ) | | | | — |
| | | | (233.3 | ) | |
Net income (loss) | | 256.9 |
| | | | (363.1 | ) | | | | — |
| | | | (106.2 | ) | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
2016 | Electric Utility | | Other | | Eliminations | | Great Plains Energy |
| | (millions) |
Operating revenues | | $ | 2,676.0 |
| | | | $ | — |
| | | | $ | — |
| | | | $ | 2,676.0 |
| |
Depreciation and amortization | | (344.8 | ) | | | | — |
| | | | — |
| | | | (344.8 | ) | |
Interest charges | | (196.1 | ) | | | | 2.5 |
| | | | 32.1 |
| | | | (161.5 | ) | |
Income tax expense | | (164.3 | ) | | | | (7.9 | ) | | | | — |
| | | | (172.2 | ) | |
Net income (loss) | | 292.1 |
| | | | (2.1 | ) | | | | — |
| | | | 290.0 |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | |
2015 | Electric Utility | | Other | | Eliminations | | Great Plains Energy |
| | (millions) |
Operating revenues | | $ | 2,502.2 |
| | | | $ | — |
| | | | $ | — |
| | | | $ | 2,502.2 |
| |
Depreciation and amortization | | (330.4 | ) | | | | — |
| | | | — |
| | | | (330.4 | ) | |
Interest charges | | (190.9 | ) | | | | (40.5 | ) | | | | 32.1 |
| | | | (199.3 | ) | |
Income tax expense | | (120.8 | ) | | | | (1.9 | ) | | | | — |
| | | | (122.7 | ) | |
Net income (loss) | | 223.8 |
| | | | (10.8 | ) | | | | — |
| | | | 213.0 |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Electric Utility | | Other | | Eliminations | | Great Plains Energy |
2017 | | (millions) | |
Assets | | $ | 11,508.1 |
| | | | $ | 1,285.7 |
| | | | $ | (335.9 | ) | | | | $ | 12,457.9 |
| |
Capital expenditures | | 573.5 |
| | | | — |
| | | | — |
| | | | 573.5 |
| |
2016 | | |
| | | | |
| | | | |
| | | | |
| |
Assets | | $ | 11,444.2 |
| | | | $ | 2,461.3 |
| | | | $ | (335.5 | ) | | | | $ | 13,570.0 |
| |
Capital expenditures | | 609.4 |
| | | | — |
| | | | — |
| | | | 609.4 |
| |
2015 | | | | | | | | | | | | | | | |
Assets | | $ | 11,045.5 |
| | | | $ | (51.1 | ) | | | | $ | (255.8 | ) | | | | $ | 10,738.6 |
| |
Capital expenditures | | 677.1 |
| | | | — |
| | | | — |
| | | | 677.1 |
| |
23. JOINTLY-OWNED ELECTRIC UTILITY PLANTS
Great Plains Energy's and KCP&L's share of jointly-owned electric utility plants at December 31, 2017, are detailed in the following tables.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Great Plains Energy | | | | | | | | | | | | | | | | | | | | | | | | |
| | Wolf Creek Unit | | La Cygne Units | | Iatan No. 1 Unit | | Iatan No. 2 Unit | | Iatan Common | | Jeffrey Energy Center |
| | (millions, except MW amounts) |
Great Plains Energy's share | | | 47% | | | | 50% | | | | 88% | | | | 73% | | | | 79% | | | | 8% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Utility plant in service | | | $ | 1,854.2 |
| | | | $ | 1,191.1 |
| | | | $ | 699.9 |
| | | | $ | 1,355.8 |
| | | | $ | 491.1 |
| | | | $ | 201.1 |
| |
Accumulated depreciation | | | 918.1 |
| | | | 347.8 |
| | | | 280.8 |
| | | | 413.0 |
| | | | 130.7 |
| | | | 82.0 |
| |
Nuclear fuel, net | | | 72.4 |
| | | | — |
| | | | — |
| | | | — |
| | | | — |
| | | | — |
| |
Construction work in progress | | | 91.8 |
| | | | 8.6 |
| | | | 31.8 |
| | | | 35.0 |
| | | | 21.7 |
| | | | 2.5 |
| |
2018 accredited capacity-MWs | | | 552 |
| | | | 699 |
| | | | 616 |
| | | | 641 |
| | | | NA |
| | | | 173 |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
KCP&L | | | | | | | | | | | | | | | | | | | | |
| | Wolf Creek Unit | | La Cygne Units | | Iatan No. 1 Unit | | Iatan No. 2 Unit | | Iatan Common |
| | (millions, except MW amounts) |
KCP&L's share | | | 47% | | | | 50% | | | | 70% | | | | 55% | | | | 61% | |
| | | | | | | | | | | | | | | | | | | | |
Utility plant in service | | | $ | 1,854.2 |
| | | | $ | 1,191.1 |
| | | | $ | 561.7 |
| | | | $ | 1,041.6 |
| | | | $ | 401.8 |
| |
Accumulated depreciation | | | 918.1 |
| | | | 347.8 |
| | | | 228.9 |
| | | | 366.6 |
| | | | 117.5 |
| |
Nuclear fuel, net | | | 72.4 |
| | | | — |
| | | | — |
| | | | — |
| | | | — |
| |
Construction work in progress | | | 91.8 |
| | | | 8.6 |
| | | | 7.6 |
| | | | 14.8 |
| | | | 12.0 |
| |
2018 accredited capacity-MWs | | | 552 |
| | | | 699 |
| | | | 490 |
| | | | 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 |
2017 | | (millions, except per share amounts) |
Operating revenue | | $ | 570.7 |
| | $ | 682.6 |
| | $ | 857.2 |
| | $ | 597.7 |
|
Operating income | | 47.4 |
| | 176.5 |
| | 305.9 |
| | 73.8 |
|
Net income (loss) | | (9.6 | ) | | (7.0 | ) | | 10.5 |
| | (100.1 | ) |
Basic and diluted earnings (loss) per common share | | (0.11 | ) | | (0.10 | ) | | 0.02 |
| | (0.46 | ) |
2016 | | | | | | | | |
Operating revenue | | $ | 572.1 |
| | $ | 670.8 |
| | $ | 856.8 |
| | $ | 576.3 |
|
Operating income | | 89.9 |
| | 182.3 |
| | 281.9 |
| | 64.8 |
|
Net income | | 26.4 |
| | 32.0 |
| | 133.6 |
| | 98.0 |
|
Basic and diluted earnings per common share | | 0.17 |
| | 0.20 |
| | 0.86 |
| | 0.39 |
|
|
| | | | | | | | | | | | | | | | |
| | Quarter |
KCP&L | | 1st | | 2nd | | 3rd | | 4th |
2017 | | (millions) |
Operating revenue | | $ | 395.9 |
| | $ | 482.7 |
| | $ | 595.7 |
| | $ | 416.4 |
|
Operating income | | 58.2 |
| | 113.8 |
| | 209.9 |
| | 61.8 |
|
Net income | | 14.2 |
| | 49.6 |
| | 114.1 |
| | 1.9 |
|
2016 | | | | | | | | |
Operating revenue | | $ | 400.9 |
| | $ | 475.6 |
| | $ | 597.6 |
| | $ | 401.3 |
|
Operating income | | 70.6 |
| | 137.9 |
| | 219.2 |
| | 54.4 |
|
Net income | | 24.6 |
| | 65.9 |
| | 117.7 |
| | 16.8 |
|
In the fourth quarter of 2017, Great Plains Energy recorded $130.3 million of additional income tax expense due to the impacts of U.S. federal income tax reform. See Note 21 for additional information regarding the impact of tax reform on Great Plains Energy.
Quarterly data is subject to seasonal fluctuations with peak periods occurring in the summer months.
ITEM 9. CHANGES IN 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, 2017, 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, 2017. Management used for this evaluation the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
Management has concluded that, as of December 31, 2017, 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 shareholders and the Board of Directors of Great Plains Energy Incorporated
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Great Plains Energy Incorporated and subsidiaries (the “Company”) as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2017, of the Company and our report dated February 21, 2018, expressed an unqualified opinion on those financial statements and financial statement schedules.
Basis for Opinion
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 are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. 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.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 21, 2018
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, 2017, 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, 2017. Management used for this evaluation the framework in Internal Control - Integrated Framework (2013) issued by the COSO of the Treadway Commission.
Management has concluded that, as of December 31, 2017, 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 shareholder and the Board of Directors of Kansas City Power & Light Company
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Kansas City Power & Light Company and subsidiaries (the “Company”) as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of an for the year ended December 31, 2017, of the Company and our report dated February 21, 2018, expressed an unqualified opinion on those financial statements and financial statement schedule.
Basis for Opinion
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 are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. 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.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 21, 2018
ITEM 9B. OTHER INFORMATION
None.
PART III
Information required by Items 10-14 of Part III of this Form 10-K with respect to Great Plains Energy will be incorporated by reference to Great Plains Energy’s definitive proxy statement with respect to its 2018 Annual Meeting of Shareholders (Proxy Statement), if such definitive proxy statement is filed with the SEC on or before April 30, 2018. Due to the pending merger with Westar, Great Plains Energy may not be required to file the Proxy Statement, in which case Great Plains Energy will file an amendment to this Form 10-K on or before April 30, 2018, to include the information that is otherwise incorporated by reference.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Great Plains Energy Directors
The information required by this item is incorporated by reference from the Proxy Statement, which will be filed with the SEC no later than April 30, 2018:
| |
• | Information regarding the directors of Great Plains Energy required by this item is contained in the Proxy Statement section titled “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 Companies have 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, director shares, director deferred share units, performance shares and other stock-based awards 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, 2017, 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 |
| Number of | | | | | | remaining available |
| securities | | | | | | for future issuance |
| to be issued upon | | Weighted-average | | under equity |
| exercise of | | exercise price of | | compensation plans |
| outstanding options, | | 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 | | 684,238 |
| (1) | | | $ | — |
| (2) | | | 4,022,044 |
| |
Equity compensation plans not approved by security holders | | — |
| | | | — |
| | | | — |
| |
Total | | 684,238 |
| (1) | | | $ | — |
| (2) | | | 4,022,044 |
| |
| |
(1) | Includes 545,087 performance shares at target performance levels and director deferred share units for 139,151 shares of Great Plains Energy common stock outstanding at December 31, 2017. |
| |
(2) | The performance shares and director deferred share units 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 sections 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 2017 and 2016 and for other services rendered during 2017 and 2016 on behalf of KCP&L, as well as all out-of-pocket costs incurred in connection with these services:
|
| | | | | | |
Fee Category | 2017 | 2016 |
Audit Fees | $ | 1,304,550 |
| $ | 1,184,550 |
|
Audit-Related Fees | 22,000 |
| 21,000 |
|
Tax Fees | 24,905 |
| 24,822 |
|
All Other Fees | — |
| — |
|
Total Fees | $ | 1,351,455 |
| $ | 1,230,372 |
|
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.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services
The Audit Committee has adopted policies and procedures for the pre-approval of all audit services, audit-related services, tax services and other services to be provided by the independent registered public accounting firm for KCP&L. The Audit Committee's policy is to pre-approve all audit, audit-related, tax or other services to be 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 the aggregate fee levels it sets. 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. The Audit Committee, as well, may specifically approve audit, audit-related, tax or other services on a case-by-case basis. Pre-approval is generally provided for up to one year, unless the Audit Committee specifically provides for a different period. The Company provides quarterly updates to the Audit Committee regarding actual fees spent with respect to pre-approved services. The Chairman of the Audit Committee may pre-approve audit, audit-related, tax
and other services provided by the independent registered public accounting firm as required between meetings 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. | | |
| | |
b. | | |
| | |
c. | | |
| | |
d. | | |
| | |
e. | | |
| | |
f. | | |
| | |
KCP&L | |
| | |
g. | | |
| | |
h. | | |
| | |
i. | | |
| | |
j. | | |
| | |
k. |
| |
| | |
l. |
| |
| | |
Financial Statement Schedules
|
| | |
| Great Plains Energy | |
| | |
a. | | |
| | |
b. | | |
| | |
| KCP&L | |
| | |
c. | | |
| | |
Exhibits |
| | | | |
Exhibit Number | | Description of Document | | Registrant |
| | | | |
2.1 | * | | | Great Plains Energy |
| | | | |
2.2 | * | Amended and Restated Merger Agreement, dated as of July 9, 2017, by and among Great Plains Energy Incorporated, Westar Energy, Inc., Monarch Energy Holding, Inc., King Energy, Inc. and, solely for the purposes set forth therein, GP Star, Inc. (Exhibit 2.1 to Form 8-K filed on July 10, 2017). | | Great Plains Energy |
| | | | |
3.1 | * | | | Great Plains Energy |
| | | | |
3.2 | * | | | Great Plains Energy |
| | | | |
3.3 | * | | | KCP&L |
| | | | |
3.4 | * | | | KCP&L |
| | | | |
4.1 | * | | | Great Plains Energy |
| | | | |
4.2 | * | | | Great Plains Energy |
| | | | |
4.3 | * | | | Great Plains Energy |
| | | | |
4.4 | * | | | Great Plains Energy |
| | | | |
4.5 | * | | | Great Plains Energy |
| | | | |
4.6 | * | | | Great Plains Energy |
| | | | |
|
| | | | |
4.7 | * | | | Great Plains Energy |
| | | | |
4.8 | * | | | Great Plains Energy |
| | | | |
4.9 | * | | | Great Plains Energy |
| | | | |
4.10 | * | | | Great Plains Energy |
| | | | |
4.11 | * | | | Great Plains Energy |
| | | | |
4.12 | | | | Great Plains Energy KCP&L |
| | | | |
4.13 | | | | Great Plains Energy KCP&L |
| | | | |
4.14 | | | | Great Plains Energy KCP&L |
| | | | |
4.15 | | | | Great Plains Energy KCP&L |
| | | | |
4.16 | * | | | Great Plains Energy KCP&L |
| | | | |
4.17 | * | | | Great Plains Energy KCP&L |
| | | | |
|
| | | | |
4.18 | * | | | Great Plains Energy KCP&L |
| | | | |
4.19 | * | | | Great Plains Energy KCP&L |
| | | | |
4.20 | * | | | Great Plains Energy KCP&L |
| | | | |
4.21 | * | | | Great Plains Energy KCP&L |
| | | | |
4.22 | * | | | Great Plains Energy KCP&L |
| | | | |
4.23 | * | | | Great Plains Energy KCP&L |
| | | | |
4.24 | * | | | Great Plains Energy KCP&L |
| | | | |
4.25 | * | | | Great Plains Energy KCP&L |
| | | | |
4.26 | * | | | Great Plains Energy KCP&L |
| | | | |
4.27 | * | | | Great Plains Energy KCP&L |
| | | | |
4.28 | * | | | Great Plains Energy KCP&L |
| | | | |
4.29 | * | | | Great Plains Energy KCP&L |
| | | | |
|
| | | | |
4.30 | * | | | Great Plains Energy KCP&L |
| | | | |
4.31 | * | | | Great Plains Energy |
| | | | |
10.1 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.2 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.3 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.4 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.5 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.6 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.7 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.8 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.9 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.10 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.11 | *+ | | | Great Plains Energy KCP&L |
| | | | |
|
| | | | |
10.12 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.13 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.14 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.15 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.16 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.17 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.18 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.19 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.20 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.21 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.22 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.23 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.24 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.25 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.26 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.27 | *+ | | | Great Plains Energy KCP&L |
| | | | |
|
| | | | |
10.28 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.29 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.30 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.31 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.32 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.33 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.34 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.35 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.36 | *+ | | | Great Plains Energy KCP&L |
| | | | |
10.37 | * | 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 |
| | | | |
10.38 | * | 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 |
|
| | | | |
| | | | |
10.39 | * | 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 (Exhibit 10.59 to Form 10-K for the year ended December 31, 2011). | | Great Plains Energy |
| | | | |
10.40 | * | Second Amendment to Credit Agreement, dated as of October 17, 2013, among Great Plains Energy Incorporated, Certain Lenders, Bank of America, N.A., JPMorgan Chase Bank, N.A. and Union Bank, N.A., as Syndication Agents and Wells Fargo Bank, National Association, as Administrative Agent, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and Union Bank, N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2013). | | Great Plains Energy |
| | | | |
10.41 | * | First Extension Agreement and Waiver, dated as of December 17, 2014, among Great Plains Energy Incorporated, Certain Lenders, Bank of America, N.A., JPMorgan Chase Bank, N.A., and MUFG Union Bank, N.A., as Syndication Agents and Wells Fargo Bank, National Association, as Administrative Agent, Swing Line Lender and an Issuer, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and MUFG Union Bank, N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.37 to Form 10-K for the year ended December 31, 2014). | | Great Plains Energy |
| | | | |
10.42 | * | Third Amendment to the Credit Agreement, dated as of June 13, 2016, among Great Plains Energy Incorporated, Certain Lenders, Bank of America, N.A., JPMorgan Chase Bank, N.A., and Union Bank, N.A., as Syndication Agents and Wells Fargo Bank, National Association, as Administrative Agent, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and Union Bank, N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2016). | | Great Plains Energy |
| | | | |
10.43 | * | 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, JPMorgan Chase Bank, N.A. and The Bank of Nova Scotia, 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 |
| | | | |
|
| | | | |
10.44 | * | 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 (Exhibit 10.61 to Form 10-K for the year ended December 31, 2011). | | Great Plains Energy KCP&L |
| | | | |
10.45 | * | Second Amendment to Credit Agreement, dated as of October 17, 2013, among Kansas City Power & Light Company, Certain Lenders, Bank of America, N.A., JPMorgan Chase Bank, N.A., and Union Bank, N.A., as Syndication Agents and Wells Fargo Bank, National Association, as Administrative Agent, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and Union Bank, N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 2013). | | Great Plains Energy KCP&L |
| | | | |
10.46 | * | First Extension Agreement and Waiver, dated as of December 17, 2014, among Kansas City Power & Light Company, Certain Lenders, Bank of America, N.A., JPMorgan Chase Bank, N.A., and MUFG Union Bank, N.A., as Syndication Agents and Wells Fargo Bank, National Association, as Administrative Agent, Swing Line Lender and an Issuer, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and MUFG Union Bank, N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.41 to Form 10-K for the year ended December 31, 2014). | | Great Plains Energy KCP&L |
| | | | |
10.47 | * | Credit Agreement, dated as of August 9, 2010, among KCP&L Greater Missouri Operations Company, Great Plains Energy Incorporated, as Guarantor, 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 |
| | | | |
10.48 | * | First Amendment to Credit Agreement, dated as of December 9, 2011, among KCP&L Greater Missouri Operations Company, Great Plains Energy Incorporated, as Guarantor, 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 (Exhibit 10.63 to Form 10-K for the year ended December 31, 2011). | | Great Plains Energy |
| | | | |
|
| | | | |
10.49 | * | Second Amendment to Credit Agreement, dated as of October 17, 2013, among KCP&L Greater Missouri Operations Company, Certain Lenders, Bank of America, N.A., JPMorgan Chase Bank, N.A., and Union Bank, N.A., as Syndication Agents and Wells Fargo Bank, National Association, as Administrative Agent, and Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and Union Bank, N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2013). | | Great Plains Energy |
| | | | |
10.50 | * | First Extension Agreement and Waiver, dated as of December 17, 2014, among KCP&L Greater Missouri Operations Company, Certain Lenders, Bank of America, N.A., JPMorgan Chase Bank, N.A., and MUFG Union Bank, N.A., as Syndication Agents and Wells Fargo Bank, National Association, as Administrative Agent, Swing Line Lender and an Issuer, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and MUFG Union Bank, N.A., as Joint Lead Arrangers and Joint Book Managers (Exhibit 10.45 to Form 10-K for the year ended December 31, 2014). | | Great Plains Energy |
| | | | |
10.51 | * | 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 |
| | | | |
10.52 | * | | | Great Plains Energy KCP&L |
| | | | |
10.53 | * | | | Great Plains Energy KCP&L |
| | | | |
10.54 | * | | | Great Plains Energy KCP&L |
| | | | |
10.55 | * | 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 |
| | | | |
10.56 | * | | | Great Plains Energy KCP&L |
| | | | |
|
| | | | |
10.57 | * | | | Great Plains Energy KCP&L |
| | | | |
10.58 | * | | | Great Plains Energy KCP&L |
| | | | |
10.59 | * | | | Great Plains Energy KCP&L |
| | | | |
10.60 | * | | | Great Plains Energy KCP&L |
| | | | |
10.61 | * | | | Great Plains Energy KCP&L |
| | | | |
10.62 | * | 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 |
| | | | |
10.63 | * | Amendment dated as of September 9, 2014, to the Receivables Sales 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, as the Purchaser (Exhibit 10.1 to Form 8-K filed on September 15, 2014). | | Great Plains Energy KCP&L |
| | | | |
10.64 | * | Amendment dated as of September 9, 2015, to the Receivables Sales 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, as the Purchaser (Exhibit 10.1 to Form 8-K filed on September 11, 2015). | | Great Plains Energy KCP&L |
| | | | |
|
| | | | |
10.65 | * | Amendment dated as of September 9, 2016, to the Receivables Sales 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 UFJ, Ltd., New York Branch, as the Agent and Victory Receivables Corporation, as the Purchaser (Exhibit 10.1 to Form 8-K filed on September 13, 2016). | | Great Plains Energy KCP&L |
| | | | |
10.66 | * | | | Great Plains Energy |
| | | | |
10.67 | * | Receivables Sale Agreement, dated as of May 31, 2012, among GMO Receivables Company, as the Seller, KCP&L Greater Missouri Operations Company, as the Initial Collection Agent, The Bank of Tokyo-Mitsubishi, Ltd., New York Branch, as the Agent, and Victory Receivables Corporation (Exhibit 10.3 to Form 10-Q for the quarter ended June 30, 2012). | | Great Plains Energy |
| | | | |
10.68 | * | First Amendment dated as of September 9, 2014, to the Receivables Sales Agreement dated as of May 31, 2012, among GMO Receivables Company, as the Seller, KCP&L Greater Missouri Operations Company, as the Initial Collection Agent, The Bank of Tokyo-Mitsubishi, Ltd., New York Branch, as the Agent and Victory Receivables Corporation, as the Purchaser. (Exhibit 10.2 to Form 8-K filed on September 15, 2014). | | Great Plains Energy |
| | | | |
10.69 | * | Second Amendment dated as of September 9, 2015, to the Receivables Sales Agreement dated as of May 31, 2012, among GMO Receivables Company, as the Seller, KCP&L Greater Missouri Operations Company, as the Initial Collection Agent, The Bank of Tokyo-Mitsubishi, Ltd., New York Branch, as the Agent and Victory Receivables Corporation, as the Purchaser. (Exhibit 10.2 to Form 8-K filed on September 11, 2015). | | Great Plains Energy |
| | | | |
10.70 | * | Third Amendment dated as of September 9, 2016, to the Receivables Sales Agreement dated as of May 31, 2012, among GMO Receivables Company, as the Seller, KCP&L Greater Missouri Operations Company, as the Initial Collection Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as the Agent and Victory Receivables Corporation, as the Purchaser (Exhibit 10.2 to Form 8-K filed September 13, 2016). | | Great Plains Energy |
| | | | |
10.71 | * | Amendment dated as of September 8, 2017, to the Receivables Sales 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 UFJ, Ltd., New York Branch, as the Agent and Victory Receivables Corporation, as the Purchaser. (Exhibit 10.1 to Form 8-K filed on September 11, 2017). | | KCP&L |
| | | | |
10.72 | * | Fourth Amendment dated as of September 8, 2017, to the Receivables Sales Agreement dated as of May 31, 2012, among GMO Receivables Company, as the Seller, KCP&L Greater Missouri Operations Company, as the Initial Collection Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as the Agent and Victory Receivables Corporation, as the Purchaser. (Exhibit 10.2 to Form 8-K filed on September 11, 2017). | | Great Plains Energy |
| | | | |
|
| | | | |
10.73 | * | 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 |
| | | | |
10.74 | * | 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 |
| | | | |
10.75 | * | 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 |
| | | | |
10.76 | * | | | Great Plains Energy |
| | | | |
10.77 | * | | | Great Plains Energy KCP&L |
| | | | |
10.78 | * | | | Great Plains Energy KCP&L |
| | | | |
10.79 | * | | | Great Plains Energy KCP&L |
| | | | |
12.1 | | | | Great Plains Energy |
| | | | |
12.2 | | | | KCP&L |
| | | | |
21.1 | | | | Great Plains Energy |
| | | | |
23.1 | | | | Great Plains Energy |
| | | | |
23.2 | | | | KCP&L |
| | | | |
|
| | | | |
24.1 | | | | Great Plains Energy |
| | | | |
24.2 | | | | KCP&L |
| | | | |
31.1 | | | | Great Plains Energy |
| | | | |
31.2 | | | | Great Plains Energy |
| | | | |
31.3 | | | | KCP&L |
| | | | |
31.4 | | | | KCP&L |
| | | | |
32.1 | ** | | | Great Plains Energy |
| | | | |
32.2 | ** | | | 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 |
Statements of Comprehensive Income (Loss) of Parent Company |
| | | | | | | |
Year Ended December 31 | | 2017 | | 2016 | | 2015 | |
Operating Expenses | | (millions, except per share amounts) | |
General and administrative | | $ | 2.3 |
| | $ | 2.7 |
| | $ | 0.9 |
| |
Costs to achieve the anticipated merger with Westar Energy, Inc. | | 16.1 |
| | 18.3 |
| | — |
| |
General taxes | | 0.1 |
| | 0.1 |
| | 0.2 |
| |
Total | | 18.5 |
| | 21.1 |
| | 1.1 |
| |
Operating loss | | (18.5 | ) | | (21.1 | ) | | (1.1 | ) | |
Other Income (Expense) | | | | | | | |
Equity in earnings from subsidiaries | | 141.4 |
| | 287.5 |
| | 220.9 |
| |
Non-operating income | | 51.5 |
| | 31.3 |
| | 29.7 |
| |
Loss on extinguishment of debt | | (82.8 | ) | | — |
| | — |
| |
Loss on Series B Preferred Stock dividend make-whole provisions | | (124.8 | ) | | — |
| | — |
| |
Total | | (14.7 | ) | | 318.8 |
| | 250.6 |
| |
Interest (charges) income | | (125.6 | ) | | 2.6 |
| | (40.3 | ) | |
Income (loss) before income taxes | | (158.8 | ) | | 300.3 |
| | 209.2 |
| |
Income tax (expense) benefit | | 52.6 |
| | (10.3 | ) | | 3.8 |
| |
Net income (loss) | | (106.2 | ) | | 290.0 |
| | 213.0 |
| |
Preferred stock dividend requirements and redemption premium | | 37.3 |
| | 16.5 |
| | 1.6 |
| |
Earnings (loss) available for common shareholders | | $ | (143.5 | ) | | $ | 273.5 |
| | $ | 211.4 |
| |
| | | | | | | |
Average number of basic common shares outstanding | | 215.5 |
| | 169.4 |
| | 154.2 |
| |
Average number of diluted common shares outstanding | | 215.5 |
| | 169.8 |
| | 154.8 |
| |
| | | | | | | |
Basic and diluted earnings (loss) per common share | | $ | (0.67 | ) | | $ | 1.61 |
| | $ | 1.37 |
| |
Comprehensive Income | | | | | | | |
Net income (loss) | | $ | (106.2 | ) | | $ | 290.0 |
| | $ | 213.0 |
| |
Other comprehensive income | | | | | | | |
Derivative hedging activity | | | | | | | |
Reclassification to expenses | | 0.4 |
| | 0.4 |
| | 0.5 |
| |
Income tax expense | | (0.1 | ) | | (0.2 | ) | | (0.1 | ) | |
Net reclassification to expenses | | 0.3 |
| | 0.2 |
| | 0.4 |
| |
Derivative hedging activity, net of tax | | 0.3 |
| | 0.2 |
| | 0.4 |
| |
Other comprehensive income from subsidiaries, net of tax | | 4.1 |
| | 5.2 |
| | 6.3 |
| |
Total other comprehensive income | | 4.4 |
| | 5.4 |
| | 6.7 |
| |
Comprehensive income (loss) | | $ | (101.8 | ) | | $ | 295.4 |
| | $ | 219.7 |
| |
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 |
| 2017 | | 2016 |
ASSETS | (millions, except share amounts) |
Current Assets | | | | | | | |
Cash and cash equivalents | | $ | 1,114.2 |
| | | | $ | 1,283.9 |
| |
Time deposit | | — |
| | | | 1,000.0 |
| |
Accounts receivable from subsidiaries | | 34.8 |
| | | | 10.6 |
| |
Notes receivable from subsidiaries | | 2.0 |
| | | | 2.0 |
| |
Interest rate derivative instruments | | 91.4 |
| | | | 79.3 |
| |
Other | | 2.3 |
| | | | 26.1 |
| |
Total | | 1,244.7 |
| | | | 2,401.9 |
| |
Investments and Other Assets | | |
| | | | |
| |
Investment in KCP&L | | 2,513.2 |
| | | | 2,541.5 |
| |
Investment in other subsidiaries | | 1,240.1 |
| | | | 1,341.6 |
| |
Note receivable from subsidiaries | | 634.9 |
| | | | 634.9 |
| |
Deferred income taxes | | 11.6 |
| | | | 12.8 |
| |
Other | | 1.0 |
| | | | 16.3 |
| |
Total | | 4,400.8 |
| | | | 4,547.1 |
| |
Total | | $ | 5,645.5 |
| | | | $ | 6,949.0 |
| |
| | | | | | | |
LIABILITIES AND CAPITALIZATION | | | | | | | |
Current Liabilities | | | | | | | |
Notes payable | | $ | 11.0 |
| | | | $ | — |
| |
Current maturities of long-term debt | | — |
| | | | 100.0 |
| |
Accounts payable to subsidiaries | | 21.7 |
| | | | 10.8 |
| |
Accrued taxes | | — |
| | | | 12.9 |
| |
Accrued interest | | 2.1 |
| | | | 10.1 |
| |
Other | | 5.9 |
| | | | 12.8 |
| |
Total | | 40.7 |
| | | | 146.6 |
| |
Deferred Credits and Other Liabilities | | 1.8 |
| | | | 2.2 |
| |
Capitalization | | |
| | | | |
| |
Great Plains Energy shareholders' equity | | |
| | | | |
| |
Common stock - 600,000,000 shares authorized without par value 215,801,723 and 215,479,105 shares issued, stated value | | 4,233.1 |
| | | | 4,217.0 |
| |
Preference stock - 11,000,000 shares authorized without par value 7.00% Series B Mandatory Convertible Preferred Stock $1,000 per share liquidation preference, 0 and 862,500 shares issued and outstanding | | — |
| | | | 836.2 |
| |
Retained earnings | | 737.9 |
| | | | 1,119.2 |
| |
Treasury stock - 137,589 and 128,087 shares, at cost | | (4.0 | ) | | | | (3.8 | ) | |
Accumulated other comprehensive loss | | (2.2 | ) | | | | (6.6 | ) | |
Total shareholders' equity | | 4,964.8 |
| | | | 6,162.0 |
| |
Long-term debt | | 638.2 |
| | | | 638.2 |
| |
Total | | 5,603.0 |
| | | | 6,800.2 |
| |
Commitments and Contingencies | |
|
| | | |
|
| |
Total | | $ | 5,645.5 |
| | | | $ | 6,949.0 |
| |
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 | 2017 | | | | 2016 | | | | 2015 |
Cash Flows from Operating Activities | (millions) |
Net income (loss) | $ | (106.2 | ) | | | | $ | 290.0 |
| | | | $ | 213.0 |
|
Adjustments to reconcile income (loss) to net cash from operating activities: | | | | | | | | | |
Amortization | 26.2 |
| | | | 30.4 |
| | | | 0.8 |
|
Deferred income taxes, net | 2.3 |
| | | | 21.8 |
| | | | (1.7 | ) |
Equity in earnings from subsidiaries | (141.4 | ) | | | | (287.5 | ) | | | | (220.9 | ) |
Fair value impact of interest rate swaps | (12.1 | ) | | | | (79.3 | ) | | | | — |
|
Loss on Series B Preferred Stock dividend make-whole provisions | 124.8 |
| | | | — |
| | | | — |
|
Loss on extinguishment of debt | 82.8 |
| | | | — |
| | | | — |
|
Cash flows affected by changes in: | | | | | | | | | |
Accounts receivable from subsidiaries | (21.6 | ) | | | | (9.8 | ) | | | | (0.1 | ) |
Accounts payable to subsidiaries | 10.9 |
| | | | (20.9 | ) | | | | 1.3 |
|
Other accounts payable | (2.2 | ) | | | | 7.0 |
| | | | — |
|
Accrued taxes | (12.9 | ) | | | | 8.4 |
| | | | 0.3 |
|
Accrued interest | (8.0 | ) | | | | 6.0 |
| | | | — |
|
Cash dividends from subsidiaries | 275.0 |
| | | | 239.0 |
| | | | 157.0 |
|
Other | 22.3 |
| | | | 8.0 |
| | | | 8.7 |
|
Net cash from operating activities | 239.9 |
| | | | 213.1 |
| | | | 158.4 |
|
Cash Flows from Investing Activities | |
| | | | |
| | | | |
Purchase of time deposit | — |
| | | | (1,000.0 | ) | | | | — |
|
Proceeds from time deposit | 1,000.0 |
| | | | — |
| | | | — |
|
Intercompany lending | — |
| | | | — |
| | | | (1.4 | ) |
Net money pool lending | — |
| | | | 3.7 |
| | | | (0.4 | ) |
Investment in subsidiary | (0.6 | ) | | | | (7.3 | ) | | | | (7.8 | ) |
Net cash from investing activities | 999.4 |
| | | | (1,003.6 | ) | | | | (9.6 | ) |
Cash Flows from Financing Activities | |
| | | | |
| | | | |
Issuance of common stock | 2.9 |
| | | | 1,603.7 |
| | | | 3.0 |
|
Issuance of preferred stock | — |
| | | | 862.5 |
| | | | — |
|
Issuance of long-term debt | 4,291.9 |
| | | | — |
| | | | — |
|
Issuance fees | (32.2 | ) | | | | (143.4 | ) | | | | — |
|
Repayment of long-term debt, including redemption premium | (4,443.0 | ) | | | | — |
| | | | — |
|
Net change in short-term borrowings | 11.0 |
| | | | (10.0 | ) | | | | 6.0 |
|
Dividends paid | (272.0 | ) | | | | (194.0 | ) | | | | (155.5 | ) |
Redemption of preferred stock | (963.4 | ) | | | | (40.1 | ) | | | | — |
|
Other financing activities | (4.2 | ) | | | | (4.3 | ) | | | | (2.3 | ) |
Net cash from financing activities | (1,409.0 | ) | | | | 2,074.4 |
| | | | (148.8 | ) |
Net Change in Cash and Cash Equivalents | (169.7 | ) | | | | 1,283.9 |
| | | | — |
|
Cash and Cash Equivalents at Beginning of Year | 1,283.9 |
| | | | — |
| | | | — |
|
Cash and Cash Equivalents at End of Year | $ | 1,114.2 |
| | | | $ | 1,283.9 |
| | | | $ | — |
|
The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements.
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.
The Great Plains Energy Incorporated Parent Company Financial Statements have been prepared to present the financial position, results of operations and cash flows of Great Plains Energy on a stand-alone basis as a holding company. Investments in subsidiaries are accounted for using the equity method.
Schedule II - Valuation and Qualifying Accounts and Reserves
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Great Plains Energy Incorporated |
Valuation and Qualifying Accounts |
Years Ended December 31, 2017, 2016 and 2015 |
| | | | | | | | | | | | | | | |
| | | | 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, 2017 | (millions) |
Allowance for uncollectible accounts | | $ | 4.0 |
| | | $ | 10.5 |
| | | $ | 8.1 |
| (a) | | $ | 17.9 |
| (b) | | $ | 4.7 |
| |
Legal reserves | | 16.1 |
| | | 0.8 |
| | | — |
| | | 9.2 |
| (c) | | 7.7 |
| |
Environmental reserves | | 1.7 |
| | | 0.1 |
| | | — |
| | | — |
| | | 1.8 |
| |
Tax valuation allowance | | 16.4 |
| | | 11.3 |
| | | — |
| | | 4.7 |
| (d) | | 23.0 |
| |
Year Ended December 31, 2016 | | | | | | | | | | | | | | | |
Allowance for uncollectible accounts | | $ | 3.8 |
| | | $ | 9.0 |
| | | $ | 8.1 |
| (a) | | $ | 16.9 |
| (b) | | $ | 4.0 |
| |
Legal reserves | | 5.9 |
| | | 10.4 |
| | | — |
| | | 0.2 |
| (c) | | 16.1 |
| |
Environmental reserves | | 1.7 |
| | | — |
| | | — |
| | | — |
| | | 1.7 |
| |
Tax valuation allowance | | 19.9 |
| | | 0.1 |
| | | — |
| | | 3.6 |
| (d) | | 16.4 |
| |
Year Ended December 31, 2015 | | | | | | | | | | | | | | | |
Allowance for uncollectible accounts | | $ | 2.8 |
| | | $ | 10.5 |
| | | $ | 8.7 |
| (a) | | $ | 18.2 |
| (b) | | $ | 3.8 |
| |
Legal reserves | | 4.7 |
| | | 2.6 |
| | | — |
| | | 1.4 |
| (c) | | 5.9 |
| |
Environmental reserves | | 1.7 |
| | | — |
| | | — |
| | | — |
| | | 1.7 |
| |
Tax valuation allowance | | 16.6 |
| | | 4.9 |
| | | — |
| | | 1.6 |
| (d) | | 19.9 |
| |
(a) Recoveries.
(b) Uncollectible accounts charged off.
(c) Payment of claims/settlements.
(d) Reversal of tax valuation allowance.
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Kansas City Power & Light Company |
Valuation and Qualifying Accounts |
Years Ended December 31, 2017, 2016 and 2015 |
| | | | | | | | | | | | | | | |
| | | | 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, 2017 | (millions) |
Allowance for uncollectible accounts | | $ | 1.8 |
| | | $ | 7.5 |
| | | $ | 5.6 |
| (a) | | $ | 12.7 |
| (b) | | $ | 2.2 |
| |
Legal reserves | | 15.1 |
| | | — |
| | | — |
| | | 9.0 |
| (c) | | 6.1 |
| |
Environmental reserves | | 0.3 |
| | | — |
| | | — |
| | | — |
| | | 0.3 |
| |
Tax valuation allowance | | — |
| | | 1.2 |
| | | — |
| | | 1.2 |
| (d) | | — |
| |
Year Ended December 31, 2016 | | | | | | | | | | | | | | | |
Allowance for uncollectible accounts | | $ | 1.8 |
| | | $ | 6.4 |
| | | $ | 5.5 |
| (a) | | $ | 11.9 |
| (b) | | $ | 1.8 |
| |
Legal reserves | | 5.3 |
| | | 9.8 |
| | | — |
| | | — |
| (c) | | 15.1 |
| |
Environmental reserves | | 0.3 |
| | | — |
| | | — |
| | | — |
| | | 0.3 |
| |
Tax valuation allowance | | 0.7 |
| | | — |
| | | — |
| | | 0.7 |
| | | — |
| |
Year Ended December 31, 2015 | | | | | | | | | | | | | | | |
Allowance for uncollectible accounts | | $ | 1.2 |
| | | $ | 7.1 |
| | | $ | 5.8 |
| (a) | | $ | 12.3 |
| (b) | | $ | 1.8 |
| |
Legal reserves | | 2.9 |
| | | 2.6 |
| | | — |
| | | 0.2 |
| (c) | | 5.3 |
| |
Environmental reserves | | 0.3 |
| | | — |
| | | — |
| | | — |
| | | 0.3 |
| |
Tax valuation allowance | | — |
| | | 0.7 |
| | | — |
| | | — |
| | | 0.7 |
| |
(a) Recoveries.
(b) Uncollectible accounts charged off.
(c) Payment of claims/settlements.
(d) Reversal of tax valuation allowance.
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 21, 2018 | By: /s/ Terry Bassham | |
| Terry Bassham
| |
| Chairman, President 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/ Terry Bassham | Chairman, President and Chief Executive Officer | ) | February 21, 2018 |
Terry Bassham | (Principal Executive Officer) | ) |
| | ) |
/s/ Kevin E. Bryant | Senior Vice President - Finance and Strategy and Chief Financial Officer | ) |
Kevin E. Bryant | (Principal Financial Officer) | ) |
| | ) |
/s/ Steven P. Busser | Vice President - Risk Management and Controller | ) |
Steven P. Busser | (Principal Accounting Officer) | ) |
| | ) |
David L. Bodde* | Director | ) |
| | ) |
Randall C. Ferguson, Jr.* | Director | ) |
| | ) |
Gary D. Forsee* | Director | ) |
| | ) |
Scott D. Grimes* | Director | ) |
| | ) |
Thomas D. Hyde* | Director | ) |
| | ) |
Ann D. Murtlow* | Director | ) |
| | ) |
Sandra J. Price* | Director | ) |
| | ) |
John J. Sherman* | Director | ) |
*By /s/ Terry Bassham
Terry Bassham
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 21, 2018 | By: /s/ Terry Bassham | |
| Terry Bassham | |
| Chairman, President 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/ Terry Bassham | Chairman, President and Chief Executive Officer | ) | February 21, 2018 |
Terry Bassham | (Principal Executive Officer) | ) |
| | ) |
/s/ Kevin E. Bryant | Senior Vice President - Finance and Strategy and Chief Financial Officer | ) |
Kevin E. Bryant | (Principal Financial Officer) | ) |
| | ) |
/s/ Steven P. Busser | Vice President - Risk Management and Controller | ) |
Steven P. Busser | (Principal Accounting Officer) | ) |
| | ) |
David L. Bodde* | Director | ) |
| | ) |
Randall C. Ferguson, Jr.* | Director | ) |
| | ) |
Gary D. Forsee* | Director | ) |
| | ) |
Scott D. Grimes* | Director | ) |
| | ) |
Thomas D. Hyde* | Director | ) |
| | ) |
Ann D. Murtlow* | Director | ) |
| | ) |
Sandra J. Price* | Director | ) |
| | ) |
John J. Sherman* | Director | ) |
*By /s/ Terry Bassham
Terry Bassham
Attorney-in-Fact*
kcplgeneralmortgageinden
KANSAS CITY POWER & LIGHT COMPANY
To
UNITED MISSOURI BANK OF
KANSAS CITY, N.A., TRUSTEE
General Mortgage Indenture and Deed of Trust
Dated as of December 1, 1986
1
. . . . . . . . . . . . CROSS REFERENCE SHEET TO
TRUST INDENTURE ACT OF 1939
Section of Act Section of Indenture
310(a) 7.04, 14.01, 14.14, 14.15
310(b) 14.12
311 (a) and (b) 14.11
312(a), (b) and (c) . 17.01
313(a ) , (b), (c) and (d) 17.03
314(a) 17.02
314(b) 7.05
314(c ) ( l ) and (2) 21.01 (b)
314(c)(3) Not applicable
314(d) (1) 1.03(q), 10.03(b),
10.04(b), 10.05(a)(ii),
I0.06(a)(iii)
314(d)(2) 1.03(e), 1.03 (q),
3.04(e), 10.05(a)(li) and
10.06(a)(iii)
3 i4 (d ) (3 ) 3.04(c), 3.04(d),
10.03(c), 10.05(a)(ii)
and (iii), 10.06(a)(iii)
and (iv)
314(e) ., 21.01 (a)
315(a) 14.01, 14.02, 14.07
315 (b) 12.02 (b)
315(c) 14.01
315(d) 14.02
315(e) 12.16(c)
316 ( a ) ( l ) 12.05, 12.24
316(a)(2) ; Omitted
316(a) last sentence . 20.03
316(b) 12.23
317(a) 12.18, 12.22
317(b) 7.06
3l8(a) 21.03
11
. . . . . . . . . . - . - , - — . , . . , . , - , - _ . TABLE OF CONTENTS
Page
Parties 1
Recitals 1
Granting clause 1
ARTICLE I
DEFINITIONS
Sec. 1.01 Trust Indenture Act 3
Sec. 1.02 Construction of accounting terms 3
Sec. 1.03 "Accountant" 3
"Accountant's Certificate" 4
"Affiliate" 4
"Appraiser" 4
"Appraiser's Certificate" 4
"Authorized Newspaper" 4
"Board" 4
"Bondable Property" 4
"Bonded" or "Bonding" 7
"Bondholder" 8
"Bonds" 8
"Business Day" 8
"Company" 8
"Cost" 8
"Coupon Bond" 9
"Default" 9
"Engineer" 9
"Engineer's Certificate11 9
"Excepted Property" 9
"Fair Value" II
"Generally Accepted Accounting Principles" 11
"Governmental Obligations" 12
"Indenture" 12
"Independent" 12
"Lien of this Indenture" 12
" 1946 Mortgage" 12
"1946 Mortgage Bonds" 12
''Mortgaged Property" 12
"Officers' Certificate" 13
"Opinion of Counsel" 13
"Outstanding" 13
"Permissible Encumbrances" 13
"Person" 16
"Prior Lien" 16
Ill
"Prior Lien Bonds" ..... ..................................................... 16
"Registered Bond" ...... ..................................................... 16
"Registered Holder" ......................................................... 16
"Responsible Officer" ........................................................ 16
"Retired" ................................................................... 17
"Supplemental Indenture" .................................................... 17
"Trustee" .................................................................. 17
"Unbonded" ................................................................ 17
ARTICLE II
FORMS, EXECUTION, REGISTRATION
AND EXCHANGE OF BONDS
Sec. 2.01 Series and form of Bonds ..................................................... 17
Sec. 2.02 Kinds and denominations of Bonds ............................................. 18
Sec. 2.03 Dates of and interest on Bonds ................................................. 18
Sec. 2.04 Legends on Bonds ........................................................... 19
Sec. 2.05 Exchange of Bonds .......................................................... 19
Sec. 2.06 Transfer of Bonds ............................................................ 20
Sec. 2.07 Execution of Bonds .......................................................... 20
Sec. 2.08 Temporary Bonds ............................................................ 21
Sec. 2.09 Replacement of stolen, lost, destroyed or mutilated Bonds .......................... 21
Sec. 2.10 Trustee's certificate on Bonds .................................................. 22
ARTICLE III
ISSUANCE OF BONDS BASED ON
BONDABLE PROPERTY
Sec. 3.01 Bonds issuable on basis of Bondable Property .................................... 22
Sec. 3.02 No Bonds issuable on basis of Bonded Bondable Property .......................... 22
Sec. 3.03 . Bonds issuable to specified percentage of Bondable Propeny ........................ 22
Sec. 3.04 Requirements for issuance ..................................................... 23
Sec. 3.05 Determination of Cost or Fair Value ............................................ 27
ARTICLE IV
ISSUANCE OF BONDS BASED ON RETIRED
BONDS PREVIOUSLY OUTSTANDING
Sec. 4.01 Requirements for issuance ..................................................... 27
Sec. 4.02 Coupon Bonds delivered to Trustee must have attached unmatured coupons .......... 28
Sec. 4.03 No Bonds issuable on basis of Bonded Bonds .................................... 28
IV
ARTICLE V
ISSUANCE OF BONDS BASED ON DEPOSIT
OF CASH WITH TRUSTEE
Sec. 5.0 1 Requirements for issuance ..................................................... 28
Sec. 5.02 Withdrawal of cash deposited under Section 5.01 ................................. 29
ARTICLE VI
ISSUANCE OF BONDS BASED ON
PRIOR LIEN BONDS
Sec. 6.01 Requirements for issuance ..................................................... 29
Sec. 6.02 No Bonds issuable on basis of Bonded Prior Lien Bonds ........................... 30
ARTICLE VII
COVENANTS OF THE COMPANY
Sec. 7.01 Payment of principal and interest ............................................... 30
Sec. 7.02 Possession, maintenance of Lien and right to mortgage ............................ 30
Sec. 7.03 Corporate existence .......................................................... 3L
Sec. 7.04 Appointment of Trustee ...................................................... 31
Sec. 7.05 Recordation of Indenture ..................................................... 31
Sec, 7.06 Paying Agents ............................................................... 32
Sec. 7.07 Payment of taxes ............................................................ 33
Sec, 7.08 Instruments of further assurance ............................................... 33
Sec. 7.09 Books of record and account ................................................... 33
Sec. 7.10 Maintenance of Mortgaged Property ............................................ 34
Sec. 7.1 1 Insurance/. ................................................................. 34
Sec. 7. [ 2 Issuance of First Mortgage Bonds .............................................. 36
Sec. 7. 1 3 Payments by Trustee ......................................................... 37
ARTICLE VIII
PRIOR LIEN BONDS DEPOSITED WITH TRUSTEE
Sec. 8.01 Requirements upon deposit of Prior Lien Bonds .................................. 37
Sec. 8.02 Disposition of principal of and interest on Prior Lien Bonds ................... ..... 37
Sec. 8.03 Surrender of Prior Lien Bonds ............................................ ..... 38
Sec. 8.04 Extension of maturity of Prior Lien Bonds .................................. ..... 38
Sec. 8.05 Trustee's rights upon Default ............................................. ..... 38
. . . . . . . . . . . . . . . , . . _ Page
ARTICLE IX
REDEMPTION OF BONDS
Sec. 9.01 Certain Bonds redeemable 39
Sec. 9.02 Genera) provisions and mechanics of redemption 39
Sec. 9.03 Bonds due on redemption date 40
Sec. 9.04 Moneys for redemption held in trust 40
Sec. 9.05 Partial redemption of Registered Bond 41
ARTICLE X
POSSESSION, USE AND RELEASE
OF THE MORTGAGED PROPERTY
Sec. 10.01 Company's possession and use 41
Sec. 10.02 Actions without consent of Trustee 41
Sec. 10.03 Release of Mortgaged Property if Bonding ratio test satisfied 43
Sec. 10.04 Release of limited amount of Mortgaged Property 44
Sec. 10.05 Release of Mortgaged Property not subject to a Prior Lien 45
Sec. 10.06 Release of Mortgaged Property subject to a Prior Lien 48
Sec. 10.07 Eminent Domain 51
Sec. 10.08 Substituted Property 52
Sec. 10.09 Receiver, Trustee, etc 52
Sec. 10,10 Purchaser in good faith 52
Sec. 10.11 Suspension of rights in case of Default 52
ARTICLE XI
APPLICATION OF FUNDS HELD BY TRUSTEE
Sec. 11.01 Withdrawat-or application of moneys held by Trustee 53
Sec. 11.02 Moneys to be held in trust; investment thereof 56
ARTICLE XII
DEFAULT AND REMEDIES
Sec. 12.01 When no entitlement to benefit of Indenture upon Default 57
Sec. 12.02 Events of default; notice of Default; action by Trustee 58
Sec. 12.03 Upon Default Trustee may sell Mortgaged Property 61
Sec. 12.04 Upon Default and request of holders of a majority of Bonds, Trustee must declare
principal due; restoration of parties to former positions 61
Sec. 12.05 Duty of Trustee to act on request of holders of a majority of Bonds 62
Sec. 12.06 Mortgaged Property to be sold as an entirety 62
Sec. 12.07 Notice of sale 63
Sec. 12.08 Adjournment of sale 63
Sec. 12.09 Interest of purchaser and Company 63
Sec. 12.10 Trustee's receipt sufficient to discharge purchaser 64
VI
Page
Sec. 12.11 Principal of Bonds to become due in case of sale 64
Sec. 12.12 Application of sale proceeds 64
Sec. 12.13 Bonds and matured coupons may be applied against purchase price 65
Sec. 12.14 Company not to insist upon or plead stay or extension law or exercise right of
redemption _ 65
Sec. 12.15 Trustee may enter on commencement of judicial proceedings entitled to appointment of
receiver 66
Sec. 12,16 Bondholder not to institute suit without request to Trustee; Trustee may enforce rights
without possession of Bonds; undertaking for costs 66
Sec. 12.17 Remedies cumulative 67
Sec. 12.18 Covenant to pay Trustee; judgment by Trustee; application of monies 68
Sec. 12.19 Surrender of possession of Mortgaged Property to Trustee before Default; appointment
of receiver 69
Sec. 12.20 Suit by Trustee to protect security 70
Sec. 12.21 Provisions solely for benefit of parties and Bondholders 70
Sec. 12.22 Trustee may file proofs of claims 70
Sec. 12.23 Bondholders' rights at maturity may not be impaired 71
Sec. 12,24 Waivers of past Default by holders of Bonds 71
ARTICLE XIII
EFFECT OF MERGER, CONSOLIDATION, CONVEYANCE AND LEASE
Sec. 13.01 Company may merge or consolidate if no impairment of Lien of this Indenture and with
assumption of obligation by successor 72
Sec. 13.02 Upon merger or consolidation Indenture not to constitute Hen upon certain properties;
successor corporation to confirm prior Lien of this Indenture and keep Mortgaged
Property identifiable 73
Sec. 13.03 Right of successor corporation 74
Sec. 13.04 Extent of Lien of this Indenture on property of successor corporation 76
ARTICLE XIV
THE TRUSTEE
Sec. 14.01 Qualification of Trustee and acceptance of trust 77
Sec. 14.02 Extent of Trustee's liability 77
Sec. 14,03 Recitals deemed made by Company 78
Sec. 14.04 Trustee not liable for debts from operation of Mortgaged Property; Trustee may own
Bonds 79
Sec. 14.05 Trustee may give notices incidental to action by it - . 79
Sec. 14.06 Notice by Trustee to Company 79
Sec. 14.07 Trustee may reiy on certificates and may consult counsel; responsibility in selection of
experts 80
Sec. 14.08 Moneys deposited with Trustee to be held in trust; interest on such moneys 80
Sec. 14.09 Compensation of Trustee; Hen therefor 81
Sec. 14.10 Trustee may rely on facts established by Officers' Certificate 32
Vll
- ' • •--. - - -- • - • - - - . • - • - - ' . . - - - -...- - . . Page
Sec. 14.11 Action to be taken by Trustee who becomes creditor of Company 82
Sec. 14.12 Action to be taken by Trustee acquiring conflicting interest 82
Sec. 14.13 Resignation or removal of Trustee 82
Sec. 14.14 Appointment of successor Trustee 83
Sec. 14.15 Appointment of additional trustees or co-trustees; notice by Bondholders to Trustee,
notice to all trustees; contents, filing, etc. of instrument appointing trustee; incapacity,
etc. of instrument appointing trustee 84
Sec. 14.16 Acceptance by successor trustee; requirements of predecessor Trustee upon retiring . . . . 86
Sec. 14.17 Merger or consolidation of Trustee 87
Sec, 14.18 Appointment of successor Trustee by Company 88
Sec. 14.19 Joining of individual trustee 88
ARTICLE XV
SUPPLEMENTAL INDENTURES
Sec. 15.01 Provision for Supplemental Indentures 89
Sec. 15.02 Requirements for Supplemental Indentures 90
ARTICLE XVI
MEETINGS OF BONDHOLDERS
Sec. 16.01 Manner of calling meetings and determination of Bonds affected 91
Sec. 16.02 Calling of meetings by Company or Bondholders 92
Sec. 16.03 Persons entitled to vote at meeting 93
Sec. 16.04 Conduct of meetings; regulations 93
Sec. 16.05 Manner of voting 94
Sec. 16.06 Rights of Trustee or Bondholders not to be hindered or delayed 95
Sec. 16.07 Action by written consent 95
ARTICLE XVII
BONDHOLDER LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Sec. 17.01 Company to furnish Bondholder lists 95
Sec. 17.02 Company to make filings with trustee and otherwise comply with TIA Section 314 96
Sec. 17.03 Company to furnish Bondholders reports and otherwise comply with TIA Section 313 . . . 96
ARTICLE XVIII
DEFEASANCE
Sec. 18.01 Effect of payment of indebtedness; deposit of money or obligation in certain instances
deemed payment 96
Sec. 18.02 Unclaimed moneys 97
Vlll
ARTICLE XIX
IMMUNITY OF INCORPORATORS, SUBSCRIBERS TO
THE CAPITAL STOCK, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Sec. 19.01 General provision ............................................................ 97
ARTICLE XX
EVIDENCE OF RIGHTS OF BONDHOLDERS
AND OWNERSHIP OF BONDS
Sec. 20.01 Evidence of action by Bondholders ............................................. 98
Sec. 20.02 Inspection of Bonds .......................................................... 99
Sec. 20.03 Bonds owned by Company or other obligor or affiliate thereof deemed not to be
outstanding ............................................................... 100
Sec. 20.04 Bondholder may revoke consent ................................................ 100
ARTICLE XXI
MISCELLANEOUS
Sec. 21.01 Certificates, opinions, etc ...................................................... 100
Sec. 21.02 Successors and assigns ........................................................ 101
Sec. 21.03 Conflict with TIA ........................................................... 101
Sec. 21.04 TIA construed as in effect on date hereof ........................................ 101
Sec. 21.05 Titles, Table of Contents, etc .................................................. 102
Sec. 21.06 Counterparts ................................................................ 102
Testimonium .......................................................................... 102
Signatures and seals . . .- ................................................................. 103
- - - - - GENERAL. MORTGAGE INDENTURE AND DEED OF TRUST , dated parties
as of December 1, 1986 between KANSAS CITY POWER & LIGHT
COMPANY, a Missouri corporation, and UNITED MISSOURI BANK OF
KANSAS CITY, N.A., as Trustee.
WHEREAS, all capitalized terms used in this Indenture have the Recitals
respective meanings set forth in Article 7; and
WHEREAS, the Company deems it necessary to borrow and, pursu-
ant to this Indenture, to issue Bonds for its corporate purposes from time
to time, and to mortgage and pledge the property hereinafter described
to secure payment of the Bonds; and
WHEREAS, all acts and things have been done and performed which
are necessary to make this Indenture, when duly executed and delivered,
a valid and binding mortgage and deed of trust for the security of all
Bonds duly issued hereunder and Outstanding from time to time; and
the execution and delivery of this Indenture have been in all respects
duly authorized.
Now, THEREFORE, THIS INDENTURE WITNESSETH, that to secure Granting clause
the payment of the principal of, premium, if any, and interest on all
Bonds issued and Outstanding under this Indenture when payable in
accordance with the provisions thereof and hereof, and to secure the
performance by the Company of, and its compliance with, the covenants
and conditions of this Indenture, and in consideration of the premises
and of One Dollar paid to the Company by the Trustee, the Company
does hereby grant, bargain, sell, warrant, release, convey, assign, trans-
fer, mortgage, pledge, set over and confirm unto United Missouri Bank
of Kansas City, N.A., as Trustee, and to its successors in trust and to its
assigns, all of the property, rights and interests in property described in
Exhibit A, and, other than Excepted Property and subject to Article
XIII, all of the property, rights and interests in property acquired by the
Company after the date of the execution of this Indenture, which shall
be and are as fully granted and conveyed by this Indenture and as fully
embraced within the Lien of this Indenture as if such property, rights
and interests in property were now owned by the Company and were
specifically described herein and conveyed hereby; the Company
expressly reserves the right, at any time and from time to time, by one or
more Supplemental Indentures, to subject to the Lien and operation of
this Indenture any part or all of the Excepted Property upon such terms
Subject to
1946 Mortgage
Grant in trust
Defeasance clause
clause
and conditions and subject to such restrictions, limitations and reserva-
tions as may be set forth in such Supplemental Indenture or Indentures.
To HAVE AND TO HOLD all such properties, rights and interests in
property granted, bargained, sold, warranted, released, conveyed,
assigned, transferred, mortgaged, pledged, set over and confirmed or in
which a security interest has been granted by the Company in this
Indenture or intended or agreed to be so granted, together with all the
appurtenances thereto, unto the Trustee and its successors and assigns
forever.
SUBJECT, HOWEVER, as to the properties, rights and interests in
property severally embraced therein or affected thereby, to the 1946
Mortgage for so long as any 1946 Mortgage Bonds are Outstanding, and
to other Permissible Encumbrances;
BUT IN TRUST, nevertheless, for the equal and proportionate
benefit and security of all present and future holders of the Bonds and
any coupons issued and to be issued hereunder and secured by the Lien
of this Indenture, and to secure the payment of the principal of,
premium, if any, and interest on the Bonds issued and Outstanding
under this Indenture when payable in accordance with the provisions
thereof and hereof, and to secure the performance by the Company of,
and its compliance with, the covenants and conditions of this Indenture
without any preference, priority or distinction of any one Bond over any
other Bond by reason of priority in the issue or negotiation thereof or
otherwise.^
PROVIDED, HOWEVER, and these presents are upon the condition,
that if the Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Bonds at the times and in the
manner therein and herein provided, or shall provide, in the manner
permitted hereby, for the payment thereof, and if the Company shall
also pay or cause to be paid all other sums payable hereunder by it and
perform all of the covenants and comply with all of the conditions of this
Indenture, then this Indenture and the estate and rights hereby granted
shall cease, determine and be void, otherwise to be and remain in full
force and effect.
IT is HEREBY COVENANTED AND AGREED, by and between the
Company and Trustee, that all Bonds and coupons, if any, are to be
authenticated, delivered and issued, and that all Mortgaged Property is
§§ 1.01, 1.02, 1.03
to' be held, subject to the further covenants, conditions, uses and trusts
hereinafter set forth, and the Company, for itself and its successors and
assigns, does hereby covenant and agree to and with the Trustee and its
successors in trust, for the benefit of those who shall hold Bonds and any
coupons, or any of them, as follows:
ARTICLE I
DEFINITIONS
Section 1.01. (a) Whenever this Indenture refers to a provision of Trust
the Trust Indenture Act of 1939, as amended ("TIA"), such provision
A
n
c
d
t
enture
is incorporated by reference in and made a part of this Indenture. The
following TIA terms incorporated in this Indenture have the following
meanings:
"indenture securities" means the Bonds.
"indenture security holder" means a Bondholder.
"indenture to be qualified" means this Indenture,
"indenture trustee" or "institutional trustee" means the Trus-
tee.
"obligor" on the indenture securities means the Company.
(b) All terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Securities and Exchange Commission have the meanings assigned to
them in the TIA or such statute or rule as in force on the date of
execution of this Indenture.
Section 1,02. The accounting terms used in this Indenture shall be
construed in accordance with Generally Accepted Accounting Princi-
ples.
Section 1.03. For purposes of this Indenture, the following terms
have the following meanings:
(a) "Accountant" means the Controller or Assistant Controller of
the Company or a Person appointed by the Board who is qualified to
pass upon accounting matters, who or which need not be a certified or
Construction of
accounting terms
"Accountant'
"Accountant's
Certificate"
"Affiliate"
"Appraiser"
"Appraiser's
Certificate"
"Authorized
Newspaper"
"Board"
"Bortdable
Property"
§ 1.03 (cont.)
public accountant and, unless required to be Independent, may be
employed by or Affiliated with the Company.
(b) "Accountant's Certificate" means a certificate signed by an
Accountant.
(c) "Affiliate" means a Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, another
Person; "Affiliated" has a meaning correlative to the foregoing.
(d) "Appraised means a Person engaged in the business of
appraising property or competent to determine the Fair Value or fair
market value of the particular property in question, and who or which,
unless required to be Independent, may be employed by or Affiliated
with the Company.
(e) "Appraiser's Certificate" means a certificate signed by an
Appraiser appointed by the Board; any Appraiser's Certificate which is
relied upon by an Independent Engineer, for purposes of an Independent
Engineer's Certificate, shall be signed by an Independent Appraiser.
(f) "Authorized Newspaper" means a newspaper of general circu-
lation in the relevant area, printed in the English language and customa-
rily published on each Business Day; whenever successive publications
in an Authorized Newspaper are required by this Indenture, such
publications may be made on the same or different days and in the same
or in different Authorized Newspapers.
(g) "Board" means either the board of directors of the Company
or any duly authorized committee of the board of directors of the
Company.
(h) "Bondable Property" means the Mortgaged Property as of
December 1, 1986, plus any property acquired or constructed by the
Company which is included in the Mortgaged Property after December
1, 1986:
(i) Bondable Property:
(A) need not consist of a specific or completed develop-
ment, plant, betterment, addition, extension, improvement or
enlargement, but may include construction work in progress
and property in the process of purchase insofar as the Com-
pany shall have acquired legal title to such property, and may
include the following:
§ 1.03 (cont,)
(1) fractional and other undivided interests of the
Company in property owned jointly or in common with
other Persons, whether or not there are with respect to
such property other agreements or obligations on the part
of the Company, if there is an effective bar against parti-
tion of such property which would preclude the sale of
such property by any or all of such other Persons or the
holder or holders of any lien or liens on the interest of any
of such other Persons in such property, without the
consent of the Company;
(2) engineering, economic, environmental, finan-
cial, geological and legal or other surveys, data processing
equipment and software, preliminary to or associated with
the acquisition or construction of property included or
intended to be included in the Mortgaged Property;
(3) paving, grading and other improvements to,
under or upon public highways, bridges, parks or other
public property of analogous character required for or in
connection with the installation or repair of overhead,
surface or underground facilities and paid for and used or
to be used by the Company, notwithstanding that the
Company may not hold legal title thereto;
(4) towers, poles, wires, transformers, meters, over-
head, surface and underground service facilities, and
property and equipment constructed or maintained under
permits, licenses, easements, franchises and other similar
privileges on property owned by other Persons, including
governmental and municipal agencies, bodies or subdivi-
sions, if the Company shall have the right to remove the
same; and
(5) property other than property specified in Section
1.03(h) (ij (A) (4) which is situated on real estate owned
by governmental or municipal agencies, bodies or subdivi-
sions under permits, licenses, easements, franchises and
other similar privileges, if the Company shall have the
right to remove the same; and
§ 1.03 (cont.)
(B) may include renewals, replacements and substitution
of property not excluded from this definition of Bondable
Property; but
(C) shall not include:
(1) Excepted Property; or
(2) going concern value or good will.
(ii) The "amount" of any Bondable Property means the lesser
of the Cost or Fair Value of Bondable Property certified to the
Trustee in an Engineer's Certificate (or in case such Fair Value
shall not be required to be evidenced to the Trustee, the Cost
thereof) minus, in the case of Bondable Property which is (A)
owned by the Company subject to a Prior Lien on the date of this
Indenture, or (B) acquired by the Company after December 1,
1986, subject to a Prior Lien (other than a Prior Lien to which such
Bondable Property becomes subject, solely as a result of such
acquisition, pursuant to an after-acquired property clause of such
Prior Lien), 133!/3% of the aggregate principal amount of the Prior
Lien Bonds secured by such Prior Liens and (I) outstanding at
December 1, 1986, and at the date of such acquisition, respectively,
and (II) issued after such date, respectively.
(iii) When any Bondable Property is certified to the Trustee
in any Engineer's Certificate delivered with an application, and as a
basis, for the authentication and delivery of Bonds, the release of
Mortgaged Property or the withdrawal of cash (except in the case
of the release of Mortgaged Property, the withdrawal of cash
representing the proceeds of insurance or the payment of or on
account of obligations secured by purchase money mortgages, in
each case on the basis of Bondable Property acquired or con-
structed within 90 days prior to the date of the application for such
release or the receipt by the Trustee of such cash, or within 90 days
subsequent to such application or receipt of cash),
(A) there shall be deducted from the Cost or Fair Value
of such Bondable Property, as the case may be (as of the date
of such application), an amount equal to the aggregate Cost of
all Bondable Property retired on and after December 1, 1986,
minus the aggregate Cost of all Bondable Property acquired or
constructed by the Company which is included in the Mort-
gaged Property after such date, and has been Bonded as the
7
§ 1.03 (conl.)
basis' for the ~ withdrawal of cash pursuant to Section
11.01(a)(i)(B), and
(B) there may, at the option of the Company, be added
to such Cost or Fair Value, as the case may be, the sum of
(1) all or any portion which the Company then
elects to add to the total of (aa) the fair market value in
cash, as set forth in an Appraiser's Certificate dated the
date of such application, of the unpaid principal amount
of any obligations (which are not in default) secured by
purchase money mortgages and Governmental Obliga-
tions, plus (bb) any cash (other than proceeds of such
purchase money obligations), then held by the Trustee or
the trustee or mortgagee under any Prior Lien, in either
case representing the proceeds of insurance on, or of the
release or other disposition of, Bondable Property retired;
and
(2) 133'/3% of the principal amount of any Bonds
which the Company then elects so to add, the right to the
authentication and delivery of which under Article IV or
Article VI shall have been waived as a basis for the release
of Bondable Property retired;
provided, however, that neither any reduction in the Cost or Fair Value
of property recorded in an account of the Company nor the transfer of
any amount from such an account to another such account shall be
deemed to be Bondable Property retired.
(i) "Bonded" or "Bonding" as applied to Bonds, Prior Lien Bonds
or Bondable Property means that such Bonds, Prior Lien Bonds or °" ms
Bondable Property are within one or more of the following classes:
(i) the aggregate amount of Bondable Property which has
been used as a basis for the authentication and delivery of Bonds
pursuant to Article III or the withdrawal of cash pursuant to Section
11.01.
(ii) Bonds which have been used as a basis for the authentica-
tion and delivery of Bonds pursuant to Article IVor the withdrawal
of cash pursuant to Section 11.01, and Bonds and Prior Lien Bonds
paid, purchased or redeemed with money applied or paid by the
Trustee pursuant to Section 11.OL
'Bondholder"
'Bonds"
'Business Day"
"Company"
'Cost"
§ 1.03 (cont.)
--•• - . - - - - (iii) Bonds and Prior Lien Bonds which have been used as a
basis for a waiver by the Company, pursuant to Section 10.05 or
10.06, of its right to the authentication and delivery of Bonds
pursuant to Article IV or Article VI.
(iv) Bonds, Prior Lien Bonds and Bondable Property which
have been allocated or used as a basis for any credit or action or
pursuant to any provision of, or retired through the operation of, any
sinking, improvement, maintenance, replacement or analogous fund
for any series of Bonds; provided, however, that any such Bonds,
Prior Lien Bonds or Bondable Property so allocated or used shall be
reinstated as Unbonded when all of the Bonds of the series of Bonds
in connection with such fund was established are retired.
(v) Prior Lien Bonds which have been (A) used as a basis for
the authentication and delivery of Bonds pursuant to Article VI or
the withdrawal of cash pursuant to Section 11.01, (B) used as a
basis for the issuance of Prior Lien Bonds under such Prior Lien or
(C) used as a basis for the release of property or the withdrawal of
cash under any Prior Lien.
All Bondable Property which shall be retired, abandoned, destroyed,
released or otherwise disposed of shall be deemed Bondable Property
retired, but as in this Indenture provided may at any time thereafter
again become Bondable Property.
(j) "Bondholder" means the bearer of a Coupon Bond or the
Registered Holder of a Registered Bond.
(k) "Bonds" means bonds authenticated and delivered under this
Indenture.
(1) "Business Day" means any day upon which banks located in
the city where the Trustee maintains its principal office and place of
business are not required or authorized to be closed.
(m) "Company" means Kansas City Power & Light Company, a
Missouri corporation, and its successors and assigns.
(n) "Cost" means, as to any property, the actual cost to the
Company in cash or its equivalent, including without limitation all costs
and allowances for funds used during the construction thereof, and other
deferred costs relating to such construction, but only to the extent
§ 1.03 (cont.)
permitted by Generally Accepted Accounting Principles or accounting
orders from any governmental regulatory commission; the Cost of
property acquired by the Company without consideration or by merger,
consolidation or dissolution shall be deemed to be the Fair Value thereof
at the date of its acquisition.
(o) "Coupon Bond" means any Bond with detachable coupons
evidencing the obligation of the Company to pay interest on such Bond.
(p) "Default" means any event specified in Section 12.02(a).
(q) "Engineer" means a Person engaged in the engineering busi-
ness, and who or which, unless required to be Independent, may be
employed by or Affiliated with Company, except that an Independent
Engineer shall sign Engineer's Certificates delivered in connection with
the release of Mortgaged Property pursuant to Section 10.03, 10.04,
10.05, 10.06 or 10.07, if the Fair Value of the Mortgaged Property to be
released and of all other Mortgaged Property released since the com-
mencement of the then current calendar year, or the Fair Value of any
purchase money obligations included in the consideration for such
release and of all other securities made a basis of any authentication and
delivery of Bonds, withdrawal of cash or release of Mortgaged Property
or securities under this Indenture since the commencement of the then
current calendar year, as set forth in Engineer's Certificates required
pursuant to Article X of this Indenture, is 10% or more of the aggregate
principal amount of Bonds at the time Outstanding, unless the Fair
Value of the Mortgaged Property to be released or of any purchase
money obligations included in the consideration for such release and of
all other securities made a basis of any authentication and delivery of
Bonds, as set forth in such Engineer's Certificate, is, in each case, less
than $25,000 or less than 1% of the aggregate principal amount of Bonds
at the time Outstanding.
(r) "Engineer's Certificate" means a certificate signed by an
Engineer appointed by the Board.
(s) "Excepted Property" means all of the following described
property, whether now owned or hereafter acquired by the Company,
which is hereby expressly excepted and excluded from the Lien of this
Indenture:
"Coupon Bond"
'Default"
'Engineer3*
"Engineer's
Certificate"
"Excepted
Pro pert)-"
10
§ 1.03 (com.)
- .- .-- .-. (i) all cash, shares of stock, bonds, notes and other obligations
and securities not deposited, or required to be deposited, with the
Trustee by the express provisions of this Indenture;
(ii) all bills, notes and other instruments and accounts receiv-
able, judgments, demands, general intangibles and choses in action,
and all contracts and operating agreements not pledged or required
to be pledged with the Trustee;
(iii) all merchandise, equipment, spare parts, tools, materials,
supplies and fuel held for sale or lease in the ordinary course of
business or for use or consumption in, or in the operation of, any
properties of, or for the benefit of, the Company, or held in advance
of use thereof for maintenance, replacement or fixed capital pur-
poses;
(iv) all electricity, gas, steam, water, ice and other materials,
products or services generated, manufactured, produced, provided
or purchased by the Company for sale or distribution or used or to
be used by the Company;
(v) all railcars, aircraft, watercraft, automobiles, buses,
trucks, tractors, trailers and similar vehicles and movable equip-
ment, and all components, spare parts, accessories, supplies and
fuel used or to be used in connection with any of the foregoing;
(vi) all office furniture and office equipment;
(vii) all leasehold interests and leasehold improvements;
(viii) the last day of the term of any lease or leasehold now
owned or hereafter acquired by the Company which is specifically
subjected to the Lien of this Indenture;
(ix) all timber, natural gas, oil, coal, uranium and other
minerals, mined or extracted from or otherwise separated from the
earth, or lying or being within or under any properties of the
Company, including Mortgaged Property, and gas, oil, coal and
other mineral rights, leases and royalties and income therefrom,
and rights to explore for such minerals;
(x) except as the same may be specifically subjected to the
Lien of this Indenture, all nuclear fuel, cores and materials;
11
§ 1.03 (COOL)
" ..... (xi) all satellites and other equipment and materials used or
to be used in outer space; all business machines; all communica-
tions equipment; all computer equipment; all record production,
storage and retrieval equipment; all telephone equipment; and all
components, spare parts, accessories, programs and supplies used or
to be used in connection with any of the foregoing; and
(xii) all real or personal property which meets all of the
following conditions:
(A) is not specifically described in this Indenture,
(B) is not specifically subjected or required to be sub-
jected to the Lien of this Indenture by any express provision of
this Indenture, and
(C) is not an integral part of or used or to be used as an
integral part of the electric and steam generating, transmission
and distribution operations of the Company, or in connection
with the operation of any property specifically subjected or
required to be subjected to the Lien of this Indenture by the
express provisions of this Indenture.
(t) "Fair Value" when applied to property means its fair value as "Fair Vaiuer
determined without deduction for any Prior Liens upon such property,
which fair value may be determined without physical inspection by use
of accounting and engineering records and other data maintained by, or
available to, the Company; the "value" of any Mortgaged Property shall
be the lesser of its Cost or Fair Value as evidenced by an Engineer's
Certificate and determined without regard to the existence of any Prior
Lien on such Mortgaged Property.
(u) "Generally Accepted Accounting Principles" means generally "Generally
accepted accounting principles in use at December I, 1986, or, at the
option of the Company, other generally accepted accounting principles Pnnc'p|es
which are in use at the time of their determination; in determining
generally accepted accounting principles, the Company may, but shall
not be required to, conform to any accounting order, rule or regulation of
any regulatory authority having jurisdiction over the electric and steam
generating, transmission and distribution operations of the Company.
12
§ 1.03 (cont.)
"Governmental
Obligations"
"Indenture"
"Independent"
"Lien of this
Indenture"
"1946 Mortgage''
"1946 Mortgage
Bonds"
"Mortgaged
Piop«rty"
- • • - - (v) "Governmental Obligations" means direct obligations of, or
obligations unconditionally guaranteed by, the United States of
America.
(w) "Indenture" means this instrument and all Supplemental
Indentures; all references to "herein", "hereof" and "hereunder" shall
respectively mean in, of or under this Indenture.
(x) "Independent" when used with respect to any specified Person
means that such Person (i) is in fact independent, (ii) does not have
any direct financial interest or any material indirect financial interest in
the Company or in any other obligor on the Bonds or in any Affiliate of
the Company or any such other obligor and (iii) is not connected with
the Company or such other obligor as an Affiliate or an officer,
employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
(y) "Lien of this Indenture" means the lien created by this
instrument (including the lien on property acquired after the date of the
execution of this Indenture) and the lien created by any subsequent
conveyance to the Trustee, whether made by the Company or any other
Person, effectively constituting any property a part of the security held
by the Trustee for the benefit of the holders of all Outstanding Bonds.
(z) "1946 Mortgage" means the Indenture of Mortgage and Deed
of Trust dated the first day of December, 1946, to Continental Illinois
National Bank and Trust Company of Chicago, as trustee, and George
G. Moore, as individual trustee (J. S. Missman, successor individual
trustee), as from time to time amended and supplemented.
(aa) "1946 Mortgage Bonds" means bonds issued and Outstanding
under the 1946 Mortgage.
(bb) "Mortgaged Property" means as of any particular time all of
the property which is an integral part of or used or to be used as an
integral part of the electric and steam generating, transmission and
distribution operations of the Company, any undivided legal interest of
the Company in any property which is jointly owned by the Company
and any other Person or Persons, and any other property (including
securities and cash held by the Trustee) which at said time is subject, or
is intended by the terms of this Indenture to be subject, to the Lien of
this Indenture, however created, including (i) all of such property which
13
1.03 (cont.)
"is acquired by the Company after December 1, 1986, and (ii) all of the
property which is described in Exhibit A and in Supplemental Inden-
tures, but Mortgaged Property shall not include Excepted Property.
(cc) "Officers' Certificate" means a certificate signed by the Chair-
man of the Board, Chief Executive Officer, President or a Vice-
President and the Controller, Treasurer or an Assistant Treasurer of the
Company.
(dd) "Opinion of Counser means a written opinion of counsel,
who may be counsel for the Company.
(ee) "Outstanding" means as of any particular time with respect to
Bonds, all Bonds which theretofore have been authenticated and deliv-
ered by the Trustee under this Indenture, except (i) Bonds theretofore
paid, retired, redeemed, discharged or canceled, or Bonds for the
purchase, payment or redemption of which money or Governmental
Obligations in the necessary amount shall have been deposited with, or
shall then be held by, the Trustee with irrevocable direction to apply
such money or the proceeds of such Governmental Obligations to such
purchase, payment or redemption, provided that, in the case of redemp-
tion, the notice required by Article IX shall have been given or provided
for to the satisfaction of the Trustee, (ii) Bonds deposited with or held
in pledge by the Trustee under this Indenture, including any Bonds so
held under any sinking, improvement, maintenance, replacement or
analogous fund, and (iii) Bonds authenticated and delivered upon
transfer of which or in exchange or substitution for and/or in lieu of
which other Bonds have been authenticated and delivered.
(ff) "Permissible Encumbrances" means as of any particular time
any of the following:
(i) the Lien of this Indenture and all liens and encumbrances
junior thereto;
(ii) liens for taxes or assessments by governmental bodies not
yet due or the payment of which is being contested in good faith by
the Company, provided that the Company shall have set aside on
its books reserves deemed by it to be adequate with respect to any
such tax or assessment so being contested;
(iii) any right of any municipal or other governmental body or
agency, by virtue of any franchise, grant, license, contract or
-Officers'
Certificate"
"Opinion of
Counsel"
"Outstanding1"
"Permissible
EncuHibrancesr
14
§ 1.03 (cent.)
statute, to occupy, purchase or designate a purchaser of, or to order
the sale of, any Mortgaged Property upon payment of reasonable
compensation therefor, or to terminate any franchise, grant, license,
contract or other right, or to regulate the property and business of
the Company;
(iv) liens and charges incidental to construction or current
operations of the Company which are not delinquent or, whether or
not delinquent, are being contested in good faith by the Company;
(v) easements, reservations or rights of way, and zoning
ordinances, regulations and restrictions, if they do not, individually
or in the aggregate, impair the utility of the affected property in the
operation of the business of the Company;
(vi) irregularities in or defects of title with respect to any
rights of way acquired by the Company for lines, structures and
appurtenances thereto, if the Company has obtained from the
apparent owner of the real estate traversed by any such right of way
a sufficient right, by the terms of the instrument granting such right
of way, to the use thereof for the purpose of such lines, structures
and appurtenances, or the Company has eminent domain power to
remove or cure such irregularities or deficiencies;
(vii) liens securing obligations neither (A) assumed by the
Company nor (B) on account of which it customarily pays interest,
directly or indirectly, existing upon real estate, or rights in or
relating to real estate acquired by the Company for rights of way for
lines, structures and appurtenances thereto;
(viii) party-wall agreements and agreements for and obliga-
tions relating to the joint or common use of property owned solely
by the Company or owned by the Company in common or jointly
with one or more parties;
(ix) liens securing indebtedness incurred by a Person, other
than the Company, which indebtedness has been neither assumed
nor guaranteed by the Company nor on which it customarily pays
interest, existing on property which the Company owns jointly or in
common with such Person or such Person and others, if there is an
effective bar against partition of such property which would pre-
clude the sale of such property by such "other Person or the holder
of such lien without the consent of the Company;
15
§ 1.03 (cent.)
(x) any attachment, judgment and other similar lien arising in
connection with court proceedings in an amount not in excess of the
greater of $10,000,000 or 5% of the principal amount of the
Outstanding Bonds at the time such attachment, judgment or lien
arises, or the execution of which has been stayed or which has been
appealed and secured, if necessary, by an appeal bond;
(xi) the burdens of any law or governmental rule, regulation,
order or permit requiring the Company to maintain certain facilities
or to perform certain acts as a condition of its occupancy or use of,
or interference with, any public or private lands or highways or any
river, stream or other waters;
(xii) any duties or obligations of the Company to any federal,
state or local or other governmental authority with respect to any
franchise, grant, license or permit which affects any Mortgaged
Property;
(xiii) liens in favor of a government or governmental entity
securing (A) payments pursuant to a statute (other than taxes), or
(B) indebtedness incurred to finance all or part.of the purchase
price or Cost of construction of the property subject to such
lien;
(xiv) possible adverse rights or interests and inconsequential
defects or irregularities in title which, in an Opinion of Counsel,
may properly be disregarded; and
(xv) the lien of the 1946 Mortgage and any other Prior Lien if
(A) at the time of the acquisition by the Company of the Mort-
gaged Property subject to such other Prior Lien, the Cost or Fair
Value, whichever is less, of such Mortgaged Property is at least
equal to 133'/3% of the principal amount of the obligations (which
are not in "default) secured by such other Prior Lien, (B) all other
liens on such Mortgaged Property, except for Permissible Encum-
brances, shall have been discharged at the time of such acquisition
and (C) such other Prior Lien shall not attach to any other
Mortgaged Property other than pursuant to an after-acquired prop-
erty clause of such other Prior Lien; but, if the Company, as
successor corporation, shall have executed a Supplemental Inden-
ture relating thereto in accordance with Article XIII, the extension
of such other Prior Lien to Mortgaged Property subsequently
§ 1.03 (cont.)
16
"Person"
"Prior Lien1
"Prior
Lien Bonds"
"Registered
Bond"
"Registered
Holder"
"Responsible
Officer"
••- - -acquired by the Company shall be permitted notwithstanding the
limitation expressed in this Section 1.03 (ff) (xiv) (C).
For the purposes of this Indenture, no mortgage or other lien on any
property of the Company shall be considered as a "mortgage," "lien,"
"charge" or "encumbrance" if cash or Governmental Obligations suffi-
cient to pay or redeem the indebtedness secured by such mortgage or
lien shall be held in trust for such purpose by the Trustee or by the
trustee, mortgagee or other holder of such mortgage or lien; the
sufficiency of such cash or Governmental Obligations shall be evidenced
to the Trustee by an Accountant's Certificate.
(gg) "Person" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
(hh) "Prior Lien " means the 1946 Mortgage and any other mort-
gage, lien, charge, encumbrance, security interest on or in, or pledge of,
any Mortgaged Property existing both at and immediately prior to the
time of the acquisition by the Company of such Mortgaged Property, or
created as a purchase money mortgage on such Mortgaged Property at
the time of its acquisition by the Company, in each case ranking prior to
or on a parity with the Lien of this Indenture.
(ii) "Prior Lien Bonds" means 1946 Mortgage Bonds and any
other indebtedness (including the evidences thereof), if any, secured by
a Prior Lien.
OJ) "Registered Bond" means any Bond registered as to both
principal and interest or as to principal only in the bond register required
pursuant to Section 2.06.
(kk) "Registered Holder" means the Person or Persons in whose
name or names the particular Registered Bond shall be registered, or the
particular Coupon Bond shall be registered as to principal, on the books
of the Company kept for that purpose in accordance with the terms of
this Indenture.
(11) "Responsible Officer" when used with respect to the Trustee
means any vice president or any other officer of the Trustee customarily
performing functions similar to those performed by a vice president and
also means, with respect to a particular corporate matter, any other
17
§§ 1.03 (cont.), 2.01
officer of the Trustee to .whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
(mm) "Retired" means as of any particular time Bonds and Prior
Lien Bonds theretofore but after December 1, 1986, paid, retired,
redeemed, discharged or canceled, or for the purchase, payment or
redemption of which money or Governmental Obligations in the neces-
sary amount shall have been deposited with, or shall then be held by, the
Trustee with respect to Bonds, or the trustee or mortgagee under the
Prior Lien which secures such Prior Lien Bonds, in each case with
irrevocable direction to apply such money or the proceeds of such
Governmental Obligations to such purchase, payment or redemption.
(nn) "Supplemental Indenture" means any indenture hereafter
duly authorized and approved by the Board and entered into between the
Company and the Trustee in accordance with this Indenture.
(oo) "Trustee" means the Person named as the Trustee in the first
paragraph of this Indenture and any successor thereto pursuant to
Section 14.14.
(pp) "Unbonded" as applied to Bonds, Prior Lien Bonds or Bond-
able Property means that such Bonds, Prior Lien Bonds or Bondable
Property are not Bonded.
ARTICLE II
FORMS, EXECUTION, REGISTRATION AND EXCHANGE OF BONDS
Section 2.01. At the option of the Company, Bonds may be issued
under this Indenture in one or more series and in an unlimited amount,
the Bonds of each series to mature on such date or dates and bear
interest, if any, at such rate or rates (which may be based on a formula
or otherwise change from time to time prior to maturity of any such
Bonds) as shall be set forth in a Supplemental Indenture authorized by
the Board prior to the authentication of such Bonds. The form of each
series of Bonds and of the coupons to be attached to the Coupon Bonds
of such series shall be set forth in a Supplemental Indenture. The Bonds
and coupons of any one or more series may be expressed in one or more
foreign languages, if also expressed in the English language. The English
text shall govern the construction thereof and both or all texts shall
constitute only a single obligation. The English text of the Coupon
'Retired'
"Supplemental
Indenture"
"Trustee'
"Unbonded'
Series and
form
of Bonds
18
2.01 (cont.), 2.02, 2.03
Kinds and
denominations of
Bonds
Dales of and
interest on Bonds
-Bonds,- coupons, Registered Bonds and the Trustee's authentication
certificate shall be in the form set forth in a Supplemental Indenture;
provided, however, that the form of each series of Bonds shall specify
the descriptive title of such series of Bonds (which title shall contain the
words "Mortgage Bond"), the designation of such series, the date of the
Coupon Bonds of such series, the rate or rates of interest, if any, or the
method by which such rate or rates are determined, to be borne by the
Bonds of such series, the coin or currency in which payable (which need
not be coin or currency of the United States of America), the date or
dates of maturity, the dates for the payment of interest, and a place or
places (which need not be in the United States of America) and the
means (which may include mail) for the payment of principal of,
premium, if any, and interest on such Bonds. Any series of Bonds to the
extent issued in registered form may provide for record dates for the
payment of interest. Any series of Bonds may also have such omissions
or modifications or contain such other provisions not prohibited by this
Indenture as may be set forth in a Supplemental Indenture.
Section 2.02. Any series of Bonds may be executed, authenticated
and delivered originally as Coupon Bonds and/or as Registered Bonds,
of such denomination or denominations as may be specified in a
Supplemental Indenture or a Board resolution.
Section 2.03. Unless otherwise specifically provided in a Supple-
mental Indenture with respect to a series of Bonds, each Registered
Bond shall be dated as of the date of its authentication; provided,
however, that if any Registered Bond shall be authenticated and deliv-
ered upon a transfer of, or in exchange for or in lieu of, any Bond or
Bonds upon which interest is in Default, it shall be dated so that such
Bond shall bear interest from the last preceding date to which interest
shall have been paid on the Bond or Bonds in respect of which such
Registered Bond shall have been delivered, unless otherwise specifically
provided with respect to a series of Bonds. Unless other provisions
(including, but not limited to, provisions establishing record dates for
the payment of interest) are specifically provided in a Supplemental
Indenture with respect to a series of Bonds, (a) the Registered Bonds of
such series shall bear interest, if any, from the beginning of the interest
period for such series, during which such Bonds were authenticated, and
(b) the first interest period for each series of Bonds shall begin on the
date of their issuance. The Coupon Bonds of each series shall be dated
19
§§ 2.03 (cont.), 104, 2.05
as'of sucrrdate as may be set forth in a Supplemental Indenture and
designated in the form of Bond established for such series.
Section 2.04. Any Bond may have imprinted thereon or included
therein any legend or legends required in order to comply with any law on Bon s
or with any rules or regulations thereunder, the rules or regulations of
any stock exchange, any contract to which the Company is a party
concerning such Bond, or to conform to usage, and the Company may at
any time amend the form of any legend to be used on Bonds then
Outstanding so as to comply with any such law, rule or regulation,
contract, or so as to conform to usage.
Section 2.05. Unless otherwise specifically provided with respect to Exchange
a series of Bonds, in all cases in which the privilege of exchanging Bonds of Boflds
exists and is exercised, the Bonds to be exchanged shall be surrendered
at such place or places as shall be set forth in a Supplemental Indenture
or designated by the Company for that purpose, with all unmatured
coupons appertaining thereto (in the case of Coupon Bonds) and the
Trustee shall authenticate and the Company shall deliver in exchange
therefor the Bond or Bonds which the Bondholder making the exchange
shall be entitled to receive, having attached thereto, in the case of
Coupon Bonds, all unmatured coupons appertaining thereto. In case at
the time of any such exchange, interest on the Bonds of such series is in
default, all Coupon Bonds of such series surrendered and delivered in
exchange for other Bonds shall have attached thereto all matured
coupons in default unless such coupons have theretofore been previously
surrendered. All Bonds so surrendered and delivered for exchange shall,
unless in bearer form, be accompanied by a written instrument or
instruments of transfer, if required by the Company, duly executed by
the registered holder of such Bond or the duly authorized attorney of
such holder, at the office or agency of the Company designated by it. All
Bonds so surrendered and delivered for exchange and the coupons
appertaining thereto shall be canceled by the Trustee. Upon any transfer
of Bonds permitted by Section 2.06, and upon any exchange of Bonds,
the Company may make a charge therefor sufficient to reimburse it for
any tax or taxes or other governmental charge and in addition may
charge a sum not exceeding a sum, if any, provided as a term of such
series of Bonds for each Bond authenticated and delivered upon any
such transfer or exchange, which sum shall be paid by the party
requesting such transfer or exchange as a condition precedent to the
20
§§2.05 (cont.), 2.06, 2.07
- . . . . - . - . . . .-exercise of the privilege of making such transfer or exchange. The
Company shall not be required to make transfers or exchanges of Bonds
of any series for a period of 15 days next preceding any interest payment
date of said series (unless such series has a record date for the payment
of interest), or next preceding any designation of Bonds of said series to
be redeemed. The Company shall not be required to make any transfer
or exchange of any Bond designated for redemption, except for any part
of such Bond which is not designated for redemption.
Transfer Section 2.06. The Company shall keep, at such place or places as
of Bonds
shall be designated by the Company for the purpose, a Bond register for
the registration and transfer of Bonds, which, at all reasonable times,
shall be open for inspection by the Trustee; and upon presentation for
such purpose at any such place or places, the Company will register or
cause to be registered therein, and permit to be transferred thereon,
under such reasonable regulations as it may prescribe, any Bonds
entitled to registration or transfer at such office. Upon the registration of
any Coupon Bond as to principal, the fact of such registration shall be
noted on such Bond. Upon the transfer of any Registered Bond, the
Trustee shall authenticate and the Company shall issue in the name of
the transferee or transferees a new Registered Bond or new Registered
Bonds of the same series for a like principal amount. All Registered
Bonds so surrendered for transfer shall be canceled by the Trustee.
Execution Section 2.07. All Bonds authenticated and delivered under this
ofBonds
Indenture shall, from time to time, be executed on behalf of the
Company by its Chairman of the Board, Chief Executive Officer,
President or a Vice-President, whose signature may be facsimile, and its
corporate seal shall be thereon impressed or imprinted and attested by
its Secretary or an Assistant Secretary, whose signature may be facsim-
ile. The coupons to be attached to Coupon Bonds shall bear the
facsimile signature of the Treasurer or an Assistant Treasurer of the
Company. In case any officer of the Company who has executed any
Bonds or attested the seal thereon, or whose facsimile signature appears
on any coupon, shall cease to be such officer before the Bonds so
executed and/or sealed shall have been actually authenticated and
delivered by the Trustee or issued by the Company, such Bonds
nevertheless may be authenticated, delivered and issued with the same
force and effect as though the person or persons who executed such
Bonds or attested the seal thereon or whose facsimile signature appears
21
§§ 2.07 (cont), 108, 2.09
"on any coupon had not ceased to be such officer or officers of the
Company.
Section 2.08. There may be authenticated and delivered and issued Temporary
from time to time in lieu of (or in exchange for) any definitive Bond or n s
Bonds issued or issuable under this Indenture one or more temporary
Bonds substantially of the tenor of such definitive Bonds, with or without
one or more coupons, and with or without the privilege of registration as
to principal only, or as to both principal and interest, and such temporary
Bond or Bonds may be in such denomination or denominations as may
be specified in a Supplemental Indenture or a Board resolution. Until a
definitive Bond or Bonds are delivered in exchange therefor, the holder
of each such temporary Bond or Bonds shall be entitled to the Lien and
benefit of this Indenture. Upon the exchange by the Company of
definitive Coupon Bonds or definitive Registered Bonds for temporary
Bonds (which exchange the Company shall make on request of, and
without charge to, the holder of temporary Bonds, when definitive Bonds
are ready for delivery) such temporary Bond or Bonds and any unma-
tured coupons appertaining thereto shall be canceled by the Trustee.
When and as interest is paid upon any unregistered temporary Bond
without coupons, the fact of such payment shall be noted thereon and
interest due on any temporary Bond which is represented by a coupon
shall be paid only upon presentation and surrender of such coupon for
cancellation. Unregistered temporary Bonds without coupons of any
series shall bear interest from the beginning of the interest period for
Bonds of that series during which such unregistered temporary Bonds
without coupons were authenticated. The holder of one or more tempo-
rary Bonds may surrender and exchange them for cancellation in bearer
form with all unmatured coupons, if any, appertaining thereto, or, if
registered, accompanied by a written instrument or instruments of
transfer, if required by the Company, duly executed by the registered
holder or by the duly authorized attorney of such holder, at the office or
agency of the Company designated by it, and shall be entitled to receive
a temporary Bond or Bonds of the same series of like aggregate principal
amount of such other denominations as may be specified in a Supple-
mental Indenture or a Board resolution.
Section 2.09. Upon receipt by the Company and the Trustee of Replacement
evidence satisfactory to them of the theft, loss, destruction or mutilation destroyed o?**
of any Outstanding Bond or the coupons appertaining thereto, and of muti!ated Bonds
§§2.09 (conl.), 2.10, 3.01, 3.02, 3.03 22
Trustee's
certificate
on Bonds
..indemnity.satisfactory to them, and upon payment, if the Company or
the Trustee shall require it, of a reasonable charge and upon reimburse-
ment to the Company and the Trustee of all reasonable expense incident
thereto, and upon surrender and cancellation of such Bond, if mutilated,
and the coupons appertaining thereto, if any, the Company may execute,
and the Trustee shall thereupon authenticate and deliver, a new Bond of
like tenor and of the same series with all unpaid coupons, if any,
appertaining thereto in lieu of such stolen, lost, destroyed or mutilated
Bond and coupons, if any, or if any such Bond or any coupon shall have
matured or be about to mature, instead of issuing a substituted Bond or
coupon the Company may pay the same without surrender thereof. Any
indemnity bond shall name as obligees the Company, the Trustee, and if
requested by the Company, any paying agent.
Section 2.10. No Bond shall be secured by this Indenture unless
there shall be endorsed thereon the certificate of the Trustee that it is
one of the Bonds (or temporary Bonds) of the series therein designated,
herein described or provided for, and such certificate on any such Bond
shall be conclusive evidence that such Bond has been duly authenticated
and delivered by the Trustee and when delivered by the Company will
be secured by this Indenture.
ARTICLE III
ISSUANCE OF BONDS BASED ON BONDABLE PROPERTY
Section 3.01. The Trustee shall, from time to time, upon the
written order or orders of the Company signed by its Chairman of the
Board, Chief Executive Officer, President or a Vice-President and its
Secretary, an Assistant Secretary, its Treasurer or an Assistant Trea-
surer, authenticate and deliver Bonds of one or more series, or any
portion of a series, upon the basis of Bondable Property, but only in
accordance with and subject to the conditions, provisions and limitations
set forth in this Article III.
NO Bonds issuabie on Section 3.02. No Bonds shall be authenticated and delivered at
Bondabie Property any time under this Article III upon the basis of Bonded Bondable
Property.
Bonds issuabie Section 3.03. Bonds of any one or more series may be authenti-
p«nS5age of cated and delivered under this Article III in a principal amount not
Bondable Property
Bonds issuabie
on basis of
Bondable Property
23 §§3.03 <cont,),3.04
exceeding 75% of the amount of Unbonded Bondable Property at the
time of such authentication and delivery.
Section 3.04. No Bonds shall be authenticated or delivered under Requirements
this Article III by the Trustee upon the basis of Bondable Property, until for issuance
the Trustee shall have received the following:
(a) a Board resolution (i) requesting the Trustee to authenti- Board
cate and deliver Bonds, (ii) authorizing the Supplemental Inden- resolutlon
ture pursuant to which such Bonds are to be issued, (in) specifying
the principal amount of Bonds to be authenticated and delivered,
the series thereof and any other matters with respect thereto
required by this Indenture, and (iv) setting forth instructions for
the delivery of such Bonds;
(b) an Officers' Certificate stating that to the knowledge of officers'
the signers of such Officers' Certificate none of the events which Certlficate
constitute or with a lapse of time would constitute a Default has
occurred and is continuing;
(c) an Engineer's Certificate, dated the date of such applica- Engineer's
, • . , • _ Certificatelion, stating:
(i) the amount, as of a date not more than 90 days prior
to the date of such application, of Bondable Property made a
basis for the application;
(ii) that all such Bondable Property is Bondable Property
as defined in Section L03(h)\
(iii) that all such Bondable Property is desirable for use
or is used in the proper conduct of the business of the
Company;
(iv) that such amount of Bondable Property, to the
extent of the lesser of Cost or Fair Value, is not then Bonded;
(v) except as to Bondable Property acquired, made or
constructed wholly through the delivery of securities, that the
amount of cash forming all or part of the Cost thereof was
equal to or more than an amount to be stated in such
Engineer's Certificate;
24
§3.04 (cont.)
- - - • - • - - - - - - - (vi) a brief description, with respect to any Bondable
Property acquired, made or constructed in whole or in part
through the delivery of securities, of the securities so delivered
and stating the date of such delivery;
(vii) that the Cost of such Bondable Property is a speci-
fied amount and, except as to Bondable Property for which a
statement is to be made in an Independent Engineer's Certifi-
cate as provided in Section 3.04 (d), that the Fair Value of
such Bondable Property as of a date not more than 90 days
prior to the date of such application is a specified amount;
(viii) the amount required to be deducted in respect of
Bondable Property under Section 1,03 (h) (in) (A) and the
amount elected to be added under Section L03(h) (Hi) (B)\
(ix) what part, if any, of such Bondable Property
includes property which within six months prior to the date of
acquisition thereof by the Company has been used or operated
by others than the Company in a business similar to that in
which it has been or is to be used or operated by the Company
and showing whether or not the Fair Value thereof as of a date
not more than 90 days prior to the date of such application is
less than $25,000 and whether or not such Fair Value is less
than 1% of the aggregate principal amount of the Bonds
Outstanding at the date of such application; and
(x) that the easements, restrictions, exceptions, reserva-
tions or rights, if any, of the character constituting Permissible
Encumbrances, to which Bondable Property is subject, and the
defects, irregularities and deficiencies in titles of the character
so permitted of any property or rights of way included in such
Bondable Property do not materially impair the use of such
property or rights of way for the purposes for which the same
are held by the Company;
independent (d) in case any Bondable Property is shown by the Engineer's
Certificate provided for in Section 3.04 fc) to include property
which within six months prior to the date of acquisition thereof by
the Company has been used or operated by others than the
Company in a business similar to that in which it has been or is to
be used or operated by the Company and such certificate does not
show the Fair Value thereof, as of a date not more than 90 days
prior to the date of such application, to be less than $25,000 or less
25
§ 3.04 (cont.)
Appraiser's
Certificate
than l%-of,the_aggregate principal amount of the Bonds Outstand-
ing at the date of such application, an Independent Engineer's
Certificate stating as to such Bondable Property and (at the option
of the Company) as to any other Bondable Property included in the
Engineer's Certificate provided for in Section 3.04 (c), that the then
aggregate Fair Value thereof, as of a date not more than 90 days
prior to the date of such application, in the opinion of the signer of
such Engineer's Certificate is a specified amount, and the Fair
Value in the opinion of such signer of any Bondable Property so
used or operated which has been subjected to the Lien of this
Indenture since the commencement of the calendar year which
includes the date of such application, as a basis for the authentica-
tion and delivery of Bonds, and as to which an Independent
Engineer's Certificate has not previously been furnished to the
Trustee;
(e) in case any Bondable Property is shown by the Engineer's
Certificate provided for in Section 3.04 (c) to have been acquired,
made or constructed in whole or in part through the delivery of
securities, an Appraiser's Certificate stating the opinion of the
signer of such Appraiser's Certificate of the fair market value in
cash of such securities at the time of delivery thereof in payment for
or for the acquisition of such Bondable Property (which Appraiser
shall be Independent in the event such fair market value of such
securities and of all other securities made a basis for the authentica-
tion and delivery of Bonds, the withdrawal of cash or the release of
Mortgaged Property or securities under this Indenture since the
commencement of the calendar year which includes the date of
such application, as set forth in the Appraiser's Certificate required
pursuant to this Section 3.04(e), and any similar Appraiser's
Certificates pursuant to this Section 3.04 (e) or any other Section of
this Indenture, is 10% or more of the aggregate principal amount of
Bonds Outstanding at the date of such application, unless such fair
market value of such securities, as set forth in such Appraiser's
Certificate, is, in each case, less than $25,000 or less than 1% of the
aggregate principal amount of Bonds Outstanding at the date of
such application);
(f) an Opinion of Counsel stating the opinion of such opinion or
r\ - CounselCounsel:
26
§3.04 (cont.)
..... . . . - , , . , ...,.(0. to-.the effect that (except as to paving, grading and
other improvements to, under or upon public highways,
bridges, parks or other public property of analogous charac-
ter) this Indenture is, or upon the delivery of, and/or the filing
and/or recording in the proper places and manner of, the
instruments of conveyance, assignment or transfer, if any,
specified in said Opinion of Counsel, will be, a lien on all the
Bondable Property made the basis of such application, subject
to no lien thereon prior or equal to the Lien of this Indenture,
except Permissible Encumbrances, and that the Company has
the right to remove any such Bondable Property which is
located on any leasehold or which is on property as to which
the Company has an easement, prior to or upon the termina-
tion of such leasehold or easement, without compensation or
other remuneration and free of any lien prior or equal to the
Lien of this Indenture, except Permissible Encumbrances;
(ii) to the effect that the Company has corporate author-
ity to operate the Bondable Property in respect to which such
application is made; and
(iii) as to the general nature and extent of any Prior
Liens existing upon any of such Bondable Property, and the
principal amount of the then outstanding Prior Lien Bonds
secured thereby, if any;
Further (g) an Opinion of Counsel stating the opinion of such Coun-
colTnsd ° sel to the effect that:
(i) such issue of the Bonds has been duly authorized by
the Company; and
(ii) such issue of the Bonds has been duly authorized by
any and all governmental authorities the consent of which is
requisite to the legal issue of such Bonds, specifying any
official orders or certificates, or other documents, by which
such consent is or may be evidenced, or that no consent of any
governmental authorities is requisite;
instruments (h) copies of the instruments of conveyance, assignment and
etc. onveyance' transfer, if any, specified in the Opinion of Counsel provided for in
Section 3.04(f)\
27
§§3.04 (cont.), 3-05, 4.01
" " ( i ) copies of ' the certificates, or other documents, if any,
specified in the Opinion of Counsel provided for in Section 3.04 (g);
and
G) if, in order to render the Opinion of Counsel provided for
in Section 3.04ff) or Section 3.04fg), counsel shall deem it neces-
sary that additional facts or matters be stated in the Engineer's
Certificate provided for in Section 3.04(c), then such Engineer's
Certificate may state all such additional facts or matters as such
counsel may request.
Section 3.05. The Cost or Fair Value of any Bondable Property and
the fair market value in cash of any securities delivered in payment
therefor or for the acquisition thereof and the amounts of any deductions
and any additions made in respect of Bondable Property pursuant to
Section 1.03(hj (ii) or Section 1.03 (h) (Hi) shall be determined for the
purposes of this Article III by the certificates provided for in Section
3.04; in the case of Bondable Property subject to a Prior Lien, the Fair
Value of such Bondable Property shall be determined as if such
Bondable Property were free of such Prior Lien.
ARTICLE IV
ISSUANCE OF BONDS BASED ON RETIRED
BONDS PREVIOUSLY OUTSTANDING
Section 4.01. The Trustee shall, from time to time, upon the written
order or orders of the Company signed by its Chairman of the Board,
Chief Executive Officer, President or a Vice-President and its Secretary,
an Assistant Secretary, its Treasurer or an Assistant Treasurer, authenti-
cate and deliver Bonds of one or more series, or any portion of a series,
in a principal amount equal to and on the basis of the principal amount
of any Retired Bonds, but only after the Trustee shall have received the
following:
(a) the Board resolution provided for in Section 3.04fa);
(b) the Officers' Certificate provided for in Section 3.04(b);
(c) an Officers' Certificate stating that Bonds theretofore
authenticated and delivered under this Indenture of a specified
principal amount (not less than the principal amount of Bonds for
Further
Certificates
Additional
facts required
by counsel
Determination
of Cost or
Fair Value
Requirements
for issuance
Board
Resolution
Officers'
Certificate
Further
Officers*
Certificate
Opinion of
Counsel
Further
Certificates, etc.
Coupon bonds
delivered must
have attached
coupons
§§4.01 (cont.), 4.02, 4.03, 5.01
28
•which such request for authentication and delivery is made under
this Section 4.01), have been Retired or concurrently with the
authentication and delivery of the Bonds requested will be Retired
or surrendered to the Trustee for cancellation (otherwise than upon
exchanges or transfers of Bonds) or that cash or Governmental
Obligations in the necessary amount for the purchase, payment,
retirement or redemption thereof is then held by or will be depos-
ited with the Trustee concurrently with the authentication and
delivery of the Bonds requested, with irrevocable direction to apply
such cash or the proceeds of such Governmental Obligations to
such purchase, payment, retirement or redemption (provided that,
in the case of redemption, the notice required by Article IX shall
have been given or provided for to the satisfaction of the Trustee),
prior to or concurrently with the authentication and delivery of the
Bonds so requested, and further stating that no part of such
principal amount of Bonds has theretofore been Bonded.
and
(d) the Opinion of Counsel provided for in Section 3.04 (g);
(e) copies of the certificates, or other documents, if any,
specified in the Opinion of Counsel provided for in Section 4.01 (d).
Section 4.02. Any and all Coupon Bonds delivered to the Trustee
pursuant to this Article IV shall have attached thereto all unmatured
coupons appertaining thereto.
NO bonds issuabie Section 4.03. No Bonds shall be authenticated and delivered at any
time under this Article /Kupon the basis of Bonded Bonds.
Requirements for
issuance
ARTICLE V
ISSUANCE OF BONDS BASED ON DEPOSIT OF CASH WITH TRUSTEE
Section 5.0L The Trustee shall, from time to time, upon the
written order or orders of the Company signed by its Chairman of the
Board, Chief Executive Officer, President or a Vice-President and its
Secretary, an Assistant Secretary, its Treasurer or an Assistant Trea-
surer, authenticate and deliver Bonds of one or more series, or any
portion of a series, upon deposit with the Trustee by the Company of
cash equal to the aggregate principal amount of the Bonds so requested
29
§§ 5.0) (coot.), 5.02, 6,01
to be authenticated and delivered but only after the Trustee shall have
received;
(a) the Board resolution provided for in Section 3. 04 (a); Board
resolution
(b) the Officers' Certificate provided for in Section 3.04 (b); officers'
Certificate
(c) the Opinion of Counsel provided for in Section 3.Q4(g); opinion of
and Counsel
(d) copies of the certificates, or other documents, if any, Further
specified in the Opinion of Counsel provided for in Section 5.01 (c) . Certificates,
Section 5.02. All cash deposited with the Trustee under Section witMnm*] of
5.01 shall be held by the Trustee as part of the Mortgaged Property, and Sberdeposited
may be withdrawn from time to time by the Company in accordance s«tion s-01
with Article XL
ARTICLE VI
ISSUANCE OF BONDS BASED
ON PRIOR LIEN BONDS
Section 6.01. Subject to Section 6.02, the Trustee shall, from time
to time, upon the written order or orders of the Company signed by its
Chairman of the Board, Chief Executive Officer, President or a Vice-
president and its Secretary, an Assistant Secretary, its Treasurer or an
Assistant Treasurer, authenticate and deliver Bonds hereunder in one or
more series, or any portion of a series, equal to the principal amount of
Prior Lien Bonds purchased or acquired by the Company and deposited
with the Trustee or Retired after December 1, 1986, but only after the
Trustee shall have received the following:
(a) the Board resolution provided for in Section 3.04(a);
Requirements
for issuance
Board
resolution
(b) the Officers' Certificate provided for in Section 3.04 (b)\ officers'
Certificate
(c) the Opinion of Counsel provided for in Section 3.04 (g); opinion
Of
Counsel
(d) copies of the certificates or other documents, if any, Further
specified in the Opinion of Counsel provided for in Section 6.01 (c); Certificates'etc-
Further
Officers'
Certificate
No Bonds issuable
on basis of
Bonded Prior
Lien Bonds
Payment
of principal
and interest
Possession,
maintenance
of Lien
and right
to mortgage
30
§§6.0J (cont.), 6.02, 7.01,7.02
- - • - - ( e ) - a n Officers' Certificate stating that Prior Lien Bonds of a
specified amount (not less than the principal amount of Bonds for which
such request for authentication and delivery is made under this Section
6.01) have been Retired or, concurrently with the authentication and
delivery of the Bonds requested, will be Retired or purchased or
acquired by the Company and deposited with the Trustee, or paid,
retired, redeemed, canceled or otherwise discharged, or that cash or
Governmental Obligations in the necessary amount for the purchase,
payment, retirement or redemption thereof are then held by or will be
deposited with the trustee or mortgagee under the Prior Lien securing
such Prior Lien Bonds concurrently with the authentication and delivery
of the Bonds requested, and further stating that the principal amount of
such Prior Lien Bonds are not Bonded, accompanied by such Prior Lien
Bonds purchased or acquired by the Company, or a certificate of the
trustee or mortgagee under such Prior Lien stating that such Prior Lien
Bonds have not been used as a basis for the issuance of Prior Lien Bonds
pursuant to such Prior Lien and that such Prior Lien Bonds have been
Retired or purchased, paid, retired, redeemed, canceled or otherwise
discharged, or that provision for such purchase, payment, retirement,
redemption, cancellation or other discharge satisfactory to such trustee
or mortgagee has been made, including the deposit of any necessary
money or Governmental Obligations with such trustee or mortgagee.
Section 6.02. No Bonds shall be authenticated and delivered at any
time under this Article VI on the basis of Bonded Prior Lien Bonds.
ARTICLE VII
COVENANTS OF THE COMPANY
Section 7.01. The Company will duly and punctually pay the
principal of, premium, if any, and interest on all Outstanding Bonds at
the times and places and in the manner provided for in the Bonds, any
coupons appertaining thereto and this Indenture.
Section 7.02. On the date of the execution of this Indenture the
Company is lawfully seized and possessed of all the Mortgaged Property
in existence on such date, free and clear of all liens other than
Permissible Encumbrances; the Company will maintain and preserve
the Lien of this Indenture so long as any Bond is Outstanding subject to
its right to create Prior Liens which are Permissible Encumbrances; and
31
§§ 7.02 (conL), 7.03, 7.04, 7.05
theCompany has'good right and lawful authority to mortgage the
Mortgaged Property, as provided in and by this Indenture.
Section 7.03. The Company will, subject to Article XIII, at all
times maintain its corporate existence and right to carry on business, and
duly procure all renewals and extensions thereof, if and when any shall
be necessary.
Section 7.04. Whenever necessary to avoid or fill a vacancy in the
office of Trustee, the Company will in the manner provided in Section
14.14 appoint a Trustee so that there shall be at all times a Trustee
which shall at all times be a bank or trust company having its principal
office and place of business in the United States of America and a
corporation or association organized and doing business under the laws
of the United States or of any State or the District of Columbia, with a
combined capital and surplus of at least Twenty Million Dollars
($20,000,000), and authorized under such laws to exercise corporate
trust powers and be subject to supervision or examination by Federal,
State or District of Columbia authority.
Section 7.05. The Company will cause this Indenture and all
Supplemental Indentures or notices in respect thereof to be promptly
recorded and filed and rerecorded and refiled in such manner and In
such places, as may be required by law in order fully to preserve and
protect the security of the Bondholders and all rights of the Trustee, and
will deliver to the Trustee:
(a) promptly after the execution and delivery of this Inden-
ture and of each Supplemental Indenture, an Opinion of Counsel
either stating that in the opinion of such counsel this Indenture or
such Supplemental Indenture or notice in respect thereof has been
properly recorded and filed, so as to make effective the Lien of this
Indenture intended to be created hereby, and reciting the details of
such action, or stating that in the opinion of such counsel no such
action is necessary to make the Lien of this Indenture effective. It
shall be a compliance with this Section 7.05(a) if (i) such Opinion
of Counsel states that this Indenture or such Supplemental Inden-
ture or notice has been received for record or filing in each
jurisdiction in which it is required to be recorded or filed and that,
in the opinion of such counsel (if such is the case), such receipt for
recording or filing makes effective the Lien of this Indenture
Corporate
existence
Appointment
of Trustee
Reconiation
of Indenture
Opinion
of Counsel
32
§§7.05 (cent.),
- ...... intended to be created thereby, and (ii) such Opinion of Counsel is
delivered to the Trustee within such time, following the date of the
execution and delivery of this Indenture or such Supplemental
Indenture, as shall be practicable having due regard to the number
and distance of the jurisdictions in which this Indenture or such
Supplemental Indenture is required to be recorded or filed; and
Annual (b) on or before December 1 of each year, beginning 1987, an
requiems Opinion of Counsel either stating that in the opinion of such
counsel such action has been taken, since the date of the most
recent Opinion of Counsel furnished pursuant to this Section
7.Q5(b) or the first Opinion of Counsel furnished pursuant to
Section 7.05 (a), with respect to the recording, filing, rerecording,
and refiling of this Indenture and each notice with respect thereto
and of each Supplemental Indenture, as is necessary to maintain
the Lien of this Indenture, and reciting the details of such action, or
stating that in the opinion of such counsel no such action is
necessary to maintain such lien.
paying Agents Section 7.06. (a) If the Company shall appoint one or more paying
agents other than the Trustee, the Company will cause each such paying
agent to (i) execute and deliver to the Trustee an instrument in which
such paying agent shall agree with the Trustee, subject to this Section
7. 06 (a) (i), that such paying agent shall hold in trust for the benefit of
the Bondholders or the Trustee all sums held by such paying agent for
the payment of the principal of, premium, if any, and interest on the
Bonds; and (ii) that such paying agent shall give to the Trustee notice of
any default by the Company in the making of any deposit with it for the
payment of the principal of, premium, if any, or interest on the Bonds,
and of any default by the Company in the making of any such payment;
such paying agent shall not be obligated to segregate such sums from
other funds of such paying agent except to the extent required by law or
unless otherwise directed by the Company.
(b) If the Company acts as its own paying agent, the Com-
pany will, on or before each installment of principal of, premium, if
any, or interest on the Bonds is required to be paid, set aside and
segregate and hold in trust for the benefit of the Bondholders or the
Trustee a sum sufficient to pay such principal, premium or interest
33 §§7.06 (cont.), 7.07,7.08,7.09
on the Bonds and will notify the Trustee of such action, or of any
failure to take such action.
(c) Anything in this Section 7.06 to the contrary notwith-
standing, the Company may at any time, for the purpose of
obtaining a release or satisfaction of this Indenture or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust
by the Company or any paying agent as required by this Section
7.06, such sums to be held by the Trustee upon the trusts contained
in this Indenture.
(d) Anything in this Section 7.06 to the contrary notwith-
standing, the holding of sums in trust as provided in this Section
7.06 is subject to Section 18.02.
Section 7.07. The Company will pay all taxes and assessments and
other governmental charges lawfully levied or assessed upon the Mort-
gaged Property, any income from the Mortgaged Property, or the
interest of the Trustee in the Mortgaged Property, before the same shall
result in the attachment of a lien on the Mortgaged Property and will use
its best efforts duly to observe and conform to all valid requirements of
any governmental authority relative to any Mortgaged Property, and all
covenants, terms and conditions upon or under which any Mortgaged
Property is held; provided, however, that nothing in this Section 7.07
shall require the Company to use its best efforts to observe or conform to
any requirement of any governmental authority or to cause to .be paid or
discharged, or to make provisions for, any such lien or charge, or to pay
any such tax, assessment or governmental charge so long as the validity
thereof shall be contested in good faith and by appropriate legal
proceedings.
Section 7.08. The Company will execute and deliver such Supple-
mental Indenture or Indentures and such further instruments and do
such further acts as may be necessary or proper to carry out more effec-
tually the purposes of this Indenture and to make subject to the Lien of
this Indenture any property (other than Excepted Property) hereafter
acquired and intended or required to be so subject.
Section 7.09. The Company will keep proper books of record and
account, in which full and correct entries shall be made of all dealings or
transactions of or in relation to the Bonds and the business, properties
and affairs of the Company in accordance with Generally Accepted
Company may
cause sums
held by paying
agent to be
paid to Trustee
This Section
subject to
Section 18.02
Payment
of taxes
Instruments
of further
assurance
Books of
record
and account
34
7.09 (conl.), 7.10, 7.11
Maintenance
of Mortgaged
Property
Insurance
Proceeds
Paid to
Company
Accounting-Principles.-The Company will furnish to the Trustee any
and all information as the Trustee may reasonably request with respect
to the performance by the Company of its covenants in this Indenture.
Section 7.10. The Company will cause the Mortgaged Property to
be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improve-
ments thereof, all as in the judgment of the Company may be necessary
so that the business carried on by the Company with the Mortgaged
Property may be properly conducted at all times; provided, however, that
nothing in this Section 7.10 shall prevent the Company from discontinu-
ing the operation and maintenance of any Mortgaged Property if, in the
judgment of the Company, such discontinuance is desirable in the
conduct of its business, and, in the judgment of the Company, is not in
any material respect adverse to the Bondholders.
Section 7.11, (a) The Company will keep or cause to be kept all
the Mortgaged Property insured with reasonable deductibles and reten-
tions against loss by fire to the extent that property of similar character is
usually so insured by companies similarly situated and operating like
properties, by insurance companies which the Company believes to be
reputable; or the Company will, in lieu of or supplementing such
insurance in whole or in part, adopt some other method or plan of
protection or, alone or in conjunction with any other Person or Persons,
create an insurance fund to protect the Mortgaged Property against loss
by fire. -J"
(b) Proceeds of any insurance or alternative method or plan
of protection of the Company against losses of the kind specified in
Section 7.11 (a) shall, at the option of the Company, be paid to the
Company, and the Company shall be under no obligation to use
such proceeds to rebuild or repair damaged or destroyed Mortgaged
Property to the extent that the value of all of the Mortgaged
Property after the damage or destruction of Mortgaged Property
with respect to which such proceeds are payable equals or exceeds
an amount equal to 133'/3% of the sum of the principal amount of
Outstanding Bonds and Prior Lien Bonds outstanding, upon receipt
by the Trustee of:
35
§ 7.11 (cont.)
- - - • • • • - " . - (i) -an Engineer's Certificate stating that the Fair Value
of the Mortgaged Property remaining after such damage or
destruction of Mortgaged Property is a specified amount; and
(ii) an Accountant's Certificate stating that the value of
all of the Mortgaged Property, as certified in the Engineer's
Certificate provided for in Section 7.11(b){i) equals or
exceeds an amount equal to 133'/3% of the sum of the principal
amount of Outstanding Bonds and Prior Lien Bonds outstand-
ing.
(c) If the value of all of the Mortgaged Property after such
damage or destruction of Mortgaged Property does not equal or
exceed an amount equal to 133!/3% of the sum of the principal
amount of Outstanding Bonds and Prior Lien Bonds outstanding,
(i) the proceeds of such insurance paid with respect to any such
loss shall be made payable to the Trustee, as the interest of the
Trustee may appear, or to the trustee or other mortgagee under any
Prior Lien upon the Mortgaged Property so destroyed or damaged,
if the terms of such Prior Lien require such losses so to be made
payable; and (ii) if the Company shall adopt such other method or
plan, it will pay or cause to be paid to the Trustee on account of any
loss sustained because of the destruction or damage of any Mort-
gaged Property by fire, an amount of cash equal to such loss less
any amount otherwise paid to the Trustee, or to the trustee or other
mortgagee of any such Prior Lien upon the Mortgaged Property so
destroyed or damaged, if the terms of such Prior Lien require such
losses so to be paid. Any amounts of cash so required to be paid by
the Company pursuant to any such method or plan shall for the
purposes of this Indenture be deemed to be proceeds of insurance.
(d) All moneys paid to the Trustee by the Company or
received by the Trustee as proceeds of any insurance shall, subject
to the requirements of any Prior Lien, be held by the Trustee and,
subject to such requirements, shall be paid by the Trustee to the
Company to reimburse the Company for an equal amount spent for
the purchase or other acquisition of property which becomes
Mortgaged Property at the time of such purchase or acquisition, or
in the rebuilding or renewal of the Mortgaged Property destroyed or
damaged, upon receipt by the Trustee of (i) an Officers' Certificate
Engineer's
Certificate
Accountant's
Certificate
If Mortgaged
Property not equal
to 133^% of
Bonds and Prior
Lien Bonds,
proceeds payable
to Trustee
Company
reimbursed
for repairs
Withdrawal of
proceeds under
Section 11.01
Annual
Requirement
Issuance of First
Mortgage Bonds
36
§§ 7.11 (cont.), 7.12
. . . .requesting .such reimbursement, (ii) an Accountant's Certificate
stating the amounts so spent and the Cost of any Mortgaged
Property so purchased or acquired, (iii) an Engineer's Certificate
stating the nature of such rebuilding or renewal and the Fair Value
of the Mortgaged Property so rebuilt or renewed, and (iv) an
Opinion of Counsel to the effect that the Mortgaged Property so
purchased, rebuilt or renewed is subject to the Lien of this Inden-
ture to the same extent as was the Mortgaged Property so destroyed
or damaged.
(e) Any moneys not applied in accordance with Section
7.11 (d) within 18 months after the receipt of such moneys by the
Trustee, or in respect of which notice in writing of the intention of
the Company to apply such moneys to the work of rebuilding or
renewal then in progress and uncompleted shall not have been given
to the Trustee by the Company within such 18 months, or which
the Company shall at any time notify the Trustee is not to be so
applied, shall thereafter be withdrawn, used or applied in the
manner, to the extent and for the purposes and subject to the
conditions in Section 11.01.
(f) There shall be delivered to the Trustee, on or before
December 1 of each year and also whenever the Trustee shall make
request therefor, a detailed statement, signed by the Treasurer or an
Assistant Treasurer of the Company, of any fire insurance policies
then ...outstanding and in force upon any Mortgaged Property,
including, or by reference to former statements including the names
of the insurance companies which have issued such policies and the
amounts and expiration dates thereof, together with a detailed
statement, signed by the Treasurer or an Assistant Treasurer of the
Company, of any alternative method or plan of protection, if any.
Section 7.12. So long as any Bonds are Outstanding, the Company
will not (a) issue additional 1946 Mortgage Bonds except to replace any
mutilated, lost, destroyed or stolen 1946 Mortgage Bonds or to effect
exchanges and transfers of 1946 Mortgage Bonds or (b) subject to the
lien of the 1946 Mortgage any property which is "excepted property" as
defined in the 1946 Mortgage; and as soon as practicable after the
Company shall be entitled to the release and discharge of record of the
1946 Mortgage, the Company shall procure and record or file all such
37
§§ 7.12 (cent). 7.13, 8.01, 8.02
certificates, 'statements and' other documents as in an Opinion of
Counsel are necessary or desirable to release and discharge the 1946
Mortgage and the lien thereof.
Section 7.13. Upon default of the Company so to do, the Trustee
may, but shall not be obligated to, make any payment which the
Company in this Indenture agrees to make, and the Company covenants
and agrees that it will repay to the Trustee any and all moneys which the
Trustee shall so pay.
ARTICLE VIII
Payments
by Trustee
PRIOR LIEN BONDS
DEPOSITED WITH TRUSTEE
Section 8.01. Each Prior Lien Bond in coupon form deposited with
the Trustee shall have all unmatured coupons attached when so depos-
ited, or shall be accompanied by evidence satisfactory to the Trustee
that the discharge of such Prior Lien may be obtained without the
production of any such coupon or coupons which may be missing; and
each Prior Lien Bond so deposited shall remain uncanceled. Each Prior
Lien Bond in registered form deposited with the Trustee shall be in
bearer form or accompanied by appropriate instruments of transfer, and
the Trustee may cause any or all registered Prior Lien Bonds deposited
under this Article VIII to be registered in its name as Trustee, or other-
wise, or in the name or names of its nominee or nominees.
Section 8.02, All Prior Lien Bonds received by the Trustee under
this Article VIII shall be held as part of the Mortgaged Property for the
protection and further security of the Bonds. Except during the continu-
ance of a Default, no payment of principal of, or premium, if any, or
interest on any Prior Lien Bond, for which the Company is the obligor,
held by the Trustee shall be made or demanded and the coupons thereto
appertaining as they mature shall be canceled by the Trustee and
delivered to the Company. Except during the continuance of a Default,
all cash received by the Trustee (a) on account of the principal of, or
premium, if any, or interest on any Prior Lien Bond, or (b) by reason of
the sale or delivery of any Prior Lien Bond pursuant to any sinking fund
or analogous fund or other similar device for the retirement of Prior Lien
Bonds, shall be paid by the Trustee to the Company.
Requirements
upon deposit
of Prior
Lien Bonds
Disposition of
principal of
and interest on
Prior Lien
Bonds
38
§§ 8.03, 8.04, 8.05
Surrender of Prior
Lien Bonds
Extension of
maturity of
Prior Lien
Bonds
Trustee's rights
upon Default
Section 8.03. (a) Except during the continuance of a Default, the
Trustee, on the written request of the Company, shall cause any Prior
Lien Bonds held by it under this Article VIII to be canceled, and the
obligation thereby evidenced to be satisfied and discharged. Upon
similar request the Trustee shall sell (on such terms as the Company
shall designate) or surrender any Prior Lien Bonds held by it subject to
this Article VIII to the trustee or other holder of the Prior Lien which
secures such Prior Lien Bonds to be held uncanceled for the purposes of
any sinking or analogous fund or other similar device for the retirement
of such Prior Lien Bonds, provided, however, that if all of the property
securing any Prior Lien Bonds deposited with the Trustee under this
Article VIII shall have been released from the Lien of this Indenture,
such bonds as shall thereupon cease to be Prior Lien Bonds and shall be
surrendered forthwith by the Trustee to the Company upon its written
request.
(b) Prior to any sale or surrender of Prior Lien Bonds by the
Trustee in accordance with Section 8.03(a), there shall be delivered to
the Trustee, an Appraiser's Certificate, made and dated not more than
90 days prior to the date of the Company's request for such sale or
surrender, stating the fair market value in cash, in the opinion of the
signer of such Appraiser's Certificate, of the Prior Lien Bonds to be sold
or surrendered, and an Officers' Certificate stating that, in the opinion of
the sign-ers of such Officers' Certificate, the release thereof will not
impair the security under this Indenture.
(c) Any cash received by the Trustee upon the sale of Prior Lien
Bonds pursuant to this Section 8.03 shall be held and applied in
accordance with Article XI.
Section 8.04. On the request of the Company as evidenced by an
Officers' Certificate, the Trustee shall permit the extension of the
maturity of and/or any other modification of any Prior Lien Bonds held
by the Trustee subject to this Article VIII and/or any modification of
any Prior Lien.
Section 8.05. Upon the occurrence and during the continuance of a
Default, the Trustee may exercise any and all rights of a holder with
respect to the Prior Lien Bonds then held by it under this Article VIII or
may take any other action which shall in its judgment be desirable or
necessary to avail itself of the security for such Prior Lien Bonds.
39
§§ 9.01, 9.02
ARTICLE IX
REDEMPTION OF BONDS
Section 9.01. Any Outstanding Bonds which are, by their terms,
redeemable before maturity, at the option of the Company or pursuant
to the requirements of this Indenture, may be redeemed at such times,
in such amounts and at such prices as may be specified therein and in
accordance with this Article IX.
Certain Bonds
redeemable
Section 9.02. (a) If less than ail of the Outstanding Bonds of any
series are to be redeemed, the particular Bonds to be redeemed shall be
selected by the Trustee from the Outstanding Bonds of such series
which have not previously been called for redemption, by such method
as the Trustee shall deem fair and appropriate, but special provisions for
the selection of the particular Bonds to be redeemed within a particular
series may be provided by a Supplemental Indenture.
(b) Unless otherwise provided as to a particular series of Bonds,
notice of the intention of the Company to redeem any Bonds which are
not Registered Bonds shall be given to the holders of such Bonds, by or
on behalf of the Company, by publication in one Authorized Newspaper
in the Borough of Manhattan, The City of New York, and in one
Authorized Newspaper in the city in which the Trustee maintains its
principal office and place of business, once at least 30 and not more than
40 days prior to the date fixed for redemption. If less than all Bonds of
any particular series are to be redeemed and unless otherwise provided
as to a particular series of Bonds, the number of any Bonds to be
redeemed shall be included in such notice and may be stated: individu-
ally; in groups from one number to another number, both inclusive,
except such as shall have been previously called for redemption or
otherwise retired; or in any other way satisfactory to the Trustee.
(c) No notice of the intention of the Company to redeem Regis-
tered Bonds is required to be published in an Authorized Newspaper,
but a copy of such notice shall be mailed to the holders of such
Registered Bonds, not less than 30 nor more than 40 days before the
date fixed for such redemption, at the last address appearing for each of
such holders in the Bond register maintained pursuant to Section 2.06.
General provisions
and mechanics of
redemption
Notice to
Bondholders
Notice to redeem
Registered Bonds
Redemption
notice may be
subject to
receipt of moneys
by Trustee
40
§§ 9.02 (com.), 9.03, 9.IM
(d) If at the time of publication or mailing of any notice of
redemption the Company shall not have irrevocably directed the Trustee
to apply funds deposited with the Trustee or held by it and available to
be used for the redemption of Bonds to redeem all the Bonds called for
redemption, such notice may state that it is subject to the receipt of the
redemption moneys by the Trustee before the date fixed for redemption
and such notice shall be of no effect unless such moneys are so received
before such date.
Failure to give
notice shall not
affect validity
of redemption
(e) Failure duly to give notice of the intention of the Company to
redeem any Bonds by publication and/or by mailing to the owner or
holder of such Bond shall not affect the validity of the proceedings for
the redemption of any other Bond.
Bonds due on
redemption date
Section 9.03. Publication or mailing of the notice of redemption, if
required, having been completed as provided in Section 9.02 (b) or
9.02(c) and the Company having before the redemption date specified
in such notice deposited with the Trustee, and/or having irrevocably
directed the Trustee to apply, from cash or Governmental Obligations
held by it and available to be used for the redemption of Bonds, an
amount in cash or the proceeds from such Governmental Obligations
sufficient to redeem all of the Bonds called for redemption, including
accrued interest, the Bonds called for redemption shall become due and
payable on such redemption date.
Moneys for
redemption held
in trust
Section 9.04, All cash or Governmental Obligations held by the
Trustee for the redemption of Bonds shall, subject to Section 18.02, be
held in trust for the account of the holders of the Bonds so to be
redeemed, and shall be paid to them respectively, upon presentation and
surrender of said Bonds, with (if required by the Company) all unma-
tured coupons, if any, appertaining thereto; any coupons maturing on or
prior to the date fixed for redemption shall remain payable in accordance
with their terms. On and after such date fixed for redemption, if the cash
for the redemption of the Bonds to be redeemed shall be held by the
Trustee for the purpose, such Bonds shall cease to bear interest and shall
cease to be entitled to the Lien of this Indenture and the coupons for
interest, if any, maturing subsequent to the date fixed for redemption
shall be void.
41
§§9.05, 10.01, 10.02
Section 9.05. If any Registered Bond shall be called for redemption
in part only, the notice of such redemption shall specify the principal
amount thereof to be redeemed, and such Registered Bond shall be
presented for cancellation properly endorsed for transfer at or after the
date fixed for the redemption of said Bonds so called for redemption, and
thereupon the payment with respect to said Bonds shall be made upon
surrender of said Bonds so endorsed, and Coupon Bonds or Registered
Bonds for the unpaid balance of the principal amount of the Registered
Bonds so presented and surrendered shall be executed by the Company
and authenticated and delivered by the Trustee without charge therefor
to the holder thereof.
ARTICLE X
POSSESSION, USE AND RELEASE OF THE MORTGAGED PROPERTY
Section 10.01. The Company shall be suffered and permitted to
possess, enjoy, use and operate the Mortgaged Property (except cash or
securities paid to or deposited with or required by the express terms of
this Indenture to be paid to or deposited with the Trustee) and to take
and use any and all tolls, rents, revenues, earnings, interest, dividends,
royalties, issues, income and profits thereof, as if this Indenture had not
been made, with power in the ordinary course of business to alter, repair,
change and add to its buildings, structures and any or all of its plant and
equipment, constructed or owned or hereafter constructed or acquired
by the Company, and hereby granted, bargained, sold, warranted,
released, conveyed, assigned, transferred, mortgaged, pledged, set over
or continued, to the Trustee, or intended so to be,
Section 10.02. The Company may at any time and from time to
time, without any release or consent by the Trustee:
(a) sell or otherwise dispose of, free from the Lien of this
Indenture, or abandon or otherwise retire, any machinery, equip-
ment, implements or other similar property which is part of the
Mortgaged Property and which, in the judgment of the Company,
shall have become old, inadequate, obsolete, worn out or unfit or
unadapted for use in the Company's electric and steam generating,
transmission and distribution operations, or any dwellings or appur-
tenant structures which, in the judgment of the Company, are unfit
Partial redemption
of Registered
Bond
Company's
possession
and use
Actions without
consent of
Trustee
Disposition
of machinery,
equipment,
implements or
other similar
property
42
§ 10.02 (cont)
Cancel or
change leases
Change or repair
transmission and
distribution
equipment
Cancel, make
changes, etc.
to right of way
Surrender or
assent to
modification
of franchise
Abandon
Mortgaged
Property and
surrender
franchises
when deemed
advisable
or unadapted for use in the Company's electric and steam generat-
ing, transmission and distribution operations;
(b) cancel or make changes in or alterations of or substitu-
tions for any and all leases;
(c) alter, change the location of, add to, repair and replace
any and all transmission and distribution lines, substations, machin-
ery, fixtures and other equipment;
(d) cancel, make changes in or substitutions for or dispose of
any and all rights of way (including easements and licenses);
(e) surrender or assent to the modification of any franchise
(including in that term any ordinances, indeterminate permits,
licenses or other operating rights, however denominated, granted by
Federal, state, municipal or other governmental authority) under
which the Company may be operating if, in the judgment of the
Company, it is advisable to do so;
(f) abandon, or permit the abandonment of, the operation of
any Mortgaged Property and surrender any franchises, as defined in
Section 10.02(e), under which such Mortgaged Property is oper-
ated, if, in the judgment of the Company, the operation of such
Mortgaged Property and such franchises is not, under the circum-
stances, necessary or important for the operation of the remaining
Mortgaged Property, or whenever the Company deems such aban-
donment or surrender to be advisable for any reason; provided,
however, that if the amount at which such property and all other
properties so abandoned or surrendered during the same calendar
year was originally charged to the fixed property accounts of the
Company is 10% or more of the aggregate principal amount of the
Bonds Outstanding immediately prior to such abandonment or
surrender, there shall be furnished to the Trustee an Independent
Engineer's Certificate to the effect that neither such operation nor
such franchises are, under the circumstances, necessary or impor-
tant for the operation of the remaining property of the Company or
that such abandonment or surrender is advisable for some other
specified reason, and in either case that such abandonment or
surrender will not impair the security under this Indenture in
contravention of the provisions hereof; and
43
§§ 10.02 (conL), 10.03
(g) grant or convey rights of way and easements over or in
respect of any real Mortgaged Property owned by the Company,
provided that such grant or conveyance will not, in the judgment of
the Company, impair the usefulness of such real Mortgaged Prop-
erty in the Company's electric and steam generating, transmission
and distribution operations, and will not be prejudicial to the
interest of the Bondholders.
Section 10.03. Subject to Section 10.11, the Trustee shall release
from the Lien of this Indenture any Mortgaged Property if the Fair
Value of all of the Mortgaged Property (excluding the Mortgaged
Property to be released but including any Mortgaged Property to be
acquired by the Company with the proceeds of, or otherwise in connec-
tion with, such release) equals or exceeds an amount equal to 133^6% of
the aggregate principal amount of Outstanding Bonds and Prior Lien
Bonds outstanding at the time of such release, upon receipt by the
Trustee of:
(a) an Officers' Certificate, dated the date of such release,
requesting such release, describing in reasonable detail the Mort-
gaged Property to be released and stating the reason for such
release;
(b) an Engineer's Certificate, dated the date of such release,
stating (i) that the signer of such Engineer's Certificate has
examined such Officers' Certificate in connection with such release,
(ii) the Fair Value, in the opinion of the signer of such Engineer's
Certificate, of (A) all of the Mortgaged Property, and (B) the
Mortgaged Property to be released, in each case as of a date not
more than 90 days prior to the date of such release, and (iii) that in
the opinion of such signer, such release will not impair the security
under this Indenture in contravention of the provisions hereof;
(c) in case any Bondable Property is being acquired by the
Company with the proceeds of, or otherwise in connection with,
such release, an Engineer's Certificate, dated the date of such
release, as to the Fair Value, as of a date not more than 90 days
prior to the date of such release, of the Bondable Property being so
acquired (and if within six months prior to the date of acquisition
by the Company of the Bondable Property being so acquired, such
Bondable Property has been used or operated by a Person or
Grant or
convey rights of
way and easements
if Mortgaged
Property, not
impaired
Release of
Mortgaged Prop-
erty if Bonding
ratio test satisfied
Officers'
Certificate
Engineers
Certificate
for released
property
Engineer's
Certificate
for acquired
property
10.03 (cont.), 10.04
44
Accountant's
Certificate
Further
Officers'
Certificate
Opinion
of Counsel
Release of
limited amount
of Mortgaged
Property
Persons other than the Company in a business similar to that in
which it has been or is to be used or operated by the Company, and
the Fair Value to the Company of such Bondable Property, as set
forth in such Certificate, is not less than $25,000 and not less than
1% of the aggregate principal amount of Bonds at the time
Outstanding, such certificate shall be an Independent Engineer's
Certificate);
(d) an Accountant's Certificate, dated the date of such
release, stating the aggregate principal amount of Outstanding
Bonds and Prior Lien Bonds outstanding at the time of such
release, and stating that the Fair Value of all of the Mortgaged
Property (excluding the Mortgaged Property to be released but
including any Bondable Property to be acquired by the Company
with the proceeds of, or otherwise in connection with, such release)
stated on the Engineer's Certificate filed pursuant to Section
10.03(c) equals or exceeds an amount equal to 133V6% of such
aggregate principal amount;
(e) an Officers' Certificate, dated the date of such release,
stating whether, and if so in what respect and to what extent, to the
knowledge of the signers of such Officer's Certificate, there has
occurred and is continuing a Default; and
(f) an Opinion of Counsel, dated the date of such release, as
to compliance with conditions precedent.
Section 10.04. If the Company is unable to obtain, in accordance
with Section 10.03, the release from the Lien of this Indenture of
Mortgaged Property, subject to Section 10.11, the Trustee shall release
from the Lien of this Indenture any Mortgaged Property if the Fair
Value thereof, as shown by the Engineer's Certificate filed pursuant to
Section 10.04 (b), is less than Vz of 1% of the aggregate principal amount
of Outstanding Bonds and Prior Lien Bonds outstanding at the time of
such release, provided that the aggregate Fair Value of all Mortgaged
Property released pursuant to this Section 10.04, as shown by all
Engineer's Certificates filed pursuant to Section 10.04(b) in any period
of 12 consecutive calendar months which includes the date of such
Engineer's Certificate, shall not exceed 1% of the aggregate principal
amount of the Outstanding Bonds and Prior Lien Bonds outstanding at
the time of such release, upon receipt by the Trustee of:
45
§§ 10.04 (cont.), 10.05
(a) an Officers' Certificate, dated the date of such release,
requesting such release, describing in reasonable detail the Mort-
gaged Property to be released and stating the reason for such
release;
(b) an Engineer's Certificate, dated the date of such release,
stating (A) that the signer of such Engineer's Certificate has
examined such Officers' Certificate in connection with such release,
(B) the Fair Value, in the opinion of the signer of such Engineer's
Certificate, of such Mortgaged Property to be released as of a date
not more than 90 days prior to the date of such release, and (C)
that in the opinion of such signer such release will not impair the
security under this Indenture in contravention of the provisions
hereof;
(c) an Accountant's Certificate, dated the date of such
release, stating the aggregate principal amount of Outstanding
Bonds and Prior Lien Bonds outstanding at the time of such
release, that 1/2 of 1% of such aggregate principal amount does not
exceed the Fair Value of the Mortgaged Property for which such
release is applied for, and that 1% of such aggregate principal
amount does not exceed the aggregate Fair Value of all Mortgaged
Property released from the Lien of this Indenture pursuant to this
Section 10.04, as shown by all Engineer's Certificates filed pursuant
to Section 10.04(b) in such period of 12 consecutive calendar
months;
(d) an Officers' Certificate, dated the date of such release,
stating whether, and if so in what respect and to what extent, to the
knowledge of the signers of such Officers' Certificate, there has
occurred and is continuing a Default; and
(e) an Opinion of Counsel, dated the date of such release, as
to compliance with conditions precedent.
Section 10.05. (a) If the Company is unable to obtain, in accor-
dance with Section 10.03, the release from the Lien of this Indenture of
Mortgaged Property which is not subject to a Prior Lien, subject to
Section 10.11 and on the basis of cash, Governmental Obligations,
purchase money obligations, Bondable Property acquired by the Com-
pany with the proceeds of, or otherwise in connection with, such release,
Officers'
Certificate
Engineer's
Certificate
Accountant's
Certificate
Further
Officers'
Certificate
Opinion of
Counsel
Release of
Mortgaged
Property not
subject to
a Prior Lien
46§ 10.05 (cont.)
or the waiver of the right to the authentication and delivery of Bonds as
described in Section 10.05(a) (Hi) (Bj, or a combination thereof, the
Company may obtain the release of such Mortgaged Property from the
Lien of this Indenture, and the Trustee shall release such Mortgaged
Property from the Lien of this Indenture, upon receipt by the Trustee of:
officers' (i) an Officers' Certificate, dated the date of such release,
Certlficate
requesting such release, describing in reasonable detail the Mort-
gaged Property to be released, stating the reason for such release
and stating the amount and character of the proceeds to be received
by the Company therefor,
Engineer's (u) an Engineer's Certificate, dated the date of such release,
Certificate
stating (A) that the signer of such Engineer's Certificate has
examined such Officer's Certificate in connection with such release,
(B) the Fair Value, in the opinion of the signer of such Engineer's
Certificate, of the Mortgaged Property to be released as of a date
not more than 90 days prior to the date of such release, (C) the fair
market value in cash, in the opinion of such signer (which opinion
may be based on an Appraiser's Certificate), of any Governmental
Obligations and purchase money obligations included in the consid-
eration for such release and (D) that in the opinion of such signer
such release will not impair the security under this Indenture in
con-travention of the provisions hereof;
Cash, etc. (in) (A) an aggregate amount of Governmental Obligations
and purchase money obligations having a fair market value in cash
as evidenced by an Appraiser's Certificate, cash and evidence of the
acquisition by the Company of Bondable Property with the pro-
ceeds of, or otherwise in connection with, such release (the amount
of such Bondable Property shall be the Fair Value thereof as of a
date not more than 90 days prior to the date of such release, as
evidenced to the Trustee by an Engineer's Certificate, dated the
date of such release, and if within six months prior to the date of
acquisition by the Company of the Bondable Property being so
acquired such Bondable Property has been used or operated by a
Person or Persons other than the Company in a business similar to
that in which it has been or is to be used or operated by the
Company, and the Fair Value to the Company of such Bondable
Property, as set forth in such Certificate, is not less than $25,000
47
§ 10.05 (cooL)
and not less than 1% of the aggregate principal amount of Bonds at
the time Outstanding, such certificate, shall be an Independent
Engineer's Certificate), not less than the Fair Value of the Mort-
gaged Property to be released, or to an aggregate amount equal to
the proceeds to be received by the Company for the Mortgaged
Property to be released, if such proceeds are greater than the Fair
Value of such Mortgaged Property, or (B) an Officers' Certificate,
dated the date of such release, waiving the right of the Company to
the authentication and delivery of an aggregate principal amount of
Bonds up to the amount required by Section 10.05(a) (in) (A), on
the basis of the retirement of previously Outstanding Bonds under
Article IV or Prior Lien Bonds under Article VI, together with all
documents, instruments and opinions (other than Board resolu-
tions) required to comply with Article IV or Article VI, as the case
may be, or (C), a combination of the items specified in Section
10.05(a) (in) {A) and (B)\
(iv) in case any obligations secured by purchase money mort-
gage upon the Mortgaged Property to be released are included in
the consideration for such release and are delivered to the Trustee
in connection with such release, an Opinion of Counsel, dated the
date of such release, stating that such obligations are valid obliga-
tions and that any purchase money mortgage securing such obliga-
tion is closed and is, or upon recording or filing in designated places
will be, sufficient to afford a valid Hen upon the Mortgaged Property
to be released from the Lien of this Indenture, subject to no lien
prior thereto, except such liens, if any, as shall have existed thereon
immediately prior to such release as Permissible Encumbrances;
(v) an Officers' Certificate, dated the date of such release,
stating whether, and if so in what respect and to what extent, to the
knowledge of the signers of such Officers' Certificate, there has
occurred and is continuing a Default; and
(vi) an Opinion of Counsel, dated the date of such release, as
to compliance with conditions precedent.
(b) Any purchase money obligations received or to be received by
the Trustee under this Indenture in consideration for the release of any
Mortgaged Property from the Lien of this Indenture by the Trustee, and
the purchase money mortgage securing such purchase money obliga-
Opinion of
Counsel
Further
Officers'
Certificate
Further
Opinion of
Counsel
Purchase money
obligation received
in consideration
for release
§§ 10.05 (cont.), 10.06
48
Cash
received by
Tnistet
Release of
Mortgaged
Property
subject to a
Prior Lien
Officers'
Certificate
Opinion
of Counsel
tions shall be released by the Trustee from the Lien of this Indenture
and delivered or assigned to the Company, or as it shall request, upon
payment by the Company to the Trustee of the unpaid principal of such
purchase money mortgage and/or of the obligations thereby secured; the
principal of any such purchase money obligations not so released shall
be paid to or collected by the Trustee as and when such principal shall
become payable, and the Trustee may take any action which in its
judgment may be desirable or necessary to preserve the security of such
purchase money mortgage.
(c) Any cash received by the Trustee pursuant to this Section
10.05 shall be held and applied in accordance with Article XL
Section 10,06. (a) If the Company is unable to obtain, in accor-
dance with Section 10.03, the release from the Lien of this Indenture of
Mortgaged Property which is subject to a Prior Lien, subject to Section
10.11, the Trustee shall release such Mortgaged Property from the Lien
of this Indenture if there has been or is being substituted for such
Mortgaged Property, by delivery to the Prior Lien trustee, mortgagee or
other holder of such Prior Lien and/or to the Trustee, an aggregate
amount of Governmental Obligations or purchase money obligations
having a fair market value in cash as evidenced by an Appraiser's
Certificate, cash and evidence of Bondable Property acquired by the
Company with the proceeds of, or otherwise in connection with, such
release, or a combination thereof, not less than the Fair Value of the
Mortgaged Property to be released from the Lien of this Indenture, upon
delivery to the Trustee of:
(i) an Officers' Certificate, dated the date of such release,
requesting such release, describing in reasonable detail the Mort-
gaged Property to be released, the Prior Lien to which such
Mortgaged Property is subject, the amount of cash, Governmental
Obligations, or purchase money obligations to be delivered to the
Prior Lien trustee, mortgagee or other holder of such Prior Lien
and/or to the Trustee, or both, and any Bondable Property acquired
by the Company with the proceeds of, or otherwise in connection
with, such release, in each case in substitution for such Mortgaged
Property, and stating the reason for such release;
(ii) an Opinion of Counsel, dated the date of such release,
that the Mortgaged Property to be released from the Lien of this
49
§ 10.06 (cont)
Indenture is subject to the Prior Lien described in the foregoing
Officers' Certificate, that, based upon documents received by such
Counsel, the Company appears to have complied with all the terms
and conditions for such release under such Prior Lien, and that any
cash, Governmental Obligations or purchase money obligations
deposited with the Trustee or the Prior Lien trustee, mortgagee or
other holder of such Prior Lien, and any Bondable Property
acquired by the Company with the proceeds of, or otherwise in
connection with, such release, will also be subject to the Lien of this
Indenture, subject only to said Prior Lien and to Permissible
Encumbrances;
(iii) an Engineer's Certificate, dated the date of such release,
stating (A) that the signer of such Engineer's Certificate has
examined such Officers' Certificate in connection with such release,
(B) the Fair Value, in the opinion of such signer, of the Mortgaged
Property to be released as of a date not more than 90 days prior to
the date of such release, (C) the Fair Value in the opinion of such
signer (which opinion may be based on an Appraiser's Certificate)
of any Governmental Obligations and purchase money obligations
included in the consideration for such release and (D) that, in the
opinion of such signer, such release will not impair the security
under this Indenture in contravention of the provisions hereof;
(iv) in case any Bondable Property is being acquired by the
Company, with the proceeds of, or otherwise in connection with,
such release, an Engineer's Certificate, dated the date of such
release, as to the Fair Value, as of a date not more than 90 days
prior to the date of such release, of the Bondable Property being so
acquired (and if within six months prior to the date of acquisition
by the Company of the Bondable Property being so acquired, such
Bondable Property has been used or operated by a Person or
Persons other than the Company in a business similar to that in
which it has been or is to be used or operated by the Company, and
the Fair Value to the Company of such Bondable Property, as set
forth in such Certificate, is not less than $25,000 and not less than
1% of the aggregate principal amount of Bonds at the time
Outstanding, such certificate shall be an Independent Engineer's
Certificate);
Engineer's
Certificate for
released
property
Engineer's
Certificate for
acquired
property
§ 10.06 (cont)
50
Cash, etc.
Further Opinion
of Counsel
Further
Officers'
Certificate
(v) (A) an aggregate amount of Governmental Obligations or
purchase money obligations having a fair market value in cash as
evidenced by an Appraiser's Certificate, and cash not less than the
excess, if any, of (I) the Fair Value, as specified in the Engineer's
Certificate described in Section 10.06(a) (Hi), of the Mortgaged
Property to be released plus the amount, if any, by which the
proceeds to be received by the Company for such Mortgaged
Property are greater than the Fair Value of such Mortgaged
Property over (II) the aggregate amount of Governmental Obliga-
tions and purchase money obligations having a fair market value in
cash as evidenced by an Appraiser's Certificate, and cash paid over
to the trustee, mortgagee or other holder of such Prior Lien or the
Trustee, and the Fair Value of Bondable Property set forth in the
Engineer's Certificate provided for in Section 10.06(a) (iv)\ or (B)
an Officers' Certificate waiving the right of the Company to the
authentication and delivery of an aggregate principal amount of
Bonds up to the amount required by Section 10.06(a) (vj (A), on
the basis of the retirement of previously Outstanding Bonds under
Article IV or Prior Lien Bonds under Article VI, together with all
documents, instruments and opinions (other than Board resolu-
tions) required to comply with Article IV or Article VI, as the case
may be;
(vi) in case any obligations secured by purchase money mort-
gage upon the Mortgaged Property to be released are included in
the-consideration for such release and are delivered to the Trustee
in connection with such release, an Opinion of Counsel, dated the
date of such release, stating that such obligations are valid obliga-
tions and that any purchase money mortgage securing such obliga-
tion is closed and is, or upon recording or filing in designated places
will be, sufficient to afford a valid lien upon the Mortgaged Property
to be released from the Lien of this Indenture subject to no lien
prior thereto, except said Prior Liens and such liens, if any, as shall
have existed thereon immediately prior to such release as Permis-
sible Encumbrances;
(vii) an Officers' Certificate, dated the date of such release,
stating whether, and if so in what respect and to what extent, to the
knowledge of the signers of such Officers' Certificate, there has
occurred and is continuing a Default; and
51
§§ 10.06 (cont.), 10.07
(viii) an Opinion of Counsel, dated the date of such release,
as to compliance with conditions precedent,
(b) Any cash received upon the disposition of any Mortgaged
Property released from the Lien of this Indenture pursuant to this
Section 10.06 and not deposited with the trustee, mortgagee or other
holder of such Prior Lien, shall be paid to the Trustee and shall be held
and applied in accordance with Article XL
Section 10.07. In case (a) any Mortgaged Property shall be taken
by exercise of the power of eminent domain, or by similar right or power,
or if any governmental authority shall exercise any right which it may
now or hereafter have to purchase or designate a purchaser of, or order
the sale of, all or any Mortgaged Property, or in case of any sale or
conveyance of Mortgaged Property in lieu and in reasonable anticipation
of any such event, and (b) the Company is unable, or elects not, to
obtain, in accordance with Section 10.03, the release from the-Lien of
this Indenture of such Mortgaged Property, all net proceeds of each
such taking, purchase or sale or, in case of a sale or conveyance in
anticipation thereof, an aggregate amount of Governmental Obligations
or purchase money obligations having a fair market value in cash as
evidenced by an Appraiser's Certificate, and cash, not less than the Fair
Value, as of a date not more than 90 days prior to the date of such
release, as evidenced by an Engineer's Certificate, dated the date of such
release, of the Mortgaged Property sold or conveyed, if greater than such
net proceeds, together with all net sums payable for any damage to any
Mortgaged Property by or in connection with any such taking, sale or
conveyance, to the extent not deposited under a Prior Lien with the
trustee, mortgagee or other holder of such Prior Lien, shall be deposited
with the Trustee, to be held and applied in accordance with Article Xl\
and the Trustee (subject to Section 10.11) shall release the Mortgaged
Property so taken, sold or conveyed upon being furnished with:
(i) an Opinion of Counsel, dated the date of such release, to
the effect that such Mortgaged Property has been lawfully taken,
sold or conveyed as aforesaid; or
(ii) in case of any such sale or conveyance in anticipation of
such taking, purchase or sale, a Board resolution to the effect that
such sale or conveyance was in lieu and in reasonable anticipation
of such taking, purchase or sale; and
(iii) an Opinion of Counsel, dated the date of such release, as
to compliance with conditions precedent.
Further Opinion
of Counsel
Cash paid
to Trustee
Eminent
Domain
Opinion of
Counsel
Board
Resolution
Further Opinion
of Counsel
§§ 10.08, 10.09, 10.10, 10.11
52
Substituted
Property
Receiver,
Trustee,
etc.
Purchaser in
good faith
Suspension of
rights in cas«
of default
Section 10.08. All rights and property (other than cash) acquired
by the Company by exchange or purchase to take the place of, or in
consideration for, any Mortgaged Property surrendered, modified,
released or sold, under this Indenture, shall forthwith and without
further conveyance, transfer or assignment become subject to the Lien
of this Indenture; but the Company, at the request of the Trustee from
time to time, or without such request to the extent necessary to comply
with any applicable legal requirements for the full protection of the
Trustee and the Bondholders, will grant, bargain, sell, warrant, release,
convey, assign, transfer, mortgage, pledge, set over and confirm any and
all such property to the Trustee, by proper deeds or other instruments,
which the Company will duly record and file, and rerecord and refile, in
all places required for the proper protection of the Trustee and of the
Bondholders, upon the trusts and for the purposes of this Indenture.
Section 10.09, In case a receiver or trustee of the Company, or of all
or a substantial part of the Mortgaged Property or business of the
Company, shall be lawfully appointed, all acts or requests which the
Company may do or make under the foregoing provisions of this Article
X may be done or made by such receiver or trustee with the consent of
the Trustee, which may give or withhold such consent from time to time
in its uncontrolled discretion, subject to Section 14.01 and Section 14.02.
In case the Trustee shall be in possession of the Mortgaged Property
under this Indenture, the Trustee in its uncontrolled discretion, without
any action or request by the Company or any receiver or trustee, and
without-hereby limiting any other right or power of the Trustee, may
take any action authorized by this Indenture to be taken by the
Company, by the Company and the Trustee or by the Trustee on the
request of the Company.
Section 10.10. No purchaser in good faith of Mortgaged Property
purporting to be released under any of the provisions of this Article X
shall be bound to ascertain the authority of the Trustee to execute the
release or to inquire as to any facts required by the provisions hereof for
the exercise of such authority, or to see to the application of any
purchase money.
Section 10.11. (a) At any time when a Default has occurred and is
continuing or the Company is in default under any Prior Lien on any
Mortgaged Property, the Company shall not have the right to exercise
any privilege or to take any action permitted by this Article X (except
53
§§ 10.11 (cont.), 11-01
under Sections 10.01 and 10.02) except to the extent that it shall have
obtained the written consent of the Trustee; and the Trustee may,
subject to Section 14.01 and Section 14.02, give or withhold such
consent from time to time in its discretion.
(b) For purposes of this Section 10.11, a Default shall be deemed
to have occurred and be continuing upon the occurrence of any-of the
events specified in Section 12.02 without awaiting the expiration of any
period of grace or the giving of notice.
ARTICLE XI
APPLICATION OF FUNDS HELD BY TRUSTEE
Section 11.01. (a) Unless the Company is in default in the payment
of any interest on any Bonds then Outstanding or any Default shall have
occurred and be continuing, any cash received by the Trustee pursuant
to Section 5.01 shall be held by the Trustee and such cash, and any other
cash which may be applied as provided in this Section 11.01:
(i) may be withdrawn from time to time by the Company
(A) in the case of cash deposited with the Trustee pursuant to
Section 5.01, to the extent of 75% of the lesser of the Cost or the
Fair Value of Unbonded Bondable Property Bonded, and (B) in the
case of cash deposited with the Trustee pursuant to any other
provision of this Indenture, to the extent of 100% of the lesser of the
Cost or Fair Value of Unbonded Bondable Property Bonded, in
each case after making any deductions and additions in respect of
Bondable Property pursuant to Section 1.03(h) (iij or (Hi);
(ii) may be withdrawn from time to time by the Company in
an amount equal to the principal amount of Bonds which the
Company shall have the right to have authenticated and delivered
under Article IV or Article VI;
(iii) may, upon the request of the Company, be applied by the
Trustee to the payment at maturity of any Outstanding Bonds or
Prior Lien Bonds or to the redemption of any Outstanding Bonds or
Prior Lien Bonds which are, by their terms, redeemable, of such
series as may be designated by the Company; and/or
(iv) may be used or applied to the purchase of Bonds;
provided, however, that none of such cash shall be applied to the
payment of more than the principal amount of any Bonds so
Withdrawal or
application of
moneys held
by Trustee
Extent to
which moneys
may be
withdrawn
When moneys
may be
withdrawn
May be
applied to
payment of
Outstanding
Bonds or
Prior Lien
Bonds
May be
applied to
purchase
of Bonds
11.01 (cont.)
54
Requirement
for such
application
of moneys
Withdrawal of
Cash operates
as waiver of
right to
authenticate and
deliver Bonds
Release of
obligation
secured by
purchase money
mortgage
purchased, except to the extent that the aggregate principal amount
of all Bonds theretofore, and all Bonds then to be, purchased with
cash deposited under Section 5,01 shall have exceeded the aggre-
gate cost for principal, interest, brokerage and premium, if any, on
all Bonds theretofore, and on all Bonds then to be, purchased with
cash so deposited.
(b) Such moneys shall, from time to time, be paid out or used or
applied by the Trustee, as aforesaid, upon the request of the Company,
and upon receipt by the Trustee of an Officers' Certificate stating that
the Company is not in default in the payment of the interest on any
Bonds then Outstanding and that no Default has occurred and is
continuing. In case such withdrawal of cash is, in whole or in part, based
upon Unbonded Bondable Property as permitted under Section
11.01 (a) (i), the Company shall comply with all applicable provisions of
this Indenture (including but not limited to the furnishing of the
Engineer's or Independent Engineer's Certificate provided for in Section
3.04(cj or Section 3.04(d)) as if such Unbonded Bondable Property
were made a basis for the authentication and delivery of Bonds thereon
equivalent in principal amount to the amount of the cash to be
withdrawn on such basis; or in case the withdrawal of cash is, in whole or
in part, based upon the right to the authentication and delivery of Bonds
pursuant to Section 11.01fa)(ii) the Company shall comply with all
applicable provisions of Article IV or Article VI as the case may be,
relating to such authentication and delivery; except that the Company
shall not. be required to deliver to the Trustee any Board resolution or
Opinion of Counsel which is described in Section 3.04(a) and Section
3.04lg).
(c) Any withdrawal of cash pursuant to Section 11.01 fa) (i) or
Section 11.01 (a) (ii) shall operate as a waiver by the Company of its
right to the authentication and delivery of the Bonds on the basis of
which such cash was withdrawn, and such Bonds may not thereafter be
authenticated and delivered hereunder on such basis, and the amount of
any Bondable Property, Bonds or Prior Lien Bonds which have been
made the basis for such withdrawal shall be Bonded.
(d) Any obligation secured by a purchase money mortgage
received by the Trustee under this Indenture in consideration for the
release of any Mortgaged Property from the Lien of this Indenture may
be released from the Lien of this Indenture at any time upon payment
55
11.01 (cont)
by the Company to the Trustee of the unpaid portion of the principal of
such obligation; provided, however, at any time after the Trustee shall
have received on account of the principal of any obligation secured by a
purchase money mortgage on specified Mortgaged Property (from the
Company, the obligor or otherwise), an amount in cash equal to the
aggregate principal amount of such obligation to the extent made a basis
of a credit in the application for the release from the Lien of this
Indenture of such Mortgaged Property, the Trustee shall deliver to the
Company on the written request of its Chairman of the Board, Chief
Executive Officer, President or a Vice-President and its Secretary, an
Assistant Secretary, its Treasurer or an Assistant Treasurer, the
purchase money mortgage on such Mortgaged Property and all obliga-
tions secured thereby then held by the Trustee.
(e) The principal of and interest on any obligation secured by a
purchase money mortgage held by the Trustee shall be collected by the
Trustee as and when such principal and interest become payable.
Unless the Company is in default in the payment of the interest on any
Outstanding Bond or Prior Lien Bond outstanding or any Default shall
have occurred and be continuing, the interest received by the Trustee on
any such obligation shall be paid over to the Company, and any
payments received by the Trustee on account of the principal of any
such obligation in excess of the amount of credit used by the Company
in respect of such obligations upon the release of any Mortgaged
Property from the Lien of this Indenture shall also be paid to the
Company.
(f) The Trustee shall have and may exercise all the rights and
powers of an owner of obligations secured by purchase money mortgage
held by the Trustee and of all substitutions therefor and, without
limiting the generality of the foregoing, may collect and receive all
insurance moneys payable to it under any provision thereof and apply
the same in accordance with the provisions thereof, may consent to
extensions thereof at a higher or lower rate of interest, may join in any
plan or plans of voluntary or involuntary reorganization or readjustment
or rearrangement and may accept and hold under this Indenture new
obligations, stocks or other securities issued in exchange therefor under
any such plan, and any discretionary action which the Trustee may be
entitled to take in connection with any such obligations or substitutions
therefor shall be taken, so long as no Default has occurred and is
Collection of
principal and
interest on
obligation secured
by purchase
money mortgage
Trustee exercises
all rights
& powers of
Owner of
Obligations secured
by purchase
money mortgage
§ 11.01 (cont.), 11.02
56
Moneys to be
held in trust;
investment thereof
May deposit
in certificates
of deposit
or otherwise
May invest in
debt obligations
continuing, in accordance with the request of the Company, evidenced
by a Board resolution, and while a Default is continuing, in the
discretion of the Trustee.
Section 11.02. (a) Subject to Section 18.02, all moneys received
by the Trustee shall, until used or applied as provided in this Indenture,
be held in trust for the purposes for which they were paid, but need not
be segregated from other funds except as directed by the Company or as
and to the extent required by law.
(b) After compliance with any applicable legal requirements, the
Trustee may deposit all or any part of moneys received by it, in a
certificate of deposit or otherwise, to its credit as Trustee in its own
banking department or in any bank or trust company having a combined
capital and surplus of not less than Twenty Million Dollars
($20,000,000); or the Trustee, after such compliance, may so deposit all
or any part of such moneys, together with moneys of like nature held by
it under other indentures and trust instruments, to its credit as Trustee of
all moneys deposited in each such account.
(c) When so directed by the Company, the Trustee shall invest all
or any part of such moneys received by it in any debt obligations at the
time authorized by the laws of the State in which the principal office of
the Trustee is located pertaining to the investment by such entity of
funds held by it without restriction as to amounts prescribed by such
laws for investment in such debt obligations; and the Trustee, when so
directed by the Company, shall sell or repurchase all or any part of such
debt obligations. Such investments shall be held by the Trustee as part
of the Mortgaged Property; provided, however, that the proceeds of such
investments representing interest shall be paid or credited to the Com-
pany and shall not constitute Mortgaged Property. If any such sale, or
any payment on the maturity of any such debt obligations held by the
Trustee, shall produce a net sum less than the cost (including accrued
interest) of such debt obligations sold or paid, the Company will
promptly pay to the Trustee such amount of cash as will, with the net
proceeds of such sale or such payment, equal the cost (including
accrued interest) of such debt obligations so sold or paid; and if any such
sale, or any payment at the maturity of any such debt obligations held by
the Trustee, shall produce a net sum greater than the cost (including
accrued interest) of such debt obligations so sold or paid the Trustee
shall, if no Default has occurred and is continuing, pay to the Company
57
§§ 11.02 (cont.), 12.01
the amount of such excess. The Company will also pay to the Trustee all
brokers' fees and other expenses incurred by the Trustee in connection
with its investment of such moneys and the sale of such debt obligations.
(d) The Trustee shall allow interest on any moneys held by it
under this Indenture and deposited by it in its banking department, at
the current rate or rates, if any, from time to time paid by it on similar
deposits of like size and nature over like periods of time, unless in a
particular instance the Trustee and the Company shall otherwise agree.
Interest so allowed and interest received by the Trustee from invest-
ments and deposits in other banks and trust companies of moneys which
are a part of the Mortgaged Property made pursuant to Section
11.02(c), except as otherwise herein provided in respect of particular
moneys, shall, if no Default has occurred and is continuing, be paid or
credited to the Company by the Trustee.
(e) At the direction of the Company, the Trustee shall establish
one or more accounts for the deposit and/or investment of monies
received by it, including a separate account from which all moneys
payable by the Trustee on behalf of the Company shall be paid and into
which moneys shall be deposited by the Company, or by the Trustee on
behalf of the Company from other accounts or investments held or
managed by the Trustee, as needed, so that such account shall be
operated with a zero balance.
ARTICLE XII
DEFAULT AND REMEDIES
Section 12.01. If any coupon or other claim for interest on any Bond
is deposited with the Trustee or any paying agent, or if the payment date
of such coupon or claim is extended, whether with or without the
consent of the Company, such coupon or claim shall not be entitled, in
case of Default, to the benefit or security of this Indenture, except after
the prior payment in full of the principal of and premium, if any, on all
Outstanding Bonds and of all coupons and claims for interest for which
such deposit has not been made, or such date extended. Any coupons or
claims for interest on any Bonds owned by the Company at or after the
maturity of such coupons or claims shall not be entitled to the benefit or
security of this Indenture; and the Company covenants that all such
coupons and claims for interest so owned by the Company shall
promptly be canceled.
Interest
to be paid
to Company
May establish
one or more
accounts
When no
entitlement
to benefit
of Indenture
upon Default
58
§ 12.02
Events
of Default
Defaul t in
payment of
principal
Default in
payment of
interest
Default in
payments in
connection with
outstanding
Prior Lien
Bonds
Default in
obs*r>ance or
performance of
covenants
Adjudicated
bankrupt or
insolvent
Petition filed
for voluntary
bankruptcy
Section 12.02. (a) Each of the following events is a Default:
(i) default in the due and punctual payment of the principal
of or premium, if any, on any Bond, when such principal or
premium shall have become due and payable, whether at maturity,
pursuant to any sinking fund or analogous fund, or by declaration or
otherwise, which default shall have continued for a period of more
than one day;
(ii) default in the payment of any interest on any Bond, when
and as the same shall have become due and payable, which default
shall have continued for a period of 90 days;
(iii) default in the payment of principal of, premium, if any,
or interest on any Prior Lien Bond, outstanding, continued beyond
the period of grace, if any, specified in the Prior Lien securing
payment of such principal, premium and interest;
(iv) default in the due observance or performance of any
other covenant or condition in this Indenture, including any Sup-
plemental Indenture, which is required to be kept or performed by
the Company, and which default shall have continued for the
period of 90 days after written notice thereof shall have been given
to the Company by the Trustee, or by the holders of 30% of the
aggregate principal amount of the Outstanding Bonds;
-- (v) by decree of a court of competent jurisdiction the Com-
pany is adjudicated a bankrupt or insolvent, or an order is made by
such court for the winding up or liquidation of the affairs of the
Company or approving a petition seeking reorganization or arrange-
ment of the Company under the bankruptcy law or other law or
statute of the United States of America or of any State, or, by order
of such court, a trustee or liquidator or receiver is appointed for the
Company or for the property of the Company, and any such decree
or order shall continue in effect for a period of 90 days;
(vi) the Company files a petition for voluntary bankruptcy, or
consents to the filing of any such petition, or makes an assignment
for the benefit of creditors, or consents to the appointment of a
trustee or liquidator or receiver of the Company or of all or a
substantial part of its Mortgaged Property, or files a petition or
59
§ 12.02 (cont.)
answer or consent seeking reorganization or arrangement under the
bankruptcy law or other law or statute of the United States of
America or of any State, or consents to the filing of any such
petition, or files a petition to take advantage of any debtors' act.
(b) The Trustee shall, within 90 days after the occurrence thereof,
give to the Bondholders, in the manner and to the extent provided in
Section 313 (c) of the TIA, notice of all defaults known to the Trustee,
unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purposes of this Section 12.02(b)
being hereby defined to be the events specified in Section 12.02(a), not
including any periods of grace provided for therein); but in the case of
defaults of the character specified in Sections 12.02 (a) (ii) and
12.02 (a) f i v j , no such notice shall be given until at least 60 days after
the occurrence thereof; provided that, except in the case of default in the
payment of the principal of or interest on any of the Bonds or in the
payment of any sinking or purchase fund installment, the Trustee shall
be protected in withholding such notice if and so long as the Board of
Directors, the Executive Committee, or a trust committee of directors
and/or Responsible Officers, of the Trustee in good faith determine that
the withholding of such notice is in the interests of the Bondholders.
(c) In each and every case of Default, and during the continuance
thereof, the Trustee directly or by its agents or attorney may, to the
extent permitted by law, enter upon the Mortgaged Property; may
exclude the Company and its agents and servants wholly therefrom;
either directly or by its receivers, agents, servants or attorneys, may use,
operate, manage and control the Mortgaged Property, and conduct the
business of the Mortgaged Property to the best advantage of the
Bondholders; may make all necessary or proper repairs, renewals,
replacements and useful alterations, additions, betterments and
improvements to the Mortgaged Property as the Trustee may deem best;
may manage and operate the Mortgaged Property and exercise all rights
and powers of the Company in respect thereof, and be entitled to collect
and receive all tolls, earnings, income, rents, issues and profits thereof;
and, after deducting all expenses incurred hereunder and all payments
which may be made for taxes, assessments, insurance and prior or other
proper charges upon the Mortgaged Property or any part thereof, as well
as just and reasonable compensation for the services of the Trustee and
Notice to
Bondholders
of Defaults
Upon Default
Trustee may
enter onto
Mortgaged
Property
§ 12.02 (cont.)
60
Upon Default
Trustee entitled to
vote alt shares of
stock subject to
Lien of this
Indenture
for all agents, clerks, servants and other employees properly engaged by
it, the Trustee shall apply the moneys arising as aforesaid, as follows:
(i) in case none of the principal of or premium, if any, on the
Bonds shall have become due, to the payment of any interest in
default, in the order of the maturity of the installments of such
interest, with interest thereon at the same rates, respectively, as
were borne by the respective Bonds on which such interest shall be
in default; such payments to be made ratably to the Persons entitled
thereto, without discrimination or preference;
(ii) in case the principal of or premium, if any, on any Bond
shall have become due,'at maturity by declaration or otherwise, first
to the payment of the accrued interest (with interest on the overdue
installments thereof at the same rates, respectively, as were borne
by the respective Bonds on which such interest shall be in default)
in the order of the maturity of such installments, and next, to the
payment of the principal of and premium, if any, due on all
Outstanding Bonds; in every instance such payments to be made
ratably to the Persons entitled to such payment without any
discrimination or preference, provided, however, Section 12.01 is
not in any way modified by this Section 12.02, which is subject to
Section 12.01.
(d) If the Trustee shall have entered, or shall have elected to
enter, the Mortgaged Property, or in case a receiver of the Mortgaged
Property shall have been appointed, or in case a Default shall have
occurred and be continuing, in each case as described in this Section
12.02, the Trustee shall be entitled to vote all shares of stock then
subject to the Lien of this Indenture, and, for the benefit of the
Bondholders, shall be entitled to collect and receive all dividends on all
such shares of stock, and all sums payable for principal of, premium, if
any, and interest on any Bonds or obligations which then shall be subject
to the Lien of this Indenture, and to apply the moneys received in
accordance with Section 12.02(c) (i) and Section 12.02(c) (ii)', and, as
holder of any shares of stock and of any such Bonds, to perform any and
all acts, or to make or execute any and all transfers, requests, requisitions
or other instruments, for the purpose of carrying out this Section 12.02;
but if a receiver of any Mortgaged Property shall have been appointed
and shall be in possession thereof, the Trustee from time to time in its
61
12.02 (cent.), 12.03, 1104
discretion may, and if requested by the holders of a majority in principal
amount of the Outstanding Bonds the Trustee shall, turn over to such
receiver, any part or all of the interest moneys and cash dividends
declared and paid out of current earnings, so collected by the Trustee,
and may cooperate with such receiver in managing and operating all of
the properties and business of the Company in such manner as the
Trustee shall deem to be in the best interests of the Bondholders.
Section 12.03. In case of the occurrence and during the continu-
ance of any Default, the Trustee, directly or by its agents or attorneys,
with or without entry upon the Mortgaged Property, in its discretion (a)
may sell, subject to Prior Liens, to the highest and best bidder, all or any
part of the Mortgaged Property of every kind and all right, title and
interest therein and right of redemption thereof, which sale shall be
made at public auction at such place and at such time and upon such
terms as the Trustee may fix and briefly specify in the notice of sale to
be given as provided in this Indenture, or as may be required by law; or
(b) may proceed to protect and to enforce the rights of the Trustee and
of the Bondholders under this Indenture, by suit or suits in equity or at
law, whether for the specific performance of any covenant or agreement
in this Indenture, or in aid of the execution of any power granted by this
Indenture, or for the foreclosure of this Indenture, or for the enforce-
ment of any other appropriate legal or equitable remedy, as the Trustee,
being advised by counsel, may deem most effectual to protect and
enforce any of its rights or exercise of any of its duties hereunder.
Section 12.04. (a) In case of the occurrence and during the
continuance of any Default, the Trustee may, and upon the written
request of the holders of not less than a majority in principal amount of
the Outstanding Bonds shall, by notice in writing delivered to the
Company, declare the principal of all Outstanding Bonds to be due and
payable immediately, and upon any such declaration, the same shall be
immediately due and payable, anything in this Indenture or in said
Bonds contained to the contrary notwithstanding. This provision, how-
ever, is subject to the condition that if at any time after the principal of
said Bonds shall have been so declared due and payable and before any
sale of the Mortgaged Property shall have been made pursuant to this
Article XII, all arrears of interest upon all of said Bonds, with interest
upon overdue installments of interest at the same rates respectively as
were borne by the respective Bonds on which installments of interest
Upon Default
Trustee may sell
Mortgaged
Property
Upon Default
and request of
holders of a
majority of
Bonds, Trustee
must declare
principal due
Restoration
of parties
to former
position
Duty of
Trustee to
act on
request
of holders
of a majority
of Bonds
Mengaged
Property to
be sold
as an
entirety
62
§§ 12.04 (cont.), 12.05, 12.06
were overdue, shall either be paid by the Company or be collected out of
the Mortgaged Property, and all Defaults shall have been remedied,
then the holders of a majority in principal amount of the Outstanding
Bonds, by written notice to the Company and to the Trustee, may waive
and rescind such Default and its consequences; but no such waiver or
rescission shall extend to or affect any subsequent Default, or impair any
right consequent thereon.
(b) In case the Trustee shall have proceeded to enforce any right
under this Indenture by foreclosure, entry or otherwise, and such
proceeding shall have been discontinued or abandoned because of a
waiver, or for any other reason, or shall have been determined adversely
to the Trustee, then and in every such case the Company and the
Trustee shall be restored to their former positions and rights hereunder
in respect of the Mortgaged Property; and all rights, remedies and
powers of the Trustee shall continue as though no such proceeding had
been taken.
Section 12.05. Upon the written request of the holders of not less
than a majority in principal amount of the Outstanding Bonds (deter-
mined as provided in Section 20.03], in case of the occurrence and
during the continuance of any Default, it shall be the duty of the
Trustee, upon being indemnified as provided in Section 12.16, to take all
steps necessary for the protection and enforcement of its rights and the
rights of the Bondholders, and to exercise the powers of entry or sale
conferred in this Indenture, or both, or to take appropriate judicial
proceedings by action, suit or otherwise, as the Trustee shall deem most
expedient in the interest of the Bondholders; but anything in this
Indenture to the contrary notwithstanding, the holders of 75% of the
principal amount of the Outstanding Bonds, from time to time shall
have the right to direct and control the action of the Trustee in any
proceedings under this Article XII.
Section 12.06. In the event of any sale, whether made under the
power of sale herein granted, or under or by virtue of judicial proceed-
ings, or of some judgment or decree of foreclosure and sale, all of the
Mortgaged Property, shall be sold in one parcel and as an entirety,
unless such sale as an entirety is impracticable because of some statute
or other cause, or unless the holders of a majority in principal amount of
the Outstanding Bonds shall in writing request the Trustee to cause said
63
§§ 1Z06 (cont.)f 12.07, 12.0S, 12.09
Mortgaged Property to be sold in parcels, in which case the sale thereof
shall be made in such parcels as specified in such request.
Section 12.07. Notice of any sale of Mortgaged Property pursuant
to this Indenture shall state the time when and the place where such sale
is to be made, and shall contain a brief general description of the
Mortgaged Property to be sold, and shall be sufficiently given if
published once in each week for four successive weeks prior to such sale
in one Authorized Newspaper published in the City of Kansas City,
Missouri and in one Authorized Newspaper published in the Borough of
Manhattan in The City of New York, New York.
Section 12.08. From time to time the Trustee, or other Person
acting in any sale of Mortgaged Property to be made under this
Indenture, may adjourn such sale by announcement at the time and
place appointed for such sale or for such adjourned sale or sales; and
without further notice or publication, such sale may be made at the time
and place to which such sale shall be so adjourned.
Section 12.09. (a) Upon the completion of any sale of any Mort-
gaged Property under or by virtue of this Indenture, the Trustee shall
execute and deliver to the purchaser a good and sufficient deed or other
instruments conveying, assigning and transferring such Mortgaged Prop-
erty. The Trustee and its successors are hereby appointed the attorneys
of the Company, in its name and stead, to make all necessary convey-
ances, assignments and transfers of Mortgaged Property and for that
purpose may execute all necessary deeds and instruments of conveyance,
assignment and transfer, and may substitute one or more persons with
similar power, the Company hereby ratifying and confirming all that its
said attorneys, or such substitute or substitutes, shall lawfully do by
virtue hereof. Nevertheless, the Company, if so requested by the
Trustee, shall join in the execution and delivery of such conveyances,
assignments and transfers.
(b) Any such sale of Mortgaged Property made under or by virtue
of this Indenture, whether under the power of sale herein granted or
pursuant to judicial proceedings, shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the Company,
in and to the Mortgaged Property sold, and shall be a perpetual bar, both
at law and in equity, against the Company, its successors and assigns,
and against any and all persons claiming or to claim the Mortgaged
Notice of sale
Adjournment
of sale
Interest of
purchaser and
Company
Sales operate
to divest
Company of
all interests
in Mortgaged
Property
64
12.09 (conL), 12.10, 12.11, 12.12
Trustee's
receipt
sufficient
to discharge
purchaser
Principal
of Bonds
to become
due in case
of sale
Application
of sale
proceeds
First—
payment of
costs and
expanses of
sale
Second—
payment of
amount
owing upon
Outstanding
Bonds
Property sold or any part thereof, from, through or under the Company
or its successors or assigns.
Section 12,10. The receipt by the Trustee or other authorized
Person of money paid for the purchase of Mortgaged Property shall be a
sufficient discharge to any purchaser of such Mortgaged Property; and
no such purchaser or the representative, grantee or assign of such
purchaser, after paying such purchase money and receiving such receipt,
shall be affected by, or in any manner answerable for any loss, misappli-
cation or non-application of such purchase money, or be bound to
inquire as to the authorization, necessity, expediency or regularity of
such sale.
Section 12.11. In case of any sale of Mortgaged Property under this
Article XII whether under the power of sale granted in this Indenture or
pursuant to judicial proceedings, the aggregate principal amount of the
Outstanding Bonds, if not previously due, shall at once become due and
payable, anything in said Bonds or in this Indenture to the contrary
notwithstanding.
Section 12.12. The purchase money received by the Trustee from
the sale of "Mortgaged Property under the power of sale granted in this
Indenture, or a sale pursuant to judicial proceedings under this Inden-
ture, together with any other moneys which may be held by the Trustee
under any provision of this Indenture as part of the Mortgaged Property,
shall be applied as follows:
.=• First. To the payment of the costs and expenses of such sale,
including reasonable compensation to the Trustee, its agents, attor-
neys and counsel, and of all expenses, liabilities or advances made
or incurred by the Trustee under this Indenture, and to the payment
of all taxes, assessments or Prior Liens, except any taxes, assess-
ments or other Prior Liens subject to which such sale shall have
been made.
Second. To the payment of the whole amount then owing or
unpaid upon the Outstanding Bonds and any coupons of the
principal of, premium, if any, and interest on such Outstanding
Bonds, with interest accruing on the overdue principal, premium, if
any, and installments of interest at the same rates respectively as
were borne by the respective Bonds whereof the principal, pre-
mium, if any, or installments of interest may be overdue, and in
65
§§ 12.12 <cont.), 12.13, 12.14
case such proceeds shall be insufficient to pay in full the whole
amount so due and unpaid upon the said Bonds, then to the
payment of such principal, premium, if any, and interest, without
preference or priority, ratably to the aggregate of such principal,
premium, if any, and interest, subject, however, to Section 12.01.
Such payments shall be made on the date fixed by the Trustee,
upon presentation of the Outstanding Bonds and coupons and
stamping thereon the amount paid if such Bonds and coupons are
only partly paid, and upon surrender thereof if fully paid.
Third. To the payment of the surplus, if any, to the Company, its
successors or assigns.
Section 12.13. In case of any such judicial sale of any Mortgaged
Property, any Bondholder, or the Trustee, subject to Section 14.01 and
Section 14.02, may bid for and purchase any Mortgaged Property, and,
upon compliance with the terms of sale, may hold, retain, possess and
dispose of such property in absolute right of such Bondholder or the
Trustee, without further accountability, and shall be entitled, for the
purpose of making settlement or payment for the Mortgaged Property
purchased, to use and apply any Bonds and any matured and unpaid
coupons by presenting such Bonds and coupons, in order that there may
be credited thereon the sum apportionable and applicable thereto out of
the net proceeds of such sale; and thereupon such purchaser shall be
credited on account of such purchase price, with the sum apportionable
and applicable but of such net proceeds to the payment of or as credit on
the Outstanding Bonds and coupons so presented.
Section 12.14. The Company will not, in the event of any sale of
Mortgaged Property under this Article XII, insist upon or plead, or in
any manner whatever claim or take the benefit or advantage of, any stay
or extension law now or at any time in force, nor will it claim, take or
insist upon any benefit or advantage from any law now or at any time in
force, providing for the valuation or appraisement of Mortgaged Prop-
erty, or any part thereof, prior to any sale thereof, or to the decree,
judgment or order of any court of competent jurisdiction; nor, after any
such sale, will the Company claim or exercise any right under any
statute now or at any time made or enacted, or otherwise, to redeem the
Mortgaged Property so sold, or any part thereof; and the Company
hereby expressly waives all benefit and advantage of any such law or
Third-
Payment to
Company
Bonds and
matured coupons
may IK applied
against purchase
price
Company
not to insist
upon or plead
stay or
extension law
or exercise
right of
redemption
12.14 (cont.), 12.15, 12.16
66
Trustee
may enter
on commencement
of judicial
proceedings
entitled to
appointment
of receiver
Bondholder
not to institute
suit without
request to
Trustee
laws, and covenants that it will not invoke or utilize any such law or laws
in order to hinder, delay or impede the execution of any power herein
granted and delegated to the Trustee, but the Company will permit the
execution of every such power as though no such law or laws had been
made or enacted.
Section 12,15. Upon filing a bill in equity, or upon commencement
of any other judicial proceedings to enforce any right of the Trustee or of
the Bondholders under this Indenture, the Trustee shall be entitled to
exercise the right of entry herein conferred and provided to be exercised
by the Trustee upon the occurrence and continuance of Default; and the
Trustee shall be entitled to the appointment of a receiver of the
Mortgaged Property, and of the earnings, income, revenue, rents, issues
and profits thereof, with such powers as the court making such appoint-
ment shall confer; but notwithstanding the appointment of any receiver,
the Trustee shall be entitled, as pledgee, to continue to retain possession
and control of any stocks, bonds, cash and indebtedness pledged or to be
pledged with or held by the Trustee under this Indenture.
Section 12.16. (a) No holder of any Outstanding Bond or coupon
shall have any right to institute any suit, action or proceeding in equity
or at law for the foreclosure of this Indenture, or for the execution of any
trust of the Indenture or for the appointment of a receiver or for any
other remedy under this Indenture, unless (i) the holders of 30% in
principal amount of the Outstanding Bonds shall (A) have requested
the Trustee in writing to take action in respect of such matter and shall
have afforded to the Trustee a reasonable opportunity either to proceed
to exercise the powers granted in this Indenture to the Trustee, or to
institute such action, suit or proceeding in its own name and (B) have
offered to the Trustee security and indemnity satisfactory to it against
the costs, expenses and liabilities to be incurred therein or thereby, and
(ii) the Trustee shall have refused or neglected to act on such notice,
request and indemnity; such notification, request and offer of indemnity
are hereby declared, in every such case, at the option of the Trustee, to
be conditions precedent to the execution by the Trustee of its powers
and trusts under this Indenture and to any action or cause of action the
Trustee may take or possess for foreclosure or for the appointment of a
receiver or any other remedy hereunder, it being understood and
intended that no one or more holders of Outstanding Bonds and coupons
shall have any right in any manner whatever to affect, disturb or
67
§§12.16 (conL), 12.17
prejudice the Lien of this Indenture by action of such one or more
holders, or to enforce any right under this Indenture, except in the
manner herein provided, and that all proceedings at law or in equity shall
be instituted, had and maintained in the manner herein provided and for
the ratable benefit of all holders of such Outstanding Bonds and
coupons.
(b) All rights of action under this Indenture may be enforced by
the Trustee without the possession of any Bond or coupon or the
production thereof at trial or other proceedings relative thereto, and any
such suit or proceedings instituted by the Trustee shall be brought in its
own name, and any recovery of judgment shall be for the ratable benefit
of the holders of said Bonds and coupons.
(c) All parties to this Indenture agree, and each holder of any
Bond or coupon by his, her or its acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee,
the filing by any party litigant in such suit or an undertaking to pay the
costs of such suit, and that such court may in its discretion assess
reasonable costs, including attorneys' fees, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but this Section 12.16(c) shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Bondholder or Bondholders holding more than 10% aggregate principal
amount of Outstanding Bonds, or to any suit instituted by any Bond-
holder for the enforcement of the payment of the principal of, premium,
if any, or interest on any Bond on or after the respective due dates
expressed in such Bond or in the coupons for such interest.
Section 12.17. No remedy herein conferred upon or reserved to the
Trustee is intended to be exclusive of any other remedy or remedies; but
each and every such remedy shall be cumulative, and shall be in
addition to every other remedy given hereunder, or now or hereafter
existing at law or in equity or by statute. No delay or omission of the
Trustee or Bondholders in exercising any right or power accruing upon
any continuing Default shall impair any such right or power or shall be
construed to be a waiver of any such Default, or an acquiescence therein;
and every such right and power may be exercised from time to time and
as often as may be deemed expedient.
Trustee may
enforce rights
without possession
of Bonds
Undertaking
for costs
Remedies
cumulative
§12.18
68
Covenant to
pay Trustee
Judgment
by Trustee
Section 12.18. (a) In case (i) default shall be made in the pay-
ment of any interest on any Outstanding Bond and such default shall
have continued for a period of 90 days or (ii) default shall be made in
the payment of the principal of or premium, if any, on any Outstanding
Bond when payable, whether upon the maturity of said Bond, or upon a
declaration of maturity as authorized by this Indenture, or upon a sale as
set forth in Section 12.11; then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders of the
Outstanding Bonds and coupons, the whole amount that then shall have
become due and payable on all such Outstanding Bonds and coupons,
for principal, premium, if any, or interest, as the case may be, with
interest upon the overdue principal, premium, if any, and interest
payable at the same rates respectively as were borne by the respective
Bonds whereof the principal, premium, if any, or interest shall be
overdue; and in case the Company shall fail to pay the same forthwith
upon such demand, the Trustee, in its own name and as the trustee of an
express trust, shall be entitled to recover judgment against the Company
for the whole amount so due and unpaid.
(b) The Trustee shall be entitled to recover judgment as described
in Section 12.IS (a), either before, after or during the pendency of any
proceedings for the enforcement of the Lien of this Indenture, and the
right of the Trustee to recover such judgment shall not be affected by
any entry or sale of Mortgaged Property, or by the exercise of any other
right, power or remedy for the enforcement of this Indenture; and in
case of a sale of Mortgaged Property, and of the application of the
proceeds of such sale to the payment of the obligations secured by the
Lien of this Indenture, the Trustee, in its own name and as trustee of an
express trust, shall be entitled to enforce payment of and to receive all
amounts then remaining due and unpaid upon any and all of the
Outstanding Bonds for the benefit of the Bondholders, and shall be
entitled to recover judgment for any portion of such obligations remain-
ing unpaid, with interest. No recovery of any such judgment by the
Trustee, and no levy of any execution upon any such judgment Mort-
gaged Property, or any other property, shall in any manner or to any
extent affect the Lien of this Indenture upon any Mortgaged Property, or
any rights, powers or remedies of the Trustee, or any lien, rights, powers
or remedies of the Bondholders, but such lien, rights, powers and
69
§§ 12.18 (cont.), 12.19
remedies of the Trustee and of the Bondholders shall continue
unimpaired as before.
(c) Any moneys received by the Trustee under this Section 12.18
shall be applied by the Trustee to the payment of the amounts then due
and unpaid on the Outstanding Bonds and coupons in respect of which
such moneys shall have been received, ratably and without any prefer-
ence or priority of any kind (except as provided in Section 12.01),
according to the amounts due and payable on such Bonds and coupons,
respectively, at the date fixed by the Trustee for the distribution of such
moneys, upon presentation of the several Bonds and coupons and
stamping such payment thereon, if partly paid, and upon surrender
thereof, if fully paid.
Section 12.19. At any time before full payment of all of the
principal of and premium, if any, and interest on all Outstanding Bonds,
and whenever the Company shall deem it expedient for the better
protection of the security for such Bonds (even though there then may
be no Default entitling the Trustee to exercise the rights and powers
conferred by Section 12.02 or Section 12.03), the Company, with the
consent of the Trustee, may surrender and may deliver to the Trustee
full possession of the whole or any part of the Mortgaged Property, and
may authorize the Trustee to collect the dividends and interest on all
shares of stock, bonds and other obligations which are part of the
Mortgaged Property, and to vote all such shares of stock, for any period,
fixed or indefinite. In such event the Trustee shall enter into and upon
the Mortgaged Property so surrendered and delivered, and shall take and
receive possession thereof, for such period, fixed or indefinite, as afore-
said, without prejudice, however, to its right at any time subsequently,
when entitled thereto by any provision of this Indenture, to insist upon
maintaining and to maintain such possession though beyond the expira-
tion of any such prescribed period; and the Trustee, from the time of
such entry, shall work, maintain, use, manage, control and employ the
Mortgaged Property in accordance with this Indenture, and shall receive
and apply the income and revenues thereof as provided in Section 12.02.
Upon application of the Trustee, and with the consent of the Company if
there is no continuing Default and without such consent if then there is
such a continuing Default, a receiver may be appointed to take posses-
sion of, and to operate, maintain and manage, the whole or any part of
the Mortgaged Property, and the Company shall transfer and deliver to
Application
of moneys
Surrender of
possession
of Mortgaged
Property to
Trustee before
Default;
appointment of
receiver
70
12.19 (cont.), 1Z20, 12,21, 12.22
Suit by Trustee (o
protect security
Provisions solely
for benefit
of parties
and Bondholders
Trustee may file
proofs of claims
such receiver all such Mortgaged Property, wheresoever it may be
situated; and in every case, when a receiver of the whole or of any part of
said Mortgaged Property shall be appointed under this Section 12.19, or
otherwise, the net income and profits of such Mortgaged Property shall
be paid over to, and shall be received by, the Trustee, for the benefit of
the Bondholders. This Section 12.19, however, is subject to the exclusive
right of the Trustee, as pledgee, to retain the possession and control of
any stocks, bonds, cash and indebtedness pledged or to be pledged with
or held by the Trustee hereunder.
Section 12.20. The Trustee shall have power to institute and to
maintain such suits and proceedings as it may be advised shall be
necessary or expedient to prevent any impairment of the Lien of this
Indenture by any acts of the Company, or of others, in violation of this
Indenture or which are unlawful, or as the Trustee may be advised shall
be necessary or expedient to preserve and to protect its interests and the
security and interests of the Bondholders in respect of the Mortgaged
Property, or in respect of the income, earnings, rents, issues and profits
thereof, including power to institute and to maintain suits or proceedings
to restrain the enforcement of, or compliance with, or the observance of,
any legislative or other governmental enactment, rule or order which
may be unconstitutional or otherwise invalid, if the enforcement of, or
compliance with, or observance of, such enactment, rule or order would
impair the Lien of this Indenture or be prejudicial to the interests of the
Bondholders or of the Trustee.
Section 12.21. Nothing in this Indenture, or in any Bond, expressed
or implied, is intended, or shall be construed, to give to any Person, other
than the Trustee, the Bondholders and the Company, any legal or
equitable right, remedy, or claim under or in respect of this Indenture, or
under any of its covenants, conditions or provisions; all of which are
intended to be and are for the sole and exclusive benefit of the Trustee,
the Bondholders and the Company.
Section 12.22. The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have
the claims of the Trustee and of the Bondholders allowed in any judicial
proceedings relative to the Company, its creditors or Mortgaged Prop-
erty. Nothing contained in this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of
71
§§ 12,22 (cent.), 12,23, 1Z24
any Bondholder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Bondholder, or to
authorize the Trustee to vote in respect of the claim of any Bondholder
in any such proceeding.
Section 12.23. Notwithstanding any other provision of this Inden- Bondholders'
ture, the right of any holder of any Bond to receive payment of the ^maturity
principal of, premium, if any, and interest on such Bond, on or after the J^
respective due dates expressed in such Bond, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such holder.
Section 12.24. The holders of more than 50% in aggregate principal Waivers of past
amount of the then Outstanding Bonds (determined as provided in *
Section 20.03) which would be affected by any action proposed to be
taken may, on behalf of the holders of all the Bonds so affected, waive
any past Default and its consequences, except (a) a Default in the
payment of the principal of, premium, if any, or interest on any Bond,
(b) a Default arising from the creation of any lien prior to or on a parity
with the Lien of this Indenture, except Permissible Encumbrances and
Prior Liens or (c) a Default in respect of the waiver of which a specific
provision is otherwise made in this Indenture; provided that if any such
waiver would affect the rights of the holders of Bonds of only one series,
as evidenced by an Opinion of Counsel, such waiver shall not be
effective unless approved by holders of more than 60% in aggregate
principal amount of the Outstanding Bonds of such series affected, but if
any such action would affect the rights of the holders of Bonds of two or
more series, the waiver on behalf of the holders of Bonds of such two or
more series may be effected by holders of more than 60% in aggregate
principal amount of the Outstanding Bonds of such two or more series,
which need not include 60% in principal amount of Outstanding Bonds
of each of such series; provided, however, that, in no event shall such
waiver be effective unless approved by holders of more than 50% in
aggregate principal amount of all the then Outstanding Bonds of all such
series.
Company may
merge or
consolidate if
no impairment of
Lien of this
Indenture and with
assumption of
obligation by
successor
72
§ 13.01
ARTICLE XIII
EFFECT OF MERGER, CONSOLIDATION,
CONVEYANCE AND LEASE
Section 13.01. Nothing in this Indenture shall prevent any consoli-
dation or merger of the Company with or into, or any conveyance,
transfer or lease, subject to the Lien of this Indenture, of all or substan-
tially all of the Mortgaged Property to, any corporation lawfully entitled
to acquire, lease or operate the Mortgaged Property; provided, however,
and the Company covenants and agrees, that such consolidation,
merger, conveyance, transfer or lease shall be upon terms which would
fully preserve and in no respect create any Prior Lien (other than
Permissible Encumbrances) on the Mortgaged Property, or impair the
Lien or security of this Indenture, or any of the rights or powers of the
Trustee or the Bondholders under this Indenture; and provided further,
that no such consolidation, merger, conveyance, transfer or lease shall be
entered into or made by the Company with or to another corporation
which has outstanding, or which proposes to issue in connection with
any such consolidation, merger, conveyance, transfer or lease, any
obligations secured by a mortgage, pledge or other lien if as a result of
such consolidation, merger, conveyance or lease any of the Mortgaged
Property owned by the Company immediately prior thereto would be
subjected to the lien of such mortgage, pledge or other lien, unless
simultaneously therewith or prior thereto effective provision shall be
made to establish the Lien of this Indenture as superior to the lien of
such mortgage, pledge or other lien with respect to any of the Mortgaged
Property then or thereafter acquired by the Company or such other
corporation, or covenanted to be subjected to the Lien of this Indenture;
and provided further, that any such lease shall be made expressly subject
to immediate termination by the Company or by the Trustee at any time
during the continuance of a Default, and also by the purchaser of the
Mortgaged Property so leased at any sale thereof under this Indenture,
whether such sale is made under the power of sale conferred in this
Indenture or judicial proceedings; and provided, further, that, upon any
such consolidation, merger, conveyance or transfer, or upon any such
lease the term of which extends beyond the date of maturity of any of
the then Outstanding Bonds, the due and punctual payment of the
principal of and premium, if any, and interest on all said Bonds
according to their tenor and the due and punctual performance and
73
§§ 13.01 (cont.), 13.02
observance of all the covenants and conditions of this Indenture to be
kept or performed by the Company shall be expressly assumed by a
Supplemental Indenture executed and delivered to the Trustee by the
corporation formed by such consolidation or surviving such merger, or
acquiring all or substantially all the Mortgaged Property, or by the lessee
under any such lease the term of which extends beyond the date of
maturity of any of the then Outstanding Bonds.
Section 13.02. (a) In the absence of an express grant by any such
successor corporation, this Indenture shall not by reason of any such
consolidation, merger, conveyance, transfer or lease or otherwise, consti-
tute or become a lien upon, and the Mortgaged Property shall not
include or comprise:
(i) any property or franchises owned prior to such consolida-
tion, merger, conveyance, transfer or lease by any corporation with
or into which the Company or any successor corporation may be
consolidated or merged or to which the Company or any successor
corporation may make any such conveyance, transfer or lease, and
which, prior to such consolidation, merger, conveyance, transfer or
lease, were not subject to the Lien of this Indenture; and
(ii) any property or franchises which may be purchased,
constructed or otherwise acquired by any such successor corpora-
tion after the date of any such consolidation, merger, conveyance,
transfer or lease; excepting only the property and franchises referred
to in Section 13.02(b) (i) which shall be and become subject to the
Lien of this Indenture, notwithstanding any such consolidation,
merger, conveyance, transfer or lease.
(b) In order to confirm of record the Lien of this Indenture and to
preserve and protect the rights of the Bondholders hereunder, the
Supplemental Indenture provided for in Section 13.01, if it does not
contain an express grant by the successor corporation, as further security
for all Bonds issued and to be issued hereunder, of all its property and
franchises then owned and which it may thereafter acquire (other than
Excepted Property) shall contain:
(i) a grant by such successor corporation confirming the prior
Lien of this Indenture upon the Mortgaged Property and subjecting
to the Lien of this Indenture as a first lien, or as a lien subject only
to liens affecting the property and franchises of the Company prior
Upon merger
or consolidation
Indenture not
to constitute
lien upon
certain properties
Property or
franchises owned
prior to
consolidation and
which prior to
consolidation were
not subject
to lien
Property or
franchises acquired
by successor after
date of
consolidation
Successor
corporation
to confirm prior
Lien of this
Indenture
and keep
Mortgaged
Property
identifiable
74
§§ 13.02 (cont.), 13.03
to such consolidation, merger, conveyance, transfer or lease, (A) all
property and franchises which such successor corporation shall
thereafter acquire or construct which shall form an integral part of,
or be essential to the use or operation of, any property then or
thereafter subject to the Lien of this Indenture, and (B) all
renewals, replacements and additional property as may be pur-
chased, constructed or otherwise acquired by such successor corpo-
ration from and after the date of such consolidation, merger,
conveyance, transfer or lease, as the case may be, to maintain the
Mortgaged Property in good repair, working order and condition as
an operating system or systems and to comply with any covenant or
condition of this Indenture to be kept or observed by the Company;
and
(ii) a covenant by such successor corporation to keep the
Mortgaged Property as far as practicable identifiable; and a stipula-
tion that the Trustee shall not be taken impliedly to waive, by
accepting or joining in the Supplemental Indenture, any rights it
would otherwise have.
Right of successor Section 13.03. In case the Company, as permitted by Section
corporation 13.01, shall be consolidated with or merged into any other corporation or
shall convey or transfer, subject to the Lien of this Indenture, all or
substantially all the Mortgaged Property, the successor corporation
formed by such consolidation, or into which the Company shall have
been merged, or which shall have received a conveyance or transfer as
aforesaid, and upon executing with the Trustee and causing to be
recorded an indenture whereby such corporation shall assume and agree
to pay, duly and punctually, the principal of, premium, if any, and
interest on the Bonds issued hereunder in accordance with the provisions
of said Bonds and coupons and this Indenture, and shall agree to
perform and fulfill all the covenants and conditions of this Indenture to
be kept or performed by the Company, shall succeed to and be
substituted for the Company with the same effect as if such corporation
had been named herein, and shall have and may exercise under this
Indenture the same powers and rights as the Company, and, without in
anyway limiting or impairing by the enumeration of the following rights
and powers the scope and intent of the foregoing, such corporation
thereafter may cause to be executed, authenticated and delivered, either
in its own name or in the name of the Company, such Bonds as might
75
§ 13.03 (cont.)
have been executed, issued and delivered by the Company after the date
of such consolidation, merger, conveyance or transfer, and had such
consolidation, merger, conveyance or transfer not occurred, and upon
the order of such corporation in lieu of the Company, but subject to all
the terms, conditions and restrictions prescribed in this Indenture
concerning the authentication and delivery of Bonds, the Trustee shall
authenticate and deliver any Bonds delivered to it for authentication
which shall have been previously executed by the proper officers of the
Company, and such Bonds as such corporation shall thereafter, in
accordance with this Indenture, cause to be executed and delivered to
the Trustee for such purpose, and such corporation shall also have and
may exercise, subject to all applicable terms, conditions and restrictions
prescribed in this Indenture, the rights and powers of the Company as to
withdrawal of cash and release of Mortgaged Property from the Lien of
this Indenture, which the Company might have exercised after the date
of such consolidation, merger, conveyance or transfer, and had such
consolidation, merger, conveyance or transfer not occurred. All of the
Bonds so issued or delivered shall in all respects have the same legal
right and security as the Bonds theretofore issued or delivered in
accordance with the terms of this Indenture as though all of said Bonds
had been authenticated and delivered at the date of the execution of this
Indenture. As a condition precedent to the execution by such corpora-
tion and the authentication and delivery by the Trustee of any such
Bonds, the withdrawal of cash or the release of Mortgaged Property
from the Lien of this Indenture, under any provision of this Indenture on
the basis of Bondable Property acquired, made or constructed by such
corporation or by any corporation with which the Company or any such
corporation may be so consolidated or into which the Company or any
such corporation may be so merged or to which the Company or any
such corporation may make any such conveyance or transfer, the
Supplemental Indenture with the Trustee to be executed and caused to
be recorded by such corporation as provided in this Section 13.03, or a
subsequent indenture, shall contain a conveyance or transfer and mort-
gage in terms sufficient to subject such property to the Lien of this
Indenture; and provided further that the lien created thereby and the
lien thereon shall have similar force, effect and standing as the Lien of
this Indenture would have if the Company was not consolidated with or
merged into such other corporation or did not convey or transfer, subject
to the Lien of this Indenture, all or substantially all the Mortgaged
76
13.03 (cont.), 13.04
Extent of
Lien of this
Indenture on
property of
successor
corporation
Property, as aforesaid, to such corporation, and would itself on or after
the date of such consolidation, merger, conveyance or transfer, acquire
or construct such property, and in respect thereof request the authenti-
cation and delivery of Bonds or the withdrawal of cash or the release of
Mortgaged Property from the Lien of this Indenture as provided in this
Indenture.
Section 13.04. In case the Company, as permitted by Section
13.01, shall be consolidated with or merged into any other corporation,
or shall convey or transfer, subject to the Lien of this Indenture, all or
substantially all the Mortgaged Property as aforesaid, neither this
Indenture nor the Supplemental Indenture with the Trustee to be
executed and caused to be recorded by the such corporation as provided
in Section 13.01, shall, unless such Supplemental Indenture shall other-
wise provide, become or be required to become or be a lien upon any of
the properties or franchises then owned or thereafter acquired by such
corporation (by purchase, consolidation, merger, donation, construction,
erection or in any other way) except (a) those acquired by such
corporation from the Company, and improvements, extensions and
additions thereto and renewals and replacements thereof, (b) the
property used by such corporation as a basis under any of the provisions
of this Indenture for the authentication and delivery of Bonds, the
withdrawal of cash, the release of Mortgaged Property from the Lien of
this Indenture or otherwise, and (c) such franchises, repairs and
property acquired, made or constructed by the successor corporation (i)
to maintain, renew and preserve the franchises which are subject to the
Lien of this Indenture, (ii) to maintain the Mortgaged Property as an
operating system or systems in good repair, working order and condition,
(iii) in rebuilding or renewal of any of the Mortgaged Property damaged
or destroyed, or (iv) in replacement of or substitution for machinery,
apparatus, equipment, frames, towers, poles, wire, pipe, implements or
furniture, or any other fixtures or personalty, which are Mortgaged
Property and which have become old, inadequate, obsolete, worn out,
unfit, unadapted, unserviceable, undesirable or unnecessary for use in
the operation of the Mortgaged Property.
77
§§ 14.01, 14.02
ARTICLE XIV
THE TRUSTEE
Section 14.01. (a) The Trustee shall at all times be a bank or trust
company eligible under Section 7.04 and have a combined capital and
surplus of not less than Twenty Million Dollars ($20,000,000). If the
Trustee publishes reports of condition at least annually, pursuant to law
or to the requirement of any supervising or examining authority referred
to in Section 7.04, then for the purposes of this Section 14.01 the
combined capital and surplus of the Trustee shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) The Trustee hereby accepts the trust created by this Inden-
ture. The Trustee and, if a separate or co-trustee is appointed pursuant
to Section 14.15, such separate or co-trustee, undertakes prior to
Default, and after the curing of all Defaults which may have occurred, to
perform such duties and only such duties as are specifically set forth in
this Indenture, and in case of Default (which has not been cured) to
exercise such of the rights and powers vested in it by this Indenture, and
to use the same degree of care and skill in their exercise, as a prudent
man would exercise or use under the circumstances in the conduct of his
own affairs. For purposes of this Section 14.01 and Section 14.02, a
Default shall be deemed cured when the act or omission or other event
giving rise to such Default shall have been cured, remedied or termi-
nated.
(c) The Trustee, upon receipt of evidence furnished to it by or on
behalf of the Company pursuant to any provision of this Indenture, will
examine such evidence to determine whether or not it conforms to the
requirements of this Indenture.
Section 14,02. (a) No provision of this Indenture shall be con-
strued to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that
(i) prior to Default, and after the curing of all Defaults which
may have occurred, the Trustee shall not be liable except for the
performance of such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee but the duties and obliga-
tions of the Trustee, prior to Default, and after the curing of all
Qualification of
Trustee
Acceptance of
Trustee
Trustee to
determine if
evidence
conforms to
requirements
Extent of
Trustee's
liability
Not liable
except for
performance
of duties under
Indenture
Trustee may
rely upon truth of
statements in
certificates
and opinions
Not liable for
error of judgment
unless negligent
Not liable for
action taken in
accordance with
direction of
Bondholders
Not liable for
misconduct or
negligence on
part of agent
Same provisions
apply to co-trustee
Recitals deemed
made by Company
78
§§ 14.02 (cont.), 14.03
Defaults which may have occurred, shall be determined solely by
the express provisions of this Indenture; and
(ii) prior to Default, and after the curing of all Defaults which
may have occurred, and in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely upon certificates or
opinions conforming to the requirements of this Indenture as to the
truth of the statements 'and the correctness of the opinions
expressed therein; and
(iii) no Trustee which is a corporation shall be personally
liable for any error of judgment made in good faith by a Responsi-
ble Officer or Responsible Officers of such Trustee unless it shall be
proved that such Trustee was negligent in ascertaining pertinent
facts and no Trustee who is an individual shall be personally liable
for any error of judgment made in good faith by such individual
unless it shall be proved that such individual was negligent in
ascertaining the pertinent facts; and
(iv) the Trustee shall not be personally liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than a
majority in principal amount of the Outstanding Bonds (deter-
mined as provided in Section 20.03} relating to the time, method,
and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture; and
(v) the Trustee may execute any of the trusts or powers or
perform any duties under this Indenture either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or
attorney, who is not, in either case, an employee of the Trustee,
appointed with due care by it hereunder.
(b) The provisions of this Section 14.02 which have been made
specifically applicable to the Trustee shall apply to the Trustee and, if a
separate or co-trustee is appointed pursuant to Section 14.15, to any
separate or co-trustee.
Section 14.03, The recitals in this Indenture and in the Bonds shall
be taken as the statements of the Company and the Trustee assumes no
79
§§ 14.03 (cont.), 14.04, 14.05, 14.06
responsibility for the correctness of such statements. The Trustee makes
no representations as to the condition, genuineness, validity or value of
the Mortgaged Property or any part thereof, or as to the title of the
Company thereto, or as to the validity or adequacy of the security
afforded thereby and hereby, or as to the validity of this Indenture or of
the Bonds or coupons issued hereunder. The Trustee shall be under no
responsibility or duty with respect to the disposition of any Bonds
authenticated and delivered hereunder or the application of the proceeds
thereof or the application of any moneys paid to the Company under any
provision hereof.
Section 14.04. (a) The Trustee and any separate or co-trustee shall
not be personally liable in case of entry by it upon the Mortgaged
Property for debts contracted or liability or damages incurred in the
management or operation of Mortgaged Property.
(b) The Trustee, any paying agent, bond registrar, or authenticat-
ing agent, in its individual or any other capacity, may become the holder,
owner or pledgee of Bonds or coupon's and, subject to Section 14.11 and
Section 14.12, may otherwise deal with the Company with the same
rights the Trustee would have if it were not Trustee, paying agent, bond
registrar or authenticating agent.
Section 14.05. Whenever it is provided in this Indenture that the
Trustee shall take any action upon the happening of a specified event or
upon the fulfillment of any condition or upon the request of the
Company or of Bondholders, the Trustee taking such action shall have
full power to give any and all notices to do any and all acts and things
incidental to such action.
Section 14.06. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee
on the Company shall be deemed to have been sufficiently given or
served, for all purposes, by being deposited postage prepaid in a post
office letter box Addressed (until another address is filed by the Com-
pany with the Trustee for the purpose of this Section 14.06} to the
Company at the following address:
Kansas City Power & Light Company
1330 Baltimore Avenue
Kansas City, Missouri 64105
Attention: Corporate Secretary
Trustee not liable
for debts from
operation of
Mortgaged
Property
Trustee may
own Bonds
Trustee may give
notices incidental
to action by it
Notice by Trustee
to Company
80
§§ 14.07, 14.08
Trustee may
rely on certificates
Trustee may
consult with
counsel
Trustee not
responsible for
selection of
expert
Moneys deposited
with Trustee
to be held
in trust; interest
on such moneys
Section 14.07. (a) To the extent permitted by Section 14.01 and
Section 14.02:
(i) the Trustee may rely and shall be protected in acting upon
any Accountant's Certificate, Appraiser's Certificate, Officers' Cer-
tificate, Engineer's Certificate, Opinion of Counsel, Board resolu-
tion, certificate, opinion, notice, request, consent, order, appraisal,
report, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties; and any request or direction of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate,
Board resolution or written order, and
(ii) the Trustee may consult with counsel, who may be
counsel to the Company, and the opinion of such counsel shall be
full and complete authorization and protection in respect of any
action taken or suffered by the Trustee hereunder in good faith and
in accordance with the opinion of such counsel.
(b) The Trustee shall not have any responsibility for the selection,
appointment or approval of any expert for any purpose expressed in this
Indenture, except that nothing in this Section 14.07 shall relieve the
Trustee of its obligation to exercise reasonable care with respect to such
selection, appointment or approval of experts who may furnish opinions
or certificates to the Trustee pursuant to this Indenture.
(c) Nothing in this Section 14.07 shall be deemed to modify the
obligation of the Trustee to exercise during the continuance of a Default
the rights and powers vested in it by this Indenture with the degree of
care and skill specified in Section 14.01.
Section 14.08. (a) Subject to Section 18.02, all moneys received by
the Trustee whether as Trustee or paying agent shall, until used,
invested or applied as provided in this Indenture, be held in trust for the
purposes for which they were received, but need not be segregated from
other funds except to the extent required by law. In accordance with
Section 11.02, the Trustee may allow and credit to the Company interest
on any moneys received by the Trustee hereunder at such rate, if any, as
may be agreed upon by the Company and the Trustee from time to time
and as may be permitted by law.
81
§§ 14.08 (cont.), 14.09
(b) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it.
Section 14.09. (a) The Company shall pay to the Trustee from
time to time, and the Trustee shall be entitled to receive from the
Company, reasonable compensation for all services rendered by the
Trustee in its execution of the trusts created by this Indenture and in its
exercise and performance of any of the powers and duties of the Trustee
hereunder, which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust, and
the Company shall reimburse the Trustee for all appropriate advances
made by the Trustee and shall pay to the Trustee from time to time its
expenses and disbursements (including the reasonable compensation
and the expenses and disbursements of all persons not regularly in its
employ and, to the extent permitted by law, of its counsel) incurred
without negligence or bad faith. The Company also covenants to
indemnify the Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part
of the Trustee, arising out of or in connection with the acceptance or
administration of the trust created by this Indenture, including the costs
and expenses of defending against any claim of liability in the premises.
To secure the perforrr nice of the obligations of the Company under this
Section 14.09, the Trustee shall have (in addition to any other rights
under this Indenture) a lien prior to that of the Bondholders upon the
Mortgaged Property, including all Mortgaged Property and funds held or
collected by the Trustee.
(b) If, and to the extent that, the Trustee and its counsel and other
persons not regularly in its employ do not receive compensation for
services rendered, reimbursement of its or their advances, expenses and
disbursements, or indemnity, as provided in Section 14.09{a), as the
result of allowances made in any reorganization, bankruptcy, receiver-
ship, liquidation or other proceeding or by any plan of reorganization or
readjustment of obligations of the Company, the Trustee shall be
entitled, in priority to the Bondholders, to receive any distribution of any
securities, dividends or other disbursements which would otherwise be
made to the Bondholders in any such proceeding or proceedings and the
Trustee not
required to risk
own funds
Compensation of
Trustee
Lien for Trustee
compensation
14.09 (cont.), 14.10, 14.11, 14.12, 14.13
82
Trustee may rely
on facts
established
by Officers'
Certificate
Action to be taken
by Trustee who
becomes creditor
of Company
Action to be taken
by Trustee
acquiring
conflicting interest
Resignation or
removal of Trustee
Trustee is hereby constituted and appointed, irrevocably, the attorney-
in-fact for the Bondholders and each of them to collect and receive, in
their name, place and stead, such distributions, dividends or other
disbursements, to deduct therefrom the amounts due to the Trustee, its
counsel and other persons not regularly in its employ on account of
services rendered, advances, expenses and disbursements made or
incurred, or indemnity, and to pay and distribute the balance, pro rata, to
the Bondholders. The Trustee shall have a lien upon any securities or
other considerations to which the Bondholders may become entitled
pursuant to any such plan of reorganization or readjustment of obliga-
tions, or in any such proceeding or proceedings; and the court or judge in
any such proceeding or proceedings may determine the terms and con-
ditions under which any such lien shall exist and be enforced.
Section 14.10. Whenever in the administration of the trusts created
by this Indenture, prior to a Default, or after the curing of Default, the
Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action hereunder, such matter
(unless other evidence in respect thereof is herein specifically pre-
scribed) may to the extent permitted by Sections 14.01 and 14.02 be
deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such Officers' Certificate shall
be full warrant to the Trustee for any action taken by it under this
Indenture in reliance thereon.
Section 14.11, The Trustee will comply with TIA Section 311 (a),
excluding any creditor relationship listed in TIA Section 311(b). A
trustee which has resigned or been removed shall be subject to TIA
Section 311 (a) to the extent indicated therein.
Section 14.12. The Trustee will comply with TIA Section 310 (b);
provided, however, that (i) there shall be excluded from the require-
ments of TIA Section 310(b) (I) all indentures which may be excluded
pursuant to the proviso to TIA Section 310(b) (l)\ and (ii) the provi-
sions of the first sentence of TIA Section 310(b) (9) shall not apply to
any securities described in the second sentence of TIA Section
310(b)(9).
Section 14.13. (a) The Trustee may at any time resign and be
discharged of the trusts created by this Indenture by giving written
notice to the Company specifying the day upon which such resignation
83
§§ 14.13 (cont.), 14.14
shall take effect and thereafter publishing notice thereof, in one Author-
ized Newspaper in the Borough of Manhattan, The City of New York,
and in one Authorized Newspaper in the city in which the principal
office of the Trustee is located, once each, and such resignation shall
take effect upon the day specified in such notice unless previously a
successor trustee shall have been appointed by the Bondholders or the
Company in the manner provided in Section 14.14, and in such event
such resignation shall take effect immediately on the appointment of
such successor trustee, provided, however, that if all then Outstanding
Bonds shall be Registered Bonds, no notice need be given except by mail
in accordance with Section 14.13(c). This Section 14.13 shall not be
applicable to resignations pursuant to Section 14.12.
(b) Any Trustee may be removed at any time by an instrument or
concurrent instruments in writing filed with such Trustee and signed and
acknowledged by the holders of a majority in principal amount of the
then Outstanding Bonds or by their attorneys in fact duly authorized.
(c) In case at any time the Trustee shall cease to be eligible in
accordance with Section 7.04 or Section 14.01, then the Trustee so
ceasing to be eligible shall resign immediately in the manner and with
the effect provided in this Section 14.13; and in the event that it does not
resign immediately in such case, then it may be removed forthwith by an
instrument or concurrent instruments in writing filed with the Trustee so
ceasing to be eligible and either (i) signed by the Chairman of the
Board, Chief Executive Officer, President or a Vice-President of the
Company attested by the Secretary or an Assistant Secretary of the
Company or (ii) signed and acknowledged by the holders of a majority
in principal amount of Outstanding Bonds or by their attorneys in fact
duly authorized.
Section 14.14. (a) In case at any time the Trustee shall resign or
shall be removed (unless such Trustee shall be removed as provided in
Section 14.12(c) in which event the vacancy shall be filled as provided
therein) or shall become adjudged a bankrupt or insolvent, or if a
receiver of the Trustee or of its property shall be appointed, or if any
public officer shall take charge or control of the Trustee, or of its
property or affairs, for the purpose of rehabilitation, conservation or
liquidation, or a vacancy shall be deemed to exist in the office of the
Trustee for any other reason, the Company, by a Board resolution, shall
Trustee may b«
removed by
holders of a
majority
of Bonds
Trustee ceasing to
be eligible shall
resign
Appointment of
successor Trustee
14.14 (conl.), 14,15
84
Notice to
Bondholders
Court to
appoint successor
Trustee in
certain
circumstances
Resignation
of Trustee
Successor Trustee
shall be
qualified
Appointment of
additional trustees
or co-trustees
promptly appoint a successor trustee. In case all or substantially all of
the Mortgaged Property shall be in the possession of a receiver or trustee
lawfully appointed, such receiver or trustee, by written instrument, may
similarly appoint a successor to fill such vacancy until a new trustee shall
be so appointed by the Bondholders. Within one year after such
resignation, removal or incapability or the occurrence of such vacancy, a
successor Trustee may be appointed by act of the holders of a majority
in principal amount of the Outstanding Bonds, delivered to the Com-
pany and the retiring Trustee, and the successor trustee so appointed
shall, forthwith upon its acceptance of such appointment, become the
successor trustee and supersede the successor trustee appointed by the
Company or by such receiver or trustee.
(b) The Company shall publish notice of any appointment of a
successor Trustee made by it or by act of Bondholders in the manner
provided in Section 14.13.
(c) If in a proper case no appointment of a successor Trustee shall
be made pursuant to Section 14.14(a)withm six months after a vacancy
shall have occurred in the office of Trustee, any Bondholder or any
resigning Trustee may apply to any court of competent jurisdiction to
appoint a successor Trustee. Said court may thereupon after such notice,
if any, as such court may deem proper and prescribe, appoint a successor
Trustee.
(d) If any Trustee resigns because of a conflict of interest as
provided in Section 14.12 and a successor Trustee has not been
appointed by the Company or the Bondholders or, if appointed, has not
accepted the appointment, within 30 days after the date of such
resignation, the resigning Trustee may apply to any court of competent
jurisdiction for the appointment of a successor trustee.
(e) Any Trustee appointed under this Section 14.14 as a successor
Trustee shall be a bank or trust company eligible under Section 7.04 and
Section 14.01 and qualified under Section 14.12.
Section 14.15. (a) At any time or times, for the purpose of
conforming to any legal requirements, restrictions or conditions in any
state or jurisdiction in which any Mortgaged Property may be located,
the Company and the Trustee shall have the power to appoint, and, upon
the request of the Trustee, the Company shall for such purpose join with
the Trustee in the execution, delivery and performance of all instru-
85
§ 14.15 (conL)
ments and agreements necessary or proper to appoint, one or more
Persons approved by the Trustee, either to act as separate trustee or
trustees, or co-trustee or co-trustees jointly with the Trustee, of all or
any of the Mortgaged Property. In the event that the Company shall not
have joined in such appointment within 15 days after the receipt by it of
a request to do so, the Trustee alone shall have power to make such
appointment.
(b) Every separate trustee, every co-trustee and every successor Appointment
trustee, other than any trustee which may be appointed as successor to «S conditions
the original Trustee, shall, to the extent permitted by law, but to such
extent only, be appointed subject to the following provisions and condi-
tions, namely:
(i) the rights, powers, duties and obligations conferred or
imposed upon trustees hereunder or any of them shall be conferred
or imposed upon and exercised or performed by the Trustee and
such separate trustee or separate trustees or co-trustee or co-
trustees, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed the Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations shall be
exercised and performed by such separate trustee or separate
trustees or co-trustee or co-trustees;
(ii) the Bonds shall be authenticated and delivered, and all
powers, duties, obligations and rights conferred upon the Trustee in
respect of the custody of all Bonds and other securities and of all
cash pledged or deposited hereunder, shall be exercised solely by
the original Trustee or its successors in the trust hereunder, and
(iii) the Company and the Trustee, at any time by an instru-
ment in writing executed by them jointly, may accept the resigna-
tion of or remove any separate trustee or co-trustee appointed under
this Section 14.15 or otherwise, and, upon the request of the
Trustee, the Company shall, for such purpose, join with the Trustee
in the execution, delivery and performance of all instruments and
agreements necessary or proper to make effective such resignation
or removal. In the event that the Company shall not have joined in
such action within 15 days after the receipt by it of a request so to
do, the Trustee alone shall have power to accept such resignation or
14.15 (cont.), 14.16
86
Notice by
Bondholders
lo Trustee,
notice to
all trustees;
contents,
filing, etc.
of instrument
appointing
trustee;
incapacity,
etc. of
instrument
appointing
trustee
Acceptance by
successor
trustee;
requirements
of predecessor
Trustee
upon retiring
to remove any such separate trustee or co-trustee. A successor to
separate trustee or co-trustee so resigned or removed may be
appointed in the manner provided in this Section 14.15.
(c) No Trustee shall be personally liable by reason of any act or
omission of any other trustee hereunder.
(d) Any notice, request or other writing, by or on behalf of the
Bondholders delivered to the original Trustee, or its successor in the
trust hereunder, shall be deemed to have been delivered to all of the
then trustees or co-trustees as effectually as if delivered to each of them.
Every instrument appointing any trustee or trustees other than a succes-
sor to the original Trustee shall refer to this Indenture and the conditions
expressed in this Article XIV and upon the acceptance in writing of such
appointment, such trustee or trustees, or co-trustee or co-trustees, shall
be vested with the estates or property specified in such instrument,
either jointly with the original Trustee, its successor, or separately, as
may be provided in such instrument the trusts, conditions and provisions
of this Indenture; and every such instrument shall be filed with the
original Trustee or its successor in the trust hereunder. Any separate
trustee or trustees, or any co-trustee or co-trustees, may at any time by
an instrument in writing constitute the original Trustee or its successor
in the trust hereunder the agent or attorney in fact for such trustee, with
full power and authority, to the extent which may be permitted by law,
to do any and all acts and things and exercise any and all discretion
authorized or permitted by such trustee, for and on behalf of such
trustee, and of such trustee name. In case any separate trustee or
trustees or co-trustee or co-trustees, or a successor to any of them, shall
die, become incapable of acting, resign or be removed, all the estates,
property, rights, powers, trusts, duties and obligations of said separate
trustee or co-trustee, so far as permitted by law, shall vest in and be
exercised by the original Trustee or its successor in the trust hereunder,
without the appointment of a new trustee as successor to such separate
trustee or co-trustee.
Section 14.16. Any successor trustee appointed hereunder shall
execute, acknowledge and deliver to the predecessor trustee, and also to
the Company, an instrument accepting such appointment hereunder,
and thereupon such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the estates, properties,
87
§§ 14.16 (cont.), 14.17
rights, powers, trusts, duties and obligations of the predecessor in trust
hereunder, with like effect as if originally named as trustee herein; but
the trustee ceasing to act shall nevertheless, on the written request of the
Company, or of the successor trustee, or of the holders of 10% in
principal amount of the then Outstanding Bonds, execute, acknowledge
and deliver such instruments of conveyance and further assurance and
do such other things as may reasonably be required for more fully and
certainly vesting and confirming in such successor trustee all the right,
title and interest of the trustee to which such trustee succeeds in and to
the Mortgaged Property and such rights, powers, trusts, duties and
obligations, and the trustee ceasing to act shall also, upon like request,
pay over, assign and deliver to the successor trustee any money or other
Mortgaged Property, including any pledged securities which may then
be in the possession of such trustee. If any deed, conveyance or
instrument in writing from the Company is required by the new trustee
for more fully and certainly vesting in and confirming to such new
trustee such estates, properties, rights, powers, trusts and duties, any and
all such deeds, conveyances and instruments in writing shall, on request,
be executed, acknowledged and delivered by the Company.
Section 14.17. Any corporation into which the Trustee may be
merged or with which it may be consolidated or any corporation "*1011 °f
resulting from any merger or consolidation in which the Trustee shall be
a party or any corporation to which substantially all the business and
assets of the Trustee may be transferred, provided such corporation shall
be eligible under Section 7.04 and Section 14.01 and qualified under
Section 14.12, shall be the successor trustee under this Indenture,
without the execution or filling of any instrument or the performance of
any further act on the part of the Company or any other co-trustee
hereunder, anything herein to the contrary notwithstanding. In case any
of the Bonds contemplated to be issued hereunder shall have been
authenticated but not delivered, any such successor to the Trustee may,
subject to the same terms and conditions as though such successor had
itself authenticated such Bonds, adopt the certificate of authentication of
the original Trustee or of any successor to it, as trustee hereunder, and
deliver the said Bonds so authenticated; and in case any of said Bonds
shall not have been authenticated, any successor to the Trustee may
authenticate such Bonds either in the name of any predecessor trustee or
in the name of the successor trustee, and in all such cases such
Appointment of
successor Trustee
by Company
Joining of
individual trustee
§§ 14.17 (cont.), 14.18, 14.19
certificate shall have the same full force which the certificate of the
Trustee shall have; provided, however, that the right to authenticate
Bonds in the name of the original Trustee shall apply only to its
successor or successors by merger or consolidation or sale as aforesaid.
Section 14.18. Notwithstanding any other provision of this Inden-
ture, by instrument executed by order of the Board and duly acknowl-
edged by its proper officers, the Company may appoint any corporation
eligible under the provisions of this Indenture, and doing business in the
United States of America, as Trustee in succession to the Trustee on the
date of such appointment, and the corporation so appointed Trustee
shall thereupon become successor Trustee hereunder, but no such
appointment may be made prior to December 1, 1996, or prior to the
tenth anniversary of any such appointment or any subsequent such
appointment.
Section 14.19. In the event that an individual trustee is joined in
order to comply with any legal requirements respecting trustees under
deeds of trust of property in any state in which Mortgaged Property is or
may in the future be situated, such individual trustee shall possess only
such powers as may be necessary to comply with such requirements.
Any and all rights, powers, duties and obligations of this Indenture
conferred or imposed upon the Trustee may be exercised and performed
by the Trustee alone without reference to any individual trustee in so far
as permitted by law. In any Supplemental Indenture joining an individ-
ual trustee, the individual trustee shall irrevocably constitute and
appoint the Trustee the true and lawful attorney in fact for such
individual trustee with full power and authority, insofar as permitted by
law, either in the name and on behalf of the Trustee alone, or of the
Trustee and the individual trustee jointly, to exercise any and all rights
or powers conferred by this Indenture upon the individual trustee alone,
or upon the Trustee and the individual trustee jointly.
89
§ 15.01
ARTICLE XV
SUPPLEMENTAL INDENTURES
Section 15.01. Without the consent of any Bondholders, the Trus-
tee and the Company, when authorized by a Board resolution, from time
to time and at any time, may enter into Supplemental Indentures hereto
which shall thereafter form a part hereof, for any one or more of the
following purposes:
(a) to convey, transfer and assign to the Trustee and to
subject to the Lien of this Indenture with the same force and effect
as if included in the granting clause hereof, additional properties
and franchises, including bonds, stock and securities in other
companies hereafter acquired by consolidation, merger, purchase or
otherwise, together with such other provisions as may be appropri-
ate to express the respective rights of the Trustee and the Company
in regard thereto;
(b) to close this Indenture against the issue of additional
Bonds or to add limitations on the amount, terms, provisions,
authentication, delivery, issue and purposes of the issue of Bonds
under this Indenture;
(c) to provide for the issue of Bonds of any series, to add
provisions with respect to such series, and to establish the forms
and provisions of the Bonds of such series, all in a manner not
inconsistent with the provisions of this Indenture;
(d) to provide the terms and conditions of the exchange or
. conversion, at the option of the holders of Bonds of any series, of
the Bonds of such series for or into Bonds of other series or stock or
other securities of the Company or any other corporation;
(e) to provide for alternative methods or forms for evidencing
and recording the ownership of Bonds and matters related thereto;
(f) to reflect changes in Generally Accepted Accounting
Principles;
(g) to modify any provision of this Indenture for the purpose
of relieving the Company from any of the obligations, conditions or
Provision for
Supplemental
Indentures for
certain purposes
Subject additional
properties to Lien
Close Indenture
Provide for
issue of a
series of Bonds
Provide terms
of exchange
or conversion
Provide
alternatives for
evidencing
ownership of
Bonds
Reflect changes in
Generally Accepted
Accounting
Principles
Modify certain
provisions in
Indenture
15.01 (cont.), 15.02 90
To make
certain corrections
To provide
for joining of
individual Trustee
Requirements for
Supplemental
Indentures
restrictions herein contained or otherwise; provided, that no such
modification shall be or become operative or effective, or in any
manner impair any of the rights of the Bondholders or of the
Trustee, while any Bonds of any series established prior to the
execution of such Supplemental Indenture shall remain Outstand-
ing;
(h) to make such provision in regard to matters or questions
arising under this Indenture as may be necessary or desirable and
not inconsistent with this Indenture or for the purpose of supplying
any omission, curing any ambiguity, or curing, correcting or supple-
menting any defective or inconsistent provision contained in this
Indenture or in any Supplemental Indenture; and
(i) to provide for the joining of an individual trustee in order
to comply with any legal requirements respecting trustees under
deeds of trust of property in any state in which Mortgaged Property
is or may in the future be situated.
Section 15.02. (a) With the consent (evidenced as provided in
Article XVI or Article XX) of the holders of more than 50% in aggregate
principal amount of the Outstanding Bonds, the Company, when author-
ized by a Board resolution, and the Trustee may, from time to time and
at any time, enter into a Supplemental Indenture for the purpose of
adding any provisions to or changing in any manner or eliminating any
provision of this Indenture or of any Supplemental Indenture or of
modifying in any manner the rights of the holders of Bonds and coupons;
provided, however, that anything in this Section 15.02 to the contrary
notwithstanding, (i) no such Supplemental Indenture shall, without the
consent of the holder of each Outstanding Bond affected thereby, (A)
extend the fixed maturity of any Bonds, change any terms of any sinking
fund or analogous fund or conversion rights with respect to any Bonds, or
reduce the rate or extend the time of payment of interest thereon, or
reduce the principal amount thereof, or, subject to Article XII, limit the
right of a holder of Bonds to institute suit for the enforcement of
payment of principal of or premium, if any, or interest on such Bonds in
accordance with the terms of said Bonds, or (B) reduce the aforesaid
percentage of Bonds, the holders of which are required to consent to any
such Supplemental Indenture, or (C) permit the creation by the
Company of any Prior Lien (but no amendment of the 1946 Mortgage
nor any merger or consolidation, as permitted by Section 13.01, of the
91
15.02 (cont,), 16.01
Company with any other Person owning property which is subject to a
Prior Lien shall be deemed the creation of any Prior Lien) and (ii) no
action specified in this Section 15.02 (a) which would affect the rights of
the holders of Bonds of only one series, as evidenced by an Opinion of
Counsel, may be taken unless approved by the holders of more than 60%
in aggregate principal amount of the Outstanding Bonds of such series
affected, but if any such action would affect the rights of the holders of
Bonds of two or more series, the approval of such action on behalf of the
holders of Bonds of such two or more series may be effected by holders
of more than 60% in aggregate principal amount of the Outstanding
Bonds of such two or more series, which need not include 60% in
principal amount of Outstanding Bonds of each of such series; provided,
however, that in no event shall such action be effective unless approved
by holders of more than 50% in aggregate principal amount of all the
then Outstanding Bonds of all such series.
(b) Upon the request of the Company, accompanied by a copy of a
Board resolution authorizing the execution of any such Supplemental
Indenture, and upon the filing with the Trustee of evidence of the
consent of Bondholders as aforesaid, the Trustee shall join with the
Company in the execution of such Supplemental Indenture.
ARTICLE XVI
MEETINGS OF BONDHOLDERS
Section 1.6.01. (a) The Trustee shall on request of the Company
pursuant to a Board resolution or upon written request of the holders of
not less than 50% in aggregate principal amount of Outstanding Bonds
call a meeting of Bondholders to be held at such time and at such place
in either the Borough of Manhattan, The City of New York, or the city
in which the principal office of the Trustee or the city in which the
principal office of the Company is located, as the Trustee shall deter-
mine. Notice of every meeting of Bondholders, setting forth the time
and the place of such meeting and in general terms the action proposed
to be taken at such meeting and specifying each series of Bonds which
would be affected by the proposed action, shall be published at least two
times in one Authorized Newspaper in the Borough of Manhattan, The
City of New York, New York and in one Authorized Newspaper in the
city in which the principal office of the Trustee is located, the first
publication in each such Authorized Newspaper to be not less than 20
Trustee shall
join Company
in execution
of Supplemental
Indenture
Manner of
calling meetings
and determination
of Bonds affected
16.01 (cont.), 16.02
92
Trusle* to
determine Bonds
affected
Calling of
meetings by
Company or
Bondholders
nor more than 60 days prior to the date fixed for such meeting (except
that, if all the Bonds which would be affected by the proposed action are
Registered Bonds, such publication need not be made) and shall be
mailed not less than 30 days before such meeting (i) to each holder on a
record date not more than 15 days prior to the date of such mailing of
Registered Bonds which would be affected by the action proposed to be
taken at the meeting and then Outstanding, addressed to such holder at
the address appearing on the Bond register maintained pursuant to
Section 2.06, (ii) to each holder of any such Bond payable to bearer who
shall have filed, within two years prior to the date of such mailing, with
the Trustee an address for notices to be addressed to such holder, (iii) to
all other Bondholders whose names and addresses are preserved at the
time by the Trustee, as provided in Section 17.02, (iv) to the Trustee
addressed to it at P.O. Box 64, Kansas City, Missouri 64141, or at such
other place as may be designated by the Trustee from time to time, and
(v) to the Company addressed to it at 1330 Baltimore Avenue, Kansas
City, Missouri 64105, Attention: Corporate Secretary, or at such other
address as may be designated by the Company from time to time;
provided, however, that the mailing of such notice to any Bondholder
shall in no case be a condition precedent to the validity of any action
taken at such meeting.
(b) The Trustee may in its discretion determine whether or not
Bonds of any particular series would be affected by action proposed to be
taken at a meeting and any such determination shall be conclusive upon
the holders of Bonds of such series and all other series. Subject to
Section 14.02 and Section 14.07, the Trustee shall not be liable for any
such determination made in good faith.
Section 16.02. In case at any time the Company, pursuant to a
Board resolution, or the holders of not less than a majority in aggregate
principal amount of the Outstanding Bonds which would be affected by
the action proposed to be taken, shall have requested the Trustee to call
a meeting of Bondholders, by written request setting forth in general
terms the action proposed to be taken at such meeting, and the Trustee
shall not have made the first publication of the notice of such meeting
within 20 days after receipt of such request, then the Company or the
holders of Bonds in the amount above specified may determine the time
and place in the Borough of Manhattan, The City of New York, or in
the city in which the principal office of the Trustee or the city in which
93
§§ 16.02 (cont.), 16.03, 16.04
the principal office of the Company is located, for such meeting and may
call such meeting by giving notice thereof as provided in Section 16.01.
Section 16.03. To be entitled to vote at any meeting of Bondhold-
ers a Person shall (a) be a holder of Coupon Bonds transferable by
delivery of a series which would be affected by the proposed action; or
(b) be a holder of Registered Bonds of such a series (whether such
Bonds are fully registered or registered only as to principal); or (c) be
the holder of a certificate then in effect and satisfactory to the Trustee
issued pursuant to Section 20.01', or (d) be a Person appointed by an
instrument in writing as a proxy for such a holder or holders of Bonds of
such a series or for a holder of such a certificate, provided that no Person
who holds a Bond which is excluded in the determination of the
requisite amount concurring in any direction, waiver or consent as set
forth in Section 20.03 shall be permitted to vote. The only Persons who
shall be entitled to be present or to speak at any meeting of Bondholders
shall be the Persons entitled to vote at such meeting and their counsel,
proxies and any representatives of the Trustee and its counsel, and any
representatives of the Company and its counsel.
Section 16.04. (a) Notwithstanding any other provision of this
Indenture, the Trustee on its own initiative or on request of the
Company may, or upon request of the holders of a majority in principal
amount of the Bonds Outstanding shall, from time to time, make such
reasonable regulations, and may vary such regulations, as it may deem
advisable for any meeting of Bondholders, in regard to the appointment
and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidences of the right to vote, and, except
as otherwise provided in this Section 16.04 and in Section 16.05, such
other matters concerning the conduct of the meeting as the Trustee may
deem advisable. Except as otherwise permitted or required by any such
regulations, the holding of Bonds shall be proved in the manner specified
in Section 20.01 and the appointment of any proxy shall be proved in the
manner specified in Section 20.01 or by having the signature of the
Person executing the proxy witnessed or guaranteed by any bank, banker
or trust company authorized by Section 20.01 to certify to the holding of
Bonds which are transferable by delivery.
Persons entitled
to vote
at meeting
Conduct
of meeting;
regulations
94
§§ 16.04 (cont.), 16.05
Trustee to
appoint chairman
of meeting
One fote
for each $1000
principal amount
or Bonds
Manner
of voting
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Bondholders as provided in Section 16.02,
in which case the Company or the Bondholders calling the meeting, as
the case may be, shall in a similar manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by majority vote of the Bondholders and proxies
present at the meeting irrespective of the principal amount of the Bonds
held or represented by them.
(c) Subject to Section 20.03, upon the submission of any resolu-
tion at any meeting, each Bondholder or proxy shall be entitled to one
vote for each and every $1000 principal amount of Outstanding Bonds
held by such Bondholder or by the Bondholders represented by such
proxy, as the case may be, the holders of which are entitled by this
Article XVI to vote, provided, however, that no vote shall be cast or
counted at any meeting in respect of any Bond challenged as not
Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Bonds held by such chairman or instruments in
writing as aforesaid duly designating such chairman as the person to vote
on behalf of other Bondholders. Any meeting of Bondholders duly called
pursuant to Section 16.01 or Section 16.02 may be adjourned from time
to time, and the meeting may be held as so adjourned without further
notice.
Section 16.05. (a) The vote upon any resolution submitted in
accordance with the provisions of Section 16.01 shall be by written
ballots on which shall be subscribed the signatures of the holders of
Bonds or their representatives by proxy and the serial number or
numbers of the Bonds held or represented by them. The chairman of the
meeting shall appoint two inspectors of votes who shall count all votes
cast at the meeting for or against any resolution and who shall make and
file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Bondholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the
facts, setting forth a copy of the notice of the meeting and showing that
95
§§ 16.05 (com.), 16.06, 16.07, 17.01
said notice was published as provided in Section 16.01. The record shall
show the serial numbers of the Bonds voting in favor of any resolution
submitted in accordance with Article XVI, The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company
and the other to the Trustee to be preserved by the Trustee.
(b) Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
Section 16.06. Nothing in this Article XVI contained shall be
deemed or construed to authorize or permit, by reason of any call of a
meeting of Bondholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Bondholders under any provision of this Indenture or of the Bonds.
Section 16.07. Any action which may be taken at a meeting of
Bondholders, including the authorization of a Supplemental Indenture
as provided in Section 15.02(a), may be taken without a meeting,
without prior notice and without a vote, if such action is consented to in
writing (evidenced as provided in Article XX) by the holders of
Outstanding Bonds holding not less than the minimum aggregate
principal amount of Outstanding Bonds which is necessary to authorize
or take such action at a meeting of Bondholders.
Record conclusive
evidence
Rights of
Trustee or
Bondholders not
to be hindered
or delayed
Action by
written consent
ARTICLE XVII
BONDHOLDER LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE
Section 17.01. The Company will, so Jong as any Bonds are
Outstanding under this Indenture, furnish or cause to be furnished to the
Trustee within 60 days after each interest payment date on Bonds of
each series from time to time Outstanding, and at such other times as
the Trustee may request in writing, the information required by TIA
Section 312(a), which the Trustee shall preserve as required by TIA
Section 312(aj. The Trustee will also comply with TlASection 312(b),
but the Trustee, the Company and each person acting on behalf of the
Trustee or the Company shall have the protection of TIA Section
312 (c).
Company
to farniso
Bondholder lists
§§ 17.02, J7.03, 18.0)
96
Company to
make filings with
Trustee and
otherwise
comply with TIA
Section 314
Company
to furnish
Bondholders
reports and
otherwise
comply with TIA
Section 313
Effect of payment
of indebtedness
Trustee to be
reimbursed for
reasonable
expenses
Deposit of money
or obligation in
certain instances
deemed payment
Section 17.02. The Company shall (a) file with the Trustee,
within 15 days after it is required to file the same with the Securities and
Exchange Commission, copies of the reports, information and docu-
ments (or portions thereof) required to be so filed pursuant to TIA
Section 314(a), and (b) comply with the other provisions of TIA
Section 314fa).
Section 17.03. The Trustee shall (a) transmit within 60 days after
June 30 in each year, beginning with the year 1987, to the Bondholders,
a brief report dated as of such June 30 and complying with the
requirements of TIA Section 313(a), and (b) comply with the other
provisions of TIA Section 313.
ARTICLE XVIII
DEFEASANCE
Section 18.01. (a) The Trustee may, and upon request of the
Company shall, cancel and discharge the Lien of this Indenture and
execute and deliver to the Company such deeds and instruments as shall
be required to discharge the Lien of this Indenture, and reconvey and
transfer to the Company the Mortgaged Property, whenever all indebt-
edness secured hereby shall have been paid or deemed to have been
paid, including all proper charges of the Trustee hereunder and there-
upon the Bondholders shall have no rights under this Indenture except
to payment of principal of, premium, if any, and interest on their Bonds.
(b) Notwithstanding the satisfaction and discharge of this Inden-
ture, the Trustee shall have an unsecured right to charge and be
reimbursed by the Company for any reasonable expenditures and liabili-
ties (incurred in good faith and without negligence by the Trustee)
which it may thereafter incur.
(c) Bonds and coupons for the payment of which and Bonds for
the redemption of which, either moneys in the necessary amount or
Governmental Obligations in an amount which, taking into account the
reinvestment and proceeds thereof, will, in the opinion of an Accountant
as certified to the Trustee in an Accountant's Certificate, provide
moneys which, together with the moneys, if any, deposited with or held
by the Trustee, shall be sufficient to pay when due the principal of,
premium, if any, and interest due and to become due on said Bonds or
portions thereof on the redemption or maturity date and on the cash
97
18.01 (cent.), 18.02, 19.01
interest payment dates thereof, as the case may be, shall have been set
apart by or deposited with the Trustee, with irrevocable direction to
apply the same to such payment, subject to Section 18.02 (with or
without any additional right given to the Bondholders to surrender their
Bonds or obtain therefrom payment therefor prior to the redemption or
maturity date) shall for all purposes under this Indenture, including
satisfying the Lien of this Indenture, be deemed to have been paid;
provided that in case of redemption the notice of such redemption shall
have been given or arrangements shall have been made to the satisfac-
tion of the Trustee that such notice will be given.
Section 18.02. In case any moneys deposited with the Trustee or
any paying agent or proceeds of the investment in or sale of Governmen-
tal Obligations held in trust for the payment of the principal of,
premium, if any, or interest on any Bond remain unclaimed for two years
after such principal, premium or interest has become due and payable,
the Trustee or such paying agent shall so advise the Company and shall
pay over to or upon the written order of the Company said moneys, upon
receipt of a written request of the Company, and thereupon the Trustee
or such paying agent shall be released from any and all further liability
with respect to the payment of principal of or premium or interest on
such Bond, or in the payment of any sinking or purchase fund install-
ment, and the holder of said Bond or any coupons for such interest shall
be entitled (subject to any applicable statute of limitations) as an
unsecured creditor to seek the payment thereof from the Company.
ARTICLE XIX
IMMUNITY OF INCORPORATORS, SUBSCRIBERS TO THE CAPITAL
STOCK, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 19.01. No recourse under or upon any obligation, covenant
or agreement in this Indenture or any Supplemental Indenture, or in any
Bond or coupon or because of the creation of any indebtedness hereby
secured, shall be had against any incorporator or any past, present or
future subscriber to the capital stock, stockholder, officer, director, agent
or representative of the Company or of any predecessor or successor
corporation, as such, either directly or through the Company or any
predecessor or successor corporation under any rule of law, statute or
constitution or by the enforcement of any assessment or by any legal or
equitable proceeding or otherwise; it being expressly agreed and under-
Unclaimed
moneys
General
provision
§§ 19.01 (cont.), 20.01
98
Evidence of
action by
Bondholders
Proof of
execution
stood that this Indenture and the obligations hereby secured, are solely
corporate obligations, and that no such personal liability shall attach to,
or be incurred by, such incorporators, subscribers to the capital stock,
stockholders, officers, directors, agents or representations of the Com-
pany or of any predecessor or successor corporation, or any of them, as
such, because of the incurring of the indebtedness hereby authorized, or
under or by reason of any of the obligations, covenants or agreements
contained in this Indenture or in any of the Bonds or coupons, or implied
therefrom, and that any and all such personal liability of every name and
nature, and any and all such rights and claims against every such
incorporator, subscriber to the capital stock, stockholder, officer or
director, as such, whether arising at common law or in equity, or created
by rule of law, statute, constitution or otherwise, are expressly released
and waived as a condition of, and as part of the consideration for, the
execution of this Indenture and the issue of the Bonds and coupons
secured hereby.
ARTICLE XX
EVIDENCE OF RIGHTS OF BONDHOLDERS
AND OWNERSHIP OF BONDS
Section 20.01. (a) Whenever in this Indenture it is provided that
the holders of a specified percentage in aggregate principal amount of
the Bonds may take any action (including the making of any demand or
request, the giving of any notice or consent, or the taking of any other
action) the fact that at the time of taking any such action the holders of
such specified percentage have joined therein may be evidenced (i) by
any instrument or any number of instruments of similar tenor executed
by Bondholders in person or by attorney appointed in writing, or (ii) by
the record of the Bondholders voting in favor thereof at any meeting of
Bondholders duly called and held in accordance with the provisions of
Article XVI, or (iii) by a combination of such instrument or instruments
and any such record of such a meeting of Bondholders.
(b) Proof of the execution of any such instrument, or of a writing
appointing any such attorney, or of the holding by any Person of any of
the Bonds or coupons shall, subject to Section 14.01, Section 14.02, and
Section 14.07, be sufficient for any purpose of this Indenture (except as
otherwise expressly provided) if made in the following manner:
99
§§ 20.01 (cont.), 20.02
(i) the fact and date of the execution by any Person of any
instrument or writing may be proved by the certificate of any notary
public, or other officer authorized to take acknowledgments of
deeds to be recorded in the jurisdiction in which such notary public
or officer purports to act, that the person signing such instrument or
writing acknowledged to such notary public or officer the execution
thereof, or by an affidavit of a witness to such execution sworn to
before any such notary public or officer,
(ii) the amount of Bonds transferable by delivery, and the
series and serial numbers thereof, held by such Person, and the date
of such Person's holding such Bonds, may be proved either by
exhibiting such Bonds themselves or by a certificate executed by
any trust company, bank, banker or other depositary wherever
situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such
Person had on deposit with or exhibited to such depositary, the
Bonds described in such certificate. Each such certificate shall be
dated and shall state that on the date thereof a Coupon Bond or
Bonds bearing a specified serial number or numbers were deposited
with or exhibited to such depositary by the Person named in such
certificate. No such certificate shall continue to be effective if (A)
a certificate bearing a later date issued in respect of the same Bond
shall be produced, or (B) the Bond specified in such certificate (or
a Coupon Bond or Bonds issued in exchange or substitution for said
Bond) shall be produced, or (C) the Bond specified in such
certificate shall be registered as to principal or shall have been
surrendered in exchange for a Registered Bond. The Trustee may
nevertheless in its discretion require further proof in cases where it
deems further proof desirable. The ownership of Registered Bonds
shall be proved by the register or registers of the Company. The
record of any Bondholders' meeting shall be proved in the manner
provided in Section 16.05.
Section 20.02. Neither the Company nor the Trustee shall be
bound to recognize any Person as the holder of a Bond unless and until
such Bond is submitted for inspection, if required, and the title of such
Person to such Bond satisfactorily established, if disputed.
Certificate of
notary public
or other
acknowledgment
Exhibiting
Bonds or
certificate
Inspection
of Bonds
20.03, 20.04, 21.01 100
Bonds owned by
Company or other
obligor or affiliate
thereof deemed
not to be
outstanding
Bondholder
may revoke
consent
Certificates,
opinions, etc.
Section 20.03. In determining whether or not the holders of the
requisite aggregate principal amount of Bonds have taken any action
under this Indenture, Bonds which are owned by the Company or any
other obligor on the Bonds or by any Affiliate of the Company or such
obligor shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on any
such action only Bonds which the Trustee knows are so owned shall be
disregarded. Bonds so owned which have been pledged in good faith may
be regarded as Outstanding for purposes of this Section 20.03, if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Bonds and that the pledgee is not an Affiliate of the
Company or any other obligor on the Bonds. In case of a dispute as to
such right, any decision by the Trustee made upon the advice of counsel
shall be full protection to the Trustee.
Section 20.04. At any time prior to (but not after) the evidencing
to the Trustee, as provided in Section 20.01, of the taking of any action
by the holders of the percentage in aggregate principal amount of the
Bonds specified in this Indenture in connection with such action, any
holder of a Bond the serial number of which is shown by the evidence to
be included in the Bonds the holders of which have taken such action
may, by filing written notice with the Trustee at its principal office and
upon proof of such holding as provided in Section 20.01, revoke such
action so far as concerns such Bond. Except as aforesaid any such action
taken by the holder of any Bond shall be conclusive and binding upon
such holder and upon all future holders of such Bond (and any Bond
issued in lieu thereof or exchanged therefor), irrespective of whether or
not any notation of such consent is made upon such Bond, and in any
event any action taken by the holders of the percentage in aggregate
principal amount of the Bonds specified in this Indenture in connection
with such action shall be conclusively binding upon the Company, the
Trustee and the holders of all the Bonds.
ARTICLE XXI
MISCELLANEOUS
Section 21.01. (a) Each certificate or opinion which is specifically
required by this Indenture to be delivered to the Trustee with respect to
compliance with a condition or covenant contained in this Indenture
101
§§ 21.01 (cent.), 21.02, 21.03, 21.04
shall include (i) a statement that the Person making such certificate or
opinion has read such covenant or condition; (ii) a brief statement as to
the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, such Person has
made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and (iv) a statement as
to whether or not in the opinion of such Person such condition or
covenant has been complied with.
(b) Every request or application by the Company for action by the
Trustee shall be accompanied by an Officers' Certificate and an Opinion
of Counsel stating in each case that in the opinion of the Person making
such certificate or opinion the conditions precedent, if any, to such
action, provided for in this Indenture (including any covenants the
compliance with which constitutes a condition precedent), have been
complied with.
(c) The same officer or officers of the Company, or the same
Engineer or counsel or other Person, as the case may be, need not certify
to all the matters required to be certified under the provisions of any
Article or Section of this Indenture, but different officers, Engineers,
counsel or other Persons may certify to different facts respectively.
Section 21.02. Whenever any Person is referred to in this Inden-
ture, such reference shall be deemed to include the successors or assigns
of such Person, and all the covenants and agreements in this Indenture
contained by or on behalf of the Company or by or on behalf of the
Trustee shall bind and inure to the benefit of the respective successors
and assigns of the Company and the Trustee whether so expressed or
not.
Section 21.03. If any provision of this Indenture limits, qualifies, or
conflicts with another provision of this Indenture which is required to be
included pursuant to any requirements of Sections 310 to 317, inclusive,
of the TIA, such required provision shall control.
Section 21.04. Wherever reference is made in this Indenture to the
TIA, such reference is made to the TIA as it was in force on the date of
the execution of this Indenture.
Successors and
assigns
Conflict with TIA
TIA construed as
inatee
§§21.05,21.06 102
Titles,
Table of
Contents, etc.
Counterparts
Section 21.05. The titles of the Articles, the table of contents and
the marginal annotations in this Indenture shall not be deemed to be
part of this Indenture.
Section 21.06. This Indenture may be executed in several counter-
parts, each of which shall be an original and all of which shall constitute
but one and the same instrument.
IN WITNESS WHEREOF, KANSAS CITY POWER & LIGHT COM-
PANY has caused its corporate name to be hereunto affixed, and this
instrument to be signed and sealed by its Chairman of the Board, Chief
Executive Officer, President or one of its Vice Presidents, and its
corporate seal to be attested by its Secretary or one of its Assistant
Secretaries, and UNITED MISSOURI BANK OF KANSAS CITY, N.A., to
evidence its acceptance of the trust hereby created, has caused its
corporate name to be hereunto affixed, and this instrument to be signed
and sealed by its President or one of its Vice Presidents, and its
corporate seal to be attested by its Secretary or one of its Assistant
Secretaries, all as of the day and year first above written.
KANSAS CITY POWER & LIGHT
COMPANY
By: ARTHUR J. DOYLE
Title: President
[Corporate Seal]
Attest:
JEANIE S. LATZ
Assistant Secretary
UNITED MISSOURI BANK OF
KANSAS CITY, N.A.
By: CHRISTY J. SMITH
Title: Vice President
[Corporate Seal]
Attest:
WILLIAM BLOEMKER
Assistant Secretary
103
STATE OF MISSOURI
COUNTY OF JACKSON
On this 24th day of November, 1986, before me appeared ARTHUR J. DOYLE, to me
personally known, who, being by me duly sworn, did say that he is the President of Kansas
City Power & Light Company, a corporation described in and which executed the foregoing
instrument, and that the seal affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed on behalf of said corporation by
authority of its board of directors, and said ARTHUR J. DOYLE acknowledged said
instrument to be the free act and deed of said corporation.
RUTH BUTLER
Notary Public
STATE OF MISSOURI
COUNTY OF JACKSON
On this 24th day of November, 1986, before me appeared CHRISTY J. SMITH, to me
personally known, who, being by me duly sworn, did say that she is the Vice President of
United Missouri Bank of Kansas City, N.A., a national banking association described in and
which executed the foregoing instrument, and that the seal affixed to the foregoing
instrument is the association seal of said national banking association, and that said
instrument was signed and sealed on behalf of said national banking association by authority
of its board of directors, and said CHRISTY J. SMITH acknowledged said instrument to be
the free act and deed of said national banking association.
RUTH BUTLER
Notary Public
Exhibit A
REAL E S T A T E IN MISSOURI
A l l t h e f o l l o w i n g d e s c r i b e d real e s t a t e o f t h e C o m p a n y
s i t u a t e d in the S t a t e of M i s s o u r i :
CARROLL COUNTY
(1) 5ubstation_No. 18 Leta, Missouri Highway 139 & U.S. Highway Ik;
Beginning at a point 30 feet south and- 15 feet east of the northwest
corner of the northwest quarter of Section 36. Township 53; Range 22;
thence due South 178.72 feet; thence due East 193-72 feet; thence due
North 178.72 feet; thence due West 193-72 feet along the right-of-way
of U.S. Highway No. Ik to the place of beginning, all in the northwest
corner of the northwest quarter of Section 36, Township 53, Range 22,
Carroll Co. , Mo.
(2) Substation No. 104 Carrollton, 1 Mile North & East of
Carrollton: A tract of land described as follows: Beginning at the
southwest corner of the northwest quarter of the southwest quarter
of Section 22, Township 53, Range 23, in Carroll County, Missouri;
thence East along the south line of said quarter quarter section, a
distance of 415 feet; thence North four hundred 447 feet; thence West
415 feet to a point on the west line of aforesaid quarter quarter
section; thence South to point of beginning, except any part of above
described land in the public road, all in Carroll County, Missouri.
(3) Substation No. 103 East Carrollton, on U.S. Highway 24 East of
Carrollton: Beginning on a line which is parallel to and 230 feet east
of the west line of the east one-half of the southwest quarter of
Section 34, Township 53, Range 23, Carroll County, Missouri, at its
point of"' intersection with the southerly line of U.S. Highway 24,
thence South 165 feet, thence East 200 feet, thence North to the
southerly line of Highway 24, thence Westerly along the said southerly
line of the highway to the point of beginning.
(4) Substation No. 116 Bogard, on U.S. Highway 65 North of
Carrollton: A tract of land 200 feet by 200 feet located in the
southeast portion of the northeast quarter of Section 33, Township 54,
Range 23, Carroll County, Missouri, described as follows: Beginning at
the intersection of the west line of U.S. Route 65 and the north line
of a public road which extends along the east-west center line of said
Section 33; thence West along said north Road line a distance of 200
feet; thence North, parallel with the said west line of U.S. Route 65 a
distance of 200 feet; thence East parallel with the said north Road
line to the said west line of U.S. Route 65, thence South along said
west line of U.S. Route 65 to the point of beginning.
A - 1
CHARITON COUNTY
[5) Substation No. 19 Polk Street, Mulberry & Polk Streets in
Brunswick: Lots 1,2,3,7,8,9,10,11 and 12, Block 22, Western Add.,
Brunswick, Mo., also a strip of ground 20 feet wide lying on the east
side of said lots which was a part of the public street and extending
the full length of said lots. See Abstract of Title for Plat No. 44.
ALSO at a point 20 ft. east of the northeast corner of Block 22,
Western Add., Brunswick, Mo., thence East 20 feet, thence South
parallel to east line of Block 22 to Grand River, thence West 20 feet,
thence North parallel to east line of Block 22 to place of beginning.
See back of Page 93 of Abstract of Title for Plats #32 and #33.
ALSO at a point 40 feet west of the northwest corner of Black 23,
Western Add., Brunswick, Mo., thence East 40 feet to northwest corner
of Block 23, thence South' along west line of Block 23, 12 feet, thence
East 1.42 feet, thence South 34 feet, thence West 0.67 feet to west
line of Block 23, thence continue West 6 feet, thence South parallel to
west line of Block 23, 25 feet, thence West 14 feet, thence South
parallel to west line of Block 23, to Grand River, thence West 20 feet,
thence North parallel to west line of Slock 23 to place of beginning.
See back of Page 52 of Abstract of Title for Plats #32 and #33.
ALSO at northwest corner Block 23, Western Add., Brunswick, Mo.,
thence South along west line of Block 23, 12 feet, thence East 1.42
feet, thence South 34 feet, thence West 6.67 feet, thence South
parallel to west line of Block 23, 25 feet, thence from this point as a
start run South parallel to west line of Block 23, 24 feet, thence West
14 feet, thence North 24 feet, thence East 14 feet to place of
beginning. See back of Pages 49 and 50 of Abstract of Title for Plats
#32 and #33;^
(6) Service Center Brunswick, at U.S. Highway 24 & Missouri
Highway 11 in Brunswick: All that portion of the southwest quarter of
Section 3, Township 53, Range 20, Chariton County, Missouri, more
particularly described as follows: Beginning at the west quarter
corner of Section 3, Township 53, Range 20, Chariton County, Mo., a
spike (found) in the pavement of State Route 11, said point reset
according to Missouri State Highway Department Information recorded in
SRB 6, Page 30,.Office of the Chariton County Recorder (OCCR), thence
along the west line of said Section 3, South 2° 00' 20" West, 1988.6
feet to the intersection with the center line of the main track of the
N 4 W Railroad, thence along said center line, South 74° 32' 10" East,
1018.5 feet, thence North 15° 58' 30" East, 25 feet to the northerly
right-of-way line of said N i W Railroad and the true point of
beginning: (2" iron pipe found North 15" 58' 30" East, 27.1 feet and
accepted as a point established an the east line of Schuchmann
201/470), thence North 15° 58' 30" East, 1233.0 feet to a set 1/2" iron
rod, on the south right-of-way line of U.S. Route 24, thence along said
A - 2
south right-of-way line, North 54° 43' 30" West, 312.6 feet to a set
1/2" iron rod, thence leaving said south right-of-way line, South
15° 58' 30" West 1,284.0 feet to a set 1/2" iron rod on the north
right-of-way line of the N 4 W Railroad (right-of-way being 80 feet
wide at that point), thence along said North right-of-way line,
(1) South 74° 32' 10" East, 135.2 feet to a set 1/2" iron rod,
(2) South 15° 27' 50" West, 55.0 feet to a set 1/2" iron rod,
(3) South 74° 32' 10" East, 159.4 feet to the true point of
beginning.
(7) Substation No. 20 Dalton, at Walnut Street & Wabash R.R. R/H in
Dalton: Beginning at the point where the north arid south quarter
section line of Section 13, Township 53, Range 19, intersects the south
line of the Wabash Railroad Company right-of-way, this point being
1096.4 feet south of the center of said Section 13; thence along the
south line of said right-of-way North 82° West 233.8 feet; thence South
40 feet; thence South 82° East on a line parallel to said right-of-way
233.8 feet to the quarter section line; thence North 40 feet to the
place of beginning.
(8) Substation No. 21 Keytesville, U.S. Highway 24 East of
Keytesville: Beginning at a point on the south line of the
right-of-way of U.S. Highway 24, 17.31 chains west of and 12.24 chains
north of the center of Section 3, Township 53, Range 18 in Chariton
County, Mo., this point being on the property line between A.C. Drace
Estate and M . V . Heuchan, thence along said property line
South 6° 35' East, 80.0 feet; thence North 83° 25' East, 70.0 feet;
thence North 6° 35' West, 51.5 feet to the south line of U.S.
Highway 24; thence North 74° 26* West, 75.6 feet to the point of
beginning.
(9) Substation No. 42 Brunswick, U.S. Highway 2A West of Brunswick;
That part of the south one-half of the northeast quarter of Section 4,
Township 53, Range 20, Chariton County, Missouri, Described as
follows: Beginning on the south line of the south one-half of the
northeast quarter of Section 4 with its intersection with the easterly
line of the right-of-way of the Wabash Railroad Company (Brunswick to
Omaha Branch), thence East along the south line of the said northeast
quarter of Section 4 a distance of 600 feet, thence North 420 feet,
thence West parallel to the south line of the said northeast quarter to
the easterly right-of-way line of the Wabash Railroad Company, thence
Southeasterly along the easterly line of said right-of-way to paint of
beginning.
(10) Subs tat iqn_No. 83 Salisbury, on U.S. Highway No. 24 and Ho.
Highway No. 5 West of Salisbury: A tract of land in the west one-half
of the southwest quarter of Section 8, Township 53, Range 17, Chariton
County, Missouri, described as follows: Beginning at a point that is
1415.2 feet north of and 21.6 feet west of the southeast corner of the
A - 3
west one-half of the southwest quarter of said Section 8, thence North
parallel to the east line of the west one-half of the southwest quarter
of Section 8, a distance of 200 feet, thence West a distance of 525
feet, thence South 200 feet, thence East 525 feet to point of
beginning.
(11) Substation No. 36 Orange Street, 710 East Chestnut in
Brunswick: The north 150 feet of Lot One, Block Five, Price's Addition
to the City of Brunswick, Chariton County, Missouri.
(12) Substation No. 60 Charitan, U.S. Highway 24 West of
Salisbury: A tract of 100' x 100' adjoining the northerly right-of-way
line of U.S. Route 24, in the northwest quarter of the northeast
quarter of Section 9, Township 53, Range 17, as described as
follows: Beginning at a point on the said northerly right-of-way line
of U.S. Route 24 which is 234 feet northeasterly from the north-south
center line of said Section 9, measured along the center line of said
U.S. Route 24, such point being the southwest corner of the said tract;
thence Northwesterly the distance of 100 feet at right angle to the
said center line of U.S. Route 24; thence Northeasterly parallel with
the said northerly right-of-way line of U.S. Route 24 a distance of 100
feet; thence Southeasterly at right angle to the said center line of
U.S. Route 24 a distance of 100 feet, to the said northerly
right-of-way line of U.S. Route 24; thence Southwesterly along said
northerly right-of-way line of U.S. Route 24 a distance of 100 feet to
the point of beginning.
CLAY COUNTY
(13) Future Service Center Northland, Baughamm & Barry Roads, Kansas
City: The west 50 feet of Lot 5, Block 2, of the Original Town of
Barry, a subdivision of land in Kansas City, Clay County, Missouri.
ALSO a tract of land in the southwest fractional quarter of
Section 10, Township 51, Range 33, Kansas City, Clay and Platte
Counties, Missouri, described as follows: Beginning at the southwest
corner of Lot 5, Block 2, Original Town of Barry, thence
South 89° 32' 37" East along the south line of Original Town of Barry,
a distance of 50 feet, thence deflecting right at an angle of 89° 40'
from the last described course a distance of 200 feet, thence
deflecting right at an angle of 90° 20' from the last described course,
a distance of 50 feet, thence deflecting left at an angle of 90° 20'
from the last described course & distance of 848 feet, thence
deflecting left at an angle of 89° 40' from the last described course a
distance of 500 feet, thence deflecting right at an angle of 89° 40'
from the last described course a distance of 1402.98 feet to the south
line of said southwest fractional quarter of said Section 10, thence
West along the south line of said southwest fractional quarter of said
Section 10, a distance of 1045 feet to the east line of Baughamm Road,
as now established, thence North 0° 06' 23" East along the east line of
A - 4
said Baughamm Road, a distance of 990.85 feet, thence Northerly along
the east line of said Baughamm Road on a curve to the left, having a
radius of 1175.92 feet, a distance of 315.42 feet, thence
North 15° 15' 44" West along the east line of said Baughamm Road, a
distance of 457.51 feet, thence Northerly along the east line of said
Baughamm Road on a curve to the right, having a radius of 379.26 feet,
a distance of 264.11 feet, thence North 24° 38' 16" East along the east
line of said Baughamm Road a distance of 130.21 feet, thence Northerly
along the east line of said Baughamm Road on a curve to the left having
a radius of 316.48 feet, a distance of 135.50 feet, thence
North 0° 06' 23" East along the east line of said Baughamm Road a
distance of 20A.67 feet, thence East along the south line of Blocks 1
and 2 of the Original Town of Barry, a distance of 605 feet to the
point of beginning.
(14) Substation No. 10 Birmingham, 7th & tiabash, Kansas City: All
that part of the northeast quarter of the northeast quarter of
Section 11, Township 50, Range 32, Clay County, Missouri, described as
follows: Beginning at the southeast corner of said quarter quarter
section; thence North along the east side of said quarter quarter
section 1095.99 feet to a point on the southeasterly line of the
right-of-way of the Milwaukee and C.R.I. 4 P. Railroads; thence
Southwesterly along said Railroad right-of-way line to a point on the
south line of said quarter quarter section which is 1031.72 feet west
of the southeast corner of said quarter quarter section; thence East
along the south line of aforesaid quarter quarter section 1081.72 feet
to the point of beginning except the northwesterly 50 feet thereof
being a 50 foot strip of land lying parallel with and adjacent to the
southeasterly line of the Railroad right-of-way above referred to.
(15) Training Center Pin jaks, 5700 N. Eugene Fields Road,
Claycomo: -; A part of the southwest quarter of the southwest quarter of
Section 28, Township 51, Range 32, in Kansas City, Clay County,
Missouri, described as follows: Beginning at a point which is 170.89
feet south of the northeast corner of said quarter quarter section;
thence West at right angles to the east line of said quarter quarter
section a distance of 400 feet; thence South at right angles to the
last said course a distance of 1007.86 feet to the center line of the
pavement on the public highway; thence Northeasterly along the center
line of said pavement to a point due south of the point of beginning,
marked by a cross in the center of said pavement; thence North 730.61
feet to the beginning.
(16) Tower Crossing Hawthorn, Missouri River & Hawthorn Plant,
Kansas City: Beginning at a point which is 320 feet east and 611.8
feet south of the northwest corner of the south one-half of the
southeast quarter of the northeast quarter of Section 15, Township 50,
Range 32, Clay County, Missouri; thence South 48° 01' 15" West a
distance of 253.55 feet to the landward or northeasterly line of the
Birmingham Drainage District Levee right-of-way; thence South
A -5
47° 35' 45" East along said Levee right-of-way line a distance of
321.7 feet; thence North 48° 0V 15" East a distance of 260 feet;
thence North 3° 01' 15" East a distance of 191.1 feet; thence North
41° 58' 45" West a distance of 185 feet; thence South 48° 01' 15" West
a distance of 173.15 feet to the point of beginning.
(17) Substation No. 52 Claycomo, Ravena Road & Wabash RR R/W,
Claycomo: A tract of land located in the southwest quarter of the
northeast quarter Section 27, Township 51, Range 32, Clay County,
Missouri, more particularly described as follows to-wit: Beginning at
a point in the east and west center line of said Section 27 distance
60.10 feet east of the center of said Section 27; thence Northeasterly
along a line that deflects to the left 50° 39' from the said east and
west center line a distance of 354.66 feet, more or less, to point in
the southerly line of a tract of land sold to Wabash Railroad Company
by deed dated July 30, 1951, .and recorded in the office of Recorder of
Deeds for Clay County, Missouri, in Book 454, Page 488; thence
Southeasterly at right angles along said southerly line of tract
conveyed to Wabash Railroad Company a distance of 150 feet, more or
less, to a 90° angle in said southerly property line of tract conveyed
to Wabash Railroad Company; thence Southwesterly at right angles a
distance of 231.67 feet, more or less, to a point in the said east and
west center line of said Section 27; thence West along said east and
west center line a distance of 193.98 feet, more or less, to the point
of beginning.
ALSO a tract of land located in the southwest quarter of the
northeast quarter and the southeast quarter of the northwest quarter
of Section 27, Township 51, Range 32, Clay County, Missouri, more
particularly described as follows: Beginning at the center of said
Section 27, thence East along the south line of the northeast quarter
of said section a distance of 60.10 feet to the southwest corner of a
tract of land conveyed to Kansas City Power 4 Light Company by deed
dated September 26, 1951; thence along a line that deflects 50° 39' to
the left from the last described line a distance of 354.66 feet, to the
most westerly corner of a tract of land conveyed to Norfolk and Western
Railway Company by deed recorded in Sook 931 at Page 336 in Clay County
Records; thence along a line that deflects 90° to the left from the
last described line a distance of 177.25 feet, more or less, to a point
in the southerly line of a tract of land designated as "Parcel 5"
conveyed to Wabash Railroad Company by deed recorded in Book 454 at
Page 488 in Clay County Records; thence along a line that deflects
13° 23' to the left from the last described line a distance of 170.23
feet, more or less, along the said southerly line of said Parcel 5
conveyed by said deed recorded in Book 454 at Page 488 to a point on
the north-south center line of said Section 27, said point being 461.11
feet North of the center of said Section 27, measured along said
north-south center line, said point also being the most southeasterly
corner of a .-tract of land designated as "Parcel 6" conveyed by said
deed recorded in Book 454 at Page 488; thence along a line that
A - 6
deflects 28° 25' to the left from the last described line a distance of
80.04 feet along the southerly line of said Parcel 6 conveyed by said
deed recorded in Book 454 at Page 488 to a point; thence along a line
that de fleets 88° 12' to the left from the last described line a
distance of 457.69 feet to a point in the south line of the northwest
quarter of said Section 27; thence East along the said south line of
said northwest quarter of said Section 27 a distance of 80 feet to the
point of beginning.
(18) Substation No. 94 North Kansas City, 301 East 9th, North Kansas
City: All of Lots 60 through 68 inclusive, and a portion of Lots 59
and 69, Midway Annex Addition, a subdivision of land in North Kansas
City, Clay County, Missouri and a part of the southwest quarter of the
southeast quarter of Section 23, Township 50, Range 33, more
particularly described as follows: Commencing at the northwest corner
of the southwest quarter of said southeast quarter; thence South 0°
East, along the west line of the southwest quarter of said southeast
quarter (this bearing and all subsequent bearings are based on said
west line bearing south 0° east) a distance of 380 feet; thence South
89° 47' East, a distance of 50 feet to a point on the easterly
right-of-way line of Swift Street, as now established; thence
continuing South 89° 47' East, along a line 380 feet south of and
parallel with the north line of the southwest quarter of said southeast
quarter, a distance of 176.19 feet, to the westerly line of a 17 foot
strip of land reserved for Railroad right-of-way; thence South 0° East,
along said westerly right-of-way, a distance of 12 feet; thence South
89° 47' East, along a line 392 feet south of and parallel with the
north line of the southwest quarter of said southeast quarter, a
distance of 221.68 feet, to a point en the northwesterly right-of-way
line of the North Kansas City Bridge and Railroad Company's Industrial
Lead Track; thence Southwesterly, along said northwesterly right-of-way
line and "along a curve to the right having a radius of 411.10 feet, a
central angle of 15° 15' 36" and whose initial tangent bearing is
South 24° 08' 15" West, an arc distance of 109.49 feet; thence
South 39° 23' 51" West, along said northwesterly right-of-way line, a
distance of 150 feet; thence Southwesterly, along said northwesterly
right-of-way line and along a curve to the right having a radius of
1910.10 feet, a central angle of 9° 52' 59" and whose initial tangent
bearing is South 43° 131 37" West, an arc distance of 329.47 feet
(meas.) 329.76 feet, more or less (deed), to a point on the easterly
right-of-way line of said Swift Street; thence North 0° East, along
said easterly right-of-way line, a distance of 441.70 feet, to the
point of beginning.
ALSO a tract of land 50 feet in width, being a part of the southwest
quarter of the southeast quarter of Section 23, Township 50, Range 33,
in the City of North Kansas City, Clay County, Missouri, described as
follows: Beginning on the west line of said quarter quarter
Section 23, at the point of intersection of the south right-of-way line
of 9th Avenue, as now established; thence East along the easterly
A - 7
extension of the aforesaid south line of 9th Avenue, a distance of
50 feet; thence South along a line 50 feet east of and parallel to the
west line af said quarter quarter Section 23, to its intersection with
the northerly line of the Burlington Northern Railroad Industrial Lead
Tract (formerly North Kansas City Bridge and Railroad Company's
Industrial Lead Tract); thence Southwesterly along said Railroad's
northerly line to its intersection with the aforesaid west quarter
quarter section line; thence North along the west line of said quarter
quarter section to the point of beginning.
(19) Future Turbine Generating Site Randolph, Birmingham & Eldoni,
Kansas City: All that part of Section 10, Township 50, Range 32, Clay
County, Missouri, and that part of Fractional Section 15, Township 50,
Range 32, Clay County, Missouri, described as follows: Beginning at a
point on the southerly line of the right-of-way of Missouri State
Highway No. 210 (as now established), said point being 1692.1 feet west
of the east line of said Section 10, thence South along a line which is
1692.1 feet west of and parallel with the east line of Section 10 to
the south line of said Section 10, thence continuing South along the
last described course into said Section 15 to a point in a line which
is 500 feet northwesterly of the northwesterly line of the right-of-way
of the Chicago, Milwaukee, St. Paul i Pacific Railroad and the Chicago,
Rock Island & Pacific Railroad (as measured at a right angle), thence
Southwesterly along a line which is 500 feet northwesterly of and
parallel with the northwesterly line of said Railroad right-of-way to a
point in the northerly line of the right-of-way of the Birmingham
Drainage District as described in Document No. A-032951 in the Office
of the Recorder of Deeds, Clay County, Missouri, thence Southeasterly
along the northerly line of said Birmingham Drainage District
right-of-way to the northwesterly line of the right-of-way of the
Chicago, Milwaukee, St. Paul i Pacific Railroad and the Chicago, Rock
Island 4 Pacific Railroad, thence continuing Northeasterly along said
Railroad right-of-way to a point on the west line of the county road
(now known as Eldon Road) right-of-way, said county roads westerly
right-of-way being 462.1 feet west of the south east corner of
Section 10, said point being 50.5 feet south of the south line of
Section 10, on the westerly right-of-way of said county road, thence
continuing due North parallel to the east line of Section 10 a distance
of 974.26 feet to the south right-of-way of Missouri State Highway
No. 210, as now established thence Northwesterly along said Missouri
State Highway No. 210 to point of beginning.
(20) Substation No. 78 Gladstone, 21D1 East 72nd Street North,
Gladstone: A tract of land consisting of the west half of the
northeast quarter of the northeast quarter of the northeast quarter of
Section 24, Township 51, Range 33, Clay County, Missouri.
ALSO a tract of land in the south half of the northwest quarter of
the northeast- quarter of Section 24, Township 51, Range 33, Clay
County, Missouri, described as follows: Beginning at the northeast
quarter of the southeast quarter of the northwest quarter of the
northeast quarter of the said Section 24, thence South along the east
line of the west half of" the southeast quarter of the northwest quarter
of the northeast quarter of said Section 24 a distance of 473.8 feet,
thence right at an angle of 91° 24' from the last described course a
distance of 217.35 feet, thence right at an angle of 64° 58' 30" from
the last described course a distance of 147.25 feet, thence left at an
angle of 69° 18' from the last described course a distance of 184.5
feet, thence right at an angle of 18° 56' from the last described
course a distance of 140.6 feet, thence right at an angle 90° 21' from
the last described course a distance of 59.6 feet, thence left at an
angle of 44° 21' from the last described course a distance of 77.8
feet, thence right at an angle of 37° 1V from the last described
course a distance of 195.3 feet to the north line of the south half of
the northwest quarter of the northeast quarter of said Section 24,
thence East along the north line of the south half of the northwest
quarter of the northeast quarter of said Section 24 to the point of
beginning.
(21) Substation No. 27 Avondale, 3150 Walker Road, North Kansas
City: A tract of land in Section 13, Township 50 north, Range 33 west
and Sections 7 and 18, Township 50, Range 32, Clay County, Missouri
described as follows: Beginning at the northeast corner of northeast
quarter of Section 13, Township 50, Range 33, thence West along the
north line of said quarter Section a distance of 218.86 feet, thence
South, parallel with the east line of said quarter section a distance
of 710 feet to the north line of a tract of land described in a certain
deed to the City of North Kansas City, Missouri, dated May 22, 1956,
recorded in Book 549 at Page 597 in the office of the Recorder of Deeds
for Clay County at Liberty, Missouri, thence East along the north line
of said City of North Kansas City, Missouri, tract to the westerly line
of the -"right-of-way of Missouri State Highway No. 10 ' (as now
established), thence Northerly along the westerly line of the
right-of-way of said Missouri State Highway No. 10 to the north line of
the northwest quarter of Section 18, Township 50, Range 32, thence West
along the north line of said quarter section a distance of 198.76 feet,
thence Northwesterly to a point which is 20 feet north of the south line
and 174 feet east of the west line of the southwest quarter of Section
7, Township 50, Range 32, thence West parallel with the south line of
the said quarter section to the east line of the northeast quarter of
Section 13, Township 50, Range 33, thence North along the east line of
said quarter section to the point of beginning.
(22) Substation No. 64 Nashua, 101 West 132nd Street North, Kansas
City: All that part of the north half of the southwest quarter of
Section 11, Township 52, Range 33, lying on the south side of 132nd
Street north running east and west through said Section 11, in Kansas
City, Clay County, Missouri.
A - 9
Less, a tract of land being a part of the north half of the southwest
quarter of Section 11, Township 52, Range 33, in Clay County, Missouri,
described as follows: Beginning at a point which is 225.6 feet south
of the north line and 614.34 feet east of the west line of the said
half quarter section; thence Easterly along the center line of N.E.
132nd Street and parallel with the north line of said half quarter
section a distance of 400 feet; thence South and parallel with the west
line of said half quarter section a distance of 464 feet, thence West
and parallel with the north line of said half quarter section a
distance of 400 feet; thence North and parallel with the west line of
said half quarter section to the point of beginning.
HENRY COUNTY
(23) Hontrose Steam Electric Generating Station and Lake, Montrose,
Missouri: The south half of the south half of the southeast quarter of
the southeast quarter of Section 27, Township 41, Range 28 of the 5th
prinicipal meridian, except that part of the above described tract now
in a public road.
ALSO the south half of the south half of the south half of the
southwest quarter of Section 26, Township 41, Range 28 of the 5th
principal meridian.
ALSO the south half of the south half of the southwest quarter of the
southeast quarter of Section 26, Township 41, Range 28 of the 5th
principal meridian, gubject to a right-of-way and easement granted to
the Missouri-Kansas-Texas Railroad Company in and over the following
described tract: A parcel of land 70 feet wide, 35 feet on each side,
measured at right angles from the following described center
line: Beginning at a point 90 feet ncrth of the southeast corner of
the southwest quarter of the southeast quarter of said Section 26,
thence 700 feet, more or less, Northwesterly to a point 660 feet west
of the northeast corner of the south half of the south half of the
southwest quarter of the southeast quarter of said Section 26.
ALSO a triangular tract bounded by a line beginning at a point 330
feet north of the southeast corner of the southwest quarter of the
southeast quarter of Section 26, Township 41, Range 28 of the 5th
principal meridian, thence West 660 feet, thence North 33° 4V East
1189.85 feet to the northeast corner of said quarter quarter section,
thence South 990 feet to the point of beginning, all in Section 26,
Township 41, Range 28 of the 5th principal meridian, subject to a
right-of-way and easement granted to the Missouri-Kansas-Texas Railroad
Company in and over the following described tract: A parcel of land 70
feet wide, 35 feet on each side, measured at right angles from the
following described center line: Beginning at a point 90 feet north of
the southeast corner of the southwest quarter of the southeast quarter
of said Section 26, thence 700 feet, more or less, Northwesterly to a
point 660 feet west of the northeast corner of the south half of the
south half of the southwest quarter of the southeast quarter of said
Section 26.
A - 10
ALSO the east half of the southeast quarter of Section 26,
Township 41, Range 28 of the 5th principal meridian, except that part
of the above described tract now in a public road, and subject^ tp_ a
right-of-way and easement granted to the Missouri-Kansas-Texas Railroad
Company in and over the following described tract: A parcel of land in
said Section 26 along the south line of the southeast quarter of the
southeast quarter of said Section 26, more particularly described as
follows: Beginning at the southeast corner of said Section 26, thence
West to the southwest corner of the southeast quarter of the southeast
quarter of said Section 26, thence North 200 feet along the west line
of the southeast quarter of the southeast quarter of said Section 26,
thence Southeasterly 1320 feet, more or less, to the east line of said
Section 26, thence South 100 feet to the point of beginning.
ALSO . the east half of the northeast quarter of Section 34,
Township 41, Range 28 of the 5th principal meridian, except that part
of the above described tract now in a public road.
ALSO that part of the north 750 feet of the east half of the
southeast quarter of Section 34, Township 41, Range 28 of the 5th
principal meridian, described as fallows: Beginning at the northeast
corner of the southeast quarter of said Section 34, thence South 750
feet, thence West 990 feet to the center of Deepwater Creek, thence in
a northwesterly direction up a tributary of Deepwater Creek, the
following calls, North 39° 30' West 106 feet, South 62° 10' West 75
feet, North 54° 40' West 235 feet, South 73° 45' West 112 feet, thence,
leaving said tributary, North 604 feet to the northwest corner of the
east half of the southeast quarter of said Section 34, thence East 1320
feet to the point of beginning, ail in Section 34, Township 41,
Range 28 of the 5th principal meridian, except that part of the above
described tract now in a public road.
ALSO the north half of Section 35, Township 41, Range 28 of the 5th
principal meridian, except a strip of land in the northeast portion of
said tract described as follows: Beginning at the northeast corner of
said Section 35, thence South 875 feet along the east line of said
Section 35, thence West 100 feet, thence North 875 feet to the north
line of said Section 35, thence East 100 feet along the north line of
said Section 35 to the point of beginning, all in Section 35,
Township 41, Range 28 of the 5th principal meridian, and subject to a
right-of-way and Easement granted to the Missouri-Kansas-Texas Railroad
Company in and over the following described tract: A triangular area
along the north line of the northeast quarter of the northeast quarter
of said Section 35, beginning at the northeast corner of said
Section 35, thence South 50 feet, more or less, along the east line of
said Section 35, thence Northwesterly 1320 feet, more or less, to the
northwest quarter of the northeast quarter of said Section 35, thence
East along the north line of said Section 35 to the point of
beginning.
A - 11
ALSO the north 750 feet of the northwest quarter of the southwest
quarter of Section 35, Township 41, Range 28 of the 5th principal
meridian.
ALSO the northeast quarter of the southwest quarter of Section 35,
Township 41, Range 28 of the 5th principal meridian.
ALSO the northwest quarter of the southeast quarter of Section 35,
Township 41, Range 28 of the 5th principal meridian.
ALSO the east half of the southeast quarter of Section 35,
Township 41, Range 28 of the 5th principal meridian, except 24.84 acres
more or less in the southeast portion of said tract described as
follows: Beginning at the southeast corner of Section 35, Township 41,
Range 28 of the 5th principal meridian, thence North 1640 feet along
the east line of said Section 35, thence West 660 feet, thence South
1640 feet, thence East 660 feet along the south line of said Section 35
to the point of beginning, all in Section 35, Township 41, Range 28
of the 5th principal meridian.
ALSO a perpetual easement to flood and otherwise damage as a result
of the construction, operation and maintenance of the dam, power plant
and works appurtenant thereto, and a perpetual easement of ingress and
egress, of entrance and re-entrance and of clearance of brush, trees
and other growth in and to the following described tract: Beginning at
the northeast corner of Section 35, Township 41, Range 28 of the 5th
principal meridian, thence South 875 feet along the east line of said
Section 35, thence West 100 feet, thence North 875 feet to the north
line of said Section 35, thence East 100 feet along the north line of
said Section 35 to the point of beginning, all in Section 35,
Township 41, Range 28 of the 5th principal meridian.
ALSO approximately 24.84 acres described as bounded by a line
starting at the southeast corner of Section 35, Township 41, Range 28,
thence proceeding North 1640 feet, thence West 660 feet, thence South
1640 feet, thence East 660 feet to the starting point.
ALSO the northwest quarter of the southeast quarter of Section 25,
Township 41, Range 28 of the 5th principal meridian.
ALSO 18 acres of equal width from east to west off the east side of
the southwest quarter of the northeast quarter, except that part of the
above described tract now in a public road, and except 2 acres more or
less in the northwest corner of said 18-acre tract, for church and
cemetery, all in Section 25, Township 41, Range 28 of the 5th principal
meridian.
ALSO the southeast quarter of the northeast quarter of Section 25,
Township 41, Range 28 of the 5th principal meridian, except that part
of the above described tract now in a public road.
A - 12
ALSO a triangular tract bounded by a line beginning at the southeast
corner of the northeast quarter of the northeast quarter of Section 25,
Township 41, Range 28 of the 5th principal meridian, thence North 20
rods, thence in a Southwesterly direction to a point 35 rods west of
the southeast corner of said quarter quarter section, thence East 35
rods to the point of beginning, all in Section 25, Township 41,
Range 28 of the 5th principal meridian, except that part of the above
described tract now in a public road.
ALSO the east half of the southeast quarter of Section 25,
Township 41, Range 28 of the 5th principal meridian.
ALSO the west half of the northwest quarter of Section 30,
Township 41, Range 27 of the 5th principal meridian, except that part
of the above described tract now in a public road.
ALSO the southwest quarter of Section 30, Township 41, Range 27 of
the 5th principal meridian, subject tp_ a right-of-way and easement
granted to the Missouri-Kansas-Texas Railroad Company in and
over the following described tract: A triangular area in the southwest
quarter of said Section 30, beginning at the southeast corner of said
southwest quar ter , thence Westerly 300 feet along the south line of
said southwest quar ter , thence Northeasterly 306 feet, more or less, to
a point in the east line of said southwest quar ter , thence South 60
feet to the point of beginning.
ALSO the southwest quarter of the southeast quarter of Section 30,
Township 41, Range 27 of the 5th principal meridian, subject t£ a
right-of-way and easement granted to the Missouri-Kansas-Texas Railroad
Company in and over the following described tract: A parcel of land 40
feet wide lying immediately north of a tract described as the south 100
feet o f - " the west half of the southeast quarter of said Section 30, and
subject to a right-of-way and easement granted to the
Missouri-Kansas-Texas Railroad Company in and over the following
described tract: A parcel of land in said Section 30, being the south
100 feet of the west half of the southeast quarter of said Section 30.
ALSO the southeast quarter of the southwest quarter of Section 29,
Township 41, Range 27 of the 5th principal meridian, except that part
of the above described tract now in a public road, and subject to a
right-of-way and easement granted to the Missouri-Kansas-Texas Railroad
Company in and over the following described tract: A parcel of land in
said Section 29, being the south 100 feet of the east half of the
southwest quarter of said Section 29.
ALSO the southwest quarter of the southeast quarter of Section 29,
Township 41, Range 27 of the 5th principal meridian, except that part
of the above described tract now in a public road, and subject to an
agreement made and entered into on the first day of July, 1955, by and
between the Missouri-Kansas-Texas Railroad Company and Kansas City
A - 13
Power & Light Company whereby the Light Company has agreed to procure
'and convey to the Railroad Company by deed in form satisfactory to the
Railroad Company a permanent easement or deed to the right-of-way
required for certain tracks of the Railroad Company in and over certain
property located in said Section 29.
ALSO the southeast quarter of the northeast quarter of Section 29,
Township 41, Range 27 of the 5th principal meridian, except that part
of the above described tract now in a public road.
ALSO the east half of the southeast quarter of Section 29,
Township 41, Range 27 of the 5th principal meridian, except that part
of the above described tract now in a public road, and subject to an
agreement made and entered into on the first day of July, 1955, by and
between the Missouri-Kansas-Texas Railroad Company and Kansas City
Power & Light Company whereby the Light Company has agreed to procure
and convey to the Railroad Company by deed in form satisfactory to the
Railroad Company a permanent easement or deed to the right-of-way
required for certain tracks of the Railroad Company in and over certain
property located in said Section 29.
ALSO the west half of the southwest quarter of Section 28,
Township 41, Range 27 of the 5th principal meridian, subject to an
agreement made and entered into on the first day of July, 1955, by and
between the Missouri-Kansas-Texas Railroad Company and Kansas City
Power 4 Light Company whereby the Light Company has agreed to procure
and convey to the Railroad Company by deed in form satisfactory to the
Railroad Company 3 permanent easement or deed to the right-of-way
required for certain tracks of the Railroad Company in and over csrtain
property located in said Section 28.
ALSO the southeast quarter of the southwest quarter of Section 28,
Township 41, Range 27 of the 5th principal meridian, subject to an
agreement made and entered into on the first day of July, 1955, by and
between the Missouri-Kansas-Texas Railroad Company and Kansas City
Power & Light Company whereby the Light Company has agreed to procure
and convey to the Railroad Company by deed in form satisfactory to the
Railroad Company a permanent easement or deed to the right-of-way
required for certain tracks of the Railroad Company in and over certain
property located in said Section 28.
ALSO all of Section 36, Township 41, Range 28 of the 5th principal
meridian, except that part of the above described tract now in a public
road, and except a strip of land in the north portion of said
Section 36 described as follows: Beginning at the northwest corner of
said Section 36, thence East 3972 feet along the north line
of said Section 36, thence South 875 feet along the east line of the
northwest quarter of the northeast quarter of said Section 36, thence
West 3972 feet .to the west line of said Section 36, thence North 875
feet along the west line of said Section 36 to the point of beginning,
A - 14
all in Section 36, Township 41, Range 28 of the 5th principal meridian,
and except that portion of the land hereafter described which lies
above the 755 foot contour line above mean sea level, which land is in
the north portion of said Section 36 and is described as
follows: Beginning at a point 496 feet north and 400 feet west of the
southeast corner of the northwest quarter of the northeast quarter of
said Section 36, thence West 3560 feet to a point on the west line of
said Section 36 which lies 496 feet north of the southwest corner of
the northwest quarter of the northwest quarter of said Section 36,
thence South to the southwest corner of the northwest quarter of the
northwest quarter of said Section 36, thence East to the southeast
corner of the northwest quarter of the northwest quarter of said
Section 36, thence South along the west line of the northwest quarter
of the southeast quarter of the northwest quarter of said Section 36 to
the southwest corner of the northwest quarter of the southeast quarter
of the northwest quarter of said Section 36, thence East to the
southeast corner of the northeast quarter of the southeast quarter of
the northwest quarter of said Section 36, thence continuing East to the
southeast corner of the northwest quarter of the southwest quarter of
the northeast quarter of said Section 36, thence North to the northeast
corner of the northwest quarter of the southwest quarter of the
northeast quarter of said Section 36, thence East to a point on the
south line of the northwest quarter of the northeast quarter of said
Section 36 which lies 400 feet west of the southeast corner of the
northwest quarter of the northeast quarter of said Section 36, thence
North 496 feet to the point of beginning, all in Section 36,
Township 41, Range 28 of the 5th principal meridian, and except a tract
of land in the southwest portion of said Section 36 described as
follows: Beginning at the southeast corner of the southwest quarter of
said Section 36, thence North 1Q80 feet, thence West 1600 feet, thence
North 560 feet, thence West 1040 feet, thence South 1640 feet along the
west line of said Section 36, thence East 2640 feet along the south
line of said Section 36 to the point of beginning, all in Section 36,
Township 41, Range 28 of the 5th principal meridian, and subject to a
right-of-way and easement granted to the Missouri-Kansas-Texas Railroad
Company in and over the following described tract: A triangular parcel
of land in said Section 36, described as follows: Beginning at the
northeast corner of the northwest quarter of the northeast quarter of
said Section 36, thence Southerly along the east line of said northwest
quarter 100 feet, thence Northwesterly 412 feet, more or less, to a
point in the north line of said northwest quarter, thence Easterly 400
feet, more or less, to the point of beginning, and subject to a
right-of-way and easement granted to the Missouri-Kansas-Texas Railroad
Company in and over the following described tract: A parcel of land in
said Section 36, being the north 100 feet of the east half of the
northeast quarter of said Section 36. A perpetual easement to flood
and otherwise damage as a result of the construction, operation and
maintenance of the dam, power plant and works appurtenant thereto, and
a perpetual-easement of ingress and egress, of entrance and re-entrance
and of clearance of brush, trees and other growth in and to the
A - 15
following described tract: Beginning at the northwest corner of said
Section 36, thence East 3972 feet along the north line of said
Section 36, thence South 875 feet along the east line of the northwest
quarter of the northeast quarter of said Section 36, thence West 3972
feet to the west line of said Section 36, thence North 875 feet along
the west line of said Section 36 to the point of beginning, all in
Section 36, Township 41, Range 28 of the 5th principal meridian.
ALSO the northeast quarter of the northeast quarter of Section 1,
Township 40, Range 28 of the 5th principal meridian.
ALSO approximately 77.41 acres described as bounded by a line
starting at the southeast corner of the southwest quarter of
Section 36, Township 41, Range 28, thence proceeding North 1080 feet,
thence West 1600 feet, thence North 560 feet, thence West 1040 feet,
thence South 1640 feet, thence East 2640 feet to the starting point,
except the east 57.5 feet of the south 1050 feet conveyed to Henry
County, Missouri.
ALSO all of Section 31, Township 41, Range 27 of the 5th principal
meridian, subject to a right-of-way and easement granted to the
Missouri-Kansas-Texas Railroad Company in and over the following
described tract: The north 100 feet of the northwest quarter of said
Section 31.
ALSO the northwest quarter of the northwest quarter of Section 6,
Township 40, Range 27 of the 5th principal meridian.
ALSO the west 30 acres of the southwest quarter of the northwest
quarter of Section 6, Township 40, Range 27 of the 5th principal
meridian.
ALSO the north 450 feet of the northeast quarter of the northeast
quarter of Section 6, Township 40, Range 27, Henry County, Missouri.
ALSO the north 450 feet of the northwest quarter of the northeast
quarter of Section 6, Township 40, Range 27, Henry County, Missouri.
ALSO the north 450 feet of the east 435.6 feet of the northeast
quarter of the northwest quarter of Section 6, Township 40, Range 27,
Henry County, Missouri.
ALSO all of Section 32, Township 41, Range 27 of the 5th principal
meridian.
ALSO the west half of Section 33, Township 41, Range 27 of the 5th
principal meridian.
A - 16
ALSO the southwest quarter of the northeast quarter of Section 33,
Township 41, Range 27 of the 5th principal meridian,
ALSO the northwest quarter of the southeast quarter of Section 33,
Township 41, Range 27 of the 5th principal meridian.
ALSO 10 acres of equal width from east to west off the west side of
the southwest quarter of the southeast quarter of Section 33,
Township 41, Range 27 of the 5th principal meridian.
ALSO the northwest quarter of the southeast quarter of the northeast
quarter of Section 33, Township 41, Range 27 of the 5th principal
meridian.
ALSO the west half of the northwest quarter of the northwest quarter
of Section 4, Township 40, Range 27 of the 5th principal meridian.
ALSO the northeast quarter of the northwest quarter of the northwest
quarter of Section 4, Township 40, Range 27 of the 5th principal
meridian.
ALSO the northwest quarter of the northwest quarter of Section 5,
Township 40, Range 27 of the 5th principal meridian.
ALSO the east half of the northwest quarter of Section 5,
Township 40, Range 27 of the 5th principal meridian.
ALSO a triangular tract bounded by a line beginning at the northeast
corner of the northwest quarter of the northeast quarter of Section 5,
Township 40, Range 27 of the 5th principal meridian, thence West 300
feet, thence in a Southeasterly direction to a point 700 feet south of
the north'east corner of said quarter quarter section, thence North 700
feet to the point of beginning, all in Section 5, Township 40, Range 27
of the 5th principal meridian.
ALSO the east half of the northeast quarter of Section 5,
Township 40, Range 27 of the 5th principal meridian, except a strip of
land in the southwest portion of said tract described as
follows: Beginning at the southwest corner of the southeast quarter of
the northeast quarter of said Section 5, thence North 1320 feet to the
northwest corner of said quarter quarter section, thence East 400 feet
along the north line of said quarter quarter section, thence South 1320
feet to the south line of said quarter quarter section, thence West 400
feet along the south line of said quarter quarter section to the paint
of beginning, all in Section 5, Township 40, Range 27 of the 5th
principal meridian.
ALSO the east one-half of the southwest quarter of the northwest
quarter of Section 5, Township 40, Range 27.
A - 17
ALSO the north 450 feet of the west one-half of the northeast quarter
of Section 5, Township 40, Range 27, Henry County, Missouri, excepting
that part, which applies, of a tract of land described as beginning at
the northeast corner of said one-half quarter section, thence South
along the east line of said one-half quarter section a distance of 700
feet, thence Northwesterly to a point on the north line of said
one-half quarter section which is 300 feet west of the northeast corner
thereof, thence East along the north line of aforesaid one-half quarter
section to the point of beginning.
HOWARD COUNTY
(24) Substation No. 25 Glasgow, 2nd & LaFayette, Glasgow; Ml of
Lots 1, 2, 3 and 4 in Block 13 in the City of Glasgow, Howard County,
Missouri.
JACKSON COUNTY
(25) Substation No. 74 Turbine Generating Site & General Plant
Northeast, 90D North Olive, Kansas City: Commencing at a point on the
north line of Nicholson Avenue in Kansas City, Missouri, 60.0 feet
southwesterly of the intersection of said north line of Nicholson
Avenue with the west line of Lot 64 in the sub-division lands of Joseph
Guinotte, adjoining the City of Kansas City; thence Northwesterly
parallel to and 60.0 feet distance from said Lot 64 a distance of 490.0
feet to the point of beginning of the Tract of Land; thence continuing
the last described course, 516.39 feet more or less, to a point being
100.0 feet distant southerly measured perpendicularly, from the United
States Harbor Line, as established by the survey of 1904; thence
Southwesterly and parallel with and 100.0 feet distance from said
Harbor Line 1700.0 feet to a point; thence Southeasterly at an angle of
90° 00' to' the last described course 600.0 feet to a point; thence
Northeasterly at an angle of 90° 00' to the last described course 1543
feet more or less, to a point 490.0 feet measured at right angles from
the northerly line of Nicholson Avenue; thence Northeasterly parallel
with said Nicholson Avenue and 490.0 feet from the northerly line
thereof 342.95 feet more or less, to the point of beginning.
ALSO commencing at a point on the northerly line of Nicholson Avenue,
in Kansas City, Missouri, 60.00 feet southwesterly from the
intersection of said northerly line of Nicholson Avenue with the
westerly line of Lot 64, in the sub-division of lands of Joseph
Guinotte; thence Northwesterly parallel with and 60.00 feet distance
from the westerly line of said Lot 64, a distance of 450.00 feet, to a
point in the northerly right-of-way line of the Kansas City Southern
Railroad Company, said point being the point of beginning of said tract
of land to be described; thence in a Northwesterly direction on the
last described course a distance of 40,00 feet, said point being the
southeasterly property corner of the Kansas City Power 4 Light Company,
A - 18
thence in Southwesterly direction making an angle of 90° 00" to last
described course, on the southerly property line of the Kansas City
Power 4 Light Company a distance of 342.95 feet; thence in a
Southwesterly direction making an angle of 19° 02' 05" to the right
from the last described course produced, and on the southerly property
line of the Kansas City Power & Light Company, a distance of 1544.22
feet to a point at the southwesterly property corner of said Kansas
City Power & Light Company; thence in a Southeasterly direction making
an angle of 90° 00' to last described course, a distance of 498.26
feet, to a point in the northerly right-of-way line of the Kansas City
Southern Railroad Company, thence in a Northeasterly direction on the
northerly right-of-way line of the Kansas City Southern Railroad
Company on a curve concave northwesterly having a radius of 5610.65
feet and a central angle of 9° 13' 43" a distance of 903.49 feet to a
point 450.00 feet northerly measured at right angles from the northerly
line of Nicholson Avenue; thence in a Northeasterly direction on the
northerly right-of-way line of said Kansas City Southern Railroad
Company, parallel with and 450.00 feet distance northerly from the
northerly line of Nicholson Avenue a distance of 1065.44 feet to point
of beginning.
(26) Substation No. 15 & Coal___Yard__Gr_and Avenue, 2nd & Grand, Kansas
City: North 20 feet of Lot 42, Block 4. South 40 feet of Lot 17. All
of Lots 20, 21, 24, 25, Block 3. All of Lots 211, 212, 213 and 214,
Block 22. All of Lots 50, 51, 52 and 53, Block 5. That part of
Lot 49, Block 5 lying south of the Chicago 4 Alton Railroad
right-of-way. All of Lots 54, 55, 56, 57, 58, 59, 62, 63, 64, 65 6 66,
Block 6. All of vacated .Spring Street lying between Lot 53, Block 5
and Lot 211, Block 22. All of vacated First Street lying between
Block 6 on the south and Blocks 5 and 22 on the north and extending
from Walnut Street to Grand Avenue. All of the vacated alleys adjacent
and reverting to the above described lots in Blocks 3, 5 and 6. All
the above described lots and blocks are in "Old Town", Kansas City,
Missouri.
(27) Substatj.Qji No. 915 & Steam Heating Station j^and Avenue, 2nd &
Grand, Kansas City: Lots 303, 304, 305, 306, 307, 308, 312, 315, 316,
317, 318, 321, 322, 323, 416 and 417 and vacated alley from north line
of Second Street to south line of First Street east of Lots 315 and
316, being all of Block 33, Old Town, lying south of First Street.
ALSO Lots 345, 346, 347 and 348, Block 40, Old Town, Kansas City,
Jackson County, Missouri. All of the original size lots except a strip
27 feet wide on east end of said lots, said strip being a part of the
approach to the Armour-Swift-Burlington Bridge; subject to an easement
in favor of North Kansas City Bridge and Railroad Company to maintain a
pier, abutment, and wing wall or retaining wall on a portion of Lots
347 and 348, as said pier, etc., is constructed; and also subject to a
like easement in favor of said North Kansas City Bridge and Railroad
Company to maintain a pier, abutment, and wing wall or retaining wall
on a portion of Lot 345, as said pier, e t c . , is constructed.
A - 19
ALSO Locust Street from the south line of First Street to the north
line of Second Street, vacated by Ordinance #1430, effective October 9,
1930.
ALSO a tract of land on the south bank of the Missouri River
beginning at a point on the northerly prolongation of the west line of
Block "A", Old Town Reserve, and on the harbor line of Missouri River
579.86 feet northerly of the southwest corner of said Block "A"; thence
North 59° 29' East along harbor line, 100 feet to a point; thence South
30° 31' East to a point 100 feet to a point; thence South 59° 29' West
139.508 feet to a point; thence North 8° 58' West 107.514 feet to
beginning.
ALSO beginning at a point in the United States Harbor Line of the
Missouri River as established by the War Department, and hereinafter
called the United States Harbor Line, or the Harbor Line, 100 feet
northeasterly from the intersection of the northerly prolongation of
the west line of Block "A" of the Old Town Reserve in Section 32,
Township 50, Range 33 in Kansas City, Jackson County, Missouri with
said Harbor Line, said point being the northeasterly corner of the
tract conveyed to the Metropolitan Street Railway Company under
paragraph "b" of deed executed by Union Depot, Bridge and Terminal
Railroad Company, dated January 8, 1903, and recorded in Book B-838 at
Page 428, which said tract has since been conveyed to and is now owned
by Kansas City Power i Light Company; thence proceeding Northeasterly
along the aforesaid Harbor Line 77 feet to a point; thence South
5° 48' 51" East 110.07 feet more or less to the intersection of a line
drawn 100 feet southeasterly from and parallel with the aforesaid
United States Harbor Line; thence Southwesterly along the last
described line 31 feet more or less to the southeasterly corner of the
tract conveyed to Metropolitan Street Railway Company under
paragraph "b" of the aforesaid deed recorded in Book B-838 at Page 428;
thence Northwesterly along the easterly line of the tract so conveyed
under paragraph "b" of said deed recorded in Book B-838 at Page 428,
10D feet to point of beginning.
(28) Substation No. 147 Cherry Terminal), 603 East First Street,
Kansas City: Lots 339, 340, and 341, Block 43, Plat of the Town of
Kansas, commonly called Old Town, a sub-division in Kansas City,
Jackson County, Missouri, according to the recorded plat thereof.
(29) Substation No. 17 Navy, 201 Main Street, Kansas City: The
south 20 feet of Lot 18, Block 3. All of Lots 19, 22, 23 and 26,
Block 3. All of the vacated alley adjacent and reverting to the above
described lots in Block 3. All of the above described lots and blocks
are in "Old Town", Kansas City, Missouri.
(30) Tj-ansmissigri Line; Hawthorn-Southfcown, Karleen & Jules, Kansas
City; All of that part of Lots 16 and 17, resurvey of part of Block 9,
Stark Acres, a sub-division in Jackson County, Missouri, lying
A - 20
westerly of the following described line: Beginning on the north line
of said Lot 16, at a point tnhich is 57 feet east of the northwest
corner of said Lot 16, thence Southerly through said Lots 16 and 17 to
a point on the westerly line of said Lob 17 which is 4 feet south of
the north line of said Lot 17.
ALSO all of that part of Lot 20, resurvey of part of Block 9, Stark
Acres, lying westerly of the following described line: Beginning at a
point on the west line of said Lot 20 which is 6 feet south of the
north line of said Lot 20, thence Northerly to a point on the north
line of said Lot 20 which is 4 feet east of the west line of said
Lot 20; Resurvey of Stark Acres, a sub-division in Jackson County,
Missouri, according to the recorded plat thereof.
ALSO Lot 8, Block 9, Stark Acres, a sub-division of land in Jackson
County, Missouri.
ALSO Lots 18 and 19, Block 9, resurvey of Stark Acres, a sub-division
of land in Jackson County, Missouri.
(31) Substation No. 56 Hickman, 11500 Grandview__ Road, Kansas
City: The north 10 acres of that part of the northeast quarter
of the northwest quarter of Section 11, Township 47, Range 33 Kansas
City, Jackson County, Missouri, lying east of the right-of-way of the
St. Louis, San Francisco Railway Company, and west of the right-of-way
of Grandview Road, as now established.
(32) General Land Garage A Parking Main Office, 13th to 14th
Baltimore to Hyandotte, Kansas City: Lots 5, 6, 7, 8, 9 and 10,
fronting on Baltimore Avenue, all in Block 7, Reid's Addition.
ALSO Lots 11 and 12 fronting on Baltimore Avenue. Lots 25, 26, 27,
28 and 29 fronting on Wyandotte Street, all in Block 7, Reid's
Addition.
ALSO Lots 5, 6, 1, 8, 9, 10, 11 and 12, fronting on 14th Street, all
in Block F, Reid's resurvey.
(33) Generaj. Land Office & Parking^ Downtown, lAth & Wyandgtte,
Kansas City: The south 104.5 feet of west 12.5 feet of Lot 9 and the
south 104.5 feet of Lot 10, in Block K, 2nd Resurvey of Reid's
Addition, a sub-division in Kansas City, Jackson County, .Missouri,
according to the recorded plat thereof; Lots 11 and 12, except the
parts of said lots in 14th Street, Block K, 2nd Resurvey of Reid's
Addition, a sub-division in Kansas City, Jackson County, Missouri,
according to the recorded plat thereof; and the north one-half of the
vacated alley lying south of and adjoining the west 12.5 feet of Lot 9
and all of Lots 10, 11 and 12 of Block K, 2nd Resurvey of Reid's
Addition, a sub-division in Kansas City, Jackson County, Missouri,
according to the recorded plat thereof.
A - 21
ALSO Lot 8 and the east one-half of Lot 9, except the north 30.5 feet
of said lots, Block K, 2nd Resurvey of Reid ' s Addition, a subdivision
in Kansas City, Jackson County, Missouri, and the north one-half of the
vacated alley lying south of and adjoining said Lot 8 and the east
one-half of Lot 9, according to the recorded plat thereof.
( 34) Substation No. 89 Sugar Creek, Sterling & Short, Sugar
Creek; A tract of land described as follows: Beginning at a point
which is 240.14 feet west and 425.63 feet south of the northeast corner
of the northwest quarter of the southeast quarter of Section 33,
Township 50, Range 32, in Jackson County, Missouri, thence South
parallel with the east line of said quarter quarter section of distance
of 130 feet, thence West parallel with the north line of said quarter
quarter section a distance of 75.54 feet, thence Northeasterly at an
angle of 101° 4* right from the last described course a distance of
131.99 feet , thence East 49.1 feet to point of beginning.
(35) Substation No. 540 Sub "J", 4000 East 43rd Street, Kansas
City: Lots 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23 in
Block 7 in Mary Wayland's First Addition.
(36) Substation No. 66 Martin Cityj __ J37th 4 Wyandgtte, Kansas
Cit^: A tract of land in the northwest quarter of the southwest
quarter of Section 20, Township 47, Range 33 Jackson County, Missouri,
described as follows: Beginning at a point on the east right of way
line of Wyandotte Street, said point being 628.35 feet west of the
northeast corner of the northwest quarter of the southwest quarter of
said Section 20; thence South and parallel to the east line of said
quarter quarter section a distance of 1180 feet to the true point of
beginning; thence continuing South 26B feet; thence South 85" 17' 20"
East 90.0 feet; thence South 53° 50' 20" East 69.0 feet; thence South
79° 08' 20" East 62.5 feet; thence North 75° 54' 40" East 55 feet;
thence North 63° 18' 0" East 60.76 feet; thence Nor th , parallel to the
east line of Wyandotte Street, 268 feet; thence West at right angles to
the last described course a distance of 315 feet to the point of
beginning.
(37) Substation No. 79 Blue Mills, Old fltherton & Courtney Road,
Kansas City: The west 230 feet of the south 660 feet of the east 40
acres of the west 53 acres of the north one-half of the southwest
quarter of Section 10, Township 50, Range 31 in Jackson County,
Missouri.
ALSO the south 660 feet of the west 13 acres of the northwest quarter
of the southwest quarter of southwest quarter of Section 10,
Township 50, Range 31, in Jackson County, Missouri. Subject to all
easements, restrictions, and reservations, if any, of record.
A - 22
(38) Material Storage Location, 61st & Forest, Kansas City: All of
Lots 1 and 2, Goodell Place.
(39) Substation No. B6 Blue Springs, Truman Road & Highway 7, Kansas
City: Beginning at a point 160.55 feet west of the northeast corner of
the northwest quarter of the northeast quarter of Section 12,
Township 49, Range 31, which point is a stake in the west right-of-way
line of State Highway No. 7, thence West 175 feet to a stake, thence
South 100 feet to a stake, thence in a Southeasterly direction bearing
South 50° East a distance of 156 feet to a stake, thence East 140.6
feet to a stake in the west right-of-way line of State Highway No. 7,
thence Northwesterly along the west right-of-way line of State Highway
No. 7 to the point of beginning.
(40) Substation _Np_. 58 Woodsweather, 12p1__Woodswethe_r__ Road^_Kansas
City_: Property includes all of Lot 1, Block 6 in Hoodswether
Addition.
(41) Substation No. 45, 3328 E. 22nd Street, Kansas City; All of
Lots 9, 10, 11, 12 and 13, Calkins Addition in Kansas City, Missouri.
(42) Transmission Line Guy Anchor Site, Kentucky & Vermont , Sugar
Creek: The south 60 feet of Lot 103, Sugar Creek Heights, in the
southwest quarter of the northwest quarter of Section 34, Township 50,
Range 32, Jackson County, Missouri.
(43) Transmission Line, Montrose to Loma Vista, Kansas City Southern
R .R . R/W & Bannister Roadj Kansas City: All that part of the southwest
quarter , Section 25, Township 48, Range 33, Jackson County , Missouri,
lying easterly of the easterly line of the right-of-way of Kansas City
Southern Railway Company and north of a line drawn 1572.5 feet north of
and parallel to the south line of said quarter section, subject to
restrictions, reservations and easements of record.
(44) Substation No. 44 Athertgn, Atherton & Bundschu Roads,
jndependence: Beginning at a point on the east line of west one-half
of southwest quarter of northeast quarter of Section 30, said point
being 20 feet north of south line of above described quarter quarter,
thence North along the east line of west one-half of said quarter
quarter a distance of 50 feet, thence West parallel with the south line
of northeast quarter to the east line of a rock road known as the Old
Atherton Road, thence Southwesterly along the easterly line of said
road to its intersection with the north line of Bundschu Road as now
established, thence East along the north line of Bundschu Road parallel
with the south line of above described quar ter quarter to point of
beginning, in Township 50, Range 31.
(45) Service Center (Manchester), 4400__East Front Street,_Kansas
Cj.ty: Beginning at a point which is 20 feet east and 140 feet south of
A - 23
the northwest corner of Section 26, Township 50, Range 33 Jackson
County, Missouri; thence due East parallel to the north line of said
Section 26 a distance of 1530.3 feet; thence Southeasterly a distance
of 243.52 feet on a circular curve having a radius of 744.5 feet to a
point which is 1739.42 feet east of the west line of Section 26 and
505,31 feet south of the north line of Section 26; thence North 51° 2V
East a distance of 5 feet; thence South 38° 38' 30" East a distance of
942,02 feet to a point which is 2328.25 feet east of the west line and
1038.62 feet south of the north line of Section 26; thence South
29° 08' 30" East a distance of 210.25 feet to a point which is 209.4
feet west of the north-south center line of Section 26 and 100 feet
north of the south line of north one-half of the northwest quarter
Section 26; thence West a distance of 2077.12 feet to a point which is
355 feet east of the west line of Section 26 and 100 feet north of the
south line of north one-half of the northwest corner of Section 26;
thence North a distance of 260 feet parallel with the west line of
Section 26; thence West a distance of 335 feet to a point 20 feet east
of the west line of Section 26; thence North a distance of 822 feet to
a point of beginning, subject to easements, restrictions, covenants
and reservations now of record.
(46) Substation No. 53 Blue Valley, 7801 E. U.S. Highway No. 24,
Kansas City: All of Slock 18 'lying south of U.S. Highway Extension
No. 24 in Washington sub-division in Kansas City, Missouri,
(47) Transmission Line; Southjgwn-Kernod^e Jet,. 110th & Prospect,
Kansas City: The west 100 feet of the southwest quarter of Section 3,
Township 47, Range 33, Jackson County, Missouri.
(48) Transmission Line; Hawthorn-Crosstown, Prospect Avenue &
Hontgaii Avenue_Ngrtjn o/ Nicholson Avenue, Kansas CHy: Lots 9, 10, 11
and 12 and the east half of the vacated alley lying west of and
adjacent to said lots, in Block 2, Modern Mutual Place, in Kansas City,
Jackson County, Missouri.
ALSO Lots 36, 37 and 38 and the west half of the vacated alley lying
east of and adjoining the same, in Block 2, Modern Mutual Place, in
Kansas City, Jackson County, Missouri.
(49) Transmission Line; ^Hawthorn-Crosstown, Olive Avenue & Wabash
Avenue South of Nicholson Avenue, Kansas City: Lots 1, 70, 71, 72, 73,
74, 75, 76 and 77, Block 3, Hamlins Addition, in Kansas City, Jackson
County, Missouri.
ALSO Lots 2, 3, 4, 5, 6, 7, 8, 9, 10 and 11, Block 3, Hamlins
Addition, in Kansas City, Jackson County, Missouri.
(50) Substation No. 88 Traff icway, 640 West 39th Street, Kansas
City: The north 66 feet of Lots 10 and 11, Richard Albery's
Subdivision, in Kansas City, Jackson County, Missouri.
A - 24
(51) Substation No. 87, 824 East 16th, Kansas City: The east 85
feet of Lots 12 and 13, Block 6, Vineyard's Addition, an addition in
Kansas City, Missouri, according to the recorded plat thereof.
(52) Substation No. 84, 7643 Troost, Kansas City: South 40 feet of
Lot 376 and the north 40 feet of Lot 377 in Marlborough Heights, a
sub-division of Kansas City, Missouri.
(53) Substation No. 92, 3737 Troost, Kansas City: The south
one-half of Lot 16 and all of Lots 17, 18 and 19, sub-division of
Block 1, Squier Manor, a sub-division of land in Kansas City, Jackson
County, Missouri.
(54) Substation No. 23, 8627 Troost, Kansas City: The south 400
feet of all that part of the southwest quarter of the northwest quarter
of Section 21, Township 48, Range 33, lying southwesterly af the right
of way of the Kansas City Public Service Company except that part
thereof taken for streets, all in Jackson County, Missouri.
(55) Hawthorn Steam Electric Generating Station, 8700 Hawthorn Roadj_
Kansas City: A parcel of land located in Sections 19, 20, 29 and 30,
Township 50, Range 32, Jackson County, Missouri, consisting partly of
accreted and/or relicted lands and consisting partly of lands described
as parts of Lots 1, 2 and 3 of Thomas West Estate, a sub-division
according to the recorded plat thereof, which parcel of land is
particularly described as follows: Beginning at a point on the west
line of Section 30, Township 50, Range 32, which is 791.7 feet north of
the southwest corner of said Section 30; thence South 80° 04' 30" East,
a distance of 141.47 feet; thence to the left from the last described
course at an angle of 18° 33", a distance of 775.41 feet; thence to the
left from the last described course at an angle of 25° 44' 30", a
distance of 1091.55 feet; thence to the left from the last described
course at an angle of 13° 27' 20", a distance of 1711.95 feet to a
point on the south line of the northeast quarter of said Section 3D,
which is 443.18 feet east of the southwest corner of said northeast
quarter; thence continuing on a tangent to the last described course a
distance of 937.58 feet; thence to the left from the last described
course at an angle of 46° 11' 30", a distance of 1808.94 feet; thence
to the left from the last described course at an angle of 40° 41', a
distance of 1717.27 feet to a point on the east line of the southwest
quarter of Section 19, Township 50, Range 32, which is 1114.1 feet
north of the southeast corner of said southwest quarter; thence to the
left from the last described course at an angle of 3° 0 9 ' , a distance
of 779.85 feet; thence to the left from the last described course at an
angle of 90°, a distance of 190 feet; thence to the right from the last
described course at an angle of 90°, a distance of 500 feet to the
northwesterly boundary line of a tract of land conveyed to Rhoda E.
Mersey as described in Instrument No. 551976 recorded in Book 864 at
Page 619 in the office of the Recorder of Deeds of Jackson
A - 25
County, Missouri, at Independence, Missouri, at a point 458.75 feet
southwesterly along said boundary line from the southerly permanent
right-of-way line of the Missouri River levee; thence to the right from
the last described course at an angle of 79° 09', a distance of 1610.78
feet, more or less, along the northwesterly boundary line of the tract
of land conveyed to Rhoda E. Mersey as aforesaid, to the southerly or
right bank of the Missouri River; thence in a Southeasterly direction
along the southerly or right bank of the Missouri River to its
intersection with a line described as follows: Beginning on the south
line of the northwest quarter of Section 29, Township 50, Range 32, at
a point 375 feet east of the southwest corner of said northwest
quarter; thence Northeasterly 44° 13' 30" from the south line of the
northwest quarter of said Section 29, a distance of 511.65 feet to a
point on the southerly permanent right-of-way line of the Missouri
River levee (hereinafter designated as point "A"), and continuing from
point "A" on a line tangent to the last described course a distance of
950 feet, more or less, to the southerly or right bank of the Missouri
River; thence from the point of intersection of the above described
line and the southerly or right bank of the Missouri River in a
Southwesterly direction along the last described course a distance of
950 feet, more or less, to point "A"; thence continuing in the same
Southwesterly direction tangent to the last described course,
intersecting the south line of the northwest quarter of said Section 29
at a point 375 feet east of the southwest corner of said northwest
quarter, a distance of 1174.65 feet; thence to the right from the last
described course at an angle of 90° a distance of 1063.45 feet to a
point which is 1798.05 feet east and 299.76 feet north of the southwest
corner of the northeast quarter of Section 30, Township 50, Range 32;
thence to the left from the last described course at an angle of 90°, a
distance of 2286.68 feet; thence to the right on a curve having a
radius of 476.15 feet, a distance of 81.46 feet; thence continuing on a
line tangent to the last described curve, a distance of 385.44 feet;
thence to the right on a curve having a radius of 830.12 feet, a
distance of 367.6 feet; thence continuing on a line tangent to the last
described curve 1941.45 feet to a point which is 642.8 feet north and
185.8 feet east of the southwest corner of said Section 30; thence
Northwesterly on a curve having a radius of 1597.7 feet, which is the
northeasterly boundary line of a 100 foot strip of land lying adjacent
to the northeasterly right-of-way line of the Missouri Pacific Railroad
Company, to a point on the west line of said Section 30, which is 713.3
feet north of the southwest corner of Section 30; thence North 78.41
feet along the west line of said Section 30 to the point of beginning.
ALSO a parcel of land located in Section 30, Township 50, Range 32,
Jackson County, Missouri, consisting partly of lands described as parts
of Lot 3 of Thomas West Estate, a sub-division according to the
recorded plat thereof, which parcel of land is particularly described
as follows: Beginning at a point 683.85 feet east and 289 feet north
of the southwest corner of Section 30, Township 50, Range 32; thence
A - 26
North 58° 02' East a distance of 881.14 feet to a point which is 142B.3
feet east and 760.71 feet north of the southwest corner of said
Section 30; thence South 81° 23' West a distance of 1140 feet, more or
less, to a point on the northeasterly line of a 100 foot strip of land
lying adjacent to the northeasterly right-of-way line of Missouri
Pacific Railroad Company; thence Southeasterly on a curve having a
radius of 1597.7 feet, which is the northeasterly boundary line of said
100 foot strip of land lying adjacent to the northeasterly right-of-way
line of Missouri Pacific Railroad Company, to the point of beginning.
Subject to the permanent and temporary easements condemned by Kansas
City for levee purposes in the portion of the land hereinbefore
described within the city limits of Kansas City, Missouri, in Case
No. 523954 in the Circuit Court of Jackson County, Missouri, at Kansas
City;. excepting therefrom the land conveyed to Kansas City and subject
to easements conveyed to said Kansas City (outside said city limits) by
deed filed for record May 27, 1948, under Document No. 541208, and
further excepting therefrom the rights of the United States Government
in the portion of said land lying between the harbor line established
by the United States Government and the low water line of the Missouri
River. And further subject to rights-of-way, easements, restrictions
and zoning regulations of Kansas City and of Jackson County, Missouri,
of record, and subject to the terms and conditions of the instrument
filed for record January 14, 1918, recorded in Book B-1845 at Page 538,
pertaining to a tract of land 25 feet in width to be used as a
right-of-way for sewers.
ALSO all that part of the southwest quarter of Section 30,
Township 50, Range 32, lying southwesterly of the right-of-way of the
Missouri Pacific Railroad Company, more specifically described as
follows: Beginning at the southwest corner of Section 30, Township 50,
Range 32; thence North along the west line of said Section 30 a
distance of 465 feet to the southerly line of the right-of-way of the
Missouri Pacific Railroad Company; thence Southeasterly along the
southerly line of said railroad right-of-way approximately 829 feet to
the south line of said Section 3D; thence 632 feet along the south line
of Section 30 to the point of beginning.
ALSO a tract of land, irregular in shape, located in the east
one-half of Section 30 and the southeast quarter of Section 19, all in
Township 50, Range 32 in Kansas City, Jackson County, Missouri, being
more particularly described as follows: Beginning at the point of
intersection of the east-west center line of said Section 30 and the
northwesterly line of Block 4, Hawthorn Plant-site addition, a
sub-division of land in Kansas City, Jackson County, Missouri; thence
Northeasterly along the northwesterly line of said Block 4 a distance
of 937.58 feet; thence North along the west line of Block 5 of said
Hawthorn Plant Site Addition a distance of 1808.94 feet; thence
Northwesterly along the southwesterly line of Block 5 and the
southwesterly line of Block 6 of said Hawthorn Plant Site Additon a
A - 27
distance of 1040.35 feet; thence South parallel with a prolongation of
the north-south center line of said Section 30 and said line itself to
the northwesterly line of said Block 4 to the point of beginning.
ALSO an irregularly shaped tract of land located in the east half of
Section 30 and the southeast quarter of Section 19, all in Township 50,
Range 32, and in Lot 2 of the Commissioners' Plat of the Estate of
Thomas West, in Kansas City, Jackson County, Missouri, being more
particularly described as follows: Beginning at the intersection of
the north-south center line of said Section 30 and the northwesterly
line of Block 3 of the Hawthorn Plant Site Addition, a sub-division of
land in Jackson County, Missouri, thence Northeasterly along the
northwesterly lines of Blocks 3 and 4 of said Hawthorn Plant Site
Addition 614 feet, more or less, to the most southerly corner of a
tract of land conveyed to Kansas City Power i Light Company by Southern
Development Company by warranty deed dated December 28, 1966, recorded
in Book 1865 at Page 682, Document 900285; thence North 3249.32 feet
coincident with the west line of the said tract of land conveyed to
Kansas City Power and Light Company by Southern Development Company's
warranty deed dated December 28, 1966, to a point in the southwesterly
line of Block 6 of said Hawthorn Plant Site Addition; thence
Northwesterly 677 feet, more or less, along the southwesterly line of
Block 6 of said Hawthorn Plant Site Addition to a point in the
north-south center line of said Section 19j thence due South coincident
with the common north-south center line of said Sections 19 and 30 a
distance of 4185.80 feet to the point of beginning.
ALSO an irregularly shaped tract of land in the east half of
Section 30, Township 50, Range 32, and in Lots 1 and 2 of the
Commissioners' Plat of the Estate of Thomas West, in Kansas City,
Jackson County, Missouri, being more particularly described as
follows: .Beginning at the most southerly corner of Block 14, Hawthorn
Plant Site Addition, a sub-division of land in Jackson County,
Missouri, thence South 46° 10' 50" West along the southwesterly
prolongation of the southeasterly line of said Block 14, Hawthorn Plant
Site Addition, a distance of 1139.86 feet to a point and corner; thence
North 89° 36' 30" West parallel to and 63.44 feet northerly from the
north line of the south half of the southeast quarter of said
Section 30 a distance of 1275.60 feet to a point 180 feet southeasterly
from as measured at right angles to the southeasterly line of Block 3,
Hawthorn Plant Site Addition; thence North 46° 20' 55" East parallel to
and 180 feet southeasterly from the southeasterly lines of Blocks 3 and
4, Hawthorn Plant Site Addition, for a distance of 2054.19 feet to a
point and corner; thence South 43° 49' 10" East coincident with the
southwesterly lines of Blacks 13 and 14, Hawthorn Plant Site Addition,
a distance of 883.45 feet to the point of beginning.
(56) Substation No. 85 Cypress, 4500 Independence Avenue,__Kansas
City: North 135 feet of Lot L, Gladstone Heights Resurvey, Lots 1 to
5, an addition in and to Kansas City, Missouri.
A - 28
(57) Transmission Line; Southbown-Hultiple Lines, Woodland Avenue &
River Avenue, Kansas Cit^: All of Lot 22, except the south 850 feet
and all that part of Lot 19, described as follows: Beginning at the
southwest corner of Lot 19; thence Norbh along the west line of Lot 19,
220.07 feet to center line of New County Road; thence Southeasterly
along center line of New County Road, 113.76 feet to a point on the
east line of Lot 19; thence South along the east line of Lot 19, 176.75
feet to the southeast corner of Lot 19; thence Northwesterly along the
south line of Lot 19 to point of beginning, except part taken for
roadways as shown on recorded plats - all in South Woodlands.
ALSO the west 5Q feet of Lot 23, except the south 850 feet and all
that part of Lot 18, described as follows: Beginning at the southwest
corner of Lot 18; thence North along the west line 176.75 feet to
center line of New County Road; thence Southeasterly along center line
of New County Road 56.88 feet to a point 50 feet measured at right
angles to west of the east line of Lot 18; thence South parallel to the
east line of Lot 18, 148.69 feet to the south line of Lot 18, thence
Northwesterly along the south line of Lot 18 to point of
beginning - all in South Woodlands.
ALSO all that part of Lots 23 and 24 in South Woodlands, a
sub-division of land in Jackson County, Missouri, lying north of the
following described line: Beginning at a point on the east line of
said Lot 24 which is 746.11 feet north of the southeast corner of said
Lot 24; thence in a Northwesterly direction to a point on the west line
of said Lot 24 which is 825 feet north of the southwest corner of said
lot; thence continuing on the same course into aforesaid Lot 23 to a
point on the west line of the east 50 feet of said Lot 23.
ALSO all that part of Lot 26 in South Woodlands, a sub-division of
land in:" Jackson County, Missouri, lying north of the following
described line: Beginning at a point on the east line of said Lot 26
which is 588.31 feet north of the southeast corner of said Lot 26;
thence Northwesterly to a point on the west line of said Lot 26 which
is 667.21 feet north of the southwest corner of said lot.
ALSO all that part of Lot 21 in South Woodlands, a sub-division of
land in Jackson County, Missouri, lying north of the following
described line: Beginning at a point on the east line of said Lot 21
which is 25 feet south of the northeast corner of said Lot 21; thence
Northwesterly to the northwest corner of said Lot.
ALSO all that part of Lot 25 in South Woodlands, a sub-division of
land in Jackson County, Missouri, lying north of a line beginning on
the east line of said Lot 25, 667.21 feet north of the southeast corner
of said lot, thence Northwesterly to a point on the west line of said
Lot 25, 746.11 feet north of the southwest corner of said Lot 25.
A - 29
ALSO all of Lot 20 in South Woodlands, a sub-division of land in
Jackson County, Missouri.
ALSO Lot 17 and all (except west 50 feet lying south of New County
Road) of Lot 18, South Woodlands, a sub-division in Jackson County,
Missouri, according .to the recorded plat thereof.
ALSO Lots 31, 32, 33, South Woodlands Addition, an addition in Kansas
City, Jackson County, Missouri.
(58) Substation No. 35 Loma Vista, 6620 East 91st Street, Kansas
City: Beginning at the southwest corner of the northwest quarter of
the southeast quarter of Section 24, Township 48, Range 33, Jackson
County, Missouri, thence North along the west line of the southeast
quarter of said Section 24, a distance of 329.75 feet; thence South
89° 17' East a distance of 350 feet, thence South 0° 04' East a
distance of 500 feet, thence North 89° 17' West to the west line of the
southeast quarter of Section 24 and continuing on North 89° 17' West a
distance of 15 feet to the easterly right-of-way line of the Kansas
City Southern Railway Company, thence Northwesterly along the easterly
right-of-way line of the Railway Company a distance of 181.3 feet to
the north line of the southeast quarter of the southwest quarter of
said Section 24, thence South 89° 15' East a distance of 74.4 feet to
the point of beginning.
ALSO all that part of the northeast quarter of the southwest quarter
of Section 24, Township 48, Range 33, in Jackson County, Missouri,
described as follows: Beginning at the southeast corner of said
quarter quarter section; thence North along the east line 329.75 feet;
thence North 89° 171 West to the east line of Kansas City Southern
Railroad right-of-way as now established; thence South 20° 40' East
along said right-of-way to south line of said quarter quarter section;
thence East along the south line of said quarter quarter section to
point of beginning.
ALSO beginning on the west line of the southwest quarter of the
southeast quarter of Section 24, Township AB, Range 33, in Jackson
County, Missouri, at a point 170.25 feet south of the north line of
said quarter quarter section; thence East parallel with said north line
a distance of 359.28 feet; thence Southerly to a point on the south
line of said quarter quarter section which is 252.1 feet east of the
west line thereof; thence West along the said south line of the quarter
quarter section to the easterly line of the right-of-way of the Kansas
City Southern Railway Company; thence Northerly along said
right-of-way line to a point which is approximately 496,75 feet south
of and 147 feet east of the northwest corner of aforesaid quarter
quarter section; thence Westerly with said right-of-way line a distance
of 70 feet; thence Northerly along said right-of-way line to a point 15
feet west of point of beginning; thence East 15 feet to point of
beginning.
A - 30
(59) Service Center Dodson, 8619 Prospect Avenue, Kansas City. The
south half of the southwest quarter of the northwest quarter of
Section 22, Township 48, Range 33, Jackson County, Missouri, except
that part of said premises described as follows: Beginning at a point
on the center line of Prospect Avenue 580 feet south of the center line
of 85th Street; thence East parallel to the center line of 85th Street
264.35 feet; thence South parallel to the center line of Prospect
Avenue 287.95 feet to the center line of a public road; thence on a
curve to the right along the center line of said road 355 feet to a
point in the center line of Prospect Avenue 80 feet south of the point
of beginning; thence North to the point of beginning; and except also
that part conveyed to William B. Shelby and Veda N. Shelby described as
follows: Beginning at the point of intersection of the present west
line of Prospect Avenue, also known as Grandview Road, with the south
line of said southwest quarter of the northwest quarter, said point
being approximately 495 feet east of the southwest corner of said
southwest quarter of the northwest quarter; thence West 130 feet,
thence North 95 feet; thence East approximately 130 feet to said
present west line of Prospect Avenue, also known as Grandview Road;
thence Southerly along said west line of Prospect Avenue, also known as
Grandview Road, to point of beginning, in Jackson County, Missouri,
subject to easements, restrictions, covenants and reservations now of
record, if any.
ALSO beginning at a point 380 feet east of the northwest corner of
southeast quarter of northwest quarter of Section 22, thence South and
parallel with the west line of said quarter quarter section, 600 feet;
thence West and parallel with the north line of said quarter quarter
section, 380 feet to the west line of said quarter quarter section;
thence South along the west line of said quarter quarter section
approximately 724 feet to the southwest corner of said quarter quarter
section; -'thence East along the south line of said quarter quarter
section 440 feet; thence North and parallel with the west line of said
quarter quarter section approximately 1,324 feet to the north line of
said quarter quarter section, thence West along the north line of said
quarter quarter section 60 feet to the point of beginning.
(60) Transmission Line; Hawthorn - Blue Valley, 8011 Winner Road,
Kansas City; Lots 1 and 2; the west 34.74 feet of Lot 3 (8011 Wilson
Road); the east 18.09 feet of Lot 3 and the west 16.65 feet of Lot 4
(8013 Wilson Road) Block 6, Washington Heights Addition.
ALSO Lots 19 and 30 inclusive, Block 6, Washington Heights Addition.
ALSO Lots 1, 2, 3, 8, 9, & 10, except those parts of Lots 1 and 10 in
Winner Road and that part of Lot 3 in U.S. Highway No. 24, Block 16,
Washington Heights Addition.
ALSO Lot 6, lying south of U.S. Highway No. 24, Block 15, Washington
Heights Addition.
A - 31
(61 ) Substation No. 75 Hidtown, 1223 East 48th Street, Kansas
City_: All that part of the southwest quar ter of Section 28,
Township 49, Range 33, Kansas C i ty , Jackson County, Missouri, more
part icularly described as follows: Beginning at a point on the south
line of 48th Street, 275.0 feet east of the east line of Troost Avenue;
thence South 89° 55' 00" East along the south line a distance of 378.32
feet to a point; thence South parallel with said east line of Troost
Avenue 158.20 feet to a point in the northerly line of Brush Creek
Parkway; thence South 57° 44' 00" West along said northerly line a
distance of 447.39 feet to a point; thence North and parallel with the
east line of Troost Avenue a distance of 397.06 feet to the point of
beginning.
ALSO, that part of the northwest quarter of the southwest quarter of
Section 28, Township 49, Range 33, in Kansas City, Jackson County,
Missouri, described as beginning at the southwest corner of Lot 21, of
Block 3 of Davis Place, a sub-division of land, and running thence
South along the extended east line of Tracy Avenue a distance of 208.2
feet to a point in the northerly line of the right-of-way of Brush
Creek Parkway as established by Ordinance No. 52089 of Kansas City,
approved March 23, 1926; thence Northeasterly along said northerly
parkway right-of-way line to a point in the extended west line of
Virginia Avenue 50 feet south of the south line of Davis Place; thence
North 50 feet along the west line of the right-of-way of Brush Creek
Parkway and the extended west line of Virginia Avenue to the point of
intersection with the South line of Lot 20, Block 3, Davis Place;
thence West along the south lines of Lots 20 and 21, Block 3, Davis
Place, a distance of 250 feet to the point of beginning.
ALSO, the south 46 feet of the west 111.67 feet of Lot 19, the west
111.67 feet of Lot 20, all of Lot 21, and the south 46 feet of Lot 22,
Block 3, Davis Place, a subdivision in Kansas City, Jackson County,
Missouri, according to the recorded plat thereof.
(62) Substation No. 61 Leeds, A210 Raytown Road, Kansas City: A
tract of land in the southwest quarter of Section 19, Township 49,
Range 32, in Jackson County, Missouri, described as follows: Beginning
on the west line of the southwest quarter of said Section 19, at a
point which is 939.2 feet north of the southwest corner of said quarter
section; thence North along said west line a distance of 100 feet;
thence East at an angle of 90° right from last described course a
distance of 204.34 feet; thence North parallel with the west line of
the quarter section a distance of 251.82 feet; thence South 40° 42'
East a distance of 479.22 feet; thence South 24° 00' East a distance of
103.80 feet; thence South 44° 01' East a distance of 56.30 feet; thence
North 50° 11' East a distance of 143.79 feet to a point on the
southwesterly line of U.S. Highway #40 Alternate; thence South 47B 30'
East along said highway line a distance of '101.50 feet ; thence South
A - 32
31" 45' West a distance of 355.29 feet; thence South 62° 45' West a
distance of 172.92 fee t j thence North 66° 11' 26" West a distance of
483.68 feet to a point on the west line of the said southwest quarter
of Section 19; thence North along said quarter section line a distance
of 310.2 feet to the point of beginning.
(63) Substation No. 146 Bru_sh___Creek___Jernun_aj._,. 4030 Brush Creek
Parkway, Kansas City: All that part of Lot "8", Block 4, Vineyard
Gardens, a subdivision of land in Kansas City, Jackson County,
Missouri, described as follows: Beginning at the southwest corner of
said Lot "B", which is on the northerly line of Brush Creek Parkway (as
now established); thence North 16° 15' 10" East along the west line of
Lot "B" a distance of 159.83 feet to a point; thence South 85° 30' 20"
East to a point on the east line of the northeast quarter of the
southeast q u a r t e r of Section 27, Township 49, Range 33, Jackson County,
Missouri, which is 662.08 feet south of the northeast corner of said
quarter quarter section, said point being also the northeast corner of
Lot "B"; thence South along the east line of Lot "B" to the southeast
corner therof or the northerly line of Brush Creek Parkway (as now
established); thence in a Westerly direction along the south line of
Lot "B" to the point of beginning or the southwest corner of said Lot
(64) Transmission Line; Hawthorn - Leeds, 47th & Park Road, Kansas
t^ity_: Lot 9, Eastwood Hills, an addition in Kansas City, Missouri,
except that portion of said lot taken for right-of-way.
(65) Transmission Line; Leeds - Midtown, 48th A Elmwood,Kansas City:
All of Lots 1 , 2, 3, 4, 5, and 6, Block 9, Vineyard Gardens, a
subdivision of land in Kansas City, Jackson County, Missouri.
(66) Transmission Line; Montros_e_- Loma Vista, 103rd & Blue Ridge
Ex t . , Kansas^ City: All of Lot 21 in the southeast quarter, northeast
quar ter , Section 36, Township 48, Range 33 except described as follows:
All that part of Lot 21, Ruskin Acres, a subdivision in Jackson
County , Missouri, which lies within the widths as hereinafter
designated on the lef t or east side of the following described center
line of Blue Ridge Boulevard and an the right or south side of the
following described survey center line of the median of highway
Interstate Route 470: The survey center line of the median of highway
Interstate Route 470 and the center line of Blue Ridge Boulevard are
located and described as follows: Beginning at the southeast corner of
the northeast quarter of Section 36, Township 48, Range 33; thence
Nor th 2° 44' 26" West 342.4 feet to Station 130+90 on the survey center
line of the median of said highway; thence from said Station 130+90 the
survey center line extends Nor th 66° 44' 26" West 1019.01 feet to the
beginning of a spiral transition curve normal to a 3° simple curve to
the left having an interior angle of 34° 53' 43" at S. T. Station
120+70.99; thence Westerly along said spiral curve 200 feet to the end
A - 33
of said spiral curve and the beginning of said 3° simple curve at C. S.
Station 118+70.99; thence Westerly along said 3° simple curve 105.22
feet to Station 117+65.77 which equals Station 10+00 on the center line
of Blue Ridge Boulevard; thence from said Station 10+00 the center line
of Blue Ridge Boulevard extends South 02° 29' 07" West 229.5 feet to
the point of curve Station 12+29.5 of a 2° curve to the left having an
interior angle of 88 56'; thence Southerly along the curve 105.5 feet
to Station 13+35. The widths of rights-of-way on the left or east side
of the center line of Blue Ridge Boulevard and on the right or south
side of the survey center line of the median of highway Interstate
Route 470 are as follows: Beginning with a width of 75 feet on the
south line of Lot 21, Ruskin Acres, as measured at right angles of Blue
Ridge Boulevard center line at Station 13+35; thence Northeasterly to a
width of 220 feet as measured at right angles to the survey center line
of the median of highway Interstate Route 470 at Station 119+40; thence
Northeasterly along a straight line and decreasing to a width of 160
feet from said survey center line of the median of highway Interstate
Route 470 Station 123+30; thence 160 feet in width from said Station
123+30 to Station 125+00; also all abutters rights of direct access
between highway now known as Interstate Route 470 including Blue Ridge
Boulevard and abutting land owned by Kansas City Power & Light Company
in Lot 21, Ruskin Acres, a subdivision of land in Jackson County,
Missouri.
(67) Transmission Line; j_eeds - Midtown, 43rd & Blue River , Kansas
Cityj Beginning at the southeast corner of the southeast quarter of
the southwest quarter of Section 24, Township 49, Range 33, Jackson
County, Missouri; thence Northwardly along the east line of said
quar te r quarter section 179.6 feet; thence Southwestwardly by a
straight line 635.8 feet, more or less, to a point in the south line of
said quarter quarter section 609.5 feet west of the point of beginning;
thence EastWardly 609.5 feet to the point of beginning.
(68) Substation No. 144 Guinotte Terminal, 2014 East Guinotte,
Kansas City: Lots 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, Block
30, Guinotte's Addition, a subdivision in Kansas City, Jackson County,
Missouri.
(69) Substation No. 24 Crosstowt, 1B01 Cherry Street, Kansas City;
Lots 1 to 10, both inclusive, and all of the vacated alley lying west
of and adjoining Lots 1 to 5, both inclusive, Block 2, McGee Place;
also Lots 25 to 36, both inclusive, and the south 10 feet of Lot 37 and
the south 10 feet of Lot 60, and all of the vacated alley lying west of
and adjoining the south 10 feet of said Lot 60 and Lots 61 to 72, both
inclusive, and all of the vacated alley lying west of and adjoining
said Lots 61 to 72, both inclusive, Park Place; both being subdivisions
in Kansas City, Jackson County, Missouri.
(70) Transmission Line, Blue Valley - Southtown, at Truman Sports^
Complex, Kansas City: All that part of Blocks 8, 9, and 10,
A - 34
Subdivision of Thomas Harrington's Land, a subdivision in Kansas City,
Jackson County, Missouri, according to the recorded plat thereof,
described as follows: Beginning at the point of intersection of the
north line of said Block 8 with the northerly right-of-way line of the
Chicago, Rock Island and Pacific Railroad Company, said right-of-way
line being 50 feet northeasterly of and normally distant from the
center line of said railroad company's main track, said point . also
being 212 feet west and 1702 feet, more or less, south of the northeast
corner of the southwest quarter of Section 19, Township 49, Range 32;
thence East along the north line of said Block 8, a distance of 116
feet to a point 96 feet west and 1702 feet, more or less, south of said
northeast corner, said point being on the northerly right-of-way line
of said railroad company, said right-of-way line being 100 feet
northeasterly of and normally distant from the center line of said
railroad company's main track; thence Southeasterly along said
northerly right-of-way line to a point 561 feet east and 2055 feet,
more or less, south of the northwest corner of the southeast quarter of
Section 19; thence Southerly to a point 562 feet east and 2114 feet,
more or less, south of said northwest corner, said point being 50 feet
northeasterly of and normally distant from the center line of said
railroad company's main track; thence Northwesterly along a line 50
feet northeasterly of and normally distant from the center line of said
main track to the point of beginning.
(71) Transmission Line; Shawnee - Navy, 12th & Bluff Street, Kansas
City: That part of the west half of Government Lot No. 1 of the
northeast quarter (sometimes called the southwest quarter of the
northeast quarter) of Section 6, Township 49, Range 33, in Kansas City,
Jackson County, Missouri, described as commencing at the intersect ion
of the north and south center line of said Section 6 with the north
line of Twelfth Street, bear East along the north line of Twelfth
Street a distance of 742.07 feet to the true point of beginning; thence
making an angle of 77° 06' to the left of the last described course
bear Northeasterly a distance of 735.80 feet along a line parallel with
and 1.97 feet normally distant from the westerly line of Beardsley
Street to a point; thence making an angle of 10° 03' to the left of the
last described course bear Northerly a distance of 451.73 feet to a
point on the easterly line of Bluff Street (formerly Bluff Street
Diversion) as established by deed of dedication dated November 8, 1912,
in Book B-1462 at page 418, Document 921088; thence Southerly along the
east line of said Bluff Street (formerly Bluff Street Diversion) making
an angle of 169° 52' 05" to the left of the last described course to a
point on the north line of Twelfth Street; and thence East along the
north line of Twelfth Street to the point of beginning.
(72) Substation No. 31 Forest, 1105 East 61st Street, Kansas City:
All of the south 25 feet of Lot 4, and the north 12-1/2 feet of Lot 5,
in Goodell Place, a subdivision in Kansas City, Jackson County,
Missouri, according to the recorded plat thereof.
A - 35
ALSO, the east 2 feet of the north 15 feet of Lot 6 and the east 2
feet of the south 20 feet of Lot 7, in Goodell Place, a subdivision in
Kansas City, Jackson County, Missouri, according to the recorded plat
thereof.
ALSO, Lot 2, Lockhart Place, a subdivision in Kansas City, Jackson
County, Missouri.
ALSO, the north 37-1/2 feet of Lot 3, Goodell Place, a subdivision in
Kansas City, Jackson County, Missouri, according to the recorded plat
thereof.
ALSO, the west 129 feet of the south 35 feet of Lot 6, Goodell Place,
a subdivision in Kansas City, Jackson County, Missouri, according to
the recorded plat thereof.
ALSO, Lot 4, Lockhart Place, a subdivision in Kansas City, Jackson
County, Missouri, according to the recorded plat thereof.
ALSO, all that part of the southwest quarter of the northwest quarter
of Section 4, Township 48, Range 33, described as follows: Beginning
at a point on west line of Forest Avenue 674.9 feet north of south line
of northwest quarter Section 4, Township 48, Range 33, thence West
parallel to north line of southwest quarter of southwest quarter of
northwest quarter of said Section 4, 131.06 feet to a point 131 feet
east of the east line of Troost Avenue as now established, thence North
parallel to east line of Troost Avenue 40 feet to a point, thence East
parallel to south line of said quarter section 131.06 feet to a point,
thence South 40 feet to beginning, Kansas City, Jackson County,
Missouri.
ALSO, all .-that part of the southwest quarter of northwest quarter
Section 4, Township 48, Range 33, described as follows: Beginning at a
point on west line of Forest Avenue 714.9 feet north of south line of
northwest quarter of Section 4, thence West parallel to north line of
southwest quarter of southwest quarter of northwest quarter of said
Section 4, 131.06 feet to a point 131 feet east of east line of Troost
Avenue as now established thence North parallel to east line of Troost
Avenue 50 feet to a point, thence East parallel to south line of said
quarter section 131.06 feet to a point, thence South 50 feet to
beginning in Kansas City, Jackson County, Missouri.
ALSO, the south 12-1/2 feet of Lot 3, and the north 25 feet of Lot 4,
Goodsll Place, a subdivision in Kansas City, Jackson County, Missouri,
according to the recorded plat thereof.
ALSO, the north 35 feet of the south 40 feet of Lot 8, Goodell Place,
an addition in Kansas City, Jackson County, Missouri, according to the
recorded plat thereof.
A - 36
ALSO, Lot 5, Lockhart Place, a subdivision in Kansas City, Jackson
County, Missouri, according to the recorded plat thereof.
ALSO, Lot 1, Lockhart Place, a subdivision in Kansas City, Jackson
County, Missouri.
ALSO, the west 129 feet of the north 15 feet of Lot 6 and the west
129 feet of the south 20 feet of Lot 7, Goodell Place, a subdivision in
Kansas City, Jackson County, Missouri, commonly known aa 6115 Troost
Avenue, and all rights to an easement for driveway purposes over the
south 6 feet of the north 21 feet of the west 107 feet of Lot 6 of the
said Goodell Place, a subdivision in Kansas City, Jackson County,
Missouri.
ALSO, all of the north 30 feet of Lot 7, and the south 5 feet of Lot
8, Goodell Place, a subdivision in Kansas City, Jackson County,
Missouri, commonly known as 6113 Troost Avenue.
ALSO, the north 10 feet of Lot 8 and the south 25 feet of Lot 9,
Goodell Place, a subdivision in Kansas City, Jackson County, Missouri,
commonly known as 6107-6109 Troost Avenue, and all rights to an
easement for driveway purposes over the north 4 feet of the north 35
feet of the south 40 feet of the west 107 feet of Lot 8 of the said
Goodell Place, a subdivision in Kansas City, Jackson County, Missouri.
ALSO, the north 25 feet of Lot 9 and all of Lot 10, Goodell Place, a
subdivision in Kansas City, Jackson County, Missouri, commonly known as
6101 Troost Avenue.
ALSO, Lot 3, Lockhart Place, a subdivision in Kansas City, Jackson
County, Missouri, according to the recorded plat thereof.
ALSO, the east 2 feet of south 35 feet of Lot 6, Goodell Place, a
subdivision in Kansas City, Jackson County, Missouri.
(73) Commercial Office, 6145 Troost,_Kansas City: All that part of
the southwest quarter of the northwest quarter of Section 4, Township
48, Range 33, in Kansas City, Jackson County, Missouri, beginning at a
point 749.9 feet north and 40 feet east of the southwest corner of said
quarter quarter section on the east line of Troost Avenue, thence East
parallel to the south line of said quarter quarter section 131 feet,
thence North parallel with the west line of said quarter quarter
section 65 feet, thence West parallel to the south line of said quarter
quarter section 131 feet, thence South 65 feet on the east line of
Troost Avenue to place of beginning, in Kansas City, Jackson County,
Missouri.
ALSO, all that part of the southwest quarter of the northwest quarter
of Section 4, Township 48, Range 33 in Kansas City, Jackson County,
Missouri, described as follows: Beginning at a point 632.57 north and
A - 37
40 feet east of the southwest corner of said quarter quarter section;
said point being the intersection of the north line of 62nd Street with
the east line of Troost Avenue; thence North along the east line of
Troost 117.33 feet; thence East parallel with the south line of said
quarter quarter section 131 feet; thence South parallel with said line
of Troost Avenue; 75-32 feet more or less to a point 42.01 feet north
of the north line of 62nd Street, thence East parallel to the north
line of 62nd Street to a point on the west line of Forest Avenue;
thence South along said west line to the north line of 62nd Street;
thence West along said north line 262.06 feet to the point of
beginning.
(74) Substation Nq._ 37 Courtney, Baker Road & Mo. Highway 291, Sugar
Creek: The north 150 feet of the east 150 feet of the southeast
quarter of Section 24, Township 50, Range 32, Jackson County,
Missouri.
ALSO, beginning at the southeast corner of the northeast quarter of
Section 24, Township 50, Range 32, Jackson County, Missouri, thence
North along the east line of said quarter section 50 feet, thence West
parallel to the south line of said quarter section 150 feet, thence
South, parallel to the east line of said quarter section to a point on
the south line of said quarter section, thence East along the south
line of said quarter section to the point of beginning.
(75) Substation No. 48 Tomahawk 910 West 103rd Street, Kansas City:
The east 175' of Lot 22, except that part thereof lying south of a line
drawn 150 feet north of and parallel to the south line of said lot, in
Eden, a subdivision in Kansas City, Jackson County, Missouri, according
to the recorded plat thereof.
ALSO, part of the southwest quarter of the northeast quarter of
Section 31, Township 48, Range 33, in Kansas City, Jackson County,
Missouri, more particularly described as follows: Beginning in the
south line of said quarter quarter section at a point 519 feet west of
the southeast corner thereof; thence North parallel to the east line of
said quarter quarter section, 150 feet; thence West parallel to the
south line of said quarter quarter section, 70 feet; thence South
parallel to the east line of said quarter quarter section, 150 feet;
thence East along the south line of said quarter quarter section, 70
feet to the place of beginning, except the south part thereof in 1Q?rd
Street.
ALSO, that part of the southwest quarter of the northeast quarter of
Section 31, Township 48, Range 33, in Kansas City, Jackson County,
Missouri, described as follows: Beginning at a point 203 feet west of
the southeast corner of the southwest quarter of the northeast quarter
of said section, thence West 72-1/2 feet, thence North to the center of
Indian Creek,' thence along the said center of Indian Creek to a line
203 feet west of the west line of the southeast quarter of the
A - 38
northeast quarter of said Section 31, thence South to the place of
beginning, except part in county highway known as 103rd Street.
ALSO, a part of Section 31, Township 48, Range 33, in Jackson County,
Missouri; beginning 454 feet west of the southeast corner of the
southwest quarter of the northeast quarter of Section 31, Township 48,
Range 33, thence West 65 feet; thence North 150 feet; thence East 65
feet; thence South 150 feet to the beginning, in Jackson County,
Missouri.
ALSO, part of the southwest quarter of the northeast quarter of
Section 31, Township 48, Range 33, in Kansas City, Jackson County,
Missouri, particularly described as follows: Beginning in the half
section line at a point 414 feet west of the southeast corner of said
southwest quarter of the northeast quarter and running, thence West
along the south line of said quarter quarter section 40 feet, thence
North and parallel with the east line of said quarter quarter section
150 feet; thence East parallel with the first course herein described
40 feet; thence South 150 feet; thence South 150 feet to the place of
beginning, in Jackson County, Missouri.
ALSO, all that part of the southwest quarter of the northeast quarter
of Section 31, Township 48, Range 33 described as follows: Beginning
at a point 275.5 feet west of the southeast corner of the west half of
the northeast quarter of Section 31; thence West along the half section
line of said section 138-1/2 feet, thence North to the center of the
channel of Indian Creek, thence East and South along the center channel
of Indian Creek to a line running north from beginning; thence South to
place of beginning in Jackson County, Missouri.
LAFAYETTE COUNTY
(76) Substation No. 34 Corder, Missouri Jjighway 20 & BB, Corder^:
Beginning at a point 92 feet north and 84.8 feet west of the Section
Corner 22, 23, 26, 27 Township 50, Range 25: thence West 152.2 feet;
thence North 189 feet; thence East 217 feet; thence South 145.7 feet;
thence West 3.9 feet, thence Southwesterly to the place of beginning;
being a part of the southeast quarter of the southeast quarter of
Section 22, Township 50, Range 25, Lafayette County, Missouri.
(77) Substation No. 122 Waverly, 208 Jefferson Street, Waverly: The
north 150 feet of Lots 1, 2, and 3, Block 10, Shelby and Company' s
Addition to the Town of Waverly, Missouri.
(78) Substation No. 703 Mayview, County Rd FF Northeast of Hayview:
A tract of land in the northeast quarter of the southeast quarter of
Section 6 in Township 49, Range 26 in Lafayette County, Missouri being
more particularly described as follows: Beginning at an iron rod on
the south right-of-way line of Missouri State Supplementary Route FF
(Truman Road), 1047.2 feet west of the east line of Section 6 and
A - 39
2620.0 feet north of the south line of said Section 6; thence from
point of beginning South 88° 52' West along the south right-of-way line
of said Route FF a distance of 208.0 feet to an iron rod; thence South
1° 08' East a distance of 208.0 feet to an iron rod; thence North 88°
52' East and parallel to the south line of Section 6, a distance of
208.0 feet to an iron rod; thence North 1° 08' West a distance of 208.0
feet to the place of beginning.
ALSG, a tract of land described as follows: Beginning on the south
line of Lafayette County FF Highway, as now established, at a point
1255.2 feet west of the east line of the southeast quarter of
Section 6, Township 49, Range 26, Lafayette County, Missouri; thence
West along the south line of said FF Highway, a distance of 119.3 feet;
thence South 1° 8' East 55 feet; thence North 88° 52' East 20 feet;
thence South 1° 8' East 153 feet; thence North 88° 52' East, a distance
of 99.3 feet; thence North 1° 8' West to the point of beginning.
(79) Substation No. 127 South Waverly, 4 Miles South of Waverly: A
tract of land in the northwest quarter of Section 2, Township 50, Range
24, Lafayette County, Missouri, described as follows: Beginning at the
northwest corner of the northwest quarter of said Section 2, thence
South along the west line of said quarter section a distance of 600
feet, thence South 89° 5V East a distance of 636 feet to the center of
a creek, thence North 31° 54' East along the center of said creek a
distance of 60 feet, thence North 34° 28' West along the center of said
creek a distance of 56 feet, thence North 13° 03' West along the center
of said creek a distance of 63.2 feet, thence North 36° 07' East along
the center of said creek a distance of 53 feet, thence North 8° 42'
East along the center of said creek a distance of 108 feet, thence
North 32° 52' West along the center of said creek a distance of 47
feet, thence North 18° 50' East along the center of said creek a
distance of 81 feet, thence North 36° 28' West along the center of said
creek a distance of 53 feet, thence North 13° 47' East along the center
of said creek a distance of 66 feet, thence North 18° 03' West along
the center of aforesaid creek a distance of 72.5 feet to the north line
of said quarter section, thence West along the north line of said
quarter section to the point of beginning.
(80) Substation No. 110 Hiqqinsville, 29th & Shelby, Hiqqinsville:
Part of Lot numbered .1 in Layne A Jones Subdivision of a part of
southeast quarter southwest quarter Section 6, Township 49, Range 25,
no* an addition to the City of Higginsville, Missouri, more
particularly described as follows: Beginning at the intersection of
the north line of said Lot numbered 1 with the east line of Shelby
Street (formerly Lipper Avenue) as now established, in the City of
Higginsville, Missouri, running thence East along the north line of
said Lot numbered 1, 100 feet, thence South parallel with the East line
of Shelby Street, 110 feet, thence West parallel with the north line of
said Lot numbered 1, 100 feet to the east line of said Shelby Street,
thence North along the east line of said Shelby Street, 110 feet to the
place of beginning.
A - 40
PLATTE COUNTY
(81) Substation No. 98 Riverside, Tillison Road 4 CB&Q Tracks^
Riverside: A tract of land in the southwest quarter of Section 4,
Township 50, Range 33, Platte County, Missouri, described as follows:
Beginning on the west line of Section 4, Township 50, Range 33, at the
point of its intersection of the northerly right-of-way line of the
Chicago, Burlington 4 Quincy Railroad Company, the said point being
324.3 feet north of the southwest corner of said Section 4; thence
North along the west line of the section a distance of 116 feet; thence
right at an angle 100° 25' 45" from the west line of the section, a
distance of 132 feet; thence right at an angle of 69° 34' 15", a
distance of 116 feet to a point on the northerly line of the
right-of-way of the Chicago, Burlington 4 Quincy Railroad; thence
Westerly along the northerly right-of-way line to point of beginning,
excepting that part of the above being in county road. Subject to all
roads and easements of record.
ALSO, all that part of the southwest quarter of Section A, Township
50, Range 33, Platte County, Missouri, described as follows: Beginning
at a point on the west line of the southwest quarter of said Section 4,
said point being the northwest corner of a tract of land conveyed to
the Kansas City Power 4 Light Company by deed filed for record as
Instrument No. 13349 in Book 164 at Page 51 in the Office of the
Recorder of Deeds for Platte County in Platte City, Missouri, said
point being 440.41 feet (Deeded 401.69 feet) north of the southwest
corner of said Section 4; thence North 00° 14' 09" East along said west
line, a distance of 98.42 feet (Deeded 136.05 feet) to a point on the
southerly right-of-way line of Interstate Route 1-635, as now
established; thence South 89° 38* 04" East along said southerly
right-of-way line, a distance of 32.48 feet (Deeded 34.14 feet); thence
North 00° 21' 56" East continuing along said right-of-way line, a
distance of 108.50 feet (Deeded 110.0 feet); thence Northeasterly
continuing along said southerly right-of-way line along a curve to the
right, tangent to the last described course, having a radius of 195.18
feet, an arc distance of 323.62 feet; thence South 84° 38' 04" East
along said right-of-way line to a point which is 300 feet east of the
west line of the southwest quarter of said Section 4 (as measured at
right angles to the west line of said quarter section); thence South,
parallel with and 300 feet distant from the west line of said quarter
section to a point on the northerly right-of-way line of the Chicago,
Burlington 4 Quincy Railroad Company; thence North 69° 10' 36" West
along the northerly right-of-way line of said railroad to a point on
the west line of the southwest quarter of said Section 4; thence North
along the west line of said southwest quarter, Section 4, to the point
of beginning. Excepting therefrom the aforesaid tract of land conveyed
to Kansas City Power 4 Light Company. Also subject to the gravel road
along the west line of the above described tract of land.
A - 41
(B2) Substation No. 11 Barry, 4401 West Tiffany Springs Road, Kansas
City: A tract of land in the northwest quarter of Section 5, Township
51, Range 33, Kansas City, Platte County, Missouri, more particularly
described as follows: Beginning at the southeast corner of the
northwest quarter of Section 5; thence West a distance of 50 feet to
the west right-of-way line of North Green Hills Road, said line also
being the east property line of Parcel I and the true point of
beginning; thence North 0° 22' 25" East a distance of 560.5 feet to the
northeast corner of Parcel I; thence North 88" 08' 26" West along the
south right-of-way line of Tiffany Springs Road, said line also being
the north property line of Parcel I, to the intersection with the
easterly right-of-way line of the special rapid transit corridor, said
point being the northwest corner of Parcel I; thence Southeasterly
along the easterly right-of-way of said corridor, said line being the
westerly property line of Parcel I, to the intersection with the south
line of the northwest quarter of Section 5; thence East along the south
line of the northwest quarter of Section 5 to the intersection with the
west right-of-way line of North Green Hills Road, said point being the
true point of beginning.
ALSO, a tract of land in the southwest quarter of Section 5, Township
51, Range 33, Kansas City, Platte County, Missouri rore particularly
described as follows: Beginning at the northeast corner of the
southwest quarter of Section 5; thence West a distance of 50 feet to
the west right-of-way line of North Green Hills Road, said line being
the east property line of Parcel II, and the true point of beginning;
thence South 0° 22' 25" West along the west right-of-way line of North
Green Hills Road a distance of 20 rods (330 feet); thence West along a
line parallel to the north line of the southwest quarter, said line
being the south property line of Parcel II, South 88° 8' 26" East, a
distance of 816.62 feet to the intersection of said line and the
easterly right-of-way line of the special rapid transit corridor;
thence Northwesterly along the easterly right-of-way line of said
corridor, said line being the west property line of Parcel II, to a
point of intersection of said line and the north line of the southwest
quarter of Section 5; thence East along the north line of the southwest
quarter of Section 5 to the intersection with the west right-of-way
line of North Green Hills Road, said point being the true point of
beginning.
(83) Substation No. 49 Weatherby, Missouri Highway 45 & Graden Road,
Platte County: A tract of land in the southwest quarter of Section 23,
Township 51, Range 34, described as follows: Beginning at a point
which is 1498.85 feet east and 502.5 feet north of the southwest corner
of said Section 23; thence North 23° 37' East 625.3 feet to a point;
thence South 66° 23' East 660 feet to a point; thence South 23* 37'
West 694.7 feet to the center of a public road; thence North 60° 25'
West 663.7 feet to the point of beginning, in Platte County, Missouri,
except that part in public road or highway.
A - 42
(84) Future Turbine Generating Site Riverside, Tillison Road &
Burlington Nor thern Railroad, Riverside: A tract of land in the
southwest quarter of Section 4, Township 50, Range 33, and the
northwest quarter of Section 9, Township 5D, Range 33, Platte County,
Missouri, described as follows: Beginning at a railroad rail at the
northwest corner of said Section 9; thence South along the west line of
said Section 9, 1591.23 feet, deed (measures 1592.11 feet) to a gag
pipe; thence East 1303.5 feet, deed (measures 1303.17 feet) to a point
in the east line of the west half of the west half of fractional
Section 9, Township 50, Range 33, thence North along said east line
1248.0 feet to a point in the southerly right-of-way line of Chicago,
Burlington 4 Quincy Railroad as now located; thence Northwesterly along
the southerly line of said railroad, 1391.0 feet, deed (measures
1390.66 feet) to the intersection of said southerly right-of-way line
and the west line of the southwest quarter of Section 4, Township 50,
Range 33, thence southerly along said west line, 127.0 feet, deed
(measures 126.48 feet) to the point of beginning.
(85) Substation No. 63 Line Creek, 3810 N .W. 64th Street, Kansas
Cit,y: All of the east 12.5 acres of the west 22.5 acres of the east 45
acres of the south half of the southeast quarter of Section 20,
Township 51, Range 33, Kansas City, Platte County, Missouri, subject to
easements and restrictions of record. Also the east 385 feet of the
west 1430 feet of the south half of the southeast quarter of Section
20, Township 51, Range 33, Platte County, Missouri.
(86) latan Steam Electric Generating Station, latan: A tract of
1 and comprised of al 1 or part of fract ional Sect ions 18, 19, 29, 30,
and 32, Township 54, Range 36 of the Fif th Principal Mer id ian , and all
or part of fractional Sections 13, 24, 25, and 26, Township 54, Range
37 of the Fi f th Principal Meridian and a part of fractional Section 5,
Township 53, Range 36 as said sections were surveyed and shown on the
Original U.S. Government Surveys of the State of Missouri.
ALSO all or part of fractional Sections 5, 6, 7, 8, 9, 16, and 17,
Township 7, Range 22 of the Sixth Principal Meridian as said sections
were surveyed and shown on the Original U.S. Government Surveys of the
Territory of Kansas.
ALSO certain accreted and relicted lands and former river bed; all
now being in Platte County in the State of Missouri and more
particularly described as follows: (NOTE : The bearings in this
description are based on, or have been converted to conform to, the
Missouri Coordinate System, West Zone) Beginning at the southwest
corner of the southeast quarter of Section 32, Township 54, Range 36;
thence North 89° 49' 28" East along said south line a distance of 928.4
feet ; thence North 00° 34' 33" East parallel with the west line of said
quar ter section, 2672.30 feet , more or less to a point on the south
line of the. northeast quarter of said Section 32; thence continuing
A - 43
North 00° 34' 33" East 432.26 feet; thence South 89° 19' 03" East,
parallel with the south line of said northeast quarter section 1716.0
feet to a point on the east line of said Section 32; thence North 00°
34' 33" East along said east line 883.99 feet, more or less, to the
southwesterly line of the right-of-way of Missouri State Highway No.
45; thence Northwesterly along said southwesterly right-of-way line
through parts of said Sections 32, 29, 30, and 19, in Township 54,
Range 36, over the next twenty-nine courses:
North 45° 03' 24" West 2772.21 feet; thence South 44° 56' 36" West 5.0
feet; thence North 45° 03' 24" West 700.0 feet; thence North 44° 56'
36" East 5.0 feet; thence North 45° 03' 24" West 466.0 feet; thence
Northwesterly along a curve to the right, tangent to the last described
course and having a radius of 5769.58 feet, an arc distance of 506.81
feet, thence North 40° 01' 24" West 2729.8 feet; thence South 49° 58'
36" West 5.0 feet; thence North 40° 0V 24" West 1625.9 feet; thence
Northwesterly along a curve to the right, tangent to the last described
course and having a radius of 11504.2 feet, an arc distance of 579.01
feet, thence North 37° 08' 24" West 340.1 feet; thence South 52° 51'
36" West 25.0 feet; thence North 37° 08' 24" West 100,0 feet; thence
North 52° 51' 36" East 25.0 feet; thence North 37° 08' 24" West 1587.51
feet; thence South 49° 41' 36" West 10.01 feet; thence North 37° 08'
24" West 610.64 feet; thence Northwesterly on a curve to the right,
tangent to the last described course and having a radius of 11514.2
feet, an arc length of 855.13 feet; thence North 89° 08' 24" West 6.02
feet; thence Northwesterly on a curve to the right, tangent to the last
described course and having a radius of 11519.2 feet, and arc distance
of 45.67 feet; thence North 32° 38 ' 24" West 1699.4 feet; thence North
57° 21' 36" East 5.0 feet; thence North 32° 38' 24" West 350.0 feet;
thence North 57° 21' 36" East 5.0 feet; thence North 32° 38' 24" West
743.09 feet; thence North 89° 38' 24" West 119.24 feet; thence North
32" 38' 24",West 95.38 feet; thence South 89° 38' 24" East 119.24 feet;
thence North 32° 38 ' 24" West 56.55 feet to the south line of said
Section 18, Township 54, Range 36 at a point 750.65 feet easterly along
said section line from the southwest corner of said section; thence
South 89° 38' 24" East along said south line 331.43 feet to the
southwesterly line of an old county road; thence along said
southwesterly line over the next six courses; North 27° 32' 56" West,
122.55 feet; thence North 28° 54' 56" West , 349.13 feet; thence North
30° 34' 56" West 983.34 feet; thence North 23° 18' 56" West, 238.91
feet; thence North 30° 18' 56" West, 452.35 feet; thence North 25° 30'
56" West 48.53 feet to a point on the east line of said Section 13,
Township 54, Range 37; thence South 00" 22' 26" West along said east
line, 574.06 feet to the southwesterly right-of-way line of the
Burlington Northern, Inc. (formerly the Chicago Burlington & Quincy
Railroad Company), thence Northwesterly along said southwesterly
right-of-way line 759.31 feet, thence continuing along said
southwesterly right-of-way line North 25° 28l 04" West 634.46 feet,
thence departing from said right-of-way line South 70° 22' 26" West
2245.96 feet; thence South 11° 37' 34" East 435.6 feet; thence North
A - 44
71° 22' 26" East 253.44 feet; thence South 85° 37' 34" East 876.48
feet; thence South 00° 52' 26" West 1547.04 feet; thence North 72° 52'
26" East 238.28 feet, to a point on the west line of Lot 5 of the
northeast fractional quarter of said Section 24, Township 54, Range 37;
thence South 00° 22' 26" West along the west line of said Lot 5 (also
referred to as the west line of the east half of the northeast quarter
of said section) and the southerly prolongation thereof, 2488.10 feet
to the easterly prolongation of the north line of the southwest
fractional quarter of said Section 24; thence South 89° 23' 37" West
along said prolongation 928.79 feet to a point which is 3055 feet
easterly along said north line and prolongation, from the northwest
corner of said southwest fractional quarter section; thence South 34°
17' 44" West 3252.40 feet to a point on the easterly prolongation of
the south line of said Section 24 at a point 1265 feet easterly along
said line from the southwest corner of said section; thence South 89"
15' 20" East along said easterly prolongation 2169.14 feet to the
north-south center line of said Section 6, Township 1, Range 22, as
said center line is located by decree of the Supreme Court of the
United States entered June 5, 1944, and reported in 64 Supreme Court
Reporter at Page 1202-1208; thence South 00° 22' 09" East along the
southerly prolongation of said line 2474.31 feet to the northwest
corner of the northeast quarter of fractional Section 7, Township 7,
Range 22, the same being the southeast corner of a tract of land
conveyed to Gary Ashpaugh and Mary Ashpaugh, husband and wife, by
General Warranty Deed filed for record on the 8th day of June 1973 and
recorded as Document No. 43211 in Book 416 at Page 430; thence North
89° 58' 25" West along the south line of said tract, 3118.5 feet to the
southwest Corner of said Ashpaugh tract, said corner also being on a
line described in a boundary line agreement recorded on July 3, 1968,
as Document No. 20330 in Book 311 at Page 83 in the Office of the
Recorder of Deeds for Platte County; thence South 0° 55' 37" West
(record -South 0° 28' West) 339.04 feet; thence North 89° 04' 23" West
(record North 89° 49' West) along said boundary line 877.2 feet; thence
South 00° 55' 37" West (record South 00° 28' West) along said boundary
line 2383.41 feet to a monumented meander point on the northerly
highbank of the Missouri River (which said monumented meander point is
the beginning point of the next six meander line courses which run
approximately parallel to a portion of the actual boundary as follows:
(1) South 68° 53' 41" East, 2169.12 feet (2) South 769 18' 33" East,
1644.66 feet (3) South 72° 24' 55" East 2300.96 feet (4) South 63a 59'
58" East, 1078.11 feet (5) South 54° 07' 46" East, 2940.56 feet (6)
South 35° 45' 15" East, 2149.20 feet to a point on the westerly point
on the westerly prolongation of the south line of said Section 32,
Township 54, Range 36; the last said meander point bearing South 89°
49' 28" West along said south line and westerly prolongation thereof a
distance of 3669.29 feet from the southwest corner of the southeast
quarter of said Section 32; thence from said monumented meander point
South 00° 55' 37" West, to the low water line on the left or northerly
shore of the Missouri River; thence Southeasterly along the low water
line to a point en the westerly prolongation of a line that is 7371
A - 45
feet north of and parallel to the south line of the northeast quarter
of Section 8, Township 53, Range 36; thence leaving said low water line
North 89° 49' 26" East along said parallel line to a point that is 2400
feet west of the east line of the northwest quarter of said Section 5;
thence South 24° 05' 32" East 228.63 feet; thence North 89° 49' 28"
East, 1052.17 feet to a point 1255 feet west of the east line of the
northwest quarter of said Section 5, Township 53, Range 36 and 7162
feet north of the south line of the northeast quarter of Section 8,
Township 53, Range 36, said point being a point on a curve; thence
Northwesterly along said curve to the left having a radius of 4677.31
feet (deed) and 4583.66 feet (as surveyed) to a point on the south line
of Section 32 at a distance of 1461.66 feet westerly along said south
line from the southwest corner of the southeast quarter of said Section
32; thence North 89° 49' 28" East along said south section line 1461.66
feet to the point of beginning.
SALINE COUNTY
(87) Substation Nq .^ 26 Blackburn, North of Blackburn: One Acre in
the northeast corner of the northwest quarter of the northwest quarter
of Section 19, Township 50, Range 23, Saline County, Missouri.
(88) Substation No. 32 Ht. Leonard, Ho. Highway 127 neai^j-lt^
Ljjonard: A tract of land located in the southwest quarter of the
southwest quarter of Section 12, Township 50, Range 23, Saline County,
Missouri, described as follows: Beginning at a point which is 721.1
feet west of the east line and 25 feet north of the south line of said
quarter quarter section, thence West parallel with the south line of
said quarter quarter section a distance of 100 feet, thence right at an
angle of 89° 05' from the last-described course a distance of 100 feet,
thence East parallel with the south line of said quarter quarter
section a -distance of 100 feet, thence South to the point of
beginning.
(89) Substation No. 43 West Marshall, U.S. Highway 65 & 240,
Harshalj.: Beginning at a stake 984.4 feet north and 32.3 feet east of
the center of Section 9, Township 50, Range 21; thence North 21° 45'
East 190.6 feet, thence South 68° 14' East 138.7 feet; thence South 7°
36' Hest 335.2 feet; thence North 36° 49* West 258.2 feet to the place
of beginning.
(90) Service Center Sweet Springs, 104 North Locust Street, Sweet
Springs: Beginning at the intersection of the east line of Miller
Street in the City of Sweet Springs and the north line of the
right-of-way of the Missouri Pacific Railroad; thence East along the
north line of the Missouri Pacific Railroad right-of-way 264 feet more
or less; thence North 50 feet, thence Hest on a line parallel with the
north line of the northwest quarter of the northwest quarter of Section
11, Township 48, Range 23, 263.9 feet more or less to the east line of
Miller Street; thence South on the east line of Miller Street to the
point of beginning.
A - 46
ALSO, all of Irregular Lot 18, Sweet Springs, Saline County,
Missouri, described by metes and bounds as follows: Commencing at a
point 25.0 feet east of the northwest corner of the southeast quarter
of the northwest quarter of the northwest quarter of Section 11,
Township 48, Range 23, Saline County, Missouri, said point being on the
east right-of-way line of Miller Street and also being the northwest
corner of Irregular Lot 19 as shown by the J. J. Smith map of Sweet
Springs, Missouri, and also the southwest corner of Lot 1 in Block 4 of
J. C. Magness Addition to Sweet Springs, Saline County, Missouri;
thence South 89° 54' 40" East along the north line of said southeast
quarter of the northwest quarter of the northwest quarter, said line
also being the north line of said Irregular Lot 19 and the south line
of said J. C. Magness Addition, 264.0 feet to the northeast corner of
said Irregular Lot 19, said point also being the northwest corner of
Irregular Lot 18, as shown on said J. J. Smith map of Sweet Springs,
Missouri, and the Point of Beginning of a tract herein described;
thence continuing South 89° 54' 40" East along the north line of said
southeast quarter of the northwest quarter of the northwest quarter,
said line also being the south line of said 3, C. Magness Addition and
the north line of said Irregular Lot 18, 466.50 feet to the northeast
corner of said Irregular Lot 18, said point also being the southeast
corner of Lot 4 in Block 3 of said J. C. Magness Addition and also
being a point on the west right-of-way line of Locust Street (Missouri
State Route 127); thence South 01° 10' West along the east line of said
Irregular Lot 18 and west right-of-way line of Locust Street (Missouri
State Route 127), 182.65 feet to a point on the northerly right-of-way
line of the Missouri Pacific Railroad, said point also being the
southeast corner of said Irregular Lot 18; thence Southwesterly along
said northerly right-of-way line and the south line of Irregular Lot
18, along a curve to the right with a main line degree of curve of 02°
42 ' , 350.32 feet to Railroad PT Station 11171 plus 43.3; thence
continuing along said northerly right-of-way line and the southerly
line of Irregular Lot 18, South 86° 38' 40" West, 123.71 feet to a
point 257.0 feet east of the east right-of-way line of said Miller
Street as measured along said northerly right-of-way line of the
Missouri Pacific Railroad, said point also being the southwest corner
of Irregular Lot 18, and the southeast corner of said Irregular Lot 19;
thence North 01° 40' 30" East along the west line of said Irregular Lot
18, said line also being the east line of said Irregular Lot 19, 240.29
feet to the point of Beginning.
(91) Substation No. 95 Norton, on County Road 0 South^ of Norton: A
tract of land described as follows: Beginning on the west line of the
southwest quarter of the southwest quarter of Section 20, Township 51,
Range 20, in Saline County, Missouri, at a point 1032.58 feet north of
the south line of said quarter quarter section, thence East parallel
A - 47
with the said south line a distance of 688.38 feet, thence North
parallel with the west line of said quarter quarter section a distance
of 345.5 feet to the north line of said quarter quarter section, thence
West along said north line a distance of 688.38 feet to the west line
of said quarter quarter section, thence South along said west line to
the point of beginning, subject to the right-of-way of State Road "0"
located along the west side of said tract.
(92) Radio Tower, on County Road AD, West of Ho. Highway 41, South
of Miami: A 5 acre tract located in the northeast quarter of Section
20, Township 52, Range 21, Saline County, Missouri, more thoroughly
described as follows: Beginning at the northwest corner of southeast
quarter of northeast quarter of Section 20, thence East along said
north line of southeast quarter of northeast quarter a distance of
466.69 feet, thence South and parallel with the west line of said
quarter quarter a distance of 466.69 feet, thence West and parallel
with the north line of said quarter quarter a distance of 466.59 feet
to a point on the west line of said quarter quarter section, thence
North along west quarter quarter line 466.69 feet to a point of
beginning, excepting that part dedicated for highway purposes.-
(93) Substation No. 2B Sweet Springs, Broadway & Oak Streets, Sweet
Springs: The east 104 feet of Lots 11, 12 and 13 in Block 11 of
Dankenbring's Re-Subdivision of part of the northwest quarter of the
southwest quarter of Section 2, Township 48, Range 23, Saline County,
Missouri.
Beginning at the southeast corner of said Block 11, thence North along
the east line of said Lots 13, 12, and 11, a distance of 95 feet, to
the north line of said Lot 11; thence West along the said north line of
Lot 11, a distance of 104 feet; thence South, parallel with the said
east line of Lots 11, 12, and 13, to the south line of said Block 11;
thence East along said south line of Block 11 to the point of
beginning.
(94) Substation No. 59_Gilliam, on Mo. Highway 240 East of jUlliam:
A tract of land described as follows: Beginning on the northerly line
of State Highway No. 240 at a point 161 feet east of the west line of
the southwest quarter of the northwest quarter of Section 4, Township
51, Range 19, Saline County, Missouri (measured along said highway
line), thence Easterly along said highway line a distance of fifty (50)
feet, thence North at an angle of 90° left from last-described course a
distance of 50 feet, thence West at an angle of 90° left from
last-described course a distance of 50 feet, thence South at an angle
of 90° left from last-described course to the point of beginning.
A - 48
(95) Substation No. 702, Newell, on Mo. Highway 20 West of Marshall:
A tract of land in the west half of the northwest quarter of Section 16
Township 50, Range 21, Saline County, Missouri, described as follows:
Beginning on the northerly line of Missouri Highway .Mo. 20, as now
established, at a point 262.1 feet west of the east line of said half
quarter section, as measured along the northerly line of said Missouri
Highway No. 20, thence North parallel with the east line of said half
quarter section a distance of 125 feet, thence left at an angle of 89°
40' from the last described course a distance of 125 feet, thence left
at an angle of 90° 20' from the last described course, to a point on
the northerly line of said Missouri Highway No. 20, thence Easterly
along the northerly line of said Missouri 20 to the point of
beginning.
REAL E S T A T E IN KANSAS
Al l the f o l l o w i n g d e s c r i b e d real e s t a t e o f the Company
s i t u a t e d i n t h e S t a t e o f K a n s a s :
ANDERSON COUNTY
Substation No. BO Greeley, on U.S. Highway 169 West of
: A tract of land located in the northeast quarter of
Section 36, Township 19, Range 20, Anderson County, Kansas, more
particularly described as follows: Beginning at a point on the
southerly right of way line of U.S. Highway 169 said point being 231.6
feet west and 103.0 feet south of the northeast corner of northeast
quarter Section 36, with a Southwest angle of 89° 10' off the north
line of said quarter section, thence continuing South on this last
described course a distance of 100.0 feet, thence East a distance of
100.0 feet, thence North and parallel with the west line of said tract
a distance of 112.0 feet to the southerly right of way line of U.S.
Highway 169, thence Westerly along said southerly right-of-way line to
point of beginning.
(97) Substation No. 97 We_lda,_ on U.S. Highway 169 near C-arnett: A
tract of land described as follows: Beginning on the west line of a
public road which lies along the east side of the northeast quarter of
Section 18, Township 21, Range 20, Anderson County, Kansas at its point
of intersection with the south line of the public road which lies along
the north side of said quarter section (said point being further
identified as being 30 feet west of and 35 feet south of the northeast
corner of said section), thence South along the west line of first
described public road a distance 100 feet, thence West parallel with
the north line of the section a distance of 100 feet, thence North to
the south line of the public road next described, thence East along
said south line of the public road to the point of beginning.
A - 49
(98) Substation No. 481 Greeley Regulator, on U.S. Highway 169
Southwest of Greeley: Beginning at a point on the easterly
right-of-way line of U.S. Kansas Highway 169, as now established, said
point being 544 feet northeasterly of the south line of the northeast
quarter of Section TO, Township 20, Range 20, Anderson County, Kansas,
as measured along the easterly right-of-way of said U.S. 169, thence at
an angle of 90° to the right from the northeasterly course of the
easterly right-of-way line of said U.S. Highway 169 a distance of 100
feet, thence at an angle of 90° to the left froo the last described
course a distance of 100 feet, thence at an angle of 90° to the left
from the last described course a distance of 100 feet to the easterly
right-of-way line of said U.S. Highway 169, thence at an angle of 90°
to the left from the last described course a distance of 100 feet to
the point of beginning.
CDFFEY COUNTY
(99) Wolf Creek Nuclear Generating Station & Lake, on U.S. Highway
75, North of Burlington: An undivided 47 percent interest in and to
the following real estate subject to that certain December 28, 1981,
Ownership Agreement between Kansas City Power 4 Light Company, Kansas
Gas and Electric Company, and Kansas Electric Power Cooperative, Inc.
recorded at the Office of the Register of Deeds in Coffey County,
Kansas, Book No. W, Pages 465-500, respectively:
Beginning at the west quarter corner of Section 24, Township 20,
Range 15; thence East to the northeast corner of the west half of the
west half of the southeast quarter of said Section 24; thence South to
the southeast corner of the west half of the northwest quarter of the
northeast quarter of Section 25, Township 20, Range 15; thence West to
the west line of the northeast quarter of said Section 25; thence South
to the south quarter corner of said Section 25; thence West to a point
797.8 feet east of the northwest corner of the northwest quarter of
Section 36, Township 20, Range 15; thence South 520 feet; thence
Southeasterly to a point 1020 feet west of the southeast corner of the
north half of the northwest quarter of said Section 36; thence South
200 feet; thence West 621.85 feet; thence South 1198.97 feet; thence
Southeasterly 350.7 feet to a point 160 feet south of the northeast
corner of the west half of the southwest quarter of said Section 36;
thence South to the northeast corner of the southwest quarter of the
southwest quarter of said Section 36; thence East to the east line of
the west half of said Section 36; thence South to the south quarter
cocnec of said Section 36; thence East to the southwest corner of the
east half of the southeast quarter of the southeast quarter of said
Section 36; thence North to the northwest corner of the east half of
the southeast quarter of the southeast quarter of said Section 36;
thence East to the northeast corner of the west half of the southwest
quarter of the southwest quarter of Section 31, Township 20, Range 16;
thence South to the southeast corner of said west half of the southwest
quarter of the southwest quarter; thence East to the northeast corner
A - 50
of Section 6, Township 21, Range 16; thence South to the northwest
corner of the south halF of the north half of Section 5, Township 21,
Range 16; thence East to the northeast corner of the southwest quarter
of the northwest quarter of Section 4, Township 21, Range 16; thence
South to the southeast corner of the southwest quarter of the southwest
quarter of said Section 4; thence West to the northeast corner of
Section 8, Township 21, Range 16; thence South to the southeast corner
of said Section 8; thence West 1704.96 feet; thence South to the north
line of the south half of the northeast quarter of Section 17,
Township 21, Range 16; thence East to the northeast corner of the south
half of the northwest quarter of Section 16, Township 21, Range 16;
thence South to the south quarter corner of Section 21, Township 21,
Range 16; thence West to a point 45Q feet west of the southeast corner
of Section 20, Township 21, Range 16; thence South to a point 450 feet
west of the east quarter corner of Section 29, Township 21, Range 16;
thence West to the center of said Section 29; thence South to the
southeast corner of the north half of the southwest quarter of said
Section 29; thence West to the southwest corner of said north half of
the southwest quarter; thence North to the southeast corner of the
north 70 acres of the southeast quarter of Section 30, Township 21,
Range 16; thence West to the southwest corner of the north 70 acres of
said southeast quarter; thence North to the center of said Section 30;
thence West to the west quarter corner of said Section 30; thence North
to the northwest corner of said Section 30; thence West to the
southwest corner of the east half of the east half of the southeast
quarter of Section 24, Township 21, Range 15; thence North to the
northwest corner of said east half of the east half of the southeast
quarter; thence East to the southeast corner of the northeast quarter
of said Section 24; thence North to the southeast corner of the
northeast quarter of the southeast quarter Section 13, Township 21,
Range 15; thence West to the southwest corner of said northeast quarter
of the southeast quarter; thence North to the northwest corner of said
northeast quarter of the southeast quarter; thence West to the center
of said Section 13; thence North to the north quarter corner of said
Section 13; thence West to the southwest corner of the southeast
quarter of the southwest quarter of Section 12, Township 21, Range 15;
thence North to the northwest corner of said southeast quarter
of the southwest quarter; thence West to the southwest corner of the
northwest quarter of the southwest quarter of said Section 12; thence
North to the northwest corner of said Section 12; thence West to the
southwest corner of the east half of the southeast quarter of
Section 2, Township 21, Range 15; thence North 1700 feet; thence West
670 feet; thence North to the north line of the south half of the
northeast quarter of said Section 2; thence West to the northwest
corner of the south half of the northeast quarter of said Section 2;
thence North to a point 1050 feet south of the north line of said
Section 2; thence West 600 feet; thence North to a point 720 feet west
of the northeast corner of the southeast quarter of Section 34,
Township 20, Range 15; thence East to the center of Section 35,
Township 20, Range 15; thence North to the center of Section 26,
A - 51
Township 20, Range 15; thence East to the southeast corner of the west
half of the southeast quarter of the northeast quarter of said
Section 26; thence North to the northeast corner of said west half
of the southeast quarter of the northeast quarter; thence East to the
east line of said Section 26; thence North to the west quarter corner
of Section 24, Township 20, Range 15 being the point of beginning,
except Stringtown Cemetery and except a tract in the northeast quarter
of the northeast quarter of Section 1, Township 21, Range 15 described
as beginning at a paint 1060.0 feet south of northeast corner of said
northeast quarter; thence West 446.9 feet; thence South 730.0 feet;
thence East 446.0 feet; thence North 726.2 feet to the point of
beginning.
With respect to the fallowing properties, v^iich are contained within
the above perimeter description, said properties are held by way of an
easement acquired by way of condemnation and are subject to certain
rights of reversion:
The south half of the southeast quarter and the southeast quarter of
the southwest quarter of Section 35, Township 20, Range 15.
A tract in Section 1, Township 21, Range 15 described as commencing
at a point situated in the center of Wolf Creek about 41 rods west of
the southeast corner of said Section 1; thence West on said section
line to another point in the center of said Wolf Creek; thence down the
center of said creek to the place of beginning.
The east half of the northwest quarter, the east half of the
southwest quarter, the northwest quarter of the southwest quarter, the
west half of the northeast quarter and the northeast quarter of the
northeast quarter of Section 12, Township 21, Range 15, except that
part of the north half of the northeast quarter of Section 12 lying
north of Wolf Creek.
The north half of the southwest quarter of the northeast quarter and
the southwest quarter of the southwest quarter of the northeast quarter
of Section 30, Township 21 South, Range 16.
The west half of the northwest quarter of Section 29 and the
southeast quarter of the northeast quarter and the southeast quarter of
the southwest quarter of the northeast quarter of Section 30, all in
Township 21, Range 16.
The north half of the southeast quarter and the south half of the
southwest quarter of Section 19, Township 21, Range 16, except a tract
16 rods X 20 rods for a school located 'in the southeast corner
thereof.
A - 52
Southeast quarter of Section 17, Township 21, Range 16.
Northeast quarter and the north half of the southeast quarter of
Section 20, Township 21, Range 16.
Legal description of other lands to be held as jointly owned
"Property" for operation of Wolf Creek Station.
The east half of the southeast quarter of Section 22, Township 20,
Range 15.
The east half of Section 23, Township 20, Range 15.
The south half of the north half and the east half of the southeast
quarter and the east half of the west half of the southeast quarter,
all in Section 24, Township 20, Range 15.
The east half of the northeast quarter and the east half of the west
half of the northeast quarter and the west half of the southwest
quarter of the northeast quarter, all in Section 25, Township 20,
Range 15.
The west half of the east half of the northeast quarter and the east
half of the northeast quarter of the northeast quarter, all ~ in
Section 26, Township 20, Range 15.
The east half of the southeast quarter of Section 34, Township 20,
Range 15 except the east 720 feet thereof.
The northwest quarter of the northeast quarter and the southwest
quarter of the southeast quarter and the northeast quarter of the
southeast quarter and the west half of the southeast quarter of the
southeast quarter, all in Section 36, Township 20, Range 15.
The west half of Section 31, Township 20, Range 16 except the west
half of the southwest quarter of the southwest quarter.
The northwest quarter and the northeast quarter of the southwest
quarter and the northwest quarter of the southeast quarter of
Section 13, Township 21, Range 15.
The northeast quarter of Section 14, Township 21, Range 15 except the
northwest quarter of the northwest quarter of the northeast quarter,
and except the west 100 feet of the northeast quarter of the northwest
quarter of the northeast quarter; also that part of the south half of
the north half of the northwest quarter of said Section 14 lying east
of U.S. 75 Highway; also a tract beginning at the intersection of the
east right-of-way line of U.S. 75 Highway and the north line of the
south half of the northwest quarter of said Section 14; thence East to
A - 53
the east line of said quarter section; thence South 80 rods; thence
West 160 rods; thence North 37 rods and 12-1/2 feet; thence East to the
east right-of-way line of U.S. 75 Highway; thence Northerly along said
right-of-way line to the point of beginning; also a tract commencing at
the northwest corner of the southwest quarter af said Section 14;
thence East 160 rods; thence South 57 rods; thence West to the Neosho
River; thence up said River to a point 10 rods south of the beginning;
thence North to the beginning, EXCEPT land deeded for Highway purposes,
all in Section 14, Township 21, Range 15, AND EXCEPT, the following
described tract, to wit: Beginning at the southwest corner of the
northwest quarter of Section 14, Township 21, Range 15; thence North 37
rods and 12-1/2 feet; thence East to the west right-of-way line of
U.S. Highway 75; thence Southerly along the westerly right-of-way line
of said Highway to the Neogho River; thence up said River to a point 10
rods south of the beginning; thence North to the beginning, containing
10 acres, more or less, the last said tract being conveyed by deed
dated August 8, 1975 to John A. Decker and Delores Decker, husband and
wife.
The north half of the northwest quarter of Section 5, Township 21,
Range 16.
The west half of the northwest quarter of Section 9, Township 21,
Range 16.
The east half of the northwest quarter of Section 34, Township 21,
Range 16, less a tract beginning at the northwest corner of said east
half of the northwest quarter; thence South to Long Creek; thence up
•Long Creek at a low-water mark in a northeasterly direction to the
section line; thence due West to the place of beginning.
DOUGLAS COUNTY
(100) Substation No. 472 Baldwin, South of Baldwin: A tract of land
in the northwest quarter of the northwest quarter of Section 10,
Township 15, Range 20, Douglas County, Kansas, described as
follows: Beginning at a point on the east line of a county road which
is 1100 feet south of the north line and 50 feet east of the west line
of the said quarter quarter section, thence left at an angle of 90°
from the southerly course of a line parallel to and 50 feet east of the
west line of said quarter quarter section, a distance of 100 feet,
thence right st an angle of 90° a distance of 100 feet, thence right at
an angle of 90° a distance of 100 feet to the east line of said county
road, thence North along the east line of aforesaid county road to the
point of beginning.
FRWttLIN COUNTY
(101) Substation No^ 76 Rock Creek, U.S. Highway 59 South of
Ottawa: Commencing at a point on the section line between Sections 24
A - 54
and 25, Township 17, Range 19, 222.75 feet east from the northwest
corner of said Section 25, thence South, parallel with the west line of
said Section 25, 198 feet, thence East parallel with the north line of
said Section 25, 111 feet, thence North parallel with the west line of
said Section 25, 198 feet, thence West, on the north line of said
Section 25, 111 feet to place of beginning. All in Franklin County,
Kansas.
(102) Substation No. 477 Ransomville, U.S. Highway 50 East of
Ransofnville: A tract of land 100 feet by 100 feet in the southeast
corner of the southeast quarter of the southeast quarter of Section 4,
Township 18, Range 18, Franklin County, Kansas, more particularly
described as follows: Beginning at a point 25 feet west of the east
line of said quarter quarter section and 40 feet north of the center
line of U.S. 50 Highway as now established, thence West 100 feet along
north right-of-way line of said U.S. 50 Highway, thence North 100 feet,
thence Easterly parallel to the north right-of-way line of U.S. 50
Highway, 100 feet to the west right-of-way line of a county road,
thence South along the west right-of-way line of said county road
100 feet to the point of beginning.
(103) Substation No. 46 South Ottawa, North of Highway 1-35, West of
U.S. Highway 59 near Ottawa: Beginning on the west line of the
southwest quarter of the northwest quarter of Section 14, Township 17,
Range 19, in Franklin County, Kansas, at a point 710 feet north of the
south line of said quarter quarter section, thence East parallel with
said south line a distance of 490 feet, thence North parallel with the
west line of said quarter quarter section a distance of 425 feet,
thence West parallel with the south line of said quarter quarter
section a distance of 490 feet to the west line of the quarter quarter
section, thence South along said west line a distance of 425 feet to
the point'"of beginning, subject to the rights of the public for highway
purpose in the west 40 feet of the tract of land herein conveyed.
(104) Radio Tower Site KCR 798, East of U.S. Highway 39 and South of
Highway 1-35 near Lane: A tract of land in the northeast quarter of
Section 25, Township 18, Range 20, Franklin County, Kansas, described
ss follows: Beginning on. the east line of the northeast quarter of
said section at a point. 1324.6 feet south of the northeast corner of
said section, thence West 466.69 feet, thence South and parallel with
the east line of said quarter section 466.69, thence East and parallel
with the north line of said tract 466.69 feet, thence North along east
line of said quarter section 466.69 feet to a point of beginning.
(105) Substation No. 105 Sand Creek, Northwest of Ottawa: A tract
of land 100 feet by 100 feet in the west half of the northwest quarter
of Section 23, Township 16, Range 19, Franklin County, Kansas,
described as follows: Beginning at a point which is approximately 30
feet south and 30 feet east of the northwest corner of said Section 23,
thence East parallel with the north line of said section a distance of
A - 55
100 feet, thence South parallel with the west line of said section a
distance of 100 feet, thence West parallel with the north line of said
section a distance of 100 feet, thence North parallel with the west
line of said section to the paint of beginning.
ALSO a tract of land in the northwest quarter of the northwest
quarter of Section 23, Township 16, Range 19, Franklin County, Kansas,
described as follows: Beginning at a point 30 feet south and 130 feet
east of the northwest corner of said Section 23; thence East, parallel
with the north line of said section 23, a distance of 25 feet; thence
South, parallel with the west line of said Section 23, a distance of
100 feet; thence West, parallel with the north line of said Section 23,
a distance of 25 feet; thence North, parallel with the west line of
said Section 23, to the point of beginning.
(106) Substation No. 480 Hellsville, Kansas Highway 33, Wellsville:
Beginning at a point 60 feet east of the west line and 25 feet south of
the north line of the northwest quarter of Section 27, Township 15,
Range 21, Franklin County, Kansas. Thence South parallel to the west
line of said quarter section a distance of 100 feet, thence East
parallel to the north line of said quarter section a distance of 100
feet. Thence north parallel to the west line of said quarter section a
distance of 100 feet, thence West parallel to the north line of said
quarter section a distance of 100 feet to the point of beginning.
(107) Microwave Tower Site, Southeast of Williamsburq: A tract of
land described as follows: Beginning at a point in the northwest
quarter of Section 32, Township 18, Range 18, Franklin County, Kansas,
said paint being 35 feet east of the west line and 30 feet south of the
north line of said northwest quarter section; thence East, parallel to
said north line, a distance of 450 feet; thence South, parallel to said
west line, a distance of 450 feet; thence West, parallel to said north
line, a distance of 450 feet; thence North, parallel to said west line
to the point of beginning.
(108) Microwave Tower Site, Southeast of Ottawa: A tract of land in
the northwest quarter of the northwest quarter of Section 22,
Township 17, Range 20, Franklin County, Kansas, described as
follows: Beginning on the west line of said Section 22 at a point 30
feet south of the north line of said section; thence East parallel with
and adjoining the south right-of-way line of a certain county road, as
now established along the north side of said Section 22, a distance of
480 feet; thence South parallel to the west line of said section, a
distance of 450 feet; thence West parallel to said south right-of-way
line of said county road to a point on the west line of said section;
thence North to point of beginning.
A - 56
JOHNSON COUNTY
(109) Substation No. 72 Craig, 10859 Craig Road, Johnson
County: All of that part of the southwest quarter of Section 12,
Township 13, Range 23, described as follows: Beginning at a point at
which R. M. Peltier has set an iron bar at the southwest corner of the
north half of the southwest quarter of said section which iron bar is
1299.31 feet north of an iron bar set by others in the southwest corner
of said section; thence North 1299.31 feet to an iron bar set by R. M.
Pelt ier at the northwest corner of the southwest quarter of said
section; thence East along the center line of said section 2651.95 feet
to an iron bar set by R. M. Peltier at the northeast corner of the
southwest quarter of said section; thence South along the center line
of sgid section a distance of 1312.6 feet to an iron bar set by R. M.
Peltier at the southeast corner of the north half of the southwest
quarter of said section; thence West along the south line of the north
half of the southwest quarter a distance of 2655.83 feet to a point of
beginning, less that part theretofore conveyed to the Atchison, Topeka
4 Santa Te Railroad. Subject to easements of record.
(110) Substation No. 81 West Gardner, 18B27 Dillie Road, Johnson
County near Gardner: The north half of the southeast quarter of
Section 32, Township 14, Range 22, Johnson County, Kansas EXCEPT the
north 27 rods 445.5 feet of the west 12 rods 198 feet thereof.
(111) Substation No. 47, 9521 West 88th Street, Overland Park: All
of Lots 61, 62, 63, 83 and B9, and the south 35 feet of vacated 88th
Street, lying north of and adjoining Lot 61, and Lot 62, except the
west 110 feet thereof, also the south 15 feet of vacated 88th Street
lying north of and adjacent to Lot 63 and the west 110 feet of Lot 62,
all being part of the Lots 28 to 119, BREYFOGLE a sub-division in the
City of -Overland Park, Johnson County, Kansas, according to the
recorded plat thereof.
ALSO all of Lots 90 and 91, of LOTS 28 TO 119, BREYFQGL£, a
sub-division in Overland Park, Johnson County, Kansas, according to the
recorded plat thereof.
ALSO all of Lot 64, except the west 20 feet; all of vacated Knox,
lying east of and adjacent to said Lot 64; and all that part of vacated
88th Street, lying north of and adjacent to said Lot 64, except the
west 20 feet thereof, and except the north 35 feet thereof; and all
that part of vacated 88th Street and vacated Knox and lying east of the
northerly extension of the east line of said Lot 64 and west of the
northerly extension of the west line of Lot 63 except the north 35 feet
thereof, all in "Lots 28 to 119 BREYFOGLE", a sub-division of land now
in the City of Overland Park, Johnson County, Kansas, according to the
recorded plat thereof.
(112) Substation No. 69 Moonlight, 17503 Moonlight Road,
Gardner: The Northeast quarter of the northeast quarter of the
northeast quarter of Section 25, Township 14, Range 22, Johnson County,
ft - 57
Kansas, lying south of the right-of-way of the Atchison, Topeka and
Santa Fe Railroad.
(113) Substabion No. 38 Oxford, 14540 Antioch, Overland
Park: Beginning at the southeast corner of the north one-half of the
northeast quarter of Section 1, Township 14, Range 24, Johnson County,
Kansas; thence West along the south line of said north one-half to the
westerly right-of-way line af Antioch Road a distance of 20 feet;
thence continuing Westerly along said south line a distance of 1100
feet to a point; thence North parallel to the east line of said north
one-half of distance of 600 feet to a point; thence East parallel to
the south line of said north one-half a distance of 670 feet to a
point; thence South parallel to the east line of said north one-half a
distance of 415 feet to a point; thence East parallel to the south line
of said north one-half a distance of 430 feet to a point in the west
right-of-way line of Antioch Road; thence East along the same course a
distance of 20 feet to a point in the east line of said north one-half;
thence South along the east line of said north one-half a distance of
185 feet to the point of beginning; subject to easements of record.
(114) Substation No. 22 Switzer, 9900 West 127th Street, Overland
P_ark: Beginning at the southwest corner of the southeast quarter of
the southwest quarter of Section 24, Township 13, Range 24, Johnson
County, Kansas; thence East along the south line of said quarter,
quarter section, 430 feet; thence North and parallel with the west line
of said quarter quarter section, 507 feet; thence West and parallel
with aforesaid south line to a point on the west line of said quarter
quarter section; thence South along said west line to the point of
beginning, except part in public road or highways.
(115) Substation No. 29 Lenexa, 15730 West 95th Street, Lenexa: The
west one-half of the southwest quarter of the southeast quarter of
Section 32, Township 12, Range 24, Johnson County, Kansas.
(116) Substation No. 62 Hur Len, 15900 West 159th Street, Johnson
County: The south 622.29 feet of the east 910 feet of the southwest
quarter of Section 8, Township 14, Range 24, Johnson County, Kansas.
(117) Substation No. 13 Shawnee, 12501 West 51st Street,
Shawnee: All of Lots 20, 21, 22, 23 and 25, MEL-Q-DEE MANOR, a
sub-division in the City of Shawnee, Johnson County, Kansas. Also all
that part of the north 30 acres of the northwest quarter of the
southeast quarter of Section 3, Township 12, Range 24, in Johnson
County, Kansas, lying westerly of and adjacent to the westerly line of
said Mel-0-Dee Manor as same is now platted except that part thereof
presently owned by Kansas City Power i Light Company.
(11B) Substation No. 50 Kenilworth, 4609 West 90th Terrace, Overland
Park: Lot 1,' except that part of Lot 1 which lies westerly from a line
40 feet easterly from and parallel to the following described center
line of Roe Avenue: Beginning at the intersection of the westerly
A - 58
extension of the north line of said Lot 1 with the north-south center
line of said Section 33, said point being on the center line of Roe
Avenue as established by the recorded plat of said Somerset Acres West;
thence South along said center line of Section 33 and of Roe Avenue to
a point which is 75 feet north of the east-west center line of said
Section 33; thence Southeasterly along a curve to the left, said curve
having a radius of 500 feet, a distance of 75.24 feet to its
intersection with the east-west center line of said Section 33, the
last aforesaid center line being on the south line of said Lot 1, and
all of Lots 2 and 3, said lots being a part of Block 6, Somerset Acres
West , a sub-division of land in the northeast quarter of Section 33,
Township 12, Range 25, in Johnson County, Kansas.
ALSO Lot 4, Block 6, Somerset Acres West, a sub-division in Prairie
Village, Johnson County, Kansas, according to the recorded plat
thereof. Subject to easements, reservations, and restrictions of
record.
(119) Substation No. 91 Merriam, 6412 Carter Avenue, Herriam: A
tract of land in the northeast quarter of the northwest quarter of
Section 13, Township 12, Range 24 in Johnson County, Kansas, described
as follows: Beginning at a point on the south line of the northeast
quarter of the northwest quarter of said Section, and 558.15 feet west
of the southeast corner of the northeast quarter of the northwest
quarter of Section 13, Township 12, Range 24, said point being on the
west right-of-way line of Crowder (Carter) Road, thence West on the
south line of the northeast quarter of the northwest quarter of said
Section 13 approximately 335.98 feet to the center line of Turkey
Creek, thence on a meandering line Northwesterly with the center line
of Turkey Creek to a point which is 990.15 feet west and approximately
71.35 feet north of the southeast corner of the northeast quarter of
the northwest quarter of said Section 13, thence North to a point which
is 990.15 feet west and 4QQ feet north on a 90° angle from the south
line of said quarter section line, thence East at a 90° angle from the
last described line to a point on the west right-of-way line of Crowder
(Carter) Road, thence Southerly along the west right-of-way line of
Crowder (Carter) Road to the point of beginning.
ALSO a parcel of land lying in the southeast corner of Lot 25,
Sherwood Forest, a sub-division in the City of Merriam, Johnson County,
Kansas; said parcel being bound on the south by the south property line
of said Lot 25; bound on the north and the east by the existing center
line of Turkey Creek as shown on the original plat of said Sherwood
Forest, dated and recorded April 9, 1947; bound an the west by the
following described line, said described line having a true point of
beginning located as follows: Beginning at the northwest corner of
Lot 25, Sherwood Forest, a sub-division in the City of Merriam, Johnson
County, Kansas; thence Southeasterly along the north line of said
Lot 25 a distance of 446.50 feet to the center line of relocated Turkey
Creek; thence South 20° 03' 53" East along the center line of relocated
A - 59
Turkey Creek a distance of 5 - 7 9 feet; thence South 29° 56' 09" East
along the center line of relocated Turkey Creek a distance of 164.86
feet; thence South 36° 29' 51" East along the center line of relocated
Turkey Creek a distance of 77-38 feet; thence Southeasterly along the
center line of relocated Turkey Creek on a curve to the right having a
radius of 200.00 feet a distance of 43.54 feet to the south line of
said Lot 25, and true point of beginning of said described line; thence
Northwesterly along the center line of relocated Turkey Creek on a
curve to the left having a radius of 200.00 feet a distance of 43.54
feet; thence North 36° 29' 51" West along the center line of relocated
Turkey Creek to the southerly extension of the west property line of
Kansas City Power 4 Light Company; thence due North along the said west
property line of Kansas City Power & Light Company to the intersection
of the center line of existing Turkey Creek as shown on the original
plat of said Sherwood Forest and said west property line; said
intersection being the terminus of said described line.
(120) Substation No. 68 Roeland Park, 4702 Roe Avenue, Roeland
Pack: A tract of land in the northwest quarter of Section 4,
Township 12, Range 25, Johnson County, Kansas, described as
follows: Beginning on the north line of the northwest quarter of
Section 4, Township 12, Range 25, at a point 215.8 feet west of the
northeast corner of the northwest quarter of said section, thence South
a distance of 350 feet, thence West a distance of 350 feet, thence
North a distance of 350 feet to the north line of the said northwest
quarter section, thence East along the north line of said quarter
section a distance of 350 feet to the point of beginning.
(121) Transmission j-ine; Overland Park - Herriam, 10001 West 75th
Street, Overland Park: A tract of land, 100 feet in width for 161 kv
Kenilworth-Merriam line right-of-way described as follows: Beginning
at. the northeast corner of the west half of the southwest quarter of
Section 24, Township 12, Range 24; thence South along the east line of
said fractional section, a distance of 150.3 feet to a point on the
westerly right-of-way of the St. Louis 4 San Francisco Railroad; thence
Southwesterly along said right-of-way to a point 100 feet west of the
east line of said fractional section; thence North parallel with the
east line of said fractional section to a point on the center line of
75th Street, said center line also being the east-west center line of
Section 24, Township 12, Range 24, 100 feet west of the northeast
corner of said fractional section; thence East a distance of 100 feet
to point of beginning.
(122) Substation No._ 1 48 Roe Terminal, 4704 Font ana
f Roeland
Park: The east half of Lots 1 and 2 of Beer's Third Addition in the
northeast quarter of Section 4, Township 12, Range 25, Johnson County,
Kansas.
(123) Substation No. 41 Olathe, 135th Street and Black Bob Road,
Olathe: The' southeast quarter of the southwest quarter of the
A - 60
southwest quarter of Section 28, Township 13, Range 24, in Johnson
County, Kansas, subject to a highway easement over the south 60 feet
thereof.
ALSO the northeast quarter of the southwest quarter of the southwest
quarter of Section 28, Township 13, Range 24, in Johnson County,
Kansas.
(124) Service Center Johnson County, 8730 Nieman Road, Overland
Park: All of Lots 7 and 8, SUNSET HILL, a sub-division of land in
Johnson County, Kansas, except the west TOO feet thereof (but including
the right-of-way reserved by parties of the first part in the deed by
which said west 100 feet was conveyed by them to L. and M., Inc., on
January 28, 1959, as appears in said deed filed February 2, 1959, as
Instrument No. 56876Q in the Office of the Register of Deeds of Johnson
County, Kansas, and there recorded in Book 437 of Deeds at Page 587)
and except that portion of said real estate described as beginning at
the southeast corner of said Lot 7 (said point being on the east line
of the northwest quarter of Section 35, Township 12, Range 24, and in
Nieman Road); thence North 150 feet; thence West 290 feet; thence South
150 feet to the south line of said Lot 7; thence East along said south
line to the point of beginning. Said real estate is further subject to
the right-of-way of the west half of Nieman Road (being the east 25
feet of said Lots 7 and 8) and is subject to the highway right-of-way
condemned by Kansas State Highway Commission, described as beginning at
the northwest corner of said Lot 8; thence South along the west line of
said lot 65 feet; thence Northeasterly to a point on the north line of
said lot 200 feet east of the place of beginning; thence West 200 feet
along said north line to the place of beginning.
ALSO a part of Lot 7, SUNSET HILL, a sub-division of land in the
northeast quarter of northwest quarter of Section 35, Township 12,
Range 24, Johnson County, Kansas, described as follows: Beginning at a
point on the east line of said quarter quarter Section 35, said point
being the southeast corner of said Lot 7, thence North 150 feet, thence
West 290 feet, thence South 150 feet, thence East along the south line
of Lot 7, to the point of beginning, subject to the right-of-way of the
west half of Nieman Road, being the east 25 feet of said Lot 7.
(125) Substation No. 16 Stillwell, 191st Street East of Metcalf,
Johnson County: The southeast quarter of Section 32, Township 14,
Range 25, in Johnson County, Kansas, except the northeast quarter of
the southeast quarter of Section 32, Township 14, Range 25.
(126) Substation No. 12 Brookridqe, 10001 West 103rd Street,
Overland Park: A tract of land in the north half of the northwest
quarter of Section 12, Township 13, Range 24, described as
follows: Beginning on the south line of 103rd Street (old R/W) (as now
established) at a point which is 112 feet east of the west line of the
northeast quarter of the northwest quarter of said Section 12, thence
A - 61
.South, parallel with the vest line of said quarter quarter section a
distance of 500 feet, thence West at an angle of 90° to the right from
the last described course a distance of AGO feet, thence North at an
angle of 90° to the right from the last described course to the south
line of said 103rd Street, thence East along the south line of
aforesaid 103rd Street to the point of beginning, all in Johnson
County, Kansas.
(127) Substation No. 93 Greeriwood? 65th and Lackman Road,
Shawnee: Beginning at a point 20 feet east of the northwest corner of
the southwest quarter of the northwest quarter of Section 16,
Township 12, Range 24, in Johnson County, Kansas; thence South 16°
161 East 125.7 feet, thence South 5° 38' East, 317.8 feet; thence North
B8° 01' East 428.6 feet; thence South 81° 17' East to the east line of
said west half of the southwest quarter of the northwest quarter,
thence North 02° 28' West, to the north line of the northwest quarter
of the southwest quarter of the northwest quarter of said Section 16,
thence West to point of beginning, of said Section 16. EXCEPT for an
easement reserved in granters to the north 25 feet of the west half of
the north half of the southwest quarter of the northwest quarter of
Section 16, Township 12, Range 24, Johnson County, Kansas, for ingress
and egress, which said easement shall be subject to the right of the
grantee to locate its poles and wires across said strip of land and to
the further eight of the grantee to dedicate same for a public
right-of-way.
(128) Substation No. 101 Stanley, 159th Street and U.S. Highway 69,
Overland Park: A tract of land 100 feet by 100 feet described as
follows: Beginning at a point 460 feet west of the east line and 20
feet north of the south line of the southeast quarter of Section 7,
Township 14, Range 25, Johnson County, Kansas, thence North 100 feet
parallel with east line of said southeast quarter section, thence West
100 feet parallel with the south line of said southeast quarter
section, thence South 100 feet, thence East 100 feet to point of
beginning.
(129) Substation No. 106 Edqeton, U.S. Highway 56, West of
Edgeton: A tract of land described as commencing at the northeast
corner of Section 12, Township 15, Range 21, in Johnson County, Kansas;
thence West on the section line 270.20 feet; thence South 45 feet at an
angle of 90° 21* to the south right-of-way line of U.S. Highway No. 56,
being the point of beginning of the tract of land herein conveyed;
thence South 100 feet; thence West 100 feet; thence North 100 feet to
the south right-of-way line of U.S. Highway No. 56; thence East 100
feet along said right-of-way to the point of beginning.
(130) Substation No. 37 Gardner^ South of Highway 56, West of
Gardner: A tract of land in the southwest quarter of Section 26,
Township 14, Range 22, Johnson County, Kansas, described as
follows: Beginning at the northeast corner of the southwest quarter of
Section 26, Township 14, Range 22, Johnson County, Kansas; thence South
along the east line of said quarter section to the northerly
A - 62
right-of-way line of the A.T. and 5.F. Railroad Company, as presently
located; thence Southwesterly along said railroad right-of-way to the
west line of said southwest quarter; thence North along said west line
of said section to the point of intersection with the southwesterly
right-of-way line of A.T. and 5.F. Railroad, as presently located;
thence Northeasterly along said railroad right-of-way line to the north
line of the southwest quarter of said Section 26; thence East along
said north line of the southwest quarter to the point of beginning.
LINN COUNTY
(131) Substation No. 99 La Cygne, 1 Mile North of Highway 135,
La_Cygne_: A tract of land described as follows: Beginning on the
north line of the northeast quarter of the northwest quarter of
Section 34, Township 19, Range 24, in Linn County, Kansas, at a point
145 feet west of the east line of said quarter quarter section, thence
South parallel with the said east line, a distance of 100 feet, thence
East parallel with the north line of said quarter quarter section, a
distance of 1QO feet to a point on the west line of a public road,
thence North along said road a distance of 100 feet to a point on the
north line of said quarter quarter section, thence West to the point of
beginning.
(132) Substation No. 107 Holly Street, 509 East 9th Street,
Pleasanton: The south 50 feet of Lots 9, 10, 11 and 12, Block 65, in
the City of Pleasanton, Linn County, Kansas, according to the recorded
plat thereof.
(133) Substation No. 471 Parker, 2 Hiles West of Cadmus: A tract of
land located in the northwest quarter of Section 1, Township 20,
Range 22, of the 6th principal meridian described as follows:
Beginning at a point 50.7 feet south and 30 feet east of the northwest
corner of Section 1, thence East 100 feet, thence South 100 feet,
thence West 100 feet, thence North 100 feet to the point of beginning.
(134) Substation No. 33 Center Street, 4th and Center Street,
Pleasanton; Lots 1 and 2, Block 109, City of Pleasanton, Linn County,
Kansas.
(135) Substation No. 106 Centerville, West of Centerville: A tract
of land located in the east half of the southeast quarter of
Section 13, Township 21, Range 21, Linn County, Kansas, described as
follows: Beginning on the north line of the east half of the southeast
quarter of Section 13, Township 21, Range 21, Linn County, Kansas, at a
point 330 feet west of the east line of said half quarter section,
thence West along the north line of said half quarter section, a
distance of 660 feet, thence South at right angles to the north line of
said half quarter section a distance of 370 feet, thence East parallel
to the north line of said half quarter section a distance of 660 feet,
thence North to the place of beginning. Subject to a public road along
the north 40 feet of the above described tract of land.
A - 63
(136) La Cygne Steam jlectric Generating Station and Lake, Linn and
Miami Counties, East of La Cyqne: An undivided one-half interest in
and to the following described real estate subject to that certain
April 19, 1971, Ownership Agreement between Kansas City Power i Light
Company and Kansas Gas and Electric Company recorded at the Offices of
the Registers of Deeds in Linn and Miami Counties at Book No. MS-2Q,
Page 187 and Book 233, Page 77, respectively: Beginning at the
northwest corner of fractional Section 2, Township 20, Range 25, Linn
County, Kansas, thence North 87° 42' 44" East a distance of 984 feet,
thence South 2° 17' 16" East a distance of 48 feet, thence South
69° 52' 44" West, thence South 49° 05' 14" West to a paint in the east
line of Section 3, Township 20, Range 25, which point is 455 feet south
of the northeast corner of said Section 3 (and 455 feet south of the
northwest corner of said fractional Section 2), measured along the east
line of said Section 3, thence Southerly along the east line of said
Section 3 to the southeast corner of the northeast quarter of said
Section 3, thence Westerly along the south line of the northeast
quarter of said Section 3 to the northeast corner of the southwest
quarter of said Section 3, thence Southerly along the east line of the
southwest quarter of said Section 3 to a point which is 2 rods north,
measured along said east line of the southwest quarter of said
Section 3, of the south line of the northeast quarter of the southwest
quarter of said Section 3, thence Westerly parallel with the south line
of said northeast quarter of the southwest quarter of Section 3, a
distance of 22 rods, thence Southerly parallel with the east line of
the northeast quarter of the southwest quarter of said Section 3, a
distance of 2 rods, thence Westerly along the south line of the north
half of the southwest quarter of said Section 3 to the east line of
Section 4, Township 20, Range 25, thence Southerly along the east line
of Section 4 to the southeast corner of said Section 4, thence Westerly
along the south line of said Section 4 to the west line of the
southeast quarter of the southwest quarter of said Section 4, thence
Northerly along the west line of the southeast quarter of the southwest
quarter of said Section 4 to the southeast corner of the northwest
quarter of the southwest quarter of said Section 4, thence Westerly
along the south line of the northwest quarter of the southwest quarter
of said Section 4 to the east line of Section 5, Township 20, Range 25,
and continuing Westerly along the south line of the northeast quarter
of the southeast quarter of said Section 5 to the west line of the
northeast quarter of the southeast quarter of said Section 5, thence
Northerly along the west line of the northeast quarter of the southeast
quarter of said Section 5 to the south line of the northeast quarter of
said Section 5, thence Westerly along the south line of the northeast
quarter of Section 5 to the west line of the northeast quarter of said
Section 5, thence Northerly along the westerly line of the northeast
quarter of said Section 5 to the southerly line of the northeast
quarter of the northwest quarter of said Section 5, thence Westerly
along the south line of the northeast quarter of the northwest quarter
of Section 5 to. the west line of the northeast quarter of the northwest
quarter of said Section 5, thence Northerly along the west line of the
A - 64
northeast quarter of the northwest quarter of Section 5 to the south
line of Section 32, Township 19, Range 25, thence Westerly along the
south line of said Section 32 to a point which is 45.32 rods east of
the west line of said Section 32, measured along the south line of said
Section 32, thence Northerly parallel with the west line of said
Section 32, a distance of 1,000 feet, thence Westerly parallel with the
south line of said Section 32 to the west line of said Section 32,
thence Northerly along the west line of Section 32 to the southwest
corner of Section 29, Township 19, Range 25, and continuing northerly
along the west line of said Section 29 to the north line of the south
half of the southwest quarter of said Section 29, thence Easterly along
the north line of the south half of the southwest quarter of Section 29
to the north-south center line of Section 29, thence Northerly along
the north-south center line of Section 29, to the south line of
Section 20, Township 19, Range 25, and continuing northerly along the
north-south center line of said Section 20 to the southeast corner of
the northwest quarter of said Section 20, thence Westerly along the
south line of the northwest quarter of Section 20 to the west line of
the northwest quarter of said Section 20, thence Northerly along the
west line of the northwest quarter of said Section 20 to a point which
is 330 feet south of the northwest corner of the northwest quarter of
said Section 20, measured along the westerly line of said northwest
quarter of section 20, thence Westerly parallel with the north line of
the northeast quarter of the northeast quarter of Section 19,
Township 19, Range 25, a distance of 200 feet, thence Northerly
parallel with the east line of the northeast quarter of the northeast
quarter of Section 19 to a point in the north line of 'sa id Section 19
(all of the foregoing being in Linn County, Kansas), said point also
being in the south line of Section 18, Township 19, Range 25, Miami
County, Kansas, thence Northerly with the east line of the southeast
quarter of said Section 18, a distance of 270 feet, thence Northerly to
a point which is 550 feet north of the southerly line, and 95 feet west
of the easterly line, of the southeast quarter of the southeast quarter
of said Section 18, thence Easterly parallel with the south line of the
southeast quarter of the southeast quarter of said Section 18, a
distance of 95 feet to the east line of the southeast quarter of the
southeast quarter of said Section 18, and continuing easterly parallel
with the south line of Section 17, Township 19, Range 25, a distance of
325 feet, thence Northerly parallel with the west line of said
Section 17, a distance of 905 feet, thence Easterly parallel with the
south line of said Section 17, a distance of 390 feet, thence
Southeasterly to a point which is 580 feet north of the south line, and
155 feet west of the east line, of the west half of the southwest
quarter of said Section 17, thence Easterly parallel with the south
line of said Section 17 to a point in the west line of the east half of
the southwest quarter of said Section 17, thence Northerly along the
west line of the east half of the southwest quarter of Section 17, to
the north line of the south half of said Section 17, thence Easterly
along the north line of the south half of Section 17 to a point which
is 77 rods west of the east line of the southwest quarter of the
A - 65
northeast quarter of Section 17 (measured along the north line of the
south half of said Section 17), thence Northerly a distance of 16.315
rods, thence Easterly a distance of 7.267 rods, thence North
58° 49' 39.8" East, a distance of 81.5 rods to a point in the west line
of the southeast quarter of the northeast quarter of said Section 17,
which point is 58.5 rods north of the southeast corner of the southwest
quarter of the northeast quarter of said Section 17, measured along the
west line of the southeast quarter of the northeast quarter of said
Section 17, thence Northerly along the west line of the southeast
quarter of the northeast quarter of said Section 17 to the north line
of the southeast quarter of the northeast quarter of said Section 17,
thence Easterly along the north line of the southeast quarter of the
northeast quarter of said Section 17 to the west line of Section 16,
Township 19, Range 25, thence Northerly along the west line of said
Section 16 to the south line of Section 9, Township 19, Range 25, and
continuing Northerly along the west line of said Section 9 to a point
which is 26 rods south of the northeast corner of the southeast quarter
of the southeast quarter of Section 6, Township 19, Range 25, thence
Westerly 15 rods, thence North 34° 4V 45" West, a distance of 31.619
rods to a point in the south line of the northeast quarter of the
southeast quarter of said Section 8, which point is 33 rods west of the
southeast corner of the northeast quarter of the southeast quarter of
said Section 8, measured along the south line of said quarter quarter
section, thence Westerly along the south line of the northeast quarter
of the southeast quarter of said Section 8 to the west line of the
northeast quarter of the southeast quarter of said Section 8, thence
Northerly along the west line of the northeast quarter of the southeast
quarter of said Section 8 to the southwest corner of the southeast
quarter of the northeast quarter of said Section 8, and continuing
along the west line of said southeast quarter of the northeast quarter
of Section 8 to the south line of the northwest quarter of the
northeast quarter of said Section 8, thence Westerly along the south
line of the northwest quarter of the northeast quarter of said
Section 8 and continuing along the south line of the north half of the
northwest quarter of Section 8 to the west line of said Section 8,
thence Northerly along the west line of Section 8 to the southwest
corner of Section 5, Township 19, Range 25, and continuing northerly
along the west line of Section 5 to the north line of the south half of
the south half of the southwest quarter of the southwest quarter of
said Section 5, thence Easterly along the north line of the south half
of the south half of the southwest quarter of the southwest quarter of
Section 5 to a point which is 20 rods west of the east line of the
southwest quarter of the southwest quarter of said Section 5, measured
along the north line of the south half of the south half of the
southwest quarter of the southwest quarter of said Section 5, thence
Northerly parallel with the east line of the southwest quarter of the
southwest quarter of said Section 5, a distance of 40 rods, thence
Easterly parallel with the south line of the southwest quarter of the
southwest quarter of said Section 5, a distance of 20 rods to the west
line of the southeast quarter of the southwest quarter of said
A - 66
Section 5, thence Northerly along the west line of the southeast
quarter of the southwest quarter of said Section 5, and continuing
along the west line of the northeast quarter of the southwest quarter
of said Section 5 to the north line of the south 5 acres of the
northeast quarter of the southwest quarter of said Section 5, thence
Easterly along the north line of the south 5 acres of the northeast
quarter of the southwest quarter of said Section 5 to the west line of
the southeast quarter of said Section 5, thence Northerly along the
west line of the southeast quarter of Section 5 to the northwest corner
of said southeast quarter of Section 5, thence Easterly along the north
line of the southeast quarter of Section 5 to the east line of said
Section 5, thence Southerly along the east line of Section 5 to the
north line of Section 9, Township 19, Range 25, thence Easterly along
the north line of said Section 9 to the southwest corner of the
southeast quarter of the southwest quarter of Section 4, Township 19,
Range 25, thence North 4° 0' East 135 rods, thence North 26° 00' East
58.5 rods, thence North 79° 00' East 93 rods, thence North 28.43 rods,
thence East 60.33 rods, thence South 13.19 rods, thence
South 36° 00' West 66 rods, thence West 28.5 rods, thence South 44.5
rods, thence West 33.5 rods, thence South 25.18 rods, thence South
49° 00' East 34,48 rods, thence South 26° 00' West 84 rods to a point
in the north line of said Section 9, thence Easterly along the north
line of said Section 9 to the east line of the west half of the
northeast quarter of said Section 9, thence Southerly along the east
line of the west half of the northeast quarter of said Section 9 to the
south line of the west half of the northeast quarter of said Section 9,
thence Westerly along the south line of the west half of the northeast
quarter of said Section 9, to the north-south center line of said
Section 9, thence Southerly along the north-south center line of said
Section 9 to the north line of Section 16, Township 19, Range 25, and
continuing along the north-south center line of said Section 16 to the
northwest corner of the west half of the southeast quarter of said
Sect ion 16, thence Easterly along the north line of the west half of
the southeast quarter of said Section 16 to the northeast corner of the
west half of the southeast quarter of said Section 16, thence Southerly
along the east line of the west half of the southeast quarter of said
Section 16 to the north line of Section 21, Township 19, Range 25, Linn
County, thence Easterly along the north line of said Section 21 to the
east line thereof, thence Southerly along the east line of said
Section 21 to the south line of the northeast quarter of said
Section 21, thence Westerly along the south line of the northeast
quarter of Section 21 to the east line of the west half of the
southeast quarter of said Section 21, thence Southerly along the east
line of the west half of the southeast quarter of said Section 21 to
the north line of the south 10 acres of the east half of the southeast
quarter of said Section 21, thence Easterly along the north line of the
south 10 acres of the east half of the southeast quarter of said
Section 21 to the east line of said Section 21, thence South along the
east line , of said Section 21 to the northwest corner of Section 27,
Township 19, Range 25, thence Easterly along the north line of said
A - 67
Section 27 to the east line of said Section 27, thence Southerly along
the east line of said Section 27 to the northwest corner of fractional
Section 35, Township 19, Range 25, thence Easterly along the north line
of said fractional Section 35 to the east line thereof, said line being
the same as the common Kansas-Missouri state line, thence Southerly
along the east line of said Fractional Section 35 to the south line of
the north half of said fractional Section 35, thence Westerly along the
south line of the north half of fractional Section 35 to the east line
of Section 34, Township 19, Range 25, thence Southerly along the east
line of said Section 34 to the point of beginning, except, (a) 2-2/3
acres more or less in the east 34.68 rods in the southwest quarter of
the southwest quarter of Section 32, Township 19, Range 25, used as a
cemetery and gn access road to said cemetery, and (b) easements and
rights-of-way of record, if any.
ALSO 'all that land in Linn County, Kansas, described as
follows: Beginning at the northeast corner of the southeast quarter of
the northwest quarter of Section 5( Township 20, Range 25, thence
Westerly along the north line of said southeast quarter of the
northwest quarter, a distance of 35 feet, thence Southeasterly to a
point 30 feet south of the northeast corner of said southeast quarter
of the northwest quarter, thence Northerly to point of beginning.
ALSO all that land in Miami County, Kansas, .described as
follows: Beginning at a point that is 429 feet south of the northeast
corner of southeast quarter of the southeast quarter of Section 8,
Township 19, Range 25, thence West a distance of 67 feet; thence in a
Southeasterly direction to a point that is 25 feet west af the east
line and 557.45 feet north of the south line of said Section 8; thence
East 25 feet to the east line of said Section 8; thence North to the
point of beginning.
ALSO all that land in Linn County, Kansas, described as follows:
From the northeast corner of the northwest quarter of northwest quarter
of Section 5, Township 20, Range 25, proceed West along the north line
of said northwest quarter of northwest quarter for a distance of 175
feet; thence Southeasterly to a point 41 feet south of the northeast
corner of the northwest quarter of northwest quarter; thence North
along the east property line to the point of origin.
ALSO a tract of land in the west half of Section 10, Township 20,
Range 24, Linn County, Kansas, described as fallows: Beginning at the
intersection of the east-west center line of said Section 10 with the
center line of the right-of-way of the St. Louis, San Francisco Railway
Company, thence Northwesterly along the center line of said railway
right-of-way a distance of 651.65 feet to a point, said point is hereby
designated and hereinafter referred to as Point "A", thence
Southwesterly at an angle of 90° left to the left from the last
described course to a point in the center line of the Marais Des Cygnes
River, said point is hereby designated and hereinafter referred to as
A - 68
Point "B", thence Southerly along the center line of said Harais Des
Cygnes River to a point which is 300 feet southeasterly from a line
drawn between Points "A" and "8" referred to above, as measured at a
right angle, thence Northeasterly along a line parallel with a line
drawn between Points "A" and "B" referred to above to a point which is
100 feet southwesterly from the southwesterly line of the right-of-way
of said St. Louis, San Francisco Railway Company as measured at a tight
angle, thence Southeasterly along a line which is 100 feet
southwesterly of and parallel with the southwesterly line of the
right-of-way of said St. Louis, San Francisco Railway Company a
distance of 1727.65 feet, thence Northeasterly at an angle of 90° to
the right to the center line of the right-of-way of the St. Louis,
San Francisco Railway Company, thence Northwesterly to a point of
beginning, except any part of the above lying southerly of a county
road located near the southerly portion of the above described tract of
land, and subject to the right-of-way of the St. Louis, San Francisco
Railway Company.
(137) Substation No. 479 Hound City, 4th and Stallcup, Mound City:
Beginning on the center line of Stallcup Road, as now established, said
point being 469.55 feet north of the center of Section 7, Township 22,
Range 24, Linn County, Kansas; thence East along said center line of
Stallcup Road a distance of 1047.4 feet to the intersection of the
center line of 4th Street, as now established, said intersection being
the true point of beginning of the tract of land to be herein
described; thence left at an angle of 85° 33' from the easterly course
of the center line of Stallcup Road a distance of 447 feet; thence left
at an angle of 90° from the last described course a distance of 40
feet; thence left at an angle of 37° 30' from the last described course
a distance of 118.6 feet; thence right at an angle of 18° 30' from the
last described course a distance of 140 feet; thence left at an angle
of 39° from the last described course a distance of 184.5 feet; thence
left at an angle of 12° from the last described course a distance of 62
feet; thence right at an angle of 21° from the last described course a
distance of 134 feet; thence left at an angle of 42° from the last
described course a distance of 52.5 feet to the center line of Stallcup
Road; thence left at an angle of 94° 15' 30" from the last described
course a distance of 480 feet to the true point of beginning, subject
to public roads of record.
(138) Headquarters_Pleasantgn, 11th and Walnut, Pleasanton: Lots 4,
5 and 6 in Block 188, of the City of Pleasanton, Linn County, Kansas,
according to the recorded plat thereof. Subject to easements,
covenants, reservations and restrictions of record.
(139) Headquarters and Office La Cygne, 2nd_ and Market, La Cygne:
All of Lots 6, 7, 8, 9 and 10, Block 12, in the City of La Cygne,
Kansas, according to the recorded plat thereof.
A - 69
ALSO all of Lots 1, 2, 3, 4, 5 and 10, Block 13, in the City of
La Cygne, Kansas, according to the recorded plat thereof, all in Linn
County , Kansas.
ALSO all that part of vacated Second Street, bounded by the west line
of Slock 12 and east line of Block 13, south of the south line of
.Market Street and north of the north line of Vine Street as said blocks
and streets are shown on the plat and dedication of the City of
La Cygne, Linn Coun ty , Kansas.
(140) Future Substation No. 471 Parker, 2 Miles North of
A tract of land being a part of Lot 4, in the northwest
q u a r t e r of Section 4, Township 21, Range 22, Linn County, Kansas,
described as follows: Beginning at the northwest corner of said Lot 4
of the northwest quarter of Section 4 (said point also being the
northwest corner of the northwest quarter of said Sect ion 4) ; thence
East along the north line of said Lot 4 a distance of 250 feet, thence
South parallel wi th the west line of said Lot 4 a distance of 250 feet,
thence West parallel with the north line of said Lot 4 a distance of
250 feet to a point on the west line of said Lot 4, thence North along
the west line of said Lot 4 to the northwest corner of said Lot 4 in
the northwest quarter of said Section 4, exclusive of any public roads,
in Linn County , Kansas.
MIAMI COUNTY
(141) Subs t at i o n _N o . 77 Spring Rid ge^ 1 M i 1 e Sou t h of P ao la : A
tract of land located in the northeast quarter of the northeast quarter
of Section 24, Township 17, Range 21, Miami County, Kansas, described
as follows: Beginning at a point which is 682 feet south of the north
line of the northeast quarter of said Section 24 and 30 feet west of
the east line of said quarter quarter section, thence South parallel
with the east line of said quarter quarter section a distance of 100
feet , thence right at an angle of 91° 25 * from the last described
course a distance of 100 feet, thence Nor th parallel wi th the east line
of said quarter quarter section a distance of 100 feet, thence East to
the point of beginning.
(142) Substation No. 55 Paola ^ M i c r o w a v e , on U . S . Highway 169, 1
Mile Wes t of Paola : Beginning at a point 1114.3 feet west and 95.0
feet south of the northeast corner of Section 31, Township 17,
Range 23, thence Southwesterly parallel to the M . K . & T . Railroad a
distance of 609.1 feet, thence East 504.9 feet , thence North 600 feet,
thence West 400 feet to place of beginning.
ALSO a tract of land in the northeast quarter of Section 31,
Township 17, Range 23, Miami County, Kansas, more particularly
described as follows: Beginning on the east line of said quarter
section at a point 95 feet south of the north line of said quarter
section, thence West parallel with said north line a distance of 714.3
A - 70
feet to the east property line of a tract of land owned by Kansas City
Power 4 Light Company, thence South along said property line a distance
of 600 feet, thence East a distance of 714.3 feet to the east line of
said quarter section, thence North along said section line to the point
of beginning.
ALSO a tract of land lying south of and adjacent to the southerly
right-of-way line of U.S. Highway 169 as now established, more
particularly described as follows: Beginning on the east line of the
northeast quarter of Section 31, Township 17, Range 23, Miami County,
Kansas, at a point 95 feet south of the north line of said quarter
section, thence North along said east line a distance of 35 feet to the
southerly right-of-way line of U.S. Highway 169 as now established,
thence West along said right-of-way line a distance of 501.7 feet,
thence South parallel with the east line of said quarter section a
distance of 35 feet, thence East parallel with said right-of-way line
to the point of beginning.
(143) Substation No. 14 Drexel Corners, U.S. Highway 69 and J3rexel
Road, Drexel: Beginning at a point on the north line of Section 19,
Township 18, Range 25, Miami County, Kansas, said point being 127 feet
west of the northeast corner of said Section 19; thence West along the
north line of said Section 19, a distance of 244.2 feet; thence South
335 feet to the northerly right-of-way line of U.S. Highway No. 69;
thence in a Northeasterly direction along the northerly and westerly
right-of-way line of said U.S. Highway No. 69 a distance of 405 feet to
the point of beginning.
(144) Substation No. 102 Overpass, Pearl Avenue and Wallace Park
Drive, Paola: Lot \f Slock 6, in Angler's Addition to the City of
Paola, Miami County, Kansas, as designated on the recorded plat
thereof. -""
(145) Substation No. 489 Louisburg, on U.S. 169 Highway North of
Louisburg: A tract of land, exclusive of road right-of-way, in the
northeast quarter of the southeast quarter of Section 30, Township 16,
Range 25, Miami County, Kansas: Beginning at a point on the south line
of the northeast quarter of the southeast quarter, 36.9 feet west of
the southeast corner of the northeast quarter of the southeast quarter
of Section 30, Township 16, Range 25; thence North and parallel to the
west right-of-way of No. 69 Highway, a distance of 200 feet; thence
West 200 feet; thence South 200 feet; thence East 200 feet, to point of
beginning.
(146) Substation No. 495 Beagle, in Beagle: A tract of land,
exclusive of road right-of-way, in the southwest quarter of the
southwest quarter of Section 36, Township 18, Range 22, Miami County,
Kansas: Beginning at a point 20 feet north and 20 feet east of the
southwest corner of the southwest quarter of Section 36, Township 18,
Range 22, Miami County, Kansas, thence East and parallel to the section
line of said section a distance of 200 feet, thence North 200 feet,
A - 71
thence West 200 feet, thence South and parallel to the west section
line of said section a distance of 200 feet to point of beginning in
Miami County, Kansas.
(147) Service Center Paola? Ottawa and Silver Stree_t_s_?_ Pag_la; All
of Block 42, in the City of Paola, Miami County, Kansas, including
vacated alley.
ALSO Lots 1, 2, 3, 4 and 5, in Block 41, in the City of Paola,
Kansas, as shown by the recorded plat thereof; and the north half of
the vacated alley adjoining said lots with easements, reservations and
covenants of record.
(148) Substation No. 54 Wea, on Old U.S. Highway 69, 1 Mile North of
We_a: A tract of land in the northeast quarter of Section 19,
Township 15, Range 25, Miami County, Kansas, more particularly
described as follows: Beginning at a point that is 35 feet west of the
east line and 25 feet south of the north line of said quarter section,
thence South parallel with the west line of U.S. Highway 69, as now
established, a distance of 100 feet, thence West parallel with the
north line of said quarter section a distance of 150 feet, thence North
parallel with the west line of said U.S. Highway 69 a distance of 100
feet, thence East parallel with the north line of aforesaid quarter
section to the point of beginning.
(149) Substation No. 62 Poplar Ridge, Poplar Ridge and South City
Limits of Paola: A tract of land in the east half of the east half of
the northeast quarter of Section 21, Township 17, Range 23, Miami
County, Kansas, described as follows: Beginning at a point which is 25
feet south of the north line and 20 feet east of the west line of the
east half of the east half of the northeast quarter of said Section 21,
thence East parallel with the north line of the east half of the east
half of the northeast quarter of said Section 21 a distance of 100
feet, thence South parallel with the west line of the east half of the
east half of the northeast quarter of said Section 21, a distance of
100 feet, thence West parallel with the north line of the east half of
the east half of the northeast quarter a said Section 21 a distance of
100 feet, thence North parallel with the west line of the east half of
the east half of the northeast quarter of said Section 21 to the point
of beginning.
(150) Substation No. 67 JLakeview, on Old U.S. Highway 69 South of
Louisburg,: A tract of land in the northeast quarter of the southeast
quarter of Section 31, Township 16, Range 25, in Miami County, Kansas,
beginning at a point which is 160 feet north and 35 feet west of the
southeast corner of the northeast quarter of the southeast quarter of
said section, thence West 125 feet, thence North 100 feet, thence East
125 feet (to the west line of U.S. 69 Highway), thence South 100 feet
to the point of beginning.
A - 72
(151) Substation No. 40 Richland, 10 Miles West of Hillsdale: A
tract located in the northeast quarter of Section 13, Township 16,
Range 21, Miami County, Kansas, more particularly described as
follows: Beginning at a point that is 20 feet south and 30 feet west
of the northeast corner of the northeast quarter of said Section 13,
thence South and parallel with the east line of said quarter section a
distance of 100 feet, thence West and parallel with the north line of
said quarter section a distance of 100 feet, thence North and parallel
with the east line of said quarter section a distance of 100 feet,
thence East and parallel with the north line of said quarter section a
distance of 100 feet to poinb of beginning.
(152) Substation No. 473 Spring Ridge Regulator, 1 Mile jouth of
Pagla: A tract of land in the northeast quarter of the northeast
quarter of Section 24, Township 17, Range 21 in Miami County, Kansas,
described as follows: Beginning at a point on the south right-of-way
line of a county road 30 feet west and 22.5 feet south of the northeast
corner of said Section 24; thence West along county road right-of-way a
distance of 200 feet; thence South a distance of 200 feet; thence East
a distance of 200 feet; thence North a distance of 200 feet, to the
point of beginning.
(153) Substation No. 475 Hillsdale, U.S. 169 Highway and K7 Highway,
Hillsdale: A tract of land 100 feet by 100 feet described as
follows: Beginning on the west line of the southeast quarter of
Section 10, Township 16, Range 23, Miami County, Kansas, at a point 378
feet north of the south line of said quarter section, thence East 100
feet, thence South 100 feet, thence West 100 feet, thence North 100
feet to the point of beginning.
(154) Substation No. 73 Centennial, Popj.ar Ridge and_ South City
Limits of Pagla : A tract of land described as follows: Beginning on
the west line of the east half of the east half of the northeast
quarter of Section 21, Township 17, Range 23, Miami County, Kansas, at
a point 534 feet south of the north line of said Section 21, thence
East parallel to said north line a distance of 330 feet, thence South
parallel to the east line of said section to point on the northerly
right-of-way line of U.S. new 169 Highway, as now established, thence
Southwesterly along said right-of-way to the west line of said east
half of east half of northeast quarter of Section 21, thence North to
the point of beginning.
(155) Substation No. 482 Chiles, U.S. Highway 69 and Cleveland-
Chiles Road, 5 Miles East: of Chiles: ft, tract of land 100 feet by 100
feet in the northeast quarter of Section 7, Township 16, Range 25,
Miami County, Kansas, more particularly described as
follows: Beginning at a point which is 313 feet west of the east line
of said Section 7 and 50 feet south of the north line of said section,
thence South' 89° 29' left from the westward course of a line drawn
parallel with and 50 feet south of the north line of said Section 7 a
A - 73
distance of 100 feet, thence East parallel with said north line a
distance of 100 feet, thence North parallel with the east line of said
Section 7 a distance of 100 feet, thence West parallel with said north
line a distance of 100 feet. Subject to easements of record.
OSAGE COUNTY
(156) Substation No. 497 Six Mile, Kansas Highway 68, 6 Miles West
of Quenemo: A tract of land in the northwest quarter of Section 15,
Township 17, Range 16, described as follows: Beginning at the
intersection of the south line of Highway K-68 with the east line of
the west 60 acres of the northwest quarter of said Section 15, thence
Southerly along the east line of the west 60 acres of said northwest
quarter a distance of 1DO feet, thence Westerly parallel with the south
line of said Highway K-68 a distance of 150 feet, thence Northerly
parallel with the east line of the west 60 acres of said quarter
section 100 feet to the south line of said Highway K-63, thence
Easterly along the south line of aforesaid Highway K-68 to the point of
beginning.
(157) Substation No. 478 Michigan, 2 Miles South of Michigan
Valley: The north 208 feet of the east 208 feet of the north half of
the northeast quarter of Section 21, Township 16, Range 17.
A -
ELECTRIC PLANTS AND SYSTEMS
All electric generating plants and electric transmission and distribution systems
of the Company situated in Bates, Buchanan, Cass, Carroll, Chariton, Clay, Cooper,
Henry, Howard, Jackson, Johnson, Lafayette, Livingston, Pettis, Platte, Randolph, Ray,
and Saline Counties in the State of Missouri, and Allen, Anderson, Atchison, Bourbon,
Coffey, Douglas, Franklin, Johnson, Leavenworth, Linn, Lyons, Miami, Osage, Shawnee and
Wyandotte Counties in the State of Kansas, including all power houses, buildings,
reservoirs, pipe lines, structures, boilers, turbines, generators, dynamos, motors,
engines, condensers, pipes, conduits, switches, transformers, insulators, towers,
poles, wires, meters, machinery, equipment, easements and rights-of-way forming a part
of or appertaining to said generating plants and electric transmission and distribution
systems, or any of them, including, without limiting the generality of the foregoing,
the following described property:
ELECTRIC GENERATING PLANTS
The Northeast Gas Turbine Electric Generating Station and Bulk Oil Storage located
at First Street and Park Avenue in Kansas City, Jackson County, Missouri.
The Hawthorn Steam Electric Generating Station located at the junction of the
Missouri and Blue Rivers in Kansas City, Jackson County, Missouri.
The Montrose Steam Electric Generating Station located nine miles west and three
miles south of Clinton, Henry County, Missouri.
A fifty percent interest in the La Cygne Steam Electric Generating Station located
five miles east of La Cygne, Linn County, Kansas.
A seventy percent interest in the latan Steam Electric Generating Station located
near latan in Platte County, Missouri.
A forty-seven percent interest in Wolf Creek Nuclear 5team Electric Generating
Station located near Burlington in Coffey County, Kansas.
ELECTRIC TRANSMISSION LINES
Line Volt
Missouri (Overhead Lines)
(From)
Stilwell
Sibley
Sib ley
Craig
Double Circuit
Common R/W
Hawthorn
Hawthorn
(To)
(16) Sibley
Overton
St. Joseph
(72) latan (705)
latan River Crossing
Hawthorn
Blue Valley #3
Leeds 91
345
345
345
345
345
154
154
5.22
73.02
50.10
1.38
.34
-
1.82
1.37
A - 75
Line
Missouri (Overhead
(Fcarc)
Tower Line
Hawthorn
Hawthorn
River Crossing
River Crossing
Blue Valley
Common R/W
Hawthorn
Southtown
Northeast
Hawthorn
Leeds
IP 4 L Co.
Southtown D.C.
D. C. Mont.
Southtown
Northeast
Com R/W Hawt.
Kernodle Jet.
Maywood
Com R/W South.
Northeast
Com R/W Mont.
Com R/W Mont.
Mont rose
Montrose
Montrose
Montrose
Southtown
Southtown
Hawthorn
Hawthorn R/W
Hawthorn
Mo. City
Salisbury
Norton
Northeast
Montrose
Ray Jet.
Midtown
Forest
Blue Mills
Claycomo
Blue Valley
Armco
Barry
Lines) (Continue
(To)
Blue Valley
Crosstown #15
Northeast
Hawthorn
Northeast
Southtown
Southtown
Leeds #10
Lama Vista
Grand Ave.
Northeast #17
Midtown if 2
Blue Mills
Kernodle
Loma Vista
Kenilworth
Greenwood
Southtown
Hickman Sub
Nashua
Stilwell
Grand Ave.
Stilwell
Loma Vista
Loma Vista #9
Loma Vista #11
Stilwell #13
Stilwell #9
Stilwell
Stilwell #10
Blue Valley #14
Ray Jet.
Mo. City #9
Salisbury
Norton
So. Waverly
St. Joseph
Clinton
Excelsior Spgs.
Forest
Southtown
Sibley
Gashland Jet.
Armco
Melt. Shop Jet.
Line Creek
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
.51
5.74
7.43
.54
.36
15.39
11 .39
3.64
.13
5.58
2.31
.23
.11
.97
4.05
2.76
2.82
17.00
.21
57.26
57.29
48.20
48.15
9.35
9.29
1.71
14.30
90.23
22.28
21.55
47.55
12.22
3.05
1.62
3.24
.21
6.45
.21
.32
4.19
A - 76
Line
Missouri (Underground Lines)
(From)
Leeds Line
Northeast
Navy
Guinotte
Grand Ave.
Kansas (Overhead
(From)
Double Circuit
Stilwell (16)
Stilwell (16)
Stilwell (16)
Craig (72)
La Cygne (704)
Leeds
Southtown
Kenilworth
Shawnee
Common R/W
Maywood
Common R/W
Common R/W
Montrose
Montrose
Southtown
Southtown
Srookridge
Stilwell
Stilwell
Paola
Paola
Herri am
Greenwood
Greenwood
Kenilworth
Craig
Craig
Craig
Double Circuit
Double Circuit
Olathe
Switzer
Switzer
Double Circuit
Oxford
Westbrook Jet.
Overland Park
(To)
Roeland Park
Grand Ave.
Grand Ave.
Crosstown
Crosstown
Lines)
(To)
latan River Crossing
Swissvale
Sib ley
La Cygne (704)
latan (705)
Craig (72)
Roeland Park
Kenilworth
Westbrook Jet.
Greenwood
Shawnee Fisher Jet.
Nashua
Southtown-Stilwell
Montrose-Stilwell
Stilwell
Stilwell
Stilwell
Stilwell
Westbrook Jet.
Oxford
Paola
Marmaton
Ottawa
Greenwood
Midland
Maywood
Lenexa
Lenexa
Olathe
Greenwood
Craig Greenwood
Craig Lenexa
Mur Len
Brookridge
Olathe
Swi tz-Brkrdg-Olathe
Olathe
Overland Park
Roeland Park
154
154
154
154
154
345
345
345
345
345
345
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
154
4.08
1.35
.19
2.61
1.94
.40
32.82
3.05
30.83
57.07
39.93
.17
4.15
3.14
3.12
-
5,16
-
-
3.26
3.14
7.05
6.85
1.79
7.49
22.92
51.30
21.72
4.44
2.23
9.95
11.31
.22
6.02
3.98
.11
2.73
4.51
2.74
4.01
.22
3.07
.27
7.23
A - 77
Line Voltage Length
Kansas (Overhead Lines) Continued
(From) ( T o )
Moonlight Mur Len 154 10.69
Double Circuit Stilwell-Qxford 154 1.30
Kansas (Underground Lines)
(From) (To)
Leeds Roeland Park 154 1.83
115 kv, 66 kv and 33 kv lines located in
Jackson, Carroll, Cass, Chariton, Clay,
Howard, Lafayette, Platte and Saline
Counties in Missouri, and Anderson, Douglas,
Franklin, Johnson, Linn, Miami and Osage
Counties in Kansas. 584.07
A - 78
ELECTRIC SUBSTATIONS AND SWITCHING STATIONS
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation Mo.
Substation No.
Substation No.
Substation No.
Substation No,
Substation No ,
Substation No,
Substation No .
Substation No,
Substation No.
Substation No.
Substation No .
Substation No,
Substation No .
Substation No.
Substation No.
Substation No.
Substation No .
Substation. No.
Substation No .
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No .
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
1
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
29T
31
32
33
34
35
36
37 '
38
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
Air Base
Gatehouse
Birmingham
Barry
Brookridge
Shawnee
Drexel Corners
Grand Ave. West
Stilwell
Navy
Leta
Polk Street
Dalton
Keytesville
Switzer
Southtown
Crosstown
Glasgow
Blackburn
Avondale
Sweet Springs
Lenexa
Lenexa
Forest
Mt. Leonard
Center Street
Corder
Loma Vista
Orange Street
Gardner
Oxford
Richland
Qlathe
Brunswick
West Marshall
Atherton
Indiana
Ottawa
Overland Park
Tomahawk
Weatherby
Kenilworth
Morningside
Claycomo
Blue Valley
We a
Paola
Hickman
Southwest of Dlathe, Johnson Co., KS
900 North Olive, Kansas City, Jackson Co., MO
7th 4 Wabash, Birmingham, Clay Co., MO
North Greenhills 4 Tiffany Springs Road, Platte Co., MO
10001 West 103rd Street, Overland Park, Johnson Co., KS
12501 West 51st Street, Shawnee, Johnson Co., KS
69 Hwy. 4 Drexel Road, Drexel, Miami Co., KS
2nd 4 Grand! Kansas City, Jackson Co., MO
191st Street East of Metcalf, Johnson Co., KS
201 Main Street, Kansas City, Jackson Co., MO
U.S. Hwy. 24 4 MO Hwy. 139, Carroll Co., MO
Mulberry 4 Polk Streets, Brunswick, Chariton Co., MO
Walnut Street 4 Wabash R.R.R/W, Dalton, Chariton Co., MO
U.S. Hwy. 24 in Keytesville, Chariton Co., MO
9900 West 127th Street, Overland Park, Johnson Co., KS
8627 Troost, Kansas City, Jackson Co., MO
1801 Cherry, Kansas City, Jackson Co., MO
2nd 4 Lafayette, Glasgow, Howard Co., MO
North of Blackburn, Saline Co., MO
315D Walker, North Kansas City, Clay Co., MO
Broadway 4 Oak Streets, Sweet Springs, Saline Co., MO
15730 West 95th Street, Lenexa, Johnson Co., KS
16500 West 95th Street, Lenexa, Johnson Co., KS
1105 East 61st Street, Kansas City, Jackson. Co., MO
Hwy. 127 East of Mt. Leonard, Saline Co., MO
Fourth 4 Center Street, Pleasanton, Linn Co., KS
Hwy, 20 North of Corder, Lafayette Co., MO
6620 East 91st Street, Kansas City, Jackson Co., MO
Orange & Chestnut Streets, Brunswick, Chariton Co., MO
South of Hwy. 56 West of Gardner, Johnson Co., KS
14540 Anfcioch Road, Overland Park, Johnson Co., KS
Northwest of Hwys. 169 4 68, Miami Co., KS
135th Street 4 Blackbob Road, Olathe, Johnson Co., KS
U.S. Hwy. 24 West of Brunswick, Chariton Co., MO
U.S, Hwy. 24 4 U.S. Hwy. 240, North of Marshall,
Saline Co., MO
Atherton 4 Bundshu Roads, Independence, Jackson Co., MO
3328 East 22nd Street, Kansas City, Jackson Co,, MO
U.S. Hwy. 59 4 1-35, South of Ottawa, franklin Co., KS
9521 West 88th Street, Overland Park, Johnson Co., KS
910 West 103rd Street, Kansas City, Jackson Co., MO
Hwy. 45 4 Graden Road, Platte Co., MO
4601 West 90th Terr., Overland Park, Johnson Co., KS
63rd 4 Morningside Drive, Kansas City, Jackson Co., MO
Ravena Road 4 Wabash R.R.R/"W, Claycomo, Clay Co., MO
7801 East U.S. Hwy. 24, Kansas City, Jackson Co., MO
215th Street 4 Metcalf, Johnson Co., KS
U.S. Hwy. 169 South 4 West of Paola, Miami Co., KS
11500 Grandview Road, Kansas City, Jackson Co., MO
A - 79
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No.
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No.
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation No.
Substation No .
Substation Mo.
Substation No .
Substation No.
57
58
59
60
61
62
63
64
65
66
67
68
69
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
91
92
93
94
95
96
96
97
98
99
100
101
102
103
104
105
106
107
108
Cortney
Woodsweather
Gilliam
Chariton
Leeds
Poplar Ridge
Line Creek
Nashua
Martin City
Martin City
Lakeview
Roeland Park
Moonlight
Temp Randolph
Craig
Centennial
Northeast
Midtown
Rock Creek
Spring Ridge
Gladstone
Blue Mills
Greeley
West Gardner
Mur Len
Salisbury
South Troost
Cypress
Blue Springs
Campbell
Traf ficway
Sugar Creek
Merriam
Troost
Greenwood
No. Kansas City
Norton
Hawthorn
Hawthorn
Welda
Riverside
La Cygne
Bowdry
Stanley
Overpass
East Carrollton
Carrollton
Sand Creek
Edgerton
Holly Street
Centerville
East of Hwy. 291 on Baker Road, Independence, Jackson Co. , MO
1201 Woodsweather Road, Kansas City, Jackson Co., MO
Hwy. 250 East of Gillian, Saline Co. , MO
U.S. Hwy. 24 West of Salisbury, Chariton Co., KG
4210 Raytown Road, Kansas City, Jackson Co., MO
Poplar Ridge 4 South City Limits of Paola, Miami Co. , KS
3810 Northwest 64th Street, Kansas City, Clay Co., MO
Northwest 132nd Street 4 Hwy. 169, Clay Co., MO
Martin City Road 4 Wornall Road, Kansas City, Jackson Co., MO
13701 Wyandotte, Kansas City, Jackson Co., MO
Old Hwy. 69 South of Louisburg, Miami Co . , KS
4702 Roe Boulevard, Roeland Park, Johnson Co., KS
17508 Moonlight Road, Gardner, Johnson Co. , KS
7400 East Birmingham Rosd, Kansas City, Clay Co. , MO
10859 Woodland Road, Johnson Co. , KS
Poplar Road 4 Centennial Road, Paola, Miami Co., KS
900 North Olive, Kansas City, Jackson Co., MO
1223 East 48th Street, Kansas City, Jackson Co., MO
Hwy. 59 South of Ottawa, Franklin Co. , KS
West of Hwy. 7 South of Paola, Miami Co., KS
2101 East 72nd Street North, Gladstone, Clay Co., MO
Courtney-Atherton & Old Atherton Roads, Jackson Co., MO
Hwy. 169 West of Greeley, Anderson Co. , KS
18827 Dil'le Road Southwest of Gardner, Johnson Co., KS
15900 West 159th Street, Olathe, Johnson Co., KS
U.S. Hwy. 24 4 Hwy. 5, Salisbury, Chariton Co., M3
7643 Troost Avenue, Kansas City, Jackson Co., MO
4500 Independence Avenue, Kansas City, Jackson Co., MO
Hwy. 7 4 Truman Road, Kansas City, Jackson Co. , MO
824 East 18th Street, Kansas City, Jackson Co., MO
640 West 39th Street, Kansas City, Jackson Co., MO
Short Street West of Sterling, Sugar Creek, Jackson Co., MO
6412 Carter Street, Merriam, Johnson Co. , KS
3737 Troost, Kansas City, Jackson Co., MO
65th 4 Lackman Road, Shawnee, Johnson Co., KS
840 Swift Street, North Kansas City, Clay Co., MO
Route 0 Northeast of Marshall, Saline Co., MO
8700 Hawthorn Road, Kansas City, Jackson Co., MO (TRANS)
8700 Hawthorn Road, Kansas City, Jackson Co., MO (DIST)
Hwy. 59 East of Garnett, Anderson Co., KS
Tillison Lane 4 C84Q R/W, Riverside, Platte Co., MO
East of La Cygne, Linn Co., KS
U.S. Hwy. 24 4 Hwy. 65 North of Waverly, Carroll Co. , MO *
U.S. Hwy. 69 4 159th Street, Johnson Co., KS
Pearl Avenue 4 Wallace Park Drive, Paola, Miami Co., KS
U.S. Hwy. 24 East of Carrollton, Carroll Co., MO
Northeast of Carrollton, Carroll Co., MO
Northwest of Ottawa, Franklin Co., KS
U.S. Hwy. 56 West of Edgerton, Johnson Co. , KS
509 East 9th Street, Pleasanton, Linn Co., KS
West of Centerville, Linn Co . , KS
* Pole Mounted Station
A - 80
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No
Substation No,
Substation No,
Substation No.
Substation No,
Substation No.
Substation No,
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
Substation No.
. 109 Moss Creek
. 110 Higginsville
, 112 Montrose
. 116 Bogard
. 12Z Waverly
. 127 South Waverly
. 144 Guinotte Term.
. 146 Brush Creek Term.
. 147 Cherry Term.
. 148 Roe Term.
. 158 Melt Shop No.2
. 159 Armco
. 174 Washburn
. 471 Parker
. 472 Baldwin
. 473 Spring Ridgs Reg.
. 476 Prescott
477 Ransomville
. 478 Michigan Valley
479 Mound City
. 480 Wellsville
481 Greeley Reg.
. 482 Chiles
484 Grassland
489 Louisburg
495 Beagle
497 Six Mile
. 540 Sub J
702 Newell
. 703 Mayview
704 La Cygne Station
705 latan Station
706 Wolf Creek Station
734 Melt Shop No.1
735 U.S. Cold Storage
736 Continental
739 Burge Ice Service
756 Muehlebach
757 Midland
762 Plaza
763 Uptown
764 Star
769 Royal Tower Apt.
771 Nelson
773 Stuart Hall
915 Grand Ave.
1222 Service Pipe Line
1284 Slater Power Plant
1319 Bendix
1440 Amaco Pipe Line Co.
1583 City of Salisbury
Hwy. 1Q West of Wabash Junction, Carroll Co., MO
29th 4 Shelby, Higginsville, Lafayette Co., MO
Montrose, Henry Co., MO
U.S. Hwy. 65 North of Carrollton, Carroll Co. , MO
208 Jefferson Street, Waverly, Lafayette Co., MO
4 Miles South of Waverly, Lafayette Co. , MO
2014 Guinotte, Kansas City, Jackson Co., MO
4030 Brush Creek Parkway, Kansas City, Jackson Co. , MO
603 East 1st Street, Kansas City, Jackson Co., MO
4706 Fontana Street, Roeland Park, Johnson Co., KS
KC Terminal RR Blue River Yards, Kansas City, Jackson Co., MO
7801 U.S. Hwy. 24, Kansas City, Jackson Co., MO
2917 Guinotte, Kansas City, Jackson Co., MO
2 Miles West of Cadmus, Linn Co. , KS
South of Baldwin, Douglas Co., KS
4 Miles South of Pressonville, Miami Co . , K5
U.S. Hwy. 69 4 Walnut, Prescott, Linn Co., KS *
U.S. Hwy. 50 at Ransomville, Franklin Co., KS
2 Miles South of Michigan Valley, Osage Co., KS
4th 4 Hemlock, Mound City, Linn Co., KS
Hwy. 33 North of 1-35, Wellsville, Franklin Co., KS
U.S. Hwy. 169 Southwest of Greeley, Anderson Co., KS
U.S. Hwy. 69 4 Cleveland-Chiles Road, Miami Co., KS
191st Street East of Metcalf, Johnson Co. , KS
U.S. Hwy. 69 North of Louisburg, Miami Co., KS
1 Mile Northeast of Beagle, Miami Co., KS
Hwy. 68 6 Miles West of Quenemo, Osage Co. , KS
4000 East 43rd Street, Kansas City, Jackson Co. , MO
Hwy. 20 West of Marshall, Saline Co., MO
Co. Road FF West of Hwy. 13, Lafayette Co. , MO
La Cygne Plant Site, Linn Co., KS
latan Plant Site, Platte Co., MO
P. 0. Box 309, Burlington, Coffey Co., KS
Pole #18 Hawthorne-Blue Valley #8 Line *
500 East 3rd Street, Kansas City, Jackson Co., MO
106 West 11th Street, Kansas City, Jackson Co. , MO
2027 Campbell, Kansas City, Jackson Co., MO
1204 Baltimore, Kansas City, Jackson Co. , MO
1228 Main Street, Kansas City, Jackson Co., MO
4704 Wyandotte, Kansas City, Jackson Co., MO
3700 Broadway, Kansas City, Jackson Co., MO
1719 Grand, Kansas City, Jackson Co., MQ
901 McGee, Kansas City, Jackson Co., MO
4525 Oak, Kansas City, Jackson Co. , MO
2131 Central, Kansas City, Jackson Co., MO
2nd & Grand, Kansas City, Jackson Co. , MO
Southwest of Centerville, Linn Co., KS
Front 4 Walnut Street, Slater, Saline Co . , MO
1200 East Bannister, Kansas City, Jackson Co., Mo
U.S. Hwy, 65 4 AT&SF RR R/W, Carrollton, Cass Co., MO
1st Street 4 Wabash RR, Salisbury, Chariton Co., MO
* Pole Mounted Station
A - 61
E1ECTRIC DISTRIBUTION SYSTEMS
The electric distribution systems of the Company located in and near the
municipalities listed below:
Municipality State
Kansas City
Blue Springs
Grandview
Independence
Raytown
Sugar Creek
Cleveland
Belton
West line
Kansas City
Avondale
Birmingham
Claycomo
Randolph
Gladstone
Liberty
North Kansas City
Oaks
Oakwood
Oakview
Oakwood Manor
Oakwood Park
Pleasant Valley
Montrose
Houston Lake
Kansas City
Northmoor
Parkville
Platte Woods
Riverside
Waukomis
Weatherby Lake
Bogard
Bosworth
Carrollton
Dewitt
Tina
Wakenda
Brunswick
Dalton
Glasgow
Jackson
Jackson
Jackson
Jackson
Jackson
Jackson
Cass
Cass
Cass
Clay
Clay
Clay
Clay
Clay
Clay
Clay
Clay
Clay
Clay
Clay
Clay
Clay
Clay
Henry
Plabte
Platte
Platte
Platte
Platte
Platte
Platte
Platte
Carroll
Carroll
Carroll
Carroll
Carroll
Carroll
Chariton
Chariton
Chariton
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
A - 82
Municipality State
Keytesville
Mendon
Salisbury
Sumner
Triplett
Glasgow
Armstrong
Alroa
Aulville
Corder
Higginsville
Mayview
Emma
Waverly
Blackburn
Houstonia
Arrow Rock
Blackburn
Emma
Gilliam
Grand Pass
Malta Bend
Marshall
Miami
Mount Leonard
Sweet Springs
Countryside
Edgerton
Fairway
Gardner
Leawood
Lenexa
Merriam
Mission
Mission Hills
Mission Woods
Olathe
Overland Park
Prairie Village
Quivira Lake
Roeland Park
Shawnee
Springhill
Stanley
Westwood
Westwood Hills
Bonner Springs
Chariton
Chariton
Chariton
Chariton
Chariton
Howard
Lafayette
Lafayette
Lafayette
Lafayette
Lafayette
Lafayette
Lafayette
Lafayette
Lafayette
Pettis
Saline
Saline
Saline
Saline
Saline
Saline
Saline
Saline
Saline
Saline
Joh ns o n
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Johnson
Wyandatte
Missouri
Missouri
Missouri
Missouri
'Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Missouri
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
A - 83
fifthsupplementalinde660
seventhsupplementalinden
eighthsupplementalindent
Exhibit
Exhibit 12.1
GREAT PLAINS ENERGY INCORPORATED
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED DIVIDEND REQUIREMENTS
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| 2017 | 2016 | | 2015 | | 2014 | | 2013 | |
| (millions) |
Net income (loss) | | $ | (106.2 | ) | | $ | 290.0 |
| | $ | 213.0 |
| | $ | 242.8 |
| | $ | 250.2 |
| |
Add | | | | | | | | | | | |
Equity investment (income) loss | | (2.5 | ) | | (2.0 | ) | | (1.2 | ) | | — |
| | 0.2 |
| |
Income subtotal | | (108.7 | ) | | 288.0 |
| | 211.8 |
| | 242.8 |
| | 250.4 |
| |
| | | | | | | | | | | |
Add | | | | | | | | | | | |
Income tax expense | | 233.3 |
| | 172.2 |
| | 122.7 |
| | 115.7 |
| | 129.2 |
| |
Kansas City earnings tax | | 0.4 |
| | 0.2 |
| | (0.5 | ) | | 0.3 |
| | 0.1 |
| |
Total taxes on income | | 233.7 |
| | 172.4 |
| | 122.2 |
| | 116.0 |
| | 129.3 |
| |
| | | | | | | | | | | |
Interest on value of leased property | | 4.9 |
| | 5.1 |
| | 5.2 |
| | 5.2 |
| | 5.5 |
| |
Interest on long-term debt | | 252.9 |
| | 199.8 |
| | 193.9 |
| | 195.0 |
| | 195.5 |
| |
Interest on short-term debt | | 13.1 |
| | 13.5 |
| | 6.1 |
| | 5.1 |
| | 7.6 |
| |
Other interest expense and amortization | | 32.4 |
| | 36.3 |
| | 6.8 |
| | 3.3 |
| | 8.2 |
| |
| | | | | | | | | | | |
Total fixed charges | | 303.3 |
| | 254.7 |
| | 212.0 |
| | 208.6 |
| | 216.8 |
| |
| | | | | | | | | | | |
Preferred dividend requirements(b) | | (44.7 | ) | | 26.3 |
| | (a) | | (a) | | (a) | |
| | | | | | | | | | | |
Combined fixed charges and preferred | | | | | | | | | | | |
dividend requirements | | 258.6 |
| | 281.0 |
| | 212.0 |
| | 208.6 |
| | 216.8 |
| |
| | | | | | | | | | | |
Earnings before taxes on | | | | | | | | | | | |
income and fixed charges | | $ | 428.3 |
| | $ | 715.1 |
| | $ | 546.0 |
| | $ | 567.4 |
| | $ | 596.5 |
| |
| | | | | | | | | | | |
Ratio of earnings to fixed charges | | 1.41 |
| | 2.81 |
| | 2.58 |
| | 2.72 |
| | 2.75 |
| |
| | | | | | | | | | | |
Ratio of earnings to combined fixed charges | | | | | | | | | | | |
and preferred dividend requirements | | 1.66 |
| | 2.54 |
| | 2.58 |
| | 2.72 |
| | 2.75 |
| |
| | | | | | | | | | | |
(a) Prior to 2016, Great Plains Energy's preferred dividends were insignificant. |
(b) Preferred stock dividend requirements have been grossed up by the effective tax rate for the period. The negative preferred dividend requirement in 2017 is a result of Great Plains Energy's effective income tax rate of 183.5% in 2017 that includes the impacts of non-deductible transaction costs related to the anticipated merger with Westar and the revaluation of deferred income taxes and other initial effects resulting from the enactment of U.S. federal income tax reform. |
Exhibit
Exhibit 12.2
KANSAS CITY POWER & LIGHT COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| 2017 | 2016 | | 2015 | | 2014 | | 2013 | |
| (millions) |
Net income | | $ | 179.8 |
| | $ | 225.0 |
| | $ | 152.8 |
| | $ | 162.4 |
| | $ | 169.0 |
| |
| | | | | | | | | | | |
Add | | | | | | | | | | | |
Income tax expense | | 128.2 |
| | 121.9 |
| | 76.8 |
| | 75.7 |
| | 79.8 |
| |
Kansas City earnings tax | | 0.4 |
| | 0.2 |
| | (0.5 | ) | | 0.3 |
| | — |
| |
Total taxes on income | | 128.6 |
| | 122.1 |
| | 76.3 |
| | 76.0 |
| | 79.8 |
| |
| | | | | | | | | | | |
Interest on value of leased property | | 4.7 |
| | 5.0 |
| | 5.0 |
| | 4.9 |
| | 5.1 |
| |
Interest on long-term debt | | 136.1 |
| | 137.8 |
| | 131.8 |
| | 128.8 |
| | 128.1 |
| |
Interest on short-term debt | | 5.0 |
| | 3.3 |
| | 4.0 |
| | 2.9 |
| | 3.4 |
| |
Other interest expense and amortization | | 4.7 |
| | 4.8 |
| | 4.7 |
| | 4.7 |
| | 5.1 |
| |
| | | | | | | | | | | |
Total fixed charges | | 150.5 |
| | 150.9 |
| | 145.5 |
| | 141.3 |
| | 141.7 |
| |
| | | | | | | | | | | |
Earnings before taxes on | | | | | | | | | | | |
income and fixed charges | | $ | 458.9 |
| | $ | 498.0 |
| | $ | 374.6 |
| | $ | 379.7 |
| | $ | 390.5 |
| |
| | | | | | | | | | | |
Ratio of earnings to fixed charges | | 3.05 |
| | 3.30 |
| | 2.57 |
| | 2.69 |
| | 2.76 |
| |
Exhibit
Subsidiaries of Great Plains Energy Incorporated (1)
|
| |
Name of Company | State of Incorporation |
| |
Kansas City Power & Light Company | Missouri |
| |
KCP&L Greater Missouri Operations Company | Delaware |
| |
(1) Certain subsidiaries of Great Plains Energy Incorporated have been omitted pursuant to Item 601(b)(21)(ii) of Regulation S-K.
Exhibit
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement, as amended, No. 333-212513 on Form S-4, Registration Statement, as amended, No. 333-202692 on Form S-3 and Registration Statement No. 333-202693 on Form S-3 and Registration Statement Nos. 333-132828, 333-142774, 333-147939, 333-152313, 333-176840, and 333-180327 on Form S-8 of our reports dated February 21, 2018, relating to the consolidated financial statements and financial statement schedules of Great Plains Energy Incorporated and subsidiaries, and the effectiveness of Great Plains Energy Incorporated and subsidiaries’ internal control over financial reporting, appearing in this Annual Report on Form 10-K of Great Plains Energy Incorporated for the year ended December 31, 2017.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 21, 2018
Exhibit
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement, as amended, No. 333-202692-01 on Form S-3 of our reports dated February 21, 2018, relating to the consolidated financial statements and financial statement schedule of Kansas City Power & Light Company and subsidiaries, and the effectiveness of Kansas City Power & Light Company and subsidiaries’ internal control over financial reporting, appearing in this Annual Report on Form 10-K of Kansas City Power & Light Company for the year ended December 31, 2017.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
February 21, 2018
Exhibit
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Great Plains Energy Incorporated, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ David. L. Bodde David L. Bodde |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared David L. Bodde, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Great Plains Energy Incorporated, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Randall C. Ferguson, Jr. Randall C. Ferguson, Jr. |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Randall C. Ferguson, Jr., to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Great Plains Energy Incorporated, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Gary D. Forsee Gary D. Forsee |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Gary D. Forsee, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Great Plains Energy Incorporated, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Scott D. Grimes Scott D. Grimes |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Scott D. Grimes, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Great Plains Energy Incorporated, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Thomas D. Hyde Thomas D. Hyde |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Thomas D. Hyde, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Great Plains Energy Incorporated, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, her true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Ann D. Murtlow Ann D. Murtlow |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Ann D. Murtlow, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that she executed the same as her free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Great Plains Energy Incorporated, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, her true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Sandra J. Price Sandra J. Price |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Sandra J. Price, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that she executed the same as her free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Great Plains Energy Incorporated, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ John J. Sherman John J. Sherman |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared John J. Sherman, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light Company, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ David L. Bodde David L. Bodde |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared David L. Bodde, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light Company, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Randall C. Ferguson, Jr. Randall C. Ferguson, Jr. |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Randall C. Ferguson, Jr., to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light Company, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Gary D. Forsee Gary D. Forsee |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Gary D. Forsee, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light Company, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Scott D. Grimes Scott D. Grimes |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Scott D. Grimes, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light Company, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Thomas D. Hyde Thomas D. Hyde |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Thomas D. Hyde, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light Company, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, her true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Ann D. Murtlow Ann D. Murtlow |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Ann D. Murtlow, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that she executed the same as her free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light Company, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, her true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ Sandra J. Price Sandra J. Price |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared Sandra J. Price, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that she executed the same as her free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit 24.2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, a Director of Kansas City Power & Light Company, a Missouri corporation, does hereby constitute and appoint Terry Bassham or Heather A. Humphrey, his true and lawful attorney and agent, with full power and authority to execute in the name and on behalf of the undersigned as such director an Annual Report on Form 10-K and any amendments thereto, hereby granting unto such attorney and agent full power of substitution and revocation in the premises; and hereby ratifying and confirming all that such attorney and agent may do or cause to be done by virtue of these presents.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of February 2018.
|
| |
|
/s/ John J. Sherman John J. Sherman |
|
| | |
STATE OF MISSOURI
COUNTY OF JACKSON | ) ) ) | ss |
On this 13th day of February 2018, before me the undersigned, a Notary Public, personally appeared John J. Sherman, to be known to be the person described in and who executed the foregoing instrument, and who, being by me first duly sworn, acknowledged that he executed the same as his free act and deed.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.
|
| |
|
/s/ Annette G. Carter Notary Public |
My Commission Expires:
October 6, 2021
Exhibit
Exhibit 31.1
CERTIFICATIONS
I, Terry Bassham, certify that:
| |
1. | I have reviewed this annual report on Form 10-K of Great Plains Energy Incorporated; |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
| |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
|
| | |
Date: | February 21, 2018 | /s/ Terry Bassham |
| | Terry Bassham Chairman, Chief Executive Officer and President |
Exhibit
Exhibit 31.2
CERTIFICATIONS
I, Kevin E. Bryant, certify that:
| |
1. | I have reviewed this annual report on Form 10-K of Great Plains Energy Incorporated; |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
| |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
|
| | |
Date: | February 21, 2018 | /s/Kevin E. Bryant |
| | Kevin E. Bryant Senior Vice President - Finance and Strategy and Chief Financial Officer |
Exhibit
Exhibit 31.3
CERTIFICATIONS
I, Terry Bassham, certify that:
| |
1. | I have reviewed this annual report on Form 10-K of Kansas City Power & Light Company; |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
| |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
|
| | | | |
Date: | February 21, 2018 | /s/ Terry Bassham |
| | | Terry Bassham Chairman, Chief Executive Officer and President |
Exhibit
Exhibit 31.4
CERTIFICATIONS
I, Kevin E. Bryant, certify that:
| |
1. | I have reviewed this annual report on Form 10-K of Kansas City Power & Light Company; |
| |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
| |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
|
| | |
Date: | February 21, 2018 | /s/ Kevin E. Bryant |
| | Kevin E. Bryant Senior Vice President - Finance and Strategy and Chief Financial Officer |
Exhibit
Exhibit 32.1
Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report on Form 10-K of Great Plains Energy Incorporated (the "Company") for the annual period ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Terry Bassham, as Chairman, President and Chief Executive Officer of the Company, and Kevin E. Bryant, as Senior Vice President - Finance and Strategy and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
| |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
|
| |
| /s/ Terry Bassham |
Name: Title: | Terry Bassham Chairman, President and Chief Executive Officer |
Date: | February 21, 2018 |
| |
| /s/Kevin E. Bryant |
Name: Title: | Kevin E. Bryant Senior Vice President - Finance and Strategy and Chief Financial Officer |
Date: | February 21, 2018 |
Exhibit
Exhibit 32.2
Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report on Form 10-K of Kansas City Power & Light Company (the "Company") for the annual period ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Terry Bassham, as Chairman, President and Chief Executive Officer of the Company, and Kevin E. Bryant, as Senior Vice President - Finance and Strategy and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
| |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
|
| |
| /s/ Terry Bassham |
Name: Title: | Terry Bassham Chairman, President and Chief Executive Officer |
Date: | February 21, 2018 |
| |
| /s/ Kevin E. Bryant |
Name: Title: | Kevin E. Bryant Senior Vice President - Finance and Strategy and Chief Financial Officer |
Date: | February 21, 2018 |