Long-Term Debt

12 Months Ended

Dec. 31, 2011

Debt Disclosure [Abstract]

Long-Term Debt

11.   LONG-TERM DEBT

Great Plains Energy’s and KCP&L’s long-term debt is detailed in the following table.

			December 31
	Year Due		2011			2010
KCP&L			(millions)
General Mortgage Bonds
4.87% EIRR bonds(a)(b)		2012-2035	$	119.3		$	158.8
7.15% Series 2009A (8.59% rate)(c)		2019		400.0			400.0
4.65% EIRR Series 2005		2035		50.0			50.0
EIRR Series 2007A-1(d)		2035		-			63.3
EIRR Series 2007A-2(d)		2035		-			10.0
5.375% EIRR Series 2007B		2035		73.2			73.2
Senior Notes
6.50% Series				-			150.0
5.85% Series (5.72% rate)(c)		2017		250.0			250.0
6.375% Series (7.49% rate)(c)		2018		350.0			350.0
6.05% Series (5.78% rate)(c)		2035		250.0			250.0
5.30% Series		2041		400.0			-
EIRR bonds 4.90% Series 2008		2038		23.4			23.4
Other		2012-2018		2.9			3.3
Current maturities				(12.7	)		(150.3	)
Unamortized discount				(4.2	)		(2.0	)
Total KCP&L excluding current maturities				1,901.9			1,629.7
Other Great Plains Energy
GMO First Mortgage Bonds 9.44% Series		2012-2021		11.2			12.4
GMO Pollution Control Bonds
5.85% SJLP Pollution Control		2013		5.6			5.6
0.164% Wamego Series 1996(e)		2026		7.3			7.3
0.353% State Environmental 1993(e)		2028		5.0			5.0
GMO Senior Notes
7.95% Series				-			137.3
7.75% Series				-			197.0
11.875% Series		2012		500.0			500.0
8.27% Series		2021		80.9			80.9
Fair Value Adjustment				16.3			49.9
GMO Medium Term Notes
7.16% Series		2013		6.0			6.0
7.33% Series		2023		3.0			3.0
7.17% Series		2023		7.0			7.0
Great Plains Energy 2.75% Senior Notes (3.67% rate)(c)		2013		250.0			250.0
Great Plains Energy 6.875% Senior Notes (7.33% rate)(c)		2017		100.0			100.0
Great Plains Energy 10.00% Equity Units Subordinated Notes		2012		287.5			287.5
Great Plains Energy 4.85% Senior Notes (7.34% rate)(c)		2021		350.0			-
Current maturities				(788.7	)		(335.4	)
Unamortized discount				(0.7	)		(0.5	)
Total Great Plains Energy excluding current maturities			$	2,742.3		$	2,942.7
(a) Weighted-average interest rates at December 31, 2011
(b) December 31, 2011, does not include $39.5 million EIRR Series 1993B bonds because the bonds have been repurchased and are held by KCP&L
(c) Rate after amortizing gains/losses recognized in OCI on settlements of interest rate hedging instruments
(d) December 31, 2011, does not include $63.3 million EIRR Series 2007 A-1and $10.0 million EIRR Series 2007 A-2 bonds because the bonds have
been repurchased and are held by KCP&L
(e) Variable rate

Amortization of Debt Expense

Great Plains Energy’s and KCP&L’s amortization of debt expense is detailed in the following table.

	2011		2010		2009
	(millions)
KCP&L	$	3.6	$	2.8	$	2.0
Other Great Plains Energy		4.5		3.6		2.4
Total Great Plains Energy	$	8.1	$	6.4	$	4.4

KCP&L General Mortgage Bonds and EIRR Bonds

KCP&L has issued mortgage bonds under the General Mortgage Indenture and Deed of Trust dated December 1, 1986, as supplemented (Indenture).  The Indenture creates a mortgage lien on substantially all of KCP&L’s utility plant.

In April 2011, KCP&L purchased in lieu of redemption its $63.3 million EIRR Series 2007A-1, $10.0 million EIRR Series 2007A-2 and $39.5 million EIRR Series 1993B bonds.  KCP&L opted to purchase rather than remarket the bonds given the poor conditions in the tax-exempt market.  As of December 31, 2011, the bonds were still outstanding, but were not reported as a liability on the balance sheet since they are being held by KCP&L.  KCP&L has the ability to remarket these bonds to third parties whenever it determines market conditions are sufficiently attractive to do so.

Mortgage bonds totaling $642.5 million and $755.3 million were outstanding at December 31, 2011 and 2010, respectively.

KCP&L Municipal Bond Insurance Policies

KCP&L’s EIRR Bonds Series 2007 A-1, 2007 A-2 and 2007B totaling $146.5 million are covered by a municipal bond insurance policy issued by Financial Guaranty Insurance Company (FGIC).  The insurance agreement between KCP&L and FGIC provides for reimbursement by KCP&L for any amounts that FGIC pays under the municipal bond insurance policy.  The policy also restricts the amount of secured debt KCP&L may issue.  In 2009, because KCP&L issued debt secured by liens not permitted by the agreement or resulting in the aggregate amount of outstanding general mortgage bonds exceeding 10% of total capitalization, KCP&L was required to issue and deliver collateral to FGIC in the form of $146.5 million of Mortgage Bonds Series 2007 EIRR Issuer due 2035.  The bonds are not incremental debt for KCP&L but collateralize FGIC’s claim on KCP&L if FGIC was required to meet its obligation under the insurance agreement.

KCP&L’s secured 1992 Series EIRR bonds totaling $31.0 million, secured Series 1993A and 1993B EIRR bonds totaling $79.5 million, and secured and unsecured EIRR Bonds Series 2005 totaling $35.9 million and $50.0 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, 2011, 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 Standard & Poor’s or Moody’s Investors Service would be at or below A- or A3, respectively.  The insurance agreement covering the unsecured EIRR Bond Series 2005 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.

KCP&L Senior Notes

In September 2011, KCP&L issued $400.0 million of 5.30% unsecured Senior Notes, maturing in 2041.  In November 2011, KCP&L repaid its $150.0 million 6.5% Senior Notes at maturity.

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 substantially all of GMO’s St. Joseph Light & Power division utility plant.  Mortgage bonds totaling $11.2 million and $12.4 million, respectively, were outstanding at December 31, 2011 and 2010.

GMO Senior Notes

The fair value adjustment for GMO represents the $133.3 million purchase accounting adjustment to record GMO’s debt related to the 11.875% and 7.75% Senior Notes that are not fully reflected in electric retail rates as of the July 14, 2008, acquisition date, at estimated fair value, with the offset recorded to goodwill.  The fair value adjustment is being amortized as a reduction to interest expense over the remaining life of the individual debt issues.  Amortization for 2011, 2010 and 2009 was $33.6 million, $34.6 million and $33.0 million, respectively.  The fair value adjustment will be fully amortized in 2012 with amortization of $16.3 million.

GMO repaid its $137.3 million 7.95% Senior Notes that matured in February 2011 and $197.0 million 7.75% Senior Notes that matured in June 2011.

Great Plains Energy Senior Notes

In May 2011, Great Plains Energy issued $350.0 million of 4.85% unsecured Senior Notes, maturing in 2021.  As a result of amortizing the loss recognized in Other Comprehensive Income (OCI) on Great Plains Energy’s three-year Forward Starting Swaps (FSS), the effective interest rate is 7.34% through May 2014.

Great Plains Energy 10.00% Equity Units Subordinated Notes Classified As Current Maturities

In May 2009, Great Plains Energy issued $287.5 million of Equity Units.  Equity Units, each with a stated amount of $50, initially consist of a 5% undivided beneficial interest in $1,000 principal amount of 10.00% subordinated notes due June 15, 2042, and a purchase contract requiring the holder to purchase the Company’s common stock by June 15, 2012 (the settlement date).  Each purchase contract obligates the holder of the purchase contract to purchase, and Great Plains Energy to sell, no later than June 15, 2012, for $50 in cash, newly issued shares of the Company’s common stock equal to the settlement rate.  The purchase contracts may be settled earlier at the option of the holder subject to certain conditions, including but not limited to, the occurrence of a fundamental change (as defined in the agreement) at least 20 business days prior to June 15, 2012.  The settlement rate will vary according to the applicable market value of the Company’s common stock at the settlement date.  The applicable market value will be measured by the average of the closing price per share of the Company’s common stock on each of the 20 consecutive trading days ending on the third trading day immediately preceding June 15, 2012.  The settlement rate will be applied to the 5,750,000 Equity Units at the settlement date to issue a number of common shares determined as described in the following table.

Applicable		Settlement rate	Market value
market value		(in common shares)	per Equity Unit (a)
$16.80 or greater		2.9762 to 1	Greater than $50 per Equity Unit
$16.80 to $14.00		$50 divided by the applicable	Equal to $50 per Equity Unit
		market value to 1
$14.00 or less		3.5714 to 1	Less than $50 per Equity Unit
(a)	Assumes that the market price of the Company's common stock on June 15, 2012,
	is the same as the applicable market value.

Great Plains Energy makes quarterly contract adjustment payments at the rate of 2.00% per year of the stated amount of $50 per Equity Unit and interest payments at the rate of 10.00% per year on the subordinated notes.  Great Plains Energy must attempt to remarket the subordinated notes, in whole but not in part, by June 12, 2012.  In connection with a successful remarketing of the notes, Great Plains Energy may elect, without the consent of any of the holders, to modify the notes’ stated maturity to any date on or after June 15, 2014 and earlier than June 15, 2042.  The proceeds from a successful remarketing will be used to satisfy the holders’ obligation under the purchase contract.  If the notes have not been successfully remarketed by June 12, 2012, the holders of all notes will have the right to put their notes to Great Plains Energy on June 15, 2012, in satisfaction of the holders’ obligation under the purchase contracts and Great Plains Energy will issue to the holders newly issued shares of the Company’s common stock equal to the settlement rate.

The May 2009 present value of the contract adjustment payments of $15.1 million was recorded as a liability in other current liabilities and other deferred credits and other liabilities with a corresponding amount recorded as capital stock premium and expense on Great Plains Energy’s consolidated balance sheet.  The liability is being relieved as Great Plains Energy makes quarterly contract adjustment payments.

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.

	2012		2013		2014		2015		2016
	(millions)
Great Plains Energy                              $		801.4	$	263.1	$	1.5	$	15.5	$	1.6
KCP&L		12.7		0.4		0.4		14.4		0.4

At December 31, 2011, Great Plains Energy’s current maturities of long-term debt were $801.4 million.  In January 2012, KCP&L repaid $12.4 million of 4.00% EIRR bonds at maturity.  Great Plains Energy’s $287.5 million of Equity Units subordinated notes mature in 2042 but must be remarketed by June 12, 2012.  GMO’s $500.0 million of 11.875% Senior Notes mature in July 2012 and Great Plains Energy is evaluating alternatives to refinance this long-term debt.  Based on current market conditions and Great Plains Energy’s unused bank lines of credit, Great Plains Energy expects to have the ability to access the markets to complete the necessary refinancing.