Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Great Plains Energy, a Missouri corporation incorporated in 2001, is a public utility holding company and does not own or operate any significant assets other than the stock of its subsidiaries.  Great Plains Energy’s wholly owned direct subsidiaries with operations or active subsidiaries 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 primarily 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.

Each of Great Plains Energy’s and KCP&L’s consolidated financial statements includes the accounts of their subsidiaries.  Intercompany transactions have been eliminated.

Great Plains Energy’s sole reportable business segment is electric utility.  See Note 16 for additional information.

Basic and Diluted Earnings per Common Share Calculation

To determine basic EPS, preferred stock dividend requirements and net loss attributable to noncontrolling interest are deducted from net income before dividing by the average number of common shares outstanding.  The effect of dilutive securities, calculated using the treasury stock method, assumes the issuance of common shares applicable to performance shares, restricted stock, stock options and Equity Units.

The following table reconciles Great Plains Energy’s basic and diluted EPS.

	Three Months Ended				Year to Date
	June 30				June 30
	2012		2011		2012			2011
Income	(millions, except per share amounts)
Net income	$	58.1	$	43.4	$	48.8		$	45.7
Less: net loss attributable to noncontrolling interest		-		-		(0.2	)		(0.1	)
Less: preferred stock dividend requirements		0.4		0.4		0.8			0.8
Earnings available for common shareholders	$	57.7	$	43.0	$	48.2		$	45.0
Common Shares Outstanding
Average number of common shares outstanding		139.6		135.6		137.7			135.5
Add: effect of dilutive securities		2.4		3.3		2.9			3.1
Diluted average number of common shares outstanding		142.0		138.9		140.6			138.6
Basic EPS	$	0.41	$	0.32	$	0.35		$	0.33
Diluted EPS	$	0.41	$	0.31	$	0.34		$	0.32

The computation of diluted EPS for the three months ended and year to date June 30, 2012, excludes anti-dilutive shares consisting of 10,617 restricted stock shares.

The computation of diluted EPS for the three months ended June 30, 2011, excludes anti-dilutive shares consisting of 201,571 performance shares, 12,115 restricted stock shares and 154,096 stock options.

The computation of diluted EPS year to date June 30, 2011, excludes anti-dilutive shares consisting of 201,571 performance shares, 43,641 restricted stock shares and 154,096 stock options.

Dividends Declared

In August 2012, Great Plains Energy’s Board of Directors (Board) declared a quarterly dividend of $0.2125 per share on Great Plains Energy’s common stock.  The common dividend is payable September 20, 2012, to shareholders of record as of August 29, 2012.  The Board also declared regular dividends on Great Plains Energy’s preferred stock, payable December 1, 2012, to shareholders of record as of November 7, 2012.

In August 2012, KCP&L’s Board of Directors declared a cash dividend payable to Great Plains Energy of $23 million payable on September 19, 2012.