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, ~~2016~~2017

[ ] 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

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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

Kansas City Power & Light Company

Yes

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

Kansas City Power & Light Company

Yes

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

Kansas City Power & Light Company

Yes

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

Kansas City Power & Light Company

Yes

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

Kansas City Power & Light Company

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Kansas City Power & Light Company

Large accelerated filer

Accelerated filer

Non-accelerated filer

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

Kansas City Power & Light Company

Yes

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

Kansas City Power & Light Company

Yes

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, 2016) was approximately $4,700,571,576. 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.

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 21, 2017, Great Plains Energy Incorporated had 215,384,601 shares of common stock outstanding.

On February 16, 2018, Great Plains Energy Incorporated had 215,665,193 shares of common stock outstanding.

On February 21, 2017, Kansas City Power & Light Company had one share of common stock outstanding and held by Great Plains Energy Incorporated.

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 2017 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.

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.

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TABLE OF CONTENTS
		PageNumber
	Cautionary Statements Regarding Certain Forward-Looking Information	3
	Glossary of Terms	5
PART I
Item 1.	Business	7
Item 1A.	Risk Factors	1312
Item 1B.	Unresolved Staff Comments	2928
Item 2.	Properties	3029
Item 3.	Legal Proceedings	3130
Item 4.	Mine Safety Disclosures	3130
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3231
Item 6.	Selected Financial Data	3332
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3332
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	5553
Item 8.	Financial Statements and Supplementary Data	5756
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	~~123~~121
Item 9A.	Controls and Procedures	~~123~~121
Item 9B.	Other Information	~~127~~125
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	~~127~~125
Item 11.	Executive Compensation	~~127~~125
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~128~~126
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~128~~126
Item 14.	Principal Accounting Fees and Services	~~129~~127
PART IV
Item 15.	Exhibits and Financial Statement Schedules	~~130~~128
	Signatures	~~149~~147

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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's ~~proposed~~and ~~acquisition of~~ 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, ~~and~~ 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 ~~its~~and ~~transmission joint ventures or to~~ integrate ortheir ~~restructure~~respective ~~the~~ transmission joint ventures ~~of Westar~~; 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 ~~acquisition~~merger or the imposition of ~~Westar~~adverse ~~and~~conditions ~~the~~or ~~terms~~costs ofin ~~those~~connection with obtaining regulatory approvals; the risk that a condition to the closing of the anticipated ~~acquisition~~merger ~~of Westar or the committed debt or equity financing~~ may not be satisfied or that the anticipated ~~acquisition~~merger may fail to close; the ~~failure to obtain, or to obtain on favorable terms, any financings necessary to complete or permanently finance the anticipated acquisition of Westar and the costs of such financing; the~~ outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted relating to the anticipated ~~acquisition of Westar~~merger; the costs incurred to consummate the anticipated ~~acquisition of Westar~~merger; the possibility that the expected value creation from the anticipated ~~acquisition~~merger ~~of Westar~~ will not be realized, or will not be realized within the expected time period; ~~the~~difficulties ~~credit~~related ~~ratings~~to ofthe ~~Great~~integration ~~Plains~~of ~~Energy following~~ the ~~anticipated~~two ~~acquisition of Westar~~companies; ~~disruption from~~ the ~~anticipated~~credit ~~acquisition~~ratings of ~~Westar~~the ~~making~~combined itcompany

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following the anticipated merger; disruption from the anticipated merger making it more difficult to maintain relationships with customers, employees, regulators or suppliers; ~~and~~ the diversion of management time and attention on the ~~proposed~~anticipated ~~transactions~~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.

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GLOSSARY OF TERMS

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

Abbreviation or Acronym		Definition
AEPTHC		AEP Transmission Holding Company, LLC, a wholly owned subsidiary of American Electric Power Company, Inc.
AFUDC		Allowance for Funds Used During Construction
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
EBITDA		Earnings before interest, income taxes, depreciation and amortization
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
FTC		Federal Trade 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
MD&A		Management's Discussion and Analysis of Financial Condition and Results of Operations
MDNR		Missouri Department of Natural Resources
MECG		Midwest Energy Consumers Group
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

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Abbreviation or Acronym		Definition
Merger Agreement		Agreement and Plan of Merger dated as of May 29, 2016, by and among Great Plains Energy, Westar and Merger Sub
Merger Sub		GP Star, Inc., a Kansas corporation that will be merged with and into Westar, pursuant to the Merger Agreement
MGP		Manufactured gas plant
MPS Merchant		MPS Merchant Services, Inc., a wholly owned subsidiary of GMO
MPSC		Public Service Commission of the State of Missouri
MW		Megawatt
MWh		Megawatt hour
NAV		Net ~~Asset~~asset ~~Value~~value
NERC		North American Electric Reliability Corporation
NEIL		Nuclear Electric Insurance Limited
NOL		Net operating loss
NOx		Nitrogen oxide
NPNS		Normal purchases and normal sales
NRC		Nuclear Regulatory Commission
OCI		Other Comprehensive Income
OMERS		OCM Credit Portfolio LP
PRB		Powder River Basin
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.
QCA		Quarterly Cost Adjustment
RCRA		Resource Conservation and Recovery Act
RESRAM		Renewable Energy Standard Rate Adjustment Mechanism
RTO		Regional Transmission Organization
SEC		Securities and Exchange Commission
SERP		Supplemental Executive Retirement Plan
Series A Preferred Stock		7.25% Mandatory Convertible Preferred Stock, Series A
SO2		Sulfur dioxide
Series B Preferred Stock		7.00% Series B Mandatory Convertible Preferred Stock
SPP		Southwest Power Pool, Inc.
TCR		Transmission Congestion Right
TDC		Transmission Delivery Charge
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

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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 ~~and a time deposit to be used to fund a portion of the cash consideration for the anticipated acquisition of Westar Energy, Inc~~. ~~(Westar).~~ 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.

~~On May 29, 2016,~~ Great Plains Energy's ~~entered~~sole ~~into~~reportable anbusiness ~~Agreement~~segment ~~and~~is ~~Plan of Merger (Merger Agreement) by and among Great Plains Energy, Westar, and, from and after its accession to~~ the ~~Merger~~electric ~~Agreement,~~utility GPsegment ~~Star, Inc., a wholly owned subsidiary of Great Plains Energy in the State of Kansas~~ (~~Merger~~Electric ~~Sub~~Utility). ~~Pursuant~~For toinformation ~~the~~regarding ~~Merger Agreement, subject to~~ the ~~satisfaction or waiver of certain conditions~~revenues, ~~Merger~~income ~~Sub will merge with~~ and ~~into~~assets ~~Westar,~~attributable ~~with Westar continuing as the surviving corporation. Upon closing, pursuant~~ to ~~the~~Electric ~~Merger Agreement~~Utility, ~~Great~~see ~~Plains~~Note ~~Energy~~22 ~~will acquire Westar for (i) $51.00 in cash and (ii) a number, rounded~~ to the ~~nearest~~consolidated ~~1/10,000~~financial ofstatements. Comparative afinancial ~~share,~~information ~~of shares of Great Plains Energy common stock, equal to an exchange ratio that may vary between 0.2709~~ and ~~0.3148,~~discussion ~~based~~regarding ~~upon~~Electric ~~the~~Utility ~~volume-weighted~~can ~~average~~be ~~price~~found ~~per~~in ~~share~~Item of7 ~~Great~~Management's ~~Plains~~Discussion ~~Energy common stock during a 20 consecutive full trading day period ending on (~~and ~~including)~~Analysis ~~the third trading day immediately prior to the closing date~~ of ~~the~~Financial ~~merger,~~Condition ~~for each share of Westar common stock issued~~ and ~~outstanding~~Results ~~immediately prior to the effective time~~ of ~~the~~Operations ~~merger, with Westar becoming a wholly owned subsidiary of Great Plains Energy~~(MD&A). ~~See Note 2 to the consolidated financial statements for additional information concerning the anticipated acquisition of Westar.~~

~~Great~~Electric ~~Plains~~Utility ~~Energy~~consists of KCP&L, a regulated utility, GMO's ~~sole~~regulated ~~reportable~~utility ~~business~~operations ~~segment~~and isGMO 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 ~~utility~~utilities. ~~For~~Electric ~~information~~Utility's ~~regarding~~retail ~~the~~revenues averaged approximately 93% of its total operating revenues over the last three years. Wholesale firm power, ~~income~~bulk power sales and ~~assets~~miscellaneous ~~attributable~~electric torevenues 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 ~~utility~~revenues ~~business~~were ~~segment,~~100% ~~see~~of ~~Note~~Great 23Plains toEnergy's revenues over the ~~consolidated~~last ~~financial~~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.

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~~statements. Comparative~~Anticipated ~~financial~~Merger ~~information~~with ~~and~~Westar ~~discussion~~Energy, ~~regarding the electric utility business segment can be found in Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)~~Inc.

~~The~~In ~~electric~~May ~~utility~~2016, ~~segment~~Great ~~consists~~Plains ofEnergy ~~KCP&L,~~and aWestar ~~regulated~~entered ~~utility,~~into ~~GMO's~~an ~~regulated~~Agreement ~~utility~~and ~~operations~~Plan ~~and~~of ~~GMO~~Merger ~~Receivables~~dated ~~Company. Electric~~as ~~utility~~of ~~serves~~May ~~approximately~~29, ~~855~~2016,~~700~~ ~~customers~~by ~~located~~and inamong ~~western~~Great ~~Missouri~~Plains ~~and~~Energy, ~~eastern~~Westar ~~Kansas. Customers~~and ~~include~~GP ~~approximately 753~~Star,~~500~~ ~~residences,~~Inc. ~~99,700~~(GP ~~commercial~~Star) ~~firms~~(Original ~~and~~Merger ~~2,500~~Agreement) ~~industrials,~~in ~~municipalities~~which ~~and~~Great ~~other~~Plains ~~electric~~Energy ~~utilities. Electric~~would ~~utility's~~have ~~retail~~acquired ~~revenues~~Westar ~~averaged~~for ~~approximately~~a ~~91%~~combination of ~~its~~cash ~~total~~and ~~operating~~shares ~~revenues~~of ~~over~~Great ~~the~~Plains ~~last~~Energy ~~three~~common ~~years~~stock. ~~Wholesale~~In ~~firm~~April ~~power~~2017, ~~bulk~~The ~~power~~State ~~sales~~Corporation ~~and~~Commission ~~miscellaneous~~of ~~electric revenues accounted for~~ the ~~remainder~~State of ~~electric~~Kansas ~~utility's~~(KCC) ~~revenues. Electric~~issued ~~utility~~an isorder ~~significantly~~denying ~~impacted~~Great byPlains ~~seasonality~~Energy's, ~~with~~KCP&L's ~~approximately~~and ~~one-third~~Westar's ofjoint ~~its~~application ~~retail~~for ~~revenues~~the ~~recorded~~approval inof the ~~third~~acquisition ~~quarter. Electric~~citing ~~utility's~~concerns ~~total~~with ~~electric~~the ~~revenues~~purchase ~~were~~price, ~~100% of~~ Great Plains Energy's ~~revenues~~capital ~~over~~structure, ~~the~~quantifiable ~~last~~and ~~three~~demonstrable ~~years. Electric~~customer ~~utility's~~benefits ~~net income accounted for approximately 101%, 105%~~ and ~~100%~~staffing oflevels ~~Great~~in ~~Plains Energy~~Westar's ~~net~~service ~~income in 2016~~territory, ~~2015~~among ~~and~~other ~~2014, respectively~~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 ~~The State Corporation Commission of the State of Kansas (~~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%	5049.092%	$2.65	~~September~~June ~~2015~~2017
KCP&L Kansas	KCC	9.3%	50.485%	$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~~Electric ~~utility~~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 retail utility model. As a result, electric utility does 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 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 cost-effectiveness.

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InCompetition this regard, electric utility competes with owners of other generating stations and other power suppliers, principally other utilities within the Southwest Power Pool, Inc. (SPP) Integrated Marketplace, on the basis of availability and price. Electric utility's wholesale revenues averaged approximately 7% of its total revenues over the last three years.

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~~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~~Utility's purchased power from others, as a percentage of ~~MWh~~total ~~requirements~~MWhs generated and purchased, averaged approximately 2426% over the last three years. Management believes ~~electric~~Electric ~~utility~~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~~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 ~~2017~~2018 MW Capacity	Percent of Total Capacity
Coal	3,~~474~~433	4644	%
Nuclear	~~549~~552	7
Natural gas and oil	2,~~352~~342	3130
Wind (a)	1,~~089~~389	1518
Solar and hydroelectric (b)	65	1
Solar, landfill gas and hydroelectric (b)	65	1
Total capacity	7,~~529~~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 ~~940~~1,240 MWs of wind generation which expire in 2032 through 2037. ~~Power~~ ~~purchase agreements for approximately 300 MWs of wind generation to begin in late 2017 and expire in 2037 are not included in the table above.~~

^(b)Includes a long-term power purchase agreement for approximately 60 MWs of hydroelectric generation which expires in 2023.

Electric ~~utility~~Utility's projected peak summer demand for ~~2017~~2018 is approximately 5,~~800~~200 MWs. Electric ~~utility~~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 ana FERC-approved RTO ~~mandated~~with bythe ~~FERC~~responsibility to ensure reliable ~~supply of~~ power supply, adequate transmission infrastructure and ensure competitive wholesale electricity prices ofin ~~electricity~~the region. As ~~members of the~~ SPP members, KCP&L and GMO are required to maintain a ~~capacity~~minimum reserve margin of ~~at least~~ 12%. This net positive supply of capacity ~~and energy~~ is maintained through ~~their~~ generation ~~assets~~asset ownership, capacity agreements, power purchase agreements and peak demand reduction programs. The ~~capacity~~reserve margin is designed to ~~ensure~~support ~~the~~ reliability of ~~electric energy in~~ the ~~SPP~~ region's inelectric ~~the event of operational failure of power generating units utilized by the members of the SPP~~supply.

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Fuel

The principal fuel sources for ~~electric~~Electric ~~utility~~Utility's owned generation are coal and nuclear fuel. It is expected, with normal weather, that approximately 9798% of ~~2017~~2018 ~~owned~~net ~~generation~~MWhs generated will come from these sources with the remainder provided by wind, natural gas and oil. The actual ~~2016~~2017 and estimated ~~2017~~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	~~2017~~2018		~~2016~~2017			~~2017~~2018	~~2016~~2017
Coal	7677	%	7975	%		1.7984	1.8481
Nuclear	21		1723			0.6462	0.69
Natural gas and oil	<1		21			7.3046	1315.6519
Wind	32		21			—	—
Total owned generation	100	%	100	%		1.4542	1.4662
(a) Fuel mix based on percent of net MWhs generated.

Coal

During ~~2017~~2018, ~~electric~~Electric ~~utility~~Utility's generating units, including jointly owned units, are projected to burn approximately 1211 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 ~~100~~95% of the projected coal requirements for ~~2017~~2018 and approximately 4840% for ~~2018~~2019. The remainder of the coal requirements is expected to be fulfilled through additional contracts or spot market purchases. ~~KCP&L~~ ~~and GMO have entered into coal contracts over time at higher average prices affecting coal costs for 2017 and beyond.~~

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 ~~2017 and approximately 39% 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~~Electric ~~utility~~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 ~~97%~~all of the uranium enrichment and ~~all of the~~ 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 ~~534~~542,~~400~~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

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~~approximately 471,900 residences, 60,500 commercial firms, and 2,000 industrials, municipalities and other electric~~ utilities. KCP&L's retail revenues averaged approximately 9092% 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 5657% and 4443%, respectively, of total retail revenues over the last three years.

Great Plains Energy and KCP&L Employees

At December 31, ~~2016~~2017, Great Plains Energy and KCP&L had 2,~~865~~709 employees, including 1,~~750~~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 ~~January~~February 3128, 2018), and with Local 412, representing power plant workers (expires February 28, ~~2018~~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, ~~2017~~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)	5657	Chairman of the Board, President and Chief Executive Officer - Great Plains Energy and KCP&L	2005
Scott H. Heidtbrink (b)	55	Executive Vice President and Chief Operating Officer - KCP&L	2008
Kevin E. Bryant (b)	42	Senior Vice President - Finance and Strategy and Chief Financial Officer - Great Plains Energy and KCP&L	2006
Kevin E. Bryant (c)	41	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
Steven P. Busser (d)	48	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
Charles A. Caisley (e)	44	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
Ellen E. Fairchild (f)	55	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
Heather A. Humphrey (g)	46	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
Darrin R. Ives (h)	47	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
Lori A. Wright (i)	54	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. ~~Heidtbrink~~Bryant was appointed ~~Executive~~Senior Vice President - Finance and Strategy and Chief ~~Operating~~Financial Officer of Great Plains Energy, KCP&L and GMO in ~~2012~~2015. He previously served as ~~Senior~~ Vice President - ~~Supply~~Strategic Planning of Great Plains Energy, KCP&L and GMO (~~2009-2012~~2014). He ~~was~~served ~~Senior~~as Vice President - ~~Corporate~~Investor ~~Services~~Relations and Strategic Planning and Treasurer of Great Plains Energy, KCP&L and GMO (~~2008~~2013). He served as Vice President - Investor Relations and Treasurer of Great Plains Energy, KCP&L and GMO (2011-2013). He was Vice President - ~~Power~~Strategy ~~Generation~~and Risk Management of KCP&L and GMO (2011) and Vice President - Energy ~~Resources~~Solutions (2006-~~2008~~2011) of KCP&L and GMO.

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(c) Mr. ~~Bryant~~Busser was appointed Vice President - ~~Finance~~Risk ~~and~~Management ~~Strategy~~ and ~~Chief~~Controller ~~Financial Officer~~ of Great Plains Energy, KCP&L and GMO in ~~2015~~2016. He previously served as Vice President - ~~Strategic~~Business Planning and Controller of Great Plains Energy, KCP&L and GMO (2014-2016). He served as Vice President - ~~Investor Relations and Strategic Planning and~~ Treasurer of ~~Great~~El ~~Plains~~Paso ~~Energy,~~Electric ~~KCP&L~~Company ~~and GMO~~ (~~2013~~2011-2014). HePrior to that, he served as Vice President - ~~Investor~~Treasurer ~~Relations~~ and ~~Treasurer~~Chief ofRisk ~~Great~~Officer ~~Plains Energy, KCP&L and GMO~~ (~~2011~~2006-~~2013~~2011). Heand ~~was~~ Vice President - ~~Strategy~~Regulatory ~~and~~Affairs ~~Risk Management of KCP&L~~ and ~~GMO~~Treasurer (~~2011) and Vice President~~ 2004- ~~Energy Solutions (~~2006~~-2011~~) of ~~KCP&L~~El ~~and~~Paso ~~GMO~~Electric Company.

(d) Mr. ~~Busser~~Caisley was appointed Vice President - ~~Risk~~Marketing ~~Management~~ and ~~Controller~~Public Affairs of Great Plains Energy, KCP&L and GMO in ~~2016~~2011. He ~~previously~~was ~~served~~Senior asDirector ~~Vice President - Business Planning and Controller~~ of ~~Great~~Public ~~Plains~~Affairs ~~Energy, KCP&L and GMO~~ (~~2014~~2008-~~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~~Director ~~Risk~~of ~~Officer~~Governmental ~~(2006-2011) and Vice President - Regulatory~~ Affairs ~~and~~of ~~Treasurer~~KCP&L (~~2004~~2007-~~2006~~2008) ~~of El Paso Electric Company~~.

(e) MrMs. ~~Caisley~~Fairchild was appointed Vice President, -Chief ~~Marketing~~Compliance Officer and ~~Public~~Corporate ~~Affairs~~Secretary of Great Plains Energy, KCP&L and GMO in ~~2011~~2010. HeShe was Senior Director of ~~Public~~Investor ~~Affairs~~Relations and Assistant Secretary (~~2008-2011~~2010) and Director of ~~Governmental~~Investor ~~Affairs~~Relations (2008-2010) of Great Plains Energy, KCP&L ~~(2007-2008)~~and GMO.

(f) Ms. ~~Fairchild~~Humphrey was appointed Senior Vice President, ~~Chief~~- ~~Compliance~~Corporate ~~Officer~~Services and ~~Corporate~~General ~~Secretary~~Counsel of Great Plains Energy, KCP&L and GMO in ~~2010~~2016. She ~~was~~previously served as General Counsel (2010-2016) and Senior ~~Director~~Vice President - Human Resources of ~~Investor~~Great ~~Relations~~Plains ~~and~~Energy, ~~Assistant~~KCP&L ~~Secretary~~and GMO (~~2010~~2012-2016). ~~and~~She ~~Director~~served as Vice President - Human Resources of ~~Investor~~Great ~~Relations~~Plains Energy, KCP&L and GMO (~~2008-~~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) MsMr. ~~Humphrey~~Ives was appointed ~~Senior~~ Vice President - ~~Corporate~~Regulatory ~~Services~~Affairs ~~and General Counsel~~ of ~~Great Plains Energy,~~ KCP&L and GMO in ~~2016~~2013. ~~She~~He previously served as ~~General Counsel (2010-2016) and~~ Senior ~~Vice~~Director ~~President~~ - ~~Human~~Regulatory ~~Resources~~Affairs of ~~Great Plains Energy,~~ KCP&L and GMO (~~2012~~2011-~~2016~~2013). ~~She~~He ~~served as Vice President - Human Resources of Great Plains Energy, KCP&L and GMO (2010-2012). She~~ was ~~Senior~~Assistant ~~Director~~Controller of ~~Human Resources and Interim General Counsel of~~ Great Plains Energy, KCP&L and GMO (~~2010)~~2008 ~~and Managing Attorney of KCP&L (2007~~-~~2010~~ 2011).

(h) MrMs. ~~Ives~~Wright was appointed Vice President - ~~Regulatory~~Corporate ~~Affairs~~Planning, Investor Relations and Treasurer of Great Plains Energy, KCP&L and GMO in ~~2013~~2016. HeShe previously served as ~~Senior~~Vice ~~Director~~President - ~~Regulatory~~Investor ~~Affairs~~Relations and Treasurer of Great Plains Energy, KCP&L and GMO (~~2011~~2014-~~2013~~2016). HeShe ~~was~~served ~~Assistant~~as Vice President - Business Planning and Controller of Great Plains Energy, KCP&L and GMO (~~2008~~2009-2014). She was Controller of Great Plains Energy and KCP&L (2002-2008) ~~2011~~and GMO (2008).

(i) 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

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~~ITEM~~common ~~1A. RISK~~stock ~~FACTORS~~as of the date of the Amended Merger Agreement, the date of this report or the date of the shareholders' meeting.

~~Actual~~The ~~results~~exchange inratio ~~future periods~~ for Great Plains Energy ~~and~~in ~~KCP&L~~the ~~could~~Amended ~~differ~~Merger ~~materially~~Agreement ~~from~~is ~~historical~~fixed ~~results~~ and will not be adjusted in the ~~forward-looking~~event ~~statements~~of ~~contained~~any change in ~~this~~the ~~report~~stock price of Great Plains Energy prior to the anticipated merger. ~~The~~ A ~~Companies'~~significant ~~business~~amount isof ~~influenced~~time bywill ~~many~~have ~~factors~~elapsed ~~that~~between ~~are~~the ~~difficult~~dates when the shareholders of Great Plains Energy voted to ~~predict,~~approve ~~involve~~the ~~uncertainties~~Amended ~~that~~Merger ~~may~~Agreement ~~materially~~at ~~affect~~the ~~actual~~shareholders' ~~results~~meeting on November 21, 2017, and ~~are~~the ~~often~~date ~~beyond~~when ~~their~~the ~~control~~anticipated merger is completed. ~~Additional~~ The ~~risks~~absolute and ~~uncertainties~~relative ~~not~~price ~~presently~~of ~~known~~shares orof ~~that~~Great Plains Energy common stock may vary significantly between the ~~Companies'~~date ~~management~~of ~~currently~~the ~~believes~~meetings, tothe bedate ~~immaterial~~of ~~may~~this ~~also~~report ~~adversely~~and ~~affect~~the date of the ~~Companies~~completion of the anticipated merger. ~~This~~ These ~~information,~~variations asmay ~~well~~be ascaused ~~the~~by, among other ~~information~~things, ~~included~~changes in ~~this~~the ~~report~~businesses, operations, results or prospects of Great Plains Energy and inWestar, market expectations of the ~~other~~likelihood ~~documents~~that ~~filed~~the ~~with~~anticipated merger will be completed and the ~~SEC~~timing of completion, ~~should~~the beprospects ~~carefully~~of ~~considered~~post-merger ~~before~~operations, ~~making~~general anmarket ~~investment~~and ineconomic conditions and other factors. In addition, it is impossible to predict accurately the ~~securities~~market price of the Holdco common stock to be received by Great Plains Energy orshareholders ~~KCP&L. Risk~~after ~~factors~~the completion of ~~KCP&L~~the ~~are~~anticipated ~~also~~merger. Accordingly, ~~risk~~the ~~factors~~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.

~~Risks~~The ~~Relating~~ability of Great Plains Energy and Westar to complete the ~~Anticipated~~anticipated ~~Acquisition~~merger is subject to various closing conditions, including the receipt of ~~Westar:~~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.

~~The~~To ~~ability~~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 ~~complete~~be issued to Great Plains Energy and Westar shareholders in the anticipated merger ismust ~~subject~~be approved, (3) there cannot be any material adverse effect with respect to ~~various~~Great ~~closing~~Plains ~~conditions~~Energy, ~~including~~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 ~~receipt~~completion of ~~consents~~the anticipated merger, (5) subject to certain materiality exceptions, the representations and ~~approvals~~warranties ~~from~~made ~~governmental~~by ~~authorities~~Great Plains Energy and Westar, ~~which~~respectively, ~~may~~must ~~impose~~be ~~conditions~~accurate ~~that~~and ~~could~~the ~~adversely~~parties ~~affect~~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 ~~cause~~cash equivalents on its balance sheet. If the ~~merger~~foregoing toconditions are not satisfied or waived, one or both of Great Plains Energy and Westar would not be ~~abandoned~~required to complete the merger.

ToGreat Plains Energy and Westar have not yet obtained the regulatory consents and approvals required to complete the anticipated merger,. Governmental ~~each~~or ofregulatory 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 ~~must~~will ~~make~~be ~~certain~~unable ~~filings~~to ~~with~~complete ~~and~~the ~~obtain~~anticipated ~~certain~~merger until the consents and approvals have been received from ~~various~~KCC, ~~governmental~~the MPSC, the NRC, FERC and ~~regulatory~~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.

~~Great~~In ~~Plains~~December Energy and Westar have not yet obtained all of the regulatory consents and approvals required to complete the merger. Governmental or regulatory agencies could seek to block or challenge the merger or could impose restrictions they deem necessary or desirable in the public interest as a condition to approving the merger. Great Plains Energy and Westar will be unable to complete the merger until the necessary consents and approvals are received from FERC2017, the ~~NRC,~~Federal ~~KCC,~~Trade ~~and~~Commission ~~the MPSC~~ (~~collectively referred to as the required governmental approvals~~FTC)~~. The~~ ~~Merger~~granted ~~Agreement may require~~ Great Plains Energy's ~~and/or~~request ~~Westar~~for toearly ~~accept~~termination ~~conditions~~of ~~from these regulators that could adversely impact~~ the ~~combined~~waiting ~~company. If~~period ~~the~~under ~~required governmental approvals are not received, or they are not received on terms that satisfy~~ the ~~conditions~~Hart-Scott-Rodino ~~set~~(HSR) ~~forth in the Merger Agreement, then neither Great Plains Energy nor Westar will be obligated to complete the merger~~Act.

InEven ~~addition~~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, ~~including after closing,~~ 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.~~

FERC Commissioner Norman Bay's resignation, effective February 3, 2017, left FERC with two sitting commissioners and the inability to convene a quorum. Without a quorum, FERC cannot issue certain orders on contested cases, including Great Plains Energy's and Westar's merger application. If a replacement commissioner is not appointed and confirmed in a timely fashion, the closing of the merger could be delayed until such time that a replacement commissioner is approved by the Senate.

The September 2016 special meetings at which the Great Plains Energy shareholders and the Westar shareholders approved the transactions contemplated by the Merger Agreement have taken place before all required approvals have been obtained and, in certain cases, before the terms of any conditions to obtain such required approvals are known. As a result, Great Plains Energy and Westar may make decisions after the special 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 Merger Agreement contains other customary conditions to the closing of the merger, each of which must be satisfied or waived in order to complete the merger.

If Great Plains Energy and Westar are unable to complete the merger, Great Plains Energy would be subject to a number of risks, including the following:

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•Energy ~~Great~~or ~~Plains~~Westar ~~Energy~~may ~~would~~ not ~~realize~~prevail ~~the~~and ~~anticipated~~may ~~benefits~~incur ofsignificant ~~the~~costs ~~merger,~~in ~~including,~~defending ~~among~~or ~~other~~settling ~~things,~~any ~~increased~~action ~~operating~~under ~~efficiencies~~the ~~and~~antitrust ~~future cost savings;~~laws.

•The ~~the~~shareholders' ~~attention~~meetings ofat ~~management~~which ofthe Great Plains Energy ~~may~~shareholders ~~have~~and ~~been~~the ~~diverted~~Westar shareholders voted to approve the ~~merger~~transactions ~~rather~~contemplated ~~than~~by tothe ~~its~~Amended ~~own~~Merger ~~operations~~Agreement took place before all such approvals have been obtained and before the ~~pursuit~~terms of ~~other~~any ~~opportunities~~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 ~~been~~an ~~beneficial~~adverse toeffect on the ~~Company;~~combined company.

•In addition, the ~~potential~~Amended ~~loss~~Merger ofAgreement ~~key~~contains ~~personnel~~other ~~during~~customary ~~the~~closing ~~pendency~~conditions, ofwhich ~~the merger as employees~~ may ~~experience~~not ~~uncertainty~~be ~~about~~satisfied ~~their~~or ~~future roles with the combined company; and~~waived.

•If ~~the trading price of~~ Great Plains Energy ~~common~~and ~~stock~~Westar ~~may~~are ~~decline~~unable to complete the ~~extent~~anticipated ~~that~~merger, ~~the~~Great ~~current~~Plains ~~market~~Energy ~~prices~~would ~~reflect~~be asubject ~~market~~to ~~assumption~~a ~~that~~number ~~the~~of ~~merger~~risks, ~~will~~including bethe ~~completed.~~following:

• Great Plains Energy ~~will~~would benot ~~required~~realize tothe ~~pay~~anticipated ~~Westar~~benefits ~~a termination fee~~ of ~~$380 million if~~ the ~~Merger~~anticipated ~~Agreement~~merger, isincluding, ~~terminated~~among ~~due~~other tothings, aincreased ~~failure~~operating toefficiencies ~~receive the required governmental approvals or a failure to receive them on terms~~ and ~~conditions~~future ~~that~~cost ~~would not result in a material adverse effect on Great Plains Energy and its subsidiaries, after giving effect to the merger.~~ savings;

We• ~~can provide no assurance that~~ the ~~various~~attention ~~closing~~of ~~conditions~~management ~~will~~of beGreat ~~satisfied~~Plains ~~and~~Energy ~~that~~may ~~the~~have ~~required~~been ~~governmental~~diverted ~~approvals~~to ~~will be obtained, or that any required conditions will not materially adversely affect~~ the ~~combined~~anticipated ~~company following the~~ merger~~. In~~ ~~addition,~~rather wethan ~~can~~to ~~provide~~its noown ~~assurance~~operations ~~that~~and ~~these conditions will not result in~~ the ~~abandonment~~pursuit ~~or delay~~ of ~~the~~other ~~merger. The~~opportunities ~~occurrence~~that ~~of any of these events individually or in combination~~ could have abeen ~~material adverse effect on Great Plains Energy's results of operations and the trading price of Great Plains Energy common stock.~~beneficial;

~~The~~• ~~Merger Agreement contains provisions that limit Great Plains Energy's or Westar's ability to pursue alternatives to~~ the ~~merger, could discourage a~~ potential ~~competing~~loss ~~acquirer~~ of ~~either~~key ~~Great~~personnel ~~Plains~~during ~~Energy~~the orpendency ~~Westar~~of ~~from~~the ~~making~~anticipated amerger ~~favorable~~as ~~alternative~~employees ~~transaction~~may ~~proposal~~experience ~~and,~~uncertainty inabout ~~certain~~their ~~circumstances,~~future ~~could~~roles ~~require~~with ~~Westar or Great Plains Energy to pay a termination fee to~~ the ~~other~~combined ~~party.~~company;

~~Under~~• ~~the Merger Agreement, Westar and~~ Great Plains Energy ~~each~~will ~~are~~have ~~restricted~~been ~~from entering into alternative merger or acquisition transactions. Unless and until the 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. Under certain ~~circumstances~~restrictions ~~either~~on ~~Westar or Great Plains Energy may be required to pay a termination fee to~~ the ~~other~~conduct ~~if they were to enter into an alternative transaction within twelve months~~ of atheir ~~termination~~businesses, ofwhich ~~the Merger Agreement. These provisions could discourage a third party that~~ may ~~have~~prevent ~~an interest in acquiring all or a significant part of Westar or~~ Great Plains Energy from ~~considering~~making orcertain ~~proposing~~acquisitions ~~that~~or ~~acquisition,~~dispositions ~~including under circumstances in which the Merger Agreement would be terminated on a separate basis, even if such third party were prepared to pay consideration with a higher per share cash~~ or ~~market~~pursuing ~~value~~certain ~~than~~business ~~the~~opportunities ~~market~~while ~~value proposed to be received or realized in~~ the anticipated merger~~. As~~ ais ~~result~~pending; of these restrictions, neither Westar nor Great Plains Energy may be able to enter into an agreement with respect to a more favorable alternative transaction without incurring potentially significant liability to the other.and

~~Great~~• ~~Plains~~the ~~Energy~~trading ~~and~~price ~~Westar~~of ~~will~~Great bePlains ~~subject~~Energy tocommon ~~various~~stock ~~uncertainties~~may ~~while~~decline to the ~~merger~~extent ~~is pending~~ that ~~may~~the ~~cause~~current ~~disruption~~market ~~and~~price ~~may~~reflects ~~make~~a itmarket ~~more~~assumption ~~difficult~~that tothe ~~maintain~~anticipated ~~relationships~~merger ~~with~~will ~~employees,~~be ~~suppliers, or customers~~completed.

~~Uncertainty~~Great ~~about~~Plains ~~the~~Energy ~~effect~~can ofprovide ~~the~~no ~~merger~~assurance onthat ~~employees,~~the ~~suppliers~~various ~~and~~closing ~~customers~~conditions ~~may~~will ~~have~~be ansatisfied ~~adverse~~and ~~effect~~that onthe ~~Great~~required ~~Plains~~governmental ~~Energy~~approvals and ~~Westar. Although~~other ~~Great~~approvals ~~Plains~~will ~~Energy~~be ~~and~~obtained, ~~Westar~~or ~~intend~~that toany ~~take~~required ~~steps~~conditions ~~designed~~will tonot ~~reduce~~materially ~~any~~adversely ~~adverse~~affect ~~effects,~~the ~~these~~combined ~~uncertainties~~company ~~may~~following ~~impair~~ the ~~ability~~anticipated ofmerger. In addition, Great Plains Energy orcan ~~Westar~~provide tono ~~attract,~~assurance ~~retain~~that ~~and~~these ~~motivate~~conditions ~~key~~will ~~personnel~~not ~~until~~result in the ~~merger~~abandonment isor ~~completed~~delay ~~and~~of ~~for~~the aanticipated ~~period~~merger. The occurrence of ~~time~~any ~~thereafter,~~of ~~and~~these ~~could~~events ~~cause~~individually ~~customers,~~or ~~suppliers~~in ~~and~~combination ~~others~~could ~~that~~have ~~deal~~a ~~with~~material ~~Great~~adverse ~~Plains~~effect ~~Energy~~on orthe ~~Westar~~companies' toresults ~~seek~~of tooperations ~~change~~and orthe ~~terminate~~trading ~~existing~~price ~~business~~of ~~relationships with~~ Great Plains Energy orcommon ~~Westar or not enter into new relationships or transactions~~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

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~~Employee~~than ~~retention~~the ~~and~~market ~~recruitment~~value ~~may~~proposed to be ~~particularly~~received ~~challenging~~or ~~prior~~realized toin the ~~completion~~anticipated ~~of the~~ merger, asor ~~employees~~might ~~and~~result ~~prospective~~in ~~employees~~a ~~may~~potential ~~experience~~acquirer ~~uncertainty~~proposing ~~about~~to ~~their~~pay ~~future~~a ~~roles~~lower ~~with~~price ~~the~~than ~~combined~~it ~~company. If,~~would ~~despite~~otherwise ~~Great~~have ~~Plains~~proposed ~~Energy's and Westar's retention and recruiting efforts, key employees depart or fail~~ to ~~continue~~pay ~~employment with either company~~ because of ~~issues relating to~~ the ~~uncertainty~~added ~~and~~expense ~~difficulty~~ of ~~integration or a desire not to remain with~~ the ~~combined~~termination ~~company,~~fee ~~Great~~that ~~Plains~~may ~~Energy's~~become ~~and/or~~payable ~~Westar's~~in ~~financial~~certain ~~results could be adversely affected~~circumstances. ~~Furthermore,~~As ~~the~~a ~~combined~~result ~~company's~~of ~~operational~~these ~~and~~restrictions, ~~financial performance following the merger could be adversely affected if it is unable to retain key employees and skilled workers of~~ Great Plains Energy ~~and~~may ~~Westar. The~~not ~~loss~~be ofable ~~the~~to ~~services~~enter ofinto ~~key~~an ~~employees~~agreement ~~and~~with ~~skilled~~respect ~~workers~~to ~~and~~a ~~their~~more ~~experience~~favorable ~~and~~alternative ~~knowledge~~transaction ~~regarding~~without ~~Great~~incurring ~~Plains~~potentially ~~Energy's~~significant ~~and~~liability ~~Westar's~~to ~~businesses could adversely affect the combined company's future operating results and the successful ongoing operation of its businesses~~Westar.

~~Failure~~The Amended Merger Agreement provides that in connection with the termination of the Amended Merger Agreement under specified circumstances relating to ~~successfully~~a ~~combine~~failure to obtain regulatory approvals, a final and nonappealable order enjoining the ~~businesses~~consummation of the anticipated merger in connection with regulatory approvals or failure by Great Plains Energy ~~and~~to ~~Westar~~comply inwith its obligations under the ~~expected~~Amended ~~time~~Merger ~~frame~~Agreement ~~may~~to ~~adversely~~consummate ~~affect~~the closing of the ~~future~~anticipated ~~results~~merger once all of the ~~combined~~conditions ~~company,~~have ~~and~~been satisfied, ~~consequently~~Great Plains Energy may be required to pay Westar a termination fee of $190 million. In addition, in the ~~value~~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 ~~common~~under ~~stock~~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.

~~The success of the merger will depend, in part, on the ability of~~ Great Plains Energy towill ~~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~~subject ~~combined. If the combined company is not able~~ to ~~achieve~~various ~~these~~uncertainties ~~objectives,~~while ~~or is not able to achieve these objectives on a timely basis,~~ the anticipated ~~benefits~~merger ofis ~~the~~pending ~~transactions~~that may ~~not~~cause bedisruption ~~realized~~and ~~fully~~may ormake atit ~~all. In~~more ~~addition,~~difficult ~~the~~to ~~actual~~maintain ~~integration~~relationships ~~may~~with ~~result~~employees, ~~in additional and unforeseen expenses~~suppliers, ~~which~~or ~~could reduce the anticipated benefits of the merger~~customers. ~~These integration difficulties could result in a decline in the market value of Great Plains Energy common stock.~~

~~Failure~~Uncertainty toabout ~~complete~~the effect of the anticipated merger on employees, orsuppliers ~~significant~~and ~~delays~~customers inmay ~~completing~~have ~~the~~an ~~merger,~~adverse ~~could~~effect ~~negatively~~on ~~affect~~Great ~~the~~Plains ~~trading~~Energy. These ~~prices~~uncertainties may impair the ability of Great Plains Energy ~~common~~to ~~stock~~attract, retain and motivate key personnel until the ~~future~~anticipated ~~business~~merger is completed and ~~financial~~for ~~results~~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.

~~Completion~~Employee ofretention ~~the~~and ~~merger~~recruitment ismay ~~not~~be ~~assured~~particularly ~~and~~challenging isprior ~~subject~~ to ~~risks, including~~ the ~~risk~~completion ~~that approval~~ of the anticipated merger, byas ~~governmental~~employees ~~agencies~~and isprospective ~~not~~employees ~~obtained~~may orexperience ~~that~~uncertainty ~~other~~about ~~closing~~their ~~conditions~~future ~~are~~roles ~~not~~with ~~satisfied~~the combined company. If, ~~the~~despite ~~merger~~Great isPlains ~~not~~Energy's ~~completed~~retention and recruiting efforts, key employees depart or iffail ~~there~~to ~~are~~continue ~~significant~~employment ~~delays~~because inof ~~completing~~issues relating to the ~~merger,~~uncertainty itand ~~could~~difficulty ~~negatively~~of ~~affect~~integration ~~the~~or ~~trading~~a ~~price~~desire ofnot to remain with the combined company, Great Plains Energy's ~~common~~financial ~~stock~~results ~~and~~could be adversely affected. Furthermore, the ~~future~~combined ~~business~~company's operational and financial ~~results~~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 ~~also~~businesses ~~will~~could beadversely ~~subject~~affect tothe ~~several~~combined ~~risks,~~company's ~~including~~future operating results and the ~~following:~~successful ongoing operation of its businesses.

• Great Plains Energy ~~may~~is besubject ~~liable~~to ~~for~~contractual ~~damages~~restrictions toin ~~Westar~~the ~~under~~Amended ~~the~~Merger ~~terms~~Agreement ~~and~~that ~~conditions~~may ofhinder its operations pending the ~~Merger~~anticipated ~~Agreement;~~merger.

•The ~~negative~~Amended ~~reactions~~Merger ~~from~~Agreement ~~the~~restricts ~~financial~~Great ~~markets~~Plains Energy, ~~including~~without ~~declines~~Westar's inconsent, from making certain acquisitions and taking other specified actions until the ~~price~~anticipated ofmerger occurs or the Amended Merger Agreement terminates. These restrictions may prevent Great Plains Energy ~~common~~from ~~stock~~pursuing ~~due~~otherwise toattractive ~~the~~business ~~fact~~opportunities ~~that~~and ~~current~~making ~~prices~~other ~~may~~changes ~~reflect~~to aits ~~market~~business ~~assumption~~prior ~~that~~to completion of the anticipated merger ~~will~~or betermination ~~completed;~~of the Amended Merger Agreement.

• having to pay certain significant costs relating to the merger, including, in certain circumstances, a termination fee; and

• the attention of Great Plains Energy will have been diverted to the merger rather than Great Plains Energy's own operations and pursuit of other opportunities that could have been beneficial to Great Plains Energy.

Each of Great Plains Energy and Westar will incur significant transaction and merger-related costs in connection with the merger.

Great Plains Energy and Westar have incurred, and expect to continue to incur, costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the merger. Additional unanticipated costs may be incurred in the integration of the businesses of Great Plains Energy and Westar. Although Great Plains Energy and Westar expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction, merger-related and restructuring costs over time, any net benefit may not be achieved in the near term, or at all.

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~~Great~~Failure ~~Plains~~to ~~Energy~~complete ~~may~~the beanticipated ~~unable~~merger, toor ~~obtain~~significant delays in completing the anticipated ~~combination~~merger, ofcould ~~financing~~negatively oraffect the ~~necessary~~trading ~~amount~~price of ~~financing~~Great toPlains ~~pay~~Energy common stock and the ~~cash~~future ~~portion~~business and financial results of ~~the~~Great ~~merger~~Plains ~~consideration~~Energy.

~~Great~~Completion ~~Plains~~of ~~Energy~~the ~~intends~~anticipated tomerger ~~finance~~is ~~the~~not ~~cash~~assured ~~portion~~and ofis ~~the~~subject ~~merger~~to ~~consideration~~risks, ~~with~~including athe ~~combination~~risks ofthat ~~cash~~approval onof ~~hand and~~ the ~~proceeds~~anticipated ~~from~~merger ~~the~~by ~~issuance~~governmental ofagencies ais ~~combination~~not ofobtained ~~common~~or ~~stock,~~that ~~mandatory~~other ~~convertible~~closing ~~preferred~~conditions ~~stock~~are ~~and~~not ~~debt securities~~satisfied. InIf ~~October~~the ~~2016,~~anticipated ~~Great~~merger ~~Plains~~is ~~Energy~~not completed, ~~registered~~or ~~public~~if ~~offerings~~there ofare ~~60.5~~significant ~~million~~delays ~~shares~~in ofcompleting ~~common~~the ~~stock~~anticipated ~~for~~merger, ~~total~~it ~~net~~could ~~proceeds~~negatively ofaffect ~~$1.55~~the ~~billion~~trading ~~and~~price ~~17.3~~of ~~million~~Great ~~depositary~~Plains ~~shares~~Energy ~~each~~common ~~representing~~stock aand ~~1/20th~~its ~~interest~~future inbusiness aand ~~share~~financial ofresults, and Great Plains Energy's ~~7.00%~~will ~~Series~~be ~~B Mandatory~~subject ~~Convertible~~to ~~Preferred~~several ~~Stock~~risks, ~~(Series~~including Bthe ~~Preferred Stock) for total net proceeds of $836.2 million.~~following:

To• ~~the extent the proceeds from~~ Great Plains Energy's ~~remaining expected securities issuances are not available on or before the closing date of the merger, or are in insufficient amounts, Great Plains Energy~~ may ~~use~~be ~~borrowings~~liable ~~under~~for ~~its~~damages ~~bridge term loan facility~~ to ~~fund~~Westar ~~the remaining portion of the cash consideration for the merger. However, the availability of funds~~ under the ~~bridge~~terms ~~term~~and ~~loan facility is subject to certain~~ conditions ~~including, among others, the absence~~ of ~~a material adverse effect with respect to Westar and its subsidiaries, taken as a whole,~~ the ~~accuracy~~Amended ofMerger ~~certain representations and warranties and the absence of certain defaults with respect to indebtedness of Great Plains Energy and its subsidiaries.~~Agreement;

If• ~~Great~~negative ~~Plains~~reactions ~~Energy~~from isthe ~~required~~financial ~~to obtain more debt financing than anticipated~~markets, ~~whether~~including ~~through~~declines in the ~~issuance~~price of ~~debt~~Great ~~securities~~Plains orEnergy ~~borrowings~~common ~~under~~stock ~~the~~due ~~bridge~~to ~~term loan facility,~~ the ~~required~~fact ~~regulatory~~that ~~approvals~~current toprices ~~complete the merger~~ may bereflect ~~more~~a ~~difficult~~market toassumption ~~obtain~~that ~~and~~ the ~~combined~~anticipated ~~company's~~merger ~~credit~~will ~~ratings and ability to service its debt could~~ be ~~adversely~~completed; ~~affected.~~and

~~Current~~• ~~Great~~having ~~Plains~~to ~~Energy~~pay ~~shareholders~~certain ~~will~~significant ~~have~~costs arelating ~~reduced~~to ~~ownership and voting interest after~~ the anticipated merger, ~~and~~including, ~~will~~in ~~exercise~~certain ~~less~~circumstances, ~~influence~~a ~~over~~termination ~~management of the combined company~~fee.

~~Great~~Failure ~~Plains Energy has already issued approximately 60.5 million shares of common stock in order~~ to ~~raise~~successfully ~~proceeds~~combine tothe ~~fund~~businesses ~~a portion~~ of ~~the cash consideration for the merger. Furthermore,~~ Great Plains Energy ~~issued~~and Westar in ~~October~~the ~~2016~~expected ~~and~~time ~~also~~frame ~~expects~~may toadversely ~~issue~~affect at the ~~time~~future results of the ~~merger~~combined company, ~~shares~~and, ~~of mandatorily convertible preferred stock~~consequently, ~~which shall ultimately convert into common stock. In connection with~~ the ~~completion~~value of the ~~merger,~~Holdco ~~Great~~common ~~Plains~~stock ~~Energy~~that ~~will also issue up to approximately 45 million shares of~~ Great Plains Energy ~~common stock to Westar~~ shareholders inreceive ~~connection~~as ~~with~~ the ~~transactions contemplated by the~~ merger ~~agreement~~consideration.

~~Great~~The ~~Plains~~success ~~Energy~~of ~~shareholders~~the ~~currently~~anticipated ~~have~~merger ~~the~~will ~~right~~depend, toin ~~vote~~part, ~~for~~on the ~~Company's~~ability ~~board~~ of ~~directors~~the combined company to realize the anticipated benefits and onefficiencies ~~other~~from ~~matters~~combining ~~affecting~~the businesses of Great Plains Energy and Westar. ~~When~~To ~~the~~realize ~~merger~~these ~~occurs~~anticipated benefits, ~~each~~the ~~Westar~~businesses ~~shareholder~~must ~~that~~be ~~receives~~successfully ~~shares~~combined. If ofthe ~~Great~~combined ~~Plains~~company ~~Energy~~is ~~common~~not ~~stock~~able ~~will~~to ~~become~~achieve athese ~~shareholder~~objectives, ofor ~~Great~~is ~~Plains~~not ~~Energy~~able ~~with~~to achieve these objectives on a ~~percentage~~timely ~~ownership~~basis, the anticipated benefits of the ~~combined~~transactions ~~company~~may ~~that~~not isbe ~~significantly~~realized ~~smaller~~fully ~~than~~or at all. In addition, the ~~shareholder's~~actual ~~percentage~~integration ~~ownership~~may result in ~~Westar.~~additional ~~Correspondingly~~and unforeseen expenses, ~~each~~which ~~Great~~could ~~Plains~~reduce ~~Energy~~the ~~shareholder~~anticipated ~~will~~benefits ~~remain~~of the anticipated merger. These integration difficulties could result in a ~~shareholder~~decline in the market value of ~~Great~~Holdco ~~Plains~~common ~~Energy~~stock ~~with~~and, consequently, result in a ~~percentage~~decline ~~ownership~~in the market value of the ~~combined~~Holdco ~~company~~common stock that isGreat ~~smaller~~Plains ~~than~~Energy ~~the~~shareholders ~~shareholder's~~receive ~~percentage~~as ~~ownership~~part of ~~Great~~the ~~Plains~~merger ~~Energy~~consideration ~~prior~~and continue to hold following consummation of the anticipated merger.

~~As a result of these securities issuances and reduced ownership percentages, current~~ Great Plains Energy ~~shareholders~~ will ~~have~~incur ~~less~~significant ~~influence~~transaction ~~on the management~~ and ~~policies~~other ofmerger-related ~~the~~costs ~~combined~~in ~~company~~connection ~~than they now have~~ with ~~respect~~the toanticipated ~~Great Plains Energy~~merger.

~~The~~Great ~~market~~Plains ~~price~~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 ~~common~~and ~~stock~~Westar. Any ~~after~~net benefit from the ~~merger~~anticipated elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may not be ~~affected~~achieved byin ~~factors~~the ~~different~~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 ~~those~~the ~~affecting~~merger, or the ~~shares~~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 ~~Westar~~the ~~currently~~future market value of Holdco common stock that Great Plains Energy shareholders receive as merger consideration, could be adversely impacted.

~~Upon~~The completion of the merger, the businesses of the combined company will differ from those of Great Plains Energy and Westar prior to the merger in important respects and, accordingly, the results of operations of the combined company and the market price of ~~Great Plains Energy~~Holdco's ~~shares of~~ common stock ~~following~~after the anticipated merger may be affected by factors different from those ~~currently~~ affecting the ~~independent~~shares ~~results~~ of ~~operations of~~ Great Plains Energy ~~and~~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.

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~~There~~Each ~~are~~of ~~risks~~Westar ~~associated~~and ~~with~~Great Plains Energy and their respective subsidiaries has substantial amounts of indebtedness. Consequently, the ~~mandatory~~combined ~~convertible~~company ~~preferred~~will ~~stock~~have ~~Great~~substantial ~~Plains~~indebtedness ~~Energy~~following ~~expects~~the toanticipated ~~issue~~merger. As ~~pursuant~~a result, it may be difficult for the combined company to pay or refinance its ~~stock~~debts ~~purchase~~or ~~agreement~~take ~~with~~other ~~OMERS~~actions, and the combined company may need to ~~finance~~divert aits ~~portion~~cash offlow ~~the~~from ~~merger~~operations ~~consideration~~to debt service payments.

InThe ~~connection~~combined ~~with~~company's ~~the~~debt ~~Merger~~service ~~Agreement,~~obligations ~~Great Plains Energy entered into a stock purchase agreement~~ with ~~OCM~~respect ~~Credit~~to ~~Portfolio~~this LPindebtedness ~~(OMERS)~~could ~~pursuant~~have toan ~~which~~adverse ~~Great~~impact ~~Plains~~on ~~Energy~~its ~~will~~earnings ~~issue~~ and ~~sell~~cash toflows ~~OMERS~~for ~~$750~~as ~~million~~long ofas ~~7.25% Mandatory Convertible Preferred Stock, Series A (Series A Preferred Stock) upon~~ the ~~consummation~~indebtedness ~~of the merger. Upon entering into the stock purchase agreement, Great Plains Energy paid OMERS $15 million, which~~ is ~~not refundable in the event the merger is not consummated~~outstanding. The terms of the Series A Preferred Stock will provide that if Great Plains Energy misses two quarterly dividend payments, Great Plains Energy would be required to appoint two representatives designated by OMERS to the Great Plains Energy Board. In addition, OMERS' non-U.S. based ownership could potentially complicate obtaining the required regulatory approvals for the merger.

The combined company's indebtedness ~~following~~could ~~the~~also ~~merger~~have ~~will~~important beconsequences ~~greater~~to ~~than~~holders ~~Great~~of ~~Plains~~Holdco ~~Energy's~~common ~~existing indebtedness~~stock. AsFor ~~a result~~example, it ~~may be more 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.~~could:

In connection with the merger, Great Plains Energy will incur additional debt to pay the cash portion of the merger consideration and transaction expenses and the indebtedness of the combined company will include Westar's outstanding debt. The combined company's debt service obligations with respect to this increased indebtedness could have an adverse impact on its earnings and cash flows, which after the merger would include the earnings and cash flows of Westar, for as long as the indebtedness is outstanding.

The combined company's increased indebtedness could also have important consequences to holders of Great Plains Energy securities. 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;

• limit the combined company's flexibility to pursue other strategic opportunities or react to changes in its business and the industry in which it operates and, consequently, place the combined company at a competitive disadvantage to its competitors with less debt;


•	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 (after the announcement of the merger, Moody's Investors Service placed its long-term ratings of Great Plains Energy on review for downgrade and Standard & Poor's Ratings Services revised the outlook of Great Plains Energy, KCP&L and GMO from stable to negative); or

• ~~result~~require inthat ~~higher~~additional ~~interest expense in the event of increases in interest rates since some of Great Plains Energy's borrowings are~~terms, ~~and~~conditions ~~will~~or ~~continue~~covenants to be, atplaced ~~variable~~on ~~rates of interest; or~~Holdco.

•Based ~~require~~upon ~~that~~current ~~additional~~levels ~~terms~~of operations, ~~conditions~~Holdco orexpects ~~covenants~~to be ~~placed~~able to generate sufficient cash on ~~Great~~a ~~Plains~~consolidated ~~Energy~~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.

~~Based~~The ~~upon~~anticipated ~~current~~benefits ~~levels~~ of ~~operations,~~combining ~~Great Plains Energy expects to be able to generate sufficient cash on a consolidated basis to make all of~~ the ~~principal~~companies and interest payments when such payments are due under Great Plains Energy's and its current subsidiaries' existing credit facilities, indentures and other instruments governing their outstanding indebtedness, and under the indebtedness of Westar and its subsidiaries that may ~~remain~~not ~~outstanding after the merger; but there can~~ be ~~no assurance that the combined company will be able to repay or refinance such borrowings and obligations~~realized.

17Great 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:

~~Table~~• 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 ~~Contents~~ the merger;

Great Plains Energy is committed to maintaining its credit ratings. In order to maintain these credit ratings, Great Plains Energy may consider it appropriate to reduce the amount of indebtedness outstanding following the merger. This may be accomplished in several ways, including issuing additional shares of common stock or securities convertible into shares of common stock, reducing discretionary uses of cash or a combination of these and other measures. Issuances of additional shares of common stock or securities convertible into shares of common stock would have the effect of diluting the ownership percentage that current Great Plains Energy shareholders and former Westar shareholders hold in the combined company and might reduce the reported earnings per share. Any potential issuances could be adversely impacted by movements in the overall equity markets or the utility sector of the market and ultimately impact any offering price. The specific measures that Great Plains Energy may ultimately decide to use to maintain or improve its credit ratings and their timing will depend upon a number of factors, including market conditions and forecasts at the time those decisions are made.

The combined company will record goodwill that could become impaired and adversely affect the combined company's operating results.

The merger will be accounted for as an acquisition by Great Plains Energy in accordance with Generally Accepted Accounting Principles (GAAP). Under the acquisition method of accounting, the assets and liabilities of Westar will be recorded, as of completion, at their respective fair values and added to those of Great Plains Energy. The reported financial condition and results of operations of Great Plains Energy issued after completion of the merger will reflect Westar balances and results after completion of the merger, but will not be restated retroactively to reflect the historical financial position or results of operations of Westar for periods prior to the merger.

Under the acquisition method of accounting, the total purchase price will be allocated to Westar's tangible assets and liabilities and identifiable intangible assets based on their fair values as of the date of completion of the merger. The fair value of Westar's tangible and intangible assets and liabilities subject to the rate setting practices of their regulators approximate their carrying values. The excess of the purchase price over those fair values will be recorded as goodwill. Great Plains Energy expects that the merger will result in the creation of goodwill based upon the application of the acquisition method of accounting. To the extent the value of goodwill or intangibles becomes impaired, the combined company may be required to incur material charges relating to such impairment. Such a potential impairment charge could have a material impact on the combined company's operating results.

The anticipated benefits of combining Great Plains Energy and Westar may not be realized.

Great Plains Energy and Westar entered into the Merger Agreement with the expectation that the merger would result in various benefits, including, among other things, increased operating efficiencies. Although Great Plains Energy and Westar expect to achieve the anticipated benefits of the merger, achieving them is subject to a number of uncertainties, including:

• whether United States federal and state public utility, antitrust and other regulatory authorities whose approval is required to complete the 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.

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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 ~~common~~shareholders ~~stock~~receive upon the consummation of the anticipated merger.

Great Plains Energy currently anticipates that the anticipated merger will be ~~neutral~~accretive to Great Plains Energy's forecasted earnings per share on a ~~stand-alone~~standalone basis. This inexpectation ~~the~~is ~~first~~based ~~full~~on ~~calendar~~preliminary ~~year~~estimates, ~~after~~including ~~closing~~with ~~increasing~~respect to ~~approximately~~the aanticipated 10timing ~~percent~~and ~~accretion~~amount inof ~~the~~common ~~third~~stock ~~full~~repurchases ~~calendar~~following ~~year~~the ~~after~~ closing~~. This~~ ~~expectation~~of isthe ~~based~~merger, onany ~~preliminary~~of ~~estimates,~~ 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 ~~Great~~the ~~Plains~~combined ~~Energy~~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 ~~Great~~Holdco ~~Plains Energy's~~ 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 ~~market~~price ~~value~~ of ~~Great~~Holdco ~~Plains Energy~~ common stock ~~could~~that ~~decline~~Great ifPlains ~~large~~Energy's ~~amounts~~shareholders ofreceive ~~its~~upon ~~common~~the ~~stock~~consummation ~~are~~of ~~sold~~the inanticipated ~~anticipation~~merger ofmay orexperience ~~following the merger~~volatility.

Following the consummation of the anticipated merger, ~~shareholders~~the price of ~~Great~~Holdco ~~Plains~~common ~~Energy~~stock ~~and~~may ~~former~~be ~~shareholders~~volatile. Some of ~~Westar~~the ~~will~~factors ~~own~~that ~~interests~~could inaffect athe ~~combined~~price ~~company~~of ~~operating~~Holdco ancommon ~~expanded~~stock ~~business~~are ~~with~~quarterly ~~more~~increases ~~assets~~or ~~and~~decreases ain ~~different~~revenue ~~mix~~or ofearnings, ~~liabilities. Current~~changes ~~shareholders~~in ofrevenue ~~Great~~or ~~Plains~~earnings ~~Energy~~estimates ~~and~~by ~~Westar~~the ~~may~~investment ~~not~~community, ~~wish~~the toability ~~continue~~of Holdco to ~~invest~~implement inits ~~the~~integration ~~combined~~strategy ~~company,~~and orto ~~may~~realize ~~wish~~the toexpected ~~reduce~~synergies ~~their~~and ~~investment~~other inbenefits from the ~~combined~~anticipated ~~company,~~merger inand ~~order~~speculation toin ~~comply~~the ~~with~~press ~~institutional~~or ~~investing~~investment ~~guidelines,~~community toabout ~~increase~~Holdco's ~~diversification~~financial condition or toresults ~~track~~of ~~any~~operations. General ~~rebalancing~~market ofconditions ~~stock~~and ~~indices~~U.S. ineconomic ~~which~~factors ~~Great~~and ~~Plains~~political ~~Energy~~events orunrelated ~~Westar~~to ~~common~~the ~~stock~~performance isof orHoldco ~~was~~may ~~included~~also affect its stock price. IfFor these reasons, ~~before~~shareholders orshould ~~following~~not ~~the~~rely ~~merger,~~on ~~large~~recent ~~amounts~~trends in the price of Great Plains Energy common stock ~~are~~to ~~sold,~~predict the future price of ~~its~~Holdco's common stock ~~could~~or ~~decline~~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~~

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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 ~~expected to be~~ substantial ~~over the next several years~~ 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

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~~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.

Tax Reform Risk:

Changes in federal income tax policy could negatively impact the Companies.

The Companies are impacted by the U.S. federal income tax policy, including corporate income tax laws. Both the new federal administration and the Republicans in the House of Representatives have made public statements in support of comprehensive tax reform, including significant changes in the U.S. corporate income tax laws. These proposed changes include, among other things, a reduction in the corporate income tax rate, the immediate deductibility of 100% of capital expenditures, and the elimination of the interest expense deduction. The Companies are currently unable to predict whether these reform discussions will result in any significant changes to existing tax laws, or if any such changes would have a cumulative positive or negative impact on the Companies. However, it is possible that changes in the U.S. federal income tax laws could have a material adverse effect on the Companies' results of operations, financial position and cash flows.

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.

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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 1917 million tons and 1513 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, ~~in December 2015~~ the Paris Agreement was adopted in December 2015 by nearly 200 countries and became effective in November 2016 ~~as the threshold of at least 55 countries representing at least 55% of global greenhouse gas emissions have joined it through ratification~~. The Paris Agreement does not result in any new, legally binding obligations on the ~~United~~U.S. ~~States~~ to meet a particular greenhouse gas emissions target, but establishes a framework for international cooperation on climate change. ~~Other~~ In ~~international~~June ~~agreements~~2017, ~~legally~~U.S. ~~binding~~President onDonald ~~the~~Trump ~~United~~announced ~~States~~the ~~may~~U.S. bewould ~~reached~~withdraw infrom the ~~future~~Paris Agreement. ~~Such~~ Under ~~new~~the ~~laws,~~rules ~~regulations~~of orthe ~~treaties~~Paris ~~could~~Agreement, ~~mandate~~the ~~new~~earliest orany ~~increased~~country ~~requirements~~can towithdraw ~~control~~is orNovember ~~reduce~~2020. Other ~~the~~international ~~emission~~agreements oflegally ~~greenhouse~~binding ~~gases,~~on ~~such~~the asU.S. ~~CO2,~~may ~~which~~be ~~are~~reached ~~created~~ in the ~~combustion~~future. Greenhouse ofgas ~~fossil~~legislation ~~fuels. These~~has ~~requirements~~the ~~could~~potential ~~include,~~of ~~among~~having ~~other~~significant ~~things,~~financial ~~taxes~~and oroperational ~~fees~~impacts on ~~fossil~~Great ~~fuels~~Plains orEnergy ~~emissions~~and KCP&L; however, ~~cap~~the ultimate financial and ~~trade~~operational ~~programs,~~consequences ~~emission~~to ~~limits~~Great Plains Energy and ~~clean~~KCP&L orcannot ~~renewable~~be ~~energy~~determined ~~standards~~until such legislation is passed. In

The Environmental Protection Agency (EPA) has enacted various regulations regarding the reporting and permitting of greenhouse gases and has proposed other regulations under the existing Clean Air Act. The EPA has established thresholds for greenhouse gas emissions, defining when Clean Air Act permits under the New Source Performance Standards, New Source Review and Title V operating permits programs would be required for new or existing industrial facilities and when the installation of best available control technology would be required. 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. Specifically, the EPA translated those performance rates into a state goal measured in mass and rate based on each state’s generation mix. The states have the ability to develop their own plans for affected units to achieve either the performance rates directly or the state goals, with guidelines for the development, submittal and implementation of those plans. 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 United States Court of Appeals for the District of Columbia Circuit and any subsequent review by the U.S. Supreme Court if such review is sought. Compliance with the Clean Power Plan 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 pending litigation is known and/or the state plans to implement the Clean Power Plan are known. Additional federal and/or state legislation or regulation respecting greenhouse gas emissions may be proposed or enacted in the future. Requirements to reduce greenhouse gas emissions may cause the Companies to incur significant costs relating to their ongoing operations (such as for additional environmental control equipment, retiring and replacing existing generation, re-powering existing plants to utilize alternative fuel or selecting more costly generation alternatives), to procure emission allowance credits, or due to the imposition of taxes, fees or other governmental charges as a result of such emissions.20

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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 ~~regarding~~pursuant ~~protection~~to ofSection ~~aquatic~~316(b) ~~life~~of ~~from~~the ~~being~~Clean ~~killed~~Water orAct ~~injured~~regarding by cooling water intake structures pursuant to a court approved settlement. KCP&L’s 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.

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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. Future water permit renewals at KCP&L's Iatan Station and at GMO's Sibley and Lake Road Stations could also be impacted by the allowable amount of heat that can be contained in the returned water. Great Plains Energy and KCP&L cannot predict the outcome of these matters; however, while less significant outcomes are possible, these matters 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.

In September 2015, the EPA finalized a revision of the technology-based effluent limitations guidelines and standards regulation to make the existing controls on discharges from steam electric power plants more stringent. The final rule sets the first federal limits on the levels of toxic metals in wastewater that can be discharged from power plants. The new requirements for existing power plants would be phased in between 2018 and 2023.

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. The Companies principally use coal in generating electricity and dispose of CCRs in both on-site facilities and facilities owned by third parties. Current and future EPA 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.

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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.

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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' ~~capital requirements are expected to be substantial over the next several years. 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 ~~Standard~~ S&P ~~Poor's. Following~~Global ~~the announcement of the anticipated acquisition of Westar, Moody's Investors Service placed its long-term ratings on Great Plains Energy on review for downgrade and Standard & Poor's~~ Ratings ~~Services revised the outlook on Great Plains Energy, KCP&L and GMO from stable to negative~~. 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 ~~and on a portion of Great Plains Energy's debt~~ 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 ~~United~~U.S. ~~States~~ 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 ~~United~~U.S. ~~States~~ or abroad, fluctuations in the price of oil, geopolitical instability or other unforeseen events both in the ~~United~~U.S. ~~States~~ 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.~~22

~~Great~~Table ~~Plains Energy has issued guarantees covering $96.6 million~~ of GMO's long-term debt. Great Plains Energy also guarantees GMO's commercial paper program. At December 31, 2016, GMO had $201.9 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.Contents

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.

24In 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.

~~Table~~Market ofperformance, ~~Contents~~ increased employee retirements and retirement plan regulations could significantly impact retirement plan funding requirements and associated cash needs and expenses.

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. In addition, if preferred stock dividends are not declared and paid when scheduled, Great Plains Energy could not declare or pay common stock dividends or purchase any common shares. If the unpaid preferred stock dividends are in arrears for six or more quarters, whether or not consecutive, the preferred shareholders will be entitled to name two directors to the Great Plains Energy Board of Directors. Furthermore, pursuant to settlement agreements with certain intervenors in Missouri that are pending MPSC approval with respect to the merger, Great Plains Energy agreed that in the event that KCP&L's or GMO's credit ratings are downgraded below investment grade as a result of the merger, then KCP&L and GMO would be restricted from paying a dividend to Great Plains Energy unless approved by the MPSC or until their credit ratings are restored to investment grade. 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 each company to maintain a consolidated indebtedness to consolidated total capitalization ratio of not more than 0.65 to 1.00, except as the ratio relates to Great Plains Energy, which was amended in June 2016. See Note 11 to the consolidated financial statements for additional information. Great Plains Energy's Board of Directors 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. While the corporate and regulatory restrictions and financial covenants discussed above are not expected to affect the Companies' ability to pay dividends at the current level in the foreseeable future, 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 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.~~23

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~~claims~~hedge ~~arising~~fail ~~from~~to ~~actions~~materialize. In ofthe ~~KCP&L~~absence ~~employees~~of inactively ~~operating~~quoted ~~GMO's~~market ~~properties~~prices and ~~providing~~pricing ~~other~~information ~~services~~from toexternal ~~GMO. KCP&L's~~sources, ~~claims~~the ~~for~~valuation ~~reimbursement~~of ~~for~~these ~~services~~financial ~~provided~~instruments tocan ~~GMO~~involve ~~are~~management's ~~unsecured~~judgment ~~and~~or ~~rank~~the ~~equally~~use ~~with other unsecured obligations~~ of ~~GMO~~estimates. ~~KCP&L's~~ ~~ability~~As toa beresult, ~~reimbursed~~changes ~~for~~in the ~~costs~~underlying ~~incurred~~assumptions ~~for~~or ~~the~~use ~~benefit~~ of ~~GMO~~alternative ~~depends~~valuation onmethods ~~the~~could ~~financial~~affect ~~ability~~the ofreported ~~GMO~~fair tovalue ~~make~~of ~~such~~these ~~payments~~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.

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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;

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•	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.

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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.

27KCP&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.

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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 recovered in a timely way, 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.

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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.

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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

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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 ~~RTO's~~RTOs or ~~ISO's~~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.

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ITEM 2. PROPERTIES

Electric Utility Generation Resources

				Year	Estimated ~~2017~~2018			Primary
	Unit	Location		Completed	MW Capacity			Fuel
Base Load	Iatan No. 2	Missouri		2010		482	(a)	Coal
	Wolf Creek	Kansas		1985		~~549~~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		9388		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,~~450~~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			~~172~~173	(a)	Coal
	Sibley Nos. 1, 2 and 3	Missouri	1960, 1962, 1969			448		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,~~074~~033
Total Great Plains Energy						6,~~524~~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.

(d) Accredited capacity is 2931 MW pursuant to SPP reliability standards.

KCP&L owns 50% of La Cygne ~~Nos~~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 ~~Nos~~No. 1 and No. 2 Units and 8% of Jeffrey Energy Center ~~Nos~~No. 1, No. 2 and No. 3 Units.

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Electric Utility Transmission and Distribution Resources

Electric ~~utility~~Utility's electric transmission system interconnects with systems of other utilities for reliability and to permit wholesale transactions with other electricity suppliers. Electric ~~utility~~Utility has approximately 3,600 circuit miles of transmission lines, 15,600 circuit miles of overhead distribution lines and 7,~~100~~400 circuit miles of underground distribution lines in Missouri and Kansas. Electric ~~utility~~Utility has all material franchise rights necessary to sell electricity within its retail service territory. Electric ~~utility~~Utility's transmission and distribution systems are ~~continuously~~routinely monitored for adequacy to meet customer needs. Management believes the current systems are adequate to serve customers.

Electric Utility General

Electric ~~utility~~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~~Utility's service centers, electric substations and a portion of its transmission and distribution systems are located on property owned or leased by ~~electric~~Electric ~~utility~~Utility. Electric ~~utility~~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~~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 $~~510~~479.5 million were outstanding at December 31, ~~2016~~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 $54.76 million were outstanding at December 31, ~~2016~~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.

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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 2116, ~~2017~~2018, Great Plains Energy's common stock was held by 1413,~~886~~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
	2016				2015				Dividends Declared
	2017				2016				Dividends Declared
Quarter	High		Low		High		Low		~~2017~~2018			~~2016~~2017		~~2015~~2016
First	$	3229.2624	$	26.3487	$	3032.0626	$	2526.8034	$	0.275	(b)	$	0.~~2625~~275	$	0.~~245~~2625
Second	3229.6892		2827.3586		2732.5268		2428.1635					0.~~2625~~275		0.~~245~~2625
Third	31.2258		2629.5314		2731.3522		2426.2153					0.~~2625~~275		0.~~245~~2625
Fourth	2834.6070		2630.2055		28.0260		2526.7420					0.275		0.~~2625~~275

^(a) Based on closing stock prices.

(b) Declared February 1413, ~~2017~~2018, and payable March 20, ~~2017~~2018, to shareholders of record as of February 27, ~~2017~~2018.

Dividend Restrictions

For information regarding dividend restrictions, see Note 13 to the consolidated financial statements.

Purchases of Equity Securities

~~Great~~The ~~Plains~~following ~~Energy~~table ~~had~~provides noinformation regarding purchases ofby ~~its~~Great ~~equity~~Plains ~~securities~~Energy ~~during~~for the three months ended December 31, ~~2016~~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.

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ITEM 6. SELECTED FINANCIAL DATA

Year Ended December 31	~~2016~~2017			~~2015~~2016		~~2014(a)~~2015		~~2013~~2014(a)		~~2012~~2013(a)
Great Plains Energy	(dollars in millions except per share amounts)
Operating revenues	$	2,~~676~~708		$	2,~~502~~676	$	2,~~568~~502	$	2,~~446~~568	$	2,~~310~~446
Net income	$	290		$	213	$	243	$	250	$	200
Net income (loss)	$	(106	)	$	290	$	213	$	243	$	250
Basic earnings per common share	$	1.61		$	1.37	$	1.57	$	1.62	$	1.36
Basic and diluted earnings (loss) per common share	$	(0.67	)	$	1.61	$	1.37	$	1.57	$	1.62
Diluted earnings per common share	$	1.61		$	1.37	$	1.57	$	1.62	$	1.35
Total assets at year end (a)	$	12,458		$	13,570	$	10,739	$	10,453	$	9,770
Total assets at year end (a)	$	13,570		$	10,739	$	10,453	$	9,770	$	9,626
Total redeemable preferred stock, mandatorily
redeemable preferred securities and long-
term debt (including current maturities) (a)	$	3,~~747~~664		$	3,~~746~~747	$	3,~~481~~746	$	3,~~492~~481	$	23,~~999~~492
Cash dividends per common share	$	1.~~0625~~10		$	01.~~9975~~0625	$	0.~~935~~9975	$	0.~~8825~~935	$	0.~~855~~8825
SEC ratio of earnings to combined fixed charges and
preferred dividend requirements	21.5466			2.5854		2.7258		2.7572		2.3175
KCP&L
Operating revenues	$	1,~~875~~891		$	1,~~714~~875	$	1,~~731~~714	$	1,~~671~~731	$	1,~~580~~671
Net income	$	~~225~~180		$	~~153~~225	$	~~162~~153	$	~~169~~162	$	~~142~~169
Total assets at year end (a)	$	8,~~058~~124		$	78,~~815~~058	$	7,~~495~~815	$	67,~~821~~495	$	6,~~689~~821
Total redeemable preferred stock, mandatorily
redeemable preferred securities and long-
term debt (including current maturities) (a)	$	2,~~565~~582		$	2,~~563~~565	$	2,~~297~~563	$	2,~~294~~297	$	12,~~887~~294
SEC ratio of earnings to fixed charges	3.3005			23.5730		2.6957		2.7669		2.5876

(a) ~~Adjusted~~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 ~~and a time deposit to be used to fund a portion of the cash consideration for the anticipated acquisition of Westar~~.

Great Plains Energy's sole reportable business segment is ~~electric~~Electric ~~utility~~Utility. Electric ~~utility~~Utility consists of KCP&L, a regulated utility, GMO's regulated utility operations and GMO Receivables Company. Electric ~~utility~~Utility has approximately 6,500 MWs of owned generating capacity and engages in the generation, transmission, distribution and sale of electricity to approximately ~~855~~867,~~700~~100 customers in the states of Missouri and Kansas. Electric ~~utility~~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 ~~acquisition~~merger ofwith Westar.

Anticipated ~~Acquisition~~Merger ofwith Westar Energy, Inc.

On ~~May~~July 299, ~~2016~~2017, Great Plains Energy entered into aan Amended Merger Agreement by and among Great Plains Energy, Westar, ~~and~~Holdco, ~~from~~ and ~~after~~Merger ~~its~~Sub. Pursuant ~~accession~~ to the Amended Merger Agreement, ~~Merger~~subject ~~Sub. Pursuant~~ to the ~~Merger~~satisfaction or waiver of certain conditions, Great Plains Energy will merge with and into Holdco, with Holdco surviving such

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~~Agreement~~merger, ~~subject~~and ~~to the satisfaction or waiver of certain conditions,~~ Merger Sub will merge with and into Westar, with Westar ~~continuing as the~~ surviving ~~corporation~~such merger. Upon closing, pursuant to the Amended Merger Agreement, ~~Great~~each ~~Plains~~outstanding ~~Energy will acquire Westar for (i) $51.00 in cash and (ii) a number, rounded to the nearest 1/10,000 of a~~ share, of Great Plains Energy's and Westar's common stock ~~equal~~will tobe anconverted ~~exchange~~into ~~ratio~~the ~~that~~right ~~may~~to ~~vary~~receive ~~between~~ 0.~~2709~~5981 and 01.~~3148~~0, ~~based~~respectively, ~~upon~~of ~~the~~validly ~~volume-weighted~~issued, ~~average~~fully ~~price~~paid ~~per~~and ~~share~~nonassessable shares of ~~Great Plains Energy~~ common stock, ~~during~~no apar 20value, ~~consecutive~~of ~~full~~Holdco. Following ~~trading~~the ~~day~~mergers, ~~period~~Holdco, ~~ending~~with ona ~~(and~~new ~~including)~~name ~~the~~that ~~third~~has ~~trading~~yet ~~day immediately prior~~ to ~~the~~be ~~closing~~established, ~~date~~will ofbe the ~~merger,~~parent ~~for each share~~ of ~~Westar~~Great ~~common~~Plains ~~stock~~Energy's ~~issued~~direct ~~and~~subsidiaries, ~~outstanding~~including ~~immediately prior to the effective time of the merger~~KCP&L, ~~with~~and Westar ~~becoming a wholly owned subsidiary of Great Plains Energy~~.

~~Great~~The ~~Plains~~anticipated ~~Energy's~~merger ~~anticipated~~has ~~acquisition~~been ofstructured ~~Westar~~as ~~was~~a ~~unanimously~~merger ~~approved~~of byequals ~~the~~in ~~Great~~a ~~Plains~~tax-free ~~Energy~~exchange ~~Board~~of ~~and~~shares ~~the~~that ~~Westar~~involves ~~Board,~~no ~~has~~premium ~~received~~paid ~~the~~or ~~required~~received ~~approvals~~with ofrespect ~~each~~to ofeither Great Plains Energy's ~~and~~or Westar's. Following ~~shareholders~~the ~~and~~completion ~~The~~of ~~Federal~~the ~~Communications~~anticipated ~~Commission (FCC)~~merger, ~~and~~Westar ~~has~~shareholders ~~received~~will ~~early~~own ~~termination~~approximately of52.5 ~~the~~percent ~~waiting~~and ~~period~~Great ~~under~~Plains ~~the~~Energy ~~HSR~~shareholders ~~Act~~will ~~with~~own ~~respect~~approximately ~~to antitrust review~~47.5 ~~The~~percent ~~anticipated~~of ~~acquisition remains subject to regulatory approvals from KCC,~~ the ~~MPSC,~~combined ~~NRC and FERC; as well as other customary conditions~~company.

~~On October 3, 2016,~~ Great Plains Energy's ~~completed~~anticipated ~~registered~~merger ~~public~~with ~~offerings~~Westar ofwas ~~60.5~~unanimously ~~million~~approved ~~shares~~by ofthe ~~common~~Great ~~stock~~Plains ~~for~~Energy ~~total~~Board ~~net~~and ~~proceeds~~Westar Board of ~~$1.55~~Directors, ~~billion~~has ~~and~~received ~~17.3~~the ~~million~~approvals ~~depositary~~of ~~shares~~ each ~~representing a 1/20th interest in a share~~ of Great Plains Energy's ~~Series~~and BWestar's ~~Preferred~~shareholders ~~Stock~~and ~~for~~has ~~total~~received ~~net~~early ~~proceeds~~termination of ~~$836.2~~the ~~million~~waiting period under the HSR Act with respect to antitrust review. The ~~proceeds~~anticipated ~~from~~merger ~~these~~remains ~~offerings~~subject ~~will~~to beregulatory ~~used~~approvals tofrom ~~fund~~KCC, athe ~~portion~~MPSC, ofNRC, ~~the~~FERC ~~cash~~and ~~consideration~~FCC; ~~for~~as ~~the~~well ~~anticipated~~as ~~acquisition~~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's ~~2016~~had ~~earnings~~a loss available for common shareholders ~~increased~~of to $~~273~~143.5 million or $10.6167 per share ~~from~~in 2017 compared to earnings of $~~211~~273.45 million or $1.3761 per share in ~~2015~~2016. This ~~driven~~decrease ~~primarily~~in byearnings ~~new~~was ~~retail~~largely ~~rates~~driven ~~and~~by ~~cost~~a ~~recovery~~number ~~mechanisms;~~of ~~warmer~~non-recurring ~~weather;~~impacts adue ~~performance~~to ~~incentive~~the ~~for~~anticipated ~~energy~~merger ~~efficiency~~with ~~programs~~Westar ~~under~~and the ~~Missouri~~impacts ~~Energy~~of ~~Efficiency~~U.S. ~~Investment~~federal ~~Act~~income ~~(MEEIA)~~tax ~~and~~reform. The aspecific drivers of the decrease in ~~interest~~earnings ~~charges~~were lower gross margin; ~~partially~~higher ~~offset~~depreciation byexpense; a ~~decrease~~loss inon ~~weather-normalized~~the ~~retail~~settlement ~~demand;~~of ~~costs~~the to7.00% ~~achieve~~Series ~~the~~B ~~anticipated~~Mandatory ~~acquisition~~Convertible ofPreferred ~~Westar~~Stock (Series B Preferred Stock) dividend make-whole provisions; ana ~~increase~~loss inon ~~utility~~extinguishment ~~operating~~of ~~and~~debt ~~maintenance~~related ~~expense;~~to ~~depreciation~~the ~~and~~redemption ~~amortization~~of ~~expense~~Great ~~and~~Plains ~~general~~Energy's ~~taxes~~$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 ~~2016~~the ~~earnings~~2017 loss per share by $0.1526.

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 (MD&A).~~

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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 ~~and 2014~~, 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 ~~and $241.2 million and $1.57~~, 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 ~~acquisition~~merger ofwith Westar~~. Adjusted~~ ~~earnings (non-GAAP)~~ and ~~adjusted earnings per share (non-GAAP) excludes certain costs, expenses, gains, losses and~~ the ~~per~~initial ~~share~~impact ~~dilutive effect~~ of ~~equity issuances resulting from the anticipated acquisition~~U. ~~This information is intended to enhance an investor's overall understanding of results~~S. ~~Adjusted~~ ~~earnings~~federal ~~(non-GAAP)~~income ~~and~~tax ~~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~~reform. 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.

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.

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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):

		2016
Reconciliation of GAAP to Non-GAAP	Earnings (Loss)										Earnings (Loss) per Diluted Share
Reconciliation of GAAP to Non-GAAP						Earningsperdilutedshare
	2017				2016				2015		2017			2016			2015
	(millions, except per share amounts)	~~(millions, except per share amounts)~~
Earnings available for common shareholders		$	273.5			$	1.61
Earnings (loss) available for common shareholders	$	(143.5	)		$	273.5			$	211.4	$	(0.67	)	$	1.61		$	1.37
Costs to achieve the anticipated acquisition of Westar:
Costs to achieve the anticipated merger with Westar:
Operating expense, pre-tax (a)	31.8	~~34.2~~			34.2	~~0.22~~			—		0.21			0.22			—
Financing, pre-tax (b)	85.5	~~35.9~~			35.9	~~0.24~~			—		0.55			0.24			—
Mark-to-market impacts of interest rate swaps, pre-tax (c)	(12.1	~~(79.3~~	)	)	(79.3	~~(0.51~~	)	)	—		(0.08		)	(0.51		)	—
Interest income, pre-tax (d)	(22.8	~~(3.2~~	)	)	(3.2	~~(0.02~~	)	)	—		(0.15		)	(0.02		)	—
Income tax expense (e)		9.5				0.06
Loss on Series B Preferred Stock dividend make-whole provisions, pre-tax (e)	124.8				—				—		0.80			—			—
Preferred stock (f)		15.4				0.10
Loss on extinguishment of debt, pre-tax (f)	82.8				—				—		0.53			—			—
Dilutive impact of October 2016 share issuance (g)		N/A				0.15
Write-off of Series A deferred offering expenses, pre-tax (g)	15.0				—				—		0.10			—			—
Adjusted earnings (non-GAAP)		$	286.0			$	1.85
Income tax expense (benefit) (h)	(59.7		)		9.5				—		(0.37		)	0.06			—
Average Shares Outstanding
Preferred stock (i)	37.3				15.4				—		0.24			0.10			—
Shares used in calculating diluted earnings per common share		169.8
Impact of October 2016 share issuance (j)	N/A				N/A				N/A		(0.26		)	0.15			—
Adjustment for October 2016 share issuance (g)		(14.9)
Impact of U.S. federal income tax reform:
Shares used in calculating adjusted earnings per share (non-GAAP)		154.9
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 ~~acquisition~~merger ofwith Westar on the consolidated statements of comprehensive income (loss).

(b) Reflects fees ~~incurred~~for toa ~~finance~~bridge ~~the~~term ~~anticipated~~loan ~~acquisition~~facility ofand ~~Westar,~~interest ~~including~~on ~~fees~~Great ~~for~~Plains aEnergy's ~~bridge~~$4.3 ~~term~~billion ~~loan~~senior ~~facility,~~notes and are included in Interest charges on the consolidated statements of comprehensive income (loss).

(c) Reflects the mark-to-market ~~gain~~impacts onof interest rate swaps ~~entered into in connection with financing the anticipated acquisition of Westar~~ 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 anthe ~~income~~loss ~~tax~~on ~~effect~~the ~~calculated~~settlement atof athe ~~38.9%~~Series ~~statutory~~B ~~rate,~~Preferred ~~with~~Stock ~~the~~dividend ~~exception~~make-whole ofprovisions ~~certain~~and ~~non~~is included within Loss on Series B Preferred Stock dividend make-~~deductible~~whole ~~legal~~provisions ~~and~~on ~~financing~~the ~~fees.~~consolidated statements of comprehensive income (loss).

(f) Reflects ~~reductions~~the toloss ~~earnings~~on ~~available~~extinguishment ~~for~~of ~~common~~debt ~~shareholders~~due ~~related~~ to ~~preferred stock dividend requirements for~~ Great Plains Energy's ~~Series B Preferred Stock issued in October 2016 and the~~ redemption of ~~cumulative~~its ~~preferred~~$4.3 ~~stock~~billion insenior ~~August~~notes ~~2016, including the redemption premium,~~ and ~~are~~is included inwithin ~~Preferred~~Loss ~~stock~~on ~~dividend~~extinguishment ~~requirements~~of ~~and~~debt ~~redemption premium~~ on the consolidated statements of comprehensive income (loss).

(g) Reflects the ~~average~~write-off ~~share~~of ~~impact~~deferred offering fees as a result of ~~Great~~the ~~Plains~~termination ~~Energy's~~of ~~issuance~~the stock purchase agreement for $750 million of 607.525% ~~million~~Mandatory ~~shares~~Convertible ofPreferred ~~common~~Stock, ~~stock~~Series inA ~~October~~(Series ~~2016~~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.

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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 ~~the~~March ~~first quarter~~ of 2018.

ENVIRONMENTAL MATTERS

See Note 15 to the consolidated financial statements for information regarding environmental matters.

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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				2016
	Change in			Benefit				Pension
Actuarial assumption	Assumption			Obligation				Expense
				(millions)
Discount rate	0.5	%	increase		$	(86.1	)		$	(5.9	)
Rate of return on plan assets	0.5	%	increase		—				(3.4		)
Discount rate	0.5	%	decrease		96.9				6.1
Rate of return on plan assets	0.5	%	decrease		—				3.4

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 2016, Great Plains Energy's pension expense was $98.2 million under GAAP and $93.3 million for ratemaking. The impact on 2016 pension expense in the table above reflects the impact on GAAP pension costs. Under the

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~~Companies'~~The ~~rate~~following ~~agreements,~~table ~~any~~reflects ~~increase~~the orsensitivities ~~decrease~~associated inwith ~~GAAP~~a ~~pension~~0.5% ~~expense~~increase ~~would~~or ~~be deferred in~~ a ~~regulatory~~0.5% ~~asset~~decrease orin ~~liability~~key ~~for~~actuarial ~~future ratemaking treatment~~assumptions. ~~See~~Each ~~Note~~sensitivity 9reflects to the ~~consolidated~~impact ~~financial~~of ~~statements~~the ~~for~~change ~~additional~~based ~~information~~on ~~regarding~~a ~~the~~change ~~accounting~~in ~~for~~that ~~pensions~~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

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~~Electric ~~utility~~Utility's rate case filings; decisions in other regulatory proceedings, including decisions related to other companies that establish precedent on matters applicable to ~~electric~~Electric ~~utility~~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~~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~~Electric ~~utility~~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 is a two step process. See Note 1 to the consolidated financial statements for additional information regarding the Company's plans to adopt Accounting Standards Update (ASU) No. 2017-04 for its 2017 goodwill impairment test. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill, to identify potential impairment. If the carrying amount exceeds the fair value of the reporting unit, the second step of the test is performed, consisting of assignment of the reporting unit's fair value to its assets and liabilities to determine an implied fair value of goodwill, which is compared to the carrying amount of goodwill to determine the impairment loss, if any, to be recognized in the financial statements. 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, 2016. 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 (EBITDA), 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.

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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 2221 to the consolidated financial statements for additional information.

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GREAT PLAINS ENERGY RESULTS OF OPERATIONS

The following table summarizes Great Plains Energy's comparative results of operations.

	2016				2015				2014
		2017				2016				2015
	(millions)
Operating revenues	$	~~2,676.0~~$	2,708.2		$	~~2,502.2~~$	2,676.0		$	~~2,568.2~~$	2,502.2
Fuel and purchased power	~~(590.1~~	(608.6	)	)	~~(608.7~~	(590.1	)	)	~~(742.5~~	(608.7	)	)
Transmission	~~(84.8~~	(105.7	)	)	~~(89.1~~	(84.8	)	)	~~(74.7~~	(89.1	)	)
Other operating expenses	~~(1,003.2~~	(987.4	)	)	~~(943.9~~	(1,003.2	)	)	~~(910.5~~	(943.9	)	)
Costs to achieve the anticipated acquisition of Westar	(34.2		)		—				—
Costs to achieve the anticipated merger with Westar		(31.8		)		(34.2		)		—
Depreciation and amortization	~~(344.8~~	(371.1	)	)	~~(330.4~~	(344.8	)	)	~~(306.0~~	(330.4	)	)
Operating income	~~618.9~~	603.6			~~530.1~~	618.9			~~534.5~~	530.1
Non-operating income and expenses	~~2.8~~	19.3			~~3.7~~	2.8			~~12.5~~	3.7
Interest charges	(161.5		)		(199.3		)		(188.5		)
Loss on Series B Preferred Stock dividend make-whole provisions		(124.8		)		—				—
Income tax expense	(172.2		)		(122.7		)		(115.7		)
Loss on extinguishment of debt		(82.8		)		—				—
Income from equity investments	2.0				1.2				—
Interest charges		(290.7		)		(161.5		)		(199.3		)
Net income	290.0				213.0				242.8
Income tax expense		(233.3		)		(172.2		)		(122.7		)
Preferred dividends and redemption premium	(16.5		)		(1.6		)		(1.6		)
Income from equity investments		2.5				2.0				1.2
Earnings available for common shareholders	$	273.5			$	211.4			$	241.2
Net income (loss)		(106.2		)		290.0				213.0
Reconciliation of gross margin to operating revenue:
Preferred dividends and redemption premium		(37.3		)		(16.5		)		(1.6		)
Operating revenues	$	2,676.0			$	2,502.2			$	2,568.2
Earnings (loss) available for common shareholders		$	(143.5	)		$	273.5			$	211.4
Fuel and purchased power	(590.1		)		(608.7		)		(742.5		)
Reconciliation of gross margin to operating revenues:
Transmission	(84.8		)		(89.1		)		(74.7		)
Operating revenues		$	2,708.2			$	2,676.0			$	2,502.2
Gross margin (a)	$	2,001.1			$	1,804.4			$	1,751.0
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.

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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~~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 ~~expenses~~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 ~~acquisition~~merger ofwith Westar;

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•	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.

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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 ~~acquisition~~merger ofwith Westar;

• $35.9 million of interest charges for fees incurred for a bridge term loan facility ~~entered into in connection with the anticipated acquisition of Westar~~;

• 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 ~~anticipated~~ 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.

2015 Compared to 2014

Electric Utility Segment

Electric utility's net income decreased $19.7 million in 2015 compared to 2014 primarily due to:

• a $53.4 million increase in gross margin driven by new retail rates, an increase in recovery of program costs for energy efficiency programs under MEEIA, an increase in recovery of renewable energy costs under the Renewable Energy Standard Rate Adjustment Mechanism (RESRAM), an increase in weather-normalized retail demand and an increase in other margin items, partially offset by lower wholesale margins, higher transmission expense and weather;

• a $33.8 million increase in other operating expenses primarily driven by an increase in program costs for energy efficiency programs under MEEIA, an increase in amortization of deferred renewable energy costs under RESRAM and an increase in general taxes driven by higher property taxes, partially offset by a decrease in Wolf Creek operating and maintenance expenses;

• a $24.4 million increase in depreciation and amortization expense due to capital additions;

• an $11.8 million decrease in non-operating income and expenses driven by a $13.2 million decrease in the equity component of Allowance for Funds Used During Construction (AFUDC) primarily due to a lower average construction work in progress in 2015 due to environmental upgrades at KCP&L's La Cygne Station being placed into service;

• a $7.9 million increase in interest charges primarily due to a $7.2 million decrease in the debt component of AFUDC; and

• a $4.8 million decrease in income tax expense primarily driven by decreased pre-tax income.

Corporate and Other Activities

Great Plains Energy's corporate and other activities loss increased $10.1 million in 2015 compared to 2014 primarily due to the release of uncertain tax positions related to former GMO non-regulated operations in the third quarter of 2014 which resulted in:

•$2.1 million lower after-tax interest expense in 2014; and

•$6.1 million of income tax benefits in 2014.

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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~~, except for KCP&L's Missouri retail operations prior to September 29, 2015, when a cost adjustment mechanism was approved~~. 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~~Electric ~~utility~~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 the electric utility segment results of operations.

		2016			2015			2014
	(millions)
Operating revenues		$	2,676.0		$	2,502.2		$	2,568.2
Fuel and purchased power		(590.1		)	(608.7		)	(742.5		)
Transmission		(84.8		)	(89.1		)	(74.7		)
Other operating expenses		(990.2		)	(940.2		)	(906.4		)
Costs to achieve the anticipated acquisition of Westar		(15.9		)	—			—
Depreciation and amortization		(344.8		)	(330.4		)	(306.0		)
Operating income		650.2			533.8			538.6
Non-operating income and expenses		2.3			1.7			13.5
Interest charges		(196.1		)	(190.9		)	(183.0		)
Income tax expense		(164.3		)	(120.8		)	(125.6		)
Net income		$	292.1		$	223.8		$	243.5
Reconciliation of gross margin to operating revenue:
Operating revenues		$	2,676.0		$	2,502.2		$	2,568.2
Fuel and purchased power		(590.1		)	(608.7		)	(742.5		)
Transmission		(84.8		)	(89.1		)	(74.7		)
Gross margin (a)		$	2,001.1		$	1,804.4		$	1,751.0

(a) Gross margin is a non-GAAP financial measure. See explanation of gross margin under Great Plains Energy's Results of Operations.

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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~~Electric ~~utility~~Utility's gross margin and MWhs sold.

				%					%
Gross Margin (a)	~~2016~~2017			Change(c)		~~2015~~2016			Change(c)		~~2014~~2015
Retail revenues	(millions)
Residential	$	1,~~092~~088.5		9—		$	1,~~006~~092.25		(29	)	$	1,~~025~~006.52
Commercial	1,~~066~~092.06			62		1,~~001~~066.0			16		~~995~~1,001.20
Industrial	~~229~~238.63			34		~~222~~229.36			(13	)	~~225~~222.3
Other retail revenues	2018.97			3(10	)	20.49			—3		20.34
Provision for rate refund	(910.67		)	N/M		—(9.6		)	—N/M		—
Energy efficiency (MEEIA)(b)	8066.04			55(17	)	5180.50			8155		2851.5
Total retail	2,~~479~~515.42			81		2,~~301~~479.4			—8		2,~~294~~301.84
Wholesale revenues	~~142~~131.08			(37	)	~~147~~142.10			(343	)	~~222~~147.61
Other revenues	5461.62			212		5354.76			62		5053.87
Operating revenues	2,~~676~~708.02			71		2,~~502~~676.20			(37	)	2,~~568~~502.2
Fuel and purchased power	(~~590~~608.16		)	(3	)	(~~608~~590.71		)	(183	)	(~~742~~608.57		)
Transmission	(84105.87		)	(525	)	(8984.18		)	19(5	)	(7489.71		)
Gross margin	$	21,~~001~~993.19		11—		$	12,~~804~~001.41		311		$	1,~~751~~804.04


^(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 $4955.30 million, $4249.93 million and $2042.79 million for ~~2016~~2017, ~~2015~~2016 and ~~2014~~2015, respectively, that have a direct offset in utility operating and maintenance expenses, recovery of throughput disincentive of $1511.12 million, $815.61 million and $7.8.6 million for ~~2016~~2017, ~~2015~~2016 and ~~2014~~2015, respectively, and a performance incentive of $0.2 million and $15.6 million for 2017 and 2016, respectively.


^(c)	N/M - not meaningful

		%			%
MWh Sales	2016	Change		2015	Change		2014
Retail MWh sales	(thousands)
Residential	8,774	2		8,585	(4	)	8,971
Commercial	10,796	—		10,777	(1	)	10,827
Industrial	3,149	(1	)	3,191	—		3,200
Other retail MWh sales	115	(1	)	116	(1	)	117
Total retail	22,834	1		22,669	(2	)	23,115
Wholesale MWh sales	7,063	9		6,512	(14	)	7,587
Total MWh sales	29,897	3		29,181	(5	)	30,702

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 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

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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.



		%			%
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.

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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~~Utility's gross margin ~~increased~~decreased $~~196.~~7.2 million in ~~2016~~2017 compared to ~~2015~~2016 ~~primarily~~ 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 ~~cooling~~CDD ~~degree days~~ 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.

43The 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

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Electric utility's gross margin increased $53.4 million in 2015 compared to 2014 primarily driven by:

• an estimated $36 million increase due to new retail rates for KCP&L in Missouri effective September 29, 2015, and in Kansas effective July 25, 2014 and October 1, 2015;

• a $22.2 million increase for recovery of program costs for energy efficiency programs under MEEIA, which have a direct offset in utility operating and maintenance expense, primarily due to the implementation of KCP&L's MEEIA programs in August 2014;

• a $7.2 million increase for recovery of renewable energy costs under RESRAM, which have a direct offset in utility operating and maintenance expense;

• an estimated $6 million increase from weather-normalized retail demand;

• an estimated $20 million increase in other margin items including a change in customer mix, lower fuel and purchased power expenses that are not included in fuel recovery mechanisms and an increase in transmission costs recovered through the transmission delivery charge rider that began in the fourth quarter of 2015;

• an estimated $19 million decrease due to lower wholesale margins partially offset by an estimated $14 million due to lower fuel and purchased power expense at KCP&L in Missouri, where there was no fuel recovery mechanism prior to September 29, 2015;

• an estimated $9 million decrease due to higher transmission expense; and

• an estimated $24 million decrease due to weather driven by a 19% decrease in heating degree days in 2015 and a 15% decrease in cooling degree days in the second quarter of 2015 partially offset by an 18% increase in cooling degree days in the third quarter of 2015.

The following table provides cooling degree days (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.

		%		%
	2016	Change	2015	Change	2014
CDD	1,585	16	1,370	8	1,266
HDD	4,296	(6)	4,578	(19)	5,666

Electric Utility Other Operating Expenses (including utility operating and maintenance expenses, general taxes and other)

Electric ~~utility~~Utility's other operating expenses ~~increased~~decreased $508.02 million in ~~2016~~2017 compared to ~~2015~~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.

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Electric utility's other operating expenses increased $33.8 million in 2015 compared to 2014 primarily driven by:

• a $22.2 million increase in program costs for energy efficiency programs under MEEIA, which have a direct offset in revenue, primarily due to the implementation of KCP&L's MEEIA programs in August 2014;

• a $7.2 million increase in amortization of deferred renewable energy costs under RESRAM, which have a direct offset in revenue;

• an $8.7 million increase in general taxes driven by higher property taxes; and

• a $10.0 million decrease in Wolf Creek operating and maintenance expenses primarily due to decreased refueling outage amortization of $3.6 million and $8.7 million from a planned mid-cycle maintenance outage in 2014.

Electric Utility Costs to Achieve the Anticipated Acquisition of Westar

Electric utility's costs to achieve the anticipated acquisition of Westar of $15.9 million in 2016 reflects consulting fees, certain severance expenses and other transition costs related to the anticipated acquisition of Westar.

Electric Utility Depreciation and Amortization

Electric ~~utility~~Utility's depreciation and amortization expense increased $1426.43 million and $2414.4 million in ~~2016~~2017 compared to ~~2015~~2016 and ~~2015~~2016 compared to ~~2014~~2015, respectively, primarily due to capital additions.

Electric Utility Non-Operating Income and Expenses

Electric utility's non-operating income and expenses decreased $11.8 million in 2015 compared to 2014 primarily due to a $13.2 million decrease in the equity component of AFUDC primarily due to a lower average construction work in progress in 2015 due to environmental upgrades at KCP&L's La Cygne Station being placed into service.

Electric Utility Interest Charges

Electric ~~utility~~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's interest charges increased $7.9 million in 2015 compared to 2014 primarily due to a $7.2 million decrease in in the equity component of AFUDC primarily due to a lower average construction work in progress in 2015 due to environmental upgrades at KCP&L's La Cygne Station being placed into service.

Electric Utility Income Tax Expense

Electric ~~utility~~Utility's income tax expense increased $~~43.~~5.1 million in ~~2016~~2017 compared to ~~2015~~2016 primarily due to ~~increased~~an ~~pre-tax~~increase ~~income~~of $11. ~~Electric~~1 ~~utility~~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 ~~expense~~reform ~~decreased~~in December 2017 and an increase of $4.85 million due to decreased wind production tax credits in ~~2015~~2017; ~~compared~~partially tooffset ~~2014~~by ~~primarily~~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, ~~2016~~2017 compared to December 31, ~~2015~~2016)

• Great Plains Energy's cash and cash equivalents ~~increased~~decreased $~~1,281~~167.87 million primarily due to athe ~~portion~~redemption of Great Plains Energy's $4.3 billion senior notes for $4,400.1 million in July 2017, the ~~proceeds~~redemption ~~from~~of Great Plains Energy's ~~October~~Series ~~2016~~B ~~common~~Preferred ~~stock~~Stock in August 2017 for $963.4 million and ~~depositary~~the ~~share~~maturity ~~offerings~~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 ~~increased~~decreased $1~~,000~~.0 ~~million~~billion due to anits ~~investment~~maturity ~~made~~in ~~with~~March ~~a portion of the proceeds from Great Plains Energy's October 2016 common stock and depositary share offerings~~2017.

• Great Plains Energy's derivative instruments - current assets increased $80.7 million due to 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 anticipated acquisition of Westar.

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• Great Plains Energy's ~~commercial~~plant ~~paper increased $110.8 million due~~ to anbe ~~increase~~retired, innet ~~commercial~~increased ~~paper of~~ $~~158~~143.26 million atin ~~GMO~~connection ~~due~~with tothe ~~borrowings~~expected ~~for~~retirement ~~capital~~of ~~expenditures~~GMO's ~~and~~Sibley ~~general~~No. ~~corporate~~3 ~~purposes partially offset by the repayment of $47~~Unit.4 ~~million~~See ofNote ~~commercial~~1 ~~paper~~to atthe ~~KCP&L~~consolidated ~~with~~financial ~~funds~~statements ~~from~~for ~~operations~~additional information.

• Great Plains Energy's ~~current~~regulatory ~~maturities~~assets ofdecreased ~~long-term~~$134.1 ~~debt~~million and regulatory liabilities increased $~~381~~796.04 million ~~and~~primarily ~~long-term~~due ~~debt~~to ~~decreased~~an $~~379~~868.93 million decrease in net deferred income tax liabilities due to the ~~reclassification~~revaluation and restatement of ~~KCP&L's~~deferred ~~$250.0~~income ~~million~~tax ofassets ~~5.85%~~and ~~Senior~~liabilities ~~Notes~~included in rate base and ~~$31.0~~a ~~million~~tax ofgross-up ~~1.25%~~adjustment ~~EIRR~~for ~~Series~~ratemaking ~~1992~~purposes ~~bonds~~in ~~and~~December ~~Great~~2017 ~~Plains~~as ~~Energy's~~a ~~$100~~result of the change in corporate income tax rate from U.0S. ~~million~~federal ofincome 6tax reform.~~875%~~ ~~Senior~~See ~~Notes~~Note ~~from~~6 ~~long-term~~and Note 21 to ~~current~~the consolidated financial statements for additional information.

• Great Plains Energy's deferred income taxes ~~increased~~decreased $~~170~~708.90 million primarily due to anthe ~~increase~~revaluation inand ~~temporary~~restatement ~~differences~~of deferred income tax assets and ~~changes~~liabilities and a tax gross-up adjustment for ratemaking purposes in ~~the~~December ~~projected~~2017 ~~utilization~~as a result of ~~net~~the ~~operating~~change ~~loss~~in ~~carryforwards,~~corporate ~~primarily~~income ~~driven~~tax byrate ~~bonus~~from ~~depreciation~~U.S. federal income tax reform.

• Great Plains Energy's ~~asset~~preference ~~retirement~~stock ~~obligations~~without ~~increased~~par value decreased $40836.12 million ~~primarily~~ due to ~~an increase in cost estimates for~~ the ~~closure~~redemption of ~~ponds~~Great ~~and~~Plains ~~landfills~~Energy's ~~containing~~Series ~~coal~~B ~~combustion~~Preferred ~~residuals~~Stock ~~(CCRs)~~in atAugust ~~KCP&L electric generating facilities~~2017.

• Great Plains Energy's common stock increased $1,570.3 million primarily due to $1.55 billion in net proceeds from Great Plains Energy's public offering of 60.5 million shares of common stock in October 2016.

• Great Plains Energy's cumulative preferred stock $100 par value decreased $39.0 million due to the redemption of its 390,000 shares of outstanding cumulative preferred stock in August 2016.

• Great Plains Energy's preference stock without par value increased $836.2 million due to the issuance of Series B Preferred Stock in conjunction with Great Plains Energy's October 2016 depositary share offering. See Note 14 to the consolidated financial statements for additional information.

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 ~~and a time deposit to be used to fund a portion of the cash consideration for the anticipated acquisition of Westar~~. 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~~Electric ~~utility~~Utility's construction and other capital expenditures. These items as well as additional cash and capital requirements, including requirements related to the anticipated ~~acquisition~~merger ofwith Westar, are discussed below.

Great Plains Energy's liquid resources at December 31, ~~2016~~2017, consisted of $1.31 billion of cash and cash equivalents on hand, ~~a $1.0 billion time deposit that matures in the first quarter of 2017~~ and $~~912~~856.14 million of available borrowing capacity from unused bank lines of credit and receivable sale agreements. The available borrowing capacity consisted of $~~199~~188.0 million from Great Plains Energy's revolving credit facility, $~~464~~429.38 million from KCP&L's credit facilities and $~~248~~238.86 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. However, the $1.3 billion of cash and cash equivalents on hand and the $1.0 billion time deposit at December 31, 2016, are primarily the result of Great Plains Energy's equity issuances in October 2016, the proceeds of which are to be used to fund a portion of the cash consideration for the anticipated acquisition of Westar.

~~Great~~The ~~Plains~~$1.1 ~~Energy~~billion ~~intends~~of tocash ~~meet~~and ~~day-to-day~~ cash ~~flow~~equivalents ~~requirements~~on ~~including~~hand ~~interest~~at ~~payments~~December 31, ~~retirement~~2017, is primarily the result of ~~maturing~~Great ~~debt,~~Plains ~~construction~~Energy's ~~requirements~~common stock offering in October 2016, ~~dividends~~the ~~and~~proceeds ~~pension~~of ~~benefit~~which ~~plan~~were ~~funding~~to ~~requirements~~be ~~with~~used to fund a ~~combination~~portion of ~~internally~~the ~~generated~~cash ~~funds~~consideration ~~and~~for the acquisition of Westar under the Original Merger Agreement. Great Plains Energy also expects to receive $140.6 million in proceeds from ~~short-term~~its ~~debt~~deal contingent interest rate swaps upon the closing of the anticipated merger with Westar. ~~From~~Under ~~time~~the toAmended ~~time~~Merger Agreement, Great Plains Energy ~~issues~~is ~~equity~~required ~~and/or~~to ~~long-term~~have ~~debt~~not toless ~~repay~~than ~~short-term~~$1.25 ~~debt~~billion orin ~~increase~~cash and cash ~~balances~~equivalents on its balance sheet at the closing of the anticipated merger with Westar. ~~Great~~It ~~Plains~~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

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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.

For a description of Great Plains Energy's financing activities and the remaining portion of its proposed financing plan with respect to the anticipated acquisition of Westar, see Note 2 to the consolidated financial statements.

Great Plains Energy also has a 364-day $5.1 billion senior unsecured bridge term loan facility to support the anticipated acquisition of Westar and provide flexibility for timing of long-term financing. See Note 11 to the consolidated financial statements for additional information.

Cash Flows from Operating Activities

Great Plains Energy generated positive cash flows from operating activities for the periods presented. The $3026.95 million increase in cash flows from operating activities for Great Plains Energy in ~~2016~~2017 compared to ~~2015~~2016 was primarily driven by ~~new~~a ~~retail~~$35.5 ~~rates~~million ~~for~~decrease ~~KCP&L~~in ~~and~~the ~~warmer~~under ~~weather~~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 $5430.9 million increase in cash flows from operating activities for Great Plains Energy in ~~2015 compared~~ ~~to 2014 was~~2016 ~~primarily~~compared ~~due~~ to a2015 ~~$34.2~~was ~~million~~primarily ~~increase~~ driven by anew ~~decrease~~retail inrates ~~solar~~for ~~rebates~~KCP&L ~~paid to customers~~ and anwarmer ~~increase in the recovery of costs subject to fuel recovery mechanisms of $76~~weather.0 ~~million, partially offset by a decrease in net income of $29.8 million and a decrease driven by deferred refueling outage costs of $23.7 million.~~

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. ~~Investing activities are offset by proceeds from the sale of properties and insurance recoveries.~~

In ~~2016~~2017, Great Plains Energy ~~purchased~~received ~~a time deposit of~~ $1.0 billion ~~with~~for ~~a portion of the~~ proceeds from ~~Great~~the ~~Plains~~maturity ~~Energy's~~of ~~October~~a ~~2016~~time ~~common stock and depositary share offerings~~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.

Great Plains Energy's utility capital expenditures decreased $96.6 million in 2015 compared to 2014 primarily due to a decrease in cash utility capital expenditures related to environmental upgrades at KCP&L's La Cygne Station.

In January 2014, KCP&L and GMO completed the sale of two SPP-approved regional transmission projects, at cost, to Transource Missouri, LLC for cash proceeds of $37.7 million.

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.

~~Great~~Impact ~~Plains Energy's cash flows from financing activities in 2015 reflect KCP&L's issuance, at a discount,~~ of ~~$350.0~~Credit ~~million~~Ratings ofon ~~3.65% Senior Notes that mature in 2025, with the proceeds used to purchase in lieu of redemption $71.9 million of EIRR bonds and repay short-term borrowings.~~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,

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among other things, an adverse impact, which could be material, on Great Plains Energy's, ~~cash~~KCP&L's ~~flows~~and ~~from~~GMO's ~~financing~~access ~~activities~~to capital, the cost of funds, the ability to recover actual interest costs in ~~2014~~state ~~reflect~~regulatory ~~increased~~proceedings, ~~short-term~~the ~~borrowings~~type atand ~~KCP&L~~amounts ~~primarily~~of ~~driven~~collateral byrequired ~~capital~~under ~~expenditures~~supply agreements and ~~pension~~Great ~~funding~~Plains ~~contributions~~Energy's ability to provide credit support for its subsidiaries.

~~Impact~~As of ~~Credit~~February ~~Ratings~~21, on2018, ~~Liquidity~~the major credit rating agencies rated Great Plains Energy's, KCP&L's and GMO's securities as detailed in the following table.

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. After the announcement of the anticipated acquisition of Westar, Moody's Investors Service placed its long-term ratings of Great Plains Energy on review for downgrade and Standard & Poors' Ratings Services revised its outlook of Great Plains Energy, KCP&L and GMO from stable to negative. 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 6.875% Senior Notes due 2017 or 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.



	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

As of February 23, 2017, 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		Standard
	Investors Service		& Poor's
Great Plains Energy
Outlook		Review for downgrade		Negative
Corporate Credit Rating		-		BBB+
Preferred Stock		Ba1		BBB-
Senior Unsecured Debt		Baa2		BBB
KCP&L
Outlook		Stable		Negative
Senior Secured Debt		A2		A
Senior Unsecured Debt		Baa1		BBB+
Commercial Paper		P-2		A-2
GMO
Outlook		Stable		Negative
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. On June 30, 2016, KCP&L's MPSC authorization to issue long-term debt expired. KCP&L will seek new authorization if and when it is deemed necessary.

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.

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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, 2016, there was $867.1 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, 2016, there was $548.1 million available under this authorization.

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, 2016, 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. ~~In September 2016,~~ Great Plains Energy ~~filed~~does anot ~~post-effective~~expect ~~amendment~~ to ~~its~~replace this shelf registration statement prior to ~~register depositary shares and preference stock among~~ the ~~types~~closing of ~~securities~~the ~~that~~anticipated ~~Great~~merger ~~Plains~~with ~~Energy may offer and sell~~Westar.

In ~~October~~March ~~2016~~2017, Great Plains Energy ~~completed~~issued ~~a registered public offering of 60~~$4.53 ~~million~~billion ~~shares~~ of ~~common~~senior ~~stock,~~notes ~~without~~and ~~par~~as ~~value, at~~ a ~~public~~result ~~offering price~~ of ~~$26.45~~the ~~per~~Amended ~~share~~Merger Agreement, ~~for~~redeemed ~~total~~the ~~gross~~senior ~~proceeds~~notes ofin ~~approximately~~July $12017.~~6 billion (net proceeds of approximately $1.55 billion after issuance costs).~~ ~~Great~~See ~~Plains~~Note ~~Energy~~12 ~~plans~~ to ~~use proceeds from~~ the ~~offering~~consolidated tofinancial ~~fund~~statements afor ~~portion~~more ofinformation on the ~~cash~~redemption ~~consideration~~of ~~for~~ the ~~anticipated~~senior ~~acquisition of Westar~~notes.

In ~~October~~August ~~2016~~2017, ~~Great~~as ~~Plains Energy also completed~~ a ~~registered~~result ~~public offering~~ of ~~17.3~~the ~~million depositary~~Amended ~~shares~~Merger Agreement, ~~each representing a 1/20th interest in a share of~~ Great Plains Energy's redeemed its 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~~See ~~Plains~~Note ~~Energy~~14 ~~plans~~ to ~~use proceeds from~~ the ~~offering~~consolidated tofinancial ~~fund~~statements afor ~~portion~~more ofinformation on the ~~cash~~redemption ~~consideration~~of ~~for~~ the ~~anticipated~~Series ~~acquisition~~B ofPreferred ~~Westar~~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 ~~general~~ 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 ~~August~~June ~~2015~~2017, KCP&L issued, at a discount, $~~350~~300.0 million of 34.6520% unsecured Senior Notes, maturing in ~~2025~~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 ~~and term loan facility related to the anticipated acquisition of Westar~~.

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Projected Utility Capital Expenditures

Great Plains Energy's cash utility capital expenditures, excluding Allowance for Funds Used During Construction (AFUDC) to finance construction, were $~~609~~573.45 million, $~~677~~609.14 million and $~~773~~677.71 million in ~~2016~~2017, ~~2015~~2016 and ~~2014~~2015, respectively. Utility capital expenditures represent a significant portion of Great Plains Energy's capital requirements. Utility capital expenditures projected for the next ~~four~~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 ~~four~~five years, excluding AFUDC, are detailed in the following table. This utility capital expenditure plan is subject to continual review and change.

		2017		2018		2019		2020
		2018		2019		2020		2021		2022
	(millions)
Generating facilities		$	~~180~~165.58	$	~~204~~170.32	$	~~178~~151.04	$	~~192~~139.78	$	151.7
Distribution and transmission facilities		~~216~~246.57		~~192~~256.36		~~216~~245.7		~~203~~284.57		235.2
General facilities		~~106~~100.2		98108.58		5693.74		6987.45		71.0
Nuclear fuel		4421.54		2524.27		2243.98		5025.04		24.8
Environmental		4314.46		362.68		117.57		1420.01		63.1
Total utility capital expenditures		$	~~591~~548.17	$	~~556~~563.91	$	~~485~~542.80	$	~~529~~557.65	$	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 2016 and 2015, the Company contributed $69.8 million and $76.9 million to the pension plans, respectively, and expects to contribute $79.6 million in 2017 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 2017 in amounts at least sufficient to meet the greater of ERISA or regulatory funding requirements; however, these amounts have not yet been determined.49

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 2017, 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.

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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	~~2017~~2018		~~2018~~2019		~~2019~~2020		~~2020~~2021		~~2021~~2022		After ~~2021~~2022			Total
Long-term debt	(millions)
Principal	$	~~382~~351.1	$	~~351~~401.1	$	~~401~~1.1	$	1432.10	$	~~432~~287.05		$	2,~~197~~209.16	$	3,~~764~~682.54
Interest	~~182~~170.53		~~156~~144.89		~~131~~130.35		~~116~~121.9		~~108~~99.30			~~945~~1,180.97		1,~~641~~847.73
Lease commitments
Operating leases	12.91		119.03		9.37		9.7		9.75			~~110~~101.50		~~163~~151.13
Capital leases	0.4		0.4		0.4		0.4		0.4			32.17		54.17
Pension and other post-retirement plans (a)	8488.26		8488.26		8488.26		8488.26		8488.26			(a)		~~421~~443.0
Purchase commitments
Fuel	~~259~~210.04		~~145~~180.81		6267.23		535.81		1137.24			~~100~~80.87		~~632~~581.80
Power	47.3		47.3		47.3		47.34		47.46			~~462~~414.26		~~698~~651.85
Other	5020.19		3214.07		336.37		5.95		62.54			3835.79		~~166~~86.51
Total contractual commitments (a)	$	~~1,018~~901.51	$	~~828~~886.64	$	~~769~~351.16	$	~~319~~710.36	$	~~699~~572.74		$	34,~~858~~025.32	$	7,~~493~~447.53

(a) The Company expects to make contributions to the pension and other post-retirement plans beyond ~~2021~~2022 but the amounts are not yet determined. Amounts for years after ~~2017~~2018 are estimates based on information available in determining the amount for ~~2017~~2018. Actual amounts for years after ~~2017~~2018 could be significantly different than the estimated amounts in the table above.

Long-term debt includes current maturities. Long-term debt principal excludes $1718.27 million of net discounts on senior notes and debt issuance costs. Variable rate interest obligations are based on rates as of December 31, ~~2016~~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.~~5 million in 2017, $1.~~2 million in 2018 and approximately $0.4 million per year from 2019 to 2025, for a total of $54.50 million.

The Company expects to contribute $8488.26 million to the pension and other post-retirement plans in ~~2017~~2018, of which the majority is expected to be paid by KCP&L. Additional contributions to the plans are expected beyond ~~2021~~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 ~~2017~~2018 are estimates based on information available in determining the amount for ~~2017~~2018. Actual amounts for years after ~~2017~~2018 could be significantly different than the estimated amounts in the table above.

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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, ~~2016~~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.

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At December 31, 2016, Great Plains Energy has provided $135.3 million of credit support for GMO as follows:

• Great Plains Energy direct guarantees to GMO counterparties totaling $38.7 million, which expire in 2017 and 2018 and

• Great Plains Energy guarantees of GMO long-term debt totaling $96.6 million, which includes debt with maturity dates ranging from 2017 to 2023.

Great Plains Energy has also guaranteed GMO's commercial paper program. At December 31, 2016, GMO had $201.9 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, 2016, KCP&L had issued letters of credit totaling $8.8 million as credit support to certain counterparties that expire in 2017. KCP&L has 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, 2016, GMO had issued letters of credit totaling $1.9 million as credit support to certain counterparties that expire in 2017.

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.

		2016			2015
		2017			2016
	(millions)
Operating revenues		$	1,~~875~~890.47		$	1,~~713~~875.84
Fuel and purchased power		(~~372~~412.71		)	(~~397~~372.17		)
Transmission		(5668.46		)	(5856.4		)
Other operating expenses		(~~705~~689.85		)	(~~658~~705.68		)
Costs to achieve the anticipated acquisition of Westar		(10.9		)	—
Costs to achieve the anticipated merger with Westar		(10.5		)	(10.9		)
Depreciation and amortization		(~~247~~266.53		)	(~~235~~247.75		)
Operating income		~~482~~443.17			~~364~~482.01
Non-operating income and expenses		43.21			14.2
Interest charges		(~~139~~138.48		)	(~~135~~139.64		)
Income tax expense		(~~121~~128.92		)	(76121.89		)
Net income		$	~~225~~179.08		$	~~152~~225.80
Reconciliation of gross margin to operating revenue:
Reconciliation of gross margin to operating revenues:
Operating revenues		$	1,~~875~~890.47		$	1,~~713~~875.84
Fuel and purchased power		(~~372~~412.71		)	(~~397~~372.17		)
Transmission		(5668.46		)	(5856.4		)
Gross margin (a)		$	1,~~446~~410.30		$	1,~~258~~446.3


^(a)	Gross margin is a non-GAAP financial measure. See explanation of gross margin under Great Plains Energy's Results of Operations.

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KCP&L Gross Margin and MWh Sales

The following table summarizes KCP&L's gross margin and MWhs sold.

	Revenues and Costs						%		MWhs Sold		%
	2016			2015			Change(c)		2016	2015	Change
	2017			2016			Change		2017	2016	Change
Retail revenues	(millions)								(thousands)
Residential	$	~~713~~715.06		$	~~639~~713.90		11—		5,~~330~~182	5,~~213~~330	2(3	)
Commercial	~~798~~826.5			~~738~~798.75			84		7,~~553~~466	7,~~569~~553	—(1	)
Industrial	~~147~~157.47			~~137~~147.84			7		1,~~839~~815	1,~~833~~839	—(1	)
Other retail revenues	1311.1			1213.51			6(15	)	8372	83	—(14	)
Provision for rate refund	0.89			—0.8			~~N/M~~16		N/A	N/A	N/A
Energy efficiency (MEEIA)(a)	5030.91			2750.59			85(41)		N/A	N/A	N/A
Total retail	1,~~723~~741.79			1,~~556~~723.47			111		14,~~805~~535	14,~~698~~805	1(2	)
Wholesale revenues	~~128~~122.9			~~134~~128.19			(45	)	6,~~629~~788	6,~~099~~629	92
Other revenues	2225.89			2322.38			(213	)	N/A	N/A	N/A
Operating revenues	1,~~875~~890.47			1,~~713~~875.84			91		21,~~434~~323	2021,~~797~~434	3(1	)
Fuel and purchased power	(~~372~~412.71		)	(~~397~~372.17		)	(611	)
Transmission	(5668.46		)	(5856.4		)	(322	)
Gross margin (b)	$	1,~~446~~410.30		$	1,~~258~~446.3		15(3	)

(a) Consists of recovery of program costs of $3124.01 million and $2031.50 million for ~~2016~~2017 and ~~2015~~2016, respectively, that have a direct offset in operating and maintenance expenses, and recovery of throughput disincentive of $96.50 million and $79.05 million for ~~2016~~2017 and ~~2015~~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.

~~(c) N/M - not meaningful~~52

KCP&L's gross margin increased $188.0 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 $25 million increase due to warmer weather with a 16% increase in cooling degree days in 2016;

• a $10.5 million increase for recovery of program costs for energy efficiency programs under MEEIA, which have a direct offset in operating and maintenance expense;

• a $2.5 million increase in MEEIA throughput disincentive;

• a $10.4 million MEEIA performance incentive recognized in 2016 related to the achievement of certain energy savings levels in the first cycle of KCP&L's MEEIA programs; and

• an estimated $6 million decrease due to a decrease in weather-normalized retail demand.

KCP&L Other Operating Expenses (including operating and maintenance expenses, general taxes and other)

KCP&L's other operating expenses increased $47.2 million in 2016 compared to 2015 primarily driven by:

• a $5.6 million increase in pension expense corresponding to the resetting of pension expense trackers with the effective date of new retail rates;

• a $10.5 million increase in program costs for energy efficiency programs under MEEIA, which have a direct offset in revenue;

• a $2.3 million increase in plant operating and maintenance expense;

• a $7.4 million increase in injuries and damages expense primarily due to an increase in estimated losses from an unfavorable judgment in ongoing litigation; and

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•KCP&L's agross margin decreased $1436.03 million ~~increase~~ in ~~general~~2017 ~~taxes~~compared ~~driven by higher property taxes and higher gross receipts taxes due~~ to an2016 ~~increase~~primarily indriven ~~retail revenues.~~by:

~~KCP&L~~• ~~Costs~~an estimated $42 million decrease due to ~~Achieve~~cooler ~~the~~weather ~~Anticipated~~driven ~~Acquisition~~by ofa ~~Westar~~16% decrease in CDD;

~~KCP&L's~~• ~~costs~~a to$6.9 ~~achieve~~million ~~the~~decrease ~~anticipated~~for ~~acquisition~~recovery of ~~Westar~~program ofcosts ~~$10.9~~for ~~million~~energy inefficiency ~~2016~~programs ~~reflects~~under ~~consulting fees~~MEEIA, ~~certain~~which ~~severance~~have ~~expenses~~a ~~and~~direct ~~other~~offset ~~transition~~in ~~costs~~utility ~~related~~operating toand ~~the~~maintenance ~~anticipated acquisition of Westar.~~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 $1118.8 million in ~~2016~~2017 compared to ~~2015~~2016 primarily due to capital additions.

KCP&L Interest Charges

KCP&L's interest charges increased $3.8 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.

KCP&L Income Tax Expense

KCP&L's income tax expense increased $456.13 million in ~~2016~~2017 compared to ~~2015~~2016 primarily due to ~~increased~~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.

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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

~~Derivative~~Great ~~instruments~~Plains ~~are~~Energy ~~utilized~~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~~ 53

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, 2016, 4% and 6%, 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 5% at December 31, 2016.

Great Plains Energy and KCP&L had $334.8 million and $132.9 million, respectively, of commercial paper outstanding at December 31, 2016. 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 $334.8 million and $132.9 million of commercial paper was outstanding for all of 2017 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 $0.3 million for Great Plains Energy and $0.1 million for KCP&L in 2017. Assuming $334.8 million and $132.9 million of commercial paper was outstanding for all of 2017 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 $3.3 million for Great Plains Energy and $1.3 million for KCP&L in 2017.

At December 31, 2016, Great Plains Energy had $4.4 billion of notional amounts of fixed-to-floating interest rate swaps 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 anticipated acquisition of Westar. Settlement of these swaps is contingent on the consummation of the anticipated acquisition of Westar. Assuming settlement of the swaps, a hypothetical 10% decrease in the interest rates underlying the swaps would have resulted in an approximately $51 million increase in interest expense associated with settlement of the swaps as of December 31, 2016.

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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 ~~capacity~~minimum reserve margin of ~~at least~~ 12%. This net positive supply of capacity ~~and energy~~ is maintained through KCP&L's generation assets, ~~and~~ capacity ~~and~~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.

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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, ~~2016~~2017, was $84.75 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, ~~2016~~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 $67.52 million reduction in the value of the decommissioning trust funds at December 31, ~~2016~~2017. A hypothetical 10% decrease in equity prices would have resulted in aan $1518.2 million reduction in the fair value of the equity securities at December 31, ~~2016~~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.

5655

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm
Great Plains Energy Incorporated		5857
Kansas City Power & Light Company		5958
Great Plains Energy Incorporated
Consolidated Statements of Comprehensive Income		60
Consolidated Statements of Comprehensive Income (Loss)		59
Consolidated Balance Sheets		6160
Consolidated Statements of Cash Flows		6362
Consolidated Statements of Shareholders' Equity		6463
Kansas City Power & Light Company
Consolidated Statements of Comprehensive Income		6564
Consolidated Balance Sheets		6665
Consolidated Statements of Cash Flows		6867
Consolidated Statements of Common Shareholder's Equity		6968
Combined Notes to Consolidated Financial Statements for Great Plains Energy Incorporated and Kansas City Power & Light Company
Note 1:	Summary of Significant Accounting Policies	7069
Note 2:	Anticipated ~~Acquisition~~Merger ofwith Westar Energy, Inc.	7675
Note 3:	Supplemental Cash Flow Information	7879
Note 4:	Receivables	7980
Note 5:	Nuclear Plant	80
Note 6:	Regulatory Matters	83
Note 7:	Goodwill and Intangible Assets	86
Note 8:	Asset Retirement Obligations	87
Note 9:	Pension Plans and Other Employee Benefits	87
Note 10:	Equity Compensation	94
Note 11:	Short-Term Borrowings and Short-Term Bank Lines of Credit	96
Note 12:	Long-Term Debt	98
Note 13:	Common Stock	100
Note 14:	Preferred Stock	101
Note 15:	Commitments and Contingencies	102
Note 16:	Legal Proceedings	106
Note 17:	Guarantees	~~107~~106
Note 18:	Related Party Transactions and Relationships	~~108~~107
Note 19:	~~Derivative~~Fair ~~Instruments~~Value Measurements	~~108~~107
Note 20:	~~Fair~~Accumulated ~~Value~~Other ~~Measurements~~Comprehensive Income (Loss)	111
Note 21:	~~Accumulated Other Comprehensive Income (Loss)~~Taxes	~~115~~113
Note 22:	~~Taxes~~Segments and Related Information	117
Note 23:	~~Segments~~Jointly-Owned ~~and~~Electric ~~Related~~Utility ~~Information~~Plants	~~120~~119
Note 24:	~~Jointly-Owned~~Quarterly ~~Electric~~Operating ~~Utility~~Results ~~Plants~~(Unaudited)	~~121~~120
Note 25:	Quarterly Operating Results (Unaudited)	122

5756

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors ~~and~~of ~~Shareholders~~Great ofPlains Energy Incorporated

~~Great~~Opinion ~~Plains~~on ~~Energy~~the ~~Incorporated~~Financial Statements

~~Kansas~~We ~~City~~have audited the accompanying consolidated balance sheets of Great Plains Energy Incorporated and subsidiaries (the "Company") as of December 31, ~~Missouri~~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, ~~the~~in ~~accompanying~~accordance ~~consolidated~~with ~~balance~~the ~~sheets~~standards of ~~Great~~the ~~Plains~~Public ~~Energy~~Company ~~Incorporated~~Accounting ~~and~~Oversight ~~subsidiaries~~Board (~~the~~United ~~"Company"~~States) ~~as of December 31~~(PCAOB), ~~2016~~the ~~and~~Company's ~~2015,~~internal ~~and~~control ~~the~~over ~~related~~financial ~~consolidated~~reporting ~~statements~~as of ~~comprehensive income~~December 31, ~~shareholders' equity~~2017, ~~and~~based ~~cash~~on ~~flows~~criteria ~~for~~established ~~each of the three years~~ in ~~the~~Internal ~~period~~Control ~~ended~~- ~~December 31,~~Integrated ~~2016. Our~~Framework ~~audits~~(2013) ~~also~~issued ~~included~~by the ~~financial~~Committee ~~statement~~of ~~schedules~~Sponsoring ~~listed~~Organizations inof the ~~Index~~Treadway atCommission ~~Item~~and ~~15. These~~our ~~financial~~report ~~statements~~dated ~~and~~February 21, ~~financial~~2018, ~~statement~~expressed ~~schedules~~an ~~are~~unqualified ~~the~~opinion ~~responsibility~~on of the Company's ~~management. Our~~internal ~~responsibility~~control isover ~~to express an opinion on the~~ financial ~~statements and financial statement schedules based on our audits~~reporting.

WeBasis conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for ~~our opinion.~~Opinion

InThese ~~our opinion, such consolidated~~ financial statements ~~present~~are ~~fairly, in all material respects,~~ the ~~financial~~responsibility ~~position~~ of ~~Great~~the ~~Plains~~Company's ~~Energy~~management. Our ~~Incorporated~~responsibility ~~and~~is ~~subsidiaries~~to asexpress ofan ~~December 31,~~opinion ~~2016~~on ~~and 2015, and~~ the ~~results~~Company's offinancial ~~their~~statements ~~operations~~based ~~and~~on ~~their~~our ~~cash~~audits. We ~~flows~~are ~~for~~a ~~each~~public ofaccounting ~~the~~firm ~~three~~registered ~~years~~with in the ~~period~~PCAOB ~~ended~~and ~~December 31,~~are ~~2016,~~required into ~~conformity~~be independent with ~~accounting~~respect ~~principles~~to ~~generally~~the ~~accepted~~Company in ~~the~~accordance ~~United~~with ~~States~~the ~~of America~~U. ~~Also,~~S. infederal ~~our~~securities ~~opinion,~~laws ~~such~~and ~~financial~~the ~~statement~~applicable ~~schedules,~~rules ~~when~~and ~~considered~~regulations inof ~~relation to~~ the ~~basic~~Securities ~~consolidated~~and ~~financial~~Exchange ~~statements~~Commission ~~taken~~and ~~as a whole, present fairly, in all material respects,~~ the ~~information set forth therein~~PCAOB.

We ~~have~~conducted ~~also~~our ~~audited,~~audits in accordance with the standards of the ~~Public~~PCAOB. Those ~~Company~~standards ~~Accounting~~require ~~Oversight~~that ~~Board~~we ~~(United~~plan ~~States),~~and perform the ~~Company's~~audit ~~internal~~to ~~control~~obtain ~~over~~reasonable assurance about whether the financial ~~reporting~~statements asare free of ~~December 31,~~material ~~2016~~misstatement, ~~based~~whether ondue ~~the~~to ~~criteria~~error ~~established~~or infraud. Our ~~Internal~~audits ~~Control -~~included ~~Integrated~~performing ~~Framework~~procedures ~~(2013)~~to ~~issued~~assess by the ~~Committee~~risks of ~~Sponsoring~~material ~~Organizations~~misstatement of the ~~Treadway~~financial ~~Commission~~statements, whether due to error or fraud, and ~~our~~performing ~~report~~procedures ~~dated~~that ~~February 23~~respond to those risks. Such procedures included examining, ~~2017~~on a test basis, ~~expressed~~evidence anregarding ~~unqualified~~the ~~opinion~~amounts onand disclosures in the ~~Company's~~financial ~~internal~~statements. Our ~~control~~audits ~~over~~also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial ~~reporting~~statements. We believe that our audits provide a reasonable basis for our opinion.

/s/DELOITTE & TOUCHE LLP

Kansas City, Missouri

February 2321, ~~2017~~ 2018

58We have served as the Company's auditor since 2002.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholder and the Board of Directors ~~and~~of ~~Shareholder~~Kansas ofCity Power & Light Company

~~Kansas~~Opinion ~~City~~on ~~Power~~the &Financial ~~Light Company~~Statements

We have audited the accompanying consolidated balance sheets of Kansas City Power & Light Company and subsidiaries (the "Company") as of December 31, ~~Missouri~~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, ~~the~~in ~~accompanying~~accordance ~~consolidated~~with ~~balance~~the ~~sheets~~standards of ~~Kansas~~the ~~City~~Public ~~Power & Light~~ Company ~~and~~Accounting ~~subsidiaries~~Oversight Board (~~the~~United ~~"Company"~~States) ~~as of December 31~~(PCAOB), ~~2016 and 2015, and~~ the ~~related consolidated statements of comprehensive income, common shareholder~~Company's ~~equity,~~internal ~~and~~control ~~cash~~over ~~flows~~financial ~~for~~reporting ~~each~~as of ~~the three years in the period ended~~ December 31, ~~2016. Our~~2017, ~~audits~~based ~~also~~on ~~included~~criteria ~~the~~established ~~financial~~in ~~statement~~Internal ~~schedule~~Control ~~listed~~- inIntegrated ~~the~~Framework ~~Index~~(2013) atissued ~~Item~~by ~~15. These~~the ~~financial~~Committee ~~statements~~of ~~and~~Sponsoring ~~financial~~Organizations ~~statement~~of ~~schedule are~~ the ~~responsibility~~Treadway ofCommission ~~the~~and ~~Company's~~our ~~management. Our~~report ~~responsibility~~dated isFebruary 21, to2018, ~~express~~expressed an unqualified opinion on the ~~financial~~Company's ~~statements~~internal ~~and~~control over financial ~~statement schedule based on our audits~~reporting.

InThese ~~our opinion, such consolidated~~ financial statements ~~present~~are ~~fairly, in all material respects,~~ the ~~financial~~responsibility ~~position~~ of ~~Kansas~~the ~~City Power & Light~~ Company's ~~and~~management. Our ~~subsidiaries~~responsibility asis ofto ~~December 31,~~express ~~2016~~an ~~and~~opinion ~~2015,~~on ~~and~~ the ~~results~~Company's offinancial ~~their~~statements ~~operations~~based ~~and~~on ~~their~~our ~~cash~~audits. We ~~flows~~are ~~for~~a ~~each~~public ofaccounting ~~the~~firm ~~three~~registered ~~years~~with in the ~~period~~PCAOB ~~ended~~and ~~December 31,~~are ~~2016,~~required into ~~conformity~~be independent with ~~accounting~~respect ~~principles~~to ~~generally~~the ~~accepted~~Company in ~~the~~accordance ~~United~~with ~~States~~the ~~of America~~U. ~~Also,~~S. infederal ~~our~~securities ~~opinion,~~laws ~~such~~and ~~financial~~the ~~statement~~applicable ~~schedule,~~rules ~~when~~and ~~considered~~regulations inof ~~relation to~~ the ~~basic~~Securities ~~consolidated~~and ~~financial~~Exchange ~~statements~~Commission ~~taken~~and ~~as a whole, presents fairly, in all material respects,~~ the ~~information set forth therein~~PCAOB.

We ~~have~~conducted ~~also~~our ~~audited,~~audits in accordance with the standards of the ~~Public~~PCAOB. Those ~~Company~~standards ~~Accounting~~require ~~Oversight~~that ~~Board~~we ~~(United~~plan ~~States),~~and perform the ~~Company's~~audit ~~internal~~to ~~control~~obtain ~~over~~reasonable assurance about whether the financial ~~reporting~~statements asare free of ~~December 31,~~material ~~2016~~misstatement, ~~based~~whether ondue ~~the~~to ~~criteria~~error ~~established~~or infraud. Our ~~Internal~~audits ~~Control~~included -performing ~~Integrated~~procedures ~~Framework~~to ~~(2013)~~assess ~~issued by~~ the ~~Committee~~risks of ~~Sponsoring~~material ~~Organizations~~misstatement of the ~~Treadway~~financial ~~Commission~~statements, whether due to error or fraud, and ~~our~~performing ~~report~~procedures ~~dated~~that ~~February 23~~respond to those risks. Such procedures included examining, ~~2017~~on a test basis, ~~expressed~~evidence anregarding ~~unqualified~~the ~~opinion~~amounts onand disclosures in the ~~Company's~~financial ~~internal~~statements. Our ~~control~~audits ~~over~~also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial ~~reporting~~statements. We believe that our audits provide a reasonable basis for our opinion.

/s/DELOITTE & TOUCHE LLP

Kansas City, Missouri

February 2321, ~~2017~~ 2018

We have served as the Company's auditor since 2002.

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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.

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GREAT PLAINS ENERGY INCORPORATED
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Year Ended December 31		2016			2015				2014
	December 31
Operating Revenues	(millions, except per share amounts)
	2017					2016
Electric revenues		$	2,676.0		$	2,502.2			$	2,568.2
ASSETS	(millions, except share amounts)
Operating Expenses
Current Assets
Fuel and purchased power		590.1			608.7				742.5
Cash and cash equivalents		$	1,125.4				$	1,293.1
Transmission		84.8			89.1				74.7
Time deposit		—					1,000.0
Utility operating and maintenance expenses		759.5			724.8				701.9
Receivables, net		151.7					166.0
Costs to achieve the anticipated acquisition of Westar Energy, Inc.		34.2			—				—
Accounts receivable pledged as collateral		180.0					172.4
Depreciation and amortization		344.8			330.4				306.0
Fuel inventories, at average cost		103.2					108.8
General taxes		226.7			213.2				204.6
Materials and supplies, at average cost		171.2					162.2
Other		17.0			5.9				4.0
Deferred refueling outage costs		6.8					22.3
Total		2,057.1			1,972.1				2,033.7
Interest rate derivative instruments		91.4					79.3
Operating income		618.9			530.1				534.5
Prepaid expenses and other assets		33.4					55.4
Non-operating income		17.1			11.7				25.0
Total		1,863.1					3,059.5
Non-operating expenses		(14.3		)	(8.0		)		(12.5		)
Utility Plant, at Original Cost
Interest charges		(161.5		)	(199.3		)		(188.5		)
Electric		13,674.1					13,597.7
Income before income tax expense and income from equity investments		460.2			334.5				358.5
Less - accumulated depreciation		5,224.0					5,106.9
Income tax expense		(172.2		)	(122.7		)		(115.7		)
Net utility plant in service		8,450.1					8,490.8
Income from equity investments, net of income taxes		2.0			1.2				—
Construction work in progress		458.6					403.9
Net income		290.0			213.0				242.8
Plant to be retired, net		143.6					—
Preferred stock dividend requirements and redemption premium		16.5			1.6				1.6
Nuclear fuel, net of amortization of $204.2 and $172.1		72.4					62.0
Earnings available for common shareholders		$	273.5		$	211.4			$	241.2
Total		9,124.7					8,956.7
Average number of basic common shares outstanding		169.4			154.2				153.9
Investments and Other Assets
Average number of diluted common shares outstanding		169.8			154.8				154.1
Nuclear decommissioning trust fund		258.4					222.9
Basic and diluted earnings per common share		$	1.61		$	1.37			$	1.57
Regulatory assets		913.9					1,048.0
Comprehensive Income
Goodwill		169.0					169.0
Net income		$	290.0		$	213.0			$	242.8
Other		128.8					113.9
Other comprehensive income
Total		1,470.1					1,553.8
Derivative hedging activity
Total		$	12,457.9				$	13,570.0
Reclassification to expenses, net of tax		5.6			5.7				8.0
Derivative hedging activity, net of tax		5.6			5.7				8.0
Defined benefit pension plans
Net gain (loss) arising during period		(1.1		)	1.0				(3.0		)
Income tax (expense) benefit		0.4			(0.4		)		1.2
Net gain (loss) arising during period, net of tax		(0.7		)	0.6				(1.8		)
Amortization of net losses included in net periodic benefit costs, net of tax		0.5			0.4				0.4
Change in unrecognized pension expense, net of tax		(0.2		)	1.0				(1.4		)
Total other comprehensive income		5.4			6.7				6.6
Comprehensive income		$	295.4		$	219.7			$	249.4

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

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GREAT PLAINS ENERGY INCORPORATED
Consolidated Balance Sheets
	December 31
	2016				2015
	2017				2016
ASSETS	(millions, except share amounts)
LIABILITIES AND CAPITALIZATION	(millions, except share amounts)
Current Assets
Current Liabilities
Cash and cash equivalents		$	1,293.1			$	11.3
Notes payable		$	11.0			$	—
Time deposit		1,000.0				—
Collateralized note payable		180.0				172.4
Receivables, net		166.0				147.7
Commercial paper		376.8				334.8
Accounts receivable pledged as collateral		172.4				175.0
Current maturities of long-term debt		351.1				382.1
Fuel inventories, at average cost		108.8				118.4
Accounts payable		340.0				323.7
Materials and supplies, at average cost		162.2				155.7
Accrued taxes		35.1				33.3
Deferred refueling outage costs		22.3				19.2
Accrued interest		42.8				50.8
Refundable income taxes		—				3.8
Accrued compensation and benefits		50.1				52.1
Derivative instruments		81.5				0.8
Pension and post-retirement liability		2.7				3.0
Prepaid expenses and other assets		53.2				32.3
Other		59.2				32.6
Total		31,~~059~~448.58				~~664~~1,384.28
Utility Plant, at Original Cost
Deferred Credits and Other Liabilities
Electric		13,597.7				13,189.9
Deferred income taxes		621.7				1,329.7
Less - accumulated depreciation		5,106.9				4,943.7
Deferred tax credits		124.8				126.2
Net utility plant in service		8,490.8				8,246.2
Asset retirement obligations		262.5				316.0
Construction work in progress		403.9				347.9
Pension and post-retirement liability		535.0				488.3
Nuclear fuel, net of amortization of $172.1 and $192.5		62.0				68.3
Regulatory liabilities		1,106.3				309.9
Total		8,956.7				8,662.4
Other		81.4				87.9
Investments and Other Assets
Total		2,731.7				2,658.0
Nuclear decommissioning trust fund		222.9				200.7
Capitalization
Regulatory assets		1,048.0				979.1
Great Plains Energy shareholders' equity
Goodwill		169.0				169.0
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
Other		113.9				63.2
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
Total		1,553.8				1,412.0
Retained earnings		737.9				1,119.2
Total		$	13,570.0			$	10,738.6
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.

Table of Contents

GREAT PLAINS ENERGY INCORPORATED
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
	December 31
Year Ended December 31	2017				2016					2015
	2016					2015
Cash Flows from Operating Activities	(millions)
LIABILITIES AND CAPITALIZATION	(millions, except share amounts)
Net income (loss)	$	(106.2	)		$	290.0				$	213.0
Current Liabilities
Adjustments to reconcile income (loss) to net cash from operating activities:
Notes payable		$	—				$	10.0
Depreciation and amortization	371.1				344.8					330.4
Collateralized note payable		172.4					175.0
Amortization of:
Commercial paper		334.8					224.0
Nuclear fuel	32.1				26.6					26.8
Current maturities of long-term debt		382.1					1.1
Other	63.9				77.5					47.7
Accounts payable		323.7					352.9
Deferred income taxes, net	235.4				170.1					124.9
Accrued taxes		33.3					31.6
Investment tax credit amortization	(1.4		)		(1.4		)			(1.4		)
Accrued interest		50.8					44.7
Income from equity investments, net of income taxes	(2.5		)		(2.0		)			(1.2		)
Accrued compensation and benefits		52.1					41.4
Fair value impacts of interest rate swaps	(12.1		)		(79.3		)			—
Pension and post-retirement liability		3.0					3.4
Loss on Series B Preferred Stock dividend make-whole provisions (Note 14)	124.8				—					—
Other		32.6					31.6
Loss on extinguishment of debt (Note 12)	82.8				—					—
Total		1,384.8					915.7
Other operating activities (Note 3)	22.6				(42.3		)			12.9
Deferred Credits and Other Liabilities
Net cash from operating activities	810.5				784.0					753.1
Deferred income taxes		1,329.7					1,158.8
Cash Flows from Investing Activities
Deferred tax credits		126.2					125.1
Utility capital expenditures	(573.5		)		(609.4		)			(677.1		)
Asset retirement obligations		316.0					275.9
Allowance for borrowed funds used during construction	(7.4		)		(6.8		)			(5.8		)
Pension and post-retirement liability		488.3					455.2
Purchases of nuclear decommissioning trust investments	(33.6		)		(31.9		)			(50.9		)
Regulatory liabilities		309.9					284.4
Proceeds from nuclear decommissioning trust investments	30.3				28.6					47.6
Other		87.9					82.9
Purchase of time deposit	—				(1,000.0		)			—
Total		2,658.0					2,382.3
Proceeds from time deposit	1,000.0				—					—
Capitalization
Other investing activities	(45.6		)		(64.0		)			(48.2		)
Great Plains Energy shareholders' equity
Net cash from investing activities	370.2				(1,683.5		)			(734.4		)
Common stock - 600,000,000 and 250,000,000 shares authorized without par value 215,479,105 and 154,504,900 shares issued, stated value		4,217.0					2,646.7
Cash Flows from Financing Activities
Cumulative preferred stock - 390,000 shares authorized, $100 par value 0 and 390,000 shares issued and outstanding		—					39.0
Issuance of common stock	2.9				1,603.7					3.0
Preference stock - 11,000,000 shares authorized without par value 7.00% Series B Mandatory Convertible Preferred Stock $1,000 per share liquidation preference, 862,500 and 0 shares issued and outstanding		836.2					—
Issuance of preferred stock	—				862.5					—
Retained earnings		1,119.2					1,024.4
Issuance of long-term debt	4,591.1				—					348.8
Treasury stock - 128,087 and 101,229 shares, at cost		(3.8		)			(2.6		)
Issuance of long-term debt from remarketing	—				—					146.5
Accumulated other comprehensive loss		(6.6		)			(12.0		)
Repayment of long-term debt from remarketing	—				—					(146.5		)
Total shareholders' equity		6,162.0					3,695.5
Issuance fees	(38.3		)		(143.6		)			(3.0		)
Long-term debt (Note 12)		3,365.2					3,745.1
Repayment of long-term debt, including redemption premium	(4,725.1		)		(1.1		)			(87.0		)
Total		9,527.2					7,440.6
Net change in short-term borrowings	53.0				100.8					(128.3		)
Commitments and Contingencies (Note 15)
Net change in collateralized short-term borrowings	7.6				(2.6		)			4.0
Total		$	13,570.0				$	10,738.6
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.

Table of Contents

GREAT PLAINS ENERGY INCORPORATED
Consolidated Statements of Cash Flows
Consolidated Statements of Shareholders' Equity
Year Ended December 31	~~2016~~2017					~~2015~~		2016		~~2014~~			2015
Cash Flows from Operating Activities	(millions)
	Shares			Amount				Shares		Amount			Shares		Amount
Net income	$	290.0				$	213.0			$	242.8
Common Stock	(millions, except share amounts)
Adjustments to reconcile income to net cash from operating activities:
Beginning balance	215,479,105			$	4,217.0			154,504,900		$	2,646.7		154,254,037		$	2,639.3
Depreciation and amortization	344.8					330.4				306.0
Issuance of common stock	322,618			11.7				60,974,205		1,565.3			250,863		6.6
Amortization of:
Equity compensation expense, net of forfeitures				5.4						4.3					1.9
Nuclear fuel	26.6					26.8				26.1
Unearned Compensation
Other	77.5					47.7				46.1
Issuance of restricted common stock				(2.3		)				(2.8		)			(2.4		)
Deferred income taxes, net	170.1					124.9				125.8
Forfeiture of restricted common stock				0.7						—					0.5
Investment tax credit amortization	(1.4		)			(1.4		)		(1.4		)
Compensation expense recognized				2.1						2.7					1.8
Income from equity investments, net of income taxes	(2.0		)			(1.2		)		—
Other				(1.5		)				0.8					(1.0		)
Fair value impacts of interest rate swaps	(79.3		)			—				—
Ending balance	215,801,723			4,233.1				215,479,105		4,217.0			154,504,900		2,646.7
Other operating activities (Note 3)	(42.3		)			12.9				(47.2		)
Cumulative Preferred Stock
Net cash from operating activities	784.0					753.1				698.2
Beginning balance	—			—				390,000		39.0			390,000		39.0
Cash Flows from Investing Activities
Redemption of cumulative preferred stock	—			—				(390,000	)	(39.0		)	—		—
Utility capital expenditures	(609.4		)			(677.1		)		(773.7		)
Ending balance	—			—				—		—			390,000		39.0
Allowance for borrowed funds used during construction	(6.8		)			(5.8		)		(13.0		)
Preference Stock
Purchases of nuclear decommissioning trust investments	(31.9		)			(50.9		)		(27.5		)
Beginning balance	862,500			836.2				—		—			—		—
Proceeds from nuclear decommissioning trust investments	28.6					47.6				24.2
Issuance of Series B Preferred Stock	—			—				862,500		836.2			—		—
Purchase of time deposit	(1,000.0		)			—				—
Redemption of Series B Preferred Stock	(862,500	)		(836.2		)		—		—			—		—
Proceeds from sale of transmission assets	—					—				37.7
Ending balance	—			—				862,500		836.2			—		—
Other investing activities	(64.0		)			(48.2		)		(27.5		)
Retained Earnings
Net cash from investing activities	(1,683.5		)			(734.4		)		(779.8		)
Beginning balance				1,119.2						1,024.4					967.8
Cash Flows from Financing Activities
Net income (loss)				(106.2		)				290.0					213.0
Issuance of common stock	1,603.7					3.0				4.8
Redemption premium on preferred stock				(2.4		)				(0.6		)			—
Issuance of preference stock	862.5					—				—
Dividends:
Issuance of long-term debt	—					348.8				—
Common stock ($1.10, $1.0625 and $0.9975 per share)				(237.1		)				(181.0		)			(153.9		)
Issuance of long-term debt from remarketing	—					146.5				—
Preferred stock - at required rates				(34.9		)				(13.0		)			(1.6		)
Repayment of long-term debt from remarketing	—					(146.5		)		—
Performance shares				(0.7		)				(0.6		)			(0.9		)
Issuance fees	(143.6		)			(3.0		)		(0.9		)
Ending balance				737.9						1,119.2					1,024.4
Repayment of long-term debt	(1.1		)			(87.0		)		(13.4		)
Treasury Stock
Net change in short-term borrowings	100.8					(128.3		)		245.1
Beginning balance	(128,087	)		(3.8		)		(101,229	)	(2.6		)	(91,281	)	(2.3		)
Net change in collateralized short-term borrowings	(2.6		)			4.0				(4.0		)
Treasury shares acquired	(149,544	)		(4.3		)		(138,021	)	(4.1		)	(76,468	)	(2.0		)
Dividends paid	(194.0		)			(155.5		)		(145.6		)
Treasury shares reissued	140,042			4.1				111,163		2.9			66,520		1.7
Redemption of cumulative preferred stock	(40.1		)			—				—
Ending balance	(137,589	)		(4.0		)		(128,087	)	(3.8		)	(101,229	)	(2.6		)
Purchase of treasury stock	(5.0		)			(1.6		)		(2.5		)
Accumulated Other Comprehensive Income (Loss)
Other financing activities	0.7					(0.8		)		0.5
Beginning balance				(6.6		)				(12.0		)			(18.7		)
Net cash from financing activities	2,181.3					(20.4		)		84.0
Derivative hedging activity, net of tax				4.9						5.6					5.7
Net Change in Cash and Cash Equivalents	1,281.8					(1.7		)		2.4
Change in unrecognized pension expense, net of tax				(0.5		)				(0.2		)			1.0
Cash and Cash Equivalents at Beginning of Year	11.3					13.0				10.6
Ending balance				(2.2		)				(6.6		)			(12.0		)
Cash and Cash Equivalents at End of Year	$	1,293.1				$	11.3			$	13.0
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.

Table of Contents

GREAT PLAINS ENERGY INCORPORATED
KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Shareholders' Equity
Consolidated Statements of Comprehensive Income
Year Ended December 31	~~2016~~	2017				2016		~~2015~~		2015				~~2014~~
	Shares			Amount				Shares			Amount			Shares		Amount
Operating Revenues		(millions)
Common Stock	(millions, except share amounts)
Electric revenues		$	1,890.7			$	1,875.4			$	1,713.8
Beginning balance	154,504,900			$	2,646.7			154,254,037			$	2,639.3		153,995,621		$	2,631.1
Operating Expenses
Issuance of common stock	60,974,205			1,565.3				250,863			6.6			258,416		6.7
Fuel and purchased power		412.1				372.7				397.1
Equity compensation expense, net of forfeitures				4.3							1.9					0.5
Transmission		68.6				56.4				58.4
Unearned Compensation
Operating and maintenance expenses		506.4				525.8				494.2
Issuance of restricted common stock				(2.8		)					(2.4		)			(2.1		)
Costs to achieve the anticipated merger with Westar Energy, Inc.		10.5				10.9				—
Forfeiture of restricted common stock				—							0.5					—
Depreciation and amortization		266.3				247.5				235.7
Compensation expense recognized				2.7							1.8					2.0
General taxes		182.5				177.5				163.5
Other		0.6		~~0.8~~		2.5				0.9	~~(1.0~~		)			~~1.1~~
Ending balance	215,479,105			4,217.0				154,504,900			2,646.7			154,254,037		2,639.3
Total		1,447.0				1,393.3				1,349.8
Cumulative Preferred Stock
Operating income		443.7				482.1				364.0
Beginning balance	390,000			39.0				390,000			39.0			390,000		39.0
Other Income (Expense)
Redemption of cumulative preferred stock	(390,000	)		(39.0		)		—			—			—		—
Non-operating income		11.2				11.8				8.4
Ending balance	—			—				390,000			39.0			390,000		39.0
Non-operating expenses		(8.1		)		(7.6		)		(7.2		)
Preference Stock
Total		3.1				4.2				1.2
Beginning balance	—			—				—			—			—		—
Interest charges		(138.8		)		(139.4		)		(135.6		)
Issuance of Series B Mandatory Convertible Preferred Stock	862,500			836.2				—			—			—		—
Income before income tax expense		308.0				346.9				229.6
Ending balance	862,500			836.2				—			—			—		—
Income tax expense		(128.2		)		(121.9		)		(76.8		)
Retained Earnings
Net income		$	179.8			$	225.0			$	152.8
Beginning balance				1,024.4							967.8					871.4
Comprehensive Income
Net income		$	179.8	~~290.0~~		$	225.0			$	~~213~~152.08					~~242.8~~
Redemption premium on cumulative preferred stock				(0.6		)					—					—
Other comprehensive income
Dividends:
Derivative hedging activity
Common stock ($1.0625, $0.9975 and $0.935 per share)				(181.0		)					(153.9		)			(144.0		)
Reclassification to expenses, net of tax		4.6				5.4				5.3
Preferred stock - at required rates				(13.0		)					(1.6		)			(1.6		)
Derivative hedging activity, net of tax		4.6				5.4				5.3
Performance shares				(0.6		)					(0.9		)			(0.8		)
Total other comprehensive income		4.6				5.4				5.3
Ending balance				1,119.2							1,024.4					967.8
Comprehensive income		$	184.4			$	230.4			$	158.1
Treasury Stock
Beginning balance	(101,229	)		(2.6		)		(91,281	)		(2.3		)	(129,290	)	(2.8		)
Treasury shares acquired	(138,021	)		(4.1		)		(76,468	)		(2.0		)	(85,744	)	(2.2		)
Treasury shares reissued	111,163			2.9				66,520			1.7			123,753		2.7
Ending balance	(128,087	)		(3.8		)		(101,229	)		(2.6		)	(91,281	)	(2.3		)
Accumulated Other Comprehensive Income (Loss)
Beginning balance				(12.0		)					(18.7		)			(25.3		)
Derivative hedging activity, net of tax				5.6							5.7					8.0
Change in unrecognized pension expense, net of tax				(0.2		)					1.0					(1.4		)
Ending balance				(6.6		)					(12.0		)			(18.7		)
Total Great Plains Energy Shareholders' Equity				$	6,162.0						$	3,695.5				$	3,625.1

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

Table of Contents

KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Year Ended December 31		2016			2015				2014
	December 31
Operating Revenues		(millions)
	2017					2016
Electric revenues		$	1,875.4		$	1,713.8			$	1,730.8
ASSETS	(millions, except share amounts)
Operating Expenses
Current Assets
Fuel and purchased power		372.7			397.1				472.7
Cash and cash equivalents		$	2.2				$	4.5
Transmission		56.4			58.4				47.2
Receivables, net		106.3					139.1
Operating and maintenance expenses		525.8			494.2				489.1
Related party receivables		84.7					67.2
Costs to achieve the anticipated acquisition of Westar Energy, Inc.		10.9			—				—
Accounts receivable pledged as collateral		130.0					110.0
Depreciation and amortization		247.5			235.7				213.9
Fuel inventories, at average cost		71.0					72.9
General taxes		177.5			163.5				159.1
Materials and supplies, at average cost		126.0					118.9
Other		2.5			0.9				(1.3		)
Deferred refueling outage costs		6.8					22.3
Total		1,393.3			1,349.8				1,380.7
Refundable income taxes		5.4					12.7
Operating income		482.1			364.0				350.1
Prepaid expenses and other assets		27.6					27.9
Non-operating income		11.8			8.4				20.4
Total		560.0					575.5
Non-operating expenses		(7.6		)	(7.2		)		(8.3		)
Utility Plant, at Original Cost
Interest charges		(139.4		)	(135.6		)		(124.1		)
Electric		10,213.2					9,925.1
Income before income tax expense		346.9			229.6				238.1
Less - accumulated depreciation		4,070.3					3,858.4
Income tax expense		(121.9		)	(76.8		)		(75.7		)
Net utility plant in service		6,142.9					6,066.7
Net income		$	225.0		$	152.8			$	162.4
Construction work in progress		350.3					300.4
Comprehensive Income
Nuclear fuel, net of amortization of $204.2 and $172.1		72.4					62.0
Net income		$	225.0		$	152.8			$	162.4
Total		6,565.6					6,429.1
Other comprehensive income
Investments and Other Assets
Derivative hedging activity
Nuclear decommissioning trust fund		258.4					222.9
Reclassification to expenses, net of tax		5.4			5.3				5.3
Regulatory assets		691.9					801.8
Derivative hedging activity, net of tax		5.4			5.3				5.3
Other		48.0					29.1
Total other comprehensive income		5.4			5.3				5.3
Total		998.3					1,053.8
Comprehensive income		$	230.4		$	158.1			$	167.7
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.

Table of Contents

KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
	December 31
	2016			2015
	2017			2016
ASSETS	(millions, except share amounts)
LIABILITIES AND CAPITALIZATION	(millions, except share amounts)
Current Assets
Current Liabilities
Cash and cash equivalents		$	4.5		$	2.3
Collateralized note payable		$	130.0		$	110.0
Receivables, net		139.1			129.2
Commercial paper		167.5			132.9
Related party receivables		67.2			65.8
Current maturities of long-term debt		350.0			281.0
Accounts receivable pledged as collateral		110.0			110.0
Accounts payable		249.0			231.6
Fuel inventories, at average cost		72.9			83.5
Accrued taxes		29.0			27.0
Materials and supplies, at average cost		118.9			114.6
Accrued interest		32.4			32.4
Deferred refueling outage costs		22.3			19.2
Accrued compensation and benefits		50.1			52.1
Refundable income taxes		12.7			79.0
Pension and post-retirement liability		1.4			1.6
Prepaid expenses and other assets		27.9			27.6
Other		46.8			11.4
Total		~~575~~1,056.52			~~631~~880.20
Utility Plant, at Original Cost
Deferred Credits and Other Liabilities
Electric		9,925.1			9,640.4
Deferred income taxes		616.1			1,228.3
Less - accumulated depreciation		3,858.4			3,722.6
Deferred tax credits		121.8			122.8
Net utility plant in service		6,066.7			5,917.8
Asset retirement obligations		231.4			278.0
Construction work in progress		300.4			246.6
Pension and post-retirement liability		512.2			465.8
Nuclear fuel, net of amortization of $172.1 and $192.5		62.0			68.3
Regulatory liabilities		779.2			187.4
Total		6,429.1			6,232.7
Other		61.6			70.6
Investments and Other Assets
Total		2,322.3			2,352.9
Nuclear decommissioning trust fund		222.9			200.7
Capitalization
Regulatory assets		801.8			732.4
Common shareholder's equity
Other		29.1			17.6
Common stock - 1,000 shares authorized without par value
Total		1,053.8			950.7
1 share issued, stated value		1,563.1			1,563.1
Total		$	8,058.4		$	7,814.6
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.

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KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
	December 31
Year Ended December 31		2017			2016				2015
	2016				2015
Cash Flows from Operating Activities	(millions)
LIABILITIES AND CAPITALIZATION	(millions, except share amounts)
Net income		$	179.8		$	225.0			$	152.8
Current Liabilities
Adjustments to reconcile income to net cash from operating activities:
Collateralized note payable		$	110.0			$	110.0
Depreciation and amortization		266.3			247.5				235.7
Commercial paper		132.9				180.3
Amortization of:
Current maturities of long-term debt		281.0				—
Nuclear fuel		32.1			26.6				26.8
Accounts payable		231.6				258.8
Other		30.2			33.9				29.1
Accrued taxes		27.0				25.6
Deferred income taxes, net		83.5			93.4				99.4
Accrued interest		32.4				32.4
Investment tax credit amortization		(1.0		)	(1.0		)		(1.0		)
Accrued compensation and benefits		52.1				41.4
Other operating activities (Note 3)		20.0			(2.1		)		(61.5		)
Pension and post-retirement liability		1.6				2.0
Net cash from operating activities		610.9			623.3				481.3
Other		11.4				12.6
Cash Flows from Investing Activities
Total		880.0				663.1
Utility capital expenditures		(437.7		)	(418.8		)		(518.3		)
Deferred Credits and Other Liabilities
Allowance for borrowed funds used during construction		(6.1		)	(5.6		)		(3.9		)
Deferred income taxes		1,228.3				1,132.6
Purchases of nuclear decommissioning trust investments		(33.6		)	(31.9		)		(50.9		)
Deferred tax credits		122.8				123.8
Proceeds from nuclear decommissioning trust investments		30.3			28.6				47.6
Asset retirement obligations		278.0				239.3
Other investing activities		(23.9		)	(23.8		)		(25.5		)
Pension and post-retirement liability		465.8				433.4
Net cash from investing activities		(471.0		)	(451.5		)		(551.0		)
Regulatory liabilities		187.4				164.6
Cash Flows from Financing Activities
Other		70.6				61.6
Issuance of long-term debt		299.2			—				348.8
Total		2,352.9				2,155.3
Issuance of long-term debt from remarketing		—			—				146.5
Capitalization
Repayment of long-term debt from remarketing		—			—				(146.5		)
Common shareholder's equity
Issuance fees		(3.0		)	(0.2		)		(3.0		)
Common stock - 1,000 shares authorized without par value
Repayment of long-term debt		(281.0		)	—				(85.9		)
1 share issued, stated value		1,563.1				1,563.1
Net change in short-term borrowings		34.6			(47.4		)		(178.0		)
Retained earnings		982.6				879.6
Net change in collateralized short-term borrowings		20.0			—				—
Accumulated other comprehensive loss		(4.2		)		(9.6		)
Net money pool borrowings		—			—				(12.6		)
Total		2,541.5				2,433.1
Dividends paid to Great Plains Energy		(212.0		)	(122.0		)		—
Long-term debt (Note 12)		2,284.0				2,563.1
Net cash from financing activities		(142.2		)	(169.6		)		69.3
Total		4,825.5				4,996.2
Net Change in Cash and Cash Equivalents		(2.3		)	2.2				(0.4		)
Commitments and Contingencies (Note 15)
Cash and Cash Equivalents at Beginning of Year		4.5			2.3				2.7
Total		$	8,058.4			$	7,814.6
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.

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KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Cash Flows
Consolidated Statements of Common Shareholder's Equity
Year Ended December 31	2017	~~2016~~					~~2015~~2016					~~2014~~		2015
Cash Flows from Operating Activities	(millions)
	Shares			Amount			Shares			Amount				Shares	Amount
Net income		$	225.0				$	152.8				$	162.4
	(millions, except share amounts)
Adjustments to reconcile income to net cash from operating activities:
Common Stock	1			$	1,563.1		1			$	1,563.1			1	$	1,563.1
Depreciation and amortization		247.5					235.7					213.9
Retained Earnings
Amortization of:
Beginning balance				982.6						879.6					726.8
Nuclear fuel		26.6					26.8					26.1
Net income				179.8						225.0					152.8
Other		33.9					29.1					29.3
Cumulative effect of adoption of ASU 2016-09 (Note 1)				(0.7		)				—					—
Deferred income taxes, net		93.4					99.4					88.4
Dividends:
Investment tax credit amortization		(1.0		)			(1.0		)			(1.0		)
Common stock held by Great Plains Energy				(212.0		)				(122.0		)			—
Other operating activities (Note 3)		(2.1		)			(61.5		)			(64.7		)
Ending balance				949.7						982.6					879.6
Net cash from operating activities		623.3					481.3					454.4
Accumulated Other Comprehensive Income (Loss)
Cash Flows from Investing Activities
Beginning balance				(4.2		)				(9.6		)			(14.9		)
Utility capital expenditures		(418.8		)			(518.3		)			(635.9		)
Derivative hedging activity, net of tax				4.6						5.4					5.3
Allowance for borrowed funds used during construction		(5.6		)			(3.9		)			(11.1		)
Ending balance				0.4						(4.2		)			(9.6		)
Purchases of nuclear decommissioning trust investments		(31.9		)			(50.9		)			(27.5		)
Total Common Shareholder's Equity				$	2,513.2					$	2,541.5				$	2,433.1
Proceeds from nuclear decommissioning trust investments		28.6					47.6					24.2
Net money pool lending		—					—					4.7
Other investing activities		(23.8		)			(25.5		)			(15.2		)
Net cash from investing activities		(451.5		)			(551.0		)			(660.8		)
Cash Flows from Financing Activities
Issuance of long-term debt		—					348.8					—
Issuance fees		(0.2		)			(3.0		)			(0.4		)
Issuance of long-term debt from remarketing		—					146.5					—
Repayment of long-term debt from remarketing		—					(146.5		)			—
Repayment of long-term debt		—					(85.9		)			—
Net change in short-term borrowings		(47.4		)			(178.0		)			265.1
Net money pool borrowings		—					(12.6		)			12.4
Dividends paid to Great Plains Energy		(122.0		)			—					(72.0		)
Net cash from financing activities		(169.6		)			69.3					205.1
Net Change in Cash and Cash Equivalents		2.2					(0.4		)			(1.3		)
Cash and Cash Equivalents at Beginning of Year		2.3					2.7					4.0
Cash and Cash Equivalents at End of Year		$	4.5				$	2.3				$	2.7

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

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KANSAS CITY POWER & LIGHT COMPANY
Consolidated Statements of Common Shareholder's Equity
Year Ended December 31	2016				2015				2014
	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		879.6				726.8				636.4
Net income		225.0				152.8				162.4
Dividends:
Common stock held by Great Plains Energy		(122.0		)		—				(72.0		)
Ending balance		982.6				879.6				726.8
Accumulated Other Comprehensive Income (Loss)
Beginning balance		(9.6		)		(14.9		)		(20.2		)
Derivative hedging activity, net of tax		5.4				5.3				5.3
Ending balance		(4.2		)		(9.6		)		(14.9		)
Total Common Shareholder's Equity		$	2,541.5			$	2,433.1			$	2,275.0

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

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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 ~~and a time deposit to be used to fund a portion of the cash consideration for the anticipated acquisition of Westar Energy, Inc~~. ~~(Westar).~~ 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.

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 2322 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 ~~time~~Company ~~deposit~~estimates ~~matures in~~ the ~~first~~fair ~~quarter~~value of ~~2017 and~~ the ~~proceeds~~time ~~from~~deposit, ~~this~~which ~~investment~~approximates ~~are~~its ~~expected~~carrying tovalue, beusing ~~used~~Level to2 ~~fund~~inputs abased ~~portion~~on ofcurrent ~~the~~interest ~~cash~~rates ~~consideration~~ for ~~the~~similar ~~anticipated~~investments ~~acquisition~~with ofcomparable ~~Westar. The~~credit ~~Company~~risk ~~estimates~~and ~~the fair value of the~~ time ~~deposit,~~to ~~which approximates its carrying~~ maturity.

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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.

Derivative instruments - The fair value of commodity derivative instruments is estimated using market quotes, over-the-counter forward price and volatility curves and correlation among fuel prices, net of estimated credit risk. The fair value of interest rate derivative instruments is determined by calculating the net present value of expected payments and receipts under interest rate swaps using observable market inputs including interest rates and LIBOR swap rates. Management also discounts the value by a contingency factor that it believes is representative of what a market participant would use in valuing these instruments in order to account for the contingent nature of the settlement of these instruments.

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 ~~used~~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. ~~See~~ ~~Note 19 for additional information regarding derivative financial instruments and hedging activities.~~

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.

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KCP&L averaged 5.7% in 2016, 3.0% in 2015 and 5.7% in 2014. The rates used to compute gross AFUDC for GMO averaged 1.6% in 2016, 4.2% in 2015 and 6.1% in 2014.

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	~~2016~~2017		~~2015~~2016
Utility plant, at original cost	(millions)
Generation (20 - 60 years)	$	87,~~106~~930.48	$	78,~~923~~106.84
Transmission (15 - 70 years)	~~886~~912.3		~~848~~886.83
Distribution (8 - 66 years)	3,~~629~~789.10		3,~~498~~629.61
General (5 - 50 years)	~~975~~1,042.90		~~918~~975.79
Total (a)	$	13,~~597~~674.71	$	13,~~189~~597.97

^(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	~~2016~~2017		~~2015~~2016
Utility plant, at original cost	(millions)
Generation (20 - 60 years)	$	6,~~350~~471.75	$	6,~~222~~350.57
Transmission (15 - 70 years)	~~484~~500.14		~~465~~484.31
Distribution (8 - 55 years)	2,~~298~~389.4		2,~~215~~298.24
General (5 - 50 years)	~~791~~851.9		~~737~~791.49
Total (a)	$	910,~~925~~213.12	$	9,~~640~~925.41

(a) Includes $~~178~~176.0 million and $~~136~~178.50 million at December 31, ~~2016~~2017 and ~~2015~~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 $308.8 million, $299.4 million and $277.9 million for 2016, 2015 and 2014, respectively. KCP&L's depreciation expense was $215.4 million, $208.5 million and $189.7 million for 2016, 2015 and 2014, respectively. 71

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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.

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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 $7072.39 million, $6270.03 million and $6062.40 million in ~~2016~~2017, ~~2015~~2016 and ~~2014~~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.

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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. IfThe goodwill impairment test consists of comparing the fair value of a reporting unit isto ~~less than~~ its carrying ~~value~~amount, including goodwill, anto identify potential impairment. In ~~charge~~the ~~for~~event ~~goodwill~~that ~~must~~the becarrying ~~recognized~~amount inexceeds the ~~financial~~fair ~~statements. To~~value ~~measure~~of the ~~amount~~reporting ofunit, ~~the~~an impairment loss tois ~~recognize,~~recognized for the ~~implied~~difference ~~fair~~between ~~value~~the carrying amount of the reporting unit ~~goodwill~~and ~~is compared with~~ its ~~carrying~~fair value.

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Income Taxes

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 ~~asset~~liability for the additional future ~~revenues~~refunds to be ~~collected~~made ~~from~~to customers for ~~deferred~~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.

~~Basic~~Non-Operating Income and ~~Diluted Earnings per Common Share Calculation~~Expenses

ToIn ~~determine basic earnings per common share (EPS)~~2017, ~~preferred~~Great ~~stock~~Plains ~~dividend~~Energy's ~~requirements~~non-operating ~~and~~income ~~redemption~~included ~~premium~~$22.8 ~~are~~million ~~deducted~~of ~~from~~interest ~~net~~ income ~~before~~earned ~~dividing~~on byincreased ~~the~~cash ~~average~~and ~~number~~cash ofequivalents ~~common~~at ~~shares~~Great ~~outstanding. To~~Plains ~~determine~~Energy ~~diluted~~in ~~EPS,~~2017 ~~preferred~~related ~~stock dividend requirements are added~~ to ~~earnings available for common shareholders for~~ the ~~periods~~proceeds infrom ~~which the assumed conversion of~~ Great Plains Energy's ~~7.00%~~October ~~Series~~2016 ~~B Mandatory~~common ~~Convertible~~stock ~~Preferred~~and ~~Stock (~~Series B Preferred Stock) ~~has~~offerings aand ~~dilutive~~March ~~effect~~2017 ~~before~~issuance ~~dividing by the diluted average number~~ of ~~common shares outstanding~~$4. ~~The~~3 ~~effect~~billion of ~~dilutive~~senior ~~securities~~notes ~~assumes~~and ~~the~~$14.0 ~~issuance~~million of ~~common shares applicable~~ mark-to-market ~~performance~~gains ~~shares~~on ~~and~~deal ~~restricted~~contingent ~~stock~~interest ~~calculated~~rate ~~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~~swaps.

~~The~~In ~~following~~2017, ~~table reconciles~~ Great Plains Energy's ~~basic~~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 ~~diluted~~OCM ~~EPS~~Credit Portfolio LP (OMERS) in July 2017.

	2016		2015		2014
	(millions, except per share amounts)
Income
Net income	$	290.0	$	213.0	$	242.8
Less: preferred stock dividend requirements and redemption premium	16.5		1.6		1.6
Earnings available for common shareholders	$	273.5	$	211.4	$	241.2
Common Shares Outstanding
Average number of common shares outstanding	169.4		154.2		153.9
Add: effect of dilutive securities	0.4		0.6		0.2
Diluted average number of common shares outstanding	169.8		154.8		154.1
Basic and Diluted EPS	$	1.61	$	1.37	$	1.57

Table of Contents

~~Anti-dilutive~~Basic ~~shares~~and ~~excluded~~Diluted ~~from~~Earnings ~~the~~(Loss) ~~computation~~per ofCommon ~~diluted~~Share ~~EPS are detailed in the following table.~~Calculation

	2016	2015	2014
Assumed conversion of Series B Preferred Stock	7,805,460	—	—
Performance shares	—	—	482,987
Restricted stock shares	—	900	3,287

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

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

Depositary Shares Each Representing a 1/20th Interest in a Share of 7.00% Series B Mandatory Convertible Preferred Stock

Securities registered pursuant to Section 12(g) of the Act: Kansas City Power & Light Company Common Stock without par value.

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