UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

# Form 10-Q

|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                    OF 1934
|--- | -----------------------------------------------------------------------------------------------------------

For
the quarterly period ended September 30, 2003

or

|[ ] | TRANSITION REPORT
PURSUANT SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
|--- | ------------------------------------------------------------------------------------

For the transition
period from _______ to _______

|            |  |                                    
|----------- |  | -----------------------------------
|Commission  |  | Registrant, State of Incorporation,
|File Number |  | Address and Telephone Number       
|0-33207     |  | GREAT PLAINS ENERGY INCORPORATED   
|            |  | (A Missouri Corporation)           
|            |  | 1201 Walnut Street                 
|            |  | Kansas City, Missouri 64106        
|            |  | (816) 556-2200                     
|            |  | www.greatplainsenergy.com          
|            | 
|1-707       |  | KANSAS CITY POWER & LIGHT COMPANY  
|            |  | (A Missouri Corporation)           
|            |  | 1201 Walnut Street                 
|            |  | Kansas City, Missouri 64106        
|            |  | (816) 556-2200                     
|            |  | www.kcpl.com                       

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes XNo _

Indicated by check mark whether the
registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Great
Plains Energy Incorporated Yes X No _ Kansas City Power & Light Company Yes _
No X

As of November 3, 2003, the number of
shares outstanding of (i) Great Plains Energys common stock was 69,255,938 and (ii)
Kansas City Power and Light Companys common stock was one, which was held by Great
Plains Energy.

Great Plains Energy Incorporated and
Kansas City Power & Light Company separately file this combined Quarterly Report on
Form 10-Q. Information contained herein relating to an individual registrant and its
subsidiaries is filed by such registrant on its own behalf. Each registrant makes
representations only as to information relating to itself and its subsidiaries.

The terms Great Plains
Energy, Company, KCP&L, and consolidated
KCP&L 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 consolidated KCP&L refers to KCP&L and
its consolidated subsidiaries.

This report should be read in its
entirety. No one section of the report deals with all aspects of the subject matter.

# 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. In connection with the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the
registrants are providing a number of important factors that could cause actual results to
differ materially from the provided forward-looking information. These important factors
include:

|  |                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------
|o | future economic conditions in the regional, national and international markets                                   
|o | market perception of the energy industry and the Company                                                         
|o | changes in business strategy, operations or development plans                                                    
|o | 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 and constraints placed on the Company's actions by the Public Utility Holding Company Act of 1935       
|o | adverse changes in applicable laws, regulations, rules, principles or practices governing tax, accounting and    
|  | environmental matters including, but not limited to, air quality                                                 
|o | financial market conditions including, but not limited to, changes in interest rates and in availability and cost
|  | of capital                                                                                                       
|o | ability to maintain current credit ratings                                                                       
|o | inflation rates                                                                                                  
|o | effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their      
|  | contractual commitments                                                                                          
|o | impact of terrorist acts                                                                                         
|o | increased competition including, but not limited to, retail choice in the electric utility industry and the entry
|  | of new competitors                                                                                               
|o | ability to carry out marketing and sales plans                                                                   
|o | weather conditions including weather-related damage                                                              
|o | cost and availability of fuel                                                                                    
|o | ability to achieve generation planning goals and the occurrence of unplanned generation outages                  
|o | delays in the anticipated in-service dates of additional generating capacity                                     
|o | nuclear operations                                                                                               
|o | ability to enter new markets successfully and capitalize on growth opportunities in non-regulated businesses     
|o | performance of projects undertaken by the Company's non-regulated businesses and the success of efforts to invest
|  | in and develop new opportunities, and                                                                            
|o | other risks and uncertainties.                                                                                   

This list of factors is not
all-inclusive because it is not possible to predict all factors.

2

# GLOSSARY OF TERMS

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

|Abbreviation or Acronym | Definition                                                           
|----------------------- | ---------------------------------------------------------------------
|
|35 Act                  | Public Utility Holding Company Act of 1935                           
|ARB                     | Accounting Research Bulletin                                         
|ARO                     | Asset Retirement Obligations                                         
|CO2                     | Carbon Dioxide                                                       
|COLI                    | Corporate Owned Life Insurance                                       
|Clean Air Act           | Clean Air Act Amendments of 1990                                     
|Compact                 | Central Interstate Low-Level Radioactive Waste Compact               
|Company                 | Great Plains Energy Incorporated and its subsidiaries                
|Consolidated KCP&L      | KCP&L and its subsidiary HSS                                         
|DTI                     | DTI Holdings, Inc. and its subsidiaries Digital Teleport, Inc.       
|                        | and Digital Teleport of Virginia, Inc.                               
|Digital Teleport        | Digital Teleport, Inc.                                               
|EBITDA                  | Earnings before interest, income taxes, depreciation and amortization
|EIRR                    | Environmental Improvement Revenue Refunding                          
|EPA                     | Environmental Protection Agency                                      
|EPS                     | Earnings per share                                                   
|ERISA                   | Employee Retirement Income Security Act of 1974                      
|FASB                    | Financial Accounting Standards Board                                 
|FERC                    | Federal Energy Regulatory Commission                                 
|FIN                     | Financial Accounting Standards Board Interpretation                  
|GPP                     | Great Plains Power Incorporated, a wholly-owned subsidiary           
|                        | of Great Plains Energy                                               
|Great Plains Energy     | Great Plains Energy Incorporated and its subsidiaries                
|HSS                     | Home Service Solutions Inc., a wholly-owned subsidiary of KCP&L      
|Holdings                | DTI Holdings, Inc.                                                   
|IEC                     | Innovative Energy Consultants Inc., a wholly-owned subsidiary        
|                        | of Great Plains Energy                                               
|IRS                     | Internal Revenue Service                                             
|ISO                     | Independent Service Operator                                         
|KCC                     | The State Corporation Commission of the State of Kansas              
|KCP&L                   | Kansas City Power & Light Company, a wholly-owned subsidiary         
|                        | of Great Plains Energy                                               
|KLT Gas                 | KLT Gas Inc., a wholly-owned subsidiary of KLT Inc.                  
|KLT Energy Services     | KLT Energy Services Inc., a wholly-owned subsidiary of KLT Inc.      
|KLT Inc.                | KLT Inc., a wholly-owned subsidiary of Great Plains Energy           
|KLT Investments         | KLT Investments Inc., a wholly-owned subsidiary of KLT Inc.          
|KLT Telecom             | KLT Telecom Inc., a wholly-owned subsidiary of KLT Inc.              
|MAC                     | Material Adverse Change                                              
|MACT                    | Maximum Achievable Control Technology                                
|MISO                    | Midwest Independent System Operator                                  
|MPSC                    | Missouri Public Service Commission                                   
|MWh                     | Megawatt hour                                                        
|NEIL                    | Nuclear Electric Insurance Limited                                   
|NOx                     | Nitrogen Oxide                                                       
|NRC                     | Nuclear Regulatory Commission                                        

3

|Abbreviation or Acronym | Definition                                                   
|----------------------- | -------------------------------------------------------------
|
|OCI                     | Other Comprehensive Income                                   
|RSAE                    | R.S. Andrews Enterprises, Inc., a subsidiary of HSS          
|RTO                     | Regional Transmission Organization                           
|Receivables Company     | Kansas City Power & Light Receivables Company, a wholly-owned
|                        | subsidiary of KCP&L                                          
|SEC                     | Securities and Exchange Commission                           
|SIP                     | State Implementation Plan                                    
|SPP                     | Southwest Power Pool, Inc.                                   
|SFAS                    | Statement of Financial Accounting Standards                  
|Securities Trust        | KCP&L Financing I                                            
|Services                | Great Plains Energy Services Incorporated                    
|Strategic Energy        | Strategic Energy, L.L.C., a subsidiary of KLT Energy Services
|WCNOC                   | Wolf Creek Nuclear Operating Corporation                     
|Wolf Creek              | Wolf Creek Nuclear Operating Station                         
|Worry Free              | Worry Free Service, Inc., a wholly-owned subsidiary of HSS   

4

# PART I - FINANCIAL
INFORMATION Item 1. Consolidated Financial Statements

GREAT PLAINS ENERGY
                                     Consolidated Balance Sheets
                            (Unaudited)

|                                                           | September 30
|---------------------------------------------------------- | ------------
|2002                                                      
|
|(thousands)                                               
|ASSETS                                                     |             
|Current Assets                                             |             
|Cash and cash equivalents                                  |             
|Restricted cash                                            |             
|Receivables                                                |             
|Fuel inventories, at average cost                          |             
|Materials and supplies, at average cost                    |             
|Deferred income taxes                                      |             
|Assets of discontinued operations                          |             
|Other                                                      |             
|                                                           |             
|Total                                                      |             
|
|Nonutility Property and Investments                        |             
|Affordable housing limited partnerships                    |             
|Gas property and investments                               |             
|Nuclear decommissioning trust fund                         |             
|Other                                                      |             
|                                                           |             
|Total                                                      |             
|
|Utility Plant, at Original Cost                            |             
|Electric                                                   |             
|Less-accumulated depreciation                              |             
|                                                           |             
|Net utility plant in service                               |             
|Construction work in progress                              |             
|Nuclear fuel, net of amortization of $132,500 and $121,951 |             
|                                                           |             
|Total                                                      |             
|
|Deferred Charges                                           |             
|Regulatory assets                                          |             
|Prepaid pension costs                                      |             
|Goodwill                                                   |             
|Other deferred charges                                     |             
|                                                           |             
|Total                                                      |             
|
|Total                                                      |             
|
|                                                           |             
|LIABILITIES AND CAPITALIZATION                             |             
|Current Liabilities                                        |             
|Notes payable                                              |             
|Current maturities of long-term debt                       |             
|EIRR bonds classified as current                           |             
|Accounts payable                                           |             
|Accrued taxes                                              |             
|Accrued interest                                           |             
|Accrued payroll and vacations                              |             
|Accrued refueling outage costs                             |             
|Supplier collateral                                        |             
|Liabilities of discontinued operations                     |             
|Other                                                      |             
|                                                           |             
|Total                                                      |             
|
|Deferred Credits and Other Liabilities                     |             
|Deferred income taxes                                      |             
|Deferred investment tax credits                            |             
|Asset retirement obligation                                |             
|Accrued nuclear decommissioning costs                      |             
|Pension liability                                          |             
|Other                                                      |             
|                                                           |             
|Total                                                      |             
|
|Capitalization (see statements)                            |             
|
|Commitments and Contingencies (Note 6)                     |             
|
|Total                                                      |             
|

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

5

GREAT PLAINS ENERGY
                                       Consolidated Statements of Capitalization
                                  (Unaudited)

|                                                              | September 30
|------------------------------------------------------------- | ------------
|2002                                                         
|
|(thousands)                                                  
|Long-term Debt (excluding current maturities)                 |             
|General Mortgage Bonds                                        |             
|Medium-Term Notes due 2007,                                   |             
|7.95%* and 7.55%** weighted-average rate                      |             
|2.16%* and 2.48%** EIRR bonds due 2012-23                     |             
|EIRR bonds classified as current liabilities                  |             
|Senior Notes                                                  |             
|7.125% due 2005                                               |             
|6.500% due 2011                                               |             
|6.000% due 2007                                               |             
|Unamortized discount                                          |             
|EIRR bonds                                                    |             
|2.12%* and 2.41%** Series A & B due 2015                      |             
|2.12%* and 2.41%** Series D due 2017                          |             
|2.25%* and 4.50%** Series C due 2017                          |             
|EIRR bonds classified as current liabilities                  |             
|Company-obligated Mandatorily Redeemable Preferred Securities |             
|of a trust holding solely KCP&L Subordinated Debentures       |             
|Affordable Housing Notes                                      |             
|7.63%* and 7.84%** weighted-average rate due 2005-08          |             
|                                                              |             
|Total                                                         |             
|
|Company-obligated Mandatorily Redeemable Preferred Securities |             
|of a trust holding solely KCP&L Subordinated Debentures       |             
|
|Cumulative Preferred Stock                                    |             
|$100 Par Value                                                |             
|3.80% - 100,000 shares issued                                 |             
|4.50% - 100,000 shares issued                                 |             
|4.20% - 70,000 shares issued                                  |             
|4.35% - 120,000 shares issued                                 |             
|                                                              |             
|Total                                                         |             
|
|Common Stock Equity                                           |             
|Common stock-150,000,000 shares authorized without par value  |             
|69,196,322 shares issued, stated value                        |             
|Capital stock premium and expense                             |             
|Retained earnings (see statements)                            |             
|Treasury stock-3,265 and 152 shares, at cost                  |             
|Accumulated other comprehensive income (loss)                 |             
|Gain (loss) on derivative hedging instruments                 |             
|Minimum pension obligation                                    |             
|                                                              |             
|Total                                                         |             
|
|Total                                                         |             
|

|   | 
|-- | 
|*  | 
|** | 

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

6

GREAT PLAINS ENERGY
          Consolidated Statements of Income                      (Unaudited)

|                                            | Three Months Ended | Year to Date
|------------------------------------------- | ------------------ | ------------
|
|2002                                        | 2002              
|
|(thousands)                                
|Operating Revenues                          |                    |             
|Electric revenues - KCP&L                   |                    |             
|Electric revenues - Strategic Energy        |                    |             
|Other revenues                              |                    |             
|                                            |                    |             
|Total                                       |                    |             
|
|Operating Expenses                          |                    |             
|Fuel                                        |                    |             
|Purchased power - KCP&L                     |                    |             
|Purchased power - Strategic Energy          |                    |             
|Other                                       |                    |             
|Maintenance                                 |                    |             
|Depreciation and depletion                  |                    |             
|General taxes                               |                    |             
|(Gain) Loss on property                     |                    |             
|                                            |                    |             
|Total                                       |                    |             
|
|Operating income                            |                    |             
|Loss from equity investments                |                    |             
|Minority interest in subsidiaries           |                    |             
|Non-operating income                        |                    |             
|Non-operating expenses                      |                    |             
|Interest charges                            |                    |             
|
|Income from continuing operations before    |                    |             
|income taxes and cumulative effect of a     |                    |             
|change in accounting principle              |                    |             
|Income taxes                                |                    |             
|
|Income from continuing operations           |                    |             
|before cumulative effect of a change        |                    |             
|in accounting principle                     |                    |             
|Loss from discontinued operations, net      |                    |             
|of income taxes (Note 9)                    |                    |             
|Cumulative effect to January 1, 2002, of    |                    |             
|a change in accounting principle            |                    |             
|
|Net income                                  |                    |             
|Preferred stock dividend requirements       |                    |             
|
|Earnings available for common stock         |                    |             
|
|
|Average number of common shares outstanding |                    |             
|
|Basic and diluted earnings per common share |                    |             
|Continuing operations                       |                    |             
|Discontinued operations                     |                    |             
|Cumulative effect                           |                    |             
|
|Basic and diluted earnings per common share |                    |             
|
|
|Cash dividends per common share             |                    |             
|

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

7

GREAT PLAINS ENERGY
                              Consolidated Statements of Cash Flows
                           (Unaudited)

|Year to Date September 30                                    | 2003
|------------------------------------------------------------ | ----
|
|(thousands)                                                 
|Cash Flows from Operating Activities                         |     
|Net income                                                   |     
|Less: Loss from discontinued operations, net of income taxes |     
|                                                             |     
|Net income from continuing operations                        |     
|Adjustments to reconcile income to net cash                  |     
|from operating activities:                                   |     
|Cumulative effect of a change in accounting principle        |     
|Depreciation and depletion                                   |     
|Amortization of:                                             |     
|Nuclear fuel                                                 |     
|Other                                                        |     
|Deferred income taxes (net)                                  |     
|Investment tax credit amortization                           |     
|Loss from equity investments                                 |     
|(Gain) Loss on property                                      |     
|Deferred storm costs                                         |     
|Minority interest                                            |     
|Other operating activities (Note 3)                          |     
|                                                             |     
|Net cash from operating activities                           |     
|
|Cash Flows from Investing Activities                         |     
|Utility capital expenditures                                 |     
|Allowance for borrowed funds used during construction        |     
|Purchases of investments                                     |     
|Purchases of nonutility property                             |     
|Proceeds from sale of assets                                 |     
|Hawthorn No. 5 partial insurance recovery                    |     
|Other investing activities                                   |     
|                                                             |     
|Net cash from investing activities                           |     
|
|Cash Flows from Financing Activities                         |     
|Issuance of long-term debt                                   |     
|Repayment of long-term debt                                  |     
|Net change in short-term borrowings                          |     
|Dividends paid                                               |     
|Other financing activities                                   |     
|                                                             |     
|Net cash from financing activities                           |     
|
|Net Change in Cash and Cash Equivalents                      |     
|Cash and Cash Equivalents from Continuing                    |     
|Operations at Beginning of Year                              |     
|                                                             |     
|Cash and Cash Equivalents from Continuing                    |     
|Operations at End of Period                                  |     
|
|                                                             |     
|
|Net Change in Cash and Cash Equivalents from                 |     
|Discontinued Operations                                      |     
|Cash and Cash Equivalents from Discontinued                  |     
|Operations at Beginning of Year                              |     
|                                                             |     
|Cash and Cash Equivalents from Discontinued                  |     
|Operations at End of Period                                  |     
|

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

8

GREAT PLAINS ENERGY
             Consolidated Statements of Comprehensive Income
                        (Unaudited)

|                                                      | Three Months Ended | Year to Date
|----------------------------------------------------- | ------------------ | ------------
|
|2002                                                  | 2002              
|
|(thousands)                                          
|Net income                                            |                    |             
|
|Other comprehensive income:                           |                    |             
|Gain (loss) on derivative hedging instruments         |                    |             
|Income tax expense                                    |                    |             
|                                                      |                    |             
|Net gain (loss) on derivative hedging instruments     |                    |             
|                                                      |                    |             
|Change in minimum pension obligation                  |                    |             
|Income tax expense                                    |                    |             
|                                                      |                    |             
|Net change in minimum pension obligation              |                    |             
|                                                      |                    |             
|Reclassification to revenues and expenses, net of tax |                    |             
|
|Comprehensive income                                  |                    |             
|

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

GREAT PLAINS ENERGY
              Consolidated Statements of Retained Earnings
                        (Unaudited)

|                                    | Three Months Ended | Year to Date
|----------------------------------- | ------------------ | ------------
|
|2002                                | 2002              
|
|(thousands)                        
|Beginning balance                   |                    |             
|Net income                          |                    |             
|                                    |                    |             
|                                    |                    |             
|Dividends declared                  |                    |             
|Preferred stock - at required rates |                    |             
|Common stock                        |                    |             
|                                    |                    |             
|Ending balance                      |                    |             
|

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

9

KANSAS CITY POWER & LIGHT
COMPANY                                         Consolidated Balance Sheets
                               (Unaudited)

|                                                           | September 30
|---------------------------------------------------------- | ------------
|2002                                                      
|
|(thousands)                                               
|ASSETS                                                     |             
|Current Assets                                             |             
|Cash and cash equivalents                                  |             
|Restricted cash                                            |             
|Receivables                                                |             
|Fuel inventories, at average cost                          |             
|Materials and supplies, at average cost                    |             
|Deferred income taxes                                      |             
|Assets of discontinued operations                          |             
|Other                                                      |             
|                                                           |             
|Total                                                      |             
|
|Nonutility Property and Investments                        |             
|Nuclear decommissioning trust fund                         |             
|Other                                                      |             
|                                                           |             
|Total                                                      |             
|
|Utility Plant, at Original Cost                            |             
|Electric                                                   |             
|Less-accumulated depreciation                              |             
|                                                           |             
|Net utility plant in service                               |             
|Construction work in progress                              |             
|Nuclear fuel, net of amortization of $132,500 and $121,951 |             
|                                                           |             
|Total                                                      |             
|
|Deferred Charges                                           |             
|Regulatory assets                                          |             
|Prepaid pension costs                                      |             
|Other deferred charges                                     |             
|                                                           |             
|Total                                                      |             
|
|Total                                                      |             
|
|                                                           |             
|LIABILITIES AND CAPITALIZATION                             |             
|Current Liabilities                                        |             
|Notes payable                                              |             
|Current maturities of long-term debt                       |             
|EIRR bonds classified as current                           |             
|Accounts payable                                           |             
|Accrued taxes                                              |             
|Accrued interest                                           |             
|Accrued payroll and vacations                              |             
|Accrued refueling outage costs                             |             
|Supplier collateral                                        |             
|Liabilities of discontinued operations                     |             
|Other                                                      |             
|                                                           |             
|Total                                                      |             
|
|Deferred Credits and Other Liabilities                     |             
|Deferred income taxes                                      |             
|Deferred investment tax credits                            |             
|Asset retirement obligation                                |             
|Accrued nuclear decommissioning costs                      |             
|Pension liability                                          |             
|Other                                                      |             
|                                                           |             
|Total                                                      |             
|
|Capitalization (see statements)                            |             
|
|Commitments and Contingencies (Note 6)                     |             
|
|Total                                                      |             
|

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

10

KANSAS CITY POWER & LIGHT
COMPANY                                           Consolidated Statements of
Capitalization                                    (Unaudited)

|                                                              | September 30
|------------------------------------------------------------- | ------------
|2002                                                         
|
|(thousands)                                                  
|Long-term Debt (excluding current maturities)                 |             
|General Mortgage Bonds                                        |             
|Medium-Term Notes due 2007,                                   |             
|7.95%* and 7.55%** weighted-average rate                      |             
|2.16%* and 2.48%** EIRR bonds due 2012-23                     |             
|EIRR bonds classified as current liabilities                  |             
|Senior Notes                                                  |             
|7.125% due 2005                                               |             
|6.500% due 2011                                               |             
|6.000% due 2007                                               |             
|Unamortized discount                                          |             
|EIRR bonds                                                    |             
|2.12%* and 2.41%** Series A & B due 2015                      |             
|2.12%* and 2.41%** Series D due 2017                          |             
|2.25%* and 4.50%** Series C due 2017                          |             
|EIRR bonds classified as current liabilities                  |             
|Company-obligated Mandatorily Redeemable Preferred Securities |             
|of a trust holding solely KCP&L Subordinated Debentures       |             
|                                                              |             
|Total                                                         |             
|
|Company-obligated Mandatorily Redeemable Preferred Securities |             
|of a trust holding solely KCP&L Subordinated Debentures       |             
|
|Common Stock Equity                                           |             
|Common stock-1,000 shares authorized without par value        |             
|1 share issued, stated value                                  |             
|Retained earnings (see statements)                            |             
|Accumulated other comprehensive income (loss)                 |             
|Gain on derivative hedging instruments                        |             
|Minimum pension obligation                                    |             
|                                                              |             
|Total                                                         |             
|
|Total                                                         |             
|

|   | 
|-- | 
|*  | 
|** | 

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

11

KANSAS CITY POWER & LIGHT
COMPANY             Consolidated Statements of Income                       (Unaudited)

|                                                    | Three Months Ended | Year to Date
|--------------------------------------------------- | ------------------ | ------------
|
|2002                                                | 2002              
|
|(thousands)                                        
|Operating Revenues                                  |                    |             
|Electric revenues                                   |                    |             
|Other revenues                                      |                    |             
|                                                    |                    |             
|Total                                               |                    |             
|
|Operating Expenses                                  |                    |             
|Fuel                                                |                    |             
|Purchased power                                     |                    |             
|Other                                               |                    |             
|Maintenance                                         |                    |             
|Depreciation and depletion                          |                    |             
|General taxes                                       |                    |             
|(Gain) Loss on property                             |                    |             
|                                                    |                    |             
|Total                                               |                    |             
|
|Operating income                                    |                    |             
|Non-operating income                                |                    |             
|Non-operating expenses                              |                    |             
|Interest charges                                    |                    |             
|
|Income from continuing operations before            |                    |             
|income taxes and cumulative effect                  |                    |             
|of a change in accounting principle                 |                    |             
|Income taxes                                        |                    |             
|
|Income from continuing operations before cumulative |                    |             
|effect of a change in accounting principle          |                    |             
|Loss from discontinued operations, net              |                    |             
|of income taxes (Note 9)                            |                    |             
|Cumulative effect to January 1, 2002, of            |                    |             
|a change in accounting principle                    |                    |             
|
|Net income                                          |                    |             
|

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

12

KANSAS CITY POWER & LIGHT
COMPANY                  Consolidated Statements of Cash Flows
                              (Unaudited)

|Year to Date September 30                                     | 2003
|------------------------------------------------------------- | ----
|
|(thousands)                                                  
|Cash Flows from Operating Activities                          |     
|Net income                                                    |     
|Less:  Loss from discontinued operations, net of income taxes |     
|                                                              |     
|Net income from continuing operations                         |     
|Adjustments to reconcile income to net cash                   |     
|from operating activities:                                    |     
|Cumulative effect of a change in accounting principle         |     
|Depreciation and depletion                                    |     
|Amortization of:                                              |     
|Nuclear fuel                                                  |     
|Other                                                         |     
|Deferred income taxes (net)                                   |     
|Investment tax credit amortization                            |     
|(Gain) Loss on property                                       |     
|Deferred storm costs                                          |     
|Other operating activities (Note 3)                           |     
|                                                              |     
|Net cash from operating activities                            |     
|
|Cash Flows from Investing Activities                          |     
|Utility capital expenditures                                  |     
|Allowance for borrowed funds used during construction         |     
|Purchases of investments                                      |     
|Purchases of nonutility property                              |     
|Proceeds from sale of assets                                  |     
|Hawthorn No. 5 partial insurance recovery                     |     
|Other investing activities                                    |     
|                                                              |     
|Net cash from investing activities                            |     
|
|Cash Flows from Financing Activities                          |     
|Issuance of long-term debt                                    |     
|Repayment of long-term debt                                   |     
|Net change in short-term borrowings                           |     
|Dividends paid to Great Plains Energy                         |     
|Equity contribution from Great Plains Energy                  |     
|Other financing activities                                    |     
|                                                              |     
|Net cash from financing activities                            |     
|
|Net Change in Cash and Cash Equivalents                       |     
|Cash and Cash Equivalents from Continuing                     |     
|Operations at Beginning of Year                               |     
|                                                              |     
|Cash and Cash Equivalents from Continuing                     |     
|Operations at End of Period                                   |     
|
|                                                              |     
|
|Net Change in Cash and Cash Equivalents from                  |     
|Discontinued Operations                                       |     
|Cash and Cash Equivalents from Discontinued                   |     
|Operations at Beginning of Year                               |     
|                                                              |     
|Cash and Cash Equivalents from Discontinued                   |     
|Operations at End of Period                                   |     
|

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

13

KANSAS CITY POWER & LIGHT
COMPANY             Consolidated Statements of Comprehensive Income
                       (Unaudited)

|                                                      | Three Months Ended | Year to Date
|----------------------------------------------------- | ------------------ | ------------
|
|2002                                                  | 2002              
|
|(thousands)                                          
|Net income                                            |                    |             
|
|Other comprehensive income :                          |                    |             
|Gain (loss) on derivative hedging instruments         |                    |             
|Income tax expense                                    |                    |             
|                                                      |                    |             
|Net gain (loss) on derivative hedging instruments     |                    |             
|                                                      |                    |             
|Change in minimum pension obligation                  |                    |             
|Income tax expense                                    |                    |             
|                                                      |                    |             
|Net change in minimum pension obligation              |                    |             
|                                                      |                    |             
|Reclassification to revenues and expenses, net of tax |                    |             
|
|Comprehensive income                                  |                    |             
|

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

KANSAS CITY POWER & LIGHT
COMPANY              Consolidated Statements of Retained Earnings
                       (Unaudited)

|                                         | Three Months Ended | Year to Date
|---------------------------------------- | ------------------ | ------------
|
|2002                                     | 2002              
|
|(thousands)                             
|Beginning balance                        |                    |             
|Net income                               |                    |             
|
|                                         |                    |             
|Dividends declared                       |                    |             
|Common stock held by Great Plains Energy |                    |             
|
|Ending balance                           |                    |             
|

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

14

# GREAT PLAINS ENERGY
INCORPORATED KANSAS CITY POWER &
LIGHT COMPANY Notes to Consolidated
Financial Statements

In managements opinion, the
consolidated interim financial statements reflect all adjustments (which, unless otherwise
noted, include only normal recurring adjustments) necessary to present fairly the results
of operations for the interim periods presented. These statements and notes should be read
in connection with the applicable financial statements and related notes included in the
combined 2002 annual report on Form 10-K of Great Plains Energy and consolidated
KCP&L.

The notes to consolidated financial
statements that follow are a combined presentation for Great Plains Energy and
consolidated KCP&L, both registrants under this filing.

# 1. ORGANIZATION

Great Plains Energy has five direct
subsidiaries:

|o |  | KCP&L is an integrated, regulated electric utility company that serves retail
customers in the states of Missouri and Kansas. KCP&L is one of Great Plains
Energys three reportable segments. KCP&Ls wholly-owned subsidiary, Home
Service Solutions Inc. (HSS) has invested in Worry Free Service, Inc. (Worry Free). Worry
Free provides energy-related residential and commercial services. Prior to the June 2003
disposition of R.S. Andrews Enterprises, Inc. (RSAE), HSS held an investment in RSAE. See
Note 9 for additional information concerning the June 2003 disposition of RSAE. KCP&L
and its subsidiaries are referred to as consolidated KCP&L.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | KLT Inc. is an intermediate holding company that primarily holds interests in Strategic
Energy, L.L.C. (Strategic Energy), KLT Gas Inc. (KLT Gas) and affordable housing limited
partnerships. Strategic Energy and KLT Gas are the other two reportable segments of Great
Plains Energy. Prior to the confirmation of DTIs restructuring plan, KLT Inc. held
an investment in DTI. See Note 8 for additional information.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | Great Plains Power Incorporated (GPP) focuses on the development of wholesale generation.
Management decided during 2002 to limit the operations of GPP to the siting and permitting
process that began in 2001 for potential new generation until market conditions improve or
the Company makes further changes in its business strategy. The siting and permitting
process is currently focused on two potential new generation sites. GPP has made no
significant investments to date.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | Innovative Energy Consultants Inc. (IEC) holds an interest in Strategic Energy. IEC does
not own or operate any assets other than its indirect interest in Strategic Energy.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | Great Plains Energy Services Incorporated (Services) is a service company created in April
2003 to provide support and administrative services to Great Plains Energy and certain of
its subsidiaries.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The operations of Great Plains Energy
and its subsidiaries are divided into three reportable segments: KCP&L, Strategic
Energy and KLT Gas. Great Plains Energys legal structure differs from the functional
management and financial reporting of its reportable segments. Other activities not
considered a reportable segment include the operations of HSS, GPP, Services, all KLT Inc.
operations other than Strategic Energy and KLT Gas and holding company operations.

15

# 2. CASH

Cash and Cash Equivalents Cash and cash equivalents consist of
highly liquid investments with original maturities of three months or less. For Great
Plains Energy this includes Strategic Energys cash held in trust of $15.2 million at
September 30, 2003, and $11.4 million at December 31, 2002.

Strategic Energy has entered into
collateral arrangements with selected electricity power suppliers that require selected
customers to remit payment to lockboxes that are held in trust and managed by a Trustee.
As part of the trust administration, the Trustee remits payment to the supplier for
electricity purchased by Strategic Energy. On a monthly basis, any remittances into the
lockboxes after the disbursement to the supplier has been made are remitted back to
Strategic Energy.

Restricted Cash KCP&L has received cash
collateral from certain wholesale counterparties that is restricted and would become
unrestricted in the event of a default by the counterparty. Restricted cash collateral at
September 30, 2003, was $1.4 million. There were no such cash collateral deposits at
December 31, 2002.

Strategic Energy has entered into
Master Power Purchase and Sale Agreements with its power suppliers. Certain of these
agreements contain provisions whereby, to the extent Strategic Energy has a net exposure
to the purchased power supplier, collateral requirements are to be maintained. Collateral
posted in the form of cash to Strategic Energy is restricted by agreement and would become
unrestricted in the event of a default by the purchased power supplier. Restricted cash
collateral at September 30, 2003, was $14.8 million. There were no such cash collateral
deposits at December 31, 2002.

# 3. SUPPLEMENTAL CASH
FLOW INFORMATION

|                                                   
|---------------------------------------------------
|Year to Date                                       
|September 30                                       
|
|2003                                               
|
|(thousands)                                        
|Great Plains Energy Other Operating Activities     
|Cash flows affected by changes in:                 
|Receivables                                        
|Fuel inventories                                   
|Materials and supplies                             
|Accounts payable                                   
|Accrued taxes and current income taxes             
|Accrued interest                                   
|Wolf Creek refueling outage accrual                
|Pension and postretirement benefit obligations     
|Allowance for equity funds used during construction
|Other                                              
|
|Total other operating activities                   
|
|Cash paid during the period:                       
|Interest                                           
|Income taxes                                       
|

16

|                                                   
|---------------------------------------------------
|Year to Date                                       
|September 30                                       
|
|2003                                               
|
|(thousands)                                        
|Consolidated KCP&L Other Operating Activities      
|Cash flows affected by changes in:                 
|Receivables                                        
|Fuel inventories                                   
|Materials and supplies                             
|Accounts payable                                   
|Accrued taxes and current income taxes             
|Accrued interest                                   
|Wolf Creek refueling outage accrual                
|Pension and postretirement benefit obligations     
|Allowance for equity funds used during construction
|Other                                              
|
|Total other operating activities                   
|
|Cash paid during the period:                       
|Interest                                           
|Income taxes                                       
|

KCP&L adopted Statement of
Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement
Obligations, on January 1, 2003, and recorded a liability for Asset Retirement
Obligations (ARO) of $99.2 million and increased property and equipment, net of
accumulated depreciation, by $18.3 million. KCP&L is a regulated utility subject to
the provisions of SFAS No. 71, Accounting for the Effects of Certain Types of
Regulation, and management believes it is probable that any differences between
expenses recognized under SFAS No. 143 and expenses recovered currently in rates will be
recoverable in future rates. As a result, the $80.9 million cumulative effect of the
adoption of SFAS No. 143 was recorded as a regulatory asset and therefore, had no impact
on net income. KLT Gas also adopted SFAS No. 143 and recorded a liability for ARO of $1.2
million, increased gas property and investments by $1.0 million and increased operating
expense by $0.2 million for the immaterial cumulative effect of the accounting change. The
adoption of SFAS No. 143 had no effect on Great Plains Energy and consolidated
KCP&Ls cash flows.

On June 13, 2003, HSS board of
directors approved a plan to dispose of its interest in residential services provider
RSAE. On June 30, 2003, HSS completed the disposition of its interest in RSAE. See Note 9
for additional information concerning the disposition of RSAE. The table below summarizes
the loss from discontinued operations as a result of this transaction.

|                                                
|------------------------------------------------
|Year to Date                                    
|June 30                                         
|2003                                            
|
|(thousands)                                     
|Cash repayment of supported bank line           
|Write-off of intercompany balance and investment
|Accrued transaction costs                       
|Income tax benefit                              
|
|Loss on disposition                             
|Pre-disposition operating losses                
|
|Discontinued operations                         
|

17

On December 31, 2001, a subsidiary of
KLT Telecom Inc. (KLT Telecom), DTI Holdings, Inc. (Holdings) and its subsidiaries,
Digital Teleport Inc. (Digital Teleport) and Digital Teleport of Virginia, Inc., filed
separate voluntary petitions in the Bankruptcy Court for the Eastern District of Missouri
for reorganization under Chapter 11 of the U.S. Bankruptcy Code, which cases have been
procedurally consolidated. In December 2002, Digital Teleport entered into an agreement to
sell substantially all of its assets (Asset Sale) to CenturyTel Fiber Company II, LLC
(CenturyTel), a nominee of CenturyTel, Inc. The Asset Sale was approved by the Bankruptcy
Court on February 13, 2003, and closed on June 6, 2003. Initial distributions from the
bankruptcy estates were made to DTI creditors in June 2003. The table below summarizes the
effects of these distributions. See Note 8 for additional information concerning the
confirmation of the DTI Chapter 11 Plan.

|                                          
|------------------------------------------
|Year to Date                              
|September 30                              
|2003                                      
|
|(thousands)                               
|Cash proceeds from bankruptcy estates     
|Cash proceeds from sale of office building
|Receivables                               
|
|Total proceeds                            
|Book basis of office building sold        
|DIP financing accrual reversal            
|Accounts payable                          
|Income tax                                
|Reversal of tax valuation allowance       
|
|Gain on sale of assets                    
|

# 4. RECEIVABLES

The Companys receivables are
comprised of the following:

|                                     
|-------------------------------------
|September 30                         
|2003                                 
|
|(thousands)                          
|Customer accounts receivable sold to 
|Receivables Company                  
|Consolidated KCP&L other receivables 
|
|Consolidated KCP&L receivables       
|Great Plains Energy other receivables
|
|Great Plains Energy receivables      
|

KCP&L has entered into a
revolving agreement, which expires in October 2004, to sell all of its right, title and
interest in the majority of its customer accounts receivable to Kansas City Power &
Light Receivables Company (Receivables Company), which in turn sells most of the
receivables to outside investors. KCP&L expects the agreement to be renewed annually.
Accounts receivable sold under this revolving agreement totaled $114.6 million at
September 30, 2003, and $89.2 million at December 31, 2002. These sales included unbilled
receivables of $34.6 million at September 30, 2003, and $27.2 million at December 31,
2002. As a result of the sales to outside investors, Receivables Company received $70
million in cash, which was forwarded to KCP&L as consideration for its sale. The
agreement is structured as a true sale under which the creditors of Receivables Company
are entitled to be satisfied out of the assets of Receivables Company prior to any value
being returned to KCP&L or its creditors.

18

KCP&L sells its receivables at a
fixed price based upon the expected cost of funds and charge-offs. These costs comprise
KCP&Ls loss on the sale of accounts receivable. KCP&L services the
receivables and receives an annual servicing fee of 0.25% of the outstanding principal
amount of the receivables sold and retains any late fees charged to customers.

Information regarding
KCP&Ls sale of accounts receivable is reflected in the following table.

|                                             
|---------------------------------------------
|Three Months Ended                           
|September 30                                 
|
|2003                                         
|
|(thousands)                                  
|Gross proceeds on sale of accounts receivable
|Collections                                  
|Loss on sale of accounts receivable          
|Late fees                                    
|

Consolidated KCP&L other
receivables at September 30, 2003, and December 31, 2002, consist primarily of receivables
from partners in jointly-owned electric utility plants, wholesale sales receivables and
accounts receivable held by Worry Free. Great Plains Energy other receivables at September
30, 2003, and December 31, 2002, are primarily the accounts receivable held by Strategic
Energy including unbilled receivables held by Strategic Energy of $64.8 million at
September 30, 2003, and $57.3 million at December 31, 2002. Great Plains Energy and
consolidated KCP&L other receivables at September 30, 2003, also include receivables
for partial settlements of Hawthorn No. 5 litigation associated with the boiler explosion
in 1999.

As described in Part II Item 1,
KCP&L has filed suit against multiple defendants who are alleged to have responsibility
for the 1999 Hawthorn No. 5 boiler explosion. KCP&L and its primary insurance company
have entered into a subrogation allocation agreement under which recoveries in this suit
are generally allocated 55% to the primary insurance company and 45% to KCP&L. Various
defendants have settled with KCP&L in this litigation, resulting in KCP&L
recording $34.1 million under the terms of the subrogation allocation agreement.

# 5. CAPITALIZATION

Great Plains Energy syndicated a $225
million, revolving credit facility with a group of banks in the first quarter of 2003.
This facility replaced a $205 million syndicated facility and a $20 million credit
facility with a bank. The line has a 364-day term but may be extended for an additional
year at the Companys option. The facility contains a material adverse change (MAC)
clause that requires Great Plains Energy to represent, prior to receiving funding, that no
MAC has occurred. The clause does, however, permit the Company to access the facility even
in the event of a MAC in order to repay maturing commercial paper. Available liquidity
under this facility is not impacted by a decline in credit ratings unless the downgrade
occurs in the context of a merger, consolidation or sale. A default by Great Plains Energy
or any of its significant subsidiaries of material other indebtedness totaling more than
$25.0 million is also a default under this bank line. Under the terms of this agreement,
Great Plains Energy is required to maintain a consolidated indebtedness to consolidated
capitalization ratio not greater than 0.65 to 1.0 at all times and an interest coverage
ratio greater than 2.25 to 1.0, as those ratios are defined in the agreement. At September
30, 2003, the Company was in compliance with these covenants. At September 30, 2003, Great
Plains Energy had $115.0 million of outstanding borrowings under this facility with a
weighted-average interest rate of 2.07%.

As of September 30, 2003, KCP&L
had no commercial paper or funds borrowed from banks outstanding. A default by KCP&L
on other indebtedness is a default under these bank line agreements.

19

Under the terms of
certain bank line agreements, KCP&L is required to maintain a consolidated
indebtedness to consolidated capitalization ratio, as defined in the agreements, not
greater than 0.65 to 1.0 at all times. At September 30, 2003, KCP&L was in compliance
with these covenants.

In 2003, KCP&L has redeemed
$124.0 million of its medium term notes, including $104.0 million called prior to
maturity. The medium term notes were paid off primarily with proceeds from a $100.0
million equity contribution received from Great Plains Energy during the first quarter of
2003. The average interest rate on the $104.0 million of notes called early was 7.28% and
the original maturity dates were 2005 through 2008.

In the third quarter of 2003,
KCP&L remarketed its 1998 Series C EIRR bonds totaling $50.0 million at a fixed rate
of 2.25% ending August 31, 2004. If the bonds could not be remarketed, KCP&L would be
obligated to either purchase or retire the bonds. These bonds were classified as current
liabilities at September 30, 2003.

In 2002, KCP&L remarketed its
1998 Series A, B, and D Environmental Improvement Revenue Refunding (EIRR) bonds totaling
$146.5 million to a 5-year fixed interest rate of 4.75% ending October 1, 2007.
Simultaneously with the remarketing, KCP&L entered into an interest rate swap for the
$146.5 million based on LIBOR to effectively create a floating interest rate obligation.
At September 30, 2003, the fair value of the swap was a $5.2 million asset. See Note 18
for additional discussion of the interest rate swap.

Strategic Energy maintains a secured
revolving credit facility for up to $95 million with a group of banks. This facility is
partially guaranteed by Great Plains Energy. The facility enhances Strategic Energys
liquidity including its ability to provide credit support through letters of credit for
purchased power and regulatory requirements. The maximum amount available for loans and
letters of credit under the facility is the lesser of $95 million or the borrowing base,
as defined in the agreement. The borrowing base generally is the sum of certain Strategic
Energy accounts receivable and the amount of the Great Plains Energy guarantee which was
$40.0 million at September 30, 2003. At September 30, 2003, Strategic Energy had a minimum
fixed charge ratio, as defined in the agreement, of at least 1.05 to 1.0; however, if the
ratio drops below 1.05 to 1.0, Great Plains Energys guarantee amount is required to
be increased based on quarterly calculations. At September 30, 2003, $57.3 million in
letters of credit had been issued under the agreement, leaving $26.0 million of capacity
available for loans and additional letters of credit. The line has a 364-day term that may
be extended for an additional year by Strategic Energy with mutual agreement of the
parties. The facility contains a MAC clause that requires Strategic Energy to represent,
prior to receiving funding, that no MAC has occurred. A default by Strategic Energy of
other indebtedness, as defined in the facility, totaling more than $5.0 million is a
default under the facility. Under the terms of this agreement, Strategic Energy is
required to maintain a minimum net worth of $30 million and a maximum debt to EBITDA ratio
of 2.0 to 1.0, as those ratios are defined in the agreement. At September 30, 2003,
Strategic Energy was in compliance with these covenants.

On June 30, 2003, HSS completed the
disposition of its interest in RSAE. RSAEs line of credit totaling $27 million was
cancelled. With proceeds from a note to Great Plains Energy, HSS repaid $22.1 million on
the supported bank line. At September 30, 2003, HSS notes payable to Great Plains
Energy totaled $25.5 million. See Note 9 for additional information concerning the
disposition of RSAE.

KCP&L Financing I (Securities
Trust) has previously issued $150.0 million of 8.3% preferred securities. KCP&L owns
all of the common securities issued by the Securities Trust. The sole asset of the
Securities Trust is the $154.6 million principal amount of 8.3% Junior Subordinated
Deferrable Interest Debentures, due 2037, issued by KCP&L. The terms and interest
payments on these debentures correspond to the terms and dividend payments on the
preferred securities. KCP&L deducts these

20

payments for tax purposes. KCP&L may
elect to defer interest payments on the debentures for a period up to 20 consecutive
quarters, causing dividend payments on the preferred securities to be deferred as well. In
case of a deferral, interest and dividends will continue to accrue, along with quarterly
compounding interest on the deferred amounts. KCP&L may redeem all or a portion of the
debentures at any time. If KCP&L redeems all or a portion of the debentures, the
Securities Trust must redeem an equal amount of preferred securities at face value plus
accrued and unpaid distributions. The back-up undertakings of KCP&L in the aggregate
provide a full and unconditional guarantee of amounts due on the preferred
securities.

On July 1, 2003, Great Plains Energy
and consolidated KCP&L adopted SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity which states that a
mandatorily redeemable financial instrument shall be classified as a liability unless the
redemption is required to occur only upon the liquidation or termination of the reporting
entity. A financial instrument issued in the form of shares is mandatorily redeemable if
it embodies an unconditional obligation requiring the issuer to redeem the instrument by
transferring its assets at a specified or determinable date or upon an event certain to
occur. As a result, the $150.0 million of 8.3% preferred securities have been reclassified
as of September 30, 2003, and are presented as long-term debt on Great Plains Energy and
consolidated KCP&L Statements of Capitalization.

In January 2003, the Financial
Accounting Standards Board (FASB) issued Interpretation (FIN) No. 46, Consolidation
of Variable Interest Entities. The Interpretation clarifies the application of
Accounting Research Bulletin (ARB) No. 51, Consolidated Financial Statements,
to certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated financial support from other
parties (Variable Interest Entities). FASB has deferred the effective date of FIN No. 46
and it is now effective for the fourth quarter of 2003 for Great Plains Energy and
consolidated KCP&L for potential Variable Interest Entities created before February 1,
2003. On October 31, 2003, FASB issued an exposure draft of a proposed interpretation
Consolidation of Variable Interest Entities, a modification of FASB Interpretation
No. 46. The Company is still evaluating the effect of the exposure draft. As FIN No.
46 is currently written, the Company has determined that KCP&L is not the primary
beneficiary of the Securities Trust and thus, KCP&L would de-consolidate the
Securities Trust in the fourth quarter of 2003. De-consolidation would require the
consolidated financial statements of Great Plains Energy and consolidated KCP&L to
present the $4.6 million investment in the common securities of the Securities Trust and
the $154.6 million 8.3% Junior Subordinated Deferrable Interest Debentures issued by
KCP&L and held by the Securities Trust while no longer presenting the $150.0 million
of 8.3% preferred securities issued by the Securities Trust.

# 6. COMMITMENTS AND
CONTINGENCIES

# Nuclear Liability and
Insurance

Liability InsuranceThe Price-Anderson Act currently
limits the combined public liability of nuclear reactor owners to $10.9 billion for claims
that could arise from a single nuclear incident. The owners of Wolf Creek, a nuclear
generating station, (the Owners) carry the maximum available commercial insurance of $0.3
billion. Secondary Financial Protection, an assessment plan mandated by the Nuclear
Regulatory Commission (NRC), provides insurance for the $10.6 billion balance.

Under Secondary Financial Protection,
if there were a catastrophic nuclear incident involving any of the nations licensed
reactors, the Owners would be subject to a maximum retrospective assessment per incident
of up to $95.8 million plus up to an additional 5% surcharge for a total of $100.6 million
($47.3 million, KCP&Ls 47% share). The Owners are jointly and severally liable
for these charges, payable at

21

a rate not to exceed $10 million ($5 million,
KCP&Ls 47% share) per incident per year, excluding applicable premium taxes. The
assessment, most recently revised in 2003, is subject to an inflation adjustment based on
the Consumer Price Index and renewal of the Price-Anderson Act by Congress.

Property,
Decontamination, Premature Decommissioning and Extra Expense Insurance

The Owners also carry $2.8 billion
($1.3 billion, KCP&Ls 47% share) of property damage, decontamination and
premature decommissioning insurance for loss resulting from damage to the Wolf Creek
facilities. Nuclear Electric Insurance Limited (NEIL) provides this insurance.

In the event of an accident,
insurance proceeds must first be used for reactor stabilization and NRC mandated site
decontamination. KCP&Ls share of any remaining proceeds can be used for further
decontamination, property damage restoration and premature decommissioning costs.
Premature decommissioning coverage applies only if an accident at Wolf Creek exceeds $500
million in property damage and decontamination expenses, and only after trust funds have
been exhausted.

The Owners also carry additional
insurance from NEIL to cover costs of replacement power and other extra expenses incurred
in the event of a prolonged outage resulting from accidental property damage at Wolf
Creek.

Under all NEIL policies, KCP&L is
subject to retrospective assessments if NEIL losses, for each policy year, exceed the
accumulated funds available to the insurer under that policy. The estimated maximum amount
of retrospective assessments to KCP&L under the current policies could total about
$24.5 million.

In the event of a catastrophic loss
at Wolf Creek, the insurance coverage may not be adequate to cover property damage and
extra expenses incurred. Uninsured losses, to the extent not recovered through rates,
would be assumed by KCP&L and could have a material, adverse effect on its financial
condition, results of operations and cash flows.

Low-Level Waste

The Low-Level Radioactive Waste
Policy Amendments Act of 1985 mandated that the various states, individually or through
interstate compacts, develop alternative low-level radioactive waste disposal facilities.
The states of Kansas, Nebraska, Arkansas, Louisiana and Oklahoma formed the Central
Interstate Low-Level Radioactive Waste Compact (Compact) and selected a site in northern
Nebraska to locate a disposal facility. Wolf Creek Nuclear Operating Corporation (WCNOC)
and the owners of the other five nuclear units in the Compact provided most of the
pre-construction financing for this project. KCP&Ls net investment in the
Compact was $7.4 million at September 30, 2003, and December 31, 2002.

Significant opposition to the project
has been raised by Nebraska officials and residents in the area of the proposed facility
and attempts have been made through litigation and proposed legislation in Nebraska to
slow down or stop development of the facility. On December 18, 1998, the application for a
license to construct this project was denied. After the license denial, WCNOC and others
filed a lawsuit in federal court contending Nebraska officials acted in bad faith while
handling the license application. In September 2002, the U.S. District Court Judge
presiding over the Central Interstate Compact Commissions federal bad
faith lawsuit against the State of Nebraska issued his decision in the case finding
clear evidence that the State of Nebraska acted in bad faith in processing the license
application for a low-level radioactive waste disposal site in Nebraska and rendered a
judgment on behalf of the Compact in the amount of $151.4 million against the state. The
state has appealed this decision to the 8th Circuit, U.S. Court of Appeals.
Based on the favorable outcome of this trial, in KCP&Ls opinion, there is a
greater possibility of reversing the states license denial once the decision in this
case is final.

22

In May 1999, the Nebraska legislature
passed a bill withdrawing Nebraska from the Compact. In August 1999, the Nebraska Governor
gave official notice of the withdrawal to the other member states effective in August
2004. In June 2003, the Compact revoked Nebraskas membership in the Compact
effective July 17, 2004. As a result, Nebraskas legal rights under the Compact will
be extinguished on the effective date of either the Compacts revocation of
Nebraskas membership or Nebraskas withdrawal from the Compact. If membership
is severed by virtue of revocation by the Compact, any legal obligations Nebraska incurred
prior to revocation shall not cease until Nebraska fulfills them. The Compact has taken
the position that Nebraskas legal obligations include the obligation to be the host
state for a disposal site. Nebraskas legal obligations, under the Compacts
position, are more extensive than would exist if Nebraskas withdrawal preceded the
revocation of its membership. On August 22, 2003, Nebraska filed a new lawsuit in U.S.
District Court in Nebraska seeking to have the Compacts action deemed void; it does
not seek damages. A procedural schedule has been set in this case to be ready for trial by
June 2004.

Environmental Matters
KCP&Ls operations are
subject to regulation by federal, state and local authorities with regard to air and other
environmental matters. The generation and transmission of electricity produces and
requires disposal of certain hazardous products that are subject to these laws and
regulations. In addition to imposing continuing compliance obligations, these laws and
regulations authorize the imposition of substantial penalties for noncompliance, including
fines, injunctive relief and other sanctions. Failure to comply with these laws and
regulations could have a material adverse effect on KCP&L.

KCP&L operates in an
environmentally responsible manner and seeks to use current technology to avoid and treat
contamination. KCP&L regularly conducts environmental audits designed to ensure
compliance with governmental regulations and to detect contamination. Governmental bodies,
however, may impose additional or more restrictive environmental regulations that could
require substantial changes to operations or facilities at a significant cost. At
September 30, 2003, and December 31, 2002, KCP&L had $1.8 million and $1.9 million,
respectively, accrued for environmental remediation expenses covering water monitoring at
one site and unasserted claims for remediation at a second site. The amounts accrued were
established on an undiscounted basis and KCP&L does not currently have an estimated
time frame over which the accrued amounts may be paid out. Expenditures to comply with
environmental laws and regulations have not been material in amount during the periods
presented and are not expected to be material in the upcoming years with the exception of
the issues discussed below.

Certain Air Toxic
SubstancesIn July 2000, the National Research
Council published its findings of a study under the Clean Air Act Amendments of 1990
(Clean Air Act), which stated that power plants that burn fossil fuels, particularly coal,
generate the greatest amount of mercury emissions. As a result, in December 2000, the
Environmental Protection Agency (EPA) announced it would propose Maximum Achievable
Control Technology (MACT) requirements by December 2003 to reduce mercury emissions and
issue final rules by December 2004. Until the rules are proposed, KCP&L cannot predict
the likelihood or compliance costs of such regulations.

Air Particulate MatterIn July 1997, the EPA revised ozone
and particulate matter air quality standards creating a new eight-hour ozone standard and
establishing a new standard for particulate matter less than 2.5 microns (PM-2.5) in
diameter. These standards were challenged in the U.S. Court of Appeals for the District of
Columbia (Appeals Court) that decided against the EPA. Upon further appeal, the U.S.
Supreme Court reviewed the standards and remanded the case back to the Appeals Court for
further review, including a review of whether the standards were arbitrary and capricious.
On March 26, 2002, the Appeals Court issued its decision on challenges to the 8-hour ozone
and PM-2.5 National Ambient Air Quality

23

Standards (NAAQS). This decision denied all state,
industry and environmental groups petitions for review and thus upheld as valid the
EPAs new 8-hour ozone and PM-2.5 NAAQS. In so doing, the court held that the EPA
acted consistently with the Clean Air Act in setting the standards at the levels it chose
and the EPAs actions were reasonable and not arbitrary and capricious, and cited the
deference given the EPAs decision-making authority. The court stated that the
extensive records established for each rule supported the EPAs actions in both
rulemakings.

This decision by the Appeals Court
removed the last major hurdle to the EPAs implementation of stricter ambient air
quality standards for ozone and fine particles. The EPA has not yet issued regulations
incorporating the new standards. Until new regulations are issued, KCP&L is unable to
estimate the impact of the new standards. However, the impact on KCP&L and all other
utilities that use fossil fuels could be substantial. In addition, the EPA is conducting a
three-year study of fine particulate ambient air levels. Until this testing and review
period has been completed, KCP&L cannot determine additional compliance costs, if any,
associated with the new particulate regulations.

Nitrogen OxideThe EPA announced in 1998 regulations
implementing reductions in Nitrogen Oxide (NOx) emissions. These regulations
initially called for 22 states, including Missouri, to submit plans for controlling
NOx emissions. The regulations require a significant reduction in
NOx emissions from 1990 levels at KCP&Ls Missouri coal-fired plants
by the year 2003.

In December 1998, KCP&L and
several other western Missouri utilities filed suit against the EPA over the inclusion of
western Missouri in the NOx reduction program based on the 1-hour
NOx standard. On March 3, 2000, a three-judge panel of the District of Columbia
Circuit of the U.S. Court of Appeals sent the NOx rules related to Missouri
back to the EPA, stating the EPA failed to prove that fossil plants in the western part of
Missouri significantly contribute to ozone formation in downwind states. On March 5, 2001,
the U.S. Supreme Court denied certiorari, making the decision of the Court of Appeals
final.

In February 2002, the EPA issued
proposed Phase II NOx State Implementation Plan (SIP) Call regulations, which
specifically exclude the fossil plants in the western part of Missouri from the
NOx SIP Call. To date, the EPA has not issued its final Phase II NOxSIP Call regulation.

If fossil plants in western Missouri
are required to implement NOx reductions, KCP&L would need to incur
significant capital costs, purchase power or purchase NOx emission allowances.
Preliminary analysis of the regulations indicates that selective catalytic reduction
technology, as well as other changes, may be required for some of the KCP&L units.
Currently, KCP&L estimates that additional capital expenditures to comply with these
regulations could range from $40 million to $60 million. Operations and maintenance
expenses could also increase by more than $2.5 million per year. KCP&L continues to
refine these preliminary estimates and explore alternatives. The ultimate cost of these
regulations, if any, could be significantly different from the amounts estimated above.

Carbon DioxideAt a December 1997 meeting in Kyoto,
Japan, delegates from 167 nations, including the United States, agreed to a treaty (Kyoto
Protocol) that would require a seven percent reduction in United States carbon dioxide
(CO2) emissions below 1990 levels. Although the United States agreed to the
Kyoto Protocol, the treaty has not been sent to Congress for ratification. The financial
impact on KCP&L of future requirements in the reduction of CO2 emissions
cannot be determined until specific regulations are adopted.

24

Clean Air Legislation Congress has debated numerous bills
that would make significant changes to the current federal Clean Air Act including
potential establishment of nationwide limits on power plant emissions for several specific
pollutants. These bills have the potential for a significant financial impact on KCP&L
through the installation of new pollution control equipment to achieve compliance with the
new nationwide limits. The financial consequences to KCP&L cannot be determined until
the final legislation is passed. KCP&L will continue to monitor the progress of these
bills.

Proposed Water Use
RegulationsIn February 2002, the EPA issued
proposed rules related to certain existing power producing facilities that employ cooling
water intake structures that withdraw 50 million gallons or more per day and use 25% or
more of that water for cooling purposes. The proposed rules establish national minimum
performance requirements designed to minimize adverse environmental impact. The date that
the EPA must take final action has been delayed until February 2004. KCP&L will
continue to monitor the progress of this rulemaking. The impact of these proposed rules
has not yet been quantified, however, KCP&Ls generating stations would be
affected.

Strategic Energy
Purchased Power Energy CommitmentsStrategic Energy has entered into agreements to
purchase electricity at various fixed prices to meet the estimated demand requirements of
long-term sales agreements with its customers. Commitments at September 30, 2003, under
these agreements total $1,225.8 million through 2010. Commitments for the remainder of
2003 total $191.6 million, and for the years 2004 through 2007 total $563.6 million,
$362.1 million, $73.7 million, and $23.2 million, respectively. See Note 18 for
derivatives discussion.

KCP&L LeasesIn 2001, KCP&L entered into a
synthetic lease arrangement with a Lease Trust (Lessor) to finance the purchase,
installation, assembly and construction of five combustion turbines and related property
and equipment that added 385 MWs of peaking capacity (Project). The Lease Trust is a
special-purpose entity and has an aggregate financing commitment from third-party equity
and debt participants of $176 million. In the second quarter of 2003, construction and
installation of KCP&Ls five combustion turbines was completed and the units were
placed in service. At September 30, 2003, cumulative project costs were approximately
$151.2 million. Total project costs, projected to be under $155 million, are anticipated
to be finalized by the end of the year and rental payments under the lease will begin
after these costs have been finalized. Upon a default during the lease period,
KCP&Ls maximum obligation to the Lessor equals 100% of project costs.
KCP&Ls rental obligation, which reflects interest payments only, is expected to
be approximately $16.8 million ending in October 2006. KCP&Ls rental obligations
for the remainder of 2003 total approximately $0.4 million and for the years 2004 through
2006 total approximately $4.1 million, $6.1 million and $6.2 million, respectively. At the
end of the lease term (October 2006), KCP&L may choose to sell the project for the
Lessor, guaranteeing to the Lessor a residual value for the Project in an amount, which
may be up to 83.21% of the project cost.

The Lease Trust, acting as Lessor in
the synthetic lease arrangement discussed above, is considered a Variable Interest Entity
under FIN No. 46. Because KCP&L has variable interests in the Lease Trust, including
among other things, a residual value guarantee provided to the Lessor, KCP&L is the
primary beneficiary of the Lease Trust as the interpretation is currently written. FASB
has deferred the effective date of FIN No. 46, which as currently written, will require
KCP&L to consolidate the Lease Trust in the fourth quarter of 2003. Great Plains
Energys and consolidated KCP&Ls utility plant and long-term debt will
increase by the total project cost and depreciation expense will increase upon
consolidation of the Lease Trust. On October 31, 2003, FASB issued an exposure draft of a
proposed interpretation Consolidation of Variable Interest Entities, a modification
of FASB Interpretation No. 46. The Company is still evaluating the effect of the
exposure draft.

25

Internal Revenue Service
Settlement  Corporate-Owned Life InsuranceIn November 2002, KCP&L accepted
a settlement offer related to corporate-owned life insurance (COLI) from the Internal
Revenue Service (IRS). The offer allowed 20% of the interest originally deducted and taxed
only 20% of the gain on surrender of the COLI policies. KCP&L surrendered the policies
in February 2003. KCP&L will make cash payments of approximately $1.3 million to the
IRS in the fourth quarter of 2003 to satisfy the liability associated with the surrender.
The remaining $9.9 million related to the disallowed interest will be paid upon completion
of the 1995  1998 IRS audit. As discussed in the 2002 Form 10-K, these charges were
recorded in 2000.

# 7. KLT GAS PROPERTY
IMPAIRMENT

Unproven gas properties are reviewed
for impairment under SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, whenever events or changes in circumstances indicate that
carrying amounts may not be recoverable. In the first quarter of 2003, primarily due to
difficulties encountered in the de-watering process at one of KLT Gas properties,
estimates of future gas production from that property were lowered. As a result of the
lower estimated production, management performed an impairment analysis of the property
utilizing future cash flows. The analysis indicated that the sum of undiscounted cash
flows was less than the carrying amount of the property. The carrying amount was then
compared to the estimated fair value of the property (discounted cash flow analysis). The
carrying amount exceeded estimated fair value indicating an impairment of $9.0 million.
The $9.0 million impairment was recorded as a loss in (Gain) Loss on property in Great
Plains Energys consolidated income statement and the related $4.5 million tax effect
was recorded as a reduction to income taxes on the consolidated income statement resulting
in a $5.5 million reduction to earnings during the first quarter of 2003.

# 8.  DTI
HOLDINGS, INC. AND SUBSIDIARIES BANKRUPTCY UPDATE

On December 31, 2001, a subsidiary of
KLT Telecom, Holdings and its subsidiaries, Digital Teleport and Digital Teleport of
Virginia, Inc., filed separate voluntary petitions in the Bankruptcy Court for the Eastern
District of Missouri for reorganization under Chapter 11 of the U.S. Bankruptcy Code,
which cases have been procedurally consolidated. Holdings and its two subsidiaries are
collectively called DTI.

In December 2002, Digital Teleport
entered into an agreement to sell substantially all of its assets (Asset Sale) to
CenturyTel Fiber Company II, LLC (CenturyTel), a nominee of CenturyTel, Inc. (Asset
Purchase Agreement). The Asset Sale was approved by the Bankruptcy Court on February 13,
2003, and closed on June 6, 2003. The Asset Sale produced approximately $38 million of
cash proceeds, $3.8 million of which was escrowed (Escrow Funds). The Escrow Funds will be
disbursed 180 days following the closing of the Asset Sale, subject to any reduction for
the amount of claims by CenturyTel for breaches of representations and warranties of
Digital Teleport under the Asset Purchase Agreement. Assuming full release of the Escrow
Funds, the proceeds of the Asset Sale together with Digital Teleports net cash on
hand are expected to total approximately $47.6 million (Anticipated Assets), which except
for certain reserves were distributed in the second quarter of 2003 pursuant to the
Chapter 11 plan discussed below.

Digital Teleport, Digital Teleport of
Virginia and Holdings prepared a joint Chapter 11 plan (Chapter 11 Plan) and disclosure
statement based on the provisions of settlement agreements, which are discussed below. The
Chapter 11 Plan provided that Digital Teleport, Holdings, and Digital Teleport of Virginia
would be dissolved and liquidated pursuant to the Chapter 11 Plan. The Chapter 11 Plan was
confirmed by the Bankruptcy Court on June 11, 2003, and became effective on June 24, 2003.
Pursuant to the Chapter 11 Plan, the stock of Digital Teleport, Holdings and Digital
Teleport of Virginia was cancelled and extinguished.

26

After providing for certain reserves
associated with the Escrow Funds, the MODOR Claim (as discussed below), certain
administrative expenses and payment of secured and priority claims, an initial
distribution of 82.5 cents on each dollar of approved claims was made by Digital Teleport
to its creditors (other than KLT Telecom), a $13.8 million distribution was made by
Holdings to its creditors, and an initial distribution of approximately $14.9 million was
made by Digital Teleport to KLT Telecom (net of the approximate $13.8 million paid by KLT
Telecom to Holdings, as discussed below). Additionally, KLT Telecom anticipates that it
will realize approximately $21 million of cash tax benefits in late 2003. Pending final
resolution of certain items including the Escrow Funds, the MODOR Claim and the put option
of a certain minority shareholder (which is described below and in Note 19 of the 2002
Form 10-K), the Company recorded a net gain of $25.9 million or $0.37 per share during the
second quarter 2003 related to the DTI bankruptcy. The impact on net income was primarily
due to the net effect of the Chapter 11 Plan confirmation and the resulting distribution,
the reversal of a $15.8 million tax valuation allowance and the reversal of a $5 million
debtor in possession financing commitment previously reserved.

Settlement agreements entered into by
Digital Teleport and Holdings, which provided the basis of the Chapter 11 plan, were also
approved by the Bankruptcy Court in its June 11, 2003, confirmation order. KLT Telecom,
KLT Inc., KCP&L, Great Plains Energy, Digital Teleport and the Official Unsecured
Creditors Committee of Digital Teleport (Creditors Committee) entered into a Settlement
Agreement as of December 23, 2002 (Teleport Settlement Agreement). Under the Teleport
Settlement Agreement, Digital Teleport, the Creditors Committee and three members of the
Creditors Committee holding claims against Digital Teleport released claims and possible
causes of action against the Company and any other entity currently or previously a member
of the Great Plains Energy or KCP&L consolidated tax group, and creditors receiving
payments were deemed to receive such payments in full satisfaction of their claims against
Digital Teleport. In addition, the Teleport Settlement Agreement provided for the receipt
by KLT Telecom of an assignment of claims of Digital Teleport, the Creditors Committee and
the bankruptcy estate of Digital Teleport against any officer or director of Digital
Teleport, or any other person or entity. The Teleport Settlement Agreement resolved all
material issues and disputes among the parties to those agreements.

The Teleport Settlement Agreement did
not, however, purport to resolve (i) three priority proofs of claim by the Missouri
Department of Revenue in the aggregate amount of $2,848,446 (collectively, the MODOR
Claim); (ii) an unsecured proof of claim by Gary Douglass, the former Chief Financial
Officer of DTI, in the amount of $2,055,900 (Douglass Claim); or (iii) any claims by
Holdings against KLT Telecom, KLT Inc., KCP&L and Great Plains Energy, or by creditors
of Holdings, including the holders of $265 million of Senior Discount Notes of Holdings.
However, the Holdings Settlement Agreement, discussed below, did resolve all material
issues and disputes among the parties to that agreement. Digital Teleport objected to the
MODOR Claim and the Douglass Claim asserting that each claim should be disallowed in full.
The Bankruptcy Court conducted an evidentiary hearing regarding the MODOR Claim, and ruled
substantially in favor of Digital Teleport. MODOR is appealing this ruling. The Bankruptcy
Court disallowed the Douglass Claim. In lieu of an appeal or motion to reconsider the
Bankruptcy Courts ruling regarding the Douglass Claim, Digital Teleport and Douglass
entered into a settlement agreement, which was approved by the Bankruptcy Court, that
afforded Douglass a $15,000 general unsecured claim against Digital Teleport.

The Teleport Settlement Agreement
provided for a pro rata distribution from the Anticipated Assets ranging from 82.5% to 90%
of the sum of (i) the non-priority unsecured claims of approximately $10.5 million held by
Digital Teleports trade creditors, (ii) an amended claim of $1 million by Union
Electric Co. d/b/a Ameren UE, and (iii) the allowed, non-priority unsecured portions, if
any, of the MODOR Claim, with the exact percentage being determined by the extent to which
the MODOR Claim is resolved in the Digital Teleport bankruptcy proceeding and is not
disallowed. After the payment of administrative, secured and priority claims (which
claims, excluding the MODOR Claim, were estimated

27

as of the initial distribution date to
total approximately $3 million), the Teleport Settlement Agreement provided for the
balance of the Anticipated Assets to be distributed to KLT Telecom, subject to the
resolution of the MODOR Claim and the Douglass Claim, and subject, further, to a payment
to the creditors of Holdings pursuant to the Holdings Settlement Agreement described
below.

On March 14, 2003, KLT Telecom, KLT
Inc., Great Plains Energy, KCP&L, Holdings, The Bank of New York (as trustee of an
Indenture, as amended, relating to the Senior Discount Notes issued by Holdings)
(Trustee), and three principal holders of Senior Discounted Notes (including the largest
creditor) of Holdings (collectively, the Noteholders) entered into a Settlement Agreement
and Plan Term Sheet (the Holdings Settlement Agreement).

Under the Holdings Settlement
Agreement, KLT Telecom paid to the Holdings bankruptcy estate approximately $13.8 million
from the distribution that KLT Telecom received under the Teleport Settlement Agreement
for distribution to unsecured creditors of Holdings. In addition, Holdings, the Trustee
and the Noteholders released claims and possible causes of action against the Company and
any other entity currently or previously a member of the Great Plains Energy or KCP&L
consolidated tax group, and creditors receiving payments were deemed to receive such
payments in full satisfaction of their claims against Holdings. In addition, the Holdings
Settlement Agreement provided for the receipt by KLT Telecom of an assignment of claims of
Holdings, the bankruptcy estate of Holdings, the Trustee and the Noteholders against any
officer or director of Holdings, or any other person or entity. The Holdings Settlement
Agreement resolved all material issues and disputes among the parties to that agreement.

Within 190 days after the closure of
the Asset Sale, KLT Inc. and KLT Telecom will pay a base sum of $1.6 million to certain
executives of Digital Teleport for entering into employment agreements required as a
condition precedent to the Asset Sale. KLT Telecom accrued the $1.6 million in the second
quarter of 2003 and the amount was considered in the determination of the $25.9 million or
$0.37 per share net gain related to the DTI bankruptcy recorded during the second quarter
of 2003. This sum will be increased based upon the amount of Escrow Funds released to
Digital Teleport, but the sum may not exceed $2.5 million (collectively, the Payment). The
Payment will be made pursuant to a December 26, 2002 letter from KLT Inc. and KLT Telecom
to Mr. Paul Pierron, President of Digital Teleport.

KLT Telecom originally acquired a 47%
interest in DTI in 1997. On February 8, 2001, KLT Telecom acquired control of DTI by
purchasing shares from another Holdings shareholder, Richard D. Weinstein (Weinstein),
increasing its ownership to 83.6%. In connection with this purchase, KLT Telecom granted
Weinstein a put option. The put option provided for the sale by Weinstein of his remaining
shares in Holdings to KLT Telecom during a period beginning September 1, 2003, and ending
August 31, 2005. The put option provides for an aggregate exercise price for these
remaining shares equal to their fair market value with an aggregate floor amount of $15
million. The floor amount of the put option was fully reserved during the fourth quarter
of 2001, as described in Note 19 to the 2002 Form 10-K. On September 2, 2003, Weinstein
delivered to KLT Telecom notice of the exercise of his put option. KLT Telecom declined to
pay Weinstein any amount under the put option because, among other things, the stock of
Holdings has been cancelled and extinguished. Weinstein has sued KLT Telecom for allegedly
breaching the put option, which is described in Part II Item 1.

Because DTI filed for bankruptcy
protection under the U.S. Bankruptcy Code, KLT Telecom no longer had control over nor
could it exert significant influence over DTI. As a consequence, as of December 31, 2001,
DTI was de-consolidated and was presented on the cost basis. Because of this
de-consolidation, KLT Telecom did not include in its financial results the ongoing results
of operations, earnings or losses incurred by DTI since December 31, 2001.

28

9.
          DISPOSITION OF OWNERSHIP INTEREST IN R.S. ANDREWS ENTERPRISES, INC.

On June 13, 2003, HSS board of
directors approved a plan to dispose of its interest in residential services provider
RSAE. On June 30, 2003, HSS completed the disposition of its interest in RSAE. Under terms
of the agreement, HSS repaid $22 million of RSAEs outstanding debt under its bank
line of credit and forgave $4 million of inter-company debt. The financial statements have
been restated to reflect RSAE as discontinued operations for all periods presented as
prescribed under SFAS No. 144. The following table summarizes the
operating results for the discontinued operations.

|                                        
|----------------------------------------
|Three Months Ended                      
|September 30                            
|2003                                    
|
|(millions)                              
|Revenues                                
|
|                                        
|Loss from operations before income taxes
|Loss on disposal before income taxes    
|
|Total loss on discontinued operations   
|before income taxes                     
|Income tax benefit (a)                  
|
|Loss on discontinued operations, net    
|of income taxes                         
|

|    |  | 
|--- |  | 
|(a) |  | 
|    |  | 
|    |  | 
|    |  | 
|    |  | 

Assets and liabilities of the
discontinued operations were as follows:

|                                            
|--------------------------------------------
|December 31                                 
|2002                                        
|
|(millions)                                  
|Current assets                              
|Other nonutility property and investments   
|Goodwill                                    
|Other deferred charges                      
|                                            
|Total assets of discontinued operations     
|
|                                            
|Current liabilities                         
|Deferred taxes                              
|Other deferred credits and liabilities      
|Long-term debt                              
|                                            
|Total liabilities of discontinued operations
|

29

# 10. INCOME TAXES

DTI Holdings, Inc. and
subsidiariesDuring the fourth quarter of 2001,
Great Plains Energy recognized a $15.8 million tax valuation allowance related to the
bankruptcy of DTI due to significant uncertainty regarding the ability to realize future
tax deductions while in the bankruptcy process. Upon the close of the Asset Sale to
CenturyTel on June 6, 2003, uncertainty no longer existed regarding the ability to realize
future tax benefits; therefore, the entire $15.8 million valuation allowance was reversed
in the second quarter of 2003. The $15.8 million tax benefit was partially offset by tax
expense associated with the income impact of the Asset Sale, the reversal of the debtor in
possession financing commitment, the estimated escrow proceeds and the Noteholder
recovery.

The full amount of the tax benefits
associated with the sale of DTI assets is limited by KLT Telecoms tax basis in DTI.
The financial statements reflect the full tax benefit allowable considering the basis
limitation.

The tax loss on the DTI transaction
will reduce Great Plains Energys 2003 consolidated taxable income. The loss will
reduce estimated tax payments by approximately $21 million, otherwise payable in late
2003.

R.S. Andrews Enterprises,
Inc.Great Plains Energy and consolidated
KCP&L recognized in their respective year to date 2003 consolidated income statements
an $11.8 million tax benefit relating to the disposition of the interest in RSAE. This is
net of $9.7 million of tax benefits recorded in prior years. The $21.5 million total tax
benefit relates to the companies original $30.4 million investment, the payment of
RSAE debt of $22 million and $1 million of fees pursuant to the disposition.

The disposition of RSAE resulted in a
capital loss for tax purposes. Under corporate tax laws, capital losses can only be offset
by capital gains. Therefore, this capital loss will be carried back to offset capital
gains recognized on the Companys consolidated 2000 tax return. These tax benefits
are expected to be realized in late 2004.

# 11. BASIC AND DILUTED
EARNINGS PER COMMON SHARE CALCULATION

There was no significant dilutive
effect on Great Plains Energys earnings per share (EPS) from other securities for
the three months ended and year to date September 30, 2003 and 2002. To determine EPS,
preferred stock dividend requirements are deducted from both income from continuing
operations before cumulative effect of a change in accounting principle and net income
before dividing by average number of common shares outstanding. The EPS impact of the loss
from discontinued operations, net of income taxes, is determined by dividing the loss from
discontinued operations, net of income taxes, by the average number of common shares
outstanding. The EPS impact of the cumulative effect of a change in accounting principle
is determined by dividing the cumulative effect of a change in accounting principle by the
average number of common shares outstanding.

30

The following table reconciles Great
Plains Energys calculation of basic and diluted EPS from continuing operations
before the cumulative effect of a change in accounting principle:

|                                                          
|----------------------------------------------------------
|
|(thousands except per share amounts)                      
|Income from continuing operations before cumulative effect
|Less: Preferred stock dividend requirement                
|                                                          
|Basic EPS                                                 
|Income available to common stockholders                   
|Add: effect of dilutive securities                        
|                                                          
|Diluted EPS                                               
|

|                                                          
|----------------------------------------------------------
|
|(thousands except per share amounts)                      
|Income from continuing operations before cumulative effect
|Less: Preferred stock dividend requirement                
|                                                          
|Basic EPS                                                 
|Income available to common stockholders                   
|Add: effect of dilutive securities                        
|                                                          
|Diluted EPS                                               
|

|                                                          
|----------------------------------------------------------
|
|(thousands except per share amounts)                      
|Income from continuing operations before cumulative effect
|Less: Preferred stock dividend requirement                
|                                                          
|Basic EPS                                                 
|Income available to common stockholders                   
|Add: effect of dilutive securities                        
|                                                          
|Diluted EPS                                               

|                                                          
|----------------------------------------------------------
|
|(thousands except per share amounts)                      
|Income from continuing operations before cumulative effect
|Less: Preferred stock dividend requirement                
|                                                          
|Basic EPS                                                 
|Income available to common stockholders                   
|Add: effect of dilutive securities                        
|                                                          
|Diluted EPS                                               
|

Options to purchase 27,898 shares of
common stock year to date September 30, 2003, were excluded from the computation of
diluted EPS because the option exercise prices were greater than the average market price
of the common shares during the period. For the three months ended September 30, 2003,
there were no anti-dilutive shares. Options to purchase 371,165 and 364,427 shares of
common stock for the three months ended and year to date September 30, 2002, respectively,
were excluded from the computation of diluted EPS because the option exercise prices were
greater than the average market price of the common shares during the period.

31

# 12. REGULATORY MATTERS

Regulatory Assets and
LiabilitiesKCP&L is subject to the
provisions of SFAS No. 71. Accordingly, KCP&L has recorded assets and liabilities on
its balance sheet resulting from the effects of the ratemaking process, which would not be
recorded under GAAP for non-regulated entities. Regulatory assets represent incurred costs
that have been deferred because they are probable of future recovery in customer rates.
Regulatory liabilities generally represent probable future reductions in revenue or
refunds to customers. KCP&Ls continued ability to meet the criteria for
application of SFAS No. 71 may be affected in the future by competitive forces and
restructuring in the electric industry. In the event that SFAS No. 71 no longer applied to
all, or a separable portion, of KCP&Ls operations, the related regulatory assets
and liabilities would be written off unless an appropriate regulatory recovery mechanism
is provided.

|                                        
|----------------------------------------
|Amortization                            
|ending                                  
|period                                  
|
|Regulatory Assets                       
|Taxes recoverable through future rates  
|Coal contract termination costs         
|Decommission and decontaminate federal  
|uranium enrichment facilities           
|Loss on reacquired debt                 
|January 2002 incremental ice storm costs
|Change in depreciable life of Wolf Creek
|Asset retirement obligations            
|Other (a)                               
|
|Total Regulatory Assets                 
|
|Regulatory Liabilities                  
|Emission allowances (b)                 
|
|Total Regulatory Liabilities            
|

|    |  | 
|--- |  | 
|(a) |  | 
|    |  | 
|(b) |  | 

Retail Rate MattersAt the end of January 2002, a severe
ice storm occurred throughout large portions of the Midwest, including the greater Kansas
City metropolitan area. In 2002, the Kansas Corporation Commission (KCC) approved a
stipulation and agreement regarding the treatment of the Kansas portion of the ice storm
costs. Pursuant to the stipulation and agreement, KCP&L implemented a retail rate
reduction January 1, 2003, and began calculating depreciation expense on Wolf Creek using
a 60 year life instead of a 40 year life. As a result of the stipulation and agreement,
KCP&L retail revenues decreased approximately $4.4 million and $10.0 million for the
three months ended and year to date September 30, 2003 periods, respectively. Depreciation
expense decreased approximately $1.9 million and $5.8 million for the three months ended
and year to date September 30, 2003 periods, respectively. The reduction in depreciation
expense has been recorded as a regulatory asset.

In 2002, the Missouri Public Service
Commission (MPSC) approved KCP&Ls application for an accounting authority order
related to the Missouri jurisdictional portion of the storm costs. The order allows
KCP&L to defer and amortize $20.1 million, representing the Missouri portion of the
storm costs, through January 2007. The amortization began in September 2002 and will
amortize approximately $4.6 million annually for the remainder of the amortization period.
KCP&L amortized $1.1 million and

32

$3.4 million of deferred ice storm costs for the
three months ended and year to date September 30, 2003 periods, respectively.

# 13. STOCK OPTIONS

The Company adopted the fair value
recognition provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, for its stock options as of January 1, 2003. The Company has elected
to use the modified prospective method of adoption as prescribed under SFAS No. 148,
Accounting for Stock-Based Compensation-Transition and Disclosure. Under the
modified prospective method of adoption, stock option compensation cost recognized
beginning January 1, 2003, is the same as if the fair value recognition provisions of SFAS
No. 123 had been applied to all stock options granted after October 1, 1995. Compensation
expense recorded for the three months ended and year to date September 30, 2002, was
immaterial.

The following table illustrates the
effect on net income and EPS for Great Plains Energy as if the fair value method had been
applied to all periods presented.

|                                    
|------------------------------------
|Three Months Ended                  
|September 30                        
|
|2003                                
|
|(thousands except per share amounts)
|Net income, as reported             
|Pro forma net income as if fair     
|value method were applied           
|Basic and diluted earnings          
|per common share, as reported       
|Pro forma basic and diluted earnings
|per common share                    
|

# 14. RELATED PARTY
TRANSACTIONS AND RELATIONSHIPS

Custom Energy Holdings, L.L.C. holds
100% of the direct ownership interests in Strategic Energy. Great Plains Energy holds an
89% indirect ownership position in Strategic Energy. SE Holdings, L.L.C. (SE Holdings)
owns the remaining 11% indirect ownership position in Strategic Energy. Richard Zomnir,
President and Chief Executive Officer of Strategic Energy, holds a 56% indirect interest
in SE Holdings and certain other employees of Strategic Energy hold the remaining
interests in SE Holdings.

SE Holdings has a put option to sell
all or part of its 11% interest in Strategic Energy to Custom Energy Holdings at any time
within the 90 days following January 31, 2004, under certain circumstances, at fair market
value. Fair market value would be determined by the mutual agreement of the parties or if
an agreement cannot be reached, by third party appraisal. Preliminary discussions have
begun between SE Holdings and the Management Committee of Custom Energy Holdings regarding
the potential put of SE Holdings 11% interest in Strategic Energy. Great Plains Energy
representatives hold two of the three positions on the Management Committee while a SE
Holdings representative holds the remaining position.

Custom Energy Holdings business
and affairs are controlled and managed by a three member Management Committee composed of
one representative designated by KLT Energy Services Inc. (KLT Energy Services), one
representative designated by IEC, and one representative designated by SE Holdings.
Certain actions (including amendment of Custom Energy Holdings operating agreement,
approval of actions in contravention of the operating agreement, approval of a dissolution
of Custom Energy Holdings, additional capital contributions and assumption of recourse
indebtedness) require the

33

unanimous consent of all the members of Custom Energy Holdings.
Certain other actions (including mergers with Custom Energy Holdings, acquisitions by
Custom Energy Holdings, assumption of non-recourse indebtedness, sales of substantial
assets, approval of distributions, filing of registration statements, partition of assets,
admission of new members and transfers of interests in Custom Energy Holdings) can be
approved by the Management Committee, but to the extent they affect the rights,
obligations, assets or business of Strategic Energy, the approval of the Strategic Energy
Management Committee is also required.

Strategic Energys business and
affairs are controlled and managed exclusively by a four member Management Committee
composed of two representatives designated by KLT Energy Services, one representative
designated by IEC and one representative designated by SE Holdings. Certain actions
(including amendment of Strategic Energys operating agreement, approval of actions
in contravention of the operating agreement, approval of transactions between Strategic
Energy and affiliates of its members, approval of a dissolution of Strategic Energy, and
assumption of recourse indebtedness) require the unanimous consent of all the Management
Committee members.

# 15. GUARANTEES

In the normal 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 indemnification of
letters of credit and surety bonds. 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
subsidiaries intended business purposes.

As prescribed in FIN No. 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Guarantees of Indebtedness of Others, the Company began recording a liability for
the fair value of the obligation it has undertaken for guarantees issued after December
31, 2002. The liability recognition requirements of FIN No. 45 are applied on a
prospective basis to guarantees issued or modified after December 31, 2002, while the
disclosure requirements are applied to all guarantees. The interpretation does not
encompass guarantees of the Companys own future performance, such as credit support
provided to its subsidiaries. As of September 30, 2003, KCP&L recorded an immaterial
amount for the fair value of guarantees issued for the residual value of vehicles and
heavy equipment under an operating lease.

34

The following table reflects Great
Plains Energys and consolidated KCP&Ls maximum potential amount of future
payments that could be required under guarantees and describes those guarantees:

|                         
|-------------------------
|Guarantor                
|
|(millions)               
|KCP&L                    
|                         
|                         
|                         
|                         
|KCP&L                    
|                         
|                         
|
|Total consolidated KCP&L 
|                         
|Great Plains Energy      
|                         
|                         
|                         
|                         
|                         
|KLT Energy Services      
|                         
|                         
|                         
|                         
|
|Total Great Plains Energy
|

In 2001, KCP&L entered into a
synthetic lease arrangement with a Lease Trust (Lessor). At the end of the lease term
(October 2006), KCP&L may choose to sell the project for the Lessor, guaranteeing to
the Lessor a residual value for the Project in an amount, which may be up to 83.21% of the
project cost. See Note 6 for additional information regarding KCP&Ls synthetic
lease arrangement and the anticipated consolidation of the Lease Trust in the fourth
quarter of 2003.

# 16. ASSET RETIREMENT
OBLIGATIONS

Effective January 1, 2003, the
Company adopted SFAS No. 143. SFAS No. 143 provides accounting requirements for the
recognition and measurement of liabilities associated with the retirement of tangible
long-lived assets. Under the standard, these liabilities are recognized at fair value as
incurred and capitalized as part of the cost of the related long-lived asset. Accretion of
the liabilities due to the passage of time is recorded as an operating expense. Retirement
obligations associated with long-lived assets included within the scope of SFAS No. 143
are those for which a legal obligation exists under enacted laws, statutes, written or
oral contracts, including obligations arising under the doctrine of promissory estoppel.

The adoption of SFAS No. 143 changed
the accounting for and the method used to report KCP&Ls obligation to
decommission its 47% share of Wolf Creek. The legal obligation to decommission Wolf Creek
was incurred when the plant was placed in service in 1985. The estimated liability,
recognized on KCP&Ls balance sheet at January 1, 2003, is based on a third party
nuclear decommissioning study conducted in 2002. KCP&L used a credit-adjusted risk
free discount rate of 6.42% to calculate the retirement obligation. This rate was based on
the estimated rate KCP&L could issue 30-year bonds, adjusted downward to reflect the
portion of the anticipated costs in current year dollars that had been funded at date of
adoption through the tax-qualified trust fund. The cumulative impact of prior

35

decommissioning accruals recorded consistent with rate orders issued by the MPSC and KCC
has been reversed and a new regulatory contra-asset for such amounts has been established.
Amounts collected through these rate orders have been deposited in a legally restricted
external trust fund. The fair market value of the trust fund was $69.6 million and $63.3
million at September 30, 2003 and December 31, 2002, respectively.

KCP&L also must recognize, where
possible to estimate, the future costs to settle other legal liabilities including the
removal of water intake structures on rivers, capping/filling of piping at levees
following steam power plant closures and capping/closure of ash landfills. Estimates for
these liabilities are based on internal engineering estimates of third party costs to
remove the assets in satisfaction of legal obligations and have been discounted using
credit adjusted risk free rates ranging from 5.25% to 7.50% depending on the anticipated
settlement date.

KLT Gas has estimated liabilities for
gas well plugging and abandonment, facility removal and surface restoration. These
estimates are based upon internal estimates of third party costs to satisfy the legal
obligations and have been discounted using credit adjusted risk free rates ranging from
6.00% to 7.25%, depending upon the anticipated settlement date.

Revisions to the estimated
liabilities of KCP&L and KLT Gas could occur due to changes in the decommissioning or
other cost estimates, extension of the nuclear operating license or changes in federal or
state regulatory requirements.

On January 1, 2003, KCP&L
recorded an ARO of $99.2 million and increased property and equipment, net of accumulated
depreciation, by $18.3 million. KCP&L is a regulated utility subject to the provisions
of SFAS No. 71 and management believes it is probable that any differences between
expenses under SFAS No. 143 and expenses recovered currently in rates will be recoverable
in future rates. As a result, the $80.9 million cumulative effect of the adoption of SFAS
No. 143 was recorded as a regulatory asset and therefore, had no impact on net income.

As a result of its adoption of SFAS
No. 143, KLT Gas recorded an ARO of $1.2 million, increased property and equipment by $1.0
million and increased operating expense by $0.2 million for the immaterial cumulative
effect of the accounting change.

KCP&L has legal ARO for certain
other assets where it is not possible to estimate the time period when the obligations
will be settled. Consequently, the retirement obligations cannot be measured at this time.
For transmission easements obtained by condemnation, KCP&L must remove its
transmission lines if the line is de-energized. It is extremely difficult to obtain siting
for new transmission lines. Consequently, KCP&L does not anticipate de-energizing any
of its existing lines. KCP&L also operates, under state permits, ash landfills at
several of its power plants. While the life of the ash landfill at one plant can be
estimated and is included in the estimated liabilities above, the future life of ash
landfills at other permitted landfills cannot be estimated. KCP&L can continue to
maintain permits for these landfills after the adjacent plant is closed.

36

The following table illustrates the
effect on ARO if the provisions of SFAS No. 143 had been applied beginning January 1,
2000. Pro forma amounts for the periods prior to the January 1, 2003, adoption were
measured using assumptions consistent with the period of adoption.

|                                               
|-----------------------------------------------
|Year to Date                                   
|September 30                                   
|2000                                           
|
|(millions)                                     
|Asset retirement obligation beginning of period
|Additions                                      
|Accretion                                      
|                                               
|Asset retirement obligation end of period      
|
|Other Great Plains Energy                      
|Asset retirement obligation beginning of period
|Additions                                      
|Accretion                                      
|                                               
|Asset retirement obligation end of period      
|
|Consolidated Great Plains Energy               
|Asset retirement obligation beginning of period
|Additions                                      
|Accretion                                      
|                                               
|Asset retirement obligation end of period      
|

# 17. SEGMENT AND RELATED
INFORMATION

Great Plains EnergyGreat Plains Energy has three
reportable segments based on its method of internal reporting, which generally segregates
the reportable segments based on products and services, management responsibility and
regulation. The three reportable business segments are: (1) KCP&L, an integrated,
regulated electric utility, which generates, transmits and distributes electricity; (2)
Strategic Energy, which provides power supply coordination services by entering into
long-term contracts with its customers to supply electricity Strategic Energy purchases
under long-term contracts, operating in several electricity markets offering retail
choice; and (3) KLT Gas, which explores for, develops, and produces unconventional natural
gas resources, including coalbed methane properties. Other includes the
operations of HSS, GPP, Services, all KLT Inc. operations other than Strategic Energy and
KLT Gas, unallocated corporate charges and intercompany eliminations. The summary of
significant accounting policies applies to all of the reportable segments. Segment
performance is evaluated based on net income.

The tables below reflect summarized
financial information concerning Great Plains Energys reportable segments.

|                            
|----------------------------
|Strategic                   
|KCP&L                       
|
|(millions)                  
|Operating revenues          
|Depreciation and depletion  
|Loss from equity investments
|Interest charges            
|Income taxes                
|Net income (loss)           
|

37

|                                 
|---------------------------------
|Strategic                        
|KCP&L                            
|
|(millions)                       
|Operating revenues               
|Depreciation and depletion       
|Loss from equity investments     
|Interest charges                 
|Income taxes                     
|Loss from discontinued operations
|Net income (loss)                
|

|                                 
|---------------------------------
|Strategic                        
|KCP&L                            
|
|(millions)                       
|Operating revenues               
|Depreciation and depletion       
|Loss from equity investments     
|Interest charges                 
|Income taxes                     
|Loss from discontinued operations
|Net income (loss)                
|

|                                 
|---------------------------------
|Strategic                        
|KCP&L                            
|
|(millions)                       
|Operating revenues               
|Depreciation and depletion       
|Loss from equity investments     
|Interest charges                 
|Income taxes                     
|Loss from discontinued operations
|Cumulative effect of a change    
|in accounting principle          
|Net income (loss)                
|

|                                       
|---------------------------------------
|Strategic                              
|KCP&L                                  
|
|(millions)                             
|Assets                                 
|Capital and investment expenditures (a)
|
|(millions)                             
|Assets                                 
|Capital and investment expenditures (a)
|

|    |  | 
|--- |  | 
|(a) |  | 

38

Consolidated KCP<he table below reflects summarized financial
information concerning consolidated KCP&Ls reportable segment. Other includes
the operations of HSS and intercompany eliminations, which are immaterial.

|                          
|--------------------------
|Consolidated              
|KCP&L                     
|
|(millions)                
|Operating revenues        
|Depreciation and depletion
|Interest charges          
|Income taxes              
|Net income (loss)         
|

|                                 
|---------------------------------
|Consolidated                     
|KCP&L                            
|
|(millions)                       
|Operating revenues               
|Depreciation and depletion       
|Interest charges                 
|Income taxes                     
|Loss from discontinued operations
|Net income (loss)                
|

|                                 
|---------------------------------
|Consolidated                     
|KCP&L                            
|
|(millions)                       
|Operating revenues               
|Depreciation and depletion       
|Interest charges                 
|Income taxes                     
|Loss from discontinued operations
|Net income (loss)                
|

|                                 
|---------------------------------
|Consolidated                     
|KCP&L                            
|
|(millions)                       
|Operating revenues               
|Depreciation and depletion       
|Interest charges                 
|Income taxes                     
|Loss from discontinued operations
|Cumulative effect of a change    
|in accounting principle          
|Net income (loss)                
|

39

|                                       
|---------------------------------------
|Consolidated                           
|KCP&L                                  
|
|(millions)                             
|Assets                                 
|Capital and investment expenditures (a)
|
|December 31, 2002                      
|Assets                                 
|Capital and investment expenditures (a)
|

|    |  | 
|--- |  | 
|(a) |  | 

# 18. DERIVATIVE FINANCIAL
INSTRUMENTS

The Companys activities expose
it to a variety of market risks including interest rates and commodity 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. The
Companys risk management activities, including the use of derivatives, are subject
to the management, direction and control of internal risk management committees. The
Companys interest rate risk management strategy uses derivative instruments to
adjust the Companys liability portfolio to optimize the mix of fixed and floating
rate debt within an established range. The Company maintains commodity-price risk
management strategies that use derivative instruments to minimize significant,
unanticipated earnings fluctuations caused by commodity price volatility. Derivative
instruments measured at fair value are recorded on the balance sheet as an asset or
liability. Changes in fair value are recognized currently in earnings unless specific
hedge accounting criteria are met.

Interest Rate Risk
ManagementKCP&L utilizes interest rate
management derivatives to adjust its liability portfolio to optimize the mix of fixed and
floating rate debt within an established range.

In 2002, KCP&L remarketed its
1998 Series A, B, and D Environmental Improvement Revenue Refunding (EIRR) bonds totaling
$146.5 million to a 5-year fixed interest rate of 4.75% ending October 1, 2007.
Simultaneously with the remarketing, KCP&L entered into an interest rate swap for the
$146.5 million based on LIBOR to effectively create a floating interest rate obligation.
The transaction is a fair value hedge with no ineffectiveness. Changes in the fair market
value of the swap are recorded on the balance sheet as an asset with an offset to the
respective debt balances with no impact on earnings. At September 30, 2003, the fair value
of the swap was a $5.2 million asset.

KCP&L had two interest rate swap
agreements in place to fix the interest rate on $30 million of floating-rate long-term
debt. The swap agreements expired in June 2003.

Commodity Risk ManagementKCP&Ls risk management
policy is to use derivative hedge instruments to mitigate its exposure to market price
fluctuations on a portion of its projected gas purchases to meet generation requirements
for retail and firm wholesale sales. These hedging instruments are designated as cash flow
hedges. The fair market values of these instruments are recorded as current assets or
current liabilities. When the gas is purchased and to the extent the hedge is effective at
mitigating the impact of a change in the purchase price of gas, the amounts in other
comprehensive income (OCI) are reclassified to the consolidated income statement. To the
extent that the hedges are not effective, the ineffective portion of the changes in fair
market value is recorded currently in fuel expense.

40

Strategic Energy maintains a
commodity-price risk management strategy that uses forward physical energy purchases and
derivative instruments to minimize significant, unanticipated earnings fluctuations caused
by commodity-price volatility.

As a result of supplying electricity
to retail customers under fixed rate contracts, Strategic Energys policy is to match
customers projected demand with fixed price purchases. In certain markets where
Strategic Energy operates, entering into forward fixed price contracts is cost
prohibitive. Derivative instruments, primarily swaps, are used to limit the unfavorable
effect that price increases will have on electricity purchases, effectively fixing the
future purchase price of electricity and protecting Strategic Energy from price
volatility. Certain forward fixed price purchases and swap agreements are designated as
cash flow hedges resulting in changes in the hedge value being recorded as OCI. To the
extent that the hedges are not effective, the ineffective portion of the changes in fair
market value is recorded currently in purchased power. Strategic Energy also enters into
economic hedges that do not qualify as accounting hedges. The changes in the fair value of
these derivative instruments are recorded into earnings as a component of purchased power.

In March 2003, Strategic Energy
terminated an agreement with a swap counterparty due to credit and performance concerns.
Strategic Energy received a $4.8 million fair value settlement. The swap was designated as
a cash flow hedge of a forecasted transaction and Strategic Energy management believes the
forecasted transaction will occur. Strategic Energy reclassified $1.6 and $3.2 million to
earnings for the three months ended and year to date September 30, 2003, respectively. The
remaining $1.6 million will be reclassified to earnings in the fourth quarter of 2003, the
remaining term of the underlying forecasted transaction.

KLT Gas risk management policy
is to use firm sales agreements or financial hedge instruments to mitigate its exposure to
market price fluctuations on up to 85% of its daily natural gas production. KLT Gas had no
significant production during the reported periods; therefore, no hedges were in place.

SFAS No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities was generally
effective for contracts entered into or modified after June 30, 2003. The adoption of SFAS
No. 149 did not have a material effect on the results of operations of Great Plains Energy
or consolidated KCP&L for the period ended September 30, 2003, or their financial
positions as of that date. The electric energy industry and the accounting profession have
requested the FASB to clarify the interpretation of certain provisions of SFAS No. 149.
Depending upon the FASBs response, certain energy contracts that the Company has
designated as normal purchases or sales accounted for under the accrual basis of
accounting could be required to be accounted for as derivatives. As derivatives, the
contracts would be recognized in the balance sheet at fair value, with changes in fair
value recorded in OCI to the extent that the contracts qualify as effective cash flow
hedges. The fair values of contracts entered into after June 30, 2003, that could be
affected by these provisions of SFAS No. 149 were not material to the consolidated balance
sheets of Great Plains Energy or consolidated KCP&L as of September 30, 2003, but the
effects could be material in future periods.

41

The amounts recorded in OCI related
to the cash flow hedges are summarized in the following tables:

|Great Plains Energy activity for the three months ended September 30, 2003
|--------------------------------------------------------------------------
|
|Increase                                                                  
|(Decrease) in                                                             
|June 30                                                                   
|2003                                                                      
|
|Assets                                                                    
|Current assets                                                            
|Other deferred charges                                                    
|Liabilities and capitalization                                            
|Other current liabilities                                                 
|Other comprehensive                                                       
|income                                                                    
|Deferred income taxes                                                     
|Other deferred credits                                                    
|

|Consolidated KCP&L activity for the three months ended September 30, 2003
|-------------------------------------------------------------------------
|
|Increase                                                                 
|(Decrease) in                                                            
|June 30                                                                  
|2003                                                                     
|
|Assets                                                                   
|Other current assets                                                     
|Liabilities and capitalization                                           
|Other comprehensive                                                      
|income                                                                   
|Deferred income taxes                                                    
|

|Great Plains Energy activity for the three months ended September 30, 2002
|--------------------------------------------------------------------------
|
|Increase                                                                  
|(Decrease) in                                                             
|June 30                                                                   
|2002                                                                      
|
|Assets                                                                    
|Other current assets                                                      
|Other deferred charges                                                    
|Liabilities and capitalization                                            
|Other current liabilities                                                 
|Other comprehensive                                                       
|income                                                                    
|Deferred income taxes                                                     
|Other deferred credits                                                    
|

42

|Great Plains Energy activity year to date September 30, 2003
|------------------------------------------------------------
|
|Increase                                                    
|(Decrease) in                                               
|December 31                                                 
|2002                                                        
|
|Assets                                                      
|Current assets                                              
|Other deferred charges                                      
|Liabilities and capitalization                              
|Other current liabilities                                   
|Other comprehensive                                         
|income                                                      
|Deferred income taxes                                       
|Other deferred credits                                      
|

|Consolidated KCP&L activity year to date September 30, 2003
|-----------------------------------------------------------
|
|Increase                                                   
|(Decrease) in                                              
|December 31                                                
|2002                                                       
|
|Assets                                                     
|Other current assets                                       
|Liabilities and capitalization                             
|Other comprehensive                                        
|income                                                     
|Deferred income taxes                                      
|

|Great Plains Energy activity year to date September 30, 2002
|------------------------------------------------------------
|
|Increase                                                    
|(Decrease) in                                               
|December 31                                                 
|2001                                                        
|
|Assets                                                      
|
|Other current assets                                        
|Liabilities and capitalization                              
|Other current liabilities                                   
|Other comprehensive                                         
|income                                                      
|Deferred income taxes                                       
|Other deferred credits                                      
|

43

|Consolidated KCP&L activity year to date September 30, 2002
|-----------------------------------------------------------
|
|Increase                                                   
|(Decrease) in                                              
|December 31                                                
|2001                                                       
|
|Assets                                                     
|Other current assets                                       
|Liabilities and capitalization                             
|Other current liabilities                                  
|Other comprehensive                                        
|income                                                     
|Deferred income taxes                                      
|

|Reclassified to earnings for the three months ended September 30,
|-----------------------------------------------------------------
|
|Great Plains Energy                                              
|2003                                                             
|
|(millions)                                                       
|Gas revenues                                                     
|Fuel expense                                                     
|Purchased power expense                                          
|Minority interest                                                
|Income taxes                                                     
|
|Other comprehensive income                                       
|

|Reclassified to earnings year to date September 30,
|---------------------------------------------------
|
|Great Plains Energy                                
|2003                                               
|
|(millions)                                         
|Gas revenues                                       
|Fuel expense                                       
|Purchased power expense                            
|Minority interest                                  
|Income taxes                                       
|
|Other comprehensive income                         
|

# 19. GAS PROPERTY AND
INVESTMENTS

In June 2001, the FASB issued SFAS
No. 141, Business Combinations, which requires the purchase method of
accounting for business combinations initiated after June 30, 2001. In July 2001, the FASB
also issued SFAS No. 142, Goodwill and Other Intangible Assets, which
discontinues the practice of amortizing goodwill and indefinite lived intangible assets
and initiates an annual review for impairment. Intangible assets with a determinable
useful life will continue to be amortized over that period. The amortization provisions
apply to goodwill and intangible assets acquired after June 30, 2001. SFAS No. 141 and 142
clarify that more assets should be distinguished and classified between tangible and
intangible. KLT Gas did not change or reclassify contractual mineral rights included in
gas property and investments on Great Plains Energys consolidated balance sheet upon
adoption of SFAS No. 142. KLT Gas management believes its classification of such mineral
rights under the full cost method of accounting for natural gas properties, which is
consistent with industry practice, is appropriate. However, the accounting profession and
others are engaged in industry-wide deliberations regarding whether SFAS No. 141 and 142
require contractual mineral rights to be classified as intangible assets. Based on the
results of the deliberations, if management determines reclassification is necessary, KLT

44

Gas gas property and investments would be reduced by $8.5 million and $6.0 million
and intangible assets would have increased by a like amount at September 30, 2003, and
December 31, 2002, respectively, representing cost incurred from the effective date of
June 30, 2001. The provisions of SFAS No. 141 and 142 impact only the balance sheet and
associated footnote disclosure, and any required reclassification would not impact Great
Plains Energys cash flows or results of operations.

45

# ITEM 2.  MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Managements Discussion and
Analysis of Financial Condition and Results of Operations that follow are a combined
presentation for Great Plains Energy and KCP&L, both registrants under this filing.
The discussion and analysis by management focuses on those factors that had a material
effect on the financial condition and results of operations of the registrants during the
periods presented. It should be read in conjunction with the accompanying consolidated
financial statements and related notes and with the managements discussion and
analysis included in the companies 2002 annual report on Form 10-K.

Losses in prior periods related to
the operations of RSAE have been reclassified and are presented as discontinued operations
due to the June 2003 disposition of RSAE.

Great Plains Energy
IncorporatedAs a diversified energy company,
Great Plains Energys reportable business segments include:

|o |  | KCP&L, an integrated, regulated electric utility in the states of Missouri and Kansas,
which provides reliable, affordable electricity to retail customers;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | Strategic Energy, which provides power supply coordination services by entering into
long-term contracts with its customers to supply electricity Strategic Energy purchases
under long-term contracts, operating in several electricity markets offering retail
choice, including Pennsylvania, California, Ohio, New York, Massachusetts, Texas, Michigan
and New Jersey; and
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|o |  | KLT Gas, which explores for,
develops and produces unconventional natural gas resources.
|- |  | ----------------------------------------------------------------------------------------

The Companys goal is to become
a premier diversified energy company that achieves annual growth in earnings per share in
a financially disciplined manner. To achieve this goal, Great Plains Energy intends to
focus on its three reportable segments of business:

|o |  | Stressing operational excellence in the utility operations of KCP&L;
|- |  | --------------------------------------------------------------------

|o |  | Expanding Strategic Energy's business model in new and existing markets; and
|- |  | ----------------------------------------------------------------------------

|o |  | Developing KLT Gas into a leading unconventional natural gas exploration company.
|- |  | ---------------------------------------------------------------------------------

# Critical Accounting
Policies

Regulatory Matters At the end of January 2002, a severe
ice storm occurred throughout large portions of the Midwest, including the greater Kansas
City metropolitan area. In 2002, the KCC approved a stipulation and agreement regarding
the treatment of the Kansas portion of the ice storm costs. Pursuant to the stipulation
and agreement, KCP&L implemented a retail rate reduction January 1, 2003, and began
calculating depreciation expense on Wolf Creek using a 60 year life instead of a 40 year
life. As a result of the stipulation and agreement, KCP&L retail revenues decreased
approximately $4.4 million and $10.0 million for the three months ended and year to date
September 30, 2003 periods, respectively. Depreciation expense decreased approximately
$1.9 million and $5.8 million for the three months ended and year to date September 30,
2003 periods, respectively. The reduction in depreciation expense has been recorded as a
regulatory asset.

In 2002, the MPSC approved
KCP&Ls application for an accounting authority order related to the Missouri
jurisdictional portion of the storm costs. The order allows KCP&L to defer and
amortize $20.1 million, representing the Missouri portion of the storm costs, through
January 2007. The amortization began in September 2002 and will amortize approximately
$4.6 million annually for the remainder of the

46

amortization period. KCP&L amortized
$1.1 million and $3.4 million of deferred ice storm costs for the three months ended and
year to date September 30, 2003 periods, respectively.

Asset Retirement
ObligationsEffective January 1, 2003, the
Company adopted SFAS No. 143. SFAS No. 143 provides accounting requirements for the
recognition and measurement of liabilities associated with the retirement of tangible
long-lived assets. Under the standard, these liabilities are recognized at fair value as
incurred and capitalized as part of the cost of the related long-lived asset. Accretion of
the liabilities due to the passage of time is recorded as an operating expense. Retirement
obligations associated with long-lived assets included within the scope of SFAS No. 143
are those for which a legal obligation exists under enacted laws, statutes written or oral
contracts, including obligations arising under the doctrine of promissory estoppel.

The adoption of SFAS No. 143 changed
the accounting for and the method used to report KCP&Ls obligation to
decommission its 47% share of Wolf Creek. The legal obligation to decommission Wolf Creek
was incurred when the plant was placed in service in 1985. The estimated liability,
recognized on KCP&Ls balance sheet at January 1, 2003, is based on a third party
nuclear decommissioning study conducted in 2002. KCP&L used a credit-adjusted risk
free discount rate of 6.42% to calculate the retirement obligation. This rate is based on
the rate KCP&L could issue 30-year bonds, adjusted downward to reflect the portion of
the anticipated costs in current year dollars that had been funded at date of adoption
through the tax-qualified trust fund. The cumulative impact of prior decommissioning
accruals recorded consistent with rate orders issued by the MPSC and KCC has been reversed
and a new regulatory contra-asset for such amounts has been established. Amounts collected
through these rate orders have been deposited in a legally restricted external trust fund.
The fair market value of the trust fund was $69.6 million and $63.3 million at September
30, 2003 and December 31, 2002, respectively.

KCP&L also must recognize, where
possible to estimate, the future costs to settle other legal liabilities including the
removal of water intake structures on rivers, capping/filling of piping at levees
following steam power plant closures and capping/closure of ash landfills. Estimates for
these liabilities are based on internal engineering estimates of third party costs to
remove the assets in satisfaction of legal obligations and have been discounted using
credit adjusted risk free rates ranging from 5.25% to 7.50% depending on the anticipated
settlement date.

KLT Gas has estimated liabilities for
gas well plugging and abandonment, facility removal and surface restoration. These
estimates are based upon internal estimates of third party costs to satisfy the legal
obligations and have been discounted using credit adjusted risk free rates ranging from
6.00% to 7.25%, depending upon the anticipated settlement date.

Revisions to the estimated
liabilities of KCP&L and KLT Gas could occur due to changes in the decommissioning or
other cost estimates, extension of the nuclear operating license or changes in federal or
state regulatory requirements.

On January 1, 2003, KCP&L
recorded an ARO of $99.2 million and increased property and equipment, net of accumulated
depreciation, by $18.3 million. KCP&L is a regulated utility subject to the provisions
of SFAS No. 71 and management believes it is probable that any differences between
expenses under SFAS No. 143 and expenses recovered currently in rates will be recoverable
in future rates. As a result, the $80.9 million cumulative effect of the adoption of SFAS
No. 143 was recorded as a regulatory asset and therefore, had no impact on net income.

47

As a result of its adoption of SFAS
No. 143, KLT Gas recorded an ARO of $1.2 million, increased property and equipment by $1.0
million and increased operating expense by $0.2 million for the immaterial cumulative
effect of the accounting change.

If the provisions of SFAS No. 143 had
been applied to the consolidated balance sheets presented, consolidated KCP&Ls
liability for ARO would have been $99.2 million at December 31, 2002. Great Plains
Energys liability for ARO at December 31, 2002, would have been $100.4 million,
reflecting consolidated KCP&Ls liability and the KLT Gas liability of $1.2
million.

KCP&L has legal ARO for certain
other assets where it is not possible to estimate the time period when the obligations
will be settled. Consequently, the retirement obligations cannot be measured at this time.
For transmission easements obtained by condemnation, KCP&L must remove its
transmission lines if the line is de-energized. It is extremely difficult to obtain siting
for new transmission lines. Consequently, KCP&L does not anticipate de-energizing any
of its existing lines. KCP&L also operates, under state permits, ash landfills at
several of its power plants. While the life of the ash landfill at one plant can be
estimated and is included in the estimated liabilities above, the future life of ash
landfills at other permitted landfills cannot be estimated. KCP&L can continue to
maintain permits for these landfills after the adjacent plant is closed.

Although the liability for Wolf Creek
decommissioning costs recorded under the new ARO method is expected to be substantially
the same at the end of Wolf Creeks life as the liability that would have been
recorded under the former ratemaking method, the rate at which the liability will increase
will be different under the two methods. In the near term, the ARO liability will be
higher than the liability under the former method. Because KCP&L is subject to SFAS
No. 71, the difference in the recognition of the liability will have no impact on
earnings.

Prior to the adoption of SFAS No.
143, KLT Gas did not record separate asset retirement costs and liabilities, or the
associated depreciation and accretion. Under the full cost method of accounting followed
by KLT Gas, estimated dismantlement and abandonment costs, net of estimated salvage
values, were recorded to the property cost to be amortized. Under SFAS No. 143, KLT
Gas reserve for depreciation and asset retirement liabilities will increase
systematically over the asset life up to the time of settlement with corresponding charges
to expense.

48

# Great Plains Energy
Results of Operations

|                                         
|-----------------------------------------
|Three Months Ended                       
|September 30                             
|2003                                     
|
|(millions)                               
|Operating revenues                       
|Fuel                                     
|Purchased power - KCP&L                  
|Purchased power - Strategic Energy       
|                                         
|Revenues, net of fuel and purchased power
|Other operating expenses                 
|Depreciation and depletion               
|Gain (loss) on property                  
|                                         
|Operating income                         
|Loss from equity investments             
|Non-operating income (expenses)          
|Interest charges                         
|Income taxes                             
|Discontinued operations                  
|Cumulative effect of a change            
|in accounting principle                  
|                                         
|Net income                               
|Preferred dividends                      
|
|Earnings available for common stock      
|

Three months ended
September 30, 2003 compared to September 30, 2002Great Plains Energys three
months ended September 30, 2003 earnings, as detailed in the table below, increased to
$83.4 million, or $1.20 per share, from $68.5 million, or $1.11 per share, compared to the
same period of 2002. The issuance of 6.9 million shares in November 2002 diluted three
months ended 2003 earnings per share by $0.14.

|                              
|------------------------------
|Earnings (loss) per Great     
|Earnings (Loss)               
|
|2003                          
|
|(millions)                    
|KCP&L                         
|Subsidiary operations         
|Discontinued operations       
|
|Consolidated KCP&L            
|Strategic Energy              
|KLT Gas                       
|Other non-regulated operations
|
|Total                         
|

KCP&L earnings from continuing
operations for the three months ended September 30, 2003, compared to the same period of
2002, increased $15.2 million primarily due to the $10.8 million related to the partial
settlements of Hawthorn No. 5 litigation (see Consolidated KCP&L Results of Operations
for additional information). Decreased interest expense and depreciation also contributed
to the increased earnings.

49

Strategic Energys earnings
increased $4.1 million for the three months ended September 30, 2003, compared to the same
period of 2002. The increase is the result of a $5.5 million increase in revenues net of
purchased power primarily due to a 34% increase in MWhs sold. In addition to the continued
growth, Great Plains Energys ownership of Strategic Energy was increased by 5.8% in
the fourth quarter of 2002.

Other non-regulated operations
includes a $5.3 million decrease in earnings primarily due to higher reductions in
affordable housing limited partnerships for the three months ended September 30, 2003,
compared to 2002.

Year to date September
30, 2003 compared to September 30, 2002Great Plains Energys year to
date September 30, 2003 earnings, as detailed in the table below, increased to $148.0
million, or $2.14 per share, from $97.7 million, or $1.58 per share, compared to the same
period of 2002. The issuance of 6.9 million shares in November 2002 diluted year to date
2003 earnings per share by $0.24.

|                                    
|------------------------------------
|Earnings (loss) per Great           
|Earnings (Loss)                     
|
|2003                                
|
|(millions)                          
|KCP&L                               
|Subsidiary operations               
|Discontinued operations             
|Cumulative effect to January 1, 2002
|of a change in accounting principle 
|
|Consolidated KCP&L                  
|Strategic Energy                    
|KLT Gas                             
|Other non-regulated operations      
|
|Total                               
|

KCP&L earnings from continuing
operations year to date September 30, 2003, compared to the same period of 2002, increased
$30.5 million, which includes $10.8 million related to the partial settlements of Hawthorn
No. 5 litigation. Excluding the partial settlements of Hawthorn No. 5 litigation,
KCP&L revenue, net of fuel and purchased power increased $22.3 million primarily due
to a significant increase in wholesale MWhs sold at higher wholesale prices partially
offset by the effect on retail revenues of the January 2003 Kansas rate reduction. This
increase combined with a decrease in interest expense more than offset increases in
pension expense and power plant maintenance. The amortization of the Missouri
jurisdictional portion of the storm costs totaled $3.4 million year to date September 30,
2003. Year to date September 30, 2002, KCP&L expensed $16.5 million for the Kansas
jurisdictional portion of the storm costs.

Discontinued operations year to date
September 30, 2003, includes a $7.1 million loss on the June 2003 disposition of HSS
interest in RSAE and continuing losses through the date of disposition of $1.6 million.
Losses from RSAE year to date September 30, 2002, of $2.5 million, have been reclassified
and are presented as discontinued operations. Additionally, year to date September 30,
2002, earnings reflect the $3.0 million cumulative effect to January 1, 2002, of a change
in accounting principle for the adoption of SFAS No. 142 and the associated write-down of
RSAE goodwill.

Strategic Energys earnings
increased $8.4 million year to date September 30, 2003, compared to the same period of
2002. The increase is the result of an $17.2 million increase in revenues net of

50

purchased
power primarily due to a 42% increase in MWhs sold. This increase was partially offset by
an increase in administrative and general expenses including employee related expenses. In
addition to the continued growth, Great Plains Energys ownership of Strategic Energy
was increased by 5.8% in the fourth quarter of 2002.

KLT Gas continues to focus on the
testing and development of several unconventional natural gas properties. Year to date
September 30, 2003, includes a first quarter after tax impairment charge of $5.5 million
recorded by KLT Gas on a Rocky Mountain project in response to lower revised estimates of
future gas production.

Other non-regulated operations
includes $25.9 million for the effects of the June 2003 confirmation of the restructuring
plan of DTI Holdings, Inc., Digital Teleport, Inc., and Digital Teleport of Virginia, Inc.
and sale of substantially all of the assets of Digital Teleport, Inc. to a subsidiary of
CenturyTel, Inc. See Note 8 to the consolidated financial statements for additional
information regarding DTI. Other non-regulated operations also included a $2.3 million
decrease in earnings primarily due to higher reductions in affordable housing limited
partnerships year to date September 30, 2003, compared to the same period of 2002.

Consolidated KCP<he following discussion of
consolidated KCP&L results of operations includes KCP&L, an integrated electric
utility and HSS, an unregulated subsidiary of KCP&L. References to KCP&L, in the
discussion that follows, reflect only the operations of the integrated electric utility.

Consolidated KCP&L
Business OverviewAs an integrated, regulated electric
utility, KCP&L engages in the generation, transmission, distribution and sale of
electricity.

KCP&Ls power business has
over 4,000 megawatts of generating capacity. Five combustion turbine units added 385
megawatts of peaking capacity in 2003. KCP&L has entered into a five-year construction
and synthetic operating lease transaction with a Lease Trust for the five combustion
turbines. The total estimated cost for the purchase, installation, assembly and
construction of the five combustion turbines is projected to be under $155 million. FASB
has deferred the effective date of FIN No. 46, which as currently written, will require
KCP&L to consolidate the Lease Trust in the fourth quarter of 2003. Great Plains
Energys and consolidated KCP&Ls utility plant and long-term debt will
increase by the total project cost and depreciation expense will increase upon
consolidation of the Lease Trust. On October 31, 2003, FASB issued an exposure draft of a
proposed interpretation Consolidation of Variable Interest Entities, a modification
of FASB Interpretation No. 46. The company is still evaluating the effect of the
exposure draft. Because of the manner in which the current synthetic lease is treated for
covenant purposes in the Companys financing arrangements, as well as by the rating
agencies, liquidity and credit ratings are not expected to be impacted by this new
accounting standard.

KCP&Ls delivery business
consists of transmission and distribution facilities that serve slightly less than 490,000
customers as of September 30, 2003. KCP&L continues to experience load growth
approximating the historical average of 2.0% to 2.5% annually through increased customer
usage and additional customers. Rates charged for electricity are below the national
average.

Customers of KCP&L set a record
peak demand for the consumption of electricity on August 21, 2003. The all-time one-hour
peak reached 3,610 MW when the downtown Kansas City, Missouri temperature was 105 degrees.
A growing customer base and the heat contributed to the new peak. The previous net hourly
summer peak for KCP&L of 3,374 MW was August 28, 2000.

51

At the end of January 2002, a severe
ice storm occurred throughout large portions of the Midwest, including the greater Kansas
City metropolitan area. At its peak, the storm caused over 300,000 customer outages
throughout the KCP&L service territory, an unprecedented level in the KCP&Ls
120-year history. Crews from other utilities in numerous states were called in to assist
in the restoration of power and power was restored in nine days. Total costs related to
the January ice storm were approximately $51.3 million of which $14.7 million were capital
expenditures and therefore charged to utility plant. KCP&L expensed a total of $16.5
million in 2002 for the Kansas jurisdictional portion of the storm costs and deferred
$20.1 million of the storm costs applicable to Missouri. In January 2003, Edison Electric
Institute honored KCP&L for exemplary performance and dedication in restoring power to
customers during the storm and recognized KCP&L by awarding it the associations
annual Emergency Response Award.

Under the Federal Energy Regulatory
Commission (FERC) Order 2000, KCP&L, as an investor-owned utility, is strongly
encouraged to join a FERC approved Regional Transmission Organization (RTO). RTOs combine
regional transmission operations of utility businesses into a regional organization that
schedules transmission services and monitors the energy market to ensure regional
transmission reliability and non-discriminatory access. During the first quarter of 2002,
the Southwest Power Pool, Inc. (SPP) and the Midwest Independent System Operator (MISO)
voted to consolidate the two organizations to create a larger Midwestern RTO, a non-profit
organization that would operate in twenty states and one Canadian province. During March
2003, SPP and MISO mutually agreed to terminate the process of consolidating the
organizations. Subsequent to the termination of the merger between SPP and MISO, the SPP
formulated and approved a strategic plan for SPP. The plan includes provisions for SPP to
become compliant with FERC Order 2000. SPP filed for FERC recognition as an RTO on October
15, 2003. It is anticipated that FERC will rule on this filing before the end of 2003.
KCP&L is directly participating in the SPP process to become FERC Order 2000 compliant
and intends to continue SPP participation.

During the third quarter of 2002, the
FERC issued a Notice of Proposed Rulemaking to Remedy Undue Discrimination through Open
Access Transmission Service and Standard Electricity Market Design. The proposed
rulemaking is designed to establish a single non-discriminatory open access transmission
tariff with a single transmission service that is applicable to all users of the
interstate transmission grid and to standardize wholesale energy market rules. All public
utilities that own, control or operate transmission facilities in interstate commerce
would be required to turn over the operation of their transmission facilities to an RTO
that meets the definition of an independent transmission provider or contract with an
entity that meets the definition of an independent transmission provider. KCP&L filed
comments with the FERC on the proposed rulemaking in November 2002. In late April 2003,
the FERC issued a white paper titled Wholesale Power Market Platform, in
response to comments received on its proposed rulemaking. In the white paper, the FERC
stated its intent in its final rule to require all public utilities to join an RTO or
Independent System Operator (ISO) and to eliminate the requirement that public utilities
create or join an independent transmission provider. The FERC also stressed that state
authorities will play a significant role in RTO and ISO formation through the formation of
Regional State Committees. The proposal also allows for phased-in implementation and
sequencing tailored to each region and for modifications to benefit customers within each
region. The FERC also indicated that divestiture is not required to achieve independent
operation of the transmission system. Companies may remain vertically integrated under an
RTO or ISO. Additionally, as proposed, each RTO or ISO would be required to have a clear
transmission cost recovery policy outlined in its tariff. The timing of a final rule is
uncertain. However, KCP&L intends to seek state commission approval to participate in
the SPP RTO after conditions placed on the SPP RTO application by FERC are known.

KCP&L has a wholly-owned
unregulated subsidiary, HSS, that holds a residential services investment, Worry Free. In
June 2003, HSS completed the disposition of its interest in RSAE.

52

Consolidated KCP&L
Results of OperationsThe following table summarizes
consolidated KCP&Ls comparative results of operations.

|                                         
|-----------------------------------------
|Three Months Ended                       
|September 30                             
|2003                                     
|
|(millions)                               
|Operating revenues                       
|Fuel                                     
|Purchased power                          
|                                         
|Revenues, net of fuel and purchased power
|Other operating expenses                 
|Depreciation and depletion               
|Gain (loss) on property                  
|                                         
|Operating income                         
|Non-operating income (expenses)          
|Interest charges                         
|Income taxes                             
|Discontinued operations                  
|Cumulative effect of a change            
|in accounting principle                  
|
|Net income                               
|

Consolidated KCP&L earnings from
continuing operations for the three months ended September 30, 2003, compared to the same
period of 2002, increased $15.1 million due to increased earnings from KCP&L.
Excluding the partial settlements of Hawthorn No. 5 litigation discussed below, KCP&L
revenue, net of fuel and purchased power increased $0.5 million. Decreased interest
expense and depreciation also contributed to the increased earnings.

Consolidated KCP&L earnings from
continuing operations year to date September 30, 2003, compared to the same period of
2002, increased $29.7 million primarily due to increased earnings from KCP&L.
Excluding the partial settlements of Hawthorn No. 5 litigation discussed below, KCP&L
revenue, net of fuel and purchased power increased $22.3 million primarily due to a
significant increase in wholesale revenues due to an increase in wholesale MWhs sold at
higher wholesale prices partially offset by the effect on retail revenues of the January
2003 Kansas rate reduction. This increase combined with a $7.4 million decrease in
interest expense more than offset a $8.7 million increase in pension expense and a $3.7
million increase in power plant maintenance. The amortization of the Missouri
jurisdictional portion of the storm costs totaled $3.4 million year to date September 30,
2003. Year to date September 30, 2002, KCP&L expensed $16.5 million for the Kansas
jurisdictional portion of the storm costs.

As described in Part II Item 1,
KCP&L has filed suit against multiple defendants who are alleged to have responsibility
for the 1999 Hawthorn No. 5 boiler explosion. KCP&L and its primary insurance company
have entered into a subrogation allocation agreement under which recoveries in this suit
are generally allocated 55% to the primary insurance company and 45% to KCP&L. Various
defendants have settled with KCP&L in this litigation, resulting in KCP&L
recording $34.1 million under the terms of the subrogation allocation agreement. The
amount recorded in earnings in the third quarter of 2003 related to the loss of use of the
plant was approximately $17.7 million ($10.8 million net of income taxes). The effect was
to increase wholesale revenues $2.6 million, decrease fuel expense $3.9 million and
decrease purchased power expense $11.2 million. The remaining $16.4 million was recorded
as a recovery of capital expenditures.

53

Discontinued operations year to date
September 30, 2003, includes a $7.1 million loss on the June 2003 disposition of HSS
interest in RSAE and continuing losses through the date of disposition of $1.6 million.
Losses from RSAE during the three months ended and year to date September 30, 2002, of
$1.1 million and $2.5 million, respectively have been reclassified and are presented as
discontinued operations. Additionally, year to date September 30, 2002, earnings reflect
the $3.0 million cumulative effect to January 1, 2002, of a change in accounting principle
for the adoption of SFAS No. 142 and the associated write-down of RSAE goodwill.

# Consolidated KCP&L
Sales Revenues and MWh Sales

|                           
|---------------------------
|Three Months Ended         
|September 30               
|2003                       
|
|Retail revenues            
|Residential                
|Commercial                 
|Industrial                 
|Other retail revenues      
|
|Total retail               
|Wholesale revenues         
|Other revenues             
|
|KCP&L electric revenues    
|Subsidiary revenues        
|
|Consolidated KCP&L revenues
|

|                        
|------------------------
|Three Months Ended      
|September 30            
|2003                    
|
|Retail MWh sales        
|Residential             
|Commercial              
|Industrial              
|Other retail MWh sales  
|
|Total retail            
|Wholesale MWh sales     
|
|KCP&L electric MWh sales
|

Retail revenues decreased $1.6
million for the three months ended and $6.2 million year to date September 30, 2003,
compared to the same periods of 2002. Extremely mild September 2003 weather was the
primary reason for the decrease in the three months ended which, combined with the mild
June weather, mostly offset the favorable weather earlier in 2003 and continued load
growth for the year to date period. The Kansas rate reduction effective January 1, 2003,
decreased retail revenues approximately $4.4 million for the three months ended and $10.0
million year to date September 30, 2003. See Critical Accounting Policies for additional
information. Less than 1% of revenues include an automatic fuel adjustment provision.

Excluding the $2.6 million related to
the partial settlements of Hawthorn No. 5 litigation, wholesale revenues increased $13.6
million for the three months ended and $53.7 million year to date. Bulk power sales, the
major component of wholesale sales, vary with system requirements, generating unit and
purchased power availability, fuel costs and requirements of other electric systems. These
factors, combined with a more focused sales effort, helped increase MWh sales for the
three months ended and year to date September 30, 2003, by 22% and 41%, respectively,
compared to the same periods of 2002. This accounted for approximately 50% and 60% of the
variances in the respective periods.

54

Average market prices per MWh of power sold in 2003
increased 33% to $26.49 for the three months ended and 45% to $28.25 year to date compared
to the same periods of 2002. The increase was driven by increased natural gas prices.

KCP&L Fuel and
Purchased PowerThe fuel cost per MWh generated and
the purchased power cost per MWh have a significant impact on the results of operations
for KCP&L. Generation fuel mix can change the fuel cost per MWh generated
substantially. Nuclear fuel costs per MWh generated remain substantially less than the
cost of coal per MWh generated. Replacement power costs for planned Wolf Creek outages are
accrued evenly over the units operating cycle. KCP&L expects its cost of nuclear
fuel to remain fairly constant through the year 2008. Coal has a significantly lower cost
per MWh generated than natural gas and oil. KCP&Ls procurement strategies
continue to provide delivered coal costs below the regional average. The cost per MWh for
purchased power is significantly higher than the fuel cost per MWh of coal and nuclear
generation. KCP&L continually evaluates its system requirements, the availability of
generating units, availability and cost of fuel supply, availability and cost of purchased
power and the requirements of other electric systems to provide reliable power
economically. Fossil plants averaged 75% of total generation and the nuclear plant the
remainder over the last three years.

Excluding the $3.9 million related to
the partial settlements of Hawthorn No. 5 litigation, fuel expense increased $6.6 million
for the three months ended and $11.7 million year to date September 30, 2003, compared to
the same periods of 2002. MWhs generated increased 5% and 9% for the same periods,
respectively. Additionally, in the three months ended September 30, 2003, compared to
2002, natural gas prices increased 41%. The year to date increase in MWhs generated was
partially offset by lower fuel cost per MWh generated due to additional coal and less
natural gas and oil in the generation fuel mix.

Excluding the $11.2 million related
to the partial settlements of Hawthorn No. 5 litigation, purchased power expense,
increased $5.8 million for the three months ended and $14.5 million year to date September
30, 2003, compared to the same periods of 2002. Approximately two-thirds of the increase
for the three months ended and year to date is attributable to price per MWh increases of
31% and 36%, respectively, driven primarily by increased natural gas prices. MWhs
purchased increased 20% and 18%, respectively, for the three months ended and year to date
September 30, 2003, compared to the same periods of 2002 due to increased load
requirements.

Consolidated KCP&L Other
Operating Expenses (including operating, maintenance and general taxes)Consolidated KCP&Ls other operating expenses decreased $2.4
million for the three months ended September 30, 2003, compared to the same period of
2002. Decreases in operating and maintenance expenses in various areas combined to more
than offset increased pension expense of $2.8 million primarily due to a significant
decline in the market value of plan assets.

Consolidated KCP&Ls other
operating expenses decreased $1.3 million year to date September 30, 2003, compared to the
same period of 2002 primarily due to expensing in 2002 the $16.5 million of the Kansas
jurisdictional portion of the January 2002 ice storm which was offset by the following:

|  |                                                                                                                     
|- | --------------------------------------------------------------------------------------------------------------------
|o | amortizing in 2003 $3.4 million of the Missouri jurisdictional portion of the ice storm                             
|o | increased pension expense of $8.7 million primarily due to a significant decline in the market value of plan assets,
|o | increased plant maintenance expense of $3.7 million for plant outages, and                                          
|o | increased transmission expenses of $3.2 million primarily due to increased usage charges as a result of the         
|  | increased wholesale MWh sales and increased MWh of purchased power.                                                 

55

Consolidated KCP&L
DepreciationConsolidated KCP&Ls
depreciation expense decreased $1.5 million for the three months ended and $4.2 million
year to date September 30, 2003, compared to the same periods of 2002 primarily due to the
change to a 60 year life for Wolf Creek pursuant to the 2002 KCC stipulation and
agreement. The change decreased depreciation expense approximately $1.9 million and $5.8
million for the three months ended and year to date September 30, 2003 periods,
respectively. See Critical Accounting Policies for additional information.

Consolidated KCP&L
Interest ChargesConsolidated KCP&Ls
interest charges decreased $2.6 million for the three months ended and $7.4 million year
to date September 30, 2003, compared to the same periods of 2002 primarily due to lower
levels of outstanding debt as a result of the repayment of $124.0 million of medium-term
notes in 2003. Lower interest rates on variable rate debt compared to the prior year
periods also contributed to the decreases.

Wolf CreekWolf Creek, a nuclear unit, is 20% of
KCP&Ls base load generating capacity and 14% of KCP&Ls total
generating capacity, including the 2003 addition of five leased combustion turbines that
added peaking capacity. Wolf Creeks operating performance has remained strong over
the last three years, contributing an average of 25% of KCP&Ls annual MWh
generation while operating at an average capacity of 93%. Wolf Creek has the lowest fuel
cost per MWh generated of any of KCP&Ls generating units.

KCP&L accrues the incremental
operating, maintenance and replacement power costs for planned outages evenly over the
units operating cycle, normally 18 months. As actual outage expenses are incurred,
the refueling liability and related deferred tax asset are reduced. Wolf Creek began its
fall outage on October 18, 2003. The outage is expected to be approximately 36 days.

There has been significant opposition
and delays to, development of a low-level radioactive waste disposal facility. See Note 6
to the consolidated financial statements for additional information. An inability to
complete this project would require KCP&L to write-off its net investment in the
project, which was $7.4 million at September 30, 2003. KCP&L, and the other owners of
Wolf Creek, could also still be required to participate in development of an alternate
site.

Ownership and operation of a nuclear
generating unit exposes KCP&L to risks regarding decommissioning costs at the end of
the units life and to potential retrospective assessments and property losses in
excess of insurance coverage. These risks are more fully discussed in the related sections
of Note 6 to the consolidated financial statements.

# Strategic Energy

Strategic Energy Business
OverviewStrategic Energy provides power
supply coordination services by entering into long-term contracts with its customers to
supply electricity that Strategic Energy purchases under long-term contracts to manage its
customers electricity needs. In return, Strategic Energy receives an ongoing
management fee, which is included in the contracted sales price for the electricity.
Strategic Energy operates in electricity markets offering retail choice, including
Pennsylvania, California, Ohio, New York, Massachusetts, Texas, Michigan and New Jersey.
During the third quarter of 2003, Strategic Energy delivered power to its first customers
in the New Jersey market. Strategic Energy currently operates in eight of the sixteen
states that offer retail choice. Strategic Energy also provides strategic planning and
consulting services in the natural gas and electricity markets.

56

Great Plains Energys indirect
ownership in Strategic Energy totals 89%. In the normal course of business, Great Plains
Energy and KLT Inc. provide financial or performance assurance to third parties on behalf
of Strategic Energy in the form of guarantees to those third parties. Additionally, Great
Plains Energy provides guarantees and indemnities supporting letters of credit and surety
bonds obtained by Strategic Energy. These agreements are entered into primarily to support
or enhance the creditworthiness otherwise attributed to Strategic Energy on a stand-alone
basis, thereby facilitating the extension of sufficient credit to accomplish Strategic
Energys intended business purposes.

At September 30, 2003, Strategic
Energy provided power supply coordination services on behalf of approximately 43,700
commercial, institutional and small manufacturing accounts. Strategic Energys
customer base is very diverse. Strategic Energy served approximately 6,300 customers,
including numerous Fortune 500 companies, smaller companies, and governmental entities.
Based solely on current signed contracts and expected usage, Strategic Energy has
forecasted future MWh commitments of 4.3 million for the remainder of 2003 and 13.4
million, 7.8 million, and 1.7 million for the years 2004 through 2006, respectively.
Strategic Energy expects to also supply additional MWh sales in these years through growth
in existing markets by re-signing existing customers and by signing new customers as well
as through expansion into new markets.

Strategic Energy maintains a
commodity-price risk management strategy that uses forward physical energy purchases and
derivative instruments to minimize significant, unanticipated earnings fluctuations caused
by commodity-price volatility. As a result of supplying electricity to retail customers
under fixed rate contracts, Strategic Energys policy is to match customers
demand with fixed price purchases. In certain markets where Strategic Energy operates,
entering into forward fixed price contracts is cost prohibitive. Derivative instruments,
primarily swaps, are used to limit the unfavorable effect that price increases will have
on electricity purchases. They effectively fix the future purchase price of electricity,
protecting Strategic Energy from price volatility.

During the third quarter of 2002, the
FERC issued a Notice of Proposed Rulemaking to Remedy Undue Discrimination through Open
Access Transmission Service and Standard Electricity Market Design. The proposed
rulemaking is designed to establish a single non-discriminatory open access transmission
tariff with a single transmission service that is applicable to all users of the
interstate transmission grid and to standardize wholesale energy market rules. Strategic
Energy has evaluated the impact of the proposed rulemaking on its operations and provided
comments to the FERC that are generally supportive of the provisions of the proposal, but
suggested some changes to the proposed rule. In late April 2003, the FERC issued a white
paper titled Wholesale Power Market Platform, in response to comments received
on its proposed rulemaking. In the white paper, the FERC stressed that state authorities
will play a significant role in RTO and ISO formation through the establishment of
Regional State Committees. The proposal also allows for phased-in implementation and
market rules tailored to each region.

Strategic Energy Supplier
Concentration and Credit RiskCredit risk represents the loss that
Strategic Energy could incur if a counterparty failed to perform under its contractual
obligations. To reduce its credit exposure, Strategic Energy enters into payment netting
agreements with certain counterparties that permit Strategic Energy to offset receivables
and payables with such counterparties. Strategic Energy further reduces credit risk with
certain counterparties by entering into agreements that enable Strategic Energy to
terminate the transaction or modify collateral thresholds upon the occurrence of
credit-related events.

Based on guidelines set by its
Exposure Management Committee, Strategic Energy monitors its counterparty credit risk by
evaluating the credit quality and performance of its suppliers on a routine basis. Among
other things, Strategic Energy monitors counterparty credit ratings, liquidity and results

57

of operations. As a result of these evaluations, Strategic Energy may, among other things,
establish counterparty credit limits and adjust the amount of collateral required from its
suppliers.

Strategic Energy enters into forward
contracts with multiple suppliers. At September 30, 2003, Strategic Energys five
largest suppliers under forward supply contracts represented 62% of the total future
committed purchases. In the event of supplier non-delivery or default, Strategic
Energys results of operations could be affected to the extent the cost of
replacement power exceeded the combination of the contracted price with the supplier and
the amount of collateral held by Strategic Energy to mitigate its credit risk with the
supplier. Strategic Energys results of operations could also be affected, in a given
period, if it was required to make a payment upon termination of a supplier contract to
the extent that the contracted price with the supplier exceeded the market value of the
contract at the time of termination.

The following table provides
information on Strategic Energys credit exposure, net of collateral, as of September
30, 2003. It further delineates the exposure by the credit rating of counterparties and
provides guidance on the concentration of credit risk and an indication of the maturity of
the credit risk by credit rating of the counterparties.

|                    
|--------------------
|Number Of           
|Counterparties      
|Exposure            
|Before Credit       
|Rating              
|
|(millions)          
|External rating     
|Investment Grade    
|Non-Investment Grade
|Internal rating     
|Investment Grade    
|Non-Investment Grade
|
|Total               
|

|                    
|--------------------
|
|Exposure            
|Less Than           
|Rating              
|
|(millions)          
|External rating     
|Investment Grade    
|Non-Investment Grade
|Internal rating     
|Investment Grade    
|Non-Investment Grade
|
|Total               
|

External ratings are determined by
using publicly available credit ratings of the counterparty. If a counterparty has
provided a guarantee by a higher rated entity, the determination has been based on the
rating of its guarantor. Internal ratings are determined by, among other things, an
analysis of the counterpartys financial statements and consideration of publicly
available credit ratings of the counterpartys parent. Investment grade
counterparties are those with a minimum senior unsecured debt Standard & Poors
rating of BBB- or a Moodys rating of Baa3. Exposure before credit collateral has
been calculated considering all netting agreements in place, netting accounts payable and
receivable exposure with net mark-to-market exposure. Exposure before credit collateral is
impacted

58

primarily by the power supply volume under contract with a given counterparty and
the relationship between current market prices and contracted power supply prices. Credit
collateral includes the amount of cash deposits and letters of credit received from
counterparties. Net exposure has only been calculated for those counterparties Strategic
Energy is exposed to and excludes counterparties exposed to Strategic Energy.

Strategic Energys total
exposure before credit collateral decreased $65.2 million from June 30, 2003. This change
is a result of the normal occurrence of a combination of factors, primarily movements in
the forward price curve and the makeup of the portfolio such as the expiration of
contracts and addition of new contracts with varying terms. At September 30, 2003,
Strategic Energy had exposure before credit collateral to non-investment grade
counterparties totaling $44.0 million of which 62% is scheduled to mature in less than two
years. In addition, Strategic Energy held collateral totaling $39.1 million limiting its
net exposure to these non-investment grade counterparties to $4.9 million at September 30,
2003.

In July 2003, Mirant filed a
voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The
bankruptcy court entered an Interim Order, which authorized Mirant to comply with the
terms of its prepetition trading contracts. In accordance with the Master Power Purchase
and Sale Agreement and the ISDA Master Agreement between Strategic Energy and Mirant, the
$10.0 million collateral threshold limit in both agreements was reduced to zero upon the
bankruptcy filing. Since that time, Mirant and Strategic Energy have continued to perform
under the conditions of their agreements. The Interim Order was finalized in the third
quarter and Mirant has assumed its contracts with Strategic Energy.

Strategic Energy is continuing to
pursue a strategy of contracting with national and regional counterparties that have
direct supplies and assets in the region of demand. Strategic Energy is also continuing to
address counterparty issues with strict margining and collateral requirements, netting of
credit exposures against payable balances, preferences for higher credit quality
counterparties and, in some cases, replacement of lower quality counterparty contracts.

Strategic Energy Results
of OperationsThe following table summarizes
Strategic Energys comparative results of operations.

|                                
|--------------------------------
|Three Months Ended              
|September 30                    
|2003                            
|
|(millions)                      
|Operating revenues              
|Purchased power                 
|                                
|Revenues, net of purchased power
|Other operating expenses        
|Depreciation                    
|                                
|Operating income                
|Non-operating income (expenses) 
|Interest charges                
|Income taxes                    
|
|Net income                      
|

Strategic Energys earnings
increased $4.1 million for the three months ended and $8.4 million year to date September
30, 2003, compared to the same periods of 2002. The increased net income for the three
months ended and year to date is primarily due to continued growth in retail electric
sales from the expansion into new markets and continued sales efforts in existing markets.
In addition to

59

continued growth, Great Plains Energys ownership of Strategic Energy
was increased by 5.8% in the fourth quarter of 2002. Earnings for the three months ended
September 30, 2002, included a higher effective state income tax rate true-up for the
first six months of 2002 and higher state income tax rates due to increased sales in
states with higher income tax rates for the quarter. These increases were partially offset
by increased general and administrative expenses including employee related expenses.
Also, revenues, net of purchased power divided by MWh sold (gross margin per MWh)
decreased to $7.32 for the three months ended and $7.52 year to date September 30, 2003,
compared to $8.07 for the three months ended and $8.60 year to date September 30, 2002.
The decreases in gross margin per MWh for the three months ended and year to date
comparative periods was primarily due to the roll-off of higher margin contracts that were
obtained during periods of high market price volatility in late 2000 and early 2001 and to
a lesser extent market conditions, including slightly increased competition. Strategic
Energy currently expects the gross margin per MWh on new customer contracts to average
$5.00 to $6.00.

Strategic Energy
Operating RevenuesOperating revenues from Strategic
Energy increased $77.0 million for the three months ended and $213.8 million year to date
September 30, 2003, compared to the same periods in 2002. The following table reflects
Strategic Energys operating revenues.

|                        
|------------------------
|Three Months Ended      
|September 30            
|2003                    
|
|(millions)              
|Electric - Retail       
|Electric - Wholesale    
|Other                   
|
|Total Operating Revenues
|

At September 30, 2003, Strategic
Energy served approximately 6,300 customers, compared to approximately 4,800 customers at
September 30, 2002. These customers represented approximately 43,700 accounts and 29,100
accounts at September 30, 2003 and 2002, respectively. Strategic Energy has added
approximately 1,100 customers since the beginning of 2003. Strategic Energy may provide
periodic billing credits to its customers resulting from its power supply coordination
efforts. The amounts credited back to the customer are treated as a reduction of retail
electric revenues when determined to be payable.

Retail electric revenues increased
$77.0 million for the three months ended and $214.6 million year to date September 30,
2003, compared to the same periods in 2002, primarily due to increased retail MWh sales.
Retail MWhs sold increased approximately 34% to 4.5 million for the three months ended
September 30, 2003, from 3.4 million for the same period in 2002. Retail MWhs sold
increased approximately 42% to 12.2 million year to date September 30, 2003, from 8.6
million for the same period in 2002. The increases in MWh sales resulted primarily from
strong sales efforts in re-signing customers as well as signing new customers in markets
in which Strategic Energy continued to experience favorable conditions for growth. Year to
date 2003 retail electric revenues were partially offset by a 3% decrease in average
retail revenues per MWh, compared to year to date 2002. Several factors contribute to change
in the average retail revenues per MWh, including the underlying price of the commodity,
the nature and type of products offered and the mix of sales by geographic market.

60

Strategic Energy
Purchased PowerTo supply its retail contracts,
Strategic Energy purchases long-term blocks of electricity under forward contracts in
fixed quantities at fixed prices from power suppliers based on projected usage. Strategic
Energy sells any excess retail supply of electricity back into the wholesale market. The
proceeds from the sale of excess supply of electricity is recorded as a reduction of
purchased power. The amount of excess retail supply sales that reduced purchased power was
$71.7 million for the three months ended and $176.8 million year to date September 30,
2003, compared to $44.2 million for the three months ended and $94.4 million year to date
September 30, 2002.

Strategic Energy utilizes derivatives
in the procurement of electricity that are considered economic hedges but not accounting
hedges. Accordingly, changes in the fair value of these derivative instruments are
recorded as a component of purchased power.

As previously discussed, Strategic
Energy operates in several retail choice electricity markets. The cost of supplying
electricity to retail customers can vary widely by geographic market. This variability can
be affected by many factors including, among other items, geographic differences in the
cost per MWh of purchased power and capacity charges due to regional purchased power
availability and requirements of other electricity providers and differences in
transmission charges. However, Strategic Energy has mitigated the effects of higher supply
costs by entering into long-term, full-requirements contracts with customers that are
priced to the customers based on the cost of the associated supply contract.

Purchased power expense increased
$71.5 million for the three months ended and $196.6 million year to date September 30,
2003, compared to the same periods in 2002, primarily due to 34% and 42% increases in MWh
purchases for the three months ended and year to date, respectively, to supply the
increase in retail MWh sales discussed above.

Strategic Energy Other
Operating ExpensesStrategic Energys other
operating expenses as a percentage of operating revenues decreased to 3.6% for the three
months ended and 3.8% year to date September 30, 2003, from 4.6% for the three months
ended and 4.5% year to date September 30, 2002, due to Strategic Energys efforts in
leveraging its infrastructure and the effects of achieving economies of scale. Strategic
Energy experienced increased labor and benefits expenses as well as other general and
administrative expenses for the three months ended and year to date September 30, 2003,
compared to the same periods in 2002. The increase is primarily due to higher labor and
benefit costs from the addition of employees, higher profit sharing and deferred
compensation expense which are tied to earnings and financial performance, and higher
other general and administrative expenses associated with higher sales volumes, geographic
market expansion, and regulatory and market development initiatives.

Strategic Energy
Non-operating Income (Expenses)Strategic Energys non-operating
income (expenses) includes non-operating income less minority interest expense and
non-operating expenses. Minority interest expense represents the share of Strategic
Energys net income not attributable to Great Plains Energys indirect ownership
interest in Strategic Energy. For the three months ended and year to date September 30,
2003, non-operating income (expenses) decreased $0.4 million and $1.7 million,
respectively, primarily due to a decrease in minority interest expense resulting from
Great Plains Energys acquisition of an additional 5.8% indirect ownership interest
in Strategic Energy during the fourth quarter of 2002.

61

# KLT Gas

KLT Gas Business OverviewKLT Gas is focused on exploring for,
developing and producing unconventional natural gas resources, including coalbed methane
properties. KLT Gas believes that unconventional natural gas resources provide an
economically attractive alternative source of supply to meet the growing demand for
natural gas in North America.

Although gas prices have been
volatile historically, KLT Gas continues to believe that the long-term future price
scenarios for natural gas appear strong. Environmental concerns, especially air quality,
and the increased demand for natural gas for new electric generating capacity are
contributing to this projected growth in demand.

KLT Gas leased properties are
primarily located in Colorado, Kansas and Wyoming with some leases in Nebraska and Texas.
These leased properties cover approximately 249,000 undeveloped acres. The testing of this
acreage is in accordance with KLT Gas exploration plan and capital budget. The
timing of the testing may vary from current plans based upon obtaining the required
environmental and regulatory approvals and permits and future changes in market
conditions.

In March 2003, KLT Gas completed the
sale of approximately 30,000 undeveloped acres in Kansas. KLT Gas follows the full cost
accounting method for its natural gas properties, under which the acreage sale was
accounted for as an adjustment to capitalized costs with no gain recognized in earnings.
During the first half of 2003, KLT
Gas leased additional acreage in the Rocky Mountain region. Exploration of portions
of the newly acquired acreage has commenced in the third quarter of 2003. In addition, KLT
Gas continued to test a new prospect in Colorado as well as the development of a pilot
project in the Powder River Basin and two additional projects in the Rocky Mountain
region.

Gas Property and
InvestmentsIn June 2001, the FASB issued SFAS
No. 141, Business Combinations, which requires the purchase method of
accounting for business combinations initiated after June 30, 2001. In July 2001, the FASB
also issued SFAS No. 142, Goodwill and Other Intangible Assets, which
discontinues the practice of amortizing goodwill and indefinite lived intangible assets
and initiates an annual review for impairment. Intangible assets with a determinable
useful life will continue to be amortized over that period. The amortization provisions
apply to goodwill and intangible assets acquired after June 30, 2001. SFAS No. 141 and 142
clarify that more assets should be distinguished and classified between tangible and
intangible. KLT Gas did not change or reclassify contractual mineral rights included in
gas property and investments on Great Plains Energys consolidated balance sheet upon
adoption of SFAS No. 142. KLT Gas management believes its classification of such mineral
rights under the full cost method of accounting for natural gas properties, which is
consistent with industry practice, is appropriate. However, the accounting profession and
others are engaged in industry-wide deliberations regarding whether SFAS No. 141 and 142
require contractual mineral rights to be classified as intangible assets. Based on the
results of the deliberations, if management determines reclassification is necessary, KLT
Gas gas property and investments would be reduced by $8.5 million and $6.0 million
and intangible assets would have increased by a like amount at September 30, 2003, and
December 31, 2002, respectively, representing cost incurred from the effective date of
September 30, 2001. The provisions of SFAS No. 141 and 142 impact only the balance sheet
and associated footnote disclosure, and any required reclassification would not impact
Great Plains Energys cash flows or results of operations.

62

KLT Gas Results of
OperationsThe following table summarizes KLT
Gas comparative results of operations.

|                               
|-------------------------------
|Three Months Ended             
|September 30                   
|2003                           
|
|(millions)                     
|Operating revenues             
|Other operating expenses       
|Depreciation and depletion     
|Loss on property               
|                               
|Operating loss                 
|Non-operating income (expenses)
|Interest charges               
|Income taxes                   
|
|Net income (loss)              
|

KLT Gas loss for the three
months ended September 30, 2003, totaled $0.8 million, compared to earnings of $0.3
million for the same period in 2002. KLT Gas loss increased $7.8 million for year to
date September 30, 2003, compared to the same period of 2002. Throughout 2002 and the
first three quarters of 2003, KLT Gas has been developing and testing gas properties.
Additionally, KLT Gas net loss year to date September 30, 2003, includes a first
quarter 2003 impairment of $9.0 million on a Rocky Mountain project, which reduced
earnings by $5.5 million. The impairment was in response to lower revised estimates of
future gas production from that property.

KLT Gas Income TaxesKLT Gas recorded tax credits related
to its investment in natural gas properties of $1.3 million and $4.1 million for the three
months ended and year to date September 30, 2002, respectively. The law that allowed
substantially all of these credits expired at the end of 2002.

# Other Non Regulated
Activities

Investment in Affordable
Housing Limited Partnerships  KLT InvestmentsKLT Investments Inc.s (KLT
Investments) loss for the three months ended September 30, 2003, totaled $2.1 million
(including an after tax reduction of $5.2 million in its affordable housing investment)
compared to earnings of $3.2 million for the three months ended September 30, 2002
(including an after tax reduction of $1.2 million in its affordable housing investment).
KLT Investments accrued tax credits of $4.8 million in the three months ended September
30, 2003 and 2002, respectively.

Year to date September 30, 2003,
earnings totaled $4.1 million (including an after tax reduction of $6.8 million in its
affordable housing investment) compared to earnings of $6.4 million year to date September
30, 2002 (including an after tax reduction of $5.7 million in its affordable housing
investment). KLT Investments earnings include accrued tax credits of $14.3 million
year to date September 30, 2003 and 2002, respectively.

At September 30, 2003, KLT
Investments had $53.5 million in affordable housing limited partnerships. Approximately
64% of these investments were recorded at cost; the equity method was used for the
remainder. Tax expense is reduced in the year tax credits are generated. The investments
generate future cash flows from tax credits and tax losses of the partnerships. The
investments also generate cash flows from the sales of the properties. For most
investments, tax credits are received over ten years. KLT Investments projects tax credits
to run through 2009. A change in accounting principle

63

relating to investments made after
May 19, 1995, requires the use of the equity method when a company owns more than 5% in a
limited partnership investment. Of the investments recorded at cost, $33.1 million exceed
this 5% level but were made before May 19, 1995. KLT Investments management does not
anticipate making additional investments in affordable housing limited partnerships at
this time.

On a quarterly basis, KLT Investments
compares the cost of those properties accounted for by the cost method to the total of
projected residual value of the properties and remaining tax credits to be received.
Estimated residual values are based on studies performed by an independent firm. Based on
the latest comparison, pretax reductions in affordable housing investments were $8.5
million for the three months ended and $11.0 million year to date September 30, 2003,
compared to $1.8 million for the three months ended and $8.9 million year to date
September 30, 2002. Based on the latest projections, there are no additional anticipated
reductions in affordable housing investments recorded at cost for the remainder of 2003.
Pretax reductions in affordable housing investments are estimated to be $7 million, $10
million, and $3 million for the years 2004 through 2006, respectively. These projections
are based on the latest information available but the ultimate amount and timing of actual
reductions could be significantly different from the above estimates. The properties
underlying the partnership investment are subject to certain risks inherent in real estate
ownership and management. Even after these estimated reductions, earnings from the
investments in affordable housing are expected to be positive for the years 2003 through
2006.

Subsidiary of KLT Telecom
Files for Bankruptcy  DTIThe accounting treatment related to
DTI and its 2001 bankruptcy is complex and is addressed in greater detail in Note 19 to
the consolidated financial statements of the Companies 2002 annual report on Form
10-K. Additionally, Note 8 of the consolidated financial statements in this quarterly
report on Form 10-Q is incorporated by reference in this portion of Managements
Discussion and Analysis. Both notes should be read as a component of this discussion.

On December 31, 2001, a subsidiary of
KLT Telecom, Holdings and its subsidiaries, Digital Teleport and Digital Teleport of
Virginia, Inc., filed separate voluntary petitions in the Bankruptcy Court for the Eastern
District of Missouri for reorganization under Chapter 11 of the U.S. Bankruptcy Code,
which cases have been procedurally consolidated. Holdings and its two subsidiaries are
collectively called DTI.

In December 2002, Digital Teleport
entered into an agreement to sell substantially all of its assets (Asset Sale) to
CenturyTel Fiber Company II, LLC, a nominee of CenturyTel, Inc. The Asset Sale was
approved by the Bankruptcy Court on February 13, 2003, and closed on June 6, 2003. The
Asset Sale produced approximately $38 million of cash proceeds, including $3.8 million of
escrowed proceeds.

DTI filed a joint Chapter 11 Plan,
based on the provisions of settlement agreements which are discussed below. The Chapter 11
Plan was confirmed by the Bankruptcy Court on June 11, 2003, and became effective on June
24, 2003. After providing for certain reserves and payment of secured and priority claims,
an initial distribution of 82.5 cents on each dollar of approved claims was made by
Digital Teleport to its creditors (other than KLT Telecom), a $13.8 million distribution
was made by Holdings to its creditors, and an initial distribution of approximately $14.9
million was made by Digital Teleport to KLT Telecom (net of the approximate $13.8 million
paid by KLT Telecom to Holdings, as discussed below). Additionally, KLT Telecom
anticipates that it will realize approximately $21 million of cash tax benefits in late
2003. Pending final resolution of certain items, the Company recorded a net gain of $25.9
million or $0.37 per share during the second quarter of 2003 related to the DTI
bankruptcy. The impact on net income was primarily due to the net effect of the Chapter 11
Plan confirmation and the resulting distribution, the reversal of a $15.8 million tax
valuation allowance and the reversal of a $5 million debtor in possession financing
commitment previously reserved.

64

Settlement agreements entered into by Digital Teleport and
Holdings, which provided the basis of the Chapter 11 Plan, were also approved by the
Bankruptcy Court in its June 11, 2003, confirmation order. In the Digital Teleport
bankruptcy case, KLT Telecom, KLT Inc., KCP&L, Great Plains Energy, Digital Teleport
and the Official Unsecured Creditors Committee of Digital Teleport entered into a
Settlement Agreement as of December 23, 2002 (Teleport Settlement Agreement). The Teleport
Settlement Agreement provided that unsecured creditors will receive up to 90 cents on each
dollar of approved claims after the consummation of the Asset Sale, and that the remaining
estate balance after the payment of administrative expenses and all other claims would be
distributed to KLT Telecom. The Teleport Settlement Agreement resolved all material issues
and disputes among the parties to that agreement.

In addition, in the Holdings
bankruptcy case, KLT Telecom, KLT Inc., Great Plains Energy, KCP&L, Holdings, The Bank
of New York (as trustee of an Indenture, as amended, relating to the senior discount notes
issued by Holdings) (Trustee) and three principal noteholders of Holdings (the
Noteholders) entered into a Settlement Agreement and Plan Term Sheet as of March 14, 2003
(Holdings Settlement Agreement). Under the Holdings Settlement Agreement, KLT Telecom paid
to the Holdings bankruptcy estate approximately $13.8 million from the distribution that
KLT Telecom received under the Teleport Settlement Agreement. The Holdings Settlement
Agreement resolved all material issues and disputes among the parties to that agreement.

In connection with the purchase of a
majority interest in Holdings in February, 2001, KLT Telecom granted the selling
shareholder, Richard D. Weinstein (Weinstein) a put option. The put option
provided for the sale by Weinstein of his remaining shares in Holdings to KLT Telecom
during a period beginning September 1, 2003, and ending August 31, 2005. The put option
provides for an aggregate exercise price for these remaining shares equal to their fair
market value with an aggregate floor amount of $15 million. On September 2, 2003,
Weinstein delivered to KLT Telecom notice of the exercise of his put option. KLT Telecom
declined to pay Weinstein any amount under the put option because, among other things, the
stock of Holdings has been cancelled and extinguished pursuant to the Chapter 11 Plan.
Weinstein has sued KLT Telecom for allegedly breaching the put option, which is described
in Part II Item 1.

Because DTI filed for bankruptcy
protection under the U.S. Bankruptcy Code, KLT Telecom no longer had control over nor
could it exert significant influence over DTI. As a consequence, as of December 31, 2001,
DTI was de-consolidated and presented on the cost basis. Because of this de-consolidation,
KLT Telecom did not include in its financial results the ongoing results of operations,
earnings or losses incurred by DTI since December 31, 2001.

Significant Balance Sheet
Changes

|  | (September 30, 2003 compared to December 31, 2002)                                                                  
|- | --------------------------------------------------------------------------------------------------------------------
|o | Great Plains Energy's restricted cash and supplier collateral increased $16.2 million due to a $1.4 million increase
|  | in consolidated KCP&L's restricted cash and supplier collateral and $14.8 million increase in Strategic Energy's    
|  | cash collateral provided to Strategic Energy from suppliers to cover portions of credit exposure.                   
|o | Great Plains Energy's receivables increased $102.6 million primarily due to a $19.2 million increase in Strategic   
|  | Energy's receivables as a result of the growth in its power supply coordination services and an $85.9 million       
|  | increase in consolidated KCP&L's receivables due to the seasonal nature of the utility business and receivables     
|  | from the partial settlements of Hawthorn No. 5 litigation.                                                          

65

|  |                                                                                                                      
|- | ---------------------------------------------------------------------------------------------------------------------
|o | Great Plains Energy and consolidated KCP&L's assets and liabilities of discontinued operations as of December 31,    
|  | 2002, are the result of the disposition of RSAE. RSAE's assets and liabilities were reclassified and presented       
|  | separately as prescribed under SFAS No. 144. As of June 30, 2003, the RSAE disposition was complete and the          
|  | assets and liabilities of discontinued operations were removed.                                                      
|o | Great Plains Energy's affordable housing limited partnerships decreased $15.1 million primarily due to a reduction in
|  | the valuation of the properties held by KLT Investments, Inc.                                                        
|o | Great Plains Energy's other nonutility property and investments decreased $15.5 million primarily due to the June    
|  | 2003 sale of a KLT Telecom building with a December 31, 2002 book value of $2.8 million, KLT Investments' 2003       
|  | sale of $7.6 million of trading securities and KLT Energy Services sale of it's investment in Custom Energy,         
|  | L.L.C. with a December 31, 2002 book value of $3.0 million.                                                          
|o | Great Plains Energy and consolidated KCP&L's regulatory assets increased $15.6 million primarily due to an $86.3     
|  | million increase in KCP&L's regulatory assets due to the $80.9 million cumulative effect of adopting SFAS No. 143    
|  | on January 1, 2003, and KCP&L's ability to defer items on the balance sheet resulting from the effects of the        
|  | ratemaking process. Current year ARO activity of $5.4 million has also increased regulatory assets. This             
|  | increase was partially offset by a $64.6 million decrease due to the reclassification of accrued nuclear             
|  | decommissioning costs at January 1, 2003, to a contra regulatory asset as these amounts have already been            
|  | considered in the ratemaking process. Current year activity for the decommissioning cost accrual of $6.4 million     
|  | has also decreased the regulatory asset.                                                                             
|o | Great Plains Energy's notes payable increased $93.9 million primarily due to Great Plains Energy's additional        
|  | borrowings of $101.0 million on its short-term credit facility that were primarily used to make a $100.0 million     
|  | capital contribution to KCP&L and repay notes outstanding at December 31, 2002, related to the acquisition of an     
|  | additional indirect interest in Strategic Energy. Consolidated KCP&L's notes payable increased primarily due to      
|  | a $25.5 million inter-company loan from Great Plains Energy to HSS primarily related to the disposition of RSAE.     
|o | Great Plains Energy's current maturities of long-term debt decreased $73.9 million due to KLT Investments paying down
|  | $8.5 million of affordable housing notes offset by a $4.1 million increase in the current portion of affordable      
|  | housing notes and a $69.5 million decrease in consolidated KCP&L's current maturities of long-term debt.             
|  | Consolidated KCP&L's current maturities of long-term debt decreased due to KCP&L retiring $124.0 million of          
|  | medium-term notes primarily with proceeds from the capital contribution from Great Plains Energy partially offset    
|  | by a $54.5 million increase in KCP&L's current portion of medium-term notes in the third quarter of 2003.            
|o | Great Plains Energy's accrued taxes increased $72.1 million primarily due to a $20.1 million increase in KLT Energy  
|  | Services' accrued taxes and a $70.7 million increase in consolidated KCP&L's accrued taxes due to the timing of      
|  | tax payments partially offset by the reversal of a $15.8 million tax valuation allowance for DTI. Consolidated       
|  | KCP&L's accrued taxes increased primarily due to the timing of tax payments and the effect of IRS refunds of         
|  | $12.0 million partially offset by HSS' $21.5 million accrued tax benefit for capital losses associated with the      
|  | disposition of RSAE.                                                                                                 
|o | Great Plains Energy and consolidated KCP&L's ARO increased $105.5 million and $104.0 million, respectively due to    
|  | adopting SFAS No. 143 on January 1, 2003.                                                                            
|o | Great Plains Energy and consolidated KCP&L's accrued nuclear decommissioning costs decreased $64.6 million due to    
|  | KCP&L reclassifying accrued nuclear decommissioning cost to a contra regulatory asset due to the adoption of SFAS    
|  | No. 143 on January 1, 2003, and the effects of the ratemaking process.                                               

66

Capital Requirements and
LiquidityGreat Plains Energy operates through
its subsidiaries and has no material assets other than the stock of its subsidiaries.
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 from its subsidiaries and
proceeds from the sale of its securities.

Great Plains Energys capital
requirements are principally comprised of KCP&Ls utility capital expenditures,
KLT Gas capital expenditures, and KCP&Ls pension benefit plan funding
requirements discussed below. Additional cash and capital requirements for the companies,
including long-term debt requirements, are discussed below.

Great Plains Energys liquid
resources at September 30, 2003, included cash flows from operations of subsidiaries,
$150.5 million cash and cash equivalents on hand and $266.0 million of unused bank lines
of credit. The unused lines consisted of $130.0 million from KCP&Ls short-term
bank lines of credit, $26.0 million from Strategic Energys revolving credit
facility, and $110.0 million from Great Plains Energys revolving credit facility.
See the debt agreements section below for more information on these agreements. In October
2003, KCP&L entered into a new bilateral credit line for $20.0 million, Strategic
Energy issued $10.7 million in additional letters of credit and Great Plains Energy repaid
$27.0 million of the borrowings outstanding at September 30, 2003. The net effect of this
October 2003 activity increased Great Plains Energys liquid resources $36.3 million.

Great Plains Energy and consolidated
KCP&L generated positive cash flows from operating activities for the periods
presented. The increase in cash flows from operating activities for Great Plains Energy
and consolidated KCP&L year to date September 30, 2003, compared to the same period of
2002 is due to increased net income before non-cash expenses and the changes in working
capital detailed in Note 3 to the consolidated financial statements. The individual
components of working capital vary with normal business cycles and operations. Also, the
timing of the Wolf Creek outage affects the refueling outage accrual, deferred income
taxes and amortization of nuclear fuel.

Great Plains Energys and
consolidated KCP&L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 the proceeds from the sale of properties and insurance
recoveries. Utility capital expenditures and the allowance for borrowed funds used during
construction increased $10.6 million year to date September 30, 2003, compared to 2002
primarily due to transmission plant and nuclear fuel additions partially offset by 2002
capital expenditures of $14.7 million related to the January 2002 ice storm and insurance
proceeds from Hawthorn No. 5 received in 2003. Additionally, Great Plains Energy received
proceeds of $14.9 million as a result of the June confirmation of the Chapter 11 Plan of
DTI Holdings, Inc., Digital Teleport, Inc., and Digital Teleport of Virginia, Inc. and
sale of substantially all of the assets of Digital Teleport, Inc. to a subsidiary of
CenturyTel, Inc.

The change in Great Plains Energy and
consolidated KCP&Ls cash flows from financing activities reflects the equity
infusion of $100.0 million from Great Plains Energy to KCP&L and KCP&Ls
subsequent redemption of $104.0 million of medium-term notes. Great Plains Energy
essentially funded the infusion with proceeds from its $151.8 million common stock
offering in late 2002; however, prior to the infusion, Great Plains Energy used the
offering proceeds to repay short-term borrowings in late 2002 and then re-borrowed in
early 2003 to make the equity infusion into KCP&L at the time of redemption. An
additional $20.0 million of KCP&Ls medium-term notes were retired during 2003.
The increase in dividends paid by Great Plains Energy is primarily attributable to the
public offering of 6.9 million of common shares in late 2002.

KCP&L expects to meet day-to-day
operating requirements including interest payments, construction requirements (excluding
new generating capacity) and dividends with internally-generated funds.

67

However, it might
not be able to meet these requirements with internally-generated funds because of the
effect of inflation on operating expenses, the level of MWh sales, regulatory actions,
compliance with future environmental regulations and the availability of generating units.
The funds Great Plains Energy and consolidated KCP&L need to retire maturing debt
(detailed below) will be provided from operations, the issuance of long and short-term
debt and/or the issuance of equity or equity-linked instruments. In addition, the Company
may issue debt, equity and/or equity-linked instruments to finance growth or take
advantage of new opportunities.

Great Plains Energy filed a
registration statement in April 2002 for the issuance of an aggregate amount up to $300
million of any combination of senior debt securities, subordinated debt securities, trust
preferred securities, convertible securities, or common stock. The registration statement
became effective in November 2002 and Great Plains Energy issued $151.8 million of common
stock.

As a registered public utility
holding company, Great Plains Energy must receive authorization from the Securities and
Exchange Commission (SEC) under the Public Utility Holding Company Act of 1935 (35 Act) to
issue equity or debt. Great Plains Energy is currently authorized to issue up to $450.0
million of debt and equity. Great Plains Energy has utilized $425.7 million of this amount
as follows: (i) $39.0 million in preferred stock issued in connection with the October 1,
2001, reorganization; (ii) $225.0 million in a revolving credit facility ($115.0 million
was outstanding at September 30, 2003); (iii) $159.8 million in common equity issued in a
public offering and in connection with IECs acquisition of an indirect ownership
interest in Strategic Energy and (iv) $1.9 million in restricted stock issued to
executives on October 1, 2003. Great Plains Energy has filed an application with the SEC
seeking authorization to issue an additional $750 million in debt and equity over the $450
million currently authorized and anticipates the SEC will act on the application in the
fourth quarter of 2003.

KCP&L filed a shelf registration
statement for up to $255 million of senior and subordinated debt securities, trust
preferred securities and related guarantees during the third quarter of 2003. This will
preserve KCP&Ls flexibility to access the capital markets.

In the third quarter of 2003,
KCP&L also completed the remarketing of its 1998 Series C EIRR bonds totaling $50.0
million. The bonds are classified as current liabilities in the September 30, 2003 balance
sheet. The remarketed bonds were issued with a one-year maturity at a fixed interest rate
of 2.25%.

KCP&L has entered into a
revolving agreement, which expires in October 2003, to sell all of its right, title and
interest in the majority of its customer accounts receivable to Receivables Company, which
in turn sells most of the receivables to outside investors. KCP&L expects the
agreement to be renewed annually. See Note 4 to the consolidated financial statements.

Debt Agreements
Great Plains Energy syndicated a $225
million, revolving credit facility with a group of banks in the first quarter of 2003. The
line has a 364-day term but may be extended for an additional year at the Companys
option. The facility contains a MAC clause that requires Great Plains Energy to represent,
prior to receiving funding, that no MAC has occurred. The clause does, however, permit the
Company to access the facility even in the event of a MAC in order to repay maturing
commercial paper. Available liquidity under this facility is not impacted by a decline in
credit ratings unless the downgrade occurs in the context of a merger, consolidation or
sale. A default by Great Plains Energy or any of its significant subsidiaries of material
other indebtedness totaling more than $25.0 million is a default under this bank line.
Under the terms of this agreement, Great Plains Energy is required to maintain a
consolidated indebtedness to consolidated capitalization ratio not greater than 0.65 to
1.0 at all times and an interest coverage ratio greater than 2.25 to 1.0, as those ratios
are defined in the agreement. At September 30, 2003, the Company was in compliance with
these covenants.

68

Strategic Energy maintains a secured
revolving credit facility for up to $95 million with a group of banks. This facility is
partially guaranteed by Great Plains Energy. The facility enhances Strategic Energys
liquidity including its ability to provide credit support through letters of credit for
purchased power and regulatory requirements. The maximum amount available for loans and
letters of credit under the facility is the lesser of $95 million or the borrowing base,
as defined in the agreement. The borrowing base generally is the sum of certain Strategic
Energy accounts receivable and the amount of the Great Plains Energy guarantee which was
$40.0 million at September 30, 2003. At September 30, 2003, Strategic Energy had a minimum
fixed charge ratio, as defined in the agreement, of at least 1.05 to 1.0; however, if the
ratio drops below 1.05 to 1.0, Great Plains Energys guarantee amount is required to
be increased based on quarterly calculations. At September 30, 2003, $57.3 million in
letters of credit had been issued under the agreement, leaving $26.0 million of capacity
available for loans and additional letters of credit. In October 2003, approximately $10.7
million in additional letters of credit were issued under the agreement. The line has a
364-day term that may be extended for an additional year by Strategic Energy with mutual
agreement of the parties. The facility contains a MAC clause that requires Strategic
Energy to represent, prior to receiving funding, that no MAC has occurred. A default by
Strategic Energy of other indebtedness, as defined in the facility, totaling more than
$5.0 million is a default under the facility. Under the terms of this agreement, Strategic
Energy is required to maintain a minimum net worth of $30 million and a maximum debt to
EBITDA ratio of 2.0 to 1.0, as those are defined in the agreement. At September 30, 2003,
Strategic Energy was in compliance with these covenants.

KCP&Ls primary sources of
liquidity are cash flows from operations and bilateral credit lines totaling $130.0
million with six banks (as of September 30, 2003). In October 2003, KCP&L entered into
a new bilateral credit line for an additional $20.0 million. KCP&L uses these lines to
provide support for its issuance of commercial paper. These bank facilities are each for a
364-day term and mature at various times throughout the year. The facilities can be
extended for one year under their term out provisions. Including the new $20.0 million
line, KCP&L has MAC clauses in three agreements covering $70.0 million of available
bilateral credit lines. These three facilities require KCP&L to represent, prior to
receiving funding, that no MAC has occurred. Under these agreements, KCP&L is able to
access the facilities even in the event of a MAC in order to redeem maturing commercial
paper. KCP&Ls available liquidity under these facilities is not impacted by a
decline in credit ratings unless the downgrade occurs in the context of a merger,
consolidation or sale. A default by KCP&L on other indebtedness is a default under
these bank line agreements. Under the terms of certain bank line agreements, KCP&L is
required to maintain a consolidated indebtedness to consolidated capitalization ratio, as
defined in the agreements, not greater than 0.65 to 1.0 at all times. At September 30,
2003, KCP&L was in compliance with the covenant.

Under the indenture relating to
KCP&Ls 8.3% Junior Subordinated Deferrable Interest Debentures, due 2037
(Debentures), which are held by KCP&L Financing I, KCP&L may not declare or pay
any dividends on any shares of its capital stock if at the time (i) there is an event of
default (as defined in the indenture), (ii) KCP&L is in default with respect to its
payment of any obligations under its guarantee of preferred securities issued by KCP&L
Financing I, or (iii) KCP&L has elected to defer payments of interest on the
Debentures.

Great Plains Energy has agreements
with KLT Investments associated with notes KLT Investments issued to acquire its
affordable housing investments. Great Plains Energy has agreed not to take certain actions
including, but not limited to, merging, dissolving or causing the dissolution of KLT
Investments, or withdrawing amounts from KLT Investments if the withdrawals would result
in KLT Investments not being in compliance with minimum net worth and cash balance
requirements. The agreements also give KLT Investments lenders the right to have KLT
Investments repurchase the notes if Great Plains Energys senior debt rating falls
below investment grade, or if Great Plains Energy

69

ceases to own at least 80% of
KCP&Ls stock. At September 30, 2003, KLT Investments had $11.2 million in
outstanding notes, including current maturities.

Pursuant to agreements with the MPSC
and the KCC, KCP&L maintains its common equity at not less than 35% of total
capitalization. Additionally, Great Plains Energy maintains its consolidated common equity
at not less than 30% of total consolidated capitalization.

PensionsThe Company maintains defined benefit
plans for substantially all employees of KCP&L and Great Plains Energy Services. The
plans are funded on an actuarial basis to provide assets sufficient to meet the benefit
obligation to participants upon their retirement and to meet the funding requirements of
the Employee Retirement Income Security Act of 1974 (ERISA). Contributions of $1.6 million
and $1.0 million were made by KCP&L in 2002 and 2001, respectively.

Due to sharp declines in the equity
markets since the third quarter of 2000, the value of plan assets to satisfy pension plan
obligations has decreased significantly during the plan years ended September 30, 2001 and
2002. As a result, under the minimum funding requirements of ERISA, contributions have
increased accordingly. During 2003, the Company will fund a minimum of $26.4 million, of
which KCP&L will fund $25.3 million. Through September 30, 2003, KCP&L had
contributed $9.3 million. The Company will contribute a minimum of $3.8 million in 2004,
the majority of which will be funded by KCP&L.

Participants in the plans can elect
to receive benefits in either a lump-sum payment or an annuity upon termination of their
employment. A change in payment assumptions could result in increased cash requirements
from pension plan assets with the Company being required to accelerate future funding.

Due to uncertain market conditions
and other factors used to estimate future cash requirements, additional funding may be
required in future years. Under the terms of the pension plans, the Company reserves the
right to amend or terminate the plans, and from time to time benefits have changed.

Credit RatingsOn August 14, 2003, Moodys
Investors Service (Moodys) placed the ratings of KCP&L under review for possible
downgrade. Concurrently with this announcement, Moodys confirmed the current ratings
for Great Plains Energy and maintained a Negative Outlook. KCP&L is working with
Moodys on its review and expects Moodys to complete the process in the fourth
quarter of 2003.

Supplemental Capital
Requirements and Liquidity InformationGreat Plains Energys and
consolidated KCP&Ls projected lease obligations have decreased approximately
10-15% for 2003 through 2006 from the amounts disclosed in the 2002 Form 10-K. The overall
decrease is 6% of the total lease obligations of both registrants. The decrease is due to
the change in the projected cost of the combustion turbines under the synthetic lease,
lower projected interest rates and the disposition of RSAE in June 2003. These lease
obligations exclude a commitment to either purchase the leased combustion turbines at
termination of the construction leasing agreement for a price equal to amounts expended by
the Lessor or sell the turbines on behalf of the Lessor while guaranteeing to the Lessor a
residual value which may be up to 83.21% of the project cost. See Note 6 to the
consolidated financial statements for additional information.

Great Plains Energys other
long-term obligations, net increased approximately 30% at September 30, 2003, over the
$1,466.3 million level at December 31, 2002, reflecting increases of approximately $264
million, $140 million, $24 million and $15 million in 2004 through 2007, respectively, for
new Strategic Energy purchased power contracts. All other contractual cash obligations for
Great Plains Energy and

70

consolidated KCP&L were relatively unchanged at September 30,
2003, compared to December 31, 2002.

GuaranteesIn the normal 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 indemnification of
letters of credit and surety bonds. 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
subsidiaries intended business purposes.

As prescribed in FIN No. 45, the
Company began recording a liability for the fair value of obligations it undertakes for
guarantees issued after December 31, 2002. The interpretation does not encompass
guarantees of the Companys own future performance, such as Great Plains
Energys guarantees to support Strategic Energy power purchases and regulatory
requirements. KCP&L began recording an immaterial amount for the fair value of
guarantees issued in 2003 for the residual value of vehicles and heavy equipment under an
operating lease.

Great Plains Energys total
guarantees at September 30, 2003, decreased $35.8 million from the December 31, 2002,
total of $241.0 million reflecting the repayment of the RSAE line of credit ($25.0 million
at December 31, 2002) and a decrease in the credit support guarantees Great Plains Energy
provides on behalf of Strategic Energy for its power purchases and regulatory
requirements.

Environmental MattersKCP&Ls operations are
subject to regulation by federal, state and local authorities with regard to air and other
environmental matters. The generation and transmission of electricity produces and
requires disposal of certain hazardous products which are subject to these laws and
regulations. In addition to imposing continuing compliance obligations, these laws and
regulations authorize the imposition of substantial penalties for noncompliance, including
fines, injunctive relief and other sanctions. Failure to comply with these laws and
regulations could have a material adverse effect on KCP&L.

KCP&L operates in an
environmentally responsible manner and seeks to use current technology to avoid and treat
contamination. KCP&L regularly conducts environmental audits designed to ensure
compliance with governmental regulations and to detect contamination. Governmental bodies,
however, may impose additional or more restrictive environmental regulations that could
require substantial changes to operations or facilities at a significant cost. See Note 6
to the consolidated financial statements.

71

# ITEM 3. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Great Plains Energy and consolidated
KCP&L are exposed to market risks associated with commodity price and supply, interest
rates and equity prices. Market risks are handled in accordance with established policies,
which may include entering into various derivative transactions. In the normal course of
business, Great Plains Energy and consolidated KCP&L also 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.

Great Plains Energy and consolidated
KCP&L interim period disclosures about market risk included in quarterly reports on
Form 10-Q address material changes, if any from the most recently filed annual report on
Form 10-K. Therefore, interim period disclosures should be read in connection with the
quantitative and qualitative disclosures about market risk included in our 2002 combined
annual report on Form 10-K. There have been no material changes in Great Plains
Energys or consolidated KCP&Ls market risk since December 31, 2002.

# ITEM 4. CONTROLS AND
PROCEDURES

Great Plains Energy and KCP&L
carried out evaluations, under the supervision and with the participation of each
companys management, including the chief executive officers and chief financial
officer of those companies and those companies disclosure committee, of the
effectiveness of the companies disclosure controls and procedures (as defined in
Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based
upon these evaluations, the chief executive officers and chief financial officer of Great
Plains Energy and KCP&L have concluded, as of the end of the period covered by this
report, that the disclosure controls and procedures of those companies are functioning
effectively to provide reasonable assurance that the information required to be disclosed
by those companies in the reports that they file or submit under the Securities Exchange
Act of 1934, as amended, is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules and forms.

There has been no change to Great
Plains Energys or KCP&Ls internal control over financial reporting that
occurred during the quarterly period ended September 30, 2003, that has materially
affected, or is reasonably likely to materially affect, those companies internal
control over financial reporting.

72

# Part II  Other
Information

# ITEM 1. LEGAL PROCEEDINGS

# DTI Bankruptcy
Proceedings

Material developments in these
proceedings during the first and second quarters of 2003 were reported in Part II Item 1
of the Quarterly Reports for the periods ended March 31, 2003 and June 30, 2003. There
were no material developments in these proceedings in the third quarter of 2003. For
further information regarding the DTI bankruptcy proceedings, see Note 8 to the
consolidated financial statements, which is incorporated by reference.

# Weinstein v. KLT Telecom

KLT Telecom acquired a controlling
interest in Holdings in February 2001 through the purchase of approximately two-thirds of
the Holdings shares held by Richard D. Weinstein (Weinstein). In connection with
that purchase, KLT Telecom entered into a put option in favor of Weinstein, which granted
Weinstein an option to sell to KLT Telecom his remaining shares of common stock in
Holdings. The put option provided for an aggregate exercise price for the remaining shares
equal to their fair market value with an aggregate floor amount of $15 million, and was
exercisable between September 1, 2003 and August 31, 2005. In June 2003, the stock of
Holdings was cancelled and extinguished pursuant to the joint Chapter 11 plan confirmed by
the Bankruptcy Court in the DTI bankruptcy proceedings. In September 2003, Weinstein
delivered a notice of exercise of his claimed rights under the put option. KLT Telecom
rejected the notice of exercise. KLT Telecom denied that Weinstein has any remaining
rights or claims pursuant to the put option, and denied any obligation to pay Weinstein
any amount under the put option. Subsequent to KLT Telecoms rejection of his notice
of exercise, Weinstein filed a lawsuit alleging breach of contract against KLT Telecom in
the St. Louis County, Missouri Circuit Court, which was served on KLT Telecom on September
22, 2003. Weinstein seeks damages of at least $15 million, plus statutory interest. KLT
Telecom believes it has meritorious defenses to this lawsuit. For further information
regarding the DTI bankruptcy proceedings and this lawsuit, see Note 8 to the consolidated
financial statements, which is incorporated by reference.

# Hawthorn No. 5 Litigation

In 1999, there was a boiler explosion
at KCP&Ls Hawthorn No. 5 generating unit, which was subsequently reconstructed
and returned to service. National Union Fire Insurance Company of Pittsburgh, Pennsylvania
(National Union) had issued a $200 million primary insurance policy, and Travelers
Indemnity Company of Illinois (Travelers) had issued a $100 million secondary insurance
policy covering Hawthorn No. 5. A dispute arose between KCP&L and these two insurance
companies regarding the amount payable under these insurance policies for the
reconstruction of Hawthorn No. 5 and replacement power expenses. KCP&L filed suit in
Missouri state court against these two carriers on June 14, 2002, which was removed to the
U.S. District Court for the Western District of Missouri. In that suit, KCP&L seeks
recovery, subject to the limits of the insurance policies, of Hawthorn No. 5 reconstruction costs and replacement
power expenses, plus damages and attorneys' fees from National Union for failing to pay the full amount of its insurance policy.
KCP&L's proof of loss in this suit is currently approximately $285 million.
To date, National Union has paid approximately $169 million, and has
subrogation rights in the litigation described in the next paragraph. Travelers has not
made any payments under its policy. Trial of this case is scheduled to begin in January
2005.

KCP&L also filed suit on April 3, 2001, in Jackson County, Missouri Circuit
Court against multiple defendants who are alleged to have responsibility for the Hawthorn
No. 5 boiler explosion. KCP&L and National Union have entered into a subrogation
allocation agreement under which recoveries in this suit are generally allocated 55% to
National Union and 45% to KCP&L. Various defendants have settled

73

with KCP&L in
this litigation, resulting in KCP&L recording $34.1 million under the terms of the
subrogation allocation agreement. Trial of this case is scheduled to begin in January
2004. For further information regarding the accounting treatment of these recoveries, see
Managements Discussion and Analysis of Financial Condition and Results of
Operations, which is incorporated by reference.

# ITEM 6. EXHIBITS AND
REPORTS ON FORM 8-K

# EXHIBITS

Great Plains
Energy Documents

|       |                        
|------ | -----------------------
|Number | Description of Document
|
|3.1    |                        
|       |                        
|10.1.a | +                      
|       |                        
|       |                        
|10.1.b | +                      
|       |                        
|10.1.c |                        
|       |                        
|       |                        
|10.1.d |                        
|       |                        
|       |                        
|10.1.e | *                      
|       |                        
|       |                        
|       |                        
|10.1.f | *                      
|       |                        
|       |                        
|       |                        
|12.1   |                        
|       |                        
|31.1.a |                        
|       |                        
|31.1.b |                        
|       |                        
|32.1   |                        

+ Indicates management contract or
compensatory plan or arrangement.

* Filed as exhibits to prior
Quarterly Reports on Form 10-Q and incorporated by reference and made a part hereof. The
exhibit number and report reference of the documents so filed, and incorporated herein by
reference, are stated in parentheses in the description of such exhibit.

74

KCP&L
Documents

|       |                        
|------ | -----------------------
|Number | Description of Document
|
|3.2    |                        
|       |                        
|12.2   |                        
|       |                        
|31.2.a |                        
|       |                        
|31.2.b |                        
|       |                        
|32.2   |                        

# REPORTS ON FORM 8-K

Great
Plains Energy

Great Plains Energy filed on
July 1, 2003, a report on Form 8-K dated June 30, 2003, including a press
release announcing the divestiture of its interest in residential services provider, R.S.
Andrews Enterprises, Inc.

Great Plains Energy furnished on
July 24, 2003, a report on Form 8-K dated July 23, 2003, furnishing a press
release announcing 2003 second quarter earnings information and affirming 2003 earnings
guidance.

Great Plains Energy filed on August
14, 2003, a report on Form 8-K dated August 14, 2003, including recast Item 6. Selected
Financial Data, Item 7. Managements Discussion and Analysis of Financial Condition
and Results of Operations, Item 8. Consolidated Financial Statements, and Schedule II
 Valuation and Qualifying Accounts and Reserves as listed in Item 15. Exhibits,
Financial Statement Schedules, and Reports on Form 8-K to the combined Annual Report on
Form 10-K of Great Plains Energy Incorporated and Kansas City Power & Light Company
for the year ended December 31, 2002.

Great Plains Energy filed on August
20, 2003, a report on Form 8-K/A dated August 14, 2003, amending and restating Exhibit 99
to the report on Form 8-K dated August 14, 2003, to include the Reports of Independent
Accountants PricewaterhouseCoopers LLP on Great Plains Energy and Subsidiaries and
KCP&L and Subsidiaries financial statements as of December 31, 2001 and for each
of the two years in the period ended December 31, 2001, and to reorder the placement of
the Reports of Independent Accountants PricewaterhouseCoopers LLP on the Registrants
financial statement schedules to follow such schedules.

Great Plains Energy filed on
September 22, 2003, a report on Form 8-K dated September 22, 2003, including a press
release announcing Michael J. Chesser as Chairman of the Board and Chief Executive Officer
of Great Plains Energy Incorporated, and William H. Downey as President, Chief Operating
Officer and Director of Great Plains Energy Incorporated and President and Chief Executive
Officer of Kansas City Power & Light Company.

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Great Plains Energy furnished on
October 23, 2003, a report on Form 8-K dated October 22, 2003, furnishing a press release
regarding third quarter 2003 earnings information and accompanying financials and raising
2003 earnings guidance.

KCP&L

KCP&L filed on July 1, 2003,
a report on Form 8-K dated June 30, 2003, including a press release announcing the
divestiture of its interest in residential services provider, R.S. Andrews Enterprises,
Inc.

KCP&L furnished on July 24,
2003, a report on Form 8-K dated July 23, 2003, furnishing a press release announcing
2003 second quarter earnings information and affirming 2003 earnings guidance.

KCP&L filed on August 14, 2003, a
report on Form 8-K dated August 14, 2003, including recast Item 6. Selected Financial
Data, Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations, Item 8. Consolidated Financial Statements, and Schedule II  Valuation
and Qualifying Accounts and Reserves as listed in Item 15. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K to the combined Annual Report on Form 10-K of Great
Plains Energy Incorporated and Kansas City Power & Light Company for the year ended
December 31, 2002.

KCP&L filed on August 20, 2003, a
report on Form 8-K/A dated August 14, 2003, amending and restating Exhibit 99 to the
report on Form 8-K dated August 14, 2003, to include the Reports of Independent
Accountants PricewaterhouseCoopers LLP on Great Plains Energy and Subsidiaries and
KCP&L and Subsidiaries financial statements as of December 31, 2001 and for each
of the two years in the period ended December 31, 2001, and to reorder the placement of
the Reports of Independent Accountants PricewaterhouseCoopers LLP on the Registrants
financial statement schedules to follow such schedules.

KCP&L filed on September 22,
2003, a report on Form 8-K dated September 22, 2003, including a press release announcing
Michael J. Chesser as Chairman of the Board and Chief Executive Officer of Great Plains
Energy Incorporated, and William H. Downey as President, Chief Operating Officer and
Director of Great Plains Energy Incorporated and President and Chief Executive Officer of
Kansas City Power & Light Company.

KCP&L furnished on October 23,
2003, a report on Form 8-K dated October 22, 2003, furnishing a press release regarding
third quarter 2003 earnings information and accompanying financials and raising 2003
earnings guidance.

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SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, Great Plains Energy
Incorporated and Kansas City Power & Light Company have duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.

# GREAT PLAINS ENERGY
INCORPORATED

|                         |  |                               
|------------------------ |  | ------------------------------
|Dated:  November 7, 2003 |  | By: /s/Michael J. Chesser     
|                         |  | (Michael J. Chesser)          
|                         |  | (Chief Executive Officer)     
|                        
|Dated:  November 7, 2003 |  | By: /s/Lori A. Wright         
|                         |  | (Lori A. Wright)              
|                         |  | (Principal Accounting Officer)

# KANSAS CITY POWER
& LIGHT COMPANY

|                         |  |                               
|------------------------ |  | ------------------------------
|Dated:  November 7, 2003 |  | By: /s/William H. Downey      
|                         |  | (William H. Downey)           
|                         |  | (Chief Executive Officer)     
|                        
|Dated:  November 7, 2003 |  | By: /s/Lori A. Wright         
|                         |  | (Lori A. Wright)              
|                         |  | (Principal Accounting Officer)

77