Great Plains Energy (NYSE: GXP) today announced third quarter 2015
earnings of $126.4 million or $0.82 per share of average common stock
outstanding, compared with third quarter 2014 earnings of $147.0 million
or $0.95 per share. For the first nine months of 2015, earnings were
$188.9 million or $1.22 per share, compared to $222.1 million or $1.44
per share in the first nine months of 2014.
The Company also announced the narrowing of its 2015 earnings guidance
range of $1.35 to $1.60 per share to $1.35 to $1.45 per share as a
result of mild weather, soft wholesale market conditions due to lower
natural gas prices, and the impact of regulatory outcomes in its recent
KCP&L rate cases. Earlier this week, the board of directors approved an
approximate 7 percent increase in the quarterly dividend.
“While we are pleased with our strong balance sheet and improved cash
flows, we remain focused on reducing regulatory lag,” said Terry
Bassham, chairman and chief executive officer of Great Plains Energy.
“We will continue to diligently manage our business and will advocate
for policy changes that will result in an improved regulatory framework
in the states where we serve customers.”
Great Plains Energy Third Quarter:
Consolidated Earnings and Earnings Per Share Three
Months Ended September 30 (Unaudited)
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Earnings per Great
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Earnings
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Plains Energy Share
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2015
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2014
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2015
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2014
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(millions)
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Electric Utility
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$
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129.1
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$
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140.3
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$
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0.83
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$
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0.91
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Other
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(2.3
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)
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7.1
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(0.01
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)
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0.04
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Net income
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126.8
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147.4
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0.82
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0.95
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Preferred dividends
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(0.4
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(0.4
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)
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-
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-
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Earnings available for common shareholders
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$
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126.4
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$
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147.0
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$
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0.82
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$
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0.95
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On a per-share basis, drivers for the third quarter 2015 compared to the
same period in 2014 included the following:
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$0.05 benefit from the release of uncertain tax positions in the 2014
results;
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$0.04 increase in other operating and maintenance expense driven
primarily by higher Wolf Creek nuclear unit expenses and an increase
in distribution expenses;
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$0.04 decrease in Allowance for Funds Used During Construction (AFUDC)
resulting from lower average construction work in progress due to
environmental upgrades at La Cygne and other capital investments
placed into service;
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$0.02 decline in wholesale margin due to lower natural gas prices;
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$0.02 increase in transmission and other expenses not recovered
through a fuel recovery mechanism;
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$0.02 increase in depreciation and amortization due to environmental
upgrades at La Cygne and other capital investments being placed into
service; and
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$0.03 of other items including higher general taxes and interest
expense.
These drivers were partially offset by an approximate $0.09 impact from
warmer weather driven by an 18 percent increase in cooling degree days
above the third quarter 2014.
Great Plains Energy Year-to-Date:
Consolidated Earnings and Earnings Per Share Year
to Date September 30 (Unaudited)
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Earnings per Great
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Earnings
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Plains Energy Share
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2015
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2014
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2015
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2014
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(millions)
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Electric Utility
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$
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196.4
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$
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221.1
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$
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1.27
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$
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1.43
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Other
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(6.3
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2.2
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(0.05
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0.01
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Net income
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190.1
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223.3
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1.22
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1.44
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Preferred dividends
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(1.2
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(1.2
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-
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-
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Earnings available for common shareholders
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$
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188.9
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$
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222.1
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$
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1.22
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$
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1.44
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On a per-share basis, drivers for the first nine months of 2015 versus
2014 were the following:
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$0.07 decline in wholesale margin due to lower natural gas prices;
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$0.02 decline from mild weather in 2015 when compared to the prior
year;
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$0.03 increase in transmission expense not recovered through a fuel
recovery mechanism;
-
$0.08 decline in AFUDC resulting from lower average construction work
in progress due to environmental upgrades at La Cygne and other
capital investments being placed into service;
-
$0.08 increase in depreciation and amortization due to environmental
upgrades at La Cygne and other capital investments being placed into
service;
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$0.05 benefit from the release of uncertain tax positions included in
the 2014 results; and
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$0.03 of other items including higher general taxes.
The factors above were partially offset by the following:
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$0.06 from lower fuel and purchased power expense;
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$0.03 from new Kansas retail rates that became effective in July 2014;
and
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$0.05 decrease in other operating and maintenance expense driven by
lower operating and maintenance expense at Wolf Creek.
Electric Utility Segment Third Quarter:
The Electric Utility segment, which includes Kansas City Power & Light
Company (KCP&L) and the regulated utility operations of KCP&L Greater
Missouri Operations Company (GMO), generated net income of $129.1
million or $0.83 per share for the third quarter 2015 compared to $140.3
million or $0.91 per share for the same period in 2014. This primarily
reflects higher operating and maintenance costs, a decrease in AFUDC and
an increase in depreciation and amortization expense partially offset by
the impacts from favorable weather.
Overall retail MWh sales were up 3.8 percent compared to the 2014 period
with the increase driven by weather. The unfavorable weather impact in
the third quarter 2015, when compared to normal, was approximately $0.01
per share.
Electric Utility Segment Year-to-Date:
Year-to-date net income for the Electric Utility segment was $196.4
million or $1.27 per share compared to $221.1 million or $1.43 per share
in 2014. This reflects the impacts from lower wholesale margin,
unfavorable weather, an increase in depreciation and amortization
expense and a decrease in AFUDC partially offset by new retail rates and
a decrease in operating and maintenance costs.
Overall retail MWh sales were down 1.1 percent compared to the 2014
period with the decrease driven by weather. The unfavorable weather
impact in the first nine months of 2015, when compared to normal, was
approximately $0.03 per share.
Other Category Third Quarter and Year-to-Date:
Results for the Other category primarily include unallocated corporate
charges, GMO non-regulated operations and preferred dividends. For the
third quarter 2015, the Other category recorded a loss of $2.7 million
or $0.01 per share compared to earnings of $6.7 million or $0.04 per
share in 2014. The 2014 quarter included the benefit from the release of
uncertain tax positions related to GMO’s former non-regulated operations
that resulted in $6.1 million of tax benefits and a $2.1 million
decrease in after-tax interest expense.
For the first nine months of 2015, the Other category recorded a loss of
$7.5 million or $0.05 per share compared to earnings of $1.0 million or
$0.01 per share in 2014.
Great Plains Energy will post its 2015 Third Quarter Form 10-Q, as
well as supplemental financial information related to the third quarter
on its website, www.greatplainsenergy.com.
Earnings Webcast Information:
An earnings conference call and webcast is scheduled for 9:00 a.m. ET
Friday, November 6, 2015, to review the Company’s 2015 third quarter
earnings and operating results.
A live audio webcast of the conference call, presentation slides,
supplemental financial information, and the earnings press release will
be available on the investor relations page of Great Plains Energy’s
website at www.greatplainsenergy.com.
The webcast will be accessible only in a “listen-only” mode.
The conference call may be accessible by dialing (888) 353-7071
(U.S./Canada) or (724) 498-4416 (international) five to ten minutes
prior to the scheduled start time. The pass code is 34055701.
A replay and transcript of the call will be available later in the day
by accessing the investor relations section of the Company’s website. A
telephonic replay of the conference call will also be available through
November 13, 2015, by dialing (855) 859-2056 (U.S./Canada) or (404)
537-3406 (international). The pass code is 34055701.
About Great Plains Energy:
Headquartered in Kansas City, Mo., Great Plains Energy Incorporated
(NYSE: GXP) is the holding company of Kansas City Power & Light Company
and KCP&L Greater Missouri Operations Company, two of the leading
regulated providers of electricity in the Midwest. Kansas City Power &
Light Company and KCP&L Greater Missouri Operations Company use KCP&L as
a brand name. More information about the companies is available on the
Internet at: www.greatplainsenergy.com
or www.kcpl.com.
Forward-Looking Statements:
Statements made in this release that are not based on historical facts
are forward-looking, may involve risks and uncertainties, and are
intended to be as of the date when made. Forward-looking statements
include, but are not limited to, the outcome of regulatory proceedings,
cost estimates of capital projects and other matters affecting future
operations. In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, Great Plains Energy and KCP&L
are providing a number of important factors that could cause actual
results to differ materially from the provided forward-looking
information. These important factors include: future economic conditions
in regional, national and international markets and their effects on
sales, prices and costs; prices and availability of electricity in
regional and national wholesale markets; market perception of the energy
industry, Great Plains Energy and KCP&L changes in business strategy,
operations or development plans; the outcome of contract negotiations
for goods and services; effects of current or proposed state and federal
legislative and regulatory actions or developments, including, but not
limited to, deregulation, re-regulation and restructuring of the
electric utility industry; decisions of regulators regarding rates the
Companies can charge for electricity; adverse changes in applicable
laws, regulations, rules, principles or practices governing tax,
accounting and environmental matters including, but not limited to, air
and water quality; financial market conditions and performance
including, but not limited to, changes in interest rates and credit
spreads and in availability and cost of capital and the effects on
nuclear decommissioning trust and pension plan assets and costs;
impairments of long-lived assets or goodwill; credit ratings; inflation
rates; effectiveness of risk management policies and procedures and the
ability of counterparties to satisfy their contractual commitments;
impact of terrorist acts, including but not limited to cyber terrorism;
ability to carry out marketing and sales plans; weather conditions
including, but not limited to, weather-related damage and their effects
on sales, prices and costs; cost, availability, quality and
deliverability of fuel; the inherent uncertainties in estimating the
effects of weather, economic conditions and other factors on customer
consumption and financial results; ability to achieve generation goals
and the occurrence and duration of planned and unplanned generation
outages; delays in the anticipated in-service dates and cost increases
of generation, transmission, distribution or other projects; Great
Plains Energy’s ability to successfully manage transmission joint
venture; the inherent risks associated with the ownership and operation
of a nuclear facility including, but not limited to, environmental,
health, safety, regulatory and financial risks; workforce risks,
including, but not limited to, increased costs of retirement, health
care and other benefits; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to
predict all factors. Other risk factors are detailed from time to time
in Great Plains Energy’s and KCP&L’s quarterly reports on Form 10-Q and
annual report on Form 10-K filed with the Securities and Exchange
Commission. Each forward-looking statement speaks only as of the date of
the particular statement. Great Plains Energy and KCP&L undertake no
obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
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