Attached files
| file | filename |
|---|---|
| 8-K - JOINT FORM 8-K - KANSAS CITY POWER & LIGHT CO | f8keei2011.htm |
2011 EEI Presentation
Great Plains Energy
Edison Electric Institute Financial Conference
November 8, 2011
Michael J. Chesser
Chairman and CEO
2011 EEI Presentation
Statements made in this presentation 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, including but not limited to possible further deterioration in
economic conditions and the timing and extent of economic recovery; 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; 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 additional generation,
transmission, distribution or other projects; 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.
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, including but not limited to possible further deterioration in
economic conditions and the timing and extent of economic recovery; 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; 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 additional generation,
transmission, distribution or other projects; 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.
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.
Forward-Looking Statement
2
2011 EEI Presentation
• Solid Midwest electric utility operating under the KCP&L brand
• Transformational events in 2008 to focus business model on fully
regulated utility operations
regulated utility operations
– Sale of Strategic Energy
– Acquisition of Aquila (now KCP&L Greater Missouri Operations
Company, or “GMO”)
Company, or “GMO”)
• Company attributes
– ~824,000 customers / 3,000 employees
– ~6,600 MW of primarily low-cost coal baseload generation
– 5-year projected synergies post-GMO acquisition of ~$757M
– ~$8.8bn in assets at 2010YE
– ~$5.6bn in rate base
Service Territories: KCP&L and GMO
Business Highlights
2010 Retail MWh Sold by Customer Type
2010 Retail MWh Sales by Jurisdiction
2010 MWh Generated by Fuel Type
Total: ~ 23,806 MWhs*
Total: ~ 23,806 MWhs*
Total: ~ 26,679 MWhs*
Solid Vertically-Integrated Midwest Utility
* In thousands
3
2011 EEI Presentation
4
2005 - 2,382
2010 - 3,188
INCREASE = 34%
2005 - 500,000
2010 - 823,200
INCREASE = 65%
2005 - 14,400
2010 - 25,600
2010 - 25,600
INCREASE = 78%
2005 - 2,788 MW
2010 - 4,345 MW
INCREASE = 56%
2005 - $2.12 Billion
2010 - $5.59 Billion
INCREASE = 164%
GXP’s Transformation: 2005 - Present
Rate Base
Utility Employees
Customers
T&D Route-Miles
Base Load Generation
4
2011 EEI Presentation
Collaboration
Agreement with
Sierra Club
Agreement with
Sierra Club
Renewable
Portfolio
Standards - KS
and MO
Portfolio
Standards - KS
and MO
Future Renewable
Requirements
Requirements
• 2007 Agreement
• KCP&L pledged to add 100 MW of wind (beyond
initial 100.5 MW at Spearville) by end of 2010
and 300 MW by end of 2012, subject to
regulatory approval
initial 100.5 MW at Spearville) by end of 2010
and 300 MW by end of 2012, subject to
regulatory approval
• 48 MW built in 2010 and 52 MW of RECs
purchased for 2010 applied to 2010
commitment; 48 MW and recent 131 MW PPA
apply toward 2012 commitment
purchased for 2010 applied to 2010
commitment; 48 MW and recent 131 MW PPA
apply toward 2012 commitment
• Refreshed recent RFP to evaluate options for
remaining 221 MW commitment
remaining 221 MW commitment
• RPS requirements are different in each state
– Missouri requirements based upon retail
energy sales and include solar needs
energy sales and include solar needs
– Kansas requirements based upon retail
peak load
peak load
5
Drivers of Future Renewable Energy Needs
2011 EEI Presentation
|
Overview
of Rule
|
|
• Final rule signed in July
2011 |
|
• Regulates SO2 and NOx
|
|
• Allows limited air quality
-assured allowance trading |
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• Includes Kansas and
Missouri |
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• Uncertainty of rule
pending judicial and administrative consideration |
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Potential Impact to
Great Plains Energy |
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• Increased capital costs
from additional emissions control equipment* |
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• Purchase allowances, if
available |
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• Off-systems sales
margin threshold |
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• Increased costs to
customers |
|
|
|
|
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Achieving
Compliance
|
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• Install emissions control
equipment |
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• Purchase allowances, if
available |
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• Change in plant
processes |
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|
|
|
|
|
6
*Potential costs included in approximate $1 billion for environmental compliance as noted in 3Q 2011 10-Q
Cross-State Air Pollution Rule (CSAPR)
2011 EEI Presentation
Focused on Delivering Value to Shareholders
Earnings Growth
Expected Through Reduced Regulatory Lag, Disciplined Cost
Management and Long-Term Rate Base Growth
Management and Long-Term Rate Base Growth
Competitive Dividend
Goal to Maintain Competitive Dividend While Strengthening Key Credit
Metrics; Objective to Grow Dividend In Line With Payout Ratio
Targets
Metrics; Objective to Grow Dividend In Line With Payout Ratio
Targets
Objective: Improved Total Shareholder Returns
7
2011 EEI Presentation
Terry Bassham
President and COO
8
2011 EEI Presentation
Operations and Regulatory Strategy
• Environmental
• Renewable Energy and Efficiency
• Transmission
• Plant Operations
• Regulatory
• State of the Service Territory
9
2011 EEI Presentation
Environmental
1. Estimated cost of compliance with
current / proposed legislation =
approximately $1 billion:
current / proposed legislation =
approximately $1 billion:
• LaCygne
– Unit 1 (368 MW*) - scrubber
and baghouse - 2015
and baghouse - 2015
– Unit 2 (341 MW*) - full Air
Quality Control System
(“AQCS”) - 2015
Quality Control System
(“AQCS”) - 2015
• Montrose 3 (176 MW) - full AQCS -
2016 (approx.)
2016 (approx.)
• Sibley 3 (364 MW) - scrubber and
baghouse - 2016
baghouse - 2016
2. Other retrofits less likely and therefore
not included in estimated cost of
compliance:
not included in estimated cost of
compliance:
• Montrose 1 and 2 (total capacity 334
MW)
MW)
• Sibley 1 and 2 (total capacity 102
MW)
MW)
• Lake Road 4 and 6 (99 MW)
*KCP&L’s share of jointly-owned facility
Iatan 2 cooling tower fans. The use of a cooling tower for condenser cooling is an
integral part of Iatan’s environmentally friendly zero liquid discharge operation.
integral part of Iatan’s environmentally friendly zero liquid discharge operation.
10
2011 EEI Presentation
Renewable Energy and Energy Efficiency
1. Future renewable requirements
driven by the following:
driven by the following:
– Renewable Portfolio Standards
(“RPS”) in Missouri and Kansas
(“RPS”) in Missouri and Kansas
– 2007 Collaboration Agreement
with Sierra Club
with Sierra Club
• Flexibility regarding acquisition
of future renewable resources:
of future renewable resources:
– Through Purchased Power
Agreements (“PPAs”) and
purchases of Renewable Energy
Credits (“RECs”); or
Agreements (“PPAs”) and
purchases of Renewable Energy
Credits (“RECs”); or
– Adding to rate base if supported
by credit profile and available
equity and debt financing
by credit profile and available
equity and debt financing
2. Energy efficiency expected to be a
key component of future resource
portfolio:
key component of future resource
portfolio:
– Aggressive pursuit planned with
appropriate regulatory recovery
appropriate regulatory recovery
Spearville 2 Wind Energy Facility in Western Kansas
11
2011 EEI Presentation
Transmission
1. Two significant projects are
currently in GXP’s plans:
currently in GXP’s plans:
• Iatan-Nashua 345kV line -
Projected $54M total cost and
2015 in-service date
Projected $54M total cost and
2015 in-service date
• Sibley-Maryville-Nebraska City
345kV line - Projected $380M
total cost and 2017 in-service
date
345kV line - Projected $380M
total cost and 2017 in-service
date
2. Increasingly competitive
environment requires consideration
of strategic options
environment requires consideration
of strategic options
3. Flexibility is important - opportunity
to pursue projects unilaterally but
also preserve capital if needed
through partnership
to pursue projects unilaterally but
also preserve capital if needed
through partnership
Iatan-Nashua 345kV, 30 miles, $54M
Expected in-service: 2015
Sibley-Maryville-Nebraska City 345kV,
170 miles, projected cost ~$380M
170 miles, projected cost ~$380M
12
2011 EEI Presentation
Plant Operations
1. No additional baseload
generation expected for
several years
generation expected for
several years
2. Targeting modest
improvements in existing
fleet performance in the
coming years
improvements in existing
fleet performance in the
coming years
3. No changes currently
planned regarding nuclear’s
role in the portfolio
planned regarding nuclear’s
role in the portfolio
Iatan 2, 850-megawatt coal fired power plant
recognized as power plant of the year by
Power Magazine
recognized as power plant of the year by
Power Magazine
13
2011 EEI Presentation
Regulatory
• Our rates continue to compare well regionally and nationally
• Over the last five years, the Company has received fair and
constructive treatment in both Kansas and Missouri, allowing
for recovery of our CEP capital additions
constructive treatment in both Kansas and Missouri, allowing
for recovery of our CEP capital additions
• We continue to aggressively pursue strategies to improve our
operating cost structure and are evaluating the best
combination of rate cases and riders/trackers to reduce
regulatory lag while minimizing the impact on customers
operating cost structure and are evaluating the best
combination of rate cases and riders/trackers to reduce
regulatory lag while minimizing the impact on customers
14
2011 EEI Presentation
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Leading Industries
(Employees in 000’s)
|
|
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State & Local Government
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124.8
|
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Full and Limited-Service Restaurants
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63.3
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General Medical & Surgical Hospitals / Offices
of Physicians
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46.7
|
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Federal Government
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29.1
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Employment Services
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20.6
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Depository Credit Intermediation
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16.3
|
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Grocery Stores
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16.2
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Department Stores
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15.5
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Computer Systems Design and Related Srvcs
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15.2
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Management of Companies and Enterprises
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15.2
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KC Metropolitan Area Economy - Snapshot
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Top 10 Employers
(# of Employees)
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HCA Midwest Health System
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8,127
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Wal-Mart Stores, Inc.
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7,400
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Sprint Corporation
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7,300
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St. Luke’s Health System
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6,622
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McDonald’s USA LLC
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5,700
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Cerner Corporation
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4,980
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Children’s Mercy Hospital & Clinics
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4,812
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DST Systems, Inc.
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4,425
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Truman Medical Center
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4,081
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University of Kansas Hospital
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3,880
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• The Kansas City metro area economy is represented by a diverse set of
industries, supported by a sizeable presence in the governmental sector
industries, supported by a sizeable presence in the governmental sector
Strengths
• Diversified economy
• Stability from governmental sector
• Well-developed transportation &
distribution network
distribution network
• Central national location
• Low cost of living/business
Weaknesses
• Increased competition from other
Midwest business centers
Midwest business centers
• High dependence on Sprint Nextel
and telecom
and telecom
• Suburban sprawl
• Low employment growth
Opportunities
• New Ford product lines create local
jobs
jobs
• Google ultra-high speed fiber
network supports tech economy
network supports tech economy
• Kansas wind power attracts clean-
energy firms
energy firms
Source: The Kansas City Business Journal, BLS and Moody’s Analytics
Source for Listed Attributes: Moody’s Analytics
15
2011 EEI Presentation
2011 Third Quarter
Financial Overview
James C. Shay
SVP, Finance & Strategic
Development and CFO
16
2011 EEI Presentation
2011 Quarterly and Year-to-Date September 30 EPS
Reconciliation Versus 2010
Reconciliation Versus 2010
|
|
Special
Factors |
WN Demand
|
Weather
|
Lag
|
Other
|
Total
|
|
1Q 2011
|
($0.07)
|
($0.04)
|
$0.01
|
($0.04)
|
-
|
($0.14)
|
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2Q 2011
|
($0.06)
|
($0.01)
|
($0.03)
|
($0.02)
|
($0.04)
|
($0.16)
|
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3Q 2011
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($0.09)
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$0.05
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($0.03)
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($0.03)
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$0.05
|
($0.05)
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Year To
Date |
($0.22)
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$0.01
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($0.04)
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($0.09)
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$0.01
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($0.33)
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|
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2010 EPS
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2011 EPS
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Change in EPS
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1Q
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$0.15
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$0.01
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($0.14)
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2Q
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$0.47
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$0.31
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($0.16)
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3Q
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$0.96
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$0.91
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($0.05)
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Year To
Date |
$1.57
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$1.24
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($0.33)
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Contributors to Lower 2011 EPS Compared to 2010
Note: Numbers may not add due to the effect of dilutive shares on EPS
17
2011 EEI Presentation
1Weighted average
Customer Consumption
|
Retail MWh Sales and Customer Growth Rates
|
|||||||||
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3Q 2011 Compared to 3Q 2010
|
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YTD 2011 Compared to YTD 20103
|
||||||
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Total
Change in MWh Sales |
Weather-Normalized
|
Total
Change in MWh Sales |
Weather-Normalized
|
|||||
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Customers
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Use /
Customer
|
Change
MWh Sales |
Customers
|
Use /
Customer
|
Change
MWh Sales |
|||
|
Residential
|
0.3%
|
0.1%
|
(0.9%)
|
(0.8%)
|
|
(1.3%)
|
0.1%
|
(2.8%)
|
(2.7%)
|
|
Commercial
|
0.1%
|
0.2%
|
3.1%
|
3.4%
|
|
(1.5%)
|
0.3%
|
0.3%
|
0.6%
|
|
Industrial
|
(2.0%)
|
(1.4%)
|
0.7%
|
(0.7%)
|
|
(2.0%)
|
(1.1%)
|
0.0%
|
(1.0%)
|
|
|
(0.0%)
|
0.1%1
|
0.8%1
|
0.9%1
|
|
(1.5%)
|
0.1%1
|
(1.0%)1,2
|
(0.9%)1,2
|
|
Statistics by Customer Class YTD 20113
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||||
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Customers
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Revenue (in millions)
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Sales (000s of MWhs)
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% of Retail MWh Sales
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Residential
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725,200
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$773.0
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7,431
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41%
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Commercial
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96,700
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676.4
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46%
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|
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Industrial
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2,200
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149.6
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2,422
8,209
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13%
|
3 As of September 30
2 Drivers contributing to the portion of the YTD decline that occurred in 1Q11 may have included a) switching to natural gas heat; b) conversion to more
efficient heat pumps; c) conservation among KCP&L KS customers on an all-electric rate triggered by a substantial rate increase for this rate class in
KCP&L’s 2010 KS rate case; and d) continued challenges in the local economy
efficient heat pumps; c) conservation among KCP&L KS customers on an all-electric rate triggered by a substantial rate increase for this rate class in
KCP&L’s 2010 KS rate case; and d) continued challenges in the local economy
18
2011 EEI Presentation
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Great Plains Energy Debt
|
||||||||
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($ in millions)
|
KCP&L
|
GMO (1)
|
GPE
|
Consolidated
|
||||
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|
Amount
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Rate (2)
|
Amount
|
Rate (2)
|
Amount
|
Rate (2)
|
Amount
|
Rate(2)
|
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Short-term debt
|
$ 105.5
|
1.07%
|
$ 0.0
|
0.0%
|
$ 28.0
|
3.00%
|
$ 133.5
|
1.47%
|
|
Long-term debt (3)
|
2,064.5
|
6.04%
|
650.2
|
10.96%
|
986.8
|
6.61%
|
3,701.5
|
7.03%
|
|
Total
|
$2,170.0
|
5.80%
|
$650.2
|
10.96%
|
$1,014.8
|
6.51%
|
$3,835.0
|
6.83%
|
Secured debt = $749 (20%), Unsecured debt = $3,086 (80%)
(1) GPE guarantees substantially all of GMO’s debt
(2) Weighted Average Rates - excludes premium / discounts and fair market value adjustments; includes full Equity Units coupon (12%) for GPE
(3) Includes current maturities of long-term debt
Long-Term Debt Maturities (4)
Debt Profile as of September 30, 2011
(4) 2013 reflects mode maturity for $167.6 million of KCP&L tax-exempt bonds subject to remarketing prior to final maturity date
19
2011 EEI Presentation
Moody's
Standard & Poor's
Great Plains Energy
Outlook
Stable
Stable
Corporate Credit Rating
-
BBB
Preferred Stock
Ba2
BB+
Senior Unsecured Debt
Baa3
BBB-
KCP&L
Outlook
Stable
Stable
Senior Secured Debt
A3
BBB+
Senior Unsecured Debt
Baa2
BBB
Commercial Paper
P-2
A-2
GMO
Outlook
Stable
Stable
Senior Unsecured Debt
Baa3
BBB
Current Credit Ratings
* All ratios calculated using Standard and Poor’s methodology. Ratios are non-GAAP measures that are defined and reconciled to GAAP in Appendix
** Last twelve months as of September 30, 2011
Credit Profile for Great Plains Energy
20
2011 EEI Presentation
|
Analyst Day Presentation
|
|
• RFP for 220 MW of wind
projects being evaluated — Likely structure is a PPA
— Would consider using equity
to finance asset growth if expected to be EPS accretive within 12-24 months of issuance |
|
|
|
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Renewable Investment and
Financing Considerations
21
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Update to Plan
|
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• Negotiated two wind contracts in 4Q 2011
for in-service by the end of 2012 — 100 MW PPA
— 100 MW PPA that may be converted to
ownership |
|
• Desire to convert PPA to build and own
project reflects favorable momentum and market conditions for construction — May finance construction with a mix of debt
and equity, consistent with our capital structure, subject to market conditions — Any equity issuance would be undertaken
only if expected to be EPS accretive with-in 12-24 months of issuance — Equity issuance supportive of balanced
regulatory capital structure |
2011 EEI Presentation
2011 and 2012 EPS Guidance Range
and 2013 Drivers
• Increased 2011 guidance to $1.22 - $1.32 from $1.10 - $1.25
– Drivers:
• 3Q weather warmer than normal
• 3Q increase in weather-normalized demand
§ Actual 2011 capital expenditures estimated to be $50 million less
than projected
than projected
• Affirming 2012 guidance of $1.35 - $1.55
• Affirming 2013 target of 50 basis points of lag in regulated
operations
operations
22
2011 EEI Presentation
• Proven track record of constructive regulatory treatment
• Credibility with regulators in terms of planning and execution of large, complex projects
• Competitive retail rates on a regional and national level supportive of potential future
investment
investment
Diligent
Regulatory
Approach
Regulatory
Approach
• Target significant reduction in regulatory lag
• Seek to deliver earnings growth and increasing and sustainable cash dividends as a key
component of TSR
component of TSR
• Improvement in / stability of key credit metrics is a priority
Focused on
Shareholder
Value Creation
Shareholder
Value Creation
Excellent
Relationships
with Key
Stakeholders
Relationships
with Key
Stakeholders
• Customers - Tier 1 customer satisfaction
• Suppliers - strategic supplier alliances focused on long-term supply chain value
• Employees - strong relations between management and labor (3 IBEW locals)
• Communities - Leadership, volunteerism and high engagement in the areas we serve
• Environmental - additional ~$1 billion of “High Likelihood” capital projects planned to
comply with existing / proposed environmental rules
comply with existing / proposed environmental rules
• Transmission - additional $0.4 billion of capital additions planned
• Renewables - driven by Collaboration Agreement and MO/KS RPS; potential capital
additions
additions
• Other Growth Opportunities - selective future initiatives that will leverage our core
strengths
strengths
Attractive
Platform for
Long-Term
Growth
Platform for
Long-Term
Growth
GXP - Platform for Shareholder Value
23
2011 EEI Presentation
Great Plains Energy
Edison Electric Institute Financial Conference
November 8, 2011
24
2011 EEI Presentation
Appendix
25
2011 EEI Presentation
Special Factors Impacting
Year-to-Date Results and 2011 Guidance
Year-to-Date Results and 2011 Guidance
|
|
1Q
|
2Q
|
3Q
|
Total
|
|
Disallowances and other
accounting effects from Missouri rate case orders |
($0.03)
|
|
|
($0.03)
|
|
Organizational realignment and
voluntary separation program |
($0.04)
|
($0.01)
|
|
($0.05)
|
|
Wolf Creek extended outage
and replacement power |
|
($0.05)
|
|
($0.05)
|
|
Coal conservation and flooding
related expenses |
|
|
($0.09)
|
($0.09) (a)
|
|
Total
|
($0.07)
|
($0.06)
|
($0.09)
|
($0.22)
|
(a) Coal conservation ended mid-October and 4Q impact expected to be insignificant
(All Amounts Per-Share)
26
2011 EEI Presentation
|
|
Earnings (in Millions)
|
|
Earnings per Share
|
||
|
|
2011
|
2010
|
|
2011
|
2010
|
|
Electric Utility
|
$ 133.9
|
$ 136.2
|
|
$ 0.97
|
$ 0.99
|
|
Other
|
(7.3)
|
(4.2)
|
|
(0.06)
|
(0.03)
|
|
Net income
|
126.6
|
132.0
|
|
0.91
|
0.96
|
|
Less: Net income attributable to noncontrolling
interest |
(0.1)
|
-
|
|
-
|
-
|
|
Net income attributable to Great Plains Energy
|
126.5
|
132.0
|
|
0.91
|
0.96
|
|
Preferred dividends
|
(0.4)
|
(0.4)
|
|
-
|
-
|
|
Earnings available for common shareholders
|
$ 126.1
|
$ 131.6
|
|
$ 0.91
|
$ 0.96
|
Great Plains Energy Consolidated Earnings
and Earnings Per Share - Three Months Ended September 30
(Unaudited)
and Earnings Per Share - Three Months Ended September 30
(Unaudited)
• Common stock outstanding for the quarter averaged 138.3 million shares, about 1 percent higher
than the same period in 2010
than the same period in 2010
27
2011 EEI Presentation
• Common stock outstanding for the year to date averaged 138.5 million shares, about 1 percent
higher than the same period in 2010
higher than the same period in 2010
|
|
Earnings (in Millions)
|
|
Earnings per Share
|
||
|
|
2011
|
2010
|
|
2011
|
2010
|
|
Electric Utility
|
$ 189.9
|
$ 232.8
|
|
$ 1.37
|
$ 1.70
|
|
Other
|
(17.6)
|
(16.1)
|
|
(0.13)
|
(0.12)
|
|
Net income
|
172.3
|
216.7
|
|
1.24
|
1.58
|
|
Less: Net income attributable to noncontrolling
interest |
-
|
(0.1)
|
|
-
|
-
|
|
Net income attributable to Great Plains Energy
|
172.3
|
216.6
|
|
1.24
|
1.58
|
|
Preferred dividends
|
(1.2)
|
(1.2)
|
|
-
|
(0.01)
|
|
Earnings available for common shareholders
|
$ 171.1
|
$ 215.4
|
|
$ 1.24
|
$ 1.57
|
Great Plains Energy Consolidated Earnings
and Earnings Per Share - Year-to-Date September 30
(Unaudited)
and Earnings Per Share - Year-to-Date September 30
(Unaudited)
28
2011 EEI Presentation
Gross margin is a financial measure that is not calculated in accordance with generally accepted accounting
principles (GAAP). Gross margin, as used by Great Plains Energy, is defined as operating revenues less fuel,
purchased power and transmission of electricity by others. The Company’s expense for fuel, purchased
power and transmission of electricity by others, offset by wholesale sales margin, is subject to recovery
through cost adjustment mechanisms, except for KCP&L’s Missouri retail operations. As a result, operating
revenues increase or decrease in relation to a significant portion of these expenses. Management believes
that gross margin provides a more meaningful basis for evaluating the Electric Utility segment’s operations
across periods than operating revenues because gross margin excludes the revenue effect of fluctuations in
these expenses. Gross margin is used internally to measure performance against budget and in reports for
management and the Board of Directors. The Company’s definition of gross margin may differ from similar
terms used by other companies. A reconciliation to GAAP operating revenues is provided in the table above.
principles (GAAP). Gross margin, as used by Great Plains Energy, is defined as operating revenues less fuel,
purchased power and transmission of electricity by others. The Company’s expense for fuel, purchased
power and transmission of electricity by others, offset by wholesale sales margin, is subject to recovery
through cost adjustment mechanisms, except for KCP&L’s Missouri retail operations. As a result, operating
revenues increase or decrease in relation to a significant portion of these expenses. Management believes
that gross margin provides a more meaningful basis for evaluating the Electric Utility segment’s operations
across periods than operating revenues because gross margin excludes the revenue effect of fluctuations in
these expenses. Gross margin is used internally to measure performance against budget and in reports for
management and the Board of Directors. The Company’s definition of gross margin may differ from similar
terms used by other companies. A reconciliation to GAAP operating revenues is provided in the table above.
Great Plains Energy Reconciliation of
Gross Margin to Operating Revenues
(Unaudited)
Gross Margin to Operating Revenues
(Unaudited)
|
(millions)
|
Three Months Ended
September 30 |
Year to Date
September 30
|
||
|
|
2011
|
2010
|
2011
|
2010
|
|
Operating revenues
|
$773.7
|
$ 728.8
|
$1,831.7
|
$ 1,787.7
|
|
Fuel
|
(146.5)
|
(127.3)
|
(365.8)
|
(333.2)
|
|
Purchase power
|
(68.1)
|
(68.0)
|
(178.4)
|
(171.4)
|
|
Transmission of electricity by others
|
(8.6)
|
(8.1)
|
(23.1)
|
(20.9)
|
|
Gross margin
|
$550.5
|
$ 525.4
|
$1,264.4
|
$ 1,262.2
|
29
2011 EEI Presentation
Credit Metric Reconciliation to GAAP
Funds from operations (FFO) to adjusted debt is a
financial measure that is not calculated in
accordance with generally accepted accounting
principles (GAAP). FFO to adjusted debt, as used by
Great Plains Energy, is defined in accordance with
Standard & Poor’s methodology used for calculating
FFO to debt. The numerator of the ratio is defined
as net cash from operating activities (GAAP) plus
non-GAAP adjustments related to operating leases,
hybrid securities, post-retirement benefit obligations,
capitalized interest, power purchase agreements,
asset retirement obligations, changes in working
capital and decommissioning fund contributions. The
denominator of the ratio is defined as the sum of
debt balances (GAAP) plus non-GAAP adjustments
related to some of the same items adjusted for in the
numerator and other adjustments related to
securitized receivables and accrued interest.
Management believes that FFO to adjusted debt
provides a meaningful way to better understand the
Company’s credit profile. FFO to adjusted debt is
used internally to help evaluate the possibility of a
change in the Company’s credit rating.
financial measure that is not calculated in
accordance with generally accepted accounting
principles (GAAP). FFO to adjusted debt, as used by
Great Plains Energy, is defined in accordance with
Standard & Poor’s methodology used for calculating
FFO to debt. The numerator of the ratio is defined
as net cash from operating activities (GAAP) plus
non-GAAP adjustments related to operating leases,
hybrid securities, post-retirement benefit obligations,
capitalized interest, power purchase agreements,
asset retirement obligations, changes in working
capital and decommissioning fund contributions. The
denominator of the ratio is defined as the sum of
debt balances (GAAP) plus non-GAAP adjustments
related to some of the same items adjusted for in the
numerator and other adjustments related to
securitized receivables and accrued interest.
Management believes that FFO to adjusted debt
provides a meaningful way to better understand the
Company’s credit profile. FFO to adjusted debt is
used internally to help evaluate the possibility of a
change in the Company’s credit rating.
30
2011 EEI Presentation
Credit Metric Reconciliation to GAAP
Funds from operations (FFO) interest coverage
ratio is a financial measure that is not calculated in
accordance with generally accepted accounting
principles (GAAP). FFO interest coverage, as
used by Great Plains Energy, is defined in
accordance with Standard & Poor’s methodology
used for calculating FFO interest coverage. The
numerator of the ratio is defined as net cash from
operating activities (GAAP) plus non-GAAP
adjustments related to operating leases, hybrid
securities, post-retirement benefit obligations,
capitalized interest, power purchase agreements,
asset retirement obligations, changes in working
capital and decommissioning fund contributions
plus adjusted interest expense (non-GAAP). The
denominator of the ratio, adjusted interest
expense, is defined as interest charges (GAAP)
plus non-GAAP adjustments related to some of
the same items adjusted for in the numerator and
other adjustments needed to match Standard &
Poor’s calculation. Management believes that
FFO interest coverage provides a meaningful way
to better understand the Company’s credit profile.
FFO interest coverage is used internally to help
evaluate the possibility of a change in the
Company’s credit rating.
ratio is a financial measure that is not calculated in
accordance with generally accepted accounting
principles (GAAP). FFO interest coverage, as
used by Great Plains Energy, is defined in
accordance with Standard & Poor’s methodology
used for calculating FFO interest coverage. The
numerator of the ratio is defined as net cash from
operating activities (GAAP) plus non-GAAP
adjustments related to operating leases, hybrid
securities, post-retirement benefit obligations,
capitalized interest, power purchase agreements,
asset retirement obligations, changes in working
capital and decommissioning fund contributions
plus adjusted interest expense (non-GAAP). The
denominator of the ratio, adjusted interest
expense, is defined as interest charges (GAAP)
plus non-GAAP adjustments related to some of
the same items adjusted for in the numerator and
other adjustments needed to match Standard &
Poor’s calculation. Management believes that
FFO interest coverage provides a meaningful way
to better understand the Company’s credit profile.
FFO interest coverage is used internally to help
evaluate the possibility of a change in the
Company’s credit rating.
31
2011 EEI Presentation
Credit Metric Reconciliation to GAAP
Adjusted debt to total adjusted capitalization is
a financial measure that is not calculated in
accordance with generally accepted accounting
principles (GAAP). Adjusted debt to total
adjusted capitalization, as used by Great Plains
Energy, is defined in accordance with Standard
& Poor’s methodology used for calculating the
ratio of debt to debt and equity. The numerator
of the ratio, adjusted debt, is defined as the sum
of debt balances (GAAP) plus non-GAAP
adjustments related to securitized receivables,
operating leases, hybrid securities, post-
retirement benefit obligations, accrued interest,
power purchase agreements and asset
retirement obligations. The denominator of the
ratio, total adjusted capitalization, is defined as
the sum of equity balances (GAAP) plus non-
GAAP adjustments related to hybrid securities
plus the non-GAAP adjusted debt as defined for
the numerator. Management believes that
adjusted debt to total adjusted capitalization
provides a meaningful way to better understand
the Company’s credit profile. Adjusted debt to
total adjusted capitalization is used internally to
help evaluate the possibility of a change in the
Company’s credit rating.
a financial measure that is not calculated in
accordance with generally accepted accounting
principles (GAAP). Adjusted debt to total
adjusted capitalization, as used by Great Plains
Energy, is defined in accordance with Standard
& Poor’s methodology used for calculating the
ratio of debt to debt and equity. The numerator
of the ratio, adjusted debt, is defined as the sum
of debt balances (GAAP) plus non-GAAP
adjustments related to securitized receivables,
operating leases, hybrid securities, post-
retirement benefit obligations, accrued interest,
power purchase agreements and asset
retirement obligations. The denominator of the
ratio, total adjusted capitalization, is defined as
the sum of equity balances (GAAP) plus non-
GAAP adjustments related to hybrid securities
plus the non-GAAP adjusted debt as defined for
the numerator. Management believes that
adjusted debt to total adjusted capitalization
provides a meaningful way to better understand
the Company’s credit profile. Adjusted debt to
total adjusted capitalization is used internally to
help evaluate the possibility of a change in the
Company’s credit rating.
32