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|Great Plains Energy Reports Second Quarter 2011 Results|
KANSAS CITY, Mo., Aug 05, 2011 (BUSINESS WIRE) --
Great Plains Energy (NYSE: GXP) today announced second quarter 2011 earnings of $43.0 million or $0.31 per share of common stock outstanding, compared with second quarter 2010 earnings of $63.9 million or $0.47 per share.
Per-share results in the 2011 quarter compared to 2010 reflected the following impacts:
The Company will host an investment community meeting in New York on Monday, August 8 at which it will discuss, among other topics, its second quarter results and earnings guidance for 2011 and 2012 (see page 6 for more information regarding the meeting). The Company's 2011 guidance will incorporate the recently-disclosed impact of the Company's coal conservation activities to manage flooding-related operational risks.
"The recent flooding in the Midwest has impacted the operation of our coal plants along the Missouri River, has significantly slowed train deliveries of coal to our Hawthorn and LaCygne units and suspended deliveries to our Iatan plants," commented Mike Chesser, Chairman and CEO. "Because the flooding is not anticipated to subside for several weeks, we have taken proactive and decisive steps to ensure that we continue to meet the needs of our customers."
The Company's specific risk mitigation activities include entering into an agreement to purchase power during the months of June, July and August, as well as engaging in various measures to conserve coal at the impacted coal-fired plants.
"We do not believe that the flooding poses any direct risk to the safe operation of our plants but will continue to monitor weather and river conditions carefully," continued Chesser. "Once all rail service resumes, we will be able to begin rebuilding our coal inventory. However, achieving desired levels may take a number of months. During this period, our customers can expect the same safe, reliable power from KCP&L they have relied on for generations."
Great Plains Energy Second Quarter:
The decrease in consolidated earnings for the second quarter 2011 compared to 2010 was attributable to a $23 million decrease in earnings in 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"). Please refer to "Electric Utility Segment Second Quarter" beginning on page 3 for additional information.
Common stock outstanding for the quarter averaged 139 million shares, approximately 2 percent higher than the same period in 2010.
Great Plains Energy's liquidity position remained strong during the quarter. As of June 30, 2011, approximately $625 million of available capacity remained on the Company's $1.25 billion of revolving credit facilities. In May, Great Plains Energy issued $350 million of 10-year senior notes at a rate of 4.85%. Proceeds were loaned on an intercompany basis to GMO, which used the funds to repay outstanding short-term debt.
Great Plains Energy Year-to-Date:
For the first six months of 2011, earnings were $45.0 million or $0.32 per share, compared to $83.8 million or $0.61 per share the same period last year.
On a per-share basis, the primary factors negatively impacting the first six months compared to the previous year were as follows:
Shares of common stock outstanding averaged 138.6 million shares, approximately 1 percent higher than the same period in 2010.
Electric Utility Segment Second Quarter:
Quarterly net income for the Electric Utility segment was $49.0 million or $0.35 per share compared to $71.7 million or $0.53 per share in 2010.
Key drivers influencing the segment results included the following:
The above factors were partially offset by about $15 million in new KCP&L retail rates which became effective in December 2010 in Kansas and May 2011 in Missouri;
Overall retail megawatt-hour ("MWh") sales declined 2.5 percent in the quarter compared to the 2010 period due to less favorable weather and lower customer consumption.
Generation fleet availability in the quarter was lower compared to 2010 primarily as a result of the Wolf Creek refueling outage. That shutdown began late in the first quarter 2011 and was extended for additional repairs, with the unit returning to 100 percent load in early July 2011. Plant availability was also impacted by a scheduled outage at Iatan 1 which began in the middle of March 2011 and concluded in early May 2011.
Electric Utility Segment Year-to-Date:
Year-to-date income for the Electric Utility segment was $56.0 million or $0.40 per share compared to $96.6 million or $0.71 per share in 2010.
Contributing factors to the negative comparative results versus 2010 were the following:
The above factors were partially offset by two primary positive drivers:
Overall retail megawatt-hour MWh sales decreased approximately 2 percent for the period due primarily to lower weather-normalized customer consumption.
Coal fleet availability in the first six months of 2011 was impacted by the Iatan 1 outage and a planned maintenance outage at LaCygne 1, which began in the fourth quarter of 2010 and concluded in March 2011. These planned outages combined with the outage at Wolf Creek contributed to a lower generation fleet availability for the first half of 2011 compared to the same period last year.
Other Category Second Quarter and Year-to-Date:
Results for the Other category primarily include unallocated corporate charges, GMO non-regulated operations, non-controlling interest and preferred dividends. For the 2011 second quarter, the Other category reflected a loss of $6.0 million or $0.04 per share compared to a loss of $7.7 million or $0.06 per share in 2010. The primary contributor to the reduced loss was a $2 million tax benefit from the settlement of Great Plains Energy's 2006-2008 tax audit.
For the first six months of 2011, the Other category generated a loss of $11.0 million or $0.08 per shared compared to a loss of $12.8 million or $0.10 per share in 2010.
The Company has posted its 2011 Second Quarter Form 10-Q, as well as supplemental financial information related to the second quarter on its website, www.greatplainsenergy.com.
Investment Community Meeting Webcast Information:
The Company will host a live meeting Monday, August 8, 2011, beginning at 9:00 a.m. EDT at the Waldorf-Astoria Hotel in New York City for members of the investment community. At the meeting, senior Great Plains Energy executives willreview the Company's strategic direction, the recently-concluded Comprehensive Energy Plan, 2011 and 2012 earnings guidance and second quarter 2011 financial and operating results. The meeting will be accessible via live audio webcast (in "listen-only" mode), along with the accompanying presentation slides, on the investor relations page of Great Plains Energy's website at www.greatplainsenergy.com.
In addition to the above-referenced meeting materials, supplemental financial information, the earnings press release and, when available, a replay and transcript of the webcast may be accessed at www.greatplainsenergy.com.
About The Companies:
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.
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 below.
SOURCE: Great Plains Energy
Great Plains Energy
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