Great Plains Energy (NYSE: GXP) today announced second quarter
2016 earnings of $31.6 million or $0.20 per share of average common
stock outstanding, compared with second quarter 2015 earnings of
$44.0 million or $0.28 per share. For the first six months of 2016,
earnings were $57.6 million or $0.37 per share, compared to $62.5
million or $0.40 per share for the same period in 2015.
Great Plains Energy’s adjusted earnings (non-GAAP), which
excludes certain costs, expenses, and losses resulting from the
anticipated acquisition of Westar, were $85.6 million or $0.55 per
share in the second quarter of 2016, compared with second quarter
2015 earnings of $44.0 million or $0.28 per share. For the first
six months of 2016, Great Plains Energy’s adjusted earnings
(non-GAAP) were $111.6 million or $0.72 per share, compared with
earnings of $62.5 million or $0.40 per share for the same period in
2015. Adjusted earnings are reconciled to GAAP earnings on page 2
and 3. The Company is also reaffirming its 2016 adjusted earnings
(non-GAAP) guidance range of $1.65 to $1.80 per share.
“Our company delivered solid financial and operational
performance for the quarter," said Terry Bassham, chairman and
chief executive officer of Great Plains Energy. “We continue
to optimize the performance of our business. Our generating
units performed well during the extreme heat conditions
that blanketed our region, where temperatures in June were the
warmest since 1980.”
In addition to strong operational performance, the Company
continues to make progress on the Westar acquisition. The Company
recently made several required regulatory filings and is on track
to close the transaction in the spring of 2017.
Great Plains Energy Second
Quarter:
GREAT PLAINS ENERGY INCORPORATED Consolidated Earnings
and Earnings Per Share Three Months Ended June 30
(Unaudited)
Earnings per Great Earnings Plains
Energy Share 2016
2015 2016 2015
GAAP Earnings (millions) Electric Utility $
88.3 $ 46.4 $ 0.57 $ 0.30 Other (56.3 )
(2.0 ) (0.37 ) (0.02 )
Net income 32.0 44.4 0.20 0.28 Preferred dividends
(0.4 ) (0.4 ) -
- Earnings available for common
shareholders $ 31.6 $ 44.0
$ 0.20 $ 0.28
Reconciliation of GAAP to Non-GAAP Earnings available
for common shareholders $ 31.6 $ 44.0 $ 0.20 $ 0.28 Costs to
achieve the anticipated acquisition of Westar: Operating expenses
(a) 5.0 - Financing (b) 4.7 - Mark-to-market impacts of interest
rate swaps (c) 77.0 - Income tax benefit (32.7
) -
Adjusted Earnings (Non-GAAP) $ 85.6
$ 44.0 $ 0.55
$ 0.28
Adjusted Earnings (Non-GAAP)
Electric Utility $ 88.3 $ 46.4 $ 0.57 $ 0.30 Other
(2.7 ) (2.4 )
(0.02 ) (0.02 ) Adjusted Earnings (Non-GAAP)
$ 85.6 $ 44.0
$ 0.55 $ 0.28 (a) Reflects
legal, advisory and consulting fees. (b) Reflects fees incurred to
finance the anticipated acquisition of Westar, including fees for a
bridge term loan facility. (c) Reflects the mark-to-market loss on
interest rate swaps entered into in connection with financing the
anticipated acquisition of Westar.
On a per-share basis, drivers for the increase in second quarter
2016 adjusted earnings (non-GAAP) per share compared to the same
period in 2015 included the following:
- Approximately $0.14 of new Missouri and
Kansas retail rates that became effective September 29, 2015 and
October 1, 2015, respectively;
- An approximately $0.11 increase due to
warmer weather driven by a 31 percent increase in cooling degree
days compared to the second quarter 2015; and
- An approximately $0.07 increase in
other margin primarily due to new cost recovery mechanisms and an
increase in the recovery of throughput disincentive associated with
our energy efficiency programs.
These drivers were partially offset by the following:
- An estimated $0.03 impact from a
decrease in weather-normalized retail demand; and
- $0.02 of other items including higher
depreciation and amortization and general taxes.
Overall retail MWh sales were up 3.4 percent in the second
quarter 2016, compared to the 2015 period with the increase driven
by weather. The favorable weather impact in the second quarter
2016, when compared to normal, was approximately $0.08 per
share.
Great Plains Energy
Year-to-Date:
GREAT PLAINS ENERGY INCORPORATED Consolidated Earnings
and Earnings Per Share Year to Date June 30 (Unaudited)
Earnings per Great Earnings Plains Energy
Share 2016
2015 2016 2015
GAAP Earnings (millions) Electric Utility $
117.3 $ 67.3 $ 0.76 $ 0.43 Other (58.9 )
(4.0 ) (0.39 )
(0.03 ) Net income 58.4 63.3 0.37 0.40 Preferred dividends
(0.8 ) (0.8 )
- - Earnings available
for common shareholders $ 57.6 $
62.5 $ 0.37 $ 0.40
Reconciliation of GAAP to Non-GAAP Earnings available
for common shareholders $ 57.6 $ 62.5 $ 0.37 $ 0.40 Costs to
achieve acquisition of Westar: Operating expenses (a) 5.0 -
Financing (b) 4.7 - Mark-to-market impacts of interest rate swaps
(c) 77.0 - Income tax benefit (32.7 )
-
Adjusted Earnings (Non-GAAP) $ 111.6
$ 62.5 $ 0.72 $
0.40
Adjusted Earnings (Non-GAAP) Electric
Utility $ 117.3 $ 67.3 $ 0.76 $ 0.43 Other
(5.7 ) (4.8 ) (0.04 )
(0.03 ) Adjusted Earnings (Non-GAAP)
$ 111.6 $ 62.5 $
0.72 $ 0.40 (a) Reflects legal,
advisory and consulting fees. (b) Reflects fees incurred to finance
the anticipated acquisition of Westar, including fees for a bridge
term loan facility. (c) Reflects the mark-to-market loss on
interest rate swaps entered into in connection with financing the
anticipated acquisition of Westar.
On a per-share basis, drivers for the increase in year to date
2016 adjusted earnings (non-GAAP) per share compared to the same
period in 2015 included the following:
- Approximately $0.26 of new Missouri and
Kansas retail rates that became effective September 29, 2015 and
October 1, 2015, respectively;
- An approximately $0.04 increase due to
warmer second quarter 2016 weather driven by a 31 percent increase
in cooling degree days partially offset by mild first quarter 2016
weather with a 16 percent decrease in heating degree days compared
to 2015; and
- An approximately $0.16 increase in
other margin primarily due to new cost recovery mechanisms and an
increase in the recovery of throughput disincentive associated with
our energy efficiency programs.
These drivers were partially offset by the following:
- An estimated $0.03 impact from a
decrease in weather-normalized retail demand;
- $0.02 increase in other operating and
maintenance expense;
- $0.03 increase in depreciation and
amortization due to capital investments being placed into service;
and
- $0.06 of other items including higher
general taxes and interest expense.
Overall retail MWh sales were down 1.2 percent compared to the
2015 period with the decrease driven by weather. The favorable
weather impact in the first six months of 2016, when compared to
normal, was approximately $0.02 per share.
On a weather-normalized basis, for the 12 months ended June 30,
2016, retail MWh sales decreased an estimated 0.4 percent, net of
an estimated 0.7 percent impact from Missouri Energy Efficiency
Investment Act, compared to the 2015 period.
Adjusted Earnings
(Non-GAAP)
In addition to earnings available for common shareholders, Great
Plains Energy's management uses adjusted earnings (non-GAAP) to
evaluate earnings without the impact of costs to achieve the
anticipated acquisition of Westar. Adjusted earnings (non-GAAP)
exclude certain costs, expenses, gains and losses resulting from
the anticipated acquisition. This information is intended to
enhance an investor's overall understanding of results. Adjusted
earnings (non-GAAP) is used internally to measure performance
against budget and in reports for management and the Board of
Directors. Adjusted earnings (non-GAAP) is a financial measure that
is not calculated in accordance with GAAP and may not be comparable
to other companies’ presentations or more useful than the GAAP
information.
Great Plains Energy will post its 2016 Second Quarter Form
10-Q, as well as supplemental financial information related to the
second 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, August 5, 2016, to review the Company’s 2016 second
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 44952644.
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 August 12, 2016, by dialing (855)
859-2056 (U.S./Canada) or (404) 537-3406 (international). The pass
code is 44952644.
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 report that are not based on historical
facts are forward-looking, may involve risks and uncertainties, and
are intended to be as of the date when made. Forward-looking
statements include, but are not limited to, statements relating to
Great Plains Energy’s proposed acquisition of Westar Energy, Inc.
(Westar), 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 derivatives and hedges, nuclear decommissioning
trust and pension plan assets and costs; impairments of long-lived
assets or goodwill; credit ratings; inflation rates; effectiveness
of risk management policies and procedures and the ability of
counterparties to satisfy their contractual commitments; impact of
terrorist acts, including, but not limited to, cyber terrorism;
ability to carry out marketing and sales plans; weather conditions
including, but not limited to, weather-related damage and their
effects on sales, prices and costs; cost, availability, quality and
deliverability of fuel; the inherent uncertainties in estimating
the effects of weather, economic conditions and other factors on
customer consumption and financial results; ability to achieve
generation goals and the occurrence and duration of planned and
unplanned generation outages; delays in the anticipated in-service
dates and cost increases of generation, transmission, distribution
or other projects; Great Plains Energy's ability to successfully
manage transmission joint venture or to integrate the transmission
joint ventures of Westar; the inherent risks associated with the
ownership and operation of a nuclear facility including, but not
limited to, environmental, health, safety, regulatory and financial
risks; workforce risks, including, but not limited to, increased
costs of retirement, health care and other benefits; the ability of
Great Plains Energy to obtain the regulatory and shareholder
approvals necessary to complete the anticipated acquisition of
Westar; the risk that a condition to the closing of the anticipated
acquisition of Westar or the committed debt or equity financing may
not be satisfied or that the anticipated acquisition may fail to
close; the failure to obtain, or to obtain on favorable terms, any
equity, debt or equity-linked financing necessary to complete or
permanently finance the anticipated acquisition of Westar and the
costs of such financing; the outcome of any legal proceedings,
regulatory proceedings or enforcement matters that may be
instituted relating to the anticipated acquisition of Westar; the
costs incurred to consummate the anticipated acquisition of Westar;
the possibility that the expected value creation from the
anticipated acquisition of Westar will not be realized, or will not
be realized within the expected time period; the credit ratings of
Great Plains Energy following the anticipated acquisition of
Westar; disruption from the anticipated acquisition of Westar
making it more difficult to maintain relationships with customers,
employees, regulators or suppliers; the diversion of management
time and attention on the proposed transactions; and other risks
and uncertainties.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160804006527/en/
Great Plains EnergyInvestors:Calvin Girard,
816-654-1777Senior Manager, Investor
Relationscalvin.girard@kcpl.comorMedia:Katie McDonald,
816-556-2365Senior Director, Corporate
Communicationskatie.mcdonald@kcpl.com
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