- Company Increased Quarterly Dividend on
Common Stock
- Westar Acquisition on Track for Spring
2017 Completion
Great Plains Energy (NYSE: GXP) today announced third quarter
2016 earnings of $132.7 million or $0.86 per share of average
common stock outstanding, compared with third quarter 2015 earnings
of $126.4 million or $0.82 per share. For the first nine months of
2016, earnings were $190.3 million or $1.23 per share, compared to
$188.9 million or $1.22 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 $154.2 million or $1.00 per
share in the third quarter of 2016, compared with third quarter
2015 earnings of $126.4 million or $0.82 per share. For the first
nine months of 2016, Great Plains Energy’s adjusted earnings
(non-GAAP) were $265.8 million or $1.72 per share, compared with
earnings of $188.9 million or $1.22 per share for the same period
in 2015. Adjusted earnings are reconciled to GAAP earnings on page
2 and 3. The Company also announced it is increasing its 2016
adjusted earnings (non-GAAP) guidance range of $1.65 to $1.80 per
share to $1.75 to $1.85 per share.
“We achieved several important milestones during the quarter
with respect to our acquisition with Westar, including receiving
shareholder approval from both companies and reaching an agreement
in Missouri that we believe allows us to move forward with greater
certainty. We remain on-track to complete the acquisition in the
spring of 2017 and are proud of our ongoing operational performance
during this busy time,” said Terry Bassham, chairman and chief
executive officer of Great Plains Energy.
Earlier this week, the Company announced a 5 percent annualized
dividend increase from $1.05 to $1.10 per share.
Great Plains Energy Third
Quarter:
GREAT PLAINS ENERGY INCORPORATEDConsolidated
Earnings and Earnings Per ShareThree Months Ended September
30(Unaudited)
Earnings per Great Earnings Plains Energy
Share 2016
2015
2016 2015
GAAP Earnings (millions)
Electric Utility $ 161.1 $ 129.1 $ 1.04 $ 0.83 Other (27.5 )
(2.3 )
(0.18 ) (0.01 ) Net income 133.6 126.8
0.86 0.82 Preferred dividends and redemption premium
(0.9 ) (0.4 )
- - Earnings
available for common shareholders $ 132.7
$ 126.4 $ 0.86
$ 0.82
Reconciliation of GAAP to
Non-GAAP Earnings available for common shareholders $ 132.7 $
126.4 $ 0.86 $ 0.82 Costs to achieve the anticipated acquisition of
Westar: Operating expenses (a) 14.4 - Financing (b) 14.3 -
Mark-to-market impacts of interest rate swaps (c) 1.8 - Income tax
benefit (9.6 ) - Redemption of cumulative preferred stock (d)
0.6 -
Adjusted
Earnings (Non-GAAP) $ 154.2 $
126.4 $ 1.00
$ 0.82
Adjusted Earnings (Non-GAAP) Electric
Utility $ 161.1 $ 129.1 $ 1.04 $ 0.83 Other (6.9 )
(2.7 )
(0.04 ) (0.01 ) Adjusted Earnings
(Non-GAAP) $ 154.2 $ 126.4
$ 1.00 $
0.82
(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.
(d)
Reflects reductions to earnings available
for common shareholders related to the redemption of cumulative
preferred stock, including the redemption premium.
On a per-share basis, drivers for the increase in third quarter
2016 adjusted earnings (non-GAAP) per share compared to the same
period in 2015 included the following:
- An estimated $0.18 from new Missouri
and Kansas retail rates that became effective September 29, 2015
and October 1, 2015, respectively;
- An estimated $0.05 increase due to
warmer weather driven by a 7 percent increase in cooling degree
days compared to the third quarter 2015;
- An estimated $0.03 impact from an
increase in weather-normalized retail demand; and
- An estimated $0.04 increase due to new
cost recovery mechanisms.
These drivers were partially offset by the following:
- $0.02 increase in other operating and
maintenance expense;
- $0.02 of higher depreciation and
amortization;
- $0.02 of higher general taxes driven
primarily by an increase in gross receipts tax; and
- $0.06 of other items.
Overall retail MWh sales were up 3.2 percent in the third
quarter 2016, compared to the 2015 period with the increase driven
by weather. The favorable weather impact in the third quarter 2016,
when compared to normal, was approximately $0.04 per share.
Great Plains Energy
Year-to-Date:
GREAT PLAINS ENERGY INCORPORATEDConsolidated
Earnings and Earnings Per ShareYear to Date September
30(Unaudited)
Earnings per Great
Earnings Plains Energy Share
2016 2015
2016 2015 GAAP
Earnings (millions) Electric Utility $ 278.4 $
196.4 $ 1.80 $ 1.27 Other (86.4 ) (6.3 )
(0.56 ) (0.05 ) Net income 192.0
190.1 1.24 1.22 Preferred dividends and redemption premium
(1.7 ) (1.2 ) (0.01 )
- Earnings available for common shareholders
$ 190.3 $ 188.9 $ 1.23
$ 1.22
Reconciliation of GAAP to
Non-GAAP Earnings available for common shareholders $ 190.3 $
188.9 $ 1.23 $ 1.22 Costs to achieve the anticipated acquisition of
Westar: Operating expenses (a) 19.4 - Financing (b) 19.0 -
Mark-to-market impacts of interest rate swaps (c) 78.8 - Income tax
benefit (42.3 ) - Redemption of cumulative preferred stock (d)
0.6 -
Adjusted Earnings (Non-GAAP) $ 265.8
$ 188.9 $ 1.72 $
1.22
Adjusted Earnings (Non-GAAP) Electric Utility $
278.4 $ 196.4 $ 1.80 $ 1.27 Other (12.6 )
(7.5 ) (0.08 ) (0.05 )
Adjusted Earnings (Non-GAAP) $ 265.8 $ 188.9
$ 1.72 $ 1.22
(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.
(d)
Reflects reductions to earnings available
for common shareholders related to the redemption of cumulative
preferred stock, including the redemption premium.
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:
- An estimated $0.44 from new Missouri
and Kansas retail rates that became effective September 29, 2015
and October 1, 2015, respectively;
- An estimated $0.09 increase due to
warmer weather driven by a 13 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 estimated $0.19 increase 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:
- $0.04 increase in other operating and
maintenance expense;
- $0.04 increase in depreciation and
amortization;
- $0.05 of higher general taxes driven
primarily by an increase in gross receipts tax; and
- $0.09 of other items including interest
expense.
Overall retail MWh sales were up 0.5 percent compared to the
2015 period with the increase driven by weather. The favorable
weather impact in the first nine months of 2016, when compared to
normal, was approximately $0.07 per share.
On a weather-normalized basis, for the 12 months ended September
30, 2016, retail MWh sales increased an estimated 0.3 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 provides its earnings guidance based on a
non-GAAP measure and does not provide the most directly comparable
GAAP measure or a reconciliation to the most directly comparable
GAAP measure due to the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliation, including certain costs, expenses, gains and losses
resulting from the anticipated acquisition of Westar that are
reflected in Great Plains Energy’s reconciliation of historic
adjusted earnings (non-GAAP) numbers found on pages 2 and 3, the
amounts of which, could be significant.
Great Plains Energy will post its 2016 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 4, 2016, to review the Company’s 2016
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 88638808.
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 11, 2016, by dialing (855)
859-2056 (U.S./Canada) or (404) 537-3406 (international). The pass
code is 88638808.
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, adjusted earnings guidance for 2016 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 its
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 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 financings 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/20161103006841/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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