- Westar Acquisition on Track for Second
Quarter 2017 Completion
Great Plains Energy (NYSE: GXP) today announced fourth quarter
2016 earnings of $83.2 million or $0.39 per share of average common
stock outstanding, compared with fourth quarter 2015 earnings of
$22.5 million or $0.15 per share. Great Plains Energy also reported
full-year 2016 earnings of $273.5 million or $1.61 per share,
compared to $211.4 million or $1.37 per share in 2015.
Great Plains Energy’s adjusted earnings (non-GAAP) and adjusted
earnings per share (non-GAAP) exclude certain costs, expenses,
gains, losses and the per share dilutive effect of equity issuances
resulting from the anticipated acquisition of Westar. Adjusted
earnings (non-GAAP) and adjusted earnings per share (non-GAAP) were
$20.2 million and $0.13, respectively, in the fourth quarter of
2016 compared with $22.5 million and $0.15, respectively, in the
fourth quarter of 2015. For the full-year 2016, Great Plains
Energy’s adjusted earnings (non-GAAP) and adjusted earnings per
share (non-GAAP) were $286.0 million and $1.85, respectively,
compared with $211.4 million and $1.37, respectively, in 2015.
Adjusted earnings (non-GAAP) and adjusted earnings per share
(non-GAAP) are reconciled to GAAP earnings in the financial tables
included with this release.
“In 2016, we delivered solid financial and operating performance
while working to exceed customer expectations. Through our
anticipated acquisition of Westar, we are shaping the region’s
bright energy future by working to keep our power local, reliable
and affordable,” said Terry Bassham, chairman and chief executive
officer of Great Plains Energy.
Great Plains Energy also announced it will not be issuing 2017
earnings per share guidance due to the anticipated closing of the
Westar acquisition, which remains on-track for completion in the
second quarter of 2017. The Company continues to target annualized
2016 to 2020 base plan and post-acquisition earnings per share and
dividend growth targets:
Base Plan Post-Transaction
Earnings Per Share Growth Target(a) 4% - 5%
6% - 8% Dividend Growth Target 5% - 7%
5% - 7%
(a) Based on our original 2016 earnings
per share guidance range of $1.65 - $1.80
Great Plains Energy Fourth
Quarter:
GREAT PLAINS ENERGY INCORPORATED Consolidated Earnings
and Diluted Earnings Per Share Three Months Ended December
31 (Unaudited)
Earnings per Great Earnings Plains Energy
Share 2016
2015 2016 2015
GAAP Earnings (millions) Electric Utility $
13.7 $ 27.4 $ 0.06 $ 0.18 Other 84.3
(4.5 ) 0.40
(0.03 ) Net income 98.0 22.9 0.46 0.15 Preferred dividends
(14.8 ) (0.4 )
(0.07 ) - Earnings available for
common shareholders $ 83.2 $
22.5 $ 0.39 $ 0.15
Reconciliation of GAAP to Non-GAAP Earnings available for
common shareholders $ 83.2 $ 22.5 $ 0.39 $ 0.15 Costs to achieve
acquisition of Westar: Operating expenses, pre-tax (a) 14.8 - 0.10
- Interest charges, pre-tax (b) 16.9 - 0.10 - Mark-to-market
impacts of interest rate swaps, pre-tax (c) (158.1 ) - (1.02 ) -
Interest income, pre-tax (d) (3.2 ) - (0.02 ) - Income tax expense
(e) 51.8 - 0.33 - Preferred stock (f) 14.8 - 0.10 - Dilutive impact
of October 2016 share issuance (g) n/a
n/a 0.15
- Adjusted Earnings (Non-GAAP)
$ 20.2 $ 22.5 $
0.13 $ 0.15
Average Shares
Outstanding (millions) Shares used in calculating diluted
earnings per share 214.2 154.9 Adjustment for October 2016 share
issuance (g) (59.2 ) - Shares used in calculating adjusted earnings
per share (Non-GAAP)
155.0 154.9
(a)
Reflects legal, advisory and consulting
fees and certain severance expenses.
(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 gain on
interest rate swaps entered into in connection with financing the
anticipated acquisition of Westar.
(d)
Reflects interest income earned on the
proceeds from Great Plains Energy's October 2016 equity
offerings.
(e)
Reflects an income tax effect calculated
at a 38.9% statutory rate, with the exception of certain
non-deductible legal and financing fees.
(f)
Reflects reductions to earnings available
for common shareholders related to preferred stock dividend
requirements for Great Plains Energy's 7.00% Series B Mandatory
Convertible Preferred Stock issued in October 2016.
(g)
Reflects the average share impact of Great
Plains Energy's issuance of 60.5 million shares of common stock in
October 2016.
On a per-share basis, drivers for the decrease in fourth quarter
2016 adjusted earnings (non-GAAP) per share compared to the same
period in 2015 included the following:
- An estimated $0.04 impact from a
decrease in weather-normalized retail demand;
- $0.06 increase in other operating and
maintenance expense;
- $0.01 of higher depreciation and
amortization;
- $0.01 of higher general taxes; and
- $0.02 of other items.
These drivers were partially offset by the following:
- An estimated $0.06 increase due to
colder weather driven by a 9 percent increase in heating degree
days compared to the fourth quarter 2015; and
- A $0.06 impact from Missouri Energy
Efficiency Investment Act (MEEIA) performance incentive recognized
in 2016 related to the achievement of certain energy savings levels
in the first cycle of our energy efficiency programs.
Overall retail MWh sales were up 1.6 percent in the fourth
quarter 2016, compared to the 2015 period with the increase driven
by weather. The weather impact in the fourth quarter 2016, when
compared to normal, was flat.
Great Plains Energy
Full-Year:
GREAT PLAINS ENERGY INCORPORATED Consolidated Earnings
and Diluted Earnings Per Share Year Ended December 31
(Unaudited)
Earnings per Great Earnings Plains Energy
Share 2016
2015 2016 2015
GAAP Earnings (millions) Electric Utility $
292.1 $ 223.8 $ 1.72 $ 1.45 Other (2.1 )
(10.8 ) (0.01 )
(0.07 ) Net income 290.0 213.0 1.71 1.38 Preferred dividends and
redemption premium (16.5 )
(1.6 ) (0.10 )
(0.01 ) Earnings available for common shareholders $
273.5 $ 211.4 $ 1.61
$ 1.37
Reconciliation of GAAP to
Non-GAAP Earnings available for common shareholders $ 273.5 $
211.4 $ 1.61 $ 1.37 Costs to achieve acquisition of Westar:
Operating expenses, pre-tax (a) 34.2 - 0.22 - Interest charges,
pre-tax (b) 35.9 - 0.24 - Mark-to-market impacts of interest rate
swaps, pre-tax (c) (79.3 ) - (0.51 ) - Interest income, pre-tax (d)
(3.2 ) - (0.02 ) - Income tax expense (e) 9.5 - 0.06 - Preferred
stock (f) 15.4 - 0.10 - Dilutive impact of October 2016 share
issuance (g) n/a
n/a 0.15 -
Adjusted Earnings (Non-GAAP) $ 286.0
$ 211.4 $ 1.85
$ 1.37
Average Shares Outstanding (millions)
Shares used in calculating diluted earnings per share 169.8 154.8
Adjustment for October 2016 share issuance (g) (14.9 ) - Shares
used in calculating adjusted earnings per share (Non-GAAP)
154.9
154.8
(a)
Reflects legal, advisory and consulting
fees and certain severance expenses.
(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 gain on
interest rate swaps entered into in connection with financing the
anticipated acquisition of Westar.
(d)
Reflects interest income earned on the
proceeds from Great Plains Energy's October 2016 equity
offerings.
(e)
Reflects an income tax effect calculated
at a 38.9% statutory rate, with the exception of certain
non-deductible legal and financing fees.
(f)
Reflects reductions to earnings available
for common shareholders related to preferred stock dividend
requirements for Great Plains Energy's 7.00% Series B Mandatory
Convertible Preferred Stock issued in October 2016 and the
redemption of cumulative preferred stock in August 2016, including
the redemption premium.
(g)
Reflects the average share impact of Great
Plains Energy's issuance of 60.5 million shares of common stock in
October 2016.
On a per-share basis, drivers for the increase in full-year 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 $0.15 increase due to
warmer weather driven by a 16 percent increase in cooling degree
days in 2016 compared to 2015;
- An estimated $0.18 increase due to new
cost recovery mechanisms and an increase in the recovery of
throughput disincentive associated with our energy efficiency
programs; and
- A $0.06 impact from MEEIA performance
incentive recognized in 2016 related to the achievement of certain
energy savings levels in the first cycle of our energy efficiency
programs.
These drivers were partially offset by the following:
- An estimated $0.04 impact from a
decrease in weather-normalized retail demand;
- $0.11 increase in other operating and
maintenance expense;
- $0.06 increase in depreciation and
amortization;
- $0.05 of higher general taxes; and
- $0.09 of other items including interest
expense.
Overall retail MWh sales were up 0.7 percent compared to the
2015 period with the increase driven by weather. The favorable
weather impact in the full-year 2016, when compared to normal, was
approximately $0.06 per share.
On a weather-normalized basis, full-year 2016, retail MWh sales
decreased an estimated 0.8 percent, net of an estimated 0.8 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) and
adjusted earnings per share (non-GAAP) to evaluate earnings and
earnings per share without the impact of the anticipated
acquisition of Westar. Adjusted earnings (non-GAAP) and adjusted
earnings per share (non-GAAP) exclude certain costs, expenses,
gains, losses and the per share dilutive effect of equity issuances
resulting from the anticipated acquisition. This information is
intended to enhance an investor's overall understanding of results.
Adjusted earnings (non-GAAP) and adjusted earnings per share
(non-GAAP) are used internally to measure performance against
budget and in reports for management and the Board of Directors.
Adjusted earnings (non-GAAP) and adjusted earnings per share
(non-GAAP) are financial measures that are 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 Form 10-K, as well as
supplemental financial information related to the fourth quarter
and full-year on its website,
www.greatplainsenergy.com.
Earnings Webcast
Information:
An earnings conference call and webcast is scheduled for 9:00
a.m. ET Friday, February 24, 2017, to review the Company’s 2016
fourth quarter and full-year 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 54300457.
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 March 3, 2017, by dialing (855) 859-2056
(U.S./Canada) or (404) 537-3406 (international). The pass code is
54300457.
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 its transmission joint ventures or to integrate or
restructure 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 and the terms of those approvals; 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/20170223006760/en/
Great Plains Energy
Contacts:Investors: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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