Westar Merger on Track to Close Second
Quarter of 2018
Great Plains Energy (NYSE: GXP) today announced a fourth quarter
2017 loss of $100.1 million or $0.46 per share of average common
stock outstanding, compared with fourth quarter 2016 earnings of
$83.2 million or $0.39 per share. Great Plains Energy also
announced a full-year 2017 loss of $143.5 million or $0.67 per
share, compared to earnings of $273.5 million or $1.61 per share in
2016.
The decrease in earnings was largely driven by a number of
non-recurring impacts due to the anticipated merger with Westar
Energy and the impacts of U.S. federal income tax reform.
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 merger with Westar Energy and the
previous plan to acquire Westar as well as the impact of U.S.
federal income tax reform. Adjusted earnings (non-GAAP) and
adjusted earnings per share (non-GAAP) were $19.6 million and
$0.13, respectively, in the fourth quarter of 2017 compared with
$20.2 million and $0.13, respectively, in the fourth quarter of
2016. For the full-year of 2017, Great Plains Energy’s adjusted
earnings (non-GAAP) were $269.4 million or $1.74 per share,
compared with adjusted earnings (non-GAAP) of $286.0 million or
$1.85 per share for the full-year of 2016. Adjusted earnings
(non-GAAP) and adjusted earnings per share (non-GAAP) are
reconciled to GAAP earnings (loss) in the financial tables included
in this release.
“In 2017, we saw the strongest customer growth our service
territory has experienced in over a decade, leading to solid
performance for the year,” said Terry Bassham, chairman and chief
executive officer of Great Plains Energy.
Bassham continued, “Our proposed merger with Westar Energy
remains on track to close in the second quarter of this year.
Through integration planning efforts, we remain focused on
delivering on the unique opportunities this combination creates for
our region. The combined company is expected to have a highly
attractive earnings and dividend growth profile and will be
positioned to deliver exceptional value to our customers and the
communities we serve.”
Great Plains Energy Fourth
Quarter:
GREAT PLAINS ENERGY INCORPORATED Consolidated Earnings
(Loss) and Diluted Earnings (Loss) Per Share Three Months
Ended December 31 (Unaudited)
Earnings (Loss) per Great Earnings
(Loss) Plains Energy Share
2017 2016 2017
2016 GAAP Earnings (millions)
Electric Utility $ 9.5 $ 13.7 $ 0.04 $ 0.06 Other
(109.6 ) 84.3
(0.50 ) 0.40 Net income (loss) (100.1 )
98.0 (0.46 ) 0.46 Preferred dividends -
(14.8 ) -
(0.07 ) Earnings (loss) available for common
shareholders $ (100.1 ) $ 83.2
$ (0.46 ) $ 0.39
Reconciliation of GAAP to Non-GAAP Earnings (loss) available
for common shareholders $ (100.1 ) $ 83.2 $ (0.46 ) $ 0.39 Costs to
achieve the anticipated merger with Westar: Operating expenses,
pre-tax (a) 7.4 14.8 0.05 0.10 Financing, pre-tax (b) - 16.9 - 0.10
Mark-to-market impacts of interest rate swaps, pre-tax (c) (14.0 )
(158.1 ) (0.09 ) (1.02 ) Interest income, pre-tax (d) (2.7 ) (3.2 )
(0.02 ) (0.02 ) Income tax expense (benefit) (e) (1.3 ) 51.8 (0.01
) 0.33 Preferred stock (f) - 14.8 - 0.10 Impact of October 2016
share issuance (g) n/a n/a (0.18 ) 0.15 Impact of U.S. federal
income tax reform: Income tax expense (h)
130.3 -
0.84 - Adjusted Earnings
(Non-GAAP) $ 19.6 $ 20.2
$ 0.13 $ 0.13
Average
Shares Outstanding (millions) Shares used in calculating
diluted earnings (loss) per share 215.6 214.2 Adjustment for
October 2016 share issuance (g) (60.5 ) (59.2 ) Shares used in
calculating adjusted earnings per share (Non-GAAP)
155.1
155.0
(a)
Reflects legal, advisory and consulting fees and certain severance
expenses and are included in Costs to achieve the anticipated
merger with Westar on the consolidated statements of comprehensive
income (loss). (b) Reflects fees for a bridge term loan facility
and interest on Great Plains Energy's $4.3 billion senior notes and
are included in Interest charges on the consolidated statements of
comprehensive income (loss). (c) Reflects the mark-to-market
impacts of interest rate swaps and is included in Interest charges
and Non-operating income on the consolidated statements of
comprehensive income (loss). (d) Reflects interest income earned on
the proceeds from Great Plains Energy's October 2016 equity
offerings and March 2017 issuance of $4.3 billion senior notes and
is included in Non-operating income on the consolidated statements
of comprehensive income (loss). (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 Series B
Preferred Stock and redemption premiums associated with Series B
Preferred Stock and cumulative preferred stock and are included in
Preferred stock dividend requirements and redemption premium on the
consolidated statements of comprehensive income (loss). (g)
Reflects the average share impact of Great Plains Energy's issuance
of 60.5 million shares of common stock in October 2016. (h)
Reflects income tax expense associated with the revaluation of
deferred income taxes and other initial impacts resulting from the
enactment of U.S. federal income tax reform.
GAAP Earnings
On a per-share basis, drivers for the decrease in fourth quarter
2017 GAAP earnings per share compared to the same period in 2016
include $0.84 of income tax expense associated with the revaluation
of deferred income taxes and other initial impacts as a result of
the enactment of U.S. federal income tax reform and $0.01 of
additional costs to achieve the anticipated merger with Westar
Energy as detailed in the table above as well as the following
items under the heading Adjusted Earnings (non-GAAP).
Adjusted Earnings (non-GAAP)
On a per-share basis, fourth quarter 2017 adjusted earnings
(non-GAAP) per share compared to the same period in 2016 were flat
with a $0.03 decrease in other operating and maintenance expense
being offset by $0.02 of higher depreciation and amortization and
$0.01 of other items.
Overall retail megawatt hour sales were up 0.3 percent in the
fourth quarter 2017 compared to the 2016 period. The weather impact
in the fourth quarter 2017, when compared to normal, was flat.
Great Plains Energy
Full-Year:
GREAT PLAINS ENERGY INCORPORATED Consolidated Earnings
(Loss) and Diluted Earnings (Loss) Per Share Year Ended
December 31 (Unaudited)
Earnings (Loss) per Great Earnings
(Loss)
Plains Energy Share
2017 2016
2017 2016 GAAP Earnings
(millions) Electric Utility $ 256.9 $ 292.1 $ 1.19 $
1.72 Other (363.1 ) (2.1 )
(1.68 ) (0.01 ) Net income
(loss) (106.2 ) 290.0 (0.49 ) 1.71 Preferred dividends and
redemption premium (37.3 )
(16.5 ) (0.18 )
(0.10 ) Earnings (loss) available for common shareholders
$ (143.5 ) $ 273.5 $
(0.67 ) $ 1.61
Reconciliation of GAAP to
Non-GAAP Earnings (loss) available for common shareholders $
(143.5 ) $ 273.5 $ (0.67 ) $ 1.61 Costs to achieve the anticipated
merger with Westar: Operating expenses, pre-tax (a) 31.8 34.2 0.21
0.22 Financing, pre-tax (b) 85.5 35.9 0.55 0.24 Mark-to-market
impacts of interest rate swaps, pre-tax (c) (12.1 ) (79.3 ) (0.08 )
(0.51 ) Interest income, pre-tax (d) (22.8 ) (3.2 ) (0.15 ) (0.02 )
Loss on Series B Preferred Stock dividend make-whole provision,
pre-tax (e) 124.8 - 0.80 - Loss on extinguishment of debt, pre-tax
(f) 82.8 - 0.53 - Write-off of Series A deferred offering expenses,
pre-tax (g) 15.0 - 0.10 - Income tax expense (benefit) (h) (59.7 )
9.5 (0.37 ) 0.06 Preferred stock (i) 37.3 15.4 0.24 0.10 Impact of
October 2016 share issuance (j) n/a n/a (0.26 ) 0.15 Impact of U.S.
federal income tax reform: Income tax expense (k)
130.3 -
0.84 - Adjusted Earnings
(Non-GAAP) $ 269.4 $ 286.0
$ 1.74 $ 1.85
Average Shares Outstanding (millions) Shares used in
calculating diluted earnings (loss) per share 215.5 169.8
Adjustment for October 2016 share issuance (j) (60.5 ) (14.9 )
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
and are included in Costs to achieve the anticipated merger with
Westar on the consolidated statements of comprehensive income
(loss). (b) Reflects fees for a bridge term loan facility and
interest on Great Plains Energy's $4.3 billion senior notes and are
included in Interest charges on the consolidated statements of
comprehensive income (loss). (c) Reflects the mark-to-market
impacts of interest rate swaps and is included in Interest charges
and Non-operating income on the consolidated statements of
comprehensive income (loss). (d) Reflects interest income earned on
the proceeds from Great Plains Energy's October 2016 equity
offerings and March 2017 issuance of $4.3 billion senior notes and
is included in Non-operating income on the consolidated statements
of comprehensive income (loss). (e) Reflects the loss on the
settlement of the Series B Preferred Stock dividend make-whole
provisions and is included within Loss on Series B Preferred Stock
dividend make-whole provisions on the consolidated statements of
comprehensive income (loss). (f) Reflects the loss on
extinguishment of debt due to Great Plains Energy's redemption of
its $4.3 billion senior notes and is included within Loss on
extinguishment of debt on the consolidated statements of
comprehensive income (loss). (g) Reflects the write-off of deferred
offering fees as a result of the termination of the stock purchase
agreement for $750 million of Series A Preferred Stock and is
included within Non-operating expenses on the consolidated
statements of comprehensive income (loss). (h) Reflects an income
tax effect calculated at a 38.9% statutory rate, with the exception
of certain non-deductible legal and financing fees. (i) Reflects
reductions to earnings available for common shareholders related to
preferred stock dividend requirements for Great Plains Energy's
Series B Preferred Stock and redemption premiums associated with
Series B Preferred Stock and cumulative preferred stock and are
included in Preferred stock dividend requirements and redemption
premium on the consolidated statements of comprehensive income
(loss). (j) Reflects the average share impact of Great Plains
Energy's issuance of 60.5 million shares of common stock in October
2016. (k) Reflects income tax expense associated with the
revaluation of deferred income taxes and other initial impacts
resulting from the enactment of U.S. federal income tax reform.
GAAP Earnings
On a per-share basis, drivers for the decrease in full-year 2017
GAAP earnings per share compared to the same period in 2016 include
$1.33 of additional costs to achieve the anticipated merger with
Westar Energy and $0.84 of income tax expense from U.S. federal
income tax reform as detailed in the table above as well as the
following items under the heading Adjusted Earnings (non-GAAP).
Adjusted Earnings (non-GAAP)
On a per-share basis, drivers for the decrease in full-year 2017
adjusted earnings (non-GAAP) per share compared to the same period
in 2016 included the following:
- An approximate $0.21 decrease from
milder weather driven by a 16 percent decrease in cooling degree
days; and
- $0.10 of higher depreciation and
amortization.
These drivers were partially offset by the following:
- An estimated $0.13 impact from an
increase in weather-normalized retail demand;
- An approximate $0.03 increase in other
margin items; and
- A $0.04 decrease in other operating and
maintenance expense.
Overall retail megawatt hour sales were down 1.6 percent
compared to the 2016 period, with the decrease primarily driven by
weather. The unfavorable weather impact for the full year of 2017,
when compared to normal, was approximately $0.19 per share.
On a weather-normalized basis, full-year 2017, retail megawatt
sales increased 0.8 percent, net of an estimated 0.9 percent impact
from the Company’s energy efficiency programs, compared to the 2016
period.
Adjusted Earnings
(Non-GAAP)
In addition to earnings (loss) 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 merger with Westar Energy and the initial impact of
U.S. federal income tax reform. 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 merger and the previous
plan to acquire Westar Energy and the income tax expense associated
with the revaluation of deferred income taxes and other initial
impacts resulting from the enactment of U.S. federal income tax
reform in December 2017. 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 of Great Plains Energy.
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 2017 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 Thursday, February 22, 2018, to review the Company’s 2017
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 passcode is 7956928.
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 1, 2018, by dialing (855) 859-2056
(U.S./Canada) or (404) 537-3406 (international). The passcode is
7956928.
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 release 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
the anticipated merger transaction of Great Plains Energy and
Westar Energy, Inc.(Westar), including those that relate to the
expected financial and operational benefits of the merger to the
companies and their shareholders (including cost savings,
operational efficiencies and the impact of the anticipated merger
on earnings per share), the expected timing of closing, the outcome
of regulatory proceedings, cost estimates of capital projects,
dividend growth, share repurchases, balance sheet and credit
ratings, rebates to customers, employee issues 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, KCP&L and Westar; 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 that 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 and Westar's ability to
successfully manage and integrate their respective transmission
joint ventures; 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 and Westar to obtain the regulatory approvals
necessary to complete the anticipated merger or the imposition of
adverse conditions or costs in connection with obtaining regulatory
approvals; the risk that a condition to the closing of the
anticipated merger may not be satisfied or that the anticipated
merger may fail to close; the outcome of any legal proceedings,
regulatory proceedings or enforcement matters that may be
instituted relating to the anticipated merger; the costs incurred
to consummate the anticipated merger; the possibility that the
expected value creation from the anticipated merger will not be
realized, or will not be realized within the expected time period;
difficulties related to the integration of the two companies; the
credit ratings of the combined company following the anticipated
merger; disruption from the anticipated merger making it more
difficult to maintain relationships with customers, employees,
regulators or suppliers; the diversion of management time and
attention on the anticipated merger; and other risks and
uncertainties.
This list of factors is not all-inclusive because it is not
possible to predict all factors. Additional risks and uncertainties
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180221006484/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
Evergy (NYSE:EVRG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Evergy (NYSE:EVRG)
Historical Stock Chart
From Apr 2023 to Apr 2024