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Great Plains Energy Reports Third Quarter 2012 Results

Stocks in this article: GXP

Great Plains Energy (NYSE: GXP) today announced third quarter 2012 earnings of $145.8 million or $0.95 per share of average common stock outstanding, compared with third quarter 2011 earnings of $126.1 million or $0.91 per share. Favorable weather in the quarter, including the hottest July on record, and lower interest expense were factors in the quarter over quarter increase. The increase was partially offset by a meaningful decrease in weather-normalized demand and dilution from a higher number of shares outstanding.

For the first nine months of 2012, earnings were $194.0 million or $1.34 per share of average common stock outstanding, compared with $171.1 million or $1.24 per share in 2011. Great Plains Energy also announced it is narrowing its 2012 earnings guidance rang e from $1.20 to $1.40 per share to $1.25 to $1.35 per share.

“The solid results for the third quarter reflect the continued effort of our employees to deliver reliable service while managing costs during a period where customer demand trends have been soft,” commented Terry Bassham, President and CEO of Great Plains Energy. “While we continue to see positive economic signs across our region, load growth has been weak, which makes it imperative that we continue to manage our operating costs while making investments that provide long-term value to our customers and shareholders.”

The Company has also continued its focus on timely cost recovery and achievement of successful outcomes in its pending general rate cases. Stipulation and agreements for certain issues were approved in the Missouri rate cases and final orders on the remaining issues are anticipated by January 2013. A non-unanimous stipulation and agreement for certain issues has been filed in the Kansas rate case, subject to approval by the Kansas Corporation Commission. A final order is due by December 17, 2012 in Kansas.

Great Plains Energy Third Quarter:

Consolidated Earnings and Earnings Per Share
Three Months Ended September 30
          Earnings per Great
Earnings Plains Energy Share
        2012         2011           2012       2011  
Electric Utility $ 141.9 $ 133.9 $ 0.93 $ 0.97
Other   4.5         (7.3 )         0.02       (0.06 )
Net income 146.4 126.6 0.95 0.91
Less: Net income attributable to noncontrolling interest   (0.2 )       (0.1 )         -       -  
Net income attributable to Great Plains Energy 146.2 126.5 0.95 0.91
Preferred dividends       (0.4 )       (0.4 )         -       -  
Earnings available for common shareholders     $ 145.8       $ 126.1         $ 0.95     $ 0.91  

On a per-share basis, the primary drivers contributing to the $0.04 increase during the quarter versus 2011 were the following:

  • The 2011 results included a $0.09 loss from the effect of coal conservation activities and other related expenses due to Missouri River flooding;
  • An estimated impact of $0.06 from favorable weather;
  • An approximate $0.06 decrease in interest expense primarily due to the retirement of $500 million of 11.875 percent senior notes that matured in early July 2012 and a lower interest rate on the refinanced debt that was underlying Great Plains Energy’s Equity Units; and
  • A combined impact of $0.01 from other items.

The above factors were mostly offset by the following:

  • An estimated $0.09 from lower weather-normalized demand; and
  • Approximately $0.09 due to dilution from the issuance of approximately 17.1 million shares of common stock in June 2012 to settle obligations under the purchase contracts underlying the Company’s Equity Units.

On a segment basis, the increase in consolidated earnings for the third quarter 2012 compared to 2011 was attributable to an $8 million increase at 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), and the results in the Other category improving from a $7.8 million loss to earnings of $3.9 million. For additional information, please refer to “Electric Utility Segment Third Quarter” and “Other Category Third Quarter and Year-to-Date” on pages 4 and 6, respectively.

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