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Great Plains Energy Incorporated (GXP)

Q4 2010 Earnings Call

February 25, 2011 9:00 am ET


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M. Chesser - Chairman, Chief Executive Officer, Chairman of Executive Committee, Chairman of Kansas City Power & Light, Chairman of GMO, Chief Executive Officer of GMO and Chief Executive Officer of Kansas City Power & Light

James Shay - Chief Financial Officer and Senior Vice President of Finance & Strategic Planning

William Downey - President, Chief Operating Officer, Director, President of GMO, President of Kansas City Power & Light Company and Chief Operating Officer of KCP&L

Terry Bassham - Executive Vice President of Utility Operations - Kansas City Power & Light Company

Michael Cline - Vice President of Investor Relations and Treasurer


Michael Lapides - Goldman Sachs Group Inc.

Erica Piserchia - Wunderlich Securities Inc.

Paul Ridzon - KeyBanc Capital Markets Inc.



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Good morning. My name is Anika and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter Year End 2010 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Michael Cline, Vice President of Investor Relations and Treasurer.

Michael Cline

Thank you, Anika, and good morning. Welcome to Great Plains Energy’s 2010 Fourth Quarter and Year End Earnings Conference Call. Our senior executives presenting this morning are Mike Chesser, Chairman and CEO; Bill Downey, President and COO; Terry Bassham, Executive Vice President Utility Operations; and Jim Shay, Senior Vice President and CFO.

I must remind you of the inherent uncertainties in any forward-looking statements in our discussion this morning. Slide 2 and the disclosure in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations.

Before I hand the call to Mike, I wanted to mention that our webcast today incorporates an updated or revised look to many of our traditional slides, as well as one or two new ones. These changes reflected Investor Relations Team's ongoing efforts to incorporate the best practices into all of our materials, as well as incorporate input from you as to what you'd like to see and how can make our information clearer. So as always, we welcome any feedback that you may have.

I also want to remind everyone that we issued our earnings release and 2010 10-K after the market closed yesterday. They're available along with today's webcast slides and supplemental financial information regarding the quarter and full year 2010 on the main page of our website at With that, it's now my pleasure to introduce Mike Chesser.

M. Chesser

Thanks, Michael, and good morning, everyone. We appreciate you joining our call today. I hope you had the opportunity to read the press release we issued yesterday afternoon. We announced full year earnings per share of $1.53, which is in line with guidance we issued on the third quarter call. Jim is going to provide additional details on our 2010 numbers in his comments further.

From my perspective, 2010 was a very solid year financially for us, even excluding the considerable help that we got from weather throughout the year. In particular, I think our diligent efforts to manage cost across the organization had a very positive impact.

Also, as you know, in recent years we have provided annual guidance on our year end conference call. However, the Missouri rate cases will have a major impact on our 2011 results and those outcomes are not known at this time. Therefore, we're planning to wait to see to issue current year guidance until those results are available and we've had an opportunity to thoroughly evaluate their impact. We will consider providing 2012 guidance at that time also. In the absence of specific guidance on today's call, Jim will provide a few considerations for 2011 and some preliminary thoughts regarding 2012 in his section.

As we reflected on our many achievements in 2010 and the actions we've taken during the past several years to transform our company, a fitting theme, The Power of Progress, has emerged. We came into 2010 with both a long list of key priorities and a number of lingering uncertainties around our region's economy. We knew that our success will depend on how well we executed not only in our daily operations but also in our activities to complete our five-year comprehensive energy plan or CEP. And I believe we rose to that challenge.

Our most significant achievement was the completion last summer of Iatan 2, an 850-megawatt coal power plant unit featured on the slide. This nearly $2 billion construction project, the largest in our history, excluding the effects of inflation, created thousands of Missouri construction jobs and launched an asset that will provide efficient, affordable energy to customers for decades to come. Not only was the summer 2010 in-service date consistent with our regional C&P commitment, but we delivered the unit at a cost that is competitive with other plants constructed in this timeframe.

Following the end of construction of Iatan 2, the single remaining piece of the CEP is the Missouri regulatory approval to include the plant in our rates.

In November, the Kansas Corporation Commission issued its order in KCP&L's rate case. Our reaction to the order was mixed overall, as Bill will discuss in his comments. But nonetheless, we were very pleased with the commission's ruling that 99% of the project's total cost is prudent.

With the Kansas case completed, we know that many of you have been watching developments in KCP&L and GMO's rate cases in Missouri with a high degree interest. We recently concluded our hearings in those proceedings and believe we presented compelling arguments with respect to Iatan prudency, as well as other issues in the case.

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