f8keeideck.htm
|
SECURITIES
AND EXCHANGE COMMISSION
|
|
Washington,
D.C. 20549
|
|
|
|
FORM
8-K
|
|
|
|
Current
Report
|
|
|
|
Pursuant
to Section 13 or 15(d) of the
|
|
Securities
Exchange Act of 1934
|
|
|
|
|
|
Date
of Report (Date of earliest event reported): November 7,
2008
|
|
|
|
Commission
File
Number
|
|
Registrant,
State of Incorporation,
Address
and Telephone Number
|
|
I.R.S.
Employer
Identification
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
001-32206
|
|
GREAT
PLAINS ENERGY INCORPORATED
|
|
43-1916803
|
|
|
|
(A
Missouri Corporation)
|
|
|
|
|
|
1201
Walnut Street
|
|
|
|
|
|
Kansas
City, Missouri 64106
|
|
|
|
|
|
(816)
556-2200
|
|
|
|
|
|
|
|
|
|
|
|
NOT
APPLICABLE
|
|
|
|
(Former
name or former address,
if
changed since last report)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
000-51873
|
|
KANSAS
CITY POWER & LIGHT COMPANY
|
|
44-0308720
|
|
|
|
(A
Missouri Corporation)
|
|
|
|
|
|
1201
Walnut Street
|
|
|
|
|
|
Kansas
City, Missouri 64106
|
|
|
|
|
|
(816)
556-2200
|
|
|
|
|
|
|
|
|
|
|
|
NOT
APPLICABLE
|
|
|
|
|
|
(Former
name or former address,
if
changed since last report)
|
|
|
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
[ ]
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
|
|
|
[ ]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
|
|
[ ]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act
|
|
|
(17
CFR 240.14d-2(b))
|
|
|
|
|
[ ]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
This
combined Current Report on Form 8-K is being furnished by Great Plains Energy
Incorporated (Great Plains Energy) and Kansas City Power & Light Company
(KCP&L). KCP&L is a wholly owned subsidiary of Great Plains
Energy and represents a significant portion of its assets, liabilities,
revenues, expenses and operations. Thus, all information contained in
this report relates to, and is furnished by, Great Plains
Energy. Information that is specifically identified in this report as
relating solely to Great Plains Energy, such as its financial statements and all
information relating to Great Plains Energy’s other operations, businesses and
subsidiaries, including KCP&L Greater Missouri Operations Company, formerly
Aquila, Inc. (GMO), does not relate to, and is not furnished by,
KCP&L. KCP&L makes no representation as to that
information. Neither Great Plains Energy nor GMO has any obligation
in respect of KCP&L’s debt securities and holders of such securities should
not consider Great Plains Energy’s or GMO’s financial resources or results of
operations in making a decision with respect to KCP&L’s debt
securities. Similarly, KCP&L has no obligation in respect of
securities of Great Plains Energy or GMO.
|
Item
7.01
|
Regulation
FD Disclosure
|
From
November 9 through November 12, 2008, Great Plains Energy will participate in
meetings with investors at the 2008 EEI Financial Conference, and will make a
presentation scheduled for 7:30 a.m. Mountain Standard Time on November 11,
2008. An audio-only webcast link and the presentation slides will be
made available in the Investor Relations section of Great Plains Energy’s
website at www.greatplainsenergy.com.
A copy of the presentation slides to be used in the investor meetings and
presentation is attached hereto as Exhibit 99.1.
The
information under Item 7.01 and in Exhibit 99.1 hereto is being furnished and
shall not be deemed filed for the purpose of Section 18 of the Securities
Exchange Act of 1934, as amended. The information under Item 7.01 and
Exhibit 99.1 hereto shall not be incorporated by reference into any registration
statement or other document pursuant to the Securities Act of 1933, as amended,
unless otherwise indicated in such registration statement or other
document.
|
Item
9.01
|
Financial
Statements and Exhibits
|
|
|
|
|
(d) Exhibits
|
|
|
|
|
|
99.1
|
2008
EEI Financial Conference presentation slides (furnished and not deemed
filed for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended).
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
GREAT
PLAINS ENERGY INCORPORATED
|
|
|
|
|
|
/s/
Michael W. Cline
|
|
|
Michael
W. Cline
|
|
|
Vice
President-Investor Relations and
Treasurer
|
|
|
KANSAS
CITY POWER & LIGHT COMPANY
|
|
|
|
|
|
/s/
Michael W. Cline
|
|
|
Michael
W. Cline
|
|
|
Treasurer
|
Date:
November 7, 2008.
ex99_1.htm
Great
Plains Energy
2008
EEI Presentation
November
11, 2008
Exhibit
99.1
Mike
Chesser,
Chairman and CEO
1
Statements made
in this presentation 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, the outcome of regulatory
proceedings, cost estimates of the Comprehensive Energy Plan
and other
matters affecting future operations. In
connection with the safe harbor provisions of the Private
Securities
Litigation Reform Act of 1995, the registrants 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 the regional,
national and international markets, including but not limited
to regional and
national wholesale electricity markets; market perception of the energy
industry, Great Plains
Energy, Kansas City Power & Light (KCP&L), and
KCP&L Greater Missouri Operations Company (GMO); changes in
business
strategy, operations or development plans; 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 KCP&L and
GMO 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 pension plan assets and costs; 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; increased competition including, but not limited to,
retail
choice in the electric utility industry and the entry of new
competitors; ability to carry out marketing and sales
plans; weather
conditions including weather-related damage; cost, availability, quality and
deliverability of fuel;
ability to achieve generation planning goals and the
occurrence and duration of planned and unplanned
generation outages; delays
in the anticipated in-service dates and cost increases of additional
generating
capacity and environmental projects; nuclear operations; workforce
risks, including retirement compensation and
benefits costs; the ability to
successfully integrate KCP&L and GMO operations and the timing and amount
of
resulting synergy savings; and other risks and uncertainties. Other risk
factors are detailed from time to time in
Great Plains Energy’s and
KCP&L’s most recent quarterly reports on Form 10-Q or Annual Reports on Form
10-K
filed with the Securities and Exchange Commission. This
list of factors is not all-inclusive because it is not
possible to predict
all factors.
Forward Looking
Statement
2
üSale of
Strategic Energy in June
üClose of Aquila
Transaction in July
+
End
result is a strong
regional
utility with resources
focused
on success in
regulated
operations
Transforming
Transactions Completed
3
•
Solid Midwest electric utility - KCP&L
brand
•
Capable, experienced management team
•
Investment grade credit rating
•
Building a platform for long-term
earnings
growth
•
Annualized dividend of $1.66/share
*
Based on unaudited proforma financial statements filed in 8K dated August 13,
2008
Regulated
vertically integrated electric utility operations with:
• $7.3 billion in
assets 9/30/08
• $1.9 billion in
revenues YE 2007*
• $2.3 billion
market cap - NYSE:GXP
• Approx. 820,000
customers in
Kansas
and Missouri
• Low
retail utility rates
• Total
generation capacity of approximately
6,000
MWs
Great Plains
Energy
4
– We will be
challenged in 2009 by the same economic factors
impacting
others in the industry;
– We believe we
have the liquidity to weather difficulties in global
markets
and continue to be committed to the dividend;
– We are managing
those challenges by prudently reducing near-term
capital
expenditures while steadfastly living up to our commitments;
– We have a plan
to move all areas toward a Tier 1 cost structure;
– We will continue
to work diligently to effectively and constructively
manage
our regulatory relationships;
– We have an
experienced, talented senior management team to lead
the
company through difficult times; and
– Our
Path to Growth remains intact.
Great Plains
Energy - Positioned to
“Weather the Storm”
5
Mike
Chesser - CEO
37
years experience
Terry
Bassham - CFO
22
years experience
Bill
Downey - COO
37
years experience
John
Marshall - EVP
Utility
Operations
32
years experience
•Accounting
•Finance and
IR
•Risk
Management
•Strategic
Planning
•Internal
Audit
•Construction
•Regulatory
•Public
Affairs
•Business
Planning
•Utility
Operations
•Supply -
Generation
•Delivery -
T&D
•Corporate
Services
Officers average
23 years of industry experience
Direct
Reports’ Average
Years
of Industry Experience
17
years
23
years
20
years
Current
Key
Responsibilities
Experienced
Management Team
Aligned
to Succeed
6
2009
and beyond: Extend the platform
• Integrate Aquila
and deliver synergies
• Complete and
include Iatan 1 AQCS and GMO environmental projects in
rates
effective in 2009
• Complete Iatan
2
• Evaluate 400 MW
of additional wind
• Additional
environmental spending at LaCygne 1 and potentially LaCygne 2
and
Montrose
• Continue with
sound strategic planning to effectively meet future
generation
requirements and be an industry leader in energy efficiency
• Expected
dividend growth, with a traditional target payout ratio, to follow
A
Path to Growth
William
Downey,
President and COO
Kansas City Power &
Light
8
• Integration
progressing smoothly and synergy capture on target
• Customer
satisfaction and reliability remains strong
• Progress on
implementation of energy efficiency and demand
response
• KCP&L coal
units set monthly and quarterly records
Operations
Highlights
9
Impact
of unplanned
coal
outages in Q1
&Q2 2007
Impact
of unplanned
coal
outages in Q1 2008
Impact
of extended
nuclear
refueling outage
• For the period
July 14 - September 30, 2008, GMO
had
equivalent
availability of 94% and a capacity factor of 76%
KCP&L
Equivalent Availability /
Capacity
10
Construction
Update
• Iatan 1
AQCS
— Planned
completion January 2009; in-service February 2009
• Iatan
2
— Planned
completion summer 2010
— Planned cost
re-assessment to be completed in early 2009
• Sibley 3
SCR
— On schedule;
planned completion and in-service Q4 2008
•
LaCygne
— Significant
expenditures extended beyond 2010
•
Wind
— Continuing to
assess opportunities
11
• Fuel recovery
included in KCP&L-MO case only
• Key assets
requested to be included in rate base:
— Iatan 1
AQCS
— Sibley
SCR
— Crossroads
peaking unit and related transmission
— GMO interest in
environmental upgrades at Jeffrey Energy Center
• New rates
expected to be effective July 2009 in Kansas and August 2009 in
Missouri
Summary of Rate
Cases
Financial
Overview
Terry
Bassham, CFO
Executive Vice President
Finance & Strategic
Development
14
Earnings Per
Share By Segment
Includes
KCP&L for full period and GMO results for the period 7/14/08 -
9/30/08
15
Core
Earnings
Key
Earnings Drivers:
+ GMO
contribution of $18.6 million or $0.16 per share to 3Q 2008
+ Higher
KCP&L revenue driven by wholesale
+ Favorable
impact of $6.5 million from AFUDC
+ Lower KCP&L
purchased power volume, offset somewhat by higher prices
- Higher
KCP&L fuel and O&M costs
- Dilution
of $0.29 caused by shares issued in connection with GMO transaction
$74.1
$102.5
3Q
‘07
3Q
‘08
Includes
KCP&L for full quarter and GMO results for the period 7/14/08 -
9/30/08
(millions
except
where
indicated)
$83.9
KCP&L
KCP&L
GMO
$18.6
3Q
‘08
Utility Total
Core
Earnings Per Share
$0.87
$0.90
3Q
‘07
3Q
‘08
KCP&L
KCP&L
GMO
$0.74
$0.16
3Q
‘08
Utility Total
Electric Utility
Third Quarter Results
16
Core
Earnings
Core
Earnings Per Share
$112.7
$147.1
$1.33
$1.54
(millions
except
where
indicated)
YTD
‘07
YTD
‘08
YTD
‘07
YTD
‘08
Earnings
Drivers:
+ GMO
contribution of $18.6 million or $0.20 per share YTD 2008
+ Increase in
KCP&L’s AFUDC of $13.7 million
+ New retail
rates at KCP&L effective January 2008
+ Increased
wholesale prices and 3Q volumes
- Mild
3Q weather
- Purchased
power $19.9 million higher
- Dilution
of $0.16 caused by shares issued in connection with GMO transaction
Includes
KCP&L for full nine months and GMO results for the period 7/14/08 -
9/30/08
KCP&L
GMO
YTD
‘08
Utility Total
KCP&L
KCP&L
KCP&L
YTD
‘08
Utility Total
$0.20
$1.34
$18.6
$128.5
GMO
Electric Utility
Year-to-Date Results
17
Great
Plains Energy 2009
Guidance
Range $1.30 - $1.60
Key
Assumptions
• Revenue
• Normal
weather
• Retail
(weather-normalized)
• 2009
-
Retail MWh sales essentially flat compared to 2008 for KCP&L;
growth
rate at GMO ~1.5%, similar to 2008 growth
• 2010-11 - Retail growth
of 0.5% - 1% at KCP&L and 1% - 2% at GMO
• New wholesale
margin threshold for KCP&L-MO of $92.5 million (subject
to
true-up) effective with new rates in August 2009
• Regulatory
• Approval of the
rate request in Kansas and Missouri with new rates in
effect
late summer 2009
• New rates in
“Iatan 2 case” in effect summer 2010 in KS, and fall 2010
for
the MO properties
• Assumed ROE of
10.75%
18
Key
Assumptions Continued
• Plant
Performance
• Equivalent
Availability Factor (EAF) and Capacity Factor (CF) for fossil
fleet
for 2009 of ~80% and 77%, respectively; in 2010-11, EAF in 80%-
85%
range and CF relatively constant
• Wolf Creek plant
performance at historical levels
• Capital
Expenditures
• Previous cost
and schedule disclosures for Iatan 2
• No wind in capex
projections until 2011
• Reduced spending
on LaCygne environmental in 2009 - 10
• No additional
environmental mandates
• Fuel
Expense
• 67% covered by
FAC
• Approximately
85% of 2009, 45% of 2010, and 15% of 2011’s
KCP&L
coal requirements are under contract
19
Key
Assumptions Continued
• Finance
• Dividend
maintained at $1.66/share for 2009-11
• $200 million of
equity issuance in 2009; total $400 million of additional
equity
issuance in 2010-11
• $850 - $950
million of new debt over 2009-11; short-term / long-term
TBD
• No refinancing
of GMO debt prior to maturity
• Amortization of
GMO debt write-up reduces pre-tax interest expense by
approximately
$32 million per year in 2009-11
• Tax
• The marginal tax
rate before credits relatively constant at 38.9%
• Tax credits of
$6-8 million per year will reduce the marginal tax rate from
38.9%
(excludes advanced coal credits)
• NOLs - No
earnings benefit, but $100 million of NOLs available annually in
2009
- - 2012 to reduce cash taxes
20
Projected
Capital Expenditures
2009-2011
21
$
Billions
$3.7
$6.5
$5.9
$5.7
$4.2
• Year-end rate
base projections
• Iatan 1, Sibley
environmental and Crossroads in rate base 3Q09
• Iatan 2 in rate
base 3Q 2010 (KCP&L-KS and GMO) and
4Q
2010 (KCP&L-MO)
Solid Rate Base
Growth
Great
Plains Energy
2008
EEI Presentation
November
11, 2008
24
Core
earnings is a non-GAAP financial measure that differs from GAAP earnings because
it excludes the effects of discontinued operations, certain unusual items and
mark-to-market gains
and losses on certain contracts. Great Plains Energy
believes core earnings provides to investors a meaningful indicator of its
results that is comparable among periods because it excludes
the effects of
items that may not be indicative of Great Plains Energy’s prospective earnings
potential. Core
earnings is used internally to measure performance against budget and in
reports
for management and the Board of Directors and are a component,
subject to adjustment, of employee and executive compensation plans. Investors
should note that this non-GAAP measure
involves judgments by management,
including whether an item is classified as an unusual item, and Great Plains
Energy’s definition of core earnings may differ from similar terms used
by
other companies. The impact of these items could be material to operating
results presented in accordance with GAAP. Great Plains Energy is unable to
reconcile core earnings guidance to
GAAP earnings per share because it does
not predict the future impact of unusual items and mark-to-market gains or
losses on energy contracts.
25
Core
earnings is a non-GAAP financial measure that differs from GAAP earnings because
it excludes the effects of discontinued operations, certain unusual items and
mark-to-market gains
and losses on certain contracts. Great Plains Energy
believes core earnings provides to investors a meaningful indicator of its
results that is comparable among periods because it excludes
the effects of
items that may not be indicative of Great Plains Energy’s prospective earnings
potential. Core
earnings is used internally to measure performance against budget and in
reports
for management and the Board of Directors and are a component,
subject to adjustment, of employee and executive compensation plans. Investors
should note that this non-GAAP measure
involves judgments by management,
including whether an item is classified as an unusual item, and Great Plains
Energy’s definition of core earnings may differ from similar terms used
by
other companies. The impact of these items could be material to operating
results presented in accordance with GAAP. Great Plains Energy is unable to
reconcile core earnings guidance to
GAAP earnings per share because it does
not predict the future impact of unusual items and mark-to-market gains or
losses on energy contracts.
