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f8kfall2010ir.htm

UNITED STATES
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 30, 2010

 
 
Commission
File Number
  
 
Exact Name of Registrant as Specified in its Charter, State of Incorporation,
Address of Principal Executive Offices and
Telephone Number
  
 
I.R.S. Employer
Identification
No.
         
         
001-32206
  
GREAT PLAINS ENERGY INCORPORATED
  
43-1916803
   
(A Missouri Corporation)
    
   
1200 Main Street
    
   
Kansas City, Missouri  64105
    
   
(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)
    
   
1200 Main Street
    
   
Kansas City, Missouri  64105
    
   
(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 (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
 
Representatives of Great Plains Energy will participate in meetings with investors at the Deutsche Bank Small Cap Value 1 on 1 Conference on December 1, 2010, the JPMorgan Small/Mid Cap Conference on December 3, 2010, and the Wells Fargo Securities 9th Annual Pipeline, MLP and E&P Services & Utility Symposiums on December 7 and December 8, 2010.  Representatives of Great Plains Energy will make a webcast presentation at the JPMorgan event, which is scheduled for 9:30 a.m. Eastern Time on December 3, 2010 and will participate in a webcast panel at the Wells Fargo event, which is scheduled for 1:00 p.m. Eastern Time on December 8, 2010.  An audio-only link to the webcasts and the presentation slides will be made available in the Invest or 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 presentation slides contain information regarding KCP&L.  Accordingly, information in the presentation slides relating to KCP&L is also being furnished on behalf of KCP&L. The information under this Item 7.01 and in Exhibit 99.1 hereto is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that section.  The information under this Item 7.01 and Exhibit 99.1 hereto shall not be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless otherwise expressly indicated in such registration statement or other document.


Item 9.01
Financial Statements and Exhibits
   
(d) Exhibits
 
  
Exhibit No.
Description
 
99.1
Investor presentation slides
 


 
 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.


 
GREAT PLAINS ENERGY INCORPORATED
   
   
   
 
/s/ Ellen E. Fairchild
 
Ellen E. Fairchild
 
Vice President, Corporate Secretary and Chief Compliance Officer

 
KANSAS CITY POWER & LIGHT COMPANY
   
   
   
 
/s/ Ellen E. Fairchild
 
Ellen E. Fairchild
 
Vice President, Corporate Secretary and Chief Compliance Officer


Date: November 30, 2010

Exhibit Index
   
Exhibit No.
Description
   
99.1
Investor presentation slides
 





 
 
 

ex99_1.htm
Great Plains Energy
Investor Presentation
Fall 2010
Fall 2010 Investor Presentation
Exhibit 99.1
 
 
 
Michael Cline
Vice President - Investor Relations and Treasurer
816-556-2622
michael.cline@kcpl.com
Terry Bassham
Executive Vice President - Utility Operations
816-556-2565
terry.bassham@kcpl.com
Fall 2010 Investor Presentation
2
Company Representatives
 
 
 
 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, 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, including but not limited
to possible further deterioration in economic conditions and the timing and extent of any economic recovery; 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; 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
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; 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, but not limited to, weather-related damage and their effects on
sales, prices and costs; cost, availability, quality and deliverability of fuel; 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 additional generating capacity
and environmental projects; nuclear operations; workforce risks, including, but not limited to, increased costs of retirement, health care and
other benefits; the timing and amount of resulting synergy savings from the GMO acquisition; and other risks and uncertainties.
 This list of factors is not all-inclusive because it is not possible to predict all factors. Other risk factors 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.
Forward-Looking Statement
Fall 2010 Investor Presentation
3
 
 
 
• Solid Midwest electric utility operating under the KCP&L brand
• Transformational events in 2008 to focus business model on fully
 regulated utility operations
 – Sale of Strategic Energy
 – Acquisition of Aquila (now KCP&L Greater Missouri
 Operations, or “GMO”)
• Company attributes
 – ~822,000 customers / 3,200+ employees
 – ~6,600 MW of primarily low-cost coal baseload
 generation
 – 5-year projected synergies post-GMO acquisition of
 ~$760M
 – ~$8.5bn in assets and $4.4bn in rate base at 2009YE
Service Territories: KCP&L and GMO
Business Highlights
YTD MWh Sold by Customer Type
YTD MWh Sales by Jurisdiction
YTD MWh Generated by Fuel Type
Total: ~ 18,423 MWhs
Total: ~ 18,423 MWhs
Total: ~ 19,958 MWhs
Note: Charts below reflect YTD 9/30/10
Fall 2010 Investor Presentation
4
Solid Vertically-Integrated Midwest Utility
 
 
 
• Strong Midwest electric utilities focused on regulated operations in Missouri and Kansas
• Diversified customer base includes ~822,000 residential, commercial, and industrial customers
• ~6,600 Megawatts of generation capacity
• Low-cost generation mix: 80% coal, 17% nuclear (Wolf Creek), 2% natural gas/oil and 1% wind in 2009
100% Regulated
Electric Utility
Operations Focus
• Growth and stability in earnings driven by sizable regulated investments as part of the Comprehensive Energy Plan
 (“CEP”)
 • Wind and environmental retrofit components of CEP in place; Iatan 2 baseload coal plant placed in-
 service in 3Q2010
• Potential growth beyond 2010 driven by additional environmental capex, transmission opportunities and wind
Attractive Platform for
Long-Term Earnings
Growth
• Constructive outcomes in 2006, 2007 and 2008 rate cases in Missouri and Kansas
• Current cases
 • Kansas - KCC order issued 11/22/10 authorized a revenue requirement increase of $21.8 million and brought
 Iatan 2 in to rate base with minimal disallowance
 • Missouri - $190 million rate increase request for KCP&L MO and GMO filed June 2010
Diligent Regulatory
Approach
• Cash flow and earnings heavily driven by regulated operations and cost recovery mechanisms
• Ample liquidity currently available under $1.25bn credit facilities
• Sustainable dividend and pay-out, right-sized to fund growth and to preserve liquidity
• Recent shift in outlook from Negative to Stable at Moody’s and S&P
Improved Financial
Position
Fall 2010 Investor Presentation
5
Strong Platform
 
 
 
Executing the Plan
Fall 2010 Investor Presentation
6
 
 
 
 
Project description 
Comments
 
• 100 MW plant in Spearville, KS
• Began construction in 2005
ü Completed in Q3 2006
ü In rate base from 1/1/2007
ü No regulatory disallowance
 
• Selective Catalytic Reduction (SCR) unit at LaCygne 1
ü  Completed in Q2 2007
ü  In rate base from 1/1/2008
ü  No regulatory disallowance
 
• Air Quality Control System at Iatan 1
üCompleted in Q2 2009
üIn rate base starting 3Q 2009 (KS 08/1 & MO 9/1)
üNo regulatory disallowance in 2009 MO and KS cases; capped
 exposure in 2010 cases
 
• Construction of Iatan 2 super-critical coal plant (850 MW;
 73% GXP ownership share)1
ü In-service on 8/26/2010; confirmed by KCC in October; MPSC
 view to be communicated through pending rate cases
ü Included in KS rate base with minimal disallowance Q4 2010;
 MO rate base treatment to be determined Q2 2011
     
Iatan 2
Iatan 1
Environmental
LaCygne
Environmental
Wind
Great Plains Energy has effectively executed all elements of its Comprehensive Energy Plan to date
and has received constructive regulatory treatment
Comprehensive Energy Plan
1 Includes post-combustion environmental technologies including an SCR system, wet flue gas desulphurization system and fabric filter to control
emissions
Fall 2010 Investor Presentation
7
Strong Track Record of Execution
 
 
 
Rate Case Outcomes
 Rate Jurisdiction
Amount
Requested
Amount
Approved
 Effective Date
Rate Base
Return on Equity
Rate-making
Equity Ratio
KCP&L - Missouri
$55.8
$50.6
1/1/2007
$1,270
11.25%
53.69%
KCP&L - Missouri
$45.4
$35.3
1/1/2008
$1,298
10.75%
57.62%
KCP&L - Missouri
$101.5
$95.0
9/1/2009
 $1,4961
n/a4
46.63%
KCP&L - Kansas
$42.3
$29.0
1/1/2007
$1,0001
n/a2
n/a
KCP&L - Kansas
$47.1
$28.0
1/1/2008
$1,1001
n/a3
n/a
KCP&L - Kansas
$71.6
$59.0
8/1/2009
$1,2701
n/a4
50.75%
KCP&L - Kansas
$55.1
$21.8
12/1/2010
$1,781
10.00%
49.66%
GMO - MPS
$94.5
$45.2
6/1/2007
$918
10.25%
48.17%
GMO - MPS
$66.0
$48.0
9/1/2009
$1,1881
n/a5
45.95%
GMO - L&P
$24.4
$13.6
6/1/2007
$186
10.25%
48.17%
GMO - L&P
$17.1
$15.0
9/1/2009
$2861
n/a5
45.95%
1 Rate Base amounts are approximate amounts since the cases were black box settlements; 2 Iatan 2 AFUDC calculation was set at 8.5%; 3  
Iatan 2 AFUDC calculation was set at 8.3%; 4 Iatan 2 AFUDC calculation was set at 8.25%; 5 Iatan 2 AFUDC calculation was set at 10.2%
Fall 2010 Investor Presentation
8
Focused Regulatory Approach
 
 
 
Operational and Strategic Overview
Fall 2010 Investor Presentation
9
 
 
 
10
Fall 2010 Investor Presentation
Steps to Completion of Iatan 2
 
 
 
§ Revenue Requirement Increase of $21.8 million (vs. Company Request of $50.9
 Million)
§ 10.00% Authorized ROE (vs. Company Request of 10.75%); Equity Ratio of 49.66%
§ Iatan 2 in Service and Added to Rate Base
 § Total project disallowance of $20.4 million of budgeted costs ($5.1 million
 KCP&L Kansas jurisdictional); GXP recognized $4.0 million pre-tax loss in
 3Q10 associated with a portion of the disallowed costs
§ Minimal Iatan 1 Environmental Project Disallowance
§ Kansas Jurisdictional Rate Base of $1.781 Billion
§ Requested Environmental Rider Denied
§ New Rates Effective 12/1/10
Fall 2010 Investor Presentation
11
KCP&L Kansas Rate Case Summary
 
 
 
 
Jurisdiction
Requested
Increase
Requested
ROE
 
Rate Base
Rates
Effective
 
Decision
KCP&L - MO
$92.1
11.00%
2,122.8
5/4/2011
Spring 2011
GMO - MPS
$75.8
11.00%
1,468.7
6/4/2011
Spring 2011
GMO - L&P
$22.1
11.00%
 422.0
6/4/2011
Spring 2011
Total
$190.0
 
$4,013.5
 
 
(in $ millions)
12
Fall 2010 Investor Presentation
Missouri Rate Case Summary
 
 
 
Filed MO
Rate Cases
6/4/10
In-service Testing
Started 8/1/10
New Tariffs
Effective
KCP&L MO
5/4/11
KCP&L KS
Hearings
8/16/10 - 9/3/10
KCP&L MO
Hearings
1/18/11- 2/4/11
JUN
New KS Tariffs
Effective
12/1/10
New Tariffs
Effective GMO
6/4/11
JULY
AUG
SEPT
OCT
NOV
DEC
JAN
MAR
FEB
MAY
APR
JUN
MO True-up
Date for Both
KCP&L MO
and GMO
12/31/10
GMO Hearings
2/14/11- 2/18/11
13
Fall 2010 Investor Presentation
Rate Case Timeline
 
 
 
Strength at the Core
Tier 1
1st Quartile
Tier 2
2nd Quartile
Tier 3
3rd Quartile
Tier 4
4th Quartile
Source: 2010 JD Power Residential Study Results (3Q09 to 2Q10)
14
Fall 2010 Investor Presentation
 
 
 
Drivers of Change
 
Environmental
 
Rules
 
Natural Gas
 
Prices
Load Growth
Energy
Legislation
Financing
Emergent
Technologies
15
Fall 2010 Investor Presentation
 
 
 
Sustainable Resource Strategy
Change Creates Opportunity
Transmission &
Distribution
Opportunities
Opportunities
Resulting from
SmartGrid
Technologies
Generation Fleet
Optimization
Opportunities
16
Fall 2010 Investor Presentation
 
 
 
Financial Overview
17
Fall 2010 Investor Presentation
 
 
 
Electric Utility’s net income increased $52.3 million primarily driven by a $109.8 million increase in gross
margin* due to favorable impacts from weather and new retail rates
Increased number of shares outstanding primarily from the May 2009 equity offering resulted in dilution of
$0.02 per share
*Gross margin is defined and reconciled to GAAP operating revenues in the Appendix
18
Fall 2010 Investor Presentation
 
 
 
Electric Utility’s net income increased $98.7 million primarily driven by a $239.4 million increase in gross
margin* due to new retail rates and favorable impacts from weather
Other category earnings decreased $18.9 million primarily as a result of increased interest from the Equity
Units issued in 2009 and a $16 million benefit in 2009 related to the settlement of GMO’s 2003 - 2004
federal tax audit
Increased number of shares outstanding primarily from the May 2009 equity offering resulted in dilution of
$0.12 per share
*Gross margin is defined and reconciled to GAAP operating revenues in the Appendix
19
Fall 2010 Investor Presentation
 
 
 
Electric Utility Third Quarter
(millions except
where indicated)
Earnings
Earnings Per Share
Key Earnings Drivers:
+  Increased gross margin of $109.8 million primarily due to significantly warmer weather and full-
 quarter impact of new retail rates which took effect in August and September 2009
–  Increased operating expense of $12.1 million primarily driven by $5.2 million increase in general taxes
 and $4.0 million Iatan 2 loss;
– Increased depreciation and amortization of $7.4 million, including $3.2 million of additional
 amortization pursuant to KCP&L’s 2009 rate cases; and
– Decrease in non-operating income and expenses of $7.0 million, including $4.2 million less AFUDC
 equity due to lower CWIP balances
 
20
Fall 2010 Investor Presentation
 
 
 
Key Earnings Drivers:
+  Increased gross margin of $239.4 million primarily due to new retail rates and favorable weather
– Increased operating expense of $40.7 million primarily due to planned plant outages, higher
 general taxes and the Iatan 2 loss; and
– Increased depreciation and amortization of $28.2 million; including $17.2 million of additional
 amortization pursuant to KCP&L’s 2009 rate cases
Earnings
Earnings Per Share
(millions except
where indicated)
21
Fall 2010 Investor Presentation
Electric Utility Year-to-Date
 
 
 
Electric Utility Segment
Retail MWh Sales by Customer Class - Third Quarter 2010
44%
12%
44%
22
Fall 2010 Investor Presentation
 
 
 
* Includes current maturities
Capital Structure
Great Plains Energy Debt ($ in millions)
 
 
 
 
 
 
 
 
 
 
KCP&L
 GMO (1)
GPE
Consolidated
 
Amount
 Rate (2)
Amount
Rate (2)
Amount
Rate (2)
Amount
Rate (2)
Short-term Debt

$304.5(3)
0.80%
 $0.0
0.00%
 $22.0
3.06%
 $326.5
0.95%
Long-term Debt(4)
$1,780.0
6.13%
$1,020.1
9.88%
 $636.9
7.57%
 $3,437.0
7.47%
Total
$2,084.5
5.35%
 $1,020.1
9.88%
 $658.9
7.42%
 $3,763.5
6.89%
Secured debt = $862.3 (23%), Unsecured debt = $2,901.2 (77%)
(1) GPE guarantees substantially all of GMO’s debt
(2) Weighted Average Rates - excludes premium/discounts and fair market value adjustments; includes full Equity Units coupon (12%) for GPE
(3) Includes fully-drawn KCP&L A/R Securitization facility of $95 million
(4) Includes current maturities of long-term debt
23
Fall 2010 Investor Presentation
 
 
 
Positioned for Long-term Earnings Growth
• Diligently pursue constructive outcomes in current rate cases
• Continue to deliver on GMO synergies and move toward Tier
 1 costs across the organization
• Evaluate future opportunities through Sustainable Resource
 Strategy and continue to advocate on behalf of our
 shareholders, customers, and communities
24
Fall 2010 Investor Presentation
 
 
 
Great Plains Energy
Fall 2010 Investor Presentation
25
Fall 2010 Investor Presentation
 
 
 
Appendix
3Q 2010
Gross Margin Reconciliation
26
Fall 2010 Investor Presentation
 
 
 
Gross margin is a financial measure that is not calculated in accordance with generally accepted accounting principles
(GAAP). Gross margin, as used by Great Plains Energy, is defined as operating revenues less fuel, purchased power and
transmission of electricity by others. The Company’s expense for fuel, purchased power and transmission of electricity by
others, offset by wholesale sales margin, is subject to recovery through cost adjustment mechanisms, except for KCP&L’s
Missouri retail operations. As a result, operating revenues increase or decrease in relation to a significant portion of these
expenses. Management believes that gross margin provides a more meaningful basis for evaluating the Electric Utility
segment’s operations across periods than operating revenues because gross margin excludes the revenue effect of
fluctuations in these expenses. Gross margin is used internally to measure performance against budget and in reports for
management and the Board of Directors. The Company’s definition of gross margin may differ from similar terms used by
other companies. A reconciliation to GAAP operating revenues is provided in the table above.
27
Fall 2010 Investor Presentation