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UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
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FORM 8-K |
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Current Report |
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Pursuant to Section 13 or 15(d) of the |
Securities Exchange Act of 1934 |
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Date of Report (Date of earliest event reported): |
August 4, 2016 |
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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. |
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001-32206 | | GREAT PLAINS ENERGY INCORPORATED | | 43-1916803 |
| | (A Missouri Corporation) | | |
| | 1200 Main Street | | |
| | Kansas City, Missouri 64105 | | |
| | (816) 556-2200 | | |
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| | NOT APPLICABLE | | |
(Former name or former address,
if changed since last report) |
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000-51873 | | KANSAS CITY POWER & LIGHT COMPANY | | 44-0308720 |
| | (A Missouri Corporation) | | |
| | 1200 Main Street | | |
| | Kansas City, Missouri 64105 | | |
| | (816) 556-2200 | | |
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| | 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:
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[X] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| (17 CFR 240.14d-2(b)) |
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[ ] | 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 provided 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.
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Item 2.02 | Results of Operations and Financial Condition |
On August 4, 2016, Great Plains Energy issued a press release announcing its results for the second quarter ended June 30, 2016. A copy of the press release is attached as Exhibit 99.1.
The press release contains information regarding KCP&L. Accordingly, information in the press release relating to KCP&L is also being furnished on behalf of KCP&L.
The information under this Item 2.02 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 2.02 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.
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Item 9.01 | Financial Statements and Exhibits |
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(d) Exhibits | |
Exhibit No. | Description |
99.1 | Press release issued by Great Plains Energy Incorporated on August 4, 2016 |
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.
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| GREAT PLAINS ENERGY INCORPORATED |
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| /s/ Lori A. Wright |
| Lori A. Wright |
| Vice President – Corporate Planning, Investor Relations and Treasurer |
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| KANSAS CITY POWER & LIGHT COMPANY |
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| /s/ Lori A. Wright |
| Lori A. Wright |
| Vice President – Corporate Planning, Investor Relations and Treasurer |
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Date: August 4, 2016
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Exhibit Index |
Exhibit No. | Description |
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99.1 | Press release issued by Great Plains Energy Incorporated on August 4, 2016. |
Exhibit
GREAT PLAINS ENERGY REPORTS SOLID FINANCIAL PERFORMANCE;
WESTAR ACQUISITION ON TRACK FOR COMPLETION IN SPRING 2017
Kansas City, Mo. (August 4, 2016) - Great Plains Energy (NYSE: GXP) today announced second quarter 2016 earnings of $31.6 million or $0.20 per share of average common stock outstanding, compared with second quarter 2015 earnings of $44.0 million or $0.28 per share. For the first six months of 2016, earnings were $57.6 million or $0.37 per share, compared to $62.5 million or $0.40 per share for the same period in 2015.
Great Plains Energy’s adjusted earnings (non-GAAP), which excludes certain costs, expenses, and losses resulting from the anticipated acquisition of Westar, were $85.6 million or $0.55 per share in the second quarter of 2016, compared with second quarter 2015 earnings of $44.0 million or $0.28 per share. For the first six months of 2016, Great Plains Energy’s adjusted earnings (non-GAAP) were $111.6 million or $0.72 per share, compared with earnings of $62.5 million or $0.40 per share for the same period in 2015. Adjusted earnings are reconciled to GAAP earnings on page 2 and 3. The Company is also reaffirming its 2016 adjusted earnings (non-GAAP) guidance range of $1.65 to $1.80 per share.
“Our company delivered solid financial and operational performance for the quarter," said Terry Bassham, chairman and chief executive officer of Great Plains Energy. “We continue to optimize the performance of our business. Our generating units performed well during the extreme heat conditions that blanketed our region, where temperatures in June were the warmest since 1980.”
In addition to strong operational performance, the Company continues to make progress on the Westar acquisition. The Company recently made several required regulatory filings and is on track to close the transaction in the spring of 2017.
Great Plains Energy Second Quarter:
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GREAT PLAINS ENERGY INCORPORATED |
Consolidated Earnings and Earnings Per Share |
Three Months Ended June 30 |
(Unaudited) |
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| | | | Earnings per Great |
| Earnings | | Plains Energy Share |
| 2016 | 2015 | | 2016 | 2015 |
GAAP Earnings | | | | | |
Electric Utility | $ | 88.3 |
| $ | 46.4 |
| | $ | 0.57 |
| $ | 0.30 |
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Other | (56.3 | ) | (2.0 | ) | | (0.37 | ) | (0.02 | ) |
Net income | 32.0 |
| 44.4 |
| | 0.20 |
| 0.28 |
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Preferred dividends | (0.4 | ) | (0.4 | ) | | — |
| — |
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Earnings available for common shareholders | $ | 31.6 |
| $ | 44.0 |
| | $ | 0.20 |
| $ | 0.28 |
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Reconciliation of GAAP to Non-GAAP | | | | | |
Earnings available for common shareholders | $ | 31.6 |
| $ | 44.0 |
| | $ | 0.20 |
| $ | 0.28 |
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Costs to achieve acquisition of Westar: | | | | | |
Operating expenses (a) | 5.0 |
| — |
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Financing (b) | 4.7 |
| — |
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Mark-to-market impacts of interest rate swaps (c) | 77.0 |
| — |
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Income tax benefit | (32.7 | ) | — |
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Adjusted Earnings (Non-GAAP) | $ | 85.6 |
| $ | 44.0 |
| | $ | 0.55 |
| $ | 0.28 |
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Adjusted Earnings (Non-GAAP) | | | | | |
Electric Utility | 88.3 |
| 46.4 |
| | 0.57 |
| 0.30 |
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Other | (2.7 | ) | (2.4 | ) | | (0.02 | ) | (0.02 | ) |
Adjusted Earnings (Non-GAAP) | $ | 85.6 |
| $ | 44.0 |
| | $ | 0.55 |
| $ | 0.28 |
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(a) Reflects legal, advisory and consulting fees.
(b) Reflects fees incurred to finance the anticipated acquisition of Westar, including fees for a bridge term loan facility.
(c) Reflects the mark-to-market loss on interest rate swaps entered into in connection with financing the anticipated acquisition of Westar.
On a per-share basis, drivers for the increase in second quarter 2016 adjusted earnings (non-GAAP) per share compared to the same period in 2015 included the following:
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• | Approximately $0.14 of new Missouri and Kansas retail rates that became effective September 29, 2015 and October 1, 2015, respectively; |
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• | An approximately $0.11 increase due to warmer weather driven by a 31 percent increase in cooling degree days compared to the second quarter 2015; and |
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• | An approximately $0.07 increase in other margin primarily due to new cost recovery mechanisms and an increase in the recovery of throughput disincentive associated with our energy efficiency programs. |
These drivers were partially offset by the following:
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• | An estimated $0.03 impact from a decrease in weather-normalized retail demand; and |
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• | $0.02 of other items including higher depreciation and amortization and general taxes. |
Overall retail MWh sales were up 3.4 percent in the second quarter 2016, compared to the 2015 period with the increase driven by weather. The favorable weather impact in the second quarter 2016, when compared to normal, was approximately $0.08 per share.
Great Plains Energy Year-to-Date:
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GREAT PLAINS ENERGY INCORPORATED |
Consolidated Earnings and Earnings Per Share |
Year to Date June 30 |
(Unaudited) |
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| | | | Earnings per Great |
| Earnings | | Plains Energy Share |
| 2016 | 2015 | | 2016 | 2015 |
GAAP Earnings | | | | | |
Electric Utility | $ | 117.3 |
| $ | 67.3 |
| | $ | 0.76 |
| $ | 0.43 |
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Other | (58.9 | ) | (4.0 | ) | | (0.39 | ) | (0.03 | ) |
Net income | 58.4 |
| 63.3 |
| | 0.37 |
| 0.40 |
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Preferred dividends | (0.8 | ) | (0.8 | ) | | — |
| — |
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Earnings available for common shareholders | $ | 57.6 |
| $ | 62.5 |
| | $ | 0.37 |
| $ | 0.40 |
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Reconciliation of GAAP to Non-GAAP | | | | | |
Earnings available for common shareholders | $ | 57.6 |
| $ | 62.5 |
| | $ | 0.37 |
| $ | 0.40 |
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Costs to achieve acquisition of Westar: | | | | | |
Operating expenses (a) | 5.0 |
| — |
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Financing (b) | 4.7 |
| — |
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Mark-to-market impacts of interest rate swaps (c) | 77.0 |
| — |
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Income tax benefit | (32.7 | ) | — |
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Adjusted Earnings (Non-GAAP) | $ | 111.6 |
| $ | 62.5 |
| | $ | 0.72 |
| $ | 0.40 |
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Adjusted Earnings (Non-GAAP) | | | | | |
Electric Utility | 117.3 |
| 67.3 |
| | 0.76 |
| 0.43 |
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Other | (5.7 | ) | (4.8 | ) | | (0.04 | ) | (0.03 | ) |
Adjusted Earnings (Non-GAAP) | $ | 111.6 |
| $ | 62.5 |
| | $ | 0.72 |
| $ | 0.40 |
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(a) Reflects legal, advisory and consulting fees.
(b) Reflects fees incurred to finance the anticipated acquisition of Westar, including fees for a bridge term loan facility.
(c) Reflects the mark-to-market loss on interest rate swaps entered into in connection with financing the anticipated acquisition of Westar.
On a per-share basis, drivers for the increase in year to date 2016 adjusted earnings (non-GAAP) per share compared to the same period in 2015 included the following:
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• | Approximately $0.26 of new Missouri and Kansas retail rates that became effective September 29, 2015 and October 1, 2015, respectively; |
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• | An approximately $0.04 increase due to warmer second quarter 2016 weather driven by a 31 percent increase in cooling degree days partially offset by mild first quarter 2016 weather with a 16 percent decrease in heating degree days compared to 2015; and |
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• | An approximately $0.16 increase in other margin primarily due to new cost recovery mechanisms and an increase in the recovery of throughput disincentive associated with our energy efficiency programs. |
These drivers were partially offset by the following:
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• | An estimated $0.03 impact from a decrease in weather-normalized retail demand; |
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• | $0.02 increase in other operating and maintenance expense; |
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• | $0.03 increase in depreciation and amortization due to capital investments being placed into service; and |
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• | $0.06 of other items including higher general taxes and interest expense. |
Overall retail MWh sales were down 1.2 percent compared to the 2015 period with the decrease driven by weather. The favorable weather impact in the first six months of 2016, when compared to normal, was approximately $0.02 per share.
On a weather-normalized basis, for the 12 months ended June 30, 2016, retail MWh sales decreased an estimated 0.4 percent, net of an estimated 0.7 percent impact from Missouri Energy Efficiency Investment Act, compared to the 2015 period.
Adjusted Earnings (Non-GAAP)
In addition to earnings available for common shareholders, Great Plains Energy's management uses adjusted earnings (non-GAAP) to evaluate earnings without the impact of costs to achieve the anticipated acquisition of Westar. Adjusted earnings (non-GAAP) exclude certain costs, expenses, gains and losses resulting from the anticipated acquisition. This information is intended to enhance an investor's overall understanding of results. Adjusted earnings (non-GAAP) is used internally to measure performance against budget and in reports for management and the Board of Directors. Adjusted earnings (non-GAAP) is a financial measure that is 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 2016 Second Quarter Form 10-Q, as well as supplemental financial information related to the second quarter on its website, www.greatplainsenergy.com.
Earnings Webcast Information:
An earnings conference call and webcast is scheduled for 9:00 a.m. ET Friday, August 5, 2016, to review the Company’s 2016 second quarter 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 pass code is 44952644.
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 August 12, 2016, by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (international). The pass code is 44952644.
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 report 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 Great Plains Energy’s proposed acquisition of Westar Energy, Inc. (Westar), the outcome of regulatory proceedings, cost estimates of capital projects 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 and KCP&L; 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 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 ability to successfully manage transmission joint venture or to integrate the transmission joint ventures of Westar; 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 to obtain the regulatory and shareholder approvals necessary to complete the
anticipated acquisition of Westar; the risk that a condition to the closing of the anticipated acquisition of Westar or the committed debt or equity financing may not be satisfied or that the anticipated acquisition may fail to close; the failure to obtain, or to obtain on favorable terms, any equity, debt or equity-linked financing necessary to complete or permanently finance the anticipated acquisition of Westar and the costs of such financing; the outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted relating to the anticipated acquisition of Westar; the costs incurred to consummate the anticipated acquisition of Westar; the possibility that the expected value creation from the anticipated acquisition of Westar will not be realized, or will not be realized within the expected time period; the credit ratings of Great Plains Energy following the anticipated acquisition of Westar; disruption from the anticipated acquisition of Westar making it more difficult to maintain relationships with customers, employees, regulators or suppliers; the diversion of management time and attention on the proposed transactions; and other risks and uncertainties.
Great Plains Energy Contacts:
Investors: Calvin Girard, Senior Manager, Investor Relations, 816-654-1777, calvin.girard@kcpl.com
Media: Katie McDonald, Senior Director, Corporate Communications, 816-556-2365,
katie.mcdonald@kcpl.com
