Exhibit 99
| Media Contact: | | Tom Robinson |
| | | 816-556-2902 |
| | | |
| Invester Contact: | | Todd Allen |
| | | 816-556-2083 |
GREAT PLAINS ENERGY ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
Kansas City, MO, November 2, 2006 - Great Plains Energy Incorporated (NYSE:GXP) today announced core earnings of $56.8 million or $0.71 per share in the third quarter of 2006, on more shares outstanding, compared to $77.9 million or $1.05 per share in the third quarter of 2005. Reported earnings were $54.7 million or $0.68 per share, compared to third quarter 2005 earnings of $90.4 million or $1.21 per share. Core earnings exclude net mark-to-market gains and losses on energy contracts and other items. Reported earnings are reconciled to core earnings in attachments B and C.
The difference in core earnings for the third quarter of 2006 compared to the third quarter last year was driven primarily by increases to 2005 core earnings of $16.7 million of tax benefits and $3.5 million due to pension benefits that were not present in 2006.
Great Plains Energy’s year to date core earnings reflect strong results largely driven by gross margin improvement at Strategic Energy with higher wholesale prices and lower purchased power expense at KCP&L, offset by the third quarter items mentioned above. Core earnings were $122.9 million or $1.59 per share, compared to $118.4 million or $1.59 per share for the same period last year. Reported earnings for the first nine months were $89.4 million or $1.16 per share, compared to $131.7 million or $1.77 per share for same period last year.
"KCP&L and Strategic Energy have produced strong results through the third quarter which support our current 2006 earnings guidance," said Chairman Mike Chesser. “Importantly, with the progress on the Comprehensive Energy Plan and continued backlog growth at Strategic Energy, we believe Great Plains Energy is positioned to deliver attractive long term earnings growth.”
Kansas City Power & Light
KCP&L core earnings were $56.4 million or $0.70 per share in the third quarter of 2006, compared to $69.1 million or $0.92 per share last year. Reported earnings were $70.0 million or $0.87 per share, compared to third quarter 2005 reported earnings of $69.1 million or $0.92 per share.
Revenues for the third quarter of 2006 were $359.3 million, compared to $353.0 million for the third quarter last year. Retail revenues in the third quarter were $311.4 million compared to $309.5 million last year. Wholesale revenues in the third quarter 2006 increased slightly to $43.7 million, up $4.4 million compared to last year. Wholesale volumes were higher primarily due to the absence of last year’s main transformer outage at Hawthorn No. 5 and the effect of coal conservation measures in the third quarter last year. The increase in wholesale volumes was partially offset by wholesale prices that were 25% lower than last year.
Purchased power expense decreased $23.2 million compared to the third quarter of 2005 primarily due to the absence of the Hawthorn No. 5 outage, as well as the litigation recoveries described below. Lower purchased power expense was more than offset by a $3.3 million increase in fuel costs in the third quarter of 2006, and the absence of tax and pension benefits recorded in the third quarter of 2005. During the third quarter last year, the implementation of a lower composite tax rate reduced KCP&L’s deferred tax liabilities by $11.8 million, directly reducing tax expense in the period. Third quarter 2005 earnings also benefited from lower pension expense due to the implementation of regulatory accounting treatment of pension costs effective from January 2005, which reduced third quarter pension expense by $5.6 million related to the first six months of 2005.
During the third quarter of 2006, KCP&L received proceeds of $38.9 million upon conclusion of an outstanding lawsuit related to the 1999 Hawthorn No. 5 incident. The proceeds reduced purchased power expense by $10.8 million and fuel expense by $3.7 million. The proceeds also increased wholesale revenues by $2.5 million and included $6.1 million of interest that increased other income during the quarter. All of these impacts are excluded from core earnings. The remaining $15.8 million of proceeds were recorded as a recovery of capital expenditures.
Year to date September 30, 2006, KCP&L’s core earnings were up slightly to $113.1 million, compared to $109.0 million in the first nine months of 2005, while core earnings per share were flat year over year at $1.46, reflecting the impact of additional shares outstanding. Reported year to date earnings were $117.8 million, compared to $109.0 million last year.
KCP&L has reached a constructive settlement with the Staff of the Kansas Corporation Commission and other parties on a rate increase effective January 1, 2007. The settlement calls for $29 million in additional revenue, including $4 million that is directly offset by accelerated depreciation, providing cash to meet KCP&L’s credit metrics, but not earnings. The settlement does not contain a fuel clause, however KCP&L agreed to file a new rate case by March 1, 2007, that includes an Energy Cost Adjustment. The settlement agreement recommends various accounting and other provisions, including annual pension costs beginning January 1, 2007, of approximately $43 million through the creation of a regulatory asset or liability. The settlement also establishes a regulatory asset or liability, effective January 1, 2006, for costs arising from defined benefit plan settlements and curtailments that will be amortized over a five-year period beginning with the effective date of rates approved in KCP&L’s next rate case. The settlement agreement is currently pending approval by the Kansas Corporation Commission.
KCP&L continues to make significant progress on the Comprehensive Energy Plan (CEP). The first element of the energy plan, the construction of the 100MW Spearville Wind Energy Facility, was completed in September. The project team brought the facility in ahead of schedule. The project met the in-service criteria to be included in our rate base for the current rate cases, despite a number of challenges including considerable tightening in the wind turbine market that occurred after the passage of the 2005 Energy Policy Act. Tax incentives from the Energy Policy Act will serve to lower ongoing O&M costs for the facility and are projected to save customers more than $30 million over the next five years. Construction of Iatan No. 2 and the environmental projects at both Iatan No. 1 and the SCR at LaCygne No. 1 have all begun and are on schedule. Demand management and asset management programs are also underway and have begun to have an impact in Missouri.
Strategic Energy
Strategic Energy core earnings, which exclude net mark-to-market gains and losses on energy contracts, were $4.8 million or $0.06 per share in the third quarter, compared to $7.4 million or $0.10 per share in the same period last year. Reported losses were $10.9 million or $0.14 per share, compared to earnings of $18.1 million or $0.24 per share in the third quarter of 2005. The decrease in core earnings was driven by lower delivered volume of 4.8 million MWhs during the third quarter of 2006, compared to 5.4 million MWhs last year. The lower delivered volume during the quarter was partially offset by higher average retail gross margins excluding unrealized mark-to-market gains and losses on energy contracts.
Average retail gross margin per MWh in the third quarter of 2006 was $(0.79). Excluding $26.6 million in net mark-to-market losses on energy contracts, average retail gross margin per MWh was $4.81, compared to an average retail gross margin per MWh, excluding net mark-to-market gains on energy contracts, of $4.48 last year. Average retail gross margin on new sales during the third quarter of 2006 was $3.50, which does not reflect potential portfolio optimization benefits.
Continuing strong sales at Strategic Energy led to a further increase in total backlog in the third quarter to 28.4 million MWhs, up 86% compared to the same period last year. Delivered volume during the first nine months, combined with fourth quarter 2006 backlog, totaled 16.5 million MWhs at the end of the third quarter, compared to 16.1 million MWhs at the end of the second quarter of 2006. Backlog for 2007 rose 26% to 11.2 million MWhs at the end of the third quarter, up from 8.9 million MWhs at the end of the second quarter of 2006. Strategic Energy’s retention rate including month-to-month customers improved to 80% during the third quarter, compared to 65% last quarter and 79% in the third quarter of 2005.
Year to date, Strategic Energy’s core earnings were up slightly to $20.4 million, compared to $19.5 million in the same period last year, and core earnings per share were flat year over year at $0.26. Strategic Energy’s reported losses were $17.6 million, or $0.23 per share, compared to earnings of $34.6 million or $0.46 per share in the same period last year. The year to date core earnings results were driven by the same factors affecting the third quarter, including lower delivered volumes compared to last year, offset by higher average retail gross margins per MWh, excluding mark-to-market gains and losses on energy contracts. In addition, the year to date comparison was favorably impacted by $5.3 million of net SECA charges.
KLT Investments and “Other”
Third quarter 2006 earnings from KLT Investments were $1.2 million or $0.01 per share, compared to $1.9 million or $0.03 per share in the third quarter of 2005. For the first nine months of 2006, earnings were $3.3 million or $0.04 per share, compared to $2.4 million or $0.03 per share last year.
In the third quarter of 2006, the “other” category loss was $5.6 million or $0.06 per share, compared to a loss of $0.5 million in the same period last year. The greater loss during the third quarter of 2006 was attributable to a $5.0 million net release of tax reserves in the third quarter last year. Year to date, the “other” category loss was $13.9 million or $0.17 per share
on a core earnings basis, compared to $12.5 million or $0.16 per share in the first nine months of 2005.
Non-GAAP Financial Measure
Core earnings is a non-GAAP financial measure that differs from earnings reported in accordance with GAAP. We believe core earnings provide investors a meaningful indicator of our results that improves comparability among periods because it excludes the effects of discontinued operations, certain unusual items and mark-to-market gains and losses on energy contracts that may not be indicative of our prospective earnings potential. Core earnings is used internally to measure performance against budget and in reports for management and the Board of Directors. Calculation of core earnings involves judgments by management, including whether an item is classified as an unusual item, and our definition of core earnings may differ from similar terms used by other companies. We are unable to reconcile our core earnings guidance to GAAP earnings per share because we do not predict the future impact of unusual items and mark-to-market gains or losses on energy contracts. The impact of these items could be material to our operating results reported in accordance with GAAP.
Great Plains Energy Incorporated (NYSE:GXP) headquartered in Kansas City, MO, is the holding company for Kansas City Power & Light Company, a leading regulated provider of electricity in the Midwest, and Strategic Energy L.L.C., a competitive electricity supplier. The Company's web site is www.greatplainsenergy.com.
CERTAIN FORWARD-LOOKING INFORMATION -- Statements made in this release 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 regarding projected delivered volumes and margins, 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 Company is 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 and Great Plains Energy; 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 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 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 unplanned generation outages; delays in the anticipated in-service dates and cost increases of additional generating capacity; nuclear operations; ability to enter new markets successfully and capitalize on growth opportunities in non-regulated businesses and the effects of competition; application of critical accounting policies, including, but not limited to, those related to derivatives and pension liabilities; workforce risks including compensation and benefits costs; performance of projects undertaken by non-regulated businesses and the success of efforts to invest in and develop new opportunities and other risks and uncertainties. Other risk factors are detailed from time to time in the Company’s most recent quarterly report on Form 10-Q or annual report 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.
GREAT PLAINS ENERGY | |
Consolidated Statements of Income | |
| (Unaudited) | |
| | | | | | | | | | |
| | | Three Months Ended | | Year to Date | |
| | | September 30 | | September 30 | |
| | | 2006 | | 2005 | | 2006 | | 2005 | |
Operating Revenues | | (thousands, except per share amounts) |
| Electric revenues - KCP&L | | $ | 359,270 | | $ | 352,974 | | $ | 890,551 | | $ | 858,272 | |
| Electric revenues - Strategic Energy | | | 458,538 | | | 429,407 | | | 1,127,056 | | | 1,099,895 | |
| Other revenues | | | 730 | | | 446 | | | 2,220 | | | 1,495 | |
| Total | | | 818,538 | | | 782,827 | | | 2,019,827 | | | 1,959,662 | |
Operating Expenses | | | | | | | | | | | | | |
| Fuel | | | 77,154 | | | 73,935 | | | 180,751 | | | 160,228 | |
| Purchased power - KCP&L | | | 5,157 | | | 28,303 | | | 18,844 | | | 56,590 | |
| Purchased power - Strategic Energy | | | 462,299 | | | 386,499 | | | 1,117,404 | | | 1,003,201 | |
| Skill set realignment costs | | | 1,389 | | | - | | | 15,905 | | | - | |
| Other | | | 88,145 | | | 76,358 | | | 244,030 | | | 240,628 | |
| Maintenance | | | 19,746 | | | 19,230 | | | 67,235 | | | 69,140 | |
| Depreciation and amortization | | | 40,422 | | | 38,382 | | | 118,618 | | | 114,485 | |
| General taxes | | | 31,826 | | | 31,197 | | | 87,234 | | | 83,619 | |
| (Gain) loss on property | | | 28 | | | 3,419 | | | (569 | ) | | 1,906 | |
| Total | | | 726,166 | | | 657,323 | | | 1,849,452 | | | 1,729,797 | |
| Operating income | | | 92,372 | | | 125,504 | | | 170,375 | | | 229,865 | |
| Non-operating income | | | 9,852 | | | 3,563 | | | 16,741 | | | 15,334 | |
| Non-operating expenses | | | (2,141 | ) | | (4,699 | ) | | (5,593 | ) | | (15,671 | ) |
| Interest charges | | | (17,974 | ) | | (17,904 | ) | | (53,113 | ) | | (53,777 | ) |
| Income from continuing operations before income | | | | | | | | | | | | | |
| taxes, minority interest in subsidiaries and loss | | | | | | | | | | | | | |
| from equity investments | | | 82,109 | | | 106,464 | | | 128,410 | | | 175,751 | |
| Income taxes | | | (26,482 | ) | | (17,300 | ) | | (36,683 | ) | | (32,396 | ) |
| Minority interest in subsidiaries | | | - | | | - | | | - | | | (7,805 | ) |
| Loss from equity investments, net of income taxes | | | (468 | ) | | (69 | ) | | (1,047 | ) | | (758 | ) |
| Income from continuing operations | | | 55,159 | | | 89,095 | | | 90,680 | | | 134,792 | |
| Discontinued operations, net of income taxes | | | - | | | 1,780 | | | - | | | (1,826 | ) |
| Net income | | | 55,159 | | | 90,875 | | | 90,680 | | | 132,966 | |
| Preferred stock dividend requirements | | | 411 | | | 412 | | | 1,234 | | | 1,235 | |
| Earnings available for common shareholders | | $ | 54,748 | | $ | 90,463 | | $ | 89,446 | | $ | 131,731 | |
| | | | | | | | | | | | | | |
| Average number of common shares outstanding | | | 80,081 | | | 74,653 | | | 77,266 | | | 74,561 | |
| | | | | | | | | | | | | | |
| Basic and diluted earnings (loss) per common share | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.68 | | $ | 1.19 | | $ | 1.16 | | $ | 1.79 | |
| Discontinued operations | | | - | | | 0.02 | | | - | | | (0.02 | ) |
| Basic and diluted earnings per common share | | $ | 0.68 | | $ | 1.21 | | $ | 1.16 | | $ | 1.77 | |
| | | | | | | | | | | | | | |
| Cash dividends per common share | | $ | 0.415 | | $ | 0.415 | | $ | 1.245 | | $ | 1.245 | |
GREAT PLAINS ENERGY | |
Consolidated Earnings and Earnings Per Share | |
Three Months Ended September 30, 2006 | |
| (Unaudited) | |
| | | | | | | | | | |
| | | | | | | Earnings per Great | |
| | | Earnings | | Plains Energy Share | |
| | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | (millions) | | | | | |
| KCP&L | | $ | 70.0 | | $ | 69.1 | | $ | 0.87 | | $ | 0.92 | |
| Strategic Energy | | | (10.9 | ) | | 18.1 | | | (0.14 | ) | | 0.24 | |
| KLT Investments | | | 1.2 | | | 1.9 | | | 0.01 | | | 0.03 | |
| Other | | | (5.1 | ) | | - | | | (0.05 | ) | | - | |
| Income from continuing operations | | | 55.2 | | | 89.1 | | | 0.69 | | | 1.19 | |
| KLT Gas discontinued operations, | | | | | | | | | | | | | |
| net of income taxes | | | - | | | 1.8 | | | - | | | 0.02 | |
| Preferred dividends | | | (0.5 | ) | | (0.5 | ) | | (0.01 | ) | | - | |
| Earnings available for common shareholders | | $ | 54.7 | | $ | 90.4 | | $ | 0.68 | | $ | 1.21 | |
| | | | | | | | | | | | | | |
Reconciliation of GAAP to Non-GAAP | | | | | | | | | | | | | |
| Earnings available for common shareholders | | $ | 54.7 | | $ | 90.4 | | $ | 0.68 | | $ | 1.21 | |
| Reconciling items | | | | | | | | | | | | | |
| KCP&L - skill set realignment costs | | | 0.8 | | | - | | | 0.01 | | | - | |
| KCP&L - Hawthorn No. 5 litigation recoveries | | | (14.4 | ) | | - | | | (0.18 | ) | | - | |
| Strategic Energy - mark-to-market impacts | | | | | | | | | | | | | |
| from energy contracts | | | 15.7 | | | (10.7 | ) | | 0.20 | | | (0.14 | ) |
| KLT Gas - discontinued operations | | | - | | | (1.8 | ) | | - | | | (0.02 | ) |
| Core earnings | | $ | 56.8 | | $ | 77.9 | | $ | 0.71 | | $ | 1.05 | |
| | | | | | | | | | | | | | |
Core earnings | | | | | | | | | | | | | |
| KCP&L | | $ | 56.4 | | $ | 69.1 | | $ | 0.70 | | $ | 0.92 | |
| Strategic Energy | | | 4.8 | | | 7.4 | | | 0.06 | | | 0.10 | |
| KLT Investments | | | 1.2 | | | 1.9 | | | 0.01 | | | 0.03 | |
| Other | | | (5.6 | ) | | (0.5 | ) | | (0.06 | ) | | - | |
| Core earnings | | $ | 56.8 | | $ | 77.9 | | $ | 0.71 | | $ | 1.05 | |
GREAT PLAINS ENERGY | |
Consolidated Earnings and Earnings Per Share | |
Year to Date September 30, 2006 | |
| (Unaudited) | |
| | | | | | | | | | |
| | | | | | | Earnings per Great | |
| | | Earnings | | Plains Energy Share | |
| | | 2006 | | 2005 | | 2006 | | 2005 | |
| | | (millions) | | | | | |
| KCP&L | | $ | 117.8 | | $ | 109.0 | | $ | 1.52 | | $ | 1.46 | |
| Strategic Energy | | | (17.6 | ) | | 34.6 | | | (0.23 | ) | | 0.46 | |
| KLT Investments | | | 3.3 | | | 2.4 | | | 0.04 | | | 0.03 | |
| Other | | | (12.8 | ) | | (11.2 | ) | | (0.16 | ) | | (0.14 | ) |
| Income from continuing operations | | | 90.7 | | | 134.8 | | | 1.17 | | | 1.81 | |
| KLT Gas discontinued operations, | | | | | | | | | | | | | |
| net of income taxes | | | - | | | (1.8 | ) | | - | | | (0.02 | ) |
| Preferred dividends | | | (1.3 | ) | | (1.3 | ) | | (0.01 | ) | | (0.02 | ) |
| Earnings available for common shareholders | | $ | 89.4 | | $ | 131.7 | | $ | 1.16 | | $ | 1.77 | |
| | | | | | | | | | | | | | |
Reconciliation of GAAP to Non-GAAP | | | | | | | | | | | | | |
| Earnings available for common shareholders | | $ | 89.4 | | $ | 131.7 | | $ | 1.16 | | $ | 1.77 | |
| Reconciling items | | | | | | | | | | | | | |
| KCP&L - skill set realignment costs | | | 9.7 | | | - | | | 0.13 | | | - | |
| KCP&L - Hawthorn No. 5 litigation recoveries | | | (14.4 | ) | | - | | | (0.19 | ) | | - | |
| Strategic Energy - mark-to-market impacts | | | | | | | | | | | | | |
| from energy contracts | | | 38.0 | | | (15.1 | ) | | 0.49 | | | (0.20 | ) |
| Other - skill set realignment costs | | | 0.2 | | | - | | | - | | | - | |
| KLT Gas - discontinued operations | | | - | | | 1.8 | | | - | | | 0.02 | |
| Core earnings | | $ | 122.9 | | $ | 118.4 | | $ | 1.59 | | $ | 1.59 | |
| | | | | | | | | | | | | | |
Core earnings | | | | | | | | | | | | | |
| KCP&L | | $ | 113.1 | | $ | 109.0 | | $ | 1.46 | | $ | 1.46 | |
| Strategic Energy | | | 20.4 | | | 19.5 | | | 0.26 | | | 0.26 | |
| KLT Investments | | | 3.3 | | | 2.4 | | | 0.04 | | | 0.03 | |
| Other | | | (13.9 | ) | | (12.5 | ) | | (0.17 | ) | | (0.16 | ) |
| Core earnings | | $ | 122.9 | | $ | 118.4 | | $ | 1.59 | | $ | 1.59 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | |
GREAT PLAINS ENERGY | |
Summary Income Statement by Segment | |
Three Months Ended September 30, 2006 | |
| (Unaudited) | |
| | | | | | | | | | |
| | Consolidated | | | | Strategic | | | |
| | GPE | | KCP&L | | Energy | | Other | |
| | | (millions) | |
| Operating revenues | | $ | 818.5 | | $ | 359.3 | | $ | 459.2 | | $ | - | |
| Fuel | | | (77.2 | ) | | (77.2 | ) | | - | | | - | |
| Purchased power | | | (467.4 | ) | | (5.1 | ) | | (462.3 | ) | | - | |
| Skill set realignment costs | | | (1.4 | ) | | (1.4 | ) | | - | | | - | |
| Other operating expense | | | (139.7 | ) | | (119.9 | ) | | (16.6 | ) | | (3.2 | ) |
| Depreciation and amortization | | | (40.4 | ) | | (38.5 | ) | | (1.9 | ) | | - | |
| Operating income (loss) | | | 92.4 | | | 117.2 | | | (21.6 | ) | | (3.2 | ) |
| Non-operating income (expenses) | | | 7.7 | | | 7.8 | | | 1.1 | | | (1.2 | ) |
| Interest charges | | | (18.0 | ) | | (15.5 | ) | | (0.6 | ) | | (1.9 | ) |
| Income taxes | | | (26.5 | ) | | (39.5 | ) | | 10.2 | | | 2.8 | |
| Loss from equity investments | | | (0.4 | ) | | - | | | - | | | (0.4 | ) |
| Net income (loss) | | $ | 55.2 | | $ | 70.0 | | $ | (10.9 | ) | $ | (3.9 | ) |
| Earnings (loss) per GPE common share | | $ | 0.68 | | $ | 0.87 | | $ | (0.14 | ) | $ | (0.05 | ) |
GREAT PLAINS ENERGY | |
Summary Income Statement by Segment | |
Year to Date September 30, 2006 | |
| (Unaudited) | |
| | | | | | | | | | |
| | | Consolidated | | | | Strategic | | | |
| | | GPE | | KCP&L | | Energy | | Other | |
| | | (millions) | |
| Operating revenues | | $ | 2,019.8 | | $ | 890.6 | | $ | 1,129.2 | | $ | - | |
| Fuel | | | (180.8 | ) | | (180.8 | ) | | - | | | - | |
| Purchased power | | | (1,136.2 | ) | | (18.8 | ) | | (1,117.4 | ) | | - | |
| Skill set realignment costs | | | (15.9 | ) | | (15.6 | ) | | - | | | (0.3 | ) |
| Other operating expense | | | (398.5 | ) | | (348.0 | ) | | (42.5 | ) | | (8.0 | ) |
| Depreciation and amortization | | | (118.6 | ) | | (112.8 | ) | | (5.8 | ) | | - | |
| Gain (loss) on property | | | 0.6 | | | 0.6 | | | - | | | - | |
| Operating income (loss) | | | 170.4 | | | 215.2 | | | (36.5 | ) | | (8.3 | ) |
| Non-operating income (expenses) | | | 11.1 | | | 10.1 | | | 3.0 | | | (2.0 | ) |
| Interest charges | | | (53.1 | ) | | (45.4 | ) | | (1.5 | ) | | (6.2 | ) |
| Income taxes | | | (36.7 | ) | | (62.1 | ) | | 17.4 | | | 8.0 | |
| Loss from equity investments | | | (1.0 | ) | | - | | | - | | | (1.0 | ) |
| Net income (loss) | | $ | 90.7 | | $ | 117.8 | | $ | (17.6 | ) | $ | (9.5 | ) |
| Earnings (loss) per GPE common share | | $ | 1.16 | | $ | 1.52 | | $ | (0.23 | ) | $ | (0.13 | ) |
Attachment E
GREAT PLAINS ENERGY | |
Consolidated Balance Sheets | |
| (Unaudited) | |
| | | | | | |
| | September 30 | | December 31 |
| | 2006 | | 2005 |
ASSETS | | (thousands) | |
Current Assets | | | | | |
| Cash and cash equivalents | | $ | 59,259 | | $ | 103,068 | |
| Restricted cash | | | - | | | 1,900 | |
| Receivables, net | | | 345,065 | | | 259,043 | |
| Fuel inventories, at average cost | | | 25,269 | | | 17,073 | |
| Materials and supplies, at average cost | | | 59,414 | | | 57,017 | |
| Deferred income taxes | | | 46,329 | | | - | |
| Assets of discontinued operations | | | - | | | 627 | |
| Derivative instruments | | | 5,485 | | | 39,189 | |
| Other | | | 14,189 | | | 13,001 | |
| Total | | | 555,010 | | | 490,918 | |
Nonutility Property and Investments | | | | | | | |
| Affordable housing limited partnerships | | | 24,475 | | | 28,214 | |
| Nuclear decommissioning trust fund | | | 98,975 | | | 91,802 | |
| Other | | | 14,718 | | | 17,291 | |
| Total | | | 138,168 | | | 137,307 | |
Utility Plant, at Original Cost | | | | | | | |
| Electric | | | 5,224,095 | | | 4,959,539 | |
| Less-accumulated depreciation | | | 2,423,708 | | | 2,322,813 | |
| Net utility plant in service | | | 2,800,387 | | | 2,636,726 | |
| Construction work in progress | | | 170,500 | | | 100,952 | |
| Nuclear fuel, net of amortization of $127,029 and $115,240 | | | 37,703 | | | 27,966 | |
| Total | | | 3,008,590 | | | 2,765,644 | |
Deferred Charges and Other Assets | | | | | | | |
| Regulatory assets | | | 207,453 | | | 179,922 | |
| Prepaid pension costs | | | 70,806 | | | 98,295 | |
| Goodwill | | | 88,139 | | | 87,624 | |
| Derivative instruments | | | 2,507 | | | 21,812 | |
| Other | | | 43,974 | | | 52,204 | |
| Total | | | 412,879 | | | 439,857 | |
| Total | | $ | 4,114,647 | | $ | 3,833,726 | |
Attachment E continued
GREAT PLAINS ENERGY | |
Consolidated Balance Sheets | |
| (Unaudited) | |
| | | | | | |
| | September 30 | | December 31 |
| | 2006 | | 2005 | |
LIABILITIES AND CAPITALIZATION | | (thousands) | |
Current Liabilities | | | | | | | |
| Notes payable | | $ | - | | $ | 6,000 | |
| Commercial paper | | | 80,600 | | | 31,900 | |
| Current maturities of long-term debt | | | 389,902 | | | 1,675 | |
| Accounts payable | | | 260,663 | | | 231,496 | |
| Accrued taxes | | | 97,403 | | | 37,140 | |
| Accrued interest | | | 13,515 | | | 13,329 | |
| Accrued payroll and vacations | | | 32,356 | | | 36,024 | |
| Accrued refueling outage costs | | | 15,707 | | | 8,974 | |
| Deferred income taxes | | | - | | | 1,351 | |
| Supplier collateral | | | - | | | 1,900 | |
| Liabilities of discontinued operations | | | - | | | 64 | |
| Derivative instruments | | | 81,641 | | | 7,411 | |
| Other | | | 24,459 | | | 25,658 | |
| Total | | | 996,246 | | | 402,922 | |
Deferred Credits and Other Liabilities | | | | | | | |
| Deferred income taxes | | | 582,904 | | | 621,359 | |
| Deferred investment tax credits | | | 27,413 | | | 29,698 | |
| Asset retirement obligations | | | 91,072 | | | 145,907 | |
| Pension liability | | | 89,812 | | | 87,355 | |
| Regulatory liabilities | | | 107,500 | | | 69,641 | |
| Derivative instruments | | | 72,318 | | | 7,750 | |
| Other | | | 63,846 | | | 65,787 | |
| Total | | | 1,034,865 | | | 1,027,497 | |
Capitalization | | | | | | | |
| Common shareholders' equity | | | | | | | |
| Common stock-150,000,000 shares authorized without par value | | | | | | | |
| 80,341,419 and 74,783,824 shares issued, stated value | | | 893,850 | | | 744,457 | |
| Retained earnings | | | 479,609 | | | 488,001 | |
| Treasury stock-45,680 and 43,376 shares, at cost | | | (1,367 | ) | | (1,304 | ) |
| Accumulated other comprehensive loss | | | (79,863 | ) | | (7,727 | ) |
| Total | | | 1,292,229 | | | 1,223,427 | |
| Cumulative preferred stock $100 par value | | | | | | | |
| 3.80% - 100,000 shares issued | | | 10,000 | | | 10,000 | |
| 4.50% - 100,000 shares issued | | | 10,000 | | | 10,000 | |
| 4.20% - 70,000 shares issued | | | 7,000 | | | 7,000 | |
| 4.35% - 120,000 shares issued | | | 12,000 | | | 12,000 | |
| Total | | | 39,000 | | | 39,000 | |
| Long-term debt | | | 752,307 | | | 1,140,880 | |
| Total | | | 2,083,536 | | | 2,403,307 | |
Commitments and Contingencies |
| Total | | $ | 4,114,647 | | $ | 3,833,726 | |
GREAT PLAINS ENERGY | |
Statistical Summary | |
| | | | | | | | | | | | |
| | | | | Three Months Ended | | Year to Date | |
| | | | | September 30 | | September 30 | |
| | | | | 2006 | | 2005 | | 2006 | | 2005 | |
KCP&L | | | | | | | | | |
| Retail revenues (millions) | | | | | $ | 311.4 | | $ | 309.5 | | $ | 742.4 | | $ | 730.9 | |
| Wholesale revenues (millions) | | | | | $ | 43.7 | | $ | 39.3 | | $ | 137.4 | | $ | 115.7 | |
| Average non-firm wholesale price per MWh | | | | | $ | 37.99 | | $ | 50.86 | | $ | 45.09 | | $ | 40.18 | |
| Wholesale MWh sales (thousands) | | | | | | 1,058 | | | 918 | | | 3,240 | | | 3,166 | |
| Cooling degree days | | | | | | 1,093 | | | 1,116 | | | 1,664 | | | 1,564 | |
| Equivalent availability - coal plants | | | | | | 88 | % | | 82 | % | | 82 | % | | 80 | % |
| Capacity factor - coal plants | | | | | | 82 | % | | 76 | % | | 75 | % | | 76 | % |
| | | | | | | | | | | | | | | | | |
Strategic Energy | | | | | | | | | | | | |
| Average retail gross margin per MWh | | | | | $ | (0.79 | ) | $ | 7.84 | | $ | 0.78 | | $ | 6.29 | |
| Change in fair value related to non-hedging energy | | | | | | | | | | | | | | |
| contracts and from cash flow hedge ineffectiveness | | | 5.60 | | | (3.36 | ) | | 5.21 | | | (1.71 | ) |
| Average retail gross margin per MWh without fair | | | | | | | | | | | | | | |
value impacts 1 | | | | | $ | 4.81 | | $ | 4.48 | | $ | 5.99 | | $ | 4.58 | |
| | | | | | | | | | | | | | | | | |
| MWhs delivered (thousands) | | | | | | 4,748 | | | 5,424 | | | 12,384 | | | 15,185 | |
| MWhs delivered plus current year backlog (thousands) | | | N/A | | | N/A | | | 16,513 | | | 19,309 | |
| Average duration - new and resigned contracts (months) | | | 17 | | | 15 | | | 17 | | | 13 | |
| MWh sales (thousands) | | | | | | 7,351 | | | 2,241 | | | 22,213 | | | 9,128 | |
| Retention rate | | | | | | 58 | % | | 39 | % | | 53 | % | | 65 | % |
| Retention rate including month to month customers | | | | 80 | % | | 79 | % | | 66 | % | | 81 | % |
1 This is a non-GAAP financial measure that differs from GAAP because it excludes the impact of unrealized fair value gains |
| or losses. Management believes this measure is more reflective of average retail gross margins on MWhs delivered due |
| to the non-cash nature and volatility of changes in fair value related to non-hedging energy contracts and from cash flow |
| hedge ineffectiveness. Management and the Board of Directors use this as a measurement of Strategic Energy's |
| realized retail gross margin per delivered MWh, which are settled upon delivery at contracted prices. |
