Exhibit 99
GREAT PLAINS ENERGY INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
In April 2008, the Board of Directors approved management’s recommendation to sell Strategic Energy, LLC (Strategic Energy) and Great Plains Energy entered into an agreement with Direct Energy Services, LLC (Direct Energy), a subsidiary of Centrica plc, under which Direct Energy agreed to acquire all of Great Plains Energy’s interest in Strategic Energy. The sale closed on June 2, 2008. The Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared to reflect the sale of Great Plains Energy’s interest in Strategic Energy to Direct Energy.
The Unaudited Pro Forma Condensed Consolidated Statements of Income reflect the historical consolidated statements of income for Great Plains Energy giving effect to the sale as if it had occurred on January 1, 2007. The Unaudited Pro Forma Condensed Consolidated Balance Sheet reflects the historical consolidated balance sheet of Great Plains Energy giving effect to the sale as if it had occurred on March 31, 2008. These Unaudited Consolidated Pro Forma Financial Statements should be read in conjunction with the:
| · | Separate unaudited financial statements of Great Plains Energy as of and for the three months ended March 31, 2008, included in the Great Plains Energy Quarterly Report on Form 10-Q for the three months ended March 31, 2008, which is incorporated by reference into this document; and |
| · | Separate historical financial statements of Great Plains Energy as of and for the year ended December 31, 2007, included in the Great Plains Energy Annual Report on Form 10-K for the year ended December 31, 2007, which is incorporated by reference into this document. |
The historical financial information of Great Plains Energy, as adjusted as of and for the three months ended March 31, 2008, reflected in the Unaudited Pro Forma Condensed Consolidated Financial Information is unaudited. The historical financial information of Great Plains Energy, as adjusted for the year ended December 31, 2007, reflected in the Unaudited Pro Forma Condensed Consolidated Financial Information is derived from the audited financial statements of Great Plains Energy but does not include all disclosures required by accounting principles generally accepted in the United States of America. The Unaudited Pro Forma Condensed Consolidated Financial Information is provided for information purposes only and is not necessarily indicative of what Great Plains Energy’s financial position or results of operations actually would have been had the sale been completed at the dates indicated. In addition, the Unaudited Pro Forma Condensed Consolidated Financial Information is not intended to project the future financial position or results of operations of Great Plains Energy subsequent to the sale.
In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” Strategic Energy will be reported as discontinued operations beginning with Great Plains Energy’s Form 10-Q for the quarterly period ending June 30, 2008. | | | | | | | | | |
| GREAT PLAINS ENERGY | |
| Unaudited Pro Forma Condensed Consolidated Statement of Income | |
| For the Three Months Ended March 31, 2008 | |
| | | | | | | | | |
| | Great Plains | | | Great Plains |
| | Energy | Pro Forma | Energy |
| | Historical | Adjustments | Pro Forma |
| Operating Revenues | (millions, except per shares amounts) | |
| Electric revenues - KCP&L | $ | 297.6 | | $ | - | | | | $ | 297.6 | |
| Electric revenues - Strategic Energy | | 527.6 | | | (527.6 | ) | A | | | - | |
| Other revenues | | 0.2 | | | (0.2 | ) | A | | | - | |
| Total | | 825.4 | | | (527.8 | ) | | | | 297.6 | |
| Operating Expenses | | | | | | | | | | | |
| Fuel | | 54.7 | | | - | | | | | 54.7 | |
| Purchased power - KCP&L | | 30.8 | | | - | | | | | 30.8 | |
| Purchased power - Strategic Energy | | 417.5 | | | (417.5 | ) | A | | | - | |
| Operating expenses - KCP&L | | 74.0 | | | - | | | | | 74.0 | |
| Selling, general and administrative - non-regulated | | 27.0 | | | (18.1 | ) | A | | | 8.9 | |
| Maintenance | | 30.2 | | | - | | | | | 30.2 | |
| Depreciation and amortization | | 52.2 | | | (2.0 | ) | A | | | 50.2 | |
| General taxes | | 30.6 | | | (0.9 | ) | A | | | 29.7 | |
| Total | | 717.0 | | | (438.5 | ) | | | | 278.5 | |
| Operating income | | 108.4 | | | (89.3 | ) | | | | 19.1 | |
| Non-operating income | | 10.2 | | | (1.1 | ) | A | | | 9.1 | |
| Non-operating expenses | | (1.1 | ) | | - | | | | | (1.1 | ) |
| Interest charges | | (42.1 | ) | | 0.5 | | A | | | (41.6 | ) |
| Income (loss) from continuing operations before income taxes | | | | | | | | | | | |
| and loss from equity investments | | 75.4 | | | (89.9 | ) | | | | (14.5 | ) |
| Income taxes | | (27.5 | ) | | 37.0 | | A | | | 9.5 | |
| Loss from equity investments, net of income taxes | | (0.4 | ) | | - | | | | | (0.4 | ) |
| Income (loss) from continuing operations | | 47.5 | | | (52.9 | ) | | | | (5.4 | ) |
| Preferred stock dividend requirements | | 0.4 | | | - | | | | | 0.4 | |
| Income (loss) from continuing operations available for common | | | | | | | | | | | |
| shareholders | $ | 47.1 | | $ | (52.9 | ) | | | $ | (5.8 | ) |
| | | | | | | | | | | | |
| Average number of basic common shares outstanding | | 85.9 | | | - | | | | | 85.9 | |
| | | | | | | | | | | | |
| Basic and diluted earnings (loss) per common share from | | | | | | | | | | | |
| continuing operations | $ | 0.55 | | $ | (0.62 | ) | | | $ | (0.07 | ) |
| | | | | | | | | | | | |
| The accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements are an integral | |
| part of these statements. | | | | | | | | | | | |
| | | | | | | | | |
| GREAT PLAINS ENERGY | |
| Unaudited Pro Forma Condensed Consolidated Statement of Income | |
| For the Year Ended December 31, 2007 | |
| | | | | | | | | |
| | Great Plains | | | Great Plains |
| | Energy | Pro Forma | Energy |
| | Historical | Adjustments | Pro Forma |
| Operating Revenues | (millions, except per shares amounts) | |
| Electric revenues - KCP&L | $ | 1,292.7 | | $ | - | | | | $ | 1,292.7 | |
| Electric revenues - Strategic Energy | | 1,972.8 | | | (1,972.8 | ) | A | | | - | |
| Other revenues | | 1.6 | | | (1.6 | ) | A | | | - | |
| Total | | 3,267.1 | | | (1,974.4 | ) | | | | 1,292.7 | |
| Operating Expenses | | | | | | | | | | | |
| Fuel | | 245.5 | | | - | | | | | 245.5 | |
| Purchased power - KCP&L | | 101.0 | | | - | | | | | 101.0 | |
| Purchased power - Strategic Energy | | 1,830.7 | | | (1,830.7 | ) | A | | | - | |
| Skill set realignment deferral | | (8.9 | ) | | - | | | | | (8.9 | ) |
| Operating expenses - KCP&L | | 295.8 | | | - | | | | | 295.8 | |
| Selling, general and administrative - non-regulated | | 91.7 | | | (70.8 | ) | A | | | 20.9 | |
| Maintenance | | 91.7 | | | - | | | | | 91.7 | |
| Depreciation and amortization | | 183.8 | | | (8.2 | ) | A | | | 175.6 | |
| General taxes | | 115.8 | | | (1.4 | ) | A | | | 114.4 | |
| Other | | 0.2 | | | - | | | | | 0.2 | |
| Total | | 2,947.3 | | | (1,911.1 | ) | | | | 1,036.2 | |
| Operating income | | 319.8 | | | (63.3 | ) | | | | 256.5 | |
| Non-operating income | | 12.4 | | | (3.6 | ) | A | | | 8.8 | |
| Non-operating expenses | | (5.7 | ) | | 0.1 | | A | | | (5.6 | ) |
| Interest charges | | (93.8 | ) | | 1.9 | | A | | | (91.9 | ) |
| Income from continuing operations before income taxes | | | | | | | | | | | |
| and loss from equity investments | | 232.7 | | | (64.9 | ) | | | | 167.8 | |
| Income taxes | | (71.5 | ) | | 26.6 | | A | | | (44.9 | ) |
| Loss from equity investments, net of income taxes | | (2.0 | ) | | - | | | | | (2.0 | ) |
| Income from continuing operations | | 159.2 | | | (38.3 | ) | | | | 120.9 | |
| Preferred stock dividend requirements | | 1.6 | | | - | | | | | 1.6 | |
| Income from continuing operations available for common | | | | | | | | | | | |
| shareholders | $ | 157.6 | | $ | (38.3 | ) | | | $ | 119.3 | |
| | | | | | | | | | | | |
| Average number of basic common shares outstanding | | 84.9 | | | - | | | | | 84.9 | |
| Average number of diluted common shares outstanding | | 85.2 | | | - | | | | | 85.2 | |
| | | | | | | | | | | | |
| Basic earnings per common share from continuing operations | $ | 1.86 | | $ | (0.45 | ) | | | $ | 1.41 | |
| Diluted earnings per common share from continuing operations | $ | 1.85 | | $ | (0.45 | ) | | | $ | 1.40 | |
| | | | | | | | | | | | |
| The accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements are an integral | |
| part of these statements. | | | | | | | | | | | |
| | | | | | | | | |
| GREAT PLAINS ENERGY | |
| Unaudited Pro Forma Condensed Consolidated Balance Sheet | |
| March 31, 2008 | |
| | | | | | | | | |
| | Great Plains | | Great Plains |
| | Energy | Pro Forma | Energy |
| | Historical | Adjustments | Pro Forma |
| ASSETS | (millions) | |
| Current Assets | | | | | | | | |
| Cash and cash equivalents | $ | 85.8 | | $ | (69.7 | ) | B | | | |
| | | | | | 305.3 | | C | | | |
| | | | | | (14.1 | ) | D | | | |
| | | | | | (34.1 | ) | E | | $ | 273.2 | |
| Restricted cash | | 0.7 | | | (0.7 | ) | B | | | - | |
| Receivables, net | | 394.4 | | | (254.6 | ) | B | | | 139.8 | |
| Fuel inventories, at average cost | | 42.9 | | | - | | | | | 42.9 | |
| Materials and supplies, at average cost | | 65.4 | | | - | | | | | 65.4 | |
| Deferred refueling outage costs | | 10.7 | | | - | | | | | 10.7 | |
| Refundable income taxes | | 24.1 | | | (2.4 | ) | B | | | 21.7 | |
| Derivative instruments | | 128.0 | | | (124.9 | ) | B | | | 3.1 | |
| Other | | 17.9 | | | (5.2 | ) | B | | | 12.7 | |
| Total | | 769.9 | | | (200.4 | ) | | | | 569.5 | |
| Nonutility Property and Investments | | | | | | | | | | | |
| Affordable housing limited partnerships | | 16.6 | | | - | | | | | 16.6 | |
| Nuclear decommissioning trust fund | | 106.9 | | | - | | | | | 106.9 | |
| Other | | 13.3 | | | (6.0 | ) | B | | | 7.3 | |
| Total | | 136.8 | | | (6.0 | ) | | | | 130.8 | |
| Utility Plant, at Original Cost | | | | | | | | | | | |
| Electric | | 5,514.2 | | | - | | | | | 5,514.2 | |
| Less-accumulated depreciation | | 2,638.9 | | | - | | | | | 2,638.9 | |
| Net utility plant in service | | 2,875.3 | | | - | | | | | 2,875.3 | |
| Construction work in progress | | 662.9 | | | - | | | | | 662.9 | |
| Nuclear fuel, net of amortization of $123.5 | | 57.8 | | | - | | | | | 57.8 | |
| Total | | 3,596.0 | | | - | | | | | 3,596.0 | |
| Deferred Charges and Other Assets | | | | | | | | | | | |
| Regulatory assets | | 401.2 | | | - | | | | | 401.2 | |
| Goodwill | | 88.1 | | | (88.1 | ) | B | | | - | |
| Derivative instruments | | 76.1 | | | (76.0 | ) | B | | | 0.1 | |
| Other | | 55.0 | | | (12.3 | ) | B | | | 42.7 | |
| Total | | 620.4 | | | (176.4 | ) | | | | 444.0 | |
| Total | $ | 5,123.1 | | $ | (382.8 | ) | | | $ | 4,740.3 | |
| | | | | | | | | | | | |
| The accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements are an integral | |
| part of these statements. | | | | | | | | | | | |
| | | | | | | | | |
| GREAT PLAINS ENERGY | |
| Unaudited Pro Forma Condensed Consolidated Balance Sheet | |
| March 31, 2008 | |
| | | | | | | | | |
| | Great Plains | | Great Plains |
| | Energy | Pro Forma | Energy |
| | Historical | Adjustments | Pro Forma |
| LIABILITIES AND CAPITALIZATION | (millions) | |
| Current Liabilities | | | | | | | | |
| Notes payable | $ | 68.0 | | $ | - | | | | $ | 68.0 | |
| Commercial paper | | 163.9 | | | - | | | | | 163.9 | |
| Current maturities of long-term debt | | 0.3 | | | - | | | | | 0.3 | |
| Accounts payable | | 433.3 | | | (178.9 | ) | B | | | 254.4 | |
| Accrued taxes | | 39.9 | | | (2.8 | ) | B | | | 37.1 | |
| Accrued interest | | 26.1 | | | - | | | | | 26.1 | |
| Accrued compensation and benefits | | 28.7 | | | (1.0 | ) | B | | | | |
| | | | | | (3.6 | ) | D | | | 24.1 | |
| Pension and post-retirement liability | | 1.3 | | | - | | | | | 1.3 | |
| Deferred income taxes | | 43.5 | | | (45.5 | ) | B | | | (2.0 | ) |
| Derivative instruments | | 43.1 | | | (4.8 | ) | B | | | 38.3 | |
| Other | | 25.7 | | | (15.0 | ) | B | | | | |
| | | | | | (0.6 | ) | D | | | 10.1 | |
| Total | | 873.8 | | | (252.2 | ) | | | | 621.6 | |
| Deferred Credits and Other Liabilities | | | | | | | | | | | |
| Deferred income taxes | | 630.5 | | | (31.8 | ) | B | | | 598.7 | |
| Deferred investment tax credits | | 26.7 | | | - | | | | | 26.7 | |
| Asset retirement obligations | | 107.4 | | | - | | | | | 107.4 | |
| Pension and post-retirement liability | | 156.4 | | | - | | | | | 156.4 | |
| Regulatory liabilities | | 138.9 | | | - | | | | | 138.9 | |
| Derivative instruments | | 2.3 | | | (2.3 | ) | B | | | - | |
| Other | | 62.3 | | | (0.7 | ) | B | | | | |
| | | | | | (1.8 | ) | D | | | 59.8 | |
| Total | | 1,124.5 | | | (36.6 | ) | | | | 1,087.9 | |
| Capitalization | | | | | | | | | | | |
| Common shareholders' equity | | | | | | | | | | | |
| Common stock | | 1,070.1 | | | 0.5 | | D | | | 1,070.6 | |
| Retained earnings | | 518.1 | | | (292.4 | ) | B | | | | |
| | | | | | 305.3 | | C | | | | |
| | | | | | (8.3 | ) | D | | | | |
| | | | | | (34.1 | ) | E | | | 488.6 | |
| Treasury stock, at cost | | (3.3 | ) | | (0.3 | ) | D | | | (3.6 | ) |
| Accumulated other comprehensive income | | 48.0 | | | (64.7 | ) | B | | | (16.7 | ) |
| Total | | 1,632.9 | | | (94.0 | ) | | | | 1,538.9 | |
| Cumulative preferred stock | | 39.0 | | | - | | | | | 39.0 | |
| Long-term debt | | 1,452.9 | | | - | | | | | 1,452.9 | |
| Total | | 3,124.8 | | | (94.0 | ) | | | | 3,030.8 | |
| Commitments and Contingencies | | | | | | | | | | | |
| Total | $ | 5,123.1 | | $ | (382.8 | ) | | | $ | 4,740.3 | |
| | | | | | | | | | | | |
| The accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements are an integral | |
| part of these statements. | | | | | | | | | | | |
GREAT PLAINS ENERGY INCORPORATED
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Pro Forma Adjustments
The pro forma adjustments included in the Unaudited Pro Forma Condensed Consolidated Financial Statements are as follows:
A – The pro forma adjustments represent the removal of Strategic Energy’s revenues and expenses.
B – The pro forma adjustments represent the removal of Strategic Energy’s assets, liabilities and accumulated other comprehensive income and related goodwill and intangible assets at March 31, 2008.
C – The pro forma adjustment represents cash proceeds received from Direct Energy upon the sale of Strategic Energy.
D – The pro forma adjustment represents the contribution of cash to Strategic Energy for the payment of employee incentive compensation, retention, employment and change in control plans and agreements; the vesting and payment of restricted stock and performance shares; and shares of common stock surrendered to Great Plains Energy to pay taxes related to the vesting of restricted stock and the issuance of performance shares.
E – The pro forma adjustment represents a preliminary estimate for the anticipated payment of income taxes resulting from the sale of Strategic Energy.
