f8kgsdeck.htm
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SECURITIES AND EXCHANGE COMMISSION
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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
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Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): March 12, 2010
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Commission
File Number
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Registrant, State of Incorporation,
Address and Telephone Number
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I.R.S. Employer
Identification
Number
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001-32206
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GREAT PLAINS ENERGY INCORPORATED
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43-1916803
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(A Missouri Corporation)
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1200 Main Street
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Kansas City, Missouri 64105
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(816) 556-2200
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NOT APPLICABLE
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(Former name or former address,
if changed since last report)
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000-51873
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KANSAS CITY POWER & LIGHT COMPANY
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44-0308720
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(A Missouri Corporation)
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1200 Main Street
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Kansas City, Missouri 64105
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(816) 556-2200
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NOT APPLICABLE
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(Former name or former address,
if changed since last report)
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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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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
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(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))
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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 or filed 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 or filed 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 7.01
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Regulation FD Disclosure
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Commencing on March 15, 2010, Great Plains Energy will participate in meetings with investors. A copy of the investor handout to be used in such meetings is attached as Exhibit 99.1 hereto. The investor handout contains information regarding KCP&L. Accordingly, information in the investor handout relating to KCP&L is also being furnished on behalf of KCP&L.
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.
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Item 8.01
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Other Information
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On March 12, 2010, Moody’s Investors Service, Inc. (Moody’s) lowered the senior unsecured rating for KCP&L to “Baa2” from “Baa1,” and affirmed KCP&L’s “A3” senior secured rating and “Prime-2” short-term commercial paper rating. Moody’s affirmed Great Plains Energy’s and GMO’s senior unsecured ratings at “Baa3,” and changed the ratings outlooks for all three companies to “stable” from “negative.”
A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.
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Item 9.01
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Financial Statements and Exhibits
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(d) Exhibits
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99.1
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Investor handout (furnished and not deemed filed for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended).
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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.
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GREAT PLAINS ENERGY INCORPORATED
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/s/ Michael W. Cline
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Michael W. Cline
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Vice President – Investor Relations and Treasurer
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KANSAS CITY POWER & LIGHT COMPANY
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/s/ Michael W. Cline
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Michael W. Cline
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Vice President – Investor Relations and Treasurer
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Date: March 12, 2010.
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Exhibit Index
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Exhibit No.
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Title
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99.1
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Investor handout (furnished and not deemed filed for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended).
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ex99_1.htm
Great Plains Energy
Goldman Sachs
Non-Deal Road Show
Investor Presentation
March 2010
Terry Bassham
Executive Vice President
Finance & Strategic Development
and Chief Financial Officer
Michael Cline
Vice President
Investor Relations & Treasurer
Exhibit 99.1
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 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 Kansas City Power & Light Company (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 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, but not limited to, retirement compensation and benefits costs; the timing and amount of resulting synergy savings from the
acquisition of KCP&L Greater Missouri Operations Company; 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
most recent quarterly report 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
3
2
Impressive Reliability
Solid Safety Record
Tier 1 Customer Service
Stewards of
the Environment
Reliable,
Economical, and
Safe Nuclear
Generation
Strong Plant Performance
3
2010 and Beyond
• Improved earnings outlook
• Completion of Iatan 2
• Continued focus on regulatory process
• Continued delivery of GMO synergies and movement toward Tier 1 costs
across the organization
• Sound planning to effectively position the Company financially and
strategically to meet future generation and network requirements and as an
industry leader in energy efficiency
William H. Downey,
President and COO
5
• Successful completion of Iatan 1 and Sibley 3 Air Quality Control Systems (AQCS) and
Iatan 1 overhaul
• Constructive settlements in five rate cases
• Filed rate case for KCP&L Kansas with flexible procedural schedule
• Major progress on Iatan 2 construction
• “Strength at the Core” in utility operations
• Improved generation fleet performance compared to 2008
• Successful Wolf Creek refueling outage
• Continued to capture synergies from GMO acquisition and identified additional
opportunities
2009 Operational and Regulatory Highlights
6
q First Fire on Oil
q First Fire on Coal
q Synchronization
q Provisional Acceptance
Steps to In-Service Date for Iatan 2
KCP&L Coal Fleet
KCP&L Nuclear
GMO Coal Fleet
Impact of refueling outages
Impact of unplanned
coal outages
Q4 08 and Q1 09
impact of Iatan 1 unit
overhaul and AQCS tie-ins
Q4 08 and Q1 09 impact of
Sibley environmental
upgrade and Iatan 1 unit
overhaul and AQCS tie-ins
*1 2008 reflects GMO results for the period July 14 through December 31, 2008
Plant Performance
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Source: J.D. Power and Associates 2010 Electric Utility Business
Customer Satisfaction StudySM
Source: J.D. Power and Associates 2009 Electric Utility Residential
Customer Satisfaction StudySM
“Strength at the Core” Performance Metrics
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* Latest available data
Reliability
Safety
*
*
“Strength at the Core” Performance Metrics
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$98M
above initial
projections
GMO Acquisition Synergies
Financial Overview
Terry Bassham, CFO
Executive Vice President Finance &
Strategic Development
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• Increased Electric Utility segment earnings of $14.7 million mainly attributable to the inclusion of GMO’s
regulated utility operations for the full period in 2009, new retail rates and lower purchased power expense.
Increase was partially offset by unfavorable weather, decline in weather-normalized customer usage,
decreased wholesale revenues and increased interest expense.
• Reduced Other segment losses of $17.4 million including a $16.0 million tax benefit from an audit settlement in
GMO’s non-utility operations.
• Loss of $1.5 million in 2009 related to the discontinued operations of Strategic Energy compared to income of
$35.0 million for the full period in 2008.
• Increase of 28.6 million average dilutive shares outstanding resulted in dilution of $0.33 per share.
Note: 2008 reflects GMO results for the period July 14, 2008 through December 31, 2008
(unaudited)
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• Electric Utility segment earnings increased $8.0 million primarily as a result of new retail rates and
decreased purchased power expense. Increase partially offset by unfavorable weather, lower weather-
normalized customer usage and increased depreciation and amortization expense and higher interest
expense.
• A 17.8 million increase in the average number of shares outstanding since the fourth quarter of 2008 resulted
in $0.02 per share dilution.
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$128.9
$125.2
$28.9
$17.9
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
$180.0
2009
2008
GMO
KCP&L
(millions except
where indicated)
Key Earnings Drivers:
+ GMO utility earnings increased $11.0 million primarily from inclusion for full year in 2009
+ Decreased purchased power expense of $48.2 million at KCP&L
+ Decreased income taxes of $12.9 million at KCP&L
+ Increase in KCP&L’s AFUDC equity of $8.2 million
- Reduced KCP&L revenues of $24.8 million, including $55.3 million drop in wholesale
- Increased non-fuel O&M of $6.0 million
- Increased depreciation and amortization of $25.3 million, including $10.8 million of
additional amortization at KCP&L
- Increased interest expense, net of AFUDC, of $12.6 million at KCP&L
- Dilution of $0.34 per share caused by additional shares outstanding
$157.8
$143.1
$1.22
$1.41
Earnings Per Share
Earnings
$1.00
$1.24
$0.22
$0.17
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
2009
2008
Electric Utility Full-Year Results
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Key Earnings Drivers:
+ Increased retail revenue of $36.5 million driven by new retail rates partially offset by mild
weather and lower weather-normalized energy consumption
+ Decline in purchased power expense of $27.8 million
- Increased fuel expense of $14.3 million
- Increased depreciation & amortization of $13.3 million; including $7.0 million of
additional amortization
- Increased interest expense, net of AFUDC, of $4.2 million
- Higher shares outstanding caused electric utility segment dilution of $0.03 per share
(millions except
where indicated)
Earnings Per Share
$23.7
$15.7
$20.0
$3.7
$16.4
$(0.7)
$0.17
$0.13
$0.14
$0.03
$0.14
$(0.01)
Earnings
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4Q 2009 Compared to 4Q 2008
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YTD 2009 Compared to YTD 2008
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GPE
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Customers
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Use/Customer
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Change
MWh
Sales
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Customers
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Use/Customer
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Change
MWh
Sales
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Residential
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0.3%
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2.5%
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2.8%
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0.4%
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0.2%
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0.6%
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Commercial
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-0.3%
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-1.2%
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-1.5%
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0.0%
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-0.7%
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-0.7%
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Industrial
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-1.5%
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-3.2%
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-4.6%
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-1.5%
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-6.6%
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-8.0%
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Weighted
Avg.
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0.2%
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-0.6%
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-0.4%
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0.3%
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-1.5%
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-1.2%
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Retail MWh Sales by Customer Class - Fourth Quarter 2009
Weather-Normalized Retail MWh Sales and Customer Growth Rates
Note: Includes GMO for full periods presented
Electric Utility Segment
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Earnings
Earnings Per Share
Key Drivers:
+ $16.0 million first quarter GMO non-utility tax benefit
– $11.4 million in after-tax interest expense
2008 included after-tax loss of $5.7 million from a mark-to-market change on
interest rate hedges, $3.6 million after-tax income from the reversal of interest expense and
$3.4 million after-tax income related to the release of a legal liability
$(7.8)
$(25.2)
(millions except
where indicated)
2009
2008
2009
2008
$(0.25)
$(0.07)
Other Segment Full-Year Results
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Earnings
Earnings Per Share
$(0.07)
$(0.07)
Key Earnings Drivers:
+ $2.5 million reduction in losses from GMO non-utility activities
- Increased after-tax interest of $4.6 million from Equity Units
$(9.3)
$(9.1)
(millions except
where indicated)
4Q ‘09
4Q ‘08
4Q ‘09
4Q ‘08
Other Segment Fourth Quarter Results
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Great Plains Energy Debt
Long-term Debt Maturities
Credit Ratings
*Includes current maturities
Credit Ratings, Debt, Capital Structure
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2010 Earnings Guidance Range
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• Revenues of approximately $2.1 - $2.2 billion
• Normal weather
• Reported retail MWh sales growth of approximately 1.3% to 2.8%
• Weather-normalized retail MWh sales decline of approximately 0.2%
• Projected fourth quarter 2010 approval of KCP&L KS rate request that was
filed in Dec. 2009
• Average Equivalent Availability Factor and Average Capacity Factor for
generation fleet of approximately 85% and 79%, respectively
• Consolidated capital expenditures of approximately $610 to $680 million
• AFUDC of approximately $65 to $70 million based on average Construction Work
in Progress (CWIP) balance of $1.0 - $1.2 billion
• Issuance of approximately $200 to $400 million in long-term debt; no common
stock issuances
• Effective tax rate for continuing operations of approximately 30%
Key 2010 Guidance Assumptions
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Reported retail MWh sales increase by approximately 1.3 to 2.8 percent
• Return to normal weather
• Decrease weather-normalized retail MWh sales of 0.2% compared to 2009
million MWh
Projected Retail MWh Sales Assumptions
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Kansas
• Approval of rate request filed in December 2009 with new rates effective in 4Q 2010
Missouri
• Expect to file rate cases in 2Q10 with new rates effective in 2Q11
• New fuel transportation contract will impact KCP&L MO earnings in 2011 until new rates are
effective
Requests for Annual Retail Rate Increases
In Millions
Effective
Amount
Amount
Rate Jurisdiction
Date
Requested
Approved
KCP&L-Kansas
8/1/2009
71.6
$
59.0
$
KCP&L-Missouri
9/1/2009
101.5
95.0
GMO-Missouri Public Service
9/1/2009
66.0
48.0
GMO-St. Joseph Light & Power (Electric)
9/1/2009
17.1
15.0
GMO-St. Joseph Light & Power (Steam)
7/1/2009
1.3
1.0
2009 Approved Rate Increases
257.5
$
218.0
$
Pending Rate Increase: KCP&L - Kansas
4Q 2010
55.2
$
na
Regulatory Assumptions
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2010 - 2012 Capital Expenditures
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• AFUDC anticipated to represent approximately 30% of consolidated
2010 Earnings Before Taxes
• KCP&L MO and KS Iatan 2 AFUDC equity rate of 8.25%
2010-2012 CWIP and AFUDC Assumptions
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Financing Requirements - Sources & Uses
of Cash 2010-2012
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Financing:
• 2010
• $200 - $400 million of new long-term debt
• 2011
• Refinancing of approximately $500 million of maturing long-term debt
• $200 - $400 million of new long-term debt
• 2012
• GXP shares issued upon conversion of Equity Units
• Proceeds from Equity Units conversion used to repay portion of maturing $500
million GMO 11.875% issue; balance refinanced with long-term debt
• Debt component of equity units remarketed
• Amortization of GMO debt write-up lowers interest expense by $34 million annually in
2010-11
Taxes:
• 39% marginal tax rate before credits; approximate 33% average effective tax rate across
2010 - 2012, after AFUDC equity and tax credits
• Utilization of NOLs reduces cash tax rate to approximately 2% for state and
AMT payments
Financing and Tax Assumptions
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Positioned for Long-Term Earnings Growth
• Increased rate base post-Iatan 2;
• Benefit from economic recovery and increased energy consumption
in our service territory;
• Continued focus on strengthening the core; and
• Continued sound strategic planning to position the Company to meet
future generation and network requirements and as an industry
leader in energy efficiency
