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Great Plains Energy Incorporated (GXP)
Q1 2013 Earnings Call
May 10, 2013 9:00 am ET
Kevin E. Bryant - Vice President of Investor Relations & Strategic Planning and Treasurer
Terry D. Bassham - Chairman of the Board, Chief Executive Officer and President
James C. Shay - Chief Financial Officer and Senior Vice President of Finance & Strategic Development
Scott H. Heidtbrink - Chief Operating Officer of Kansas City Power & Light Company and Executive Vice President of Kansas City Power & Light Company
Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division
Charles J. Fishman - Morningstar Inc., Research Division
Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division
Paul T. Ridzon - KeyBanc Capital Markets Inc., Research Division
Michael J. Lapides - Goldman Sachs Group Inc., Research Division
Andrew Levi - Caris & Company, Inc., Research Division
Paul Patterson - Glenrock Associates LLC
David A. Paz - BofA Merrill Lynch, Research Division
Previous Statements by GXP
» Great Plains Energy Incorporated Management Discusses Q4 2012 Results - Earnings Call Transcript
» Great Plains Energy Incorporated Management Discusses Q3 2012 Results - Earnings Call Transcript
» Great Plains Energy Incorporated Management Discusses Q2 2012 Results - Earnings Call Transcript
Kevin E. Bryant
Thank you, Melissa, and good morning, everyone, and thank you for joining us for our first quarter 2013 earnings conference call. Let me begin by introducing the members of the Great Plains Energy management team who are here with me today. We have Terry Bassham, our new Chairman and Chief Executive Officer; and Jim Shay, Senior Vice President and Chief Financial Officer, who, in a few moments, will provide an overview of the first quarter results. Scott Heidbrink, our Executive Vice President and Chief Operating Officer of KCP&L, is also with us this morning and will be available during the question-and-answer portion of today's call.
Before we begin, I must remind you of the inherent uncertainties in any forward-looking statements in our discussion this morning. Slide 2 and the disclosure in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations.
I also want to remind everyone that we issued our earnings release and first quarter 2013 10-Q after the market closed yesterday. These items are available, along with today's webcast slides and supplemental financial information regarding the quarter, on the main page of our website.
With that, I'll now hand the call to Terry.
Terry D. Bassham
Thanks, Kevin, and good morning, everyone. Thank you for joining us on our call. Yesterday, we announced first quarter earnings of $25.6 million or $0.17 per share compared with a loss of $9.5 million or $0.07 per share last year. The improvement in earnings was primarily driven by new retail rates which became effective in January of this year, lower interest expense and favorable weather. The solid financial performance in the first quarter reinforces our view that we're well positioned to deliver earnings within our guidance range, and we are affirming our 2013 earnings per share range of $1.44 to $1.64. Jim will provide more details on the quarter in his comments.
We continue making progress on Transource Energy, our joint venture with American Electric Power. Earlier this week, FERC issued an order approving Transource Missouri settlement on the formula rate-based ROE. The commission approved a base ROE of 9.8% with a 55% cap on the equity component of the post-construction capital structure. Including the incentive rate components already approved by FERC, the weighted average all-in rate for the 2 SPP projects is 11.15%.
Last month, a stipulation and agreement was filed with the Missouri Public Service Commission that would authorize the transfer of transmission property related to our 2 Southwest Power Pool regional projects to Transource Missouri and to allow Transource Missouri to construct, own and operate the projects. We anticipate an order from the commission this summer.
Following approval in Missouri, KCP&L and GMO must also seek approval from the SPP to novate the projects to Transource. The SPP will then submit its approval of the novation to FERC for final approval. We anticipate receiving the final necessary regulatory approvals to novate these projects by the end of the year.
At our Wolf Creek nuclear unit, the refueling outage was completed, and the unit returned to service in April. We're planning a mid-cycle outage for modifications and maintenance work in spring of 2014 with the next refueling outage expected to begin in the first quarter of 2015.
Regarding RFPs that we and our co-owners initiated last year to review all options to improve the unit's performance, the review process continues and we expect to have an update later this year on what, if any, changes might be made. We'll keep you updated on further developments.
Construction of the state-of-the-art environmental control equipment at our La Cygne generating station continues with the installation of the low-NOx burners for unit 2 wrapping up this month. The project remains on budget and on schedule with major construction continuing through the middle of 2014 and completion targeted for the second quarter of 2015.
In conclusion, we began the year focused on a set of priorities that included improving our earnings and credit profile by reducing regulatory lag and diligently managing O&M expenditures, providing reliable customer service, successfully novating our 2 regional SPP projects to Transource Missouri and keeping the environmental upgrade project at La Cygne on schedule and on budget. We believe we're off to a solid start, and we remain focused on execution in 2013 and beyond.