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Great Plains Energy, Inc. (GXP)
Q3 2010 Earnings Conference Call
October 29, 2010 9 AM ET
Mike Cline – VP, IR & Treasurer and Corporate Secretary
Mike Chesser – Chairman and CEO
Bill Downey – President and COO
Jim Shay – SVP, Finance and Strategic Planning and CFO
Terry Bassham – EVP, Utility Operations
Mike Hahn - Bryn Mawr Capital Management
Michael Lapides – Goldman Sachs
Steven Gambuzza – Longbow Capital
Previous Statements by GXP
» Great Plains Energy Incorporated Q2 2010 Earnings Call Transcript
» Great Plains Energy Incorporated Q1 2010 Earnings Call Transcript
» Great Plains Energy Incorporated Q4 2009 Earnings Call Transcript
» Great Plains Energy Incorporated Q3 2009 Earnings Call Transcript
Thank you, Amanda, and good morning. Welcome to Great Plain Energy’s Q3 2010 earnings conference call. Our senior executives presenting this morning are Mike Chesser, Chairman and CEO, Bill Downey, President and COO, and Jim Shay, Senior Vice President and CFO. Also joining us on the call today is Terry Bassham, Executive Vice President Utility Operations, who will be available for questions.
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. Before I had the call to Mike I wanted to remind everyone that we issued our earnings release and 10Q for the Q3 after the market closed yesterday. They are available along with supplemental financial information regarding the quarter and today’s webcast slides on the main page of our website at http://www.greatplainsenergy.com.
I also wanted to mention that after nearly three years in investor relations at Great Plains Energy, Ellen Fairchild has been promoted to the role of Vice President, Corporate Secretary and Chief Compliance Officer effective immediately. Tony Carino, most recently a Director in our Regulatory Affairs Group, will be replacing Ellen in investor relations. In addition to his regulatory background, Tony brings a wealth of accounting and corporate finance experience to investor relations from his past positions at both Great Plains Energy and Hallmark. I’d like to take this opportunity to publicly welcome Tony to investor relations as well as thank Ellen for her excellent contributions over the past few years and wish her the best in her new role.
Tony and Ellen will be accompanying Mike, Bill, Terry, Jim, and me to the Edison Electric Institute financial conference in California next week and we look forward to seeing you then. For those of you not attending EEI, the company’s presentation will be webcast beginning at 11:15 am Pacific Time on Tuesday, November 2nd. Please see the Great Plains Energy website for more information. With that it’s not my pleasure to introduce Mike Chesser.
Thanks, Michael, and good morning everyone. I’d like to add my congratulations to Ellen for her well-deserved promotion and welcome Tony to the investor relations team. I know you’ll all enjoy getting to know him and working with him.
I also noted, there’s a great deal of earnings related activity in the industry this morning, in advance of the EEI conference, so we do appreciate you joining us. And I hope you’ve had the opportunity to read the press release that we issued yesterday afternoon. We announced a very solid Q3 with earnings that were well above consensus, and as it has been all year weather was a key factor in the quarter and accounted for all the sales volume growth we experienced compared to last year. As we’ve discussed many times on these calls, the summer cooling season is extremely important to our full year earnings. With that season behind us we are both raising and narrowing our EPS guidance range, and Jim will cover this further in his comments.
We were very pleased to announce in late August that in the company’s view, the Iatan 2 coal plant has successfully satisfied it’s in service criteria. This was consistent with our initial target of summer 2010 under the comprehensive energy plan, and well ahead of the projected Q4 date that we communicated earlier this year. This great result would not have been possible without the incredible commitment, focus, and hard work by our startup team, the many KCP&L employees who supported that team, our key contractors and countless others. I could not be prouder of their efforts and would like to take this opportunity to publicly thank them for a job very well done.
While Iatan 2 coming online represents the last construction step in our comprehensive energy plan, we still have one key element of the CEP to complete – the rate cases in Kansas and Missouri that will bring the state of the art asset into our rate base. These proceedings are extremely important to the company’s financial and credit positions and our ability to capitalize on strategic opportunities going forward. We’ve concluded our regulatory hearings in Kansas and expect an order from the commission in late November with the new rates effective on December 1st. In Missouri, our proceedings will become very active over the next few months, and Bill will provide additional details on the process and timelines in his remarks.
We continue to take steps that reflect our commitment to sound environmental stewardship. During the quarter we began construction of 48 megawatts of wind adjacent to our existing 100 megawatt Spearville facility. In addition, we’ve issued RFPs related to environmental retrofits at our Lacine (ph) units that would bring these units into compliance with BARTS, or best available retrofit technology standards, by mid-2015. We also are evaluating environmental control alternatives at our Cibri 3 (ph), Lake Road, and Montour units.