Great Plains Energy Incorporated (GXP)
Q1 2011 Earnings Call
May 06, 2011 9:00 am ET
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James Shay - Chief Financial Officer and Senior Vice President of Finance & Strategic Development
William Downey - President, Chief Operating Officer, Director, President of GMO, President of Kansas City Power & Light Company and Chief Operating Officer of Kansas City Power & Light Company
Terry Bassham - Executive Vice President of Utility Operations - Kansas City Power & Light Company
Michael Cline - Vice President of Investor Relations and Treasurer
Michael Lapides - Goldman Sachs Group Inc.
Erica Piserchia - Wunderlich Securities Inc.
Paul Ridzon - KeyBanc Capital Markets Inc.
Unknown Analyst -
Good morning. My name is Vanessa and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2011 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Michael Cline, Vice President of Investor Relations and Treasurer. Please go ahead, sir.
Thank you, Vanessa, and good morning. Welcome to Great Plains Energy’s First Quarter 2011 Earnings Conference Call. Our senior executives presenting this morning are Mike Chesser, Chairman and CEO; Bill Downey, Executive Vice Chairman; Terry Bassham, President and COO; and Jim Shay, Senior Vice President and CFO.
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 Mike begins his remarks, I wanted to remind everyone that we issued our earnings release and first quarter 2011 10-Q after the market closed this past Tuesday. They're available along with today's webcast slides and supplemental financial information regarding the quarter on the main page of our website at www.greatplainsenergy.com. With that, I'll now hand the call to Mike Chesser.
Thanks, Michael and good morning, everyone. We appreciate you joining us on the call today. I'd like to start this morning by discussing a key change in our senior management team. Earlier this week, we announced that Bill Downey would step down from his position as President and Chief Operating Officer effective immediately. Bill has assumed the role of Executive Vice Chairman of Great Plains Energy before retiring at the end of August. As you all know, he has had a long and distinguished career in this industry with 29 years at Commonwealth Edison and the last 11 years at Great Plains. I can't begin to capture the magnitude of his contributions in just a few minutes but suffice it to say that Bill has been a huge force behind the transformation of our company.
The success of the Comprehensive Energy Plan from planning to construction to regulatory treatment is due in large part to his diligence and his leadership. In addition, he's been a trusted colleague and a good friend and I would like to take this opportunity to thank him for his dedicated service to Great Plains and wish him the best in his retirement. We also announced earlier this week that effective immediately, Terry Bassham will succeed Bill as President and Chief Operating Officer. As you know, most recently, Terry served as Executive Vice President of Utility Operations and prior to that, he was our CFO for 5 years. Terry's excellent leadership ability, combined with his regulatory, legal, financial and operational background, make him an outstanding successor to Bill. So I'd like to publicly congratulate Terry on his new role and I look forward to working with him to leverage the platform that we've built over the past few years to drive shareholder returns as we go forward.
Next, I'd like to provide a few comments or our quarterly results. In our press release on Tuesday, we announced first quarter earnings of $0.01 per share compared to $0.15 per share last year. Jim is going to provide additional details in his comments but I wanted to highlight 3 key points before the year -- behind the year-over-year change. First, our results this quarter included a negative effect of about $0.07 per share from KCP&L's recent rate case outcome in Missouri and the organizational realignment and voluntary separation program we announced.
Second, we had a negative effect of about $0.04 of regulatory lag. And finally, about $0.03 was a result of lower customer consumption, which fell about 3% on a weather normalized basis. As a result, we are reducing our demand outlook for the year, However, I'd like to emphasize that this is based on our actual results for the first quarter and does not reflect a change in our view for the rest of 2011.
As Terry is going to discuss further, we believe a confluence of factors contributed to the drop in demand for electric heat in the quarter. However, we do not expect those negative dynamics to persist during the summer cooling season. While we combined this view with the projected regional economic growth of about 3% for the year, we feel confident with our forecast of about 1% growth in weather normalized demand for the rest of 2011.
I also wanted to briefly discuss earnings guidance. You will recall that we do not provide 2011 guidance on our February call due to our pending rate case in Missouri and their importance to our 2011 earnings. As I will discuss in a minute, we have resolution in the Missouri rate cases after receiving KCP&L's order last month and GMO's earlier this week. However, we have not had the opportunity to thoroughly evaluate the impact of GMO's case and as such, are not issuing 2011 guidance for today's call. Our plan is to provide guidance for both 2011 and 2012 on our second quarter call in early August.