Great Plains Energy Incorporated (GXP)
Q4 2011 Earnings Call
February 28, 2012 9:00 am ET
Kevin E. Bryant - Vice President of Investor Relations and Treasurer
Previous Statements by GXP
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Terry Bassham - President, Chief Operating officer, Director, President of Kcp&L and Chief Operating officer of Kcp&L
James C. Shay - Chief Financial Officer and Senior Vice President of Finance & Strategic Development
Unknown Executive -
Paul T. Ridzon - KeyBanc Capital Markets Inc., Research Division
Paul Patterson - Glenrock Associates LLC
Michael J. Lapides - Goldman Sachs Group Inc., Research Division
Andrew Levi - Caris & Company, Inc., Research Division
Shahriar Pourreza - Citigroup Inc, Research Division
James Bellessa - D.A. Davidson & Co., Research Division
Kamal B. Patel - Wells Fargo Securities, LLC, Research Division
Good morning. My name is Lindsey, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Fourth Quarter Year End Earnings Conference Call. [Operator Instructions] Thank you. Mr. Kevin Bryant, Vice President of Investor Relations and Treasurer, you may begin your conference.
Kevin E. Bryant
Thank you, Lindsey, and good morning. Welcome to Great Plains Energy's 2011 Fourth Quarter and Year End Earnings Conference Call. Joining me this morning to present our results are Mike Chesser, Chairman and Chief Executive Officer; Terry Bassham, President and Chief Operating Officer; and Jim Shay, Senior Vice President and Chief Financial Officer.
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 on 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 after the market closed yesterday. That release is available, along with today's webcast slides and supplemental financial information regarding the quarter and the full year, on the main page of our website at www.greatplainsenergy.com. We will also be issuing our 2011 10-K this week, which will be available on the main page of our website.
With that, I'll now hand the call to Mike Chesser.
Michael J. Chesser
Thanks very much, Kevin. Let me start by saying, as many of you know, last week I announced my decision to retire as Chief Executive Officer of Great Plains Energy and KCP&L. Over the last 9 years, our company has grown and evolved significantly, and I believe as we stand here today, we are positioned for significant growth.
That said, one of the most important roles of any CEO is to develop the next generation of company leadership. The selection of Terry Bassham to succeed me is a strong showing of support from our board. Their confidence, not just in Terry, but in the entire management team. I have every confidence in Terry and the team as well and look forward to continuing to work with them through this period of transition as I retain the role of Chairman of the Board.
On a personal note, it truly has been a pleasure to work with many of you. Your support has been greatly appreciated during the last 9 years as our company has evolved to the strong point where it is today.
I hope you had the opportunity to read the earnings release we issued yesterday. We announced full year earnings of $1.25 per share, which were in line with the revised guidance that we issued on our third quarter call.
At our Analyst Day presentation in August, we outlined the strategy to achieve 50 basis points of regulatory lag in 2013, and we also provided guidance that our 2012 earnings would be between $1.35 to $1.55.
Yesterday, we announced we lowered our 2012 earnings guidance to a range of $1.20 to $1.40. This was driven by near-term economic uncertainty and the impact of lower natural gas prices on our off-system sales. There had been recent developments in these areas that Jim will address in his comments as he updates you on our guidance assumptions.
Although, we're -- let me emphasize, though, that while we're reducing our 2012 guidance, we remain focused on achieving our 2013 target to reduce regulatory lag to 50 basis points. In today's presentation, we attempt to fully communicate our plans to achieve that goal.
One of our key strategies is regulatory. And as you may have seen yesterday, we filed general rate cases in our Missouri jurisdictions with a total requested increase in rates of $189 million. We understand the challenges in asking for our -- asking our customers for a rate increase, but we're asking for these increases so we can maintain a reliable electric system, make renewable energy and environmental investments needed to meet government mandates and expand energy efficiency programs. Terry will provide more details around the rate case filings in his comments.
As you can see on Slide 4, we had many accomplishments in 2011, including enhancing our renewable generation portfolio, introducing initiatives that streamline our business, rightsizing our organization and aggressively managing costs. Our many accomplishments during the year are examples of our commitment to providing award-winning, reliable service to our customers, while at the same time, improving shareholder returns.
For the past several years, we have worked to create a fair and balanced framework to partner with our customers and encourage investment in energy efficiency. In December, we became the first utility in the state of Missouri to file for a comprehensive energy efficiency program under the Missouri Energy Efficiency Investment Act or MEEIA. A benefit of energy efficiency is scalability. It can be increased or decreased depending upon energy resource needs of a utility. Our energy efficiency programs have created jobs within the local communities and have allowed us to partner with our customers to understand how we can all use energy better and smarter than we do today, and Terry will provide additional details on our MEEIA filings in his remarks.