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Great Plains Energy Inc. Reports Operating Results (10-Q)

October 28, 2010 | About:
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10qk

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Great Plains Energy Inc. (GXP) filed Quarterly Report for the period ended 2010-08-16.

Great Plains Energy Inc. has a market cap of $2.55 billion; its shares were traded at around $18.82 with a P/E ratio of 14.4 and P/S ratio of 1.3. The dividend yield of Great Plains Energy Inc. stocks is 4.4%.GXP is in the portfolios of HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Mario Gabelli of GAMCO Investors, Bruce Kovner of Caxton Associates, Murray Stahl of Horizon Asset Management, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Great Plains Energy s earnings available for common shareholders for the three months ended September 30, 2010, were $131.6 million or $0.96 per share compared to $78.7 million, or $0.58 per share, for the same period in 2009. Electric utility s net income increased $52.3 million for the three months ended September 30, 2010, compared to the same period in 2009 primarily driven by an increase in gross margin due to new retail rates and favorable weather. Gross margin is a financial measure that is not calculated in accordance with GAAP. See the explanation of gross margin and the reconciliation to GAAP operating revenues under Great Plains Energy s Results of Operations for further information. Partially offsetting the increase in gross margin was increased depreciation and amortization expense due to additional regulatory amortization pursuant to KCP&L s 2009 rate cases and depreciation from placing Iatan No. 2 in service in the third quarter of 2010 and increased general taxes. KCP&L supported a recommended disallowance of certain Iatan No. 2 construction costs in its Kansas rate case post-hearing brief filed in September 2010. Great Plains Energy recorded a $4.0 million pre-tax loss in the third quarter of 2010 for KCP&L s and GMO s combined share of these Iatan No. 2 construction costs.

Great Plains Energy s earnings available for common shareholders year to date September 30, 2010, were $215.4 million or $1.57 per share compared to $133.3 million, or $1.04 per share, for the same period in 2009. Electric utility s net income increased $98.7 million year to date September 30, 2010, compared to the same period in 2009 primarily driven by an increase in gross margin due to new retail rates and favorable weather. Partially offsetting the increase in gross margin was higher operations and maintenance expense driven by planned plant outages, increased depreciation and amortization expense due to additional regulatory amortization pursuant to KCP&L s 2009 rate cases and depreciation from placing in service the Iatan No. 1 environmental equipment in April 2009 and Iatan No. 2 in the third quarter of 2010 and increased general taxes. KCP&L supported a recommended disallowance of certain Iatan No. 2 construction costs in its Kansas rate case post-hearing brief filed in September 2010. Great Plains Energy recorded a $4.0 million pre-tax loss in the third quarter of 2010 for KCP&L s and GMO s combined share of these Iatan No. 2 construction costs. Great Plains Energy s corporate and other activities had a loss of $17.4 million year to date September 30, 2010, compared to income of $1.5 million for the same period in 2009. Year to date September 30, 2010, reflects an additional $6.9 million of after-tax interest expense for Equity Units issued in May 2009 and year to date September 30, 2009, reflects a $16.0 million tax benefit due to the settlement of GMO s 2003-2004 tax audit. Additionally, year to date September 30, 2009, includes a $2.3 million loss from the discontinued operations of Strategic Energy.

In June 2010, KCC staff and certain interveners filed their direct testimony in KCP&L s rate case. KCC staff recommended a rate reduction of $9.1 million. The main differences between KCP&L s and KCC staff s positions are the staff s proposals for a return on equity of 9.70%, disallowance of $231 million of the total project cost of Iatan No. 2 ($58 million for KCP&L s Kansas jurisdictional portion of the plant) and depreciation rate differences. KCP&L supported a recommended disallowance of certain Iatan No. 2 construction costs in its

Great Plains Energy s earnings available for common shareholders for the three months ended September 30, 2010, increased to $131.6 million, or $0.96 per share, from $78.7 million, or $0.58 per share for the same period in 2009.

Great Plains Energy s earnings available for common shareholders year to date September 30, 2010, increased to $215.4 million, or $1.57 per share, from $133.3 million, or $1.04 per share for the same period in 2009.

Great Plains Energy s corporate and other activities had a loss of $17.4 million year to date September 30, 2010, compared to income of $1.5 million for the same period in 2009. Year to date September 30, 2010, reflects an additional $6.9 million of after-tax interest expense for Equity Units issued in May 2009 and year to date September 30, 2009, reflects a $16.0 million tax benefit due to the settlement of GMO s 2003-2004 tax audit.

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