Great Plains Energy Announces Full-Year and Fourth Quarter Results for 2007

Business Wire, Feb 6, 2008

Operational Challenges in First Half 2007 Led to Lower Annual Core Earnings

KANSAS CITY, Mo. -- Great Plains Energy Incorporated (NYSE: GXP) today announced full-year 2007 reported earnings of $157.6 million or $1.85 per share, compared to full-year 2006 earnings of $126.0 million or $1.61 per share. Core earnings, which exclude net mark-to-market gains and losses on energy contracts and other items, were $133.4 million or $1.57 per share on more shares outstanding for the full-year 2007, compared to $150.9 million or $1.93 per share in 2006. Reported earnings are reconciled to core earnings in attachment B and C.

Compared to 2006, full-year 2007 core earnings were favorably impacted by weather, increased wholesale revenues, new retail rates, and increased customer usage at Kansas City Power & Light (KCP&L), as well as higher delivered volumes at Strategic Energy. These positive factors were more than offset by the impact of plant outages during the first and second quarters at KCP&L, lower gross margin, increased bad debt expense, a first quarter resettlement charge at Strategic Energy and by higher expenses at the holding company.

Core earnings per share for 2007 reflect $0.14 per share in additional dilution compared to 2006 resulting from the full-year impact of Great Plains Energy's May 2006 issuance of 5.25 million shares of common stock and the FELINE PRIDES-related issuance of 5.18 million shares in February 2007.

"Although 2007 was a challenging year for Great Plains Energy, we remain enthusiastic about the prospects for our Company," commented Chairman and CEO Mike Chesser. "Our long-term growth path remains clear. Completion of the Aquila acquisition, fulfillment of our Comprehensive Energy Plan, and the conclusion of our strategic assessment for Strategic Energy will provide a platform for future growth in earnings and dividends for Great Plains Energy shareholders."

For the fourth quarter of 2007, reported earnings of $47.7 million or $0.56 per share rose $13.6 million or $0.14 per share compared to the same period last year. Core earnings were $31.2 million or $0.36 per share in the fourth quarter of 2007 compared to $25.5 million or $0.31 per share in the fourth quarter of 2006. Retail and wholesale revenues at KCP&L were the primary drivers of the improvement, partially offset by higher purchased power expense and an increase in holding company costs.

Earnings Guidance

Due to the status and timing of the Aquila transaction and the Company's strategic alternatives assessment for Strategic Energy, Great Plains Energy is not issuing 2008 guidance or confirming future years' guidance at this time. The Company expects to issue guidance later in 2008 upon conclusion of these initiatives.

BUSINESS SEGMENTS

Kansas City Power & Light

Reported earnings were $156.8 million or $1.84 per share compared to $149.6 million or $1.91 per share last year. Core earnings at KCP&L were $146.4 million or $1.72 per share for the full-year 2007 compared to $141.0 million or $1.80 per share in 2006.

Revenues for the full-year 2007 increased to $1.29 billion, a 13% increase over 2006. Retail revenues rose to $1.04 billion in 2007 compared to $935.5 million in 2006 due primarily to new retail rates, with favorable weather and load growth also contributing. Wholesale revenues rose to $234.0 million, a 23% increase from the 2006 level of $190.4 million. The increase in wholesale revenues was attributable mainly to volume growth.

Partially offsetting the retail and wholesale revenue growth in 2007 were the following:

* A three-fold increase in purchased power expense compared to 2006 due to increased purchased power volumes primarily from plant outages in the first and second quarters of 2007;

* Higher operating expenses due to increased depreciation and amortization expense and higher pension costs; and

* Higher interest expense incurred to finance Comprehensive Energy Plan projects.

KCP&L fourth quarter reported earnings for 2007 rose 43% over 2006 levels, to $41.7 million or $0.49 per share from $29.3 million or $0.36 per share in 2006. Fourth quarter core earnings of $34.7 million or $0.40 per share were 37% higher than 2006's levels of $25.4 million or $0.31 per share. The improvement in core earnings from the same quarter a year ago was driven primarily by a 12% increase in retail revenues from $193.1 million in 2006 to $215.9 million in 2007, as well as a 54% increase in wholesale revenues from $53.0 million in 2006 to $82.0 million in 2007. KCP&L's total fourth quarter revenues were $301.9 million compared to $249.8 million in the fourth quarter of 2006.

The improved wholesale results for the 2007 fourth quarter were attributable to both higher volumes and higher average prices than 2006. These positive impacts were tempered somewhat by higher purchased power volume compared to the fourth quarter of 2006.

KCP&L continued the execution of its Comprehensive Energy Plan in 2007. The Selective Catalytic Reduction system at LaCygne 1 was completed on-time and on-budget and placed into service in the second quarter. Progress continued on the Iatan 1 environmental project, currently estimated to be completed by year-end 2008 and construction of the Iatan 2 coal-fired plant, estimated to be in-service in the summer of 2010. The Company's demand response and energy efficiency programs began to have a meaningful impact in reducing summer peak load requirements in 2007. Finally, for the second consecutive year, KCP&L received constructive regulatory treatment in its Missouri and Kansas rate cases. KCP&L expects to file its next rate cases in mid-2008.