Great Plains Energy Announces First Quarter Financial Results

Business Wire, May 7, 2008

* The in-service date for the Iatan 1 project is now expected to be February 2009 compared to the previous estimate of year-end 2008.

"Though we are seeing cost increases in the Iatan projects, they are in line with what the industry as a whole is experiencing," commented Bill Downey, President and Chief Executive Officer of KCP&L. "The updated assessment reflects our intent to manage the cost of the projects prudently while, at the same time, holding as closely as possible to the original schedule. We continue to believe that when in service, Iatan 2 will be competitive with other coal plants under construction and will serve our region well for years to come."

Strategic Energy

Reported earnings for the first quarter 2008 were $52.9 million or $0.62 per share compared to $27.1 million or $0.33 per share in 2007. Strategic Energy's first quarter 2008 core earnings were $5.2 million or $0.06 per share compared to a core loss of $6.9 million or $0.08 per share in 2007. Higher core earnings in the first quarter of 2008 compared to the same period in 2007 were driven by higher delivered volumes at a higher average retail gross margin per MWh, excluding unrealized net mark-to-market impacts. Margins in the first quarter of 2007 were negatively impacted by customer attrition and a resettlement charge.

Strategic Energy's first quarter 2008 revenues were $527.8 million, up 29 percent compared to first quarter 2007 driven by a 27 percent increase in delivered volumes. The average retail gross margin per MWh in first quarter 2008 was $20.65 compared to $15.79 in the first quarter of 2007. Excluding unrealized net mark-to-market impacts, the average retail gross margin per MWh in first quarter 2008 was $5.08 compared to $2.16 in the previous year first quarter.

As a result of the announced sale of Strategic Energy to Direct Energy, Strategic Energy's financial results will be reported as discontinued operations in Great Plains Energy's financial statements beginning in the second quarter 2008.

Other

Reported results for the "Other" segment, which mainly includes the Company's investments in affordable housing and unallocated corporate charges, for the first quarter 2008 were a loss of $22.8 million or $0.27 loss per share compared to a loss of $6.2 million or $0.07 loss per share in the first quarter last year. Core results in the "Other" category for the first quarter 2008 were a loss of $7.3 million or $0.09 loss per share in the first quarter of 2008 compared to a loss of $6.2 million or $0.07 loss per share in the first quarter of 2007. The primary differences between core and reported results for first quarter 2008 are the unrealized mark-to-market impact of interest rate hedging and non-labor transition costs related to the Aquila transaction, partially offset by the settlement of litigation below the reserved amount.

Non-GAAP Financial Measures

Great Plains Energy provides in its earnings releases descriptions of "core earnings" in addition to earnings calculated in accordance with GAAP. Great Plains Energy also provides its earnings guidance in terms of core earnings. Core earnings are a non-GAAP financial measure that differs from GAAP earnings because it excludes the effects of discontinued operations, certain unusual items and mark-to-market gains and losses on energy contracts. Core earnings for historical periods are reconciled to GAAP earnings in attachment B. The Company also provides Strategic Energy average retail gross margin per MWh, excluding unrealized net mark-to-market impacts, in addition to average retail gross margin per MWh calculated in accordance with GAAP.