Aquila Sa · EURONEXT:ALAQU
Aquila Sa — Merger or Acquisition (September 2007)
33 slides from Aquila Sa's merger presentation, Sep 13, 2007
Slide 1: Schedule 14A
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant x Filed by a Party other than the Registrant o Check the appropriate box: o Preliminary Proxy
Slide 2: Schedule 14A filing notes
(5) Total fee paid: o Fee paid previously with preliminary materials: o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or t
Slide 3: Great Plains Energy / Aquila
Investor Presentation Great Plains Energy / Aquila GREAT PLAINS ENERGY AQUILA Michael Chesser Rick Green Chief Executive Officer Chief Executive Officer Terry Bassham Beth Armstrong Chief Financial Officer Chief Accounting Officer
Slide 4: Forward Looking Statement
Forward Looking Statement Information Concerning Forward-Looking Statements This presentation and the statements to be made by Great Plains Energy and Aquila contain forward-looking information related to the proposed acquisition of Aquila by Great Plains Energy, financial forecasts of each company
Slide 5: Additional Information
Additional Information Additional Information and Where to Find It In connection with the acquisition of Aquila by Great Plains Energy, Great Plains Energy filed with the SEC a registration statement on Form S-4 (Registration No. 333-142715), containing a definitive joint proxy statement/prospectus
Slide 6: Discussion Agenda
Discussion Agenda I. Transaction Overview II. Result Of A Robust Process III. Opportunity For Shareholders 3
Slide 7: Shareholder Value Proposition
Shareholder Value Proposition Enhanced Shareholder Returns Strong annual dividend yield - currently 5%+ Lower cost and more efficient access to capital Greater value from Aquila tax benefits through Black Hills transaction Adjacent utility territories provide opportunity for integration and signific
Slide 8: I. Transaction Overview
|. Transaction Overview ns ENERGY
Slide 9: Deal Structure
Deal Structure Step 1: Asset Sale Step 2: Merger Step 3: Combined Entity Great Plains Great Plains Energy Aquila Aquila Cash/Stock Shareholders Energy ~ 27% Selected $1.80/0.0856 ~ 73% Assets & Liabilities Great Plains Black Hills Aquila Energy Gregory Strategic Cash Acquisition Aquila KCP&L Aquila
Slide 10: Expected Milestones
Expected Milestones Providing safe, reliable customer service will remain a priority throughout the transition process 2007 2007 2007 2007 2008 Aug Sep Oct Nov-Dec Q1 Great Plains Energy NE regulatory Aquila Colorado Missouri regulatory Missouri hearing shareholder vote regulatory decision & Kansas
Slide 11: Integration Plan
Integration Plan Steering Team – Bill Downey GXP & ILA representation on all teams Integration Team & Project Management – John Marshall Deal Closure Plant Energy Resources Delivery & Energy Information Finance & Support Operations Management Service Solutions Technology Accounting Services Integrat
Slide 12: Governance Structure
Governance Structure Great Plains Energy will retain current 11 directors, 9 are independent Great Plains Energy Executive Management Michael Chesser, Chairman & CEO Steve Easley, SVP Supply William Downey, President & COO John Marshall, SVP Delivery Terry Bassham, CFO Barbara Curry, SVP Corp. Svcs.
Slide 13: Combined Company Overview
Combined Company Overview Upon closing, KCP&L and Aquila will achieve considerable regional scale. Approximately 800,000 customers Combined base of about $3.6 billion Total generating capacity of nearly 5,800MWs Generating approximately 25 million MWhs annually + Additional scale mitigates operation
Slide 14: Company Updates – Recent Events
Company Updates – Recent Events Aquila Recent Recognitions Customer Call Center certified by J.D. Power & Associates New rates in 2007 Missouri Electric $58.8 million rate increase plus a 95% Fuel Adjustment (FAC) Kansas Gas $5.1 million increase Nebraska Gas $9.2 million increase Restructuring Clos
Slide 15: II. Result Of A Robust Process
II. Result Of A Robust Process
Slide 16: Aquila Board Perspective
Aquila Board Perspective Board unanimously recommends merger; accelerates shareholder return & lowers risk profile. Board followed a robust process: Conducted extensive sales process Considered fairness opinions of three external advisors Selected best strategic alternative Transaction value of offe
Slide 17: Robust Auction Process
Robust Auction Process Thorough process engaged both interested parties & those identified as logical, strategic candidates. Fall 2005 2006 2006 2006 2006 2006 2006 Dec 2006 2007 to to Feb 2006 Feb - Jun May Jun - Jul Aug Aug-Sep Nov Jan 2007 Feb Strategic Data rooms Aquila Nine parties Five Access
Slide 18: Indicative Non-Binding Bids
Indicative Non-Binding Bids Diverse interest received in excess of Aquila’s stand-alone value, indicating a healthy, market process. Indicative Description of Participant Indicative Bid Range per Form of Consideration Bidder Aquila Share A Financial party partnering with Strategic $4.50 - $5.00 100%
Slide 19: ILA Stand-Alone Valuations
ILA Stand-Alone Valuations * Information on this slide excerpted from opinions of Aquila's financial advisors contained in the registration statement filed with the SEC by Great Plains Energy. This excerpt must be read in conjunction with the full description of Blackstone's, Lehman Brothers' and Ev
Slide 20: III. Opportunity For Shareholders
III. Opportunity For Shareholders
Slide 21: Significant Synergies Expected
Significant Synergies Expected Combined company expects to realize $643 million of total savings and synergies in first five years. $36m $302m $305m $27m $120m $275m $131m $54m Note: Cost savings are computed using 2006 baseline. 18
Slide 22: Regulated Operating Synergies
Regulated Operating Synergies Estimated Five-Year Cumulative Utility Operational Synergies ($305mm) Reduce non-fuel O&M Reduction in positions and associated spend Facility consolidation $120m $131m Projects that reduce purchased power and $54m increase revenue Improve Aquila’s coal unit performance
Slide 23: Synergy Examples
Synergy Examples Operational and corporate synergies have been identified that build on the capabilities of both organizations Facility Consolidation KCP&L's headquarters to be maintained and Aquila's to be sold Aquila's Raytown facility as primary call center Net reduction of three service centers
Slide 24: Corporate Savings 2008-2012
Corporate Savings 2008-2012 Estimated Five-Year Cumulative Corporate Savings ($302mm) Direct labor not allocated to MO properties Benefits Outside services Other (IT, office expenses, etc) Claims, recovery, insurance, etc. Reduction of approximately 300 positions including benefits plus miscellaneou
Slide 25: Current Merger Regulatory Requests
Current Merger Regulatory Requests Approval requests includes sharing of synergy benefits with customers. Missouri Retention of 50% of the estimated utility operational synergies, net of estimated transition costs, over 5 years. 100% recovery of transition and transaction costs over 5 years. Recover
Slide 26: Financial Highlights
Financial Highlights Enhanced shareholder returns from the combined company Enhanced Shareholder Returns Shared net synergies requested for 5 years (Utility Operational Synergies) Efficient use of Aquila's tax position The transaction with Black Hills is expected to accelerate the utilization of an
Slide 27: Estimated Total Utility Rate Base
Estimated Total Utility Rate Base Compound annual growth rate of 16% in rate base builds shareholder value. $5,575 $3,975 $4,150 $3,600 Capex primarily on common projects Aquila capex plan in line with KCPL’s Comprehensive Energy Plan 1 . Rate base amounts can vary by state. 24
Slide 28: Appendix
Appendix ns ENERGY
Slide 29: Synergies Benefit Shareholders & Customers
Synergies Benefit Shareholders & Customers $643 Estimated Five-Year Cumulative Synergies ($643mm) Interest Savings (net of debt tender costs) $500 ‘Corporate’ costs - not Emissions Credits $452 allocated to MO regulated utilities Interest Savings Operational Utility Synergies (No Operational differe
Slide 30: Aquila Overview
Aquila Overview Aquila Utility Divisions Merchant Services Crossroads Peaker 340 MW gas–fired peaking plant in MS Electric Utilities Gas Utilities Gas / Merchant Book Missouri Public Service (“MPS”) and St. CO, NE, IA, KS (Black Hills Transaction) 14 gas contracts Joseph Light & Power (“SJLP”) ~509,
Slide 31: Great Plains Energy Overview
Great Plains Energy Overview Great Plains Energy Kansas City Power & Light Strategic Energy Serving approx. 26,700 customers & 108,500 accounts as Regulated electric utility in KS and MO, serving the Greater of 2Q07 Kansas City metro area 16.6mm MWhs delivered in 2006 Total generation capacity: ˜ 4,
Slide 32: Anticipated Capital Expenditures
Anticipated Capital Expenditures 4 KCP&L Estimated Capital Expenditures 4 1 . Demand Response / Energy Efficiency includes $8M, $8M, $10M, and $13M for the years 2007 through 2010, respectively, of expenditures that are deferred as a regulatory asset pursuant to MPSC and KCC rate orders. 2 . CEP cap
Slide 33: Announced Synergies as % of Utility Non-Fuel O&M
Announced Synergies as % of Utility Non-Fuel O&M (1) (2) median (2) (1) Source: SEC filings and press releases. Includes fuel/purchased energy savings O&M from FERC Form 1 and 2 reported costs in calendar year prior to closing; includes all utility operating companies reported by shown parent firms