Slide 1: Aquila Q2 2007 Financial Results Call
Aquila Inc. NYSE: ILA www.aquila.com Rick Green Chief Executive Officer Aquila Q2 2007 Financial Results Call August 3, 2007 Jon Empson Senior Vice President of Regulated Operations Beth Armstrong Senior Vice President & Chief Accounting Officer
Slide 2: Information Concerning Forward-Looking Statements
2 Information Concerning Forward-Looking Statements This presentation and comments we will make contain forward-looking information relating to our pending transactions with Great Plains Energy and Black Hills Corporation, our financial forecasts and key assumptions underlying those forecasts. In co
Slide 3: Additional Information and Where to Find It
3 ADDITIONAL INFORMATION AND WHERE TO FIND IT This information is not a solicitation of a proxy from any holder of our common stock. In connection with our proposed merger with a subsidiary of Great Plains Energy, Great Plains filed with the Securities and Exchange Commission (“SEC”) an amended regi
Slide 4: Second Quarter in Review
4 Second Quarter in Review Utility progress continues -- focused on delivering predictable & respectable earnings. Rate relief, customer growth, & Missouri Fuel Adjustment Clause positively impact utility operations. Ongoing liability management yields stronger balance sheet & interest savings. Upda
Slide 5: Transaction Update
Close Transaction 5 Feb. 2007 Announce Transactions Q1 2007 Q2 2007 Q3 2007 Q4 07 Regulatory Filings Develop Integration Implementation Plan Work To Secure Regulatory Approvals (FERC, HSR, MO, KS, IA, NE, CO) Regulatory Approval File Joint Proxy Statement & Shareholder Votes Q1 08 Execute Integratio
Slide 6: Financial Review
Financial Review Beth Armstrong Senior Vice President & Chief Accounting Officer
Slide 7: Income Statement – 2007 vs. Prior Year
7 Income Statement –2007 vs. Prior Year
Slide 8: EBITDA by Business Segment – 2007 vs. Prior Year
8 EBITDA by Business Segment – 2007 vs. Prior Year
Slide 9: Major Drivers of Company Performance
9 Major Drivers of Company Performance Second Quarter 2007 Significant Variances 2007 versus 2006 fav/(unfav) Electric - Continuing Operations Missouri rate relief and fuel adjustment 6.2 $ Weather and other volume variances 1.9 Unfavorable fuel, purchase power and hedge costs (6.0) Lower operation
Slide 10: Major Drivers of Company Performance
10 Major Drivers of Company Performance
Slide 11: Delivering Results
Delivering Results Rick Green Chief Executive Officer
Slide 12: Deploying Asset Sale Proceeds – $ Millions
12 Deploying Asset Sale Proceeds – $ Millions (1) - includes working capital. (2) - includes premium . (345.3) June 2007 Debt Reduction (2) 291.8 April 2007 Kansas Electric (1) $(218.0) June 2006 Elwood Uses: $1,299.2 Total Asset Sale Proceeds (1) $(1,161.3) Total Debt Retirement (215.3) September 2
Slide 13: Strengthening Our Capital Structure
13 Strengthening Our Capital Structure ($ Millions) Reducing Interest Expense * Excludes LT Gas Improving Our Equity Ratio
Slide 14: Regulatory Initiatives
v v v v v v v v v/R v/R v v v v v v v v v 14 Regulatory Initiatives R P Sharing Mechanism Affordability v/R P R v/R v Energy Efficiency Affordability F F R R Fixed Bill/Fixed Price Program Affordability R R R Weather Normalization Clause Weather v/R R N/A N/A Decouple Margin Declining Use per Custom
Slide 15: Cost Recovery Improves Returns
15 Cost Recovery Improves Returns June 2007 n/a TBD $5.1 MM 11/2006 Kansas Gas Interim February 2007 51% - 49% 10.4% $9.2 MM 11/2006 Nebraska Gas 48% - 52% 48% - 52% Cap Structure $13.6 MM $45.2 MM Received 7/2006 7/2006 Filed 10.25% 10.25% ROE June 2007 Missouri SJLP June 2007 Missouri MPS Rates Ef
Slide 16: Residential Rate Comparison based on EEI data as of January 2007
16 1 Residential Rate Comparison based on EEI data as of January 2007 MO Rates Consistently Below National Average National Average: 10.62 Cents/KWh National Average = 10.62 Cents per KWh
Slide 17: Generation Capacity Optimal Performance
17 Generation Capacity Optimal Performance ILA Operated Base Load Units -- Equivalent Availability Factor Seven week planned major turbine overhaul Lake Road unit 4/6 88% Avg
Slide 18: Gas Rates Well Below National Average
18 Gas Rates Well Below National Average National Residential Gas Rate Average of $13.38 per MCF* Aquila's gas rates below national average * National Average from Energy Information Administration as of April 2007 National Average $13.38 / MCF
Slide 19: Second Quarter in Review
19 Second Quarter in Review Utility progress continues -- focused on delivering predictable & respectable earnings. Rate relief, customer growth, & Missouri Fuel Adjustment Clause positively impact utility operations. Ongoing liability management yields stronger balance sheet & interest savings. Rel
Slide 20: Questions & Answers
Questions & Answers Aquila Q2 2007 Financial Results Call