Evergy, Inc. · NASDAQ:EVRG
Evergy — Investor Presentation (September 2018)
30 slides from Evergy's investor presentation, September 2018
Slide 1: Investor Update September 2018
Investor Update September 2018
Slide 2: Important Information
Important Information Forward Looking Statements Statements made in this presentation that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward- looking statements include, but are not limited to, stateme
Slide 3: Recent News
Recent News • Announced second quarter 2018 earnings - GAAP EPS: $0.56 - Pro Forma EPS: $0.90 • Declared dividend of $0.46/sh payable September 20, 2018 • Board approved share repurchase program - ~60 million shares by mid-year 2020 - Began executing in August • Reached settlement with key interveno
Slide 4: Profile
Profile
Slide 5: Pure Play, Vertically Integrated, Regulated Electric Utilities
Pure Play, Vertically Integrated, Regulated Electric Utilities Evergy Statistics1 $15.5B Market Cap2 $13.1B of rate base3 1.6M electric customers 13,083 MW of owned generation 3,116 MW of renewables4 10,000 miles of transmission 52,000 miles of distribution 1. Operating metrics combined Westar Energ
Slide 6: Clear Focus
Clear Focus Empowering a better future. . . • Providing safe, reliable, and cost effective operations • Being a trusted energy partner to our customers • Collaborative, open and transparent regulatory relationships • Focused on delivering consistent and superior total shareholder return • Allocating
Slide 7: Compelling Investment Thesis
Compelling Investment Thesis Earnings growth driven by merger savings, cost management and share repurchases; not predicated on raising customer prices Stable base rates allow for on-going, constructive dialogue with customers, regulators, policy makers and is good for economic development Strong ba
Slide 8: Investment Outlook
Targeted EPS Growth1 Investment Outlook $3.57 6% - 8% CAGR $3.25 $2.43 Earnings Growth • Net merger savings of ~$600M 2018-2022 • Share repurchases of ~60 million shares by mid-year 2020 • On-going 2018 general rate reviews to reduce regulatory lag • FERC regulated transmission growth 2016A 2021E Ta
Slide 9: Financial Focus
Financial Focus Remain confident in merger savings Targeted Net Merger Savings • Merger provides maximum opportunities for efficiencies, cost ($mm)2 savings for customers, and better ability to earn allowed returns • Opportunities above targeted merger savings - Over $200 million of potential cost s
Slide 10: Regulatory and Legislative Priorities
Regulatory and Legislative Priorities
Slide 11: Regulatory Matters
Regulatory Matters Kansas Corporation Commission • Westar General Rate Review - Docket #18-WSEE-328-RTS - Anticipated effective date: 9/27/2018 • KCP&L-KS General Rate Review – Docket #18-KCPE-480-RTS - Anticipated effective date: 12/27/2018 Missouri Public Service Commission • KCP&L-MO and GMP Gene
Slide 12: Rate Review Update
Rate Review Update Key intervenor settlement in Westar rate review 3Q18 7/17 – Reached non-unanimous settlement in • Includes KCC Staff, CURB, KIC, DOE Westar rate review • Subject to KCC approval 8/20 – Settlement conference for MO rate reviews 9/6 – Settlement conference for MO rate revi
Slide 13: Westar Rate Review Settlement
Westar Rate Review Settlement • Settlement reiterates constructive regulatory relationship in Kansas and de-risks the rate review process • Many of the large items don’t impact the bottom line • ~$74M annual reduced revenue to reflect customer’s benefit of Tax Cut and Jobs Act • $41M wholesale contr
Slide 14: KCP&L – Kansas General Rate Review
KCP&L – Kansas General Rate Review General Rate Review Drivers: Federal corporate tax cut savings resulting from Tax Cuts and Jobs Act of 2017 New customer information system and infrastructure investments, and cost of service true-up since rates were last set CASE ATTRIBUTES $15.7 MILLION REVEN
Slide 15: KCP&L – Missouri General Rate Review
KCP&L – Missouri General Rate Review General Rate Review Drivers: Federal corporate tax savings resulting from Tax Cuts and Jobs Act of 2017 New customer information system and infrastructure investments, and cost of service true-up since rates were last set CASE ATTRIBUTES $8.9 MILLION REVENUE
Slide 16: GMO General Rate Review
GMO General Rate Review General Rate Review Drivers: Federal corporate tax savings resulting from Tax Cuts and Jobs Act of 2017 New customer information system and infrastructure investments, and cost of service true-up since rates were last set CASE ATTRIBUTES ($2.4) MILLION REVENUE DECREASE RE
Slide 17: Missouri Legislation Update
Missouri Legislation Update • Missouri Senate Bill 564 was signed in to law on June 1, 2018 - Modernizes the regulatory framework in Missouri - Provides rate caps and stability for customers - Reduces regulatory lag through Plant in Service Accounting (PISA), making Missouri a more attractive jurisd
Slide 18: Sustainability
Sustainability
Slide 19: Lower Carbon Future
Lower Carbon Future • Wind portfolio one of the largest in the United States: 3,116MW1 currently and expect to be over 3,800MW by 2020 Annual EPS Growth • Focused on growing renewables while retiring end-of-life fossil plants Target of 6% - 8%1 - Retiring 1,500 MW of fossil generation by year-end 20
Slide 20: Clean Energy Leader
Clean Energy Leader 2020 Projections Renewables as a Percentage of Retail Sales CO2 Emission Reductions 50% 60% 40% 50% ~33% of retail sales >40% CO2 reduction 40% 30% 30% 20% 20% 10% 10% 0% 0% 2005 2008 2011 2014 2017 2020E 2005 2008 2011 2014 2017 2020E • By 2020, we expect carbon emission reducti
Slide 21: Appendix
Appendix
Slide 22: Diverse Supply and Sales Mix
Diverse Supply and Sales Mix 2017 Pro Forma Retail Sales 2017 Pro Forma Capacity by Customer Type1 by Fuel Type1,2 20% Coal 22% 35% Nuclear Residential 43% Commercial Gas & Oil 30% 43% Industrial Renewables 7% 2017 Pro Forma Retail Sales 2017 Pro Forma Rate Base by Jurisdiction1 by Jurisdiction1 12%
Slide 23: Strong Credit Profile
Strong Credit Profile Manageable Levels of Current Credit Ratings1 S&P Global Moody’s Long-Term Debt Maturities2 EVERGY $800 Millions Outlook Stable Stable Corporate Credit Rating A- $700 Senior Unsecured Debt BBB+ Baa2 $600 WESTAR / KGE Outlook Stable Stable $500 Senior Secured Debt A A2 Senior Uns
Slide 24: 2018 Rate Review Schedules
2018 Rate Review Schedules Westar (KCC) KCP&L-KS (KCC) KCP&L-MO & GMO (MPSC) Docket: 18-WSEE-328-RTS Docket: 18-KCPE-480-RTS Docket: ER-2018-0145 Filing Date 2/1/18 Filing Date 5/1/18 Filing Date 1/30/18 Public Hearing 5/22/18 Public Hearing 8/23/18 Staff/Intervenor Testimony – Cost of Service 6/19/
Slide 25: Most Recent Completed Rate Reviews
Most Recent Completed Rate Reviews Rate Case Outcomes ($ in millions) Common Annual Date Effective Rate Authorized Percent Rate Jurisdiction Equity Revenue Filed Date Base ROE Increase Ratio Increase Westar – Kansas 10/26/2016 5/3/2017 $5,102 53.45% 9.35% $16.3 0.74% implied KCP&L – Kansas 11/9/2016
Slide 26: Constructive Ratemaking
Constructive Ratemaking Westar KCP&L KCP&L GMO Cost Recovery Mechanisms Kansas Kansas Missouri Missouri Fuel Adjustment Clause Rider Pension and OPEB Tracker Property Tax Surcharge Rider Energy Efficiency Cost Recovery Rider Missouri Energy Efficiency Investment Act Program R
Slide 27: State Commissioners
State Commissioners Missouri Public Service Commission (MPSC) Kansas Corporation Commission (KCC) Mr. Daniel Y. Hall (D) Ms. Shari Feist Albrecht (I) Chair (since August 2015) Chair (since January 2018) Term began: September 2013 Term began: June 2012 Term expires: September 2019 Reappointed: Januar
Slide 28: GAAP to Pro Forma
GAAP to Pro Forma 2Q18 YTD EPS EPS GAAP Earnings1 $0.56 $1.00 Non-recurring merger-related costs 0.25 0.25 One-time bill credits 0.16 0.16 GXP GAAP earnings prior to merger 0.22 0.35 GXP shares prior to merger (0.19) (0.40) Interest rate swaps and other (0.10) (0.13) Pro Forma Earnings2 $0.90 $1.23
Slide 29: Transource Energy
Transource Energy • Joint venture between Evergy (13.5%) and AEP (86.5%) structured to pursue competitive transmission projects1 • Total project portfolio over $600 million • Positioned for sustainable, long-term growth in competitive transmission market 1. The venture excludes transmission projects
Slide 30: Investor Relations Contacts
Investor Relations Contacts NYSE: Evergy (EVRG) Lori Wright Vice President – Corporate Planning, Investor Relations and Treasurer (816) 556-2506 lori.wright@evergyinc.com Cody VandeVelde Director, Investor Relations (785) 575-8227 cody.vandevelde@evergyinc.com Kyle Beck Investor Relations Analyst (7