Evergy, Inc. · NASDAQ:EVRG
Evergy — Q4 2023 Earnings Presentation
32 slides from Evergy's earnings presentation, Feb 29, 2024
Slide 1: Fourth Quarter 2023 Earnings Call
Fourth Quarter 2023 Earnings Call February 29, 2024
Slide 2: Important Information
Important Information Forward Looking Statements Statements made in this document 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, statements r
Slide 3: Agenda
Agenda David Campbell, President & CEO • 2023 highlights • Economic development outlook • Regulatory and legislative update Kirk Andrews, EVP & CFO • 2023 financial results • Retail sales trends • 2024 guidance 3 Fourth Quarter 2023 Earnings Presentation
Slide 4: Business Update
Business Update David Campbell President & CEO
Slide 5: 2023 Highlights
2023 Highlights 2023 EPS • GAAP: $3.17 • Financial results reflect challenges from higher interest • Adjusted1: $3.54 rates, regulatory lag and mild weather at the end of the Adjusted EPS1 Adjusted O&M2 year ($0.06 negative impact across November and December), partially offset by $129 million reduc
Slide 6: Strong Operating Performance
Strong Operating Performance Adjusted O&M1 SAIDI SAIFI $ in millions Annual outage minutes per customer Annual outage frequency per customer -28% -10% $1,306 -9% 105.0 1.11 94.5 1.01 $945 $960 2018A 2023A 2025 Target 2022 2023 2022 2023 Ahead of 2025 adjusted O&M target by two years while improving
Slide 7: Reaffirming 4-6% Adjusted EPS CAGR Target 2023-2026
Reaffirming 4-6% Adjusted EPS1 CAGR2 Target 2023-2026 Introducing 2024 EPS Guidance GAAP: $3.73-3.93 Adjusted1 (non-GAAP): $3.73-3.93 4-6% EPS CAGR2 $4.11-4.35 $3.73-3.93 $3.65 $3.30 2023 Baseline2 2024E 2026E Reaffirming 4-6% annual earnings growth target off of the 2023 guidance baseline of $3.65
Slide 8: Regional Rate Competitiveness Progress
Regional Rate Competitiveness Progress Total Rate Change from 2017 to 20231 22.7% 20.0% Avg. 18.4% 17.8% 17.8% Regional States 14.6% Excl. Evergy Missouri & Evergy 7.5% Kansas +11.3% 3.7% 1.3% 1.0% -9.4% CPI Inflated Texas Minnesota Colorado Arkansas Oklahoma Iowa South Evergy Evergy North Prices Da
Slide 9: Economic Development & Demand Growth
Economic Development & Demand Growth Weather-Normalized Demand Growth Recent Successes 2023-2026E CAGR Base Demand + 2-3% New Industrial Load Base Demand Growth 0.5-1% $12 billion of potential investment representing 1.3 gigawatts of potential demand evaluating our Kansas and Missouri service territ
Slide 10: Grid Modernization & Fleet Transition
Grid Modernization & Fleet Transition Capital Investment Plan Update • Updated capital plan continues to support ~6% ($ millions) annualized rate base growth +7.7% $12,495 • Targeting transmission and distribution $11,607 investment to support reliability, flexibility, safety, and resiliency • Inves
Slide 11: Regulatory & Legislative Updates
Regulatory & Legislative Updates Kansas • Electric Infrastructure Investment Bill (HB 2527): Hearing held on February 6; constructive stakeholder discussions advancing • Integrated Resource Plan: plan to file triennial update in May Missouri • Missouri West Rate Case (ER-2024-0189): Procedural sched
Slide 12: Core Tenets of Evergy Strategy
Core Tenets of Evergy Strategy ✓ Affordability: Keeping rates Affordability affordable and improving regional rate competitiveness ✓ Reliability: Targeting top-tier performance in reliability, customer service and generation ✓ Sustainability: Advancing emissions reductions and fleet transition to ac
Slide 13: Financial Update
Financial Update Kirk Andrews Executive Vice President & CFO
Slide 14: Fourth Quarter 2023 Adjusted EPS
Fourth Quarter 2023 Adjusted EPS1 $0.30 (0.05) $0.27 (0.07) (14%) decrease 0.10 0.06 in heating degree days, (0.06) Increased (23%) decrease infrastructure in December (2.4)% Continued investment and (0.07) 0.06 new decrease execution on depreciation primarily driving cost rates, partially driven by
Slide 15: Full Year 2023 Adjusted EPS
Full Year 2023 Adjusted EPS1 Adjusted EPS1 Drivers $3.71 (0.26) 0.41 (0.28) Increased $3.54 infrastructure 0.04 investment and 0.17 0.02 Accelerated new Decrease in execution on (0.46) depreciation cooling and driving cost rates, partially 0.09 heating efficiencies offset by new degree days 0.10 ret
Slide 16: Retail Sales Trends
Retail Sales Trends 2023 Weather-Normalized Retail Sales Growth Unemployment Rate3 Compared to prior year1,2 15% U.S. KC Metro Kansas 12% 0.8% 1.0% Total Retail 9% 0.0% 6% (3.6%) Residential Commercial Industrial 3% 4Q23 weather-normalized total retail sales growth is (2.4%) compared to prior year 0
Slide 17: Adjusted 2023A To Adjusted 2024E EPS Walk
Adjusted 2023A To Adjusted 2024E EPS1 Walk Adjusted EPS1 Drivers (0.06) 0.12 (0.12) (0.02) $3.83 (0.03) 0.25 0.15 $3.54 2023A Weather / New Retail Transmission O&M D&A Interest Other 2024E4 Demand2 Rates3 Margin Expense & AFUDC 1Adjusted EPS is a non-GAAP financial measure, see appendix for reconcil
Slide 18: Growth Outlook
Growth Outlook • 2024 adjusted EPS1 guidance: $3.73 - $3.93 Targeted Adjusted EPS Growth1 • Reaffirming adjusted EPS1 growth target of 4% to 6% through 2026 off the original 2023 adjusted EPS 4 - 6% guidance midpoint of $3.65 CAGR2 $4.11 - $4.35 • Continuing to target 60% to 70% payout ratio $3.65 •
Slide 19: Q&A
Q&A 19 Fourth Quarter 2023 Earnings Presentation
Slide 20: Appendix
Appendix
Slide 21: Rate Base, Year-End 2023 Estimates
Rate Base, Year-End 2023 Estimates Jurisdictional Allocation Rate Base Growth ($ in billions) FERC 15% +6% 24.0 – 25.0 18.6 53% Kansas Missouri 32% 2023E 2028E 21 Fourth Quarter 2023 Earnings Presentation
Slide 22: Evergy Five-Year Capital Investment Plan
Evergy Five-Year Capital Investment Plan $ in millions 2024E 2025E 2026E 2027E 2028E Total New Generation/Renewables 157 394 654 604 1107 2,916 General Facilities, IT, and Other 299 163 160 227 256 1,105 Transmission 660 528 555 682 710 3,135 Distribution 667 659 744 780 773 3,623 Legacy Generation
Slide 23: Kansas Central Five-Year Capital Investment Plan
Kansas Central Five-Year Capital Investment Plan $ in millions 2024E 2025E 2026E 2027E 2028E Total New Generation/Renewables 57 289 372 359 689 1,766 General Facilities, IT, and Other 126 49 50 53 73 351 Transmission 478 357 380 457 467 2,139 Distribution 240 214 276 291 272 1,293 Legacy Generation
Slide 24: Metro Five-Year Capital Investment Plan
Metro Five-Year Capital Investment Plan $ in millions 2024E 2025E 2026E 2027E 2028E Total New Generation/Renewables - - - 28 56 84 General Facilities, IT, and Other 155 104 104 160 175 698 Transmission 75 87 65 81 101 409 Distribution 218 239 254 269 295 1,275 Legacy Generation 134 136 136 129 152 6
Slide 25: Missouri West Five-Year Capital Investment Plan
Missouri West Five-Year Capital Investment Plan $ in millions 2024E 2025E 2026E 2027E 2028E Total New Generation/Renewables 99 105 282 217 363 1,066 General Facilities, IT, and Other 18 11 6 14 7 56 Transmission 107 85 110 144 141 587 Distribution 209 206 215 219 206 1,055 Legacy Generation 20 34 23
Slide 26: Debt Maturities & Credit Ratings
Debt Maturities & Credit Ratings CFO pre-WC/Debt1 2023 Strong Credit Ratings Moody’s S&P Global Evergy, Inc. Actual (pro forma)2 15.0% Outlook Stable Stable Senior Unsecured Debt Baa2 BBB Target3 >15.0% Commercial Paper P-2 A-2 Evergy Kansas Central Long-Term Debt Maturities4 ($ millions) Outlook St
Slide 27: 2024E – 2026E Financing Plan
2024E – 2026E Financing Plan Sources & Uses $ in billions $6.6 $6.7 1.7 (1.9) 0.3 2024E-2026E Dividends Net Securitization Incremental 2024E-2026E Cash From Proceeds1 Debt2 Capex Plan Operations Financing plan requires no new equity through 2026 1$331 million issued in February 2024 for Winter Storm
Slide 28: Missouri West Rate Case Expected Timeline
Missouri West Rate Case Expected Timeline Staff/Intervenor Direct Testimony June 27, 2024 True-Up Date June 30, 2024 Rebuttal Testimony August 6, 2024 Surrebuttal and True-Up Direct Testimony September 10, 2024 True-Up Rebuttal Testimony September 17, 2024 Settlement Conferences September 23 – 24, 2
Slide 29: GAAP to Non-GAAP EPS Reconciliation
GAAP to Non-GAAP EPS Reconciliation 1Adjusted earnings and adjusted earnings per share guidance (non-GAAP) are financial measures that are not calculated in accordance with GAAP and may not 29 Fourth Quarter 2023 Earnings Presentation be comparable to other companies’ presentations of similarly-name
Slide 30: GAAP to Non-GAAP O&M Reconciliation
GAAP to Non-GAAP O&M Reconciliation 1Adjusted O&M (non-GAAP) is a financial measure that is not calculated in accordance with GAAP and may not be comparable to other 30 Fourth Quarter 2023 Earnings Presentation companies’ presentations of similarly-named measures or more useful than the GAAP informa
Slide 31: Fourth Quarter GAAP to Non-GAAP EPS Reconciliation
Fourth Quarter GAAP to Non-GAAP EPS Reconciliation (a) Reflects non-regulated energy marketing margins related to the February 2021 winter weather event that are included in operating revenues on the consolidated statements of comprehensive income. (b) Reflects the deferral of the cumulative amount
Slide 32: Full Year GAAP to Non-GAAP EPS Reconciliation
Full Year GAAP to Non-GAAP EPS Reconciliation (a) Reflects non-regulated energy marketing margins related to the February 2021 winter weather event that are included in operating revenues on the consolidated statements of comprehensive income. (b) Reflects the deferral of the cumulative amount of pr