The Empire District Electric Company
The Empire District Electric — Empire District Electric — Q3 2016 Earnings Presentation
32 slides from The Empire District Electric's earnings presentation, Nov 7, 2016
Slide 1: Forward Looking Statements
Forward Looking Statements Certain matters discussed in this presentation are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about
Slide 2: Index
Index Merger Update . . . . . . . . . . . . . . 3 Second Quarter Update . . . . . . . 6 Regulatory Update . . . . . . . . . . 14 Supplemental Materials . . . . . . 17 Who We Are . . . . . . . . . . . . . . . . . 18 Growth . . . . . . . . . . . . . . . . . . . . . . 20 Financial . . . . . . . . . . .
Slide 3: Merger Update
SERVICES YOU COUNT ON Merger Update Riverton, Kansas Unit 12 Combined Cycle Conversion Project In Service May 1, 2016
Slide 4: Merger Approval Timeline
1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 Merger applications filed with State regulatory agencies and FERC 3/16/16 Approvals / Clearances obtained: Missouri(1), Arkansas(2), Oklahoma, FERC, HSR Act (waiting period expired), CFIUS (review concluded), FCC Approval pending: Kansas(3) Merger Proxy Statem
Slide 5: Overview of Liberty Utilities Central Region
Kansas City Oklahoma City St. Louis Omaha KS NE IA MO OK AR IL Joplin IN KY TN Jefferson City Overview of Liberty Utilities Central Region Complimentary service areas (Central region includes additional service areas in Arkansas and Texas not pictured)
Slide 6: Third Quarter Update
Third Quarter Update Elk River Wind Farm – Meeting renewable energy standards
Slide 7: Third Quarter Highlights
3rd Quarter 2016 3rd Quarter 2015 YTD September, 2016 YTD September, 2015 TME September, 2016 TME September, 2015 Net Income (millions) $27.5 $25.3 $50.7 $46.7 $60.6 $57.8 Earnings Per Share - including merger costs $0.62 $0.58 $1.15 $1.07 $1.38 $1.33 Earnings Per Share -exclusive of merger costs $0
Slide 8: Third Quarter Highlights: Quarter ended September 30, 2016
Third Quarter Highlights Quarter ended September 30, 2016: Consolidated Basic EPS After Tax Increase (Decrease) $0.00 $0.08 $0.03 $0.00 $0.02 $(0.05) $(0.01) $(0.02) $(0.01) $0.58 $0.62 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 Period Ended 9/30/2015 Margin O&M Merger Costs Depreciation & A
Slide 9: Third Quarter Highlights: Year-to-Date September 30, 2016
Third Quarter Highlights Year-to-Date September 30, 2016: Consolidated Basic EPS After Tax Increase (Decrease) $0.21 $0.08 $0.00 $0.02 $(0.12) $(0.07) $(0.02) $(0.01) $(0.01) $1.07 $1.15 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 Period Ended 9/30/2015 Margin O&M Merger Costs Depreciation &
Slide 10: Third Quarter Highlights: Twelve Months Ended September 30, 2016
Third Quarter Highlights Twelve Months Ended September 30, 2016: Consolidated Basic EPS After Tax Increase (Decrease) $(0.03) $0.23 $0.09 $0.01 $(0.12) $(0.09) $(0.01) $(0.02) $(0.01) $1.33 $1.38 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 Period Ended 9/30/2015 Margin O&M Merger Costs
Slide 11: 2016 Earnings Per Share Guidance
Earnings Per Share 2016 Earnings Drivers 2016 Guidance: Full year of Asbury AQCS cost recovery in customer rates Rates in effect late September 2016 for Missouri case filed October 16, 2015 to recover Riverton Unit 12 Combined Cycle project costs Riverton lag effect until project costs recovered in
Slide 12: Quarterly ROE – Trailing 12-Month Basis
Quarterly ROE* – Trailing 12-Month Basis * Not weather adjusted Return on Equity ROE absent merger-related costs 7.3% 7.8% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q
Slide 13: Electric Vehicle Initiative Launch
Electric Vehicle Initiative Launch www.evolvewithempire.com Initiative Includes: Expansion of charging station network Rebates for purchase or lease of new electric vehicle (EV), plug-in hybrids, electric fork trucks Dealer incentives Federal tax credits available Initiative Purpose: Address flatten
Slide 14: Regulatory Update
Regulatory Update Leading by example – adopting electric and plug-in technologies for vehicle fleet
Slide 15: Missouri Public Service Commission rate case approval
Approved by Missouri Public Service Commission – August 10, 2016 $20.4M (4.46%) base revenue increase (original request for $33.4M, or 7.3% increase) Stipulated settlement, based on Return on Equity range of 9.5% to 9.9% (requested 9.9% ROE) Base fuel reduction of $2.69 per MWh, little impact to gro
Slide 16: Regulatory updates: Missouri, Kansas, Arkansas
Missouri Filed Integrated Resource Plan (IRP) April 1, 2016 Solar Rebates; at September 30, 2016, 841 applications processed; $10.9M deferred on Balance Sheet for recovery. Kansas As a condition of Unanimous Settlement Agreement related to the merger filed October 6, 2016, pending $6M Kansas rate ca
Slide 17: Supplemental Materials
Supplemental Materials Who We Are Growth Financial Operations Contacts Asbury Generating Station –environmentally compliant base-load generation
Slide 18: Who We Are
Who We Are 100% Regulated Electric and Gas Utility Over 100 years of operation Operations in four states: MO, KS, OK, AR plus FERC 218,000 customers 10,000 square mile service territory NYSE Ticker: EDE FERC , 3.4% Missouri , 85.9% Kansas , 4.7% Arkansas , 3.3% Oklahoma , 2.7% 2015 On - System Elect
Slide 19: Experienced Management Team and Board of Directors
Executive Management Officers average nearly 20 years utility experience with Empire Independent Board of Directors Non-executive chairman All directors other than CEO are independent Who We Are Board of Directors Brad Beecher President & CEO Laurie Delano VP - Finance & CFO Kelly Walters VP & COO -
Slide 20: Growth: Demand, Capacity and Net Plant Investment
1 Measure of customer usage, excluding losses Actuals include AFUDC, projections exclude AFUDC; Net Plant excludes depreciation recorded as a Cost of Removal regulatory liability Includes effect of Bonus Depreciation through 2019 Growth 1 1,100 1,255 1,255 1,257 1,409 1,392 1,391 1,377 1,326 1,280 1
Slide 21: Electric Customer Growth and Average Residential Rates
Electric Customer Growth Average Residential Rates 1 Source EIA 2 2015 EIA not yet available 1 Source: EIA 2 2015 EIA Not yet available Growth 1 2 -2 -1.5 -1 -0.5 0 0.5 1 1.5 2 2.5 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Percent Change EDE Industry Average 1 Note: Impact of E F -
Slide 22: Historical Performance
1 Operating Revenues include revenues for fuel recovery and, effective March 1, 2014, SPP Integrated Market (IM) activity ($20.0M for TME September 30, 2016; $15.0M in 2015; $41.9M in 2014) 2 Operating revenues less fuel and purchased power and cost of natural gas sold and transported 3 Exclusive of
Slide 23: Earnings and Dividends Per Share
Financial 1 Dividend suspended for Q3 and Q4 in 2011 following EF-5 tornado on May 22, 2011 2 Basic EPS 1.17 1.18 1.17 1.31 1.32 1.48 1.55 1.30 1.28 1.28 1.28 0.64 1.00 1.005 1.025 1.04 $0.00 $0.40 $0.80 $1.20 $1.60 2008 2009 2010 2011 2012 2013 2014 2015 Earnings and Dividends Per Share EPS Dividen
Slide 24: Total Return Performance
Period Ending Index 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 Empire District Electric Company $ 100.00 $ 98.06 $ 99.50 $ 115.97 $ 158.30 $ 156.20 S&P Electric Utilities Index $ 100.00 $ 120.97 $ 120.30 $ 129.68 $ 170.15 $ 160.95 S&P 500 $ 100.00 $ 102.11 $ 118.45 $ 156.82 $ 178.28 $ 180
Slide 25: Credit Ratings
Moody’s Standard & Poor’s Corporate Issuer Baa1 BBB First Mortgage Bonds A2 A- Commercial Paper P-2 A-2 Outlook Stable Negative Financial Strong Investment Grade Credit Target 50/50 capital structure March 2016 Moody’s reaffirmed credit ratings April 29, 2016 Standard & Poor’s reaffirmed debt rating
Slide 26: Debt Maturities
Financial Well-spaced debt maturities, upcoming maturity of $25M in late-2016 with expectation to pay off at maturity $200M five-year revolving credit facility maturing October 19, 2019; $75M accordion Average cost of debt: 5.2% 1 Not being refinanced (1) 25 90 100 88 60 92 40 55 80 50 120 60 0 30 6
Slide 27: Revenue Source and Revenues by Customer
Financial Revenue Source (LTM 12/31/15) Electric Revenues by Customer (LTM 12/31/15) Gas Revenues by Customer (LTM 12/31/15) (1) 1 Includes $15 Million of SPP IM revenues 2 Excludes $2 Million of water revenues (2) Electric 92% Gas 7% Other 1% Total: $606 Million Residential 42% Commercial 31% Indus
Slide 28: Energy Supply
Energy Supply Primary Fuel Net Capacity (MW) Status Asbury Coal 198 Owned Riverton Natural Gas 271 Owned1 Iatan (12% owner, Units 1 &2) Coal 191 Owned State Line Combined Cycle Natural Gas 295 Owned2 State Line Unit 1 Natural Gas 96 Owned Empire Energy Center Natural Gas 257 Owned Ozark Beach Hydro
Slide 29: Diverse Generation/Balanced Mix of Resources
Operations Diverse Generation/Balanced Mix of Resources 1,374 Net MW Owned Capacity 86 MW Purchased Power Capacity Total: 4,936 GWh 1 Includes Riverton 12 combined cycle placed in service May 1, 2016 30% 3% 3% 1% 24% 39% 2016 Capacity Mix (1) Coal-fired Coal PPA Wind PPA Hydro Gas-fired Simple Cycle
Slide 30: Executive Management and Investor Relations Team
Brad Beecher, President and CEO Laurie Delano, Vice President – Finance and CFO Dale Harrington, Corporate Secretary and Director of Investor Relations The Empire District Electric Company 602 S. Joplin Avenue Joplin, MO 64801 www.empiredistrict.com Laurie Delano Office: 417-625-5127 Mobile: 417-291
Slide 31: Making lives better every day
Making lives better every day with reliable energy and service SERVICES YOU COUNT ON Asbury Generating Station – 2015 AQCS construction Photo by Randy Richardson, AQCS Construction Manager
Slide 32: sn ig _ better every ‘ny amelie and ~~
sn ig _ better every ‘ny amelie and ~~ on - 2095 AQCS construction \QCS Construction Manager|
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