Evergy, Inc. · NASDAQ:EVRG
Evergy — Q1 2020 Earnings Presentation
19 slides from Evergy's earnings presentation, May 7, 2020
Slide 1: First Quarter 2020 Earnings Call
First Quarter 2020 Earnings Call May 7, 2020
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, statemen
Slide 3: Agenda
Agenda Business Update Terry Bassham, President & CEO • COVID-19 Update • Regulatory and Legislative Update • Strategic Review & Operations Committee Update Financial Update Tony Somma, EVP & CFO • Quarter Results • Liquidity and Finance Activities • 2020 Considerations 3 First Quarter 2020 Earnings
Slide 4: Business Update
Business Update Terry Bassham President & CEO
Slide 5: COVID-19 Response Plans
COVID-19 Response Plans • Employee and public safety are first priority • Working diligently to maintain normal operations while implementing pandemic response plans - Over 2,000, or almost 40%, of our employees are working from home - Implementing social distancing protocol for critical sites and u
Slide 6: Well Positioned With Capital Plan Intact
NEW SLIDE Well Positioned With Capital Plan Intact • Flexible capital plan that is not dependent on issuing equity - Focused on critical projects to maintain and improve customer reliability - No plans to reduce capital expenditures - 5-year capital plan remains intact - Some projects deferred to 2n
Slide 7: Regulatory and Legislative Update
Regulatory and Legislative Update • Regulatory calendar is limited in near-term Targeted Net Merger Savings ($mm)2 - Next general rate cases are expected to be filed in Missouri in 2022 and in Kansas in 2023 - Continue to have regular and open dialogue with both Commissions - Both MPSC Staff and KCC
Slide 8: Strategic Review & Operations Committee
Strategic Review & Operations Committee • In February, announced cooperation agreement with Elliott Management and created a four-person Strategic Review & Operations Committee (SROC) - Members include: Terry Bassham, Art Stall, Paul Keglevic and Kirk Andrews - Co-Chairs: Art Stall and Paul Keglevic
Slide 9: Financial Update
Financial Update Tony Somma EVP & CFO
Slide 10: First Quarter Results
First Quarter Results Adjusted EPS1 Variance Drivers GAAP EPS: 1Q19 $0.39 vs 1Q20 $0.31 - Lower gross margin primarily from unfavorable weather - Lower other income; zero earnings from COLI in 1Q20 Gross Margin $27M lower, due primarily to unfavorable weather + Lower O&M O&M $37M lower driven by cos
Slide 11: Retail Sales
Residential usage represents ~50% Retail Sales contribution to total retail earnings COVID-19 sales impact worsened in April Annual Estimated Annual Retail Sales1 Earnings Contribution by Customer Type by Customer Type 10% Total Retail Sales - Weather Normalized 21% 2020 -vs- 2019 36% 2% 50% 0% 40%
Slide 12: Strong Liquidity Position
Strong Liquidity Position Limited Capital Market Needs • $2.5B credit facility maturing in September 2023 - ~$1.9B of available capacity as of April 30, 2020 - ~$350M of cash on hand as of April 30, 2020 • Increased liquidity through debt financing strategy - On April 2nd, Evergy Kansas Central issu
Slide 13: 2020 Outlook
2020 Outlook Key 2020 Driver Considerations • We now expect a decline in weather normalized sales in 2020 Retail electric sales: • Prior guidance was flat to 50 bps of growth • 6% to 9% reduction from 2019 Adjusted O&M of $1.187B Adjusted O&M expense1: • Prior guidance was 5% to 8% reduction from 20
Slide 14: Appendix
Appendix
Slide 15: Disciplined Cost Management
Disciplined Cost Management Net Merger Savings1 vs O&M Reductions2 Original Merger Targets Annual EPS Growth ($ in millions) ($ in millions) $160 Target of 6% - 8%1 Exceeded 2019 $150 $150 $145 target by ~9% ~36% Reduction $110 $1,306 ~6% - 9% $1,187 $1,080 Reduction to $1,116 $30 $23 2018 2019 2019
Slide 16: $7.6B of Planned Utility Investment through 2024
$7.6B of Planned Utility Investment through 2024 Projected 2020-2024 CapEx Five-Year Capital Plan 2020E 2021E 2022E 2023E 2024E by Jurisdiction (millions) Generating Facilities $487 $555 $563 $455 $263 16% Transmission and Distribution 45% Facilities 893 914 886 867 1,006 39% General Facilities and
Slide 17: Rate Base Growth Outlook
Rate Base Growth Outlook Projected Rate Base by Jurisdiction Targeted Rate Base Growth $ in billions 14% 11% 3% - 4% $17 - $18 CAGR $16.5 - $17.3 34% 32% ~$14.5 57% 52% 2019e 2020e 2021e 2022e 2023e 2024e 2019 2024 Kansas Missouri FERC 17 First Quarter 2020 Earnings Presentation
Slide 18: GAAP to Non-GAAP O&M Reconciliation
GAAP to Non-GAAP O&M Reconciliation1 2018 O&M 2019 O&M ($ in millions) ($ in millions) 2018 GAAP O&M $1,116 2019 GAAP O&M $1,219 Great Plains Energy O&M prior to the merger 318 Severance expense and rebranding costs (32) Non-recurring merger-related costs (101) 2019 Adjusted O&M (non-GAAP) $1,187 Pr
Slide 19: 2019/2020 EPS: GAAP to Non-GAAP Reconciliation
2019/2020 EPS: GAAP to Non-GAAP Reconciliation Earnings Earnings (Loss) (Loss) per per Earnings Diluted Earnings Diluted (Loss) Share (Loss) Share Three Months Ended March 31 2020 2019 (millions, except per share amounts) Net income attributable to Evergy, Inc. $ 69.4 $ 0.31 $ 99.5 $ 0.39 Non-GAAP r