Great Plains Energy
Great Plains Energy — Aquila — Merger or Acquisition (September 2007)
32 slides from Great Plains Energy's merger presentation, Sep 13, 2007
Slide 1: Great Plains Energy / Aquila
Filed by Great Plains Energy Incorporated pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Aquila, Inc. This filing consists of a joint investor presentation issued by Great Plains Energy Incorpo
Slide 2: Forward Looking Statement
Forward Looking Statement Information Concerning Forward-Looking Statements This presentation and the statements to be made by Great Plains Energy and Aquila contain forward-looking information related to the proposed acquisition of Aquila by Great Plains Energy, financial forecasts of each company
Slide 3: Additional Information
Additional Information Additional Information and Where to Find It In connection with the acquisition of Aquila by Great Plains Energy, Great Plains Energy filed with the SEC a registration statement on Form S-4 (Registration No. 333-142715), containing a definitive joint proxy statement/prospectus
Slide 4: Discussion Agenda
Discussion Agenda I. II. Transaction Overview III. Result Of A Robust Process Opportunity For Shareholders 4
Slide 5: Shareholder Value Proposition
Shareholder Value Proposition Enhanced Shareholder Returns u u Strong annual dividend yield - currently 5%+ u Lower cost and more efficient access to capital u Greater value from Aquila tax benefits through Black Hills transaction Adjacent utility territories provide opportunity for integration and
Slide 6: I. Transaction Overview
|. Transaction Overview @ j Aquila GREAT PLAINS FIIERGY —_ for Dele’ Lv
Slide 7: Deal Structure
Deal Structure Step 1: Asset Sale Step 2: Merger Step 3: Combined Entity Great Plains Great Plains Energy Aquila Aquila Cash/Stock Energy $1.80/0.0856 Shareholders ~ 27% Selected ~ 73% Assets & Liabilities Great Plains Black Hills Aquila Energy Gregory Strategic Cash Acquisition Aquila KCP&L Aquila
Slide 8: Expected Milestones
Expected Milestones Providing safe, reliable customer service will remain a priority throughout the transition process 2007 2007 2007 2007 2008 Aug Sep Oct Nov-Dec Q1 Great Plains Energy NE regulatory Aquila Colorado Missouri regulatory Missouri hearing shareholder vote regulatory decision & Kansas
Slide 9: Integration Plan
Integration Plan Steering Team - Bill Downey GXP & ILA representation on all teams Integration Team & Project Management - John Marshall Deal Closure Plant Operations Energy Resour ce Delivery & Service Energy Solutions Information Finance & Support Services Management Technology Accounting Integrat
Slide 10: Governance Structure
Governance Structure Great Plains Energy will retain current 11 directors, 9 are independent Great Michael Chesser, Chairman Plains Energy Executive & CEO Management Steve Easley, SVP Supply William Downey, President & COO John Marshall, SVP Delivery Terry Bassham, CFO Barbara Curry, SVP Corp. Svcs.
Slide 11: Combined Company Overview
Combined Company Overview Upon closing, KCP&L and Aquila will achieve considerable regional scale. „ Approximately 800,000 customers „ Combined base of about $3.6 billion „ Total generating capacity of nearly 5,800MWs „ Generating approximately 25 million MWhs annually „ + Additional scale mitigates
Slide 12: Company Updates - Recent Events
Company Updates - Recent Events Aquila Recent Recognitions „ New rates inCustomer 2007 Call Center certified by J.D. Power & Associates „ „ Missouri Electric $58.8 million rate increase plus a 95% Fuel Adjustment (FAC) „ Kansas Gas $5.1 million increase Restructuring Nebraska Gas $9.2 million increa
Slide 13: II. Result Of A Robust Process
II. Result Of A Robust Process
Slide 14: Aquila Board Perspective
Aquila Board Perspective Board unanimously recommends merger; accelerates shareholder return & lowers risk profile. Board followed a robust process: „ Conducted extensive sales process „ Considered fairness opinions of three external advisors „ Selected best strategic alternative Transaction value o
Slide 15: Robust Auction Process
Robust Auction Process Thorough process engaged both interested parties & those identified as logical, strategic candidates. Fall 2005 2006 2006 2006 2006 2006 2006 Dec 2006 2007 to Feb - Jun May Jun - Jul Aug Aug-Sep Nov to Feb Feb 2006 Jan 2007 Strategic Data rooms Aquila Nine parties Five Access
Slide 16: Indicative Non-Binding Bids
Indicative Non-Binding Bids Diverse interest received in excess of Aquila’s stand-alone value, indicating a healthy, market process. Indicative Description of Participant Indicative Bid Range per Form of Consideration Bidder Aquila Share A Financial party partnering with Strategic $4.50 - $5.00 100%
Slide 17: ILA Stand-Alone Valuations
ILA Stand-Alone Valuations * GXP offer exceeds valuations ** • Information on this slide excerpted from opinions of Aquila's financial advisors contained in the registration statement filed with the SEC by Great Plains Energy. This excerpt must be read in conjunction with the full description of Bla
Slide 18: III. Opportunity For Shareholders
III. Opportunity For Shareholders
Slide 19: Significant Synergies Expected
Significant Synergies Expected Combined company expects to realize $643 million of total savings and synergies in first five years. $36m $302m $305m $27m $120m $275m $131m $54m Note: § Cost savings are computed using 2006 baseline. 19
Slide 20: Regulated Operating Synergies
Regulated Operating Synergies Estimated Five-Year Cumulative Utility Operational Synergies ($305mm) „ „ Reduce non-fuel O&M „ Reduction in positions and associated spend $120m $131m Facility consolidation „ $54m Projects that reduce purchased power and increase revenue „ Improve Aquila’s coal unit p
Slide 21: Synergy Examples
Synergy Examples Operational and corporate synergies have been identified that build on the capabilities of both organizations Facility Consolidation „ KCP&L's headquarters to be maintained and Aquila's to be sold „ Aquila's Raytown facility as primary call center „ Net reduction of three service ce
Slide 22: Corporate Savings 2008-2012
Corporate Savings 2008-2012 Estimated Five-Year Cumulative Corporate Savings ($302mm) Direct labor not allocated to MO properties Benefits Outside services Other (IT, office expenses, etc) Claims, recovery, insurance, etc. „ Reduction of approximately 300 positions including benefits plus miscellane
Slide 23: Current Merger Regulatory Requests
Current Merger Regulatory Requests Approval requests includes sharing of synergy benefits with customers. Missouri „ Retention of 50% of the estimated utility operational synergies, net of estimated transition costs, over 5 years. „ 100% recovery of transition and transaction costs over 5 years. „ R
Slide 24: Financial Highlights
Financial Highlights Enhanced shareholder returns from the combined company Enhanced Shareholder Returns „ „ Shared net synergies requested for 5 years (Utility Operational Synergies) „ Efficient use of Aquila's tax position The transaction with Black Hills is expected to accelerate the utilization
Slide 25: Estimated Total Utility Rate Base
Estimated Total Utility Rate Base Compound annual growth rate of 16% in rate base builds shareholder value. $5,575 $3,975 $4,150 $3,600 „ Capex primarily on common projects „ Aquila capex plan in line with KCPL’s Comprehensive Energy Plan 1. Rate base amounts can vary by state. 25
Slide 26: Appendix
Appendix @ j Aquila GREAT PLAINS EtRay B rrovicing Frovey Tor Dele: Lara
Slide 27: Synergies Benefit Shareholders & Customers
Synergies Benefit Shareholders & Customers $643 Estimated Five-Year Cumulative Synergies ($643mm) Interest Savings (net of debt tender costs) $500 ‘Corporate’ costs - not allocated to MO regulated Emissions Credits $452 utilities Interest Savings Operational Utility Operational Synergies (No Synergi
Slide 28: Aquila Overview
Aquila Overview Aquila Utility Divisions Merchant Services Crossroads Peaker „ 340 MW Gas / Merchant gas-fired peaking plant in MS Book MPS / SJLP Electric Utilities Gas Utilities CO, NE, IA, KS (Black Hills Transaction) „ „ 14 gas contracts Missouri Public Service (“MPS”) and St. „ „ Joseph Light &
Slide 29: Great Plains Energy Overview
Great Plains Energy Overview Great Plains Energy Kansas City Power & Light Strategic Energy „ „ Serving approx. 26,700 customers & 108,500 accounts as of Regulated electric utility in KS and MO, serving the Greater 2Q07 Kansas City metro area „ „ „ 16.6mm MWhs delivered in 2006 Total generation capa
Slide 30: Anticipated Capital Expenditures
Anticipated Capital Expenditures 4 4 KCP&L Estimated Capital Expenditures 1. Demand Response / Energy Efficiency includes $8M, $8M, $10M, and $13M for the years 2007 through 2010, respectively, of expenditures that are deferred as a regulatory asset pursuant to MPSC and KCC rate orders. 2. CEP capex
Slide 31: Announced Synergies as % of Utility Non-Fuel O&M
Announced Synergies as % of Utility Non-Fuel O&M (1) (2) median (1) (2) Source: SEC filings and press releases. Includes fuel/purchased energy savings O&M from FERC Form 1 and 2 reported costs in calendar year prior to closing; includes all utility operating companies reported by shown parent firms
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