Evergy, Inc. (EVRG) Earnings Call Transcript & Summary

Good day. And welcome to the Evergy, Inc. 2020 Annual Meeting of Shareholders. I would now like to turn the conference over to Mark Ruelle, Chairman of the Board. Please go ahead.

Good morning. Welcome, and thank you for joining us for our 2020 Annual Shareholders Meeting. We appreciate everyone's willingness to adapt to the online format we are using this year to support the health and well-being of our shareholders and the communities we serve. Our shareholders can vote and ask questions relevant to the business of the meeting using the web portal instead of the typical in-person ballot and discussion period. As we get started, we'll take a moment to thank and honor the tireless and brave workers in our company, our communities and our country who are keeping things running and doing their best to keep people safe during these difficult times. Thank you to all of them. Today's agenda is reflected on the web portal. The rules of conduct that govern our meeting are available there as well. Regarding the order of the meeting, after a safety moment, we'll make introductions, then conduct the business portion of our meeting. Afterward, our President and CEO, Terry Bassham, will provide a few remarks followed by questions and answers at the end of the meeting. Evergy promotes an unwavering commitment to safety and emphasizes that commitment by opening all of our meetings with a safety topic. Today, our virtual meeting itself is an indicator of our safety mindset. We're doing our part to slow the spread of the COVID-19 virus by adapting to virtual meetings throughout our company, deploying work-from-home technology for those employees who can work remotely and taking additional safety precautions for the critical employees at our facilities and in the field who are keeping our power supply safe and reliable during an uncertain time. I'm pleased to report that, as usual, our employees have risen to the challenge and are adapting appropriately to ensure uninterrupted service to our customers while protecting their own health and safety. The Board of Directors set February 25, 2020, as the record date for determining shareholders entitled to vote at this meeting. An affidavit has been delivered, confirming that materials for this meeting were mailed beginning March 20, 2020, to all identified shareholders as of the record date, and that the documents also were made available electronically to shareholders via the Internet. Notice of change of location of the annual meeting of shareholders was filed with the Securities and Exchange Commission on April 6, 2020, and also posted on our Investor website that same day. The shareholder list shows that as of the record date, approximately 227 million shares of common stock were outstanding and entitled to vote at this meeting. Our inspectors of election inform us that a quorum is present for purposes of transacting business. Most, if not all of you, I surmise, have already voted. Shareholders who sent in proxies or voted via telephone or Internet and who do not want to change their vote do not need to take any further action. But if you have not yet voted or if you wish to change your vote, you may do so now by clicking on the voting button on the web portal and following the instructions there at any time before the polls close. At this time, I'd like to introduce the Evergy Board of Directors and senior officers who are virtually attending today's meeting: Terry Bassham; Kirkland Andrews; Mollie Hale Carter; Charles Chandler IV; Gary Forsee; Scott Grimes; Richard Hawley; Thomas Hyde; B. Anthony Isaac; Paul Keglevic; Sandra Lawrence; Ann Murtlow; Sandra Price; John Sherman; S. Carl Soderstrom Jr.; and John Arthur Stall. We welcome Kirkland Andrews and Paul Keglevic, who joined the Board in March 2020, to their first Evergy shareholder meeting. At the same time, we say farewell to 4 directors who will retire from the Board. Today, we thank and honor these directors for their excellent service, Charles Chandler, Gary Forsee, John Sherman and Scott Grimes. We appreciate the significant contribution that each has made to the company. I also would like to introduce our senior officers. They are Kevin Bryant, Executive Vice President and Chief Operations Officer; Greg Greenwood, Executive Vice President, Strategy, and Chief Administrative Officer; Tony Somma, Executive Vice President and Chief Financial Officer; Jerl Banning, Senior Vice President and Chief People Officer; Chuck Caisley, Senior Vice President, Marketing and Public Affairs, and Chief Customer Officer; Heather Humphrey, Senior Vice President, General Counsel and Corporate Secretary; and Charles King, Senior Vice President and Chief Technology Officer. Also joining us virtually today are Kim Felker and others from Deloitte & Touche, our independent public accounting firm. Deloitte & Touche will be available during the question-and-answer session after the meeting to respond to appropriate questions. Finally, the company has appointed Nancy Hoffman and Peter Scheibelein of Broadridge Financial services to act as independent inspectors of election. They are also with us virtually today. Each took the oath of inspection before the meeting. The inspectors of election will certify the voting results after the meeting, and that data will be filed with the Securities and Exchange Commission. As I mentioned a few moments ago, after the formal meeting has been adjourned, we will provide time for questions relevant to the business at hand. Validated shareholders may ask questions in the designated field on the web portal. Out of consideration for others, please limit yourself to one question. Our business meeting is now called to order. I have been advised that the proxy statement and annual report were properly mailed or made available to identified shareholders via the Internet, and that we have a quorum to conduct business. Now I will present the matters to be voted upon. The first item of business is the election of directors. The proxy statement listed 13 nominees for election to our Board of Directors to hold office until the 2021 Annual Shareholders Meeting or until their successors are duly elected and qualified: Kirkland B. Andrews; Terry Bassham; Mollie Hale Carter; Richard L. Hawley; Thomas D. Hyde; B. Anthony Isaac; Paul M. Keglevic; Sandra A.J. Lawrence; Ann D. Murtlow; Sandra J. Price; Mark A. Ruelle; S. Carl Soderstrom Jr.; and John Arthur Stall. The Board has recommended a vote for the election of all the nominees. The second item is the advisory nonbinding resolution, approving the 2019 compensation of our named executive officers as disclosed in our proxy statement. The Board has recommended a vote for this proposal. The third item is the ratification of Deloitte & Touche, our independent public accountants for 2020. The Board has recommended a vote for the ratification. If you haven't done so and are planning to vote on the web portal, please do so now. [Voting]

Now that everyone has had the opportunity to vote, I now declare the polls for the 2020 Evergy Annual Shareholder Meeting closed. We've been informed by the inspectors of election that the preliminary vote report shows that the nominees for election to the Board have been duly elected, the compensation of the named executive officers has been approved by advisory vote and Deloitte & Touche has been ratified as the independent registered accountants for the company for 2020. We will report the final vote results with the Securities and Exchange Commission. Thank you. With no further business to address, the business portion of this meeting -- this morning's meeting is now adjourned. I'm pleased now to introduce Terry Bassham, our President and Chief Executive Officer, to tell you more about the progress of our company. Terry?

Thank you, Mark, and good morning, everybody. Thank you for joining us for Evergy's second annual shareholder meeting. During this difficult time in our country's history, we share our sympathy for the many people experiencing loss as a result of the pandemic. We're grateful for those who have stepped up to help others in need and are particularly proud and appreciative of our employees who are working together in challenging circumstances to keep the lights on, providing stable, reliable service for those who depend on us most during difficult times while keeping themselves safe. Their dedication, along with the other frontline workers, who are keeping our country running, has been amazing to witness. Thanks to adaptive measures developed and implemented by our leaders and employees, we've kept our business moving forward. And as planned, we'll host our next earnings call on May 7. That's just a couple of days away, I'll keep these comments brief and focus on a few key achievements from last year. 2019 was yet another exciting and successful year for Evergy. We successfully rebranded our operating companies, serving customers in Kansas and Missouri. Giving us the ability to build upon our new brand identity, which is a forward-thinking, sustainable and efficient energy company, delivering on the promises we made when we created Evergy. 2019 was also a year for moving forward, a year that garnered merger savings ahead of plan, strong financial performance and sustainability gains. Let me highlight a few of our accomplishments from last year. We returned over $2 billion in capital to our shareholders through share repurchases and dividends. We exceeded our 2019 net merger savings target of $110 million, ending the year at $150 million or 36% above target and drove our adjusted O&M expense down better than 9% year-over-year. We invested more than $1 billion in infrastructure improvements to continue providing the reliable service that customers expect. And we advanced our long-standing commitment to environmental stewardship, announcing our goal to reduce CO2 emissions 80% by 2050 from 2005 levels. And additionally and importantly, we continue to build the Evergy culture by staying true to our 4 core values: safety, integrity, ownership and adaptability. Our execution of these strategies allowed for solid financial performance as well, which resulted in delivering a total shareholder return of 18.4% last year. At the time of the merger, we committed to achieving $628 million in merger efficiencies by 2023. I'm happy to report we are well ahead of that plan, having already realized more than $215 million in savings and expecting to capture an additional $145 million or so in savings this year. Capitalize on the momentum of this favorable cost trajectory, we'll continue to focus on opportunities to streamline, automate, digitize and enhance our processes and performance. Purpose we have laid out to empower a better future requires an eye toward the future to build the best energy company for our shareholders, customers, employees and the communities we serve by moving energy forward. Now with that, we'll move to our question-and-answer time if there are any questions. All right. I don't see any questions relevant to the business of this meeting. But in the event that we receive additional business-related questions, and they are submitted, we'll post responses on our corporate website after the meeting. So thank you for joining us this morning and for your support of Evergy. Good day.

Thank you for attending today's conference. The presentation has now concluded, and you may now disconnect.