Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 3, 2017
WESTAR ENERGY, INC.
(Exact name of registrant as specified in its charter)
|
| | | | | |
KANSAS | | 1-3523 | | 48-0290150 |
(State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (IRS Employer Identification No.) |
| | | | |
818 South Kansas Avenue, Topeka, Kansas | | 66612 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code | (785) 575-6300 |
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
ý Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
WESTAR ENERGY, INC.
Item 7.01. Regulation FD Disclosure.
On November 3, 2017, Westar Energy, Inc. (“Westar Energy”) and Great Plains Energy Incorporated (“Great Plains Energy”) released an investor presentation. A copy of that investor presentation is attached hereto as Exhibit 99.1.
This information is also available to the public on our website, http://www.WestarEnergy.com. Investors should note that we announce material financial information in Securities and Exchange Commission (“SEC”) filings and press releases, and on public conference calls. In accordance with SEC guidance, we may also use the Investor Relations section of our website to communicate with investors about us. It is possible that the financial and other information we post there could be deemed to be material information.
The information furnished pursuant to this Item 7.01, except for the portions included in Item 8.01 as set forth below, will not be incorporated by reference into any registration statement filed by us under the Securities Act of 1933, as amended (“Securities Act”), unless specifically identified therein as being incorporated by reference.
Item 8.01. Other Events.
Pages 1-10 and 15-25 of the investor presentation attached as Exhibit 99.1 relate to the pending merger between Westar Energy and Great Plains Energy and are being filed herewith in compliance with Rule 425 of the Securities Act.
Item 9.01. Financial Statements and Exhibits.
Forward Looking Statements
Statements made in the 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, statements relating to the anticipated merger transaction of Great Plains Energy and Westar Energy, including those that relate to the expected financial and operational benefits of the merger to the companies and their shareholders (including cost savings, operational efficiencies and the impact of the anticipated merger on earnings per share), the expected timing of closing, the outcome of regulatory proceedings, cost estimates of capital projects, dividend growth, share repurchases, balance sheet and credit ratings, rebates to customers, employee issues and other matters affecting future operations. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Great Plains Energy and Westar Energy are providing a number of important factors that could cause actual results to differ materially from the provided forward-looking information. These important factors include: future economic conditions in regional, national and international markets and their effects on sales, prices and costs; prices and availability of electricity in regional and national wholesale markets; market perception of the energy industry, Great Plains Energy, KCP&L, and Westar Energy; changes in business strategy, operations or development plans; the outcome of contract negotiations for goods and services; effects of current or proposed state and federal legislative and regulatory actions or developments, including, but not limited to, deregulation, re-regulation and restructuring of the electric utility industry; decisions of regulators regarding rates that the companies can charge for electricity; adverse changes in applicable laws, regulations, rules, principles or practices governing tax, accounting and environmental matters including, but not limited to, air and water quality; financial market conditions and performance including, but not limited to, changes in interest rates and credit spreads and in availability and cost of capital and the effects on derivatives and hedges, nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of terrorist acts, including, but not limited to, cyber terrorism; ability to carry out marketing and sales plans; weather conditions including, but not limited to, weather-related damage and their effects on sales, prices and costs; cost, availability, quality and deliverability of fuel; the inherent uncertainties in estimating the effects of weather, economic conditions and other factors on customer consumption and financial results; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution or other projects; Great Plains Energy’s and Westar Energy’s ability to successfully manage and integrate their respective transmission joint ventures; the inherent risks associated with the ownership and operation of a nuclear facility including, but not limited to, environmental, health, safety, regulatory and financial risks; workforce risks, including, but not limited to, increased costs of retirement, health care and other benefits; the ability of Great Plains Energy and Westar Energy to obtain the regulatory and shareholder approvals necessary to complete the anticipated merger or the imposition of adverse conditions or costs in connection with obtaining regulatory approvals; the risk that a condition to the closing of the anticipated merger may not be satisfied or that the anticipated merger may fail to close; the outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted relating to the anticipated merger; the costs incurred to consummate the anticipated merger; the possibility that the expected value creation from the anticipated merger will not be realized, or will not be realized within the expected time period; difficulties related to the integration of the two companies; the credit ratings of the combined company following the anticipated merger; disruption from the anticipated merger making it more difficult to maintain relationships with customers, employees, regulators or suppliers; the anticipated diversion of management time and attention on the anticipated merger; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Additional risks and uncertainties are discussed in the joint proxy statement/prospectus and other materials that Great Plains Energy, Westar Energy and Monarch Energy Holding, Inc. (“Monarch Energy”) file with the SEC in connection with the anticipated merger. Other risk factors are detailed from time to time in quarterly reports on Form 10-Q and annual reports on Form 10-K filed by Great Plains Energy, KCP&L and Westar Energy with the SEC. Each forward-looking statement speaks only as of the date of the particular statement. Monarch Energy, Great Plains Energy, KCP&L and Westar Energy undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any proxy, vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed transactions, Monarch Energy has filed with the SEC a Registration Statement on Form S-4 (Registration No. 333-220465), which was declared effective by the SEC, Great Plains Energy and Westar Energy have each filed a definitive joint proxy statement, which also constitutes a prospectus of Monarch Energy, each of which is publicly available, and Great Plains Energy, Westar Energy and Monarch Energy have filed and may file other documents regarding the proposed transactions with the SEC. Great Plains Energy and Westar Energy mailed the definitive joint proxy statement/prospectus in connection with the transactions to their respective shareholders on or around October 13, 2017. WE URGE INVESTORS TO READ THE REGISTRATION STATEMENT AND DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND THESE OTHER MATERIALS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT GREAT PLAINS ENERGY, WESTAR ENERGY, MONARCH ENERGY AND THE PROPOSED TRANSACTIONS.
Investors can obtain free copies of the Registration Statement and definitive joint proxy statement/prospectus and other documents filed by Monarch Energy, Great Plains Energy and Westar Energy with the SEC at http://www.sec.gov, the SEC’s website. These documents filed by Great Plains Energy and Monarch Energy are also available free of charge from Great Plains Energy’s website (http://www.greatplainsenergy.com) under the tab, “Investor Relations” and then under the heading “SEC Filings,” or by contacting Great Plains Energy’s Investor Relations Department at 1-800-245-5275. These documents filed by Westar Energy are also available free of charge from Westar Energy’s website (http://www.westarenergy.com) under the tab “Investors” and then under the heading “SEC Filings,” or by contacting Westar Energy’s Investor Relations Department at 785-575-8227.
Participants in Proxy Solicitation
Great Plains Energy, Westar Energy and their respective directors and certain of their executive officers and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Great Plains Energy’s and Westar Energy’s shareholders with respect to the proposed transactions. Information regarding the officers and directors of Great Plains Energy is included in its definitive proxy statement for its 2017 annual meeting filed with the SEC on March 23, 2017. Information regarding the officers and directors of Westar Energy is included in its definitive proxy statement for its 2017 annual meeting filed with the SEC on September 14, 2017. Additional information regarding the identity of potential participants, and their direct or indirect interests, by securities, holdings or otherwise, is set forth in the Registration Statement and definitive joint proxy statement/prospectus and other materials filed with SEC in connection with the proposed merger. Free copies of these documents may be obtained as described in the paragraphs above.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
| | | | | | |
| | | | WESTAR ENERGY, INC. |
| | | | | | |
Date: | | November 3, 2017 | | By: | | /s/ Jeffrey C. DeBruin |
| | | | Name: | | Jeffrey C. DeBruin |
| | | | Title: | | Director, Law and Assistant Corporate Secretary |
eeiwrgxpupdatefinal
Westar Energy and Great Plains Energy
MERGER OF EQUALS TO FORM LEADING ENERGY COMPANY
2017 Edison Electric Institute Financial Conference
November 5-8, 2017
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, statements relating to the anticipated merger transaction of Great Plains Energy Incorporated (Great
Plains Energy) and Westar Energy, Inc. (Westar Energy), including those that relate to the expected financial and operational benefits of the merger to the companies and
their shareholders (including cost savings, operational efficiencies and the impact of the anticipated merger on earnings per share), the expected timing of closing, the
outcome of regulatory proceedings, cost estimates of capital projects, dividend growth, share repurchases, balance sheet and credit ratings, rebates to customers, employee
issues and other matters affecting future operations. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Great Plains Energy
and Westar Energy are providing a number of important factors that could cause actual results to differ materially from the provided forward-looking information. These
important factors include: future economic conditions in regional, national and international markets and their effects on sales, prices and costs; prices and availability of
electricity in regional and national wholesale markets; market perception of the energy industry, Great Plains Energy, KCP&L, and Westar Energy; changes in business
strategy, operations or development plans; the outcome of contract negotiations for goods and services; effects of current or proposed state and federal legislative and
regulatory actions or developments, including, but not limited to, deregulation, re-regulation and restructuring of the electric utility industry; decisions of regulators regarding
rates that the companies can charge for electricity; adverse changes in applicable laws, regulations, rules, principles or practices governing tax, accounting and
environmental matters including, but not limited to, air and water quality; financial market conditions and performance including, but not limited to, changes in interest rates
and credit spreads and in availability and cost of capital and the effects on derivatives and hedges, nuclear decommissioning trust and pension plan assets and costs;
impairments of long-lived assets or goodwill; credit ratings; inflation rates; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy
their contractual commitments; impact of terrorist acts, including, but not limited to, cyber terrorism; ability to carry out marketing and sales plans; weather conditions
including, but not limited to, weather-related damage and their effects on sales, prices and costs; cost, availability, quality and deliverability of fuel; the inherent uncertainties
in estimating the effects of weather, economic conditions and other factors on customer consumption and financial results; ability to achieve generation goals and the
occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution
or other projects; Great Plains Energy’s and Westar Energy’s ability to successfully manage and integrate their respective transmission joint ventures; the inherent risks
associated with the ownership and operation of a nuclear facility including, but not limited to, environmental, health, safety, regulatory and financial risks; workforce risks,
including, but not limited to, increased costs of retirement, health care and other benefits; the ability of Great Plains Energy and Westar Energy to obtain the regulatory and
shareholder approvals necessary to complete the anticipated merger or the imposition of adverse conditions or costs in connection with obtaining regulatory approvals; the
risk that a condition to the closing of the anticipated merger may not be satisfied or that the anticipated merger may fail to close; the outcome of any legal proceedings,
regulatory proceedings or enforcement matters that may be instituted relating to the anticipated merger; the costs incurred to consummate the anticipated merger; the
possibility that the expected value creation from the anticipated merger will not be realized, or will not be realized within the expected time period; difficulties related to the
integration of the two companies; the credit ratings of the combined company following the anticipated merger; disruption from the anticipated merger making it more difficult
to maintain relationships with customers, employees, regulators or suppliers; the anticipated diversion of management time and attention on the anticipated merger; and other
risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Additional risks and uncertainties are discussed in the joint proxy statement/prospectus
and other materials that Great Plains Energy, Westar Energy and Monarch Energy Holding, Inc. (Monarch Energy) file with the Securities and Exchange Commission (“SEC”)
in connection with the anticipated merger. Other risk factors are detailed from time to time in quarterly reports on Form 10-Q and annual reports on Form 10-K filed by Great
Plains Energy, KCP&L and Westar Energy with the SEC. Each forward-looking statement speaks only as of the date of the particular statement. Monarch Energy, Great
Plains Energy, KCP&L and Westar Energy undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future
events or otherwise.
2 2017 EEI FINANCIAL CONFERENCE
MERGER OVERVIEW
Creates a leading energy company with a
combined equity value of ~$15 billion1 – a more
valuable company for shareholders and a stronger
company for customers
100% stock-for-stock, tax-free exchange of shares
with no transaction debt and no exchange of cash
Exchange Ratio
WR: 1:1 (52.5% ownership)
GXP: 0.5981:1 (47.5% ownership)
Transaction structure directly responsive to
regulatory concerns
Closing expected to occur in the first half of 2018
4
MERGER OF EQUALS
Combined Service Area2
Great Plains
Energy
Westar
Energy
Pro Forma
Combined
Rate Base ($billion)3 $6.6 $6.5 $13.1
Electric Customers 864,400 707,000 1,571,400
Owned Generation
Capacity (MW)
6,524 6,573 13,097
Transmission Miles 3,600 6,400 10,000
Distribution Miles 22,700 29,000 51,700
1. Great Plains Energy and Westar Energy combined market cap as of 10/31/17.
2. Excludes Great Plains Energy’s Crossroad Energy Center in the Mississippi Delta and Westar’s Spring Creek Energy Center in Logan County, OK.
3. Estimated rate base based on ordered and settled rate cases.
Key Operating Metrics
2017 EEI FINANCIAL CONFERENCE
Energy Centers Westar Energy Great Plains Energy
STRONG PLATFORM FOR EARNINGS GROWTH
5
$3.25
$2.43
$3.57
2016A Pro Forma 2021E
Targeted Pro Forma EPS Growth1
6%-8%
CAGR
1. EPS growth based on Westar Energy 2016 actual EPS of $2.43.
Driven By:
• Merger savings
• FERC regulated transmission growth
• Share repurchases
• 2018 general rate review to reduce regulatory lag
2017 EEI FINANCIAL CONFERENCE
$2.19
$1.84
$2.32
Pro Forma 2018E Pro Forma 2021E
Targeted Pro Forma Dividend Growth
6%-8%
CAGR
6
STRONG PLATFORM FOR DIVIDEND GROWTH
1. Illustrative analysis based on most recent Great Plains Energy quarterly dividend payment annualized of $1.10 per share divided by the 0.5981 exchange ratio.
1
Initial dividend results in 15% increase for Westar’s shareholders
Initial dividend maintains Great Plains Energy’s current dividend policy
Targeted annual dividend growth in line with EPS growth while targeting payout
ratio of 60% to 70%
2017 EEI FINANCIAL CONFERENCE
2018E 2019E 2020E 2021E
$110.3
$143.5 $149.4
$27.8
7
PLATFORM FOR SIGNIFICANT MERGER SAVINGS
Targeted Merger Savings ($mm)1
2016A 2021E
Great Plains Energy Westar Pro Forma
$1,367
~$1,100 – $1,200
Targeted O&M Cost Reductions ($mm)2
• Unique combination provides maximum opportunities for efficiency creation, cost savings for
customers, and better ability to earn allowed returns
• Cost savings and ongoing management of O&M expected to drive total cost reductions of
approximately 15% from 2016 to 2021
• Detailed integration plans demonstrate merger savings of $150+ million in 2021 and beyond
o In addition to targeted merger savings, we expect over $200 million dollars of cost
savings related to Great Plains Energy plant retirements
1. Excludes Great Plains Energy plant retirements announced June 2017 and potential capital expenditure savings. Planned merger savings include non-fuel O&M and Other shown net of
costs to achieve. See appendix slide for projected merger savings by type and year.
2. Inclusive of targeted O&M merger savings and expected O&M cost savings of Great Plains Energy announced plant retirements.
3. Represents Great Plains Energy utility O&M and Westar’s O&M and SG&A as reported in GAAP financials.
2017 EEI FINANCIAL CONFERENCE
~(15%)
3
8
FINANCIAL BENEFITS
2017 EEI FINANCIAL CONFERENCE
Projected significant earnings accretion to Great Plains Energy
and Westar Energy
Expect to offer top quartile total shareholder return amongst
electric utilities:
o Target EPS growth of 6% to 8%, 2016 to 20211
o Target dividend growth in line with EPS growth,
60% to 70% target payout ratio
Diversifies and enhances earnings stream
Opportunity to improve earned returns relative to allowed levels
Over $6 billion in investment from 2018 through 2022
o Over $1 billion in FERC regulated transmission
investment
Target rate base growth of 3 to 4% through 20222
Capital structure rebalancing post-closing of the merger
o Expect to repurchase ~60 million, or ~22% of pro forma
shares outstanding, over time in the first two years after
merger closing3
o Rebalancing supported by strong balance sheet that is
expected to include approximately $1.25 billion of cash
at closing
o Combined company will maintain strong investment-
grade credit ratings
1. Targeted EPS growth based on Westar Energy 2016 actual EPS of $2.43.
2. Based on 2016 pro forma rate base currently reflected in rates of $13.1 billion.
3. Anticipated initial pro forma shares of approximately 272 million at merger closing.
9
STRONG CREDIT QUALITY AND CAPACITY FOR
SIGNIFICANT SHARE REPURCHASES
• Great Plains Energy completed unwind of prior debt and mandatory convertible preferred equity acquisition financing
following July 2017 merger of equals announcement, with a cost of approximately $150 million
• Merger of equals structure with no merger-related debt results in a strengthened credit profile and positive rating
agency action
o Credit metrics for the combined company expected to be in-line with those of Great Plains Energy pre-merger
• Expect to repurchase ~60 million shares (~22% of pro forma shares outstanding) in the first two years after merger
closing1
• Projected consolidated FFO / Total Debt of ~18% to 20% in 2019 – 2021
• Projected consolidated Debt / Capitalization of ~48 to 50% in 2019 – 2021
Ratings / Outlook2
Westar
Energy
Great Plains
Energy KCP&L GMO
S
&
P
Issuer Rating BBB+ BBB+ BBB+ BBB+
Senior Secured Debt A - A -
Senior Unsecured Debt - BBB BBB+ BBB+
Outlook Positive Positive Positive Positive
M
o
o
d
y
’s
Issuer Rating Baa1 - - -
Senior Secured Debt A2 - A2 -
Senior Unsecured Debt - Baa2 Baa1 Baa2
Outlook Stable Stable Stable Stable
1. Anticipated initial pro forma shares of approximately 272 million at merger closing.
2. Credit ratings as of 11/1/2017.
2017 EEI FINANCIAL CONFERENCE
10
MERGER EXPECTED TO CLOSE IN FIRST HALF 2018
Stakeholder Filed
Approval
Anticipated Additional Info.
GXP and WR shareholders
√ 4Q17
Special shareholder meetings for Westar and Great
Plains to be held on November 21, 2017
KCC √ 2Q18 Docket: 18-KCPE-095-MER
MPSC √ 2Q18 Docket: EM-208-0012
FERC √ 1Q18 – 2Q18 Docket: EC-171-000
NRC √ 1Q18 – 2Q18 Docket: 50-482
U.S. DOJ/FTC (HSR) 4Q17 4Q17 – 1Q18
FCC 1Q18 – 2Q18 1Q18 – 2Q18
Procedural Schedule
Proposed procedural schedules in both Kansas and Missouri – suggest effective orders late May, 2018
o Missouri Public Service Commission (MPSC) issued an order on October 19, 2017 consistent with the
proposed procedural schedule and supportive of a late May, 2018 order effective date – expected order
date is not specifically stated
o Expect Kansas Corporation Commission (KCC) decision on procedural schedule in November 2017
2017 EEI FINANCIAL CONFERENCE
REGULATORY AND
LEGISLATIVE PRIORITIES
12
REGULATORY INITIATIVES
Regulatory Timing 4Q17 1Q18 2Q18 3Q18 4Q18
Merger Approval
Westar General Rate Review
KCP&L – KS General Rate Review
KCP&L – MO General Rate Review
GMO General Rate Review
Missouri & Kansas Legislative Session
Westar General Rate Review Drivers:
• Westar Plains Wind Farm
• Expiration of wholesale contracts which are currently reflected in rates and have generated offsets to the retail cost of
service
• Expiring production tax credits currently reflected in rates
KCP&L/GMO General Rate Review Drivers:
• New customer information system and other infrastructure investments since rates were last set
Legislative Priorities:
• Supporting comprehensive regulatory reform in Missouri; expecting to pursue legislation in 2018
• Not expecting major Kansas legislative activities in 2018
2017 EEI FINANCIAL CONFERENCE
RATEMAKING CONSTRUCT
13
Cost Recovery Mechanisms
Westar
Kansas
KCP&L
Kansas
KCP&L
Missouri
GMO
Missouri
Energy Cost Adj. Rider (KS) / Fuel Adj. Clause Rider (MO) √ √ √ √
Pension and OPEB Tracker √ √ √ √
Property Tax Surcharge Rider √ √
Energy Efficiency Cost Recovery Rider √ √
Missouri Energy Efficiency Investment Act Program Rider √ √
Renewable Energy Standards Tracker √ √
Renewable Energy Standard Rate Adj. Mechanism Rider √
Transmission Delivery Charge Rider √ √
Critical Infrastructure Protection Standards / Cybersecurity Tracker √ √
Abbreviated Rate Case √ √
2017 EEI FINANCIAL CONFERENCE
14
STATE COMMISSIONERS
Missouri Public Service Commission (MPSC) Kansas Corporation Commission (KCC)
Mr. Daniel Y. Hall (D)
Chair (since August 2015)
Term began: September 2013
Term expires: September 2019
Mr. Pat Apple (R)
Chair (since January 2017)
Term began: March 2014
Term expires: March 2018
Mr. Stephen M. Stoll (D)
Commissioner
Term began: June 2012
Term expires: December 2017
Ms. Shari Feist Albrecht (I)
Commissioner
Term began: June 2012
Reappointed: January 2017
Term expires: March 2020
Mr. William P. Kenney (R)
Commissioner
Term began: January 2013
Term expires: January 2019
Mr. Jay S. Emler (R)
Commissioner
Term began: January 2014
Reappointed: May 2015
Term expires: March 2019
Mr. Scott T. Rupp (R)
Commissioner
Term began: March 2014
Term expires: March 2020
Ms. Maida J. Coleman (D)
Commissioner
Term began: August 2015
Term expires: August 2021
MPSC consists of five (5) members, including the Chairman, who are
appointed by the Governor and confirmed by the Senate.
Members serve six-year terms (may continue to serve after term
expires until reappointed or replaced)
Governor appoints one member to serve as Chairman
KCC consists of three (3) members, including the Chairman, who are
appointed by the Governor and confirmed by the Senate.
Members serve four-year terms (may continue to serve after term
expires until reappointed or replaced)
Commissioners elect one member to serve as Chairman
2017 EEI FINANCIAL CONFERENCE
CLEAN ENERGY FOCUS
2005 2018
0%
10%
20%
30%
40%
Combined Company Projections
Anticipated Emission Reduction 2005 - 2020 Renewables as Percent of Retail Sales
38%
98%
85%
NOx
~30%
16
COMBINED SUSTAINABLE ENERGY PORTFOLIO
• Wind portfolio will be one of the largest in the United States:
~3,200 MW1
• Renewable energy ~30% of retail sales
o Emission-free energy (renewable and nuclear) nearly half
of retail sales
• Well ahead of renewable portfolio standards in Missouri and
voluntary goals in Kansas
• RPS in Missouri requires 15% of electricity sales to
customers with renewable sources by 2021
• Kansas voluntary goal of 20% of the utility’s peak by 2020
CO2
SOx
2017 EEI FINANCIAL CONFERENCE
1. Includes owned generation and power purchase agreements based on nameplate capacity of the facility.
2. Source: American Wind Energy Association.
• Company sponsored energy-efficiency programs and
demand response are expected to be a key component
of future resource portfolio
• Focused on growing renewables while retiring end-of-
life fossil plants
• Strong platform to grow renewable energy portfolio and
take further advantage of abundant natural resources
o Kansas wind energy resources, ranked 5th in the
nation for installed wind capacity, are a unique
advantage2
APPENDIX
PROJECTED MERGER SAVINGS
18
2016- 2017 2018E 2019E 2020E 2021E 2022E Total
NFOM
Labor
- $38.3 $66.6 $78.1 $83.2 $85.3 $351.5
NFOM Non-
Labor
- $8.6 $41.4 $55.1 $54.3 $61.1 $220.5
Fuel - $0.7 $1.0 $1.1 $1.3 $2.3 $6.4
Other - $2.2 $7.9 $12.3 $13.3 $13.4 $49.0
Gross
Efficiencies
- $49.7 $116.9 $146.5 $151.9 $162.0 $627.0
Transition
Costs
($35.6) ($21.9) ($6.6) ($3.0) ($2.5) ($2.2) ($71.8)
Net
Savings
($35.6) $27.8 $110.3 $143.5 $149.4 $159.8 $555.2
Merger Savings by Type and Year ($mm)1,2
1. Some numbers may not add due to rounding
2. Source: Steven Busser, Kansas direct testimony filed August 25, 2017; page 15 (Docket: 18-KCPE-095-MER).
Steven Busser, Missouri direct testimony filed August 31, 2015; page 14 (Docket: EM-2018-0012).
2017 EEI FINANCIAL CONFERENCE
$15.0 $14.5 $12.7
$8.6 $10.0 $9.8 $6.2 $8.3
$9.3 $7.6 $7.4 $7.1
$23.5
$21.2 $20.1
$16.8
$14.9 $14.8 $14.0 $12.7 $12.6 $11.5 $10.6 $9.9
Combined
Company
WR GXP
Market Cap EV
15.0
13.4 13.2 13.1 12.8 12.8
11.0
9.4 9.2
8.2 7.6
6.6 6.5
GXP WR
1.6 1.6
1.2
1.0 0.9 0.9 0.8 0.8 0.7 0.7
0.5 0.5
GXP WR
SELECTED MID-CAP UTILITIES BY ENTERPRISE VALUE ($BN)
Source: Company filings, investor presentations, Bloomberg market data as of 10/31/2017.
SELECTED MID-CAP UTILITIES BY CUSTOMERS (MILLIONS) SELECTED MID-CAP UTILITIES BY RATE BASE ($BN)
Combined
Company
Combined
Company
TRANSFORMATION INTO A
LEADING MIDWEST ENERGY UTILITY
2017 EEI FINANCIAL CONFERENCE 19
20
COMPELLING STRATEGIC AND GEOGRAPHIC FIT
Better positioned to meet customer’s energy needs, provide clean energy and optimize investments to achieve
improved long-term financial returns
Increased scale and jurisdictional diversity with enhanced platform to drive value for shareholders and customers
Strong geographic fit, complementary operations with contiguous territories and existing shared assets produce
economies of scale and significant savings and efficiencies
1. Customer breakdown by jurisdiction based on retail sales generation.
2. KCP&L,GMO, Westar and KG&E are also subject to regulation by The Federal Energy Regulatory Commission (FERC) with respect to transmission, wholesale sales and rates, and
other matters.
3. Projected as of year-end 2017.
Standalone Great Plains Energy Standalone Westar Energy Combined Company
G
e
o
graph
y
b
y
Cu
s
to
m
e
r1
Rat
e
B
a
s
e
M
ix
b
y
J
uri
s
d
ic
ti
o
n
2
Cap
a
c
it
y
M
ix
(M
W
)3
KS
100%
KS
60%
MO
40%
MO
64%
KS
31%
FERC
5%
KS
81%
FERC
19%
KS
56%
MO
32%
FERC
12%
Coal
44% Natural
Gas & …
Nuclear
7%
Renewable
19%
Coal
43% Natural
Gas & …
Nuclear
7%
Renewable
20%
Coal
42% Natural
Gas …
Nuclear
7%
Renewabl
e …
MO
72%
KS
28%
2017 EEI FINANCIAL CONFERENCE
NewCo
Kansas City Power &
Light
KCP&L Greater
Missouri Operations
Great Plains Energy
Other Subsidiaries
Westar Energy
Westar Subsidiaries,
notably, KG&E
21
PRO FORMA COMBINED COMPANY
CORPORATE STRUCTURE
2017 EEI FINANCIAL CONFERENCE
President & CEO
Terry Bassham
EVP Chief Operating
Officer
Kevin Bryant
EVP Strategy & Chief
Administrative Officer
Greg Greenwood
EVP Chief Financial
Officer
Tony Somma
SVP Chief People
Officer
Jerl Banning
SVP Marketing, Public
Affairs & Chief
Customer Officer
Chuck Caisley
SVP General
Counsel, Corporate
Secretary
Heather Humphrey
22
PRO FORMA COMBINED COMPANY
EXECUTIVE OFFICER TEAM
Board of Directors to be comprised equally of Westar Energy and Great Plains
Energy board members.
Both Mark Ruelle and Terry Bassham will be members of the Board of
Directors.
Mark Ruelle will serve as the non-executive Chairman of the Board
Charles Q. Chandler IV, currently the non-executive chairman of Westar
Energy’s Board, will be the lead independent director
2017 EEI FINANCIAL CONFERENCE
KEY TERMS
23
Transaction Structure
• All stock merger of equals (100% stock-for-stock tax-free exchange); combined equity value of
~$15 billion
• New company to be jointly named prior to close
Exchange Ratio
• Westar Energy: 1:1
• Great Plains Energy: 0.5981:1
Approximate Pro
Forma Ownership
• Westar Energy 52.5%
• Great Plains Energy 47.5%
Pro Forma Dividend
• Adjust to maintain current Great Plains Energy dividend
• Results in a 15% dividend uplift for Westar Energy
Termination Fee
• Reverse break-up fee of $190 million in favor of Westar Energy
• Mutual fiduciary out break-up fees of $190 million in favor of the other
• Great Plains Energy no-vote fee of $80 million in favor of Westar Energy
Governance
• Mark Ruelle, Westar Energy CEO to become non-executive chairman
• Terry Bassham, Great Plains Energy Chairman, President & CEO to become President & CEO
• Tony Somma (Westar Energy CFO) to be CFO; Kevin Bryant (Great Plains Energy CFO) to be
COO
• Equal board representation from each company, including Bassham and Ruelle
Headquarters
• Corporate Headquarters – Kansas City, Missouri
• Operating Headquarters – Topeka, Kansas; Kansas City, Missouri
Timing / Approvals
• Expected to close first half 2018
• Shareholders, federal and state regulators
2017 EEI FINANCIAL CONFERENCE
ADDITIONAL INFORMATION
24 2017 EEI FINANCIAL CONFERENCE
Additional Information and Where to Find It
This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any proxy, vote or approval, nor shall
there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. In connection with the proposed transactions, Monarch Energy has filed with the SEC a Registration Statement on Form S-4
(Registration No. 333-220465), which was declared effective by the SEC, Great Plains Energy and Westar Energy have each filed a definitive joint proxy
statement, which also constitutes a prospectus of Monarch Energy, each of which is publicly available, and Great Plains Energy, Westar Energy and Monarch
Energy have filed and may file other documents regarding the proposed transactions with the SEC. Great Plains Energy and Westar Energy mailed the definitive
joint proxy statement/prospectus in connection with the transactions to their respective shareholders on or around October 13, 2017. WE URGE INVESTORS TO
READ THE REGISTRATION STATEMENT AND DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND THESE OTHER MATERIALS CAREFULLY
BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT GREAT PLAINS ENERGY, WESTAR ENERGY, MONARCH ENERGY AND THE PROPOSED
TRANSACTIONS.
Investors can obtain free copies of the Registration Statement and definitive joint proxy statement/prospectus and other documents filed by Monarch Energy, Great
Plains Energy and Westar Energy with the SEC at http://www.sec.gov, the SEC’s website. These documents filed by Great Plains Energy and Monarch Energy are
also available free of charge from Great Plains Energy’s website (http://www.greatplainsenergy.com) under the tab, “Investor Relations” and then under the
heading “SEC Filings,” or by contacting Great Plains Energy’s Investor Relations Department at 1-800-245-5275. These documents filed by Westar Energy are
also available free of charge from Westar Energy’s website (http://www.westarenergy.com) under the tab “Investors” and then under the heading “SEC Filings,” or
by contacting Westar Energy’s Investor Relations Department at 785-575-8227.
Participants in Proxy Solicitation
Great Plains Energy, Westar Energy and their respective directors and certain of their executive officers and employees may be deemed, under SEC rules, to be
participants in the solicitation of proxies from Great Plains Energy’s and Westar Energy’s shareholders with respect to the proposed transactions. Information
regarding the officers and directors of Great Plains Energy is included in its definitive proxy statement for its 2017 annual meeting filed with the SEC on March 23,
2017. Information regarding the officers and directors of Westar Energy is included in its definitive proxy statement for its 2017 annual meeting filed with the SEC
on September 14, 2017. Additional information regarding the identity of potential participants, and their direct or indirect interests, by securities, holdings or
otherwise, is set forth in the Registration Statement and definitive joint proxy statement/prospectus and other materials filed with SEC in connection with the
proposed merger. Free copies of these documents may be obtained as described in the paragraphs above.
25
Lori Wright
Vice President – Corporate Planning, Investor
Relations and Treasurer
(816) 556-2506
lori.wright@kcpl.com
Calvin Girard
Senior Manager, Investor Relations
(816) 654-1777
calvin.girard@kcpl.com
NYSE: GREAT PLAINS ENERGY (GXP)
INVESTOR RELATIONS INFORMATION
Cody VandeVelde
Director, Investor Relations
(785) 575-8227
cody.vandevelde@westarenergy.com
Amber Housholder
Investor Relations Manager
(785) 575-8278
amber.housholder@westarenergy.com
NYSE: WESTAR ENERGY (WR)
2017 EEI FINANCIAL CONFERENCE