- Third quarter 2022 GAAP earnings per share (EPS) of $1.86,
Adjusted EPS (Non-GAAP) of $2.01
- Increases quarterly dividend 7%, to $0.6125 per share,
annualized to $2.45
- Revises 2022 GAAP EPS guidance range to $3.33 to $3.43, revises
Adjusted EPS (Non-GAAP) guidance range to $3.53 to $3.63 from $3.43
to $3.63
Evergy, Inc. (NYSE: EVRG) today announced third quarter 2022
GAAP earnings of $428 million, or $1.86 per share, compared to GAAP
earnings of $449 million, or $1.95 per share, for third quarter
2021.
Evergy’s third quarter 2022 adjusted earnings (non-GAAP) and
adjusted earnings per share (non-GAAP) were $462 million and $2.01,
respectively, compared to $452 million and $1.97, respectively, in
third quarter 2021. Adjusted earnings (non-GAAP) and adjusted
earnings per share (non-GAAP) are reconciled to GAAP earnings in
the financial table included in this release.
Third quarter earnings were driven by higher weather-normalized
demand, favorable weather, and higher transmission margin,
partially offset by higher depreciation and amortization expense
and higher interest expense.
"We finished the third quarter with solid results despite
mounting challenges impacting our customers, our company and our
communities – in particular, ongoing high inflation and increasing
interest rates. Given results ahead of expectations driven by
operational performance and warmer than normal weather, we are
narrowing our 2022 adjusted earnings guidance range to $3.53 to
$3.63 per share from $3.43 to $3.63 per share. We are also
increasing our quarterly dividend by 7%, consistent with our stated
targets," said David Campbell, Evergy President and Chief Executive
Officer. "We'll make a strong push to the finish line in 2022 and
drive ongoing execution as we continue to address these
macroeconomic challenges in 2023."
Earnings Guidance
The Company revised its 2022 GAAP EPS guidance range to $3.33 to
$3.43 from its original guidance of $3.37 to $3.57 and narrowed its
2022 adjusted EPS (Non-GAAP) guidance range to $3.53 to $3.63 from
its original guidance of $3.43 to $3.63. Additionally, the Company
reaffirmed its long-term adjusted EPS (Non-GAAP) annual growth
target of 6% to 8% through 2025 from the $3.30 midpoint of the
original 2021 adjusted EPS (Non-GAAP) guidance range. Adjusted EPS
(non-GAAP) guidance is reconciled to GAAP EPS guidance in the
financial table included in this release.
Dividend Declaration
The Board of Directors declared a dividend on the Company’s
common stock of $0.6125 per share payable on December 20, 2022. The
dividends are payable to shareholders of record as of November 18,
2022.
Earnings Conference Call
Evergy management will host a conference call Friday, November
4, with the investment community at 9:00 a.m. ET (8:00 a.m. CT). To
view the webcast and presentation slides, please go to
investors.evergy.com. To access via phone, investors and analysts
will need to register using this link where they will be provided a
phone number and access code.
Members of the media are invited to listen to the conference
call and then contact Gina Penzig with any follow-up questions.
This earnings announcement, a package of detailed third-quarter
financial information, the Company's quarterly report on Form 10-Q
for the period ended September 30, 2022, and other filings the
Company has made with the Securities and Exchange Commission are
available on the Company's website at
http://investors.evergy.com.
Adjusted Earnings (non-GAAP) and
Adjusted Earnings Per Share (non-GAAP)
Effective in the third quarter of 2022, the calculation of
adjusted earnings (non-GAAP) and adjusted EPS (non- GAAP) excludes
the revenues collected from customers for the return on investment
of the retired Sibley Station in the current period and the
subsequent deferral of the cumulative amount of revenues collected
since December 2018 for expected future refunds to customers.
Management believes that this is a more representative measure of
Evergy's recurring earnings, assists in the comparability of
results and is consistent with how management reviews performance.
Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP)
for the three months ended and year to date September 30, 2021 have
been recast, as applicable, to conform to the current year
presentation.
In addition to net income attributable to Evergy, Inc. and
diluted EPS, Evergy's management uses adjusted earnings (non-GAAP)
and adjusted EPS (non-GAAP) to evaluate earnings and EPS without
i.) the income or costs resulting from non-regulated energy
marketing margins from the February 2021 winter weather event; ii.)
gains or losses related to equity investments subject to a
restriction on sale; iii.) the revenues collected from customers
for the return on investment of the retired Sibley Station in the
current period and the subsequent deferral of the cumulative amount
of revenues collected since December 2018 for expected future
refunds to customers; iv.) the estimated impairment loss on Sibley
Unit 3; v.) the mark-to-market impacts of economic hedges related
to Evergy Kansas Central's non-regulated 8% ownership share of
Jeffrey Energy Center; and vi.) costs resulting from executive
transition, severance and advisor expenses.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are
intended to enhance an investor's overall understanding of results.
Management believes that adjusted earnings (non-GAAP) provides a
meaningful basis for evaluating Evergy's operations across periods
because it excludes certain items that management does not believe
are indicative of Evergy's ongoing performance or that can create
period to period earnings volatility.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are
used internally to measure performance against budget and in
reports for management and the Evergy Board. Adjusted earnings
(non-GAAP) and adjusted EPS (non-GAAP) are financial measures that
are not calculated in accordance with GAAP and may not be
comparable to other companies' presentations or more useful than
the GAAP information provided elsewhere in this report.
The following tables provide a reconciliation between net income
attributable to Evergy, Inc. and diluted earnings per common share
as determined in accordance with GAAP and adjusted earnings
(non-GAAP) and adjusted earnings per share (non-GAAP).
Evergy, Inc
Consolidated Earnings and
Diluted Earnings Per Share
(Unaudited)
Earnings (Loss)
Earnings (Loss) per Diluted
Share
Earnings (Loss)
Earnings (Loss) per Diluted
Share
Three Months Ended September 30
2022
2021
(millions, except per share
amounts)
Net income attributable to Evergy,
Inc.
$
428.2
$
1.86
$
449.4
$
1.95
Non-GAAP reconciling items:
Non-regulated energy marketing margin
related to February 2021 winter weather event, pre-tax(a)
2.1
0.01
—
—
Sibley Station return on investment,
pre-tax(b)
44.4
0.19
(3.1
)
(0.01
)
Mark-to-market impact of JEC economic
hedges, pre-tax(c)
(10.3
)
(0.04
)
—
—
Non-regulated energy marketing costs
related to February 2021 winter weather event, pre-tax(d)
0.3
—
1.9
0.01
Executive transition costs, pre-tax(e)
0.7
—
3.3
0.02
Advisor expenses, pre-tax(g)
0.6
—
1.2
—
Estimated impairment loss on Sibley Unit
3, pre-tax(h)
6.0
0.03
—
—
Income tax benefit(j)
(9.7
)
(0.04
)
(0.3
)
—
Adjusted earnings (non-GAAP)
$
462.3
$
2.01
$
452.4
$
1.97
Earnings (Loss)
Earnings (Loss) per
Diluted Share
Earnings (Loss)
Earnings (Loss) per Diluted
Share
Year to Date September 30
2022
2021
(millions, except per share
amounts)
Net income attributable to Evergy,
Inc.
$
745.2
$
3.23
$
826.3
$
3.60
Non-GAAP reconciling items:
Non-regulated energy marketing margin
related to February 2021 winter weather event, pre-tax(a)
2.1
0.01
(95.0
)
(0.42
)
Sibley Station return on investment,
pre-tax(b)
38.2
0.17
(9.3
)
(0.04
)
Mark-to-market impact of JEC economic
hedges, pre-tax(c)
(10.3
)
(0.04
)
—
—
Non-regulated energy marketing costs
related to February 2021 winter weather event, pre-tax(d)
0.9
—
5.9
0.03
Executive transition costs, pre-tax(e)
0.7
—
10.6
0.05
Severance costs, pre-tax(f)
—
—
2.8
0.01
Advisor expenses, pre-tax(g)
3.1
0.01
8.4
0.04
Estimated impairment loss on Sibley Unit
3, pre-tax(h)
6.0
0.03
—
—
Restricted equity investment losses,
pre-tax(i)
16.3
0.07
—
—
Income tax expense (benefit)(j)
(12.5
)
(0.05
)
18.4
0.08
Adjusted earnings (non-GAAP)
$
789.7
$
3.43
$
768.1
$
3.35
(a)
Reflects non-regulated energy
marketing margins related to the February 2021 winter weather event
and are included in operating revenues on the consolidated
statements of comprehensive income.
(b)
Reflects revenues collected from
customers for the return on investment of the retired Sibley
Station in the current period and the subsequent deferral of the
cumulative amount of revenues collected since December 2018 for
expected future refunds to customers and are included in operating
revenues on the consolidated statements of comprehensive
income.
(c)
Reflects mark to market gains or
losses related to forward contracts for natural gas and electricity
entered into as economic hedges against fuel price volatility
related to Evergy Kansas Central's non-regulated 8% ownership share
of JEC and are included in operating revenues on the consolidated
statements of comprehensive income.
(d)
Reflects non-regulated energy
marketing incentive compensation costs related to the February 2021
winter weather event and are included in operating and maintenance
expense on the consolidated statements of comprehensive income.
(e)
Reflects costs associated with
executive transition including inducement bonuses, severance
agreements and other transition expenses and are included in
operating and maintenance expense on the consolidated statements of
comprehensive income.
(f)
Reflects severance costs incurred
associated with certain voluntary severance programs at the Evergy
Companies and are included in operating and maintenance expense on
the consolidated statements of comprehensive income.
(g)
Reflects advisor expenses
incurred associated with strategic planning and are included in
operating and maintenance expense on the consolidated statements of
comprehensive income.
(h)
Reflects the estimated impairment
loss on Sibley Unit 3 and is included in estimated impairment loss
on Sibley Unit 3 on the consolidated statements of comprehensive
income.
(i)
Reflects losses related to equity
investments which were subject to a restriction on sale and are
included in investment earnings (loss) on the consolidated
statements of comprehensive income.
(j)
Reflects an income tax effect
calculated at a statutory rate of approximately 22%, with the
exception of certain non-deductible items.
GAAP to Non-GAAP Earnings
Guidance
Original 2021 Earnings
per Diluted Share
Guidance
Original 2022
Earnings per
Diluted Share
Guidance
Revised 2022 Earnings
per Diluted Share
Guidance
GAAP EPS attributable to Evergy,
Inc.
$3.14 - $3.34
$3.37 - $3.57
$3.33 - $3.43
Non-GAAP reconciling items:
Non-regulated energy marketing margin
related to February 2021 winter weather event, pre-tax(a)
-
0.01
Sibley Station return on investment,
pre-tax(b)
-
0.17
Mark-to-market impact on JEC economic
hedges, pretax(c)
-
(0.04)
Executive transition cost, pre-tax(d)
0.03
-
Advisor expense, pre-tax(e)
0.05
0.01
0.01
Estimated impairment loss on Sibley Unit
3, pre-tax(f)
-
0.03
Restricted equity investment losses,
pre-tax(g)
-
0.07
0.07
Income tax benefit(h)
(0.02)
(0.02)
(0.05)
Adjusted EPS (non-GAAP)
$3.20 - $3.40
$3.43 - $3.63
$3.53 - $3.63
(a)
Reflects non-regulated energy
marketing margins related to the February 2021 winter weather event
and are included in operating revenues on the consolidated
statements of comprehensive income.
(b)
Reflects revenues collected from
customers for the return on investment of the retired Sibley
Station and the subsequent deferral of these revenues collected
since December 2018 for expected future refunds to customers and
are included in operating revenues on the consolidated statements
of comprehensive income.
(c)
Reflects mark to market gains or
losses related to forward contracts for natural gas and electricity
entered into as economic hedges against fuel price volatility
related to Evergy Kansas Central's non-regulated 8% ownership share
of JEC and are included in operating revenues on the consolidated
statements of comprehensive income.
(d)
Reflects costs associated with
executive transition including inducement bonuses, severance
agreements and other transition expenses and are included in
operating and maintenance expense on the consolidated statements of
comprehensive income.
(e)
Reflects advisor expenses
incurred associated with strategic planning and are included in
operating and maintenance expense on the consolidated statements of
comprehensive income.
(f)
Reflects the estimated impairment
loss on Sibley Unit 3 and is included in estimated impairment loss
on Sibley Unit 3 on the consolidated statements of comprehensive
income.
(g)
Reflects losses related to equity
investments which were subject to a restriction on sale and are
included in investment earnings (loss) on the consolidated
statements of comprehensive income.
(h)
Reflects an income tax effect
calculated at a statutory rate of approximately 22%, with the
exception of certain non-deductible items.
About Evergy
Evergy, Inc. (NYSE: EVRG), serves 1.6 million customers in
Kansas and Missouri. Evergy’s mission is to empower a better
future. Our focus remains on producing, transmitting and delivering
reliable, affordable, and sustainable energy for the benefit of our
stakeholders. Today, about half of Evergy’s power comes from
carbon-free sources, creating more reliable energy with less impact
to the environment. We value innovation and adaptability to give
our customers better ways to manage their energy use, to create a
safe, diverse and inclusive workplace for our employees, and to add
value for our investors. Headquartered in Kansas City, our
employees are active members of the communities we serve.
For more information about Evergy, visit us at
http://investors.evergy.com.
Forward Looking
Statements
Statements made in this document 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 Evergy's strategic plan, including, without
limitation, those related to earnings per share, dividend,
operating and maintenance expense and capital investment goals; the
outcome of legislative efforts and regulatory and legal
proceedings; future energy demand; future power prices; plans with
respect to existing and potential future generation resources; the
availability and cost of generation resources and energy storage;
target emissions reductions; and other matters relating to expected
financial performance or affecting future operations.
Forward-looking statements are often accompanied by forward-looking
words such as “anticipates,” “believes,” “expects,” “estimates,”
“forecasts,” “should,” “could,” “may,” “seeks,” “intends,”
“proposed,” “projects,” “planned,” “target,” “outlook,” “remain
confident,” “goal,” “will” or other words of similar meaning.
Forward-looking statements involve risks, uncertainties and other
factors that could cause actual results to differ materially from
the forward-looking information.
In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, Evergy, Inc., Evergy
Kansas Central, Inc. and Evergy Metro, Inc. (collectively, the
Evergy Companies) are providing a number of risks, uncertainties
and other factors that could cause actual results to differ from
the forward-looking information. These risks, uncertainties and
other factors include, but are not limited to: economic and weather
conditions and any impact on sales, prices and costs; changes in
business strategy or operations; the impact of federal, state and
local political, legislative, judicial and regulatory actions or
developments, including deregulation, re-regulation, securitization
and restructuring of the electric utility industry; decisions of
regulators regarding, among other things, customer rates and the
prudency of operational decisions such as capital expenditures and
asset retirements; changes in applicable laws, regulations, rules,
principles or practices, or the interpretations thereof, governing
tax, accounting and environmental matters, including air and water
quality and waste management and disposal; the impact of climate
change, including increased frequency and severity of significant
weather events and the extent to which counterparties are willing
to do business with, finance the operations of or purchase energy
from the Evergy Companies due to the fact that the Evergy Companies
operate coal-fired generation; prices and availability of
electricity and natural gas in wholesale markets; market perception
of the energy industry and the Evergy Companies; the impact of the
Coronavirus (COVID-19) pandemic on, among other things, sales,
results of operations, financial condition, liquidity and cash
flows, and also on operational issues, such as supply chain issues
and the availability and ability of the Evergy Companies’ employees
and suppliers to perform the functions that are necessary to
operate the Evergy Companies; changes in the energy trading markets
in which the Evergy Companies participate, including retroactive
repricing of transactions by regional transmission organizations
(RTO) and independent system operators; financial market conditions
and performance, including 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; the transition to a
replacement for the London Interbank Offered Rate (LIBOR) benchmark
interest rate; effectiveness of risk management policies and
procedures and the ability of counterparties to satisfy their
contractual commitments; impact of physical and cybersecurity
breaches, criminal activity, terrorist attacks, acts of war and
other disruptions to the Evergy Companies’ facilities or
information technology infrastructure or the facilities and
infrastructure of third-party service providers on which the Evergy
Companies rely; Impact of the Russian, Ukrainian conflict on the
global energy market; ability to carry out marketing and sales
plans; cost, availability, quality and timely provision of
equipment, supplies, labor and fuel; ability to achieve generation
goals and the occurrence and duration of planned and unplanned
generation outages; delays and cost increases of generation,
transmission, distribution or other projects; the Evergy Companies’
ability to manage their transmission and distribution development
plans and transmission joint ventures; the inherent risks
associated with the ownership and operation of a nuclear facility,
including environmental, health, safety, regulatory and financial
risks; workforce risks, including those related to the Evergy
Companies’ ability to attract and retain qualified personnel,
maintain satisfactory relationships with their labor unions and
manage costs of, or changes in, wages, retirement, health care and
other benefits; disruption, costs and uncertainties caused by or
related to the actions of individuals or entities, such as activist
shareholders or special interest groups, that seek to influence
Evergy’s strategic plan, financial results or operations; the
possibility that strategic initiatives, including mergers,
acquisitions and divestitures, and long-term financial plans, may
not create the value that they are expected to achieve in a timely
manner or at all; difficulties in maintaining relationships with
customers, employees, regulators or suppliers; and other risks and
uncertainties.
This list of factors is not all-inclusive because it is not
possible to predict all factors. You should also carefully consider
the information contained in our other filings with the Securities
and Exchange Commission (SEC). Additional risks and uncertainties
are discussed in the Annual Report on Form 10-K for the year ended
December 31, 2021, filed by the Evergy Companies with the SEC, and
from time to time in current reports on Form 8-K and quarterly
reports on Form 10-Q filed by the Evergy Companies with the SEC.
Each forward-looking statement speaks only as of the date of the
particular statement. The Evergy Companies undertake no obligation
to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise, except
as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221103006403/en/
Investor Contact: Pete Flynn Director, Investor Relations
Phone: 816-652-1060 Peter.Flynn@evergy.com
Media Contact: Gina Penzig Manager, External
Communications Phone: 785-508-2410 Gina.Penzig@evergy.com Media
line: 888-613-0003
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