Energy Forward
2019 Annual Report
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Evergy works every day to deliver
outstanding results for shareholders,
customers and our communities alike.
There is a fundamental shift in investment trends toward investing in companies that
make strategic decisions with the interests of all its stakeholders in mind. We know that
for Evergy to truly succeed, we must create a sustainable energy company positioned
to serve all our stakeholders. 2019 was a year of additional progress toward that
– a year that garnered merger savings ahead of plan, strong financial performance
and sustainability gains. We’re continuing to propel Evergy forward, delivering on the
promises we made when we created the company, as a forward-thinking, sustainable
and efficient energy company.
Year Ended December 31
(Dollars in millions except per share amounts)
2019
2018(b)
2017(b)
2016(b)
2015(b)
EVERGY
Operating Revenues
Net income
Net income attributable to Evergy, Inc.
Basic earnings per common share
Diluted earnings per common share
Total assets at year end
Total long-term obligations at year end(a)
Cash dividends per common share
$
$
$
$
$
5,148
686
670
2.80
2.79
$ 25,976
$
$
9,200
1.93
$
$
$
$
$
4,276
546
536
2.50
2.50
$
$
$
$
$
2,571
337
324
2.27
2.27
$
$
$
$
$
2,562
361
347
2.43
2.43
$
$
$
$
$
2,459
302
292
2.11
2.09
$ 25,598
$ 11,624
$ 11,487
$ 10,706
$
$
7,472
1.735
$
$
3,846
1.60
$
$
3,699
1.52
$
$
3,379
1.44
(a) Includes long-term debt, current maturities of long-term debt, finance leases, operating leases, long-term debt of Variable Interest Entities (“VIEs”)
and current maturities of long-term debt of VIEs. Obligations related to operating leases are only included beginning in 2019 due to Evergy’s adoption
of Topic 842, Leases. See Note 1 to the consolidated financial statements included in Part II, Item 8 of Evergy’s annual report on Form 10-K for
additional information.
(b) On June 4, 2018, Evergy completed the mergers contemplated by the Amended Merger Agreement. The results of Great Plains Energy’s direct subsidiaries
have been included in Evergy’s results from the date of the closing of the merger and thereafter. Evergy amounts for 2017, 2016, and 2015 reflect the
results of operation and financial position of Evergy Kansas Central as the accounting acquirer in the merger transaction.
Evergy 2019 Annual Report – 1
To Our Shareholders
We are Evergy! With the successful
at Evergy work every day to deliver
rebrand of our operating companies
outstanding results for shareholders,
complete, we are proudly known as
customers and our communities alike.
Evergy not only to our investors but
We know that for Evergy to truly
also throughout our Kansas and Missouri
succeed, we must create a sustainable
operating areas. Now, we are building
energy company positioned to serve all
on our new brand identity as a forward-
our stakeholders.
thinking, sustainable and efficient energy
company by delivering on the promises
People and Profit Forward
we made when we created the company.
When KCP&L and Westar Energy merged
in 2018, we committed to $628 million
2019 was a year of moving forward – a
in merger efficiencies by 2023. We are
year that garnered merger savings ahead
well ahead of that plan having realized
of plan, strong financial performance and
more than $215 million in savings,
sustainability gains. Our moment of
and we expect about $145 million in
reflection is brief because 2019 was just
additional savings to be realized in 2020.
the beginning. We already have shifted
At more than 40 percent ahead of target,
toward how we propel Evergy forward.
that outperformance stems from a
combination of timing and savings
Adapting to the changes in our industry
attributable directly to our team’s ingenuity
as well as in the broader business
finding new opportunities. As promised,
community tops that list. If you look at a
we have delivered $190 million in bill
broad array of investment trends, there is
credits to customers and requested
a fundamental shift toward investing in
no increases in our base rates.
companies that make strategic decisions
with the interests of all its stakeholders.
Our merger provided a platform for
As a regulated energy company, we
operational cost savings and synergies.
$15b
Market Capitalization
Market cap as of 12/31/19.
Quarterly Dividend
6.3%
$0.505
$0.475
3Q19
4Q19
2 – Evergy 2019 Annual Report
Operations
Delivering
reliable,
low cost
energy
to customers
3,714
megawatts of
renewable power
C02 Emission Reduction Targets
2019 Retail Sales
by Customer Type
21%
36%
43%
Commercial
Residential
Industrial
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
45%
Reduction
2019 Capacity
by Fuel Type
80%
Reduction
Coal
Gas & Oil
Renewables1
Nuclear
2005
2019
2050E
1. Renewables include both owned and
power purchase agreements as of 12/31/19.
Evergy 2019 Annual Report – 3
But that is just the beginning of our effort
Our capital allocation plan performed
to manage cost and improve operations.
as expected, with $1.2 billion invested
To capitalize on the momentum of our
in infrastructure to maintain customer
positive cost trajectory, we will continue
reliability, which ranked solidly in industry
to focus on opportunities to streamline,
standard reliability metrics. Additionally,
automate, digitize and enhance our
when Missouri legislation allowed for Plant
processes and performance execution.
in Service Accounting (PISA), we adopted
Our team is engaged in an all-out effort
the practice and began infrastructure
to drive continuous improvement and
investments to capitalize on this new
sustainable cost reduction in all aspects
opportunity. We expect further PISA
and at all levels of our company. We
opportunities in 2020 and will continue
are committed to building a culture
our strategy to make the most of this
where employee engagement and
productivity thrives.
legislation for the benefit of our stakeholders.
Planet Forward
Our successful strategy execution has
Evergy only succeeds when we serve the
resulted in returning almost $2.1 billion in
greater good of our communities and
capital to our shareholders – $1.6 billion
help them thrive. We are delivering clean,
in share repurchases and another $463
safe, reliable energy for today and in the
million in dividends, which we raised
future by embracing alternative energy
6.3 percent, in line with guidance, at an
sources to generate more power with less
indicated annual rate of $2.02 per share.
impact to the environment and choosing
Reliability
+ Providing safe,
reliable, and cost
effective operations
+ Being a trusted
energy partner to
our customers
+ Collaborative, open
and transparent
regulatory relationships
4 – Evergy 2019 Annual Report
Financial
Delivering on Strategic Priorities
Keep customer bills stable
while delivering reliable
services
Allocate capital to drive
sustainable, diverse
energy solutions
Deliver competitive
shareholder returns
• Delivering on merger commitments
and efficiencies
• $7.6B of utility infrastructure
investment 2020 – 2024
+ Merger savings
+ Reliable service
• Enhancing relationships with
customers and regulators
+ An increase of $1.5B compared to
prior five-year plan
• Focusing on CapEx optimization and
reallocation to further capitalize on
Missouri PISA
• Creating Value
+ Infrastructure investments
+ Merger savings
+ Continued cost reductions
• Targeting dividend pay-out range
of 60% to 70% and growth in line
with EPS growth
Five-Year Capital Plan (millions)
2020
2021
2022
2023
2024
Generating Facilities
$
487 $
555 $
563 $
455 $
263
Transmission and Distribution Facilities
General Facilities and other
893
238
914
117
886
112
867
1,006
92
94
Total Capital Expenditures
$
1,618 $
1,586 $
1,571 $
1,414 $
1,363
Gross Merger Savings vs
Original Merger Savings
($ in millions)
Projected 2020-2024 CapEx
by Jurisdiction
Actual
Original
Merger
Targets
$50
$48
$171
$117
$147
$152
$162
Exceeded
2019
target by
~46%
2018
2019
2020
2021
2022
16%
39%
45%
Kansas
Missouri
FERC
Evergy 2019 Annual Report – 5
technologies that balance emission
emissions 80 percent from 2005 levels by
reductions with costs.
2050 through:
Earlier this year, we announced our intent
+ Retiring all coal power plants in the
to add 660 megawatts of wind energy
Evergy fleet at or before the end of
to our portfolio. This addition will bring
their useful life;
the total amount of wind serving Evergy
+ Continuing to make significant
customers to 4,535 megawatts, making
investments in renewable energy and
Evergy one of the top five wind energy
energy efficiency;
+ Operating the Wolf Creek Nuclear
Station until its license expires in 2045;
Evergy is one of the top five wind energy
companies in the United States.
and, if necessary
+ Adding new low or carbon-free
generation.
With the myriad of steps we have taken
companies in the United States. Thanks
to reduce emissions the past 15 years
in part to our investments, Kansas now
we have reduced carbon emissions by 45
ranks #1 in the nation for wind generation
percent in comparison to 2005 levels, with
as a percentage of population and #4
sulfur dioxide and nitrogen oxide down 98
in overall wind generation! We also
percent and 87 percent respectively.
announced our plan to reduce carbon
Some stakeholders may say the 80
Unique
Investment
Thesis
+ Earnings growth driven by merger
savings, cost management, infrastructure
investment and share repurchase; not
predicated on raising customer prices
+ Stable base rates allow for on-going,
constructive dialogue with customers,
regulators, policy makers and is good
for economic development
+ Strong balance sheet combined with
expected earnings and dividend growth
2019 Stock Price Movement
EVRG
UTY Index
S&P 500
40%
30%
20%
10%
0%
provides an attractive total shareholder
-10%
return profile
12/31 1/31 2/28 3/31 4/30 5/31 6/30 7/31 8/31 9/30 10/31 11/30 12/31
6 – Evergy 2019 Annual Report
Culture
Foster
engagement,
diversity,
excellence,
and inclusion
$1,000,000
Nearly $1 million raised through Employee
Giving Campaign donations by nearly 2,500
employees. Matched by Evergy.
20,000
employee volunteer hours
$7.3 million
in philanthropic and community support
$110 million
spent with diverse suppliers
30
years active
supplier diversity
initiative
Evergy 2019 Annual Report – 7
percent by 2050 isn’t fast enough.
our strategy to ensure short-term gains
Again, fast-tracking the closing of plants
don’t compromise long-term success and
doesn’t take into account the potential
sustainability. That’s why we set realistic,
financial impact those stranded assets
attainable financial and environmental
could have on our customers’ rates or
goals that balance our stakeholders’
shareholder earnings, nor does it address
interests. When you invest in Evergy, we
the potential job implications for the
want you to invest knowing that we are
communities where they are located or
good stewards of that investment for
the employees who work in them. Taking
your benefit, as well as for our customers,
a measured, attainable approach allows
employees and our environment.
us to make a commitment consistent with
the Paris Climate Accord while being
It is our honor to deliver consistent returns
mindful and planning for the impact to other
stakeholders. Of course, we will continue
through conscientious business practices
that make you as proud to invest in us
to evaluate opportunities and business
as we are to serve our customers and
conditions that might allow for a quicker
communities. Thank you again for your
approach that benefits all stakeholders.
confidence in Evergy.
Evergy Forward
The purpose we have laid out – to
empower a better future – requires an
Terry Bassham
eye toward the future. We have structured
President and Chief Executive Officer
Community Vitality
Advancing our communities through workforce
and economic development
We will invest in:
Access and Creation Working with
organizations to create jobs and
improve our communities
Business retention and expansion, equity/diversity/inclusion,
technology connectivity/access, and entrepreneurship
Career Readiness Preparing our
community and individuals of all
ages for jobs
Career skills and training, STEAM programs, mentoring, job
shadowing, internships, scholarships, workforce recruitment
and retention
Basic Needs Supporting our
communities’ basic needs such
as hunger, utility assistance, and
emergency aid
Utility assistance (energy savings and payments), disaster
and emergency relief, targeted social services to address
root cause issues
8 – Evergy 2019 Annual Report
Industry Insights
Advancing Environmental, Social and Governance (ESG)
and Sustainability Reporting
The market awareness and desire for metrics
to measure and manage sustainability
performance has emerged as a key strategic
consideration for companies. Sustainability is
no longer a vague concept, but has evolved to
focus on three primary areas: Environmental,
Social and Governance (ESG).
Historically, there was a limited universe of
companies that disclosed ESG data, but now
it is becoming an expectation of investors...
and really all stakeholders. The premise is
that by monitoring companies’ ESG practices,
stakeholders can avoid companies that might
pose a greater financial risk due to their ESG
practices. As a result, stakeholders want
standardized ESG benchmarking data in order
to better understand a company’s risks and to
push for improvement of ESG metrics.
For several years, the electric industry has been
working toward standardized reporting of ESG
data and Evergy has participated with our
industry peers through Edison Electric Institute
(EEI) and Electric Power Research Institute
(EPRI) to develop uniform, consistent data and
information for the benefit of stakeholders
interested in the industry’s sustainability
progress. This process is continuing to evolve
as we are now working with EEI and others in
the industry to assess aligning our reporting
to broader market frameworks such as the
Sustainability Accounting Standards Board and
the Task Force on Climate-Related Financial
Disclosure recommendations.
Evergy has a strong foundation for its ESG
reporting. For years, Evergy and its predecessor
companies have been diversifying electricity
generation, increasing renewable generation,
reducing emissions and providing energy
efficiency options for our customers. Evergy
now ranks as the #5 company in utility wind
energy generation and #3 in wind generation
per customer. Thanks in part to our company’s
commitment to wind energy, Kansas ranks
#1 for per capita wind generation and #4 for
installed wind capacity in the country.
Evergy also has become a leader in the electric
vehicle arena nationwide by installing clean
charging networks across our service territories,
with more than 1,000 dual-port EV charging
stations installed, energizing communities
and reducing vehicle emissions, which are the
largest source of CO2 emissions.
Beyond environmental responsibility, we
recognize the decisions we make have a social
impact. We have strengthened our community
outreach strategies to promote environmental
leadership and community vitality and have
heightened our emphasis on diversity and
inclusion. We’re expanding our recruiting
programs to attract more diverse applicants
and, through our Supplier Diversity Program,
we spent more than $110 million in 2019 with
diverse suppliers.
Our Board of Directors is engaged in our ESG
oversight and we’ve also added an executive
steering committee to oversee our ESG
initiatives and progress to mitigate risk and
build a more sustainable company.
Energy Forward
2019 Annual Report
Form 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______to_______
Commission
File Number
001-38515
TM
Exact name of registrant as specified in its charter,
state of incorporation, address of principal
executive offices and telephone number
EVERGY, INC.
(a Missouri corporation)
1200 Main Street
Kansas City, Missouri 64105
(816) 556-2200
I.R.S. Employer
Identification Number
82-2733395
001-03523
EVERGY KANSAS CENTRAL, INC.
48-0290150
(formerly Westar Energy, Inc.)
(a Kansas corporation)
818 South Kansas Avenue
Topeka, Kansas 66612
(785) 575-6300
000-51873
EVERGY METRO, INC.
44-0308720
(formerly Kansas City Power & Light Company)
(a Missouri corporation)
1200 Main Street
Kansas City, Missouri 64105
(816) 556-2200
Securities registered pursuant to Section 12(b) of
the Act:
Title of each class
Trading Symbol(s)
Evergy, Inc. common stock
EVRG
Name of each exchange on
which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: Evergy Kansas Central, Inc. Common Stock $0.01 par value and
Evergy Metro, Inc. Common Stock without par value.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Yes
Yes
Yes
No
No
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Yes
Yes
Yes
No
No
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Yes
Yes
Yes
No
No
No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files).
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Yes
Yes
Yes
No
No
No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Large
Accelerated
Filer
Large
Accelerated
Filer
Large
Accelerated
Filer
Accelerated
Filer
Accelerated
Filer
Accelerated
Filer
Non-
accelerated
Filer
Non-
accelerated
Filer
Non-
accelerated
Filer
Smaller
Reporting
Company
Smaller
Reporting
Company
Smaller
Reporting
Company
Emerging
Growth
Company
Emerging
Growth
Company
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.
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Yes
Yes
Yes
No
No
No
The aggregate market value of the voting and non-voting common equity held by non-affiliates of Evergy, Inc. (based on the closing price of
its common stock on the New York Stock Exchange on June 30, 2019) was approximately $14,138,041,261. All of the common equity of
Evergy Kansas Central, Inc. and Evergy Metro, Inc. is held by Evergy, Inc.
On February 24, 2020, Evergy, Inc. had 226,659,013 shares of common stock outstanding.
On February 24, 2020, Evergy Kansas Central, Inc. and Evergy Metro, Inc. each had one share of common stock outstanding and held by
Evergy, Inc.
Evergy Kansas Central, Inc. and Evergy Metro, Inc. meet the conditions set forth in General Instruction (I)(1)(a) and (b) of Form
10-K and are therefore filing this Form 10-K with the reduced disclosure format.
Portions of the 2020 annual meeting proxy statement of Evergy, Inc. to be filed with the Securities and Exchange Commission are
incorporated by reference in Part III of this report.
Documents Incorporated by Reference
This combined annual report on Form 10-K is provided by the following registrants: Evergy, Inc. (Evergy), Evergy
Kansas Central, Inc. (Evergy Kansas Central) and Evergy Metro, Inc. (Evergy Metro) (collectively, the Evergy
Companies). Information relating to any individual registrant is filed by such registrant solely on its own behalf.
Each registrant makes no representation as to information relating exclusively to the other registrants.
TABLE OF CONTENTS
Cautionary Statements Regarding Certain Forward-Looking Information
Glossary of Terms
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
PART I
PART II
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Selected Financial Data
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
Item 9A.
Item 9B.
Controls and Procedures
Other Information
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Item 15.
Exhibits and Financial Statement Schedules
PART IV
Signatures
Page
Number
3
4
7
14
22
23
26
26
27
28
29
54
56
147
147
151
151
152
152
153
153
154
175
2
CAUTIONARY STATEMENTS REGARDING CERTAIN FORWARD-LOOKING INFORMATION
Statements made in this report 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 our strategic plan, including, without limitation, earnings per share and dividend
growth targets, operating and maintenance expense savings goals and future capital allocation plans; the outcome of
regulatory and legal proceedings; 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," "seeks," "intends," "proposed," "projects," "planned,"
"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, 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 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 reduced demand for coal-based energy; prices and availability of electricity in
wholesale markets; market perception of the energy industry and 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 terrorist acts, including cyber terrorism;
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 increased
costs of, or changes in, 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 our strategic plan, financial results or operations; the possibility that the expected value creation from the
merger of Great Plains Energy Incorporated (Great Plains Energy) and Evergy Kansas Central that resulted in the
creation of Evergy will not be realized, or will not be realized within the expected time period; difficulties related to
the integration, including the diversion of management time; difficulties in maintaining relationships with
customers, employees, regulators or suppliers; disruption related to the rebranding of the Evergy Companies,
including the impact of the rebranding on receipt of customer payments; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Part I, Item 1A, Risk Factors
included in this report should be carefully read for further understanding of potential risks for the Evergy
Companies. Other sections of this report and other periodic reports filed by the Evergy Companies with the
Securities and Exchange Commission (SEC) should also be read for more information regarding risk factors. 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.
3
Available Information
The SEC maintains an internet site that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC at sec.gov. Additionally, information about the Evergy
Companies, including their combined annual reports on Form 10-K, combined quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports filed with the SEC, is also available through the
Evergy Companies' website, www.evergy.com. Such reports are accessible at no charge and are made available as
soon as reasonably practical after such material is filed with or furnished to the SEC.
Investors should note that the Evergy Companies announce material financial information in SEC filings, press
releases and public conference calls. In accordance with SEC guidelines, the Evergy Companies also use the
Investor Relations tab on their website, www.evergy.com, to communicate with investors. It is possible that the
financial and other information posted there could be deemed to be material information. The information on
Evergy's website is not part of this document.
GLOSSARY OF TERMS
The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report.
Abbreviation or Acronym
Definition
ACE
AEP
AFUDC
Amended Merger Agreement
Affordable Clean Energy
American Electric Power Company, Inc.
Allowance for Funds Used During Construction
Amended and Restated Agreement and Plan of Merger, dated as of July 9,
2017, by and among Great Plains Energy, Evergy Kansas Central, Monarch
Energy Holding, Inc. and King Energy, Inc.
AMT
AROs
ASC
ASR
ASU
BSER
CAA
CCRs
CO2
COLI
CPP
CWA
D.C. Circuit
DOE
EIRR
ELG
EPA
EPS
ERISA
ERSP
Evergy
Evergy Board
Evergy Companies
Alternative Minimum Tax
Asset Retirement Obligations
Accounting Standards Codification
Accelerated share repurchase
Accounting Standards Update
Best system of emission reduction
Clean Air Act Amendments of 1990
Coal combustion residuals
Carbon dioxide
Corporate-owned life insurance
Clean Power Plan
Clean Water Act
U.S. Court of Appeals for the D.C. Circuit
Department of Energy
Environmental Improvement Revenue Refunding
Effluent limitations guidelines
Environmental Protection Agency
Earnings per common share
Employee Retirement Income Security Act of 1974, as amended
Earnings Review and Sharing Plan
Evergy, Inc. and its consolidated subsidiaries
Evergy Board of Directors
Evergy, Evergy Kansas Central, and Evergy Metro, collectively, which are
individual registrants within the Evergy consolidated group
4
Abbreviation or Acronym
Evergy Kansas Central
Evergy Kansas South
Evergy Metro
Evergy Metro Mortgage
Indenture
Evergy Missouri West
Definition
Evergy Kansas Central, Inc., formerly known as Westar Energy, Inc., a
wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
Evergy Kansas South, Inc., formerly known as Kansas Gas and Electric
Company, a wholly-owned subsidiary of Evergy Kansas Central
Evergy Metro, Inc., formerly known as Kansas City Power & Light
Company, a wholly-owned subsidiary of Evergy, and its consolidated
subsidiaries
Evergy Metro General Mortgage Indenture and Deed of Trust dated as of
December 1, 1986, as supplemented
Evergy Missouri West, Inc., formerly known as KCP&L Greater Missouri
Operations Company, a wholly-owned subsidiary of Evergy
Evergy Transmission Company Evergy Transmission Company, LLC, formerly known as GPE Transmission
Exchange Act
FASB
FERC
FMB
GAAP
GHG
Great Plains Energy
JEC
KCC
KDHE
King Energy
kWh
LIBOR
LTISA
MDNR
MECG
MEEIA
Monarch Energy
MPSC
MW
MWh
NAAQS
NAV
NRC
NSR
OCI
OPC
PISA
Prairie Wind
RSU
RTO
SEC
SPP
TCJA
Holding Company, LLC
The Securities Exchange Act of 1934, as amended
Financial Accounting Standards Board
Federal Energy Regulatory Commission
First Mortgage Bond
Generally Accepted Accounting Principles
Greenhouse gas
Great Plains Energy Incorporated
Jeffrey Energy Center
State Corporation Commission of the State of Kansas
Kansas Department of Health & Environment
King Energy, Inc., a wholly-owned subsidiary of Evergy
Kilowatt hour
London Interbank Offered Rate
Long-Term Incentive and Share Award plan
Missouri Department of Natural Resources
Midwest Energy Consumers Group
Missouri Energy Efficiency Investment Act
Monarch Energy Holding, Inc.
Public Service Commission of the State of Missouri
Megawatt
Megawatt hour
National Ambient Air Quality Standards
Net Asset Value
Nuclear Regulatory Commission
New source review
Other comprehensive income
Office of the Public Counsel
Plant-in service accounting
Prairie Wind Transmission, LLC, 50% owned by Evergy Kansas Central
Restricted share unit
Regional transmission organization
Securities and Exchange Commission
Southwest Power Pool, Inc.
Tax Cuts and Jobs Act
5
Abbreviation or Acronym
TCR
TFR
Transource
VIE
Wolf Creek
Definition
Transmission Congestion Rights
Transmission formula rate
Transource Energy, LLC and its subsidiaries, 13.5% owned by Evergy
Transmission Company
Variable interest entity
Wolf Creek Generating Station
6
ITEM 1. BUSINESS
PART I
General
Evergy, Inc., Evergy Kansas Central, Inc. and Evergy Metro, Inc. are separate registrants filing this combined
annual report on Form 10-K. The terms "Evergy," "Evergy Kansas Central," "Evergy Metro" and "Evergy
Companies" are used throughout this report. "Evergy" refers to Evergy, Inc. and its consolidated subsidiaries,
unless otherwise indicated. "Evergy Kansas Central" refers to Evergy Kansas Central, Inc. and its consolidated
subsidiaries, unless otherwise indicated. "Evergy Metro" refers to Evergy Metro, Inc. and its consolidated
subsidiaries, unless otherwise indicated. "Evergy Companies" refers to Evergy, Evergy Kansas Central, and Evergy
Metro, collectively, which are individual registrants within the Evergy consolidated group.
Information in other Items of this report as to which reference is made in this Item 1 is hereby incorporated by
reference in this Item 1. The use of terms such as "see" or "refer to" shall be deemed to incorporate into this Item 1
the information to which such reference is made.
EVERGY, INC.
Evergy is a public utility holding company incorporated in 2017 and headquartered in Kansas City, Missouri.
Evergy operates primarily through the following wholly-owned direct subsidiaries listed below. In September 2019,
these wholly-owned direct subsidiaries were rebranded and renamed under the Evergy brand name.
• Evergy Kansas Central, Inc. (Evergy Kansas Central), formerly known as Westar Energy, Inc., is an
integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Evergy
Kansas Central has one active wholly-owned subsidiary with significant operations, Evergy Kansas South,
Inc. (Evergy Kansas South), formerly known as Kansas Gas and Electric Company.
• Evergy Metro, Inc. (Evergy Metro), formerly known as Kansas City Power & Light Company, is an
integrated, regulated electric utility that provides electricity to customers in the states of Missouri and
Kansas.
• Evergy Missouri West, Inc. (Evergy Missouri West), formerly known as KCP&L Greater Missouri
Operations Company, is an integrated, regulated electric utility that provides electricity to customers in the
state of Missouri.
• Evergy Transmission Company, LLC (Evergy Transmission Company), formerly known as GPE
Transmission Holding Company, LLC, owns 13.5% of Transource Energy, LLC (Transource) with the
remaining 86.5% owned by AEP Transmission Holding Company, LLC, a subsidiary of American Electric
Power Company, Inc. (AEP). Transource is focused on the development of competitive electric
transmission projects. Evergy Transmission Company accounts for its investment in Transource under the
equity method.
Evergy Kansas Central also owns a 50% interest in Prairie Wind Transmission, LLC (Prairie Wind), which is a joint
venture between Evergy Kansas Central and subsidiaries of AEP and Berkshire Hathaway Energy Company. Prairie
Wind owns a 108-mile, 345 kV double-circuit transmission line that provides transmission service in the Southwest
Power Pool, Inc. (SPP). Evergy Kansas Central accounts for its investment in Prairie Wind under the equity
method.
Since the rebranding in September 2019, Evergy Kansas Central, Evergy Kansas South, Evergy Metro, and Evergy
Missouri West have been conducting business in their respective service territories using the name Evergy. The
Evergy Companies assess financial performance and allocate resources on a consolidated basis (i.e., operates in one
segment). Evergy serves approximately 1,604,300 customers located in Kansas and Missouri. Customers include
approximately 1,407,700 residences, 189,600 commercial firms and 7,000 industrials, municipalities and other
electric utilities. Evergy is significantly impacted by seasonality with approximately one-third of its retail revenues
recorded in the third quarter.
7
The table below summarizes the percentage of Evergy's revenues by customer classification.
Residential
Commercial
Industrial
Wholesale
Transmission
Other
Total
2019
37%
35%
12%
7%
6%
3%
100%
2018
37%
32%
12%
10%
7%
2%
100%
The table below summarizes the percentage of Evergy's retail electricity sales by customer class.
Residential
Commercial
Industrial
Total
2019
36%
43%
21%
100%
2018
37%
41%
22%
100%
2017
32%
28%
16%
12%
11%
1%
100%
2017
32%
38%
30%
100%
Merger of Great Plains Energy and Evergy Kansas Central
Evergy was incorporated in 2017 as Monarch Energy Holding, Inc. (Monarch Energy), a wholly-owned subsidiary
of Great Plains Energy Incorporated (Great Plains Energy). Prior to the closing of the merger transactions, Monarch
Energy changed its name to Evergy and did not conduct any business activities other than those required for its
formation and matters contemplated by the Amended and Restated Agreement and Plan of Merger, dated as of July
9, 2017, by and among Great Plains Energy, Evergy Kansas Central, Monarch Energy and King Energy, Inc. (King
Energy), a wholly-owned subsidiary of Monarch Energy (Amended Merger Agreement).
On June 4, 2018, Evergy completed the mergers contemplated by the Amended Merger Agreement. As a result of
the mergers, Great Plains Energy merged into Evergy, with Evergy surviving the merger and King Energy merged
into Evergy Kansas Central, with Evergy Kansas Central surviving the merger. Following the completion of these
mergers, Evergy Kansas Central and the direct subsidiaries of Great Plains Energy, including Evergy Metro and
Evergy Missouri West, became wholly-owned subsidiaries of Evergy.
The merger was structured as a merger of equals in a tax-free exchange of shares that involved no premium paid or
received with respect to either Great Plains Energy or Evergy Kansas Central. As a result of the closing of the
merger transaction, each outstanding share of Great Plains Energy common stock was converted into 0.5981 shares
of Evergy common stock and each outstanding share of Evergy Kansas Central common stock was converted
into 1 share of Evergy common stock.
Evergy Kansas Central was determined to be the accounting acquirer in the merger and thus, the predecessor of
Evergy. Evergy had separate operations for the period beginning with the quarter ended June 30, 2018, and
references to amounts for periods after the closing of the merger relate to Evergy. The results of Great Plains
Energy's direct subsidiaries have been included in Evergy's results of operations from June 4, 2018, the date of the
closing of the merger, and thereafter.
See Note 2 to the consolidated financial statements for more information regarding the merger.
Regulation
Evergy Kansas Central's and Evergy Metro's Kansas operations are regulated by the State Corporation Commission
of the State of Kansas (KCC) and Evergy Metro's Missouri operations and Evergy Missouri West are regulated by
the Public Service Commission of the State of Missouri (MPSC), in each case with respect to retail rates, certain
accounting matters, standards of service and, in certain cases, the issuance of securities, certification of facilities and
8
service territories. The Evergy Companies are also subject to regulation by the Federal Energy Regulatory
Commission (FERC) with respect to transmission, wholesale sales and rates and other matters. Evergy has an
indirect 94% ownership interest in Wolf Creek Generating Station (Wolf Creek), which is subject to regulation by
the Nuclear Regulatory Commission (NRC) with respect to licensing, operations and safety-related requirements.
The table below summarizes the rate orders in effect for Evergy Kansas Central's, Evergy Metro's and Evergy
Missouri West's retail rate jurisdictions.
Evergy Kansas Central (a)
Evergy Metro - Kansas
Evergy Metro - Missouri
Regulator
KCC
KCC
MPSC
Allowed Return
on Equity
Rate-Making
Equity Ratio
9.3%
9.3%
(b)
51.46%
49.09%
(b)
Effective Date
September 2018
December 2018
December 2018
Evergy Missouri West
(a) The KCC establishes rates for Evergy Kansas Central and Evergy Kansas South on a consolidated basis.
(b) Evergy Metro's and Evergy Missouri West's current MPSC rate order does not contain an allowed return on equity or rate-making equity
December 2018
MPSC
(b)
(b)
ratio.
Evergy expects its 2020 Kansas and Missouri jurisdictional retail revenues to be approximately 60% and 40%,
respectively, based on historical averages of Evergy Kansas Central's, Evergy Metro's and Evergy Missouri West's
total retail revenues.
See Item 7 MD&A, Critical Accounting Policies section, and Note 5 to the consolidated financial statements for
additional information concerning regulatory matters.
Competition
Missouri and Kansas continue to operate on the fully integrated and regulated retail utility model. As a result, the
Evergy Companies do not compete with others to supply and deliver electricity in their franchised service territories
in exchange for agreeing to have their terms of service regulated by state regulatory bodies. If Missouri or Kansas
were to pass and implement legislation authorizing or mandating retail choice, Evergy may no longer be able to
apply regulated utility accounting principles to deregulated portions of its operations, which may require a surcharge
to recover certain costs from legacy customers or could lead to a write-off of certain regulatory assets and liabilities.
Evergy competes in the wholesale market to sell power in circumstances when the power it generates is not required
for retail customers in its service territory. This competition primarily occurs within the SPP Integrated
Marketplace, in which Evergy Kansas Central, Evergy Metro and Evergy Missouri West are participants. This
marketplace determines which generating units among market participants should run, within the operating
constraints of a unit, at any given time for maximum regional cost-effectiveness.
The SPP Integrated Marketplace is similar to other Regional Transmission Organization (RTO) or Independent
System Operator (ISO) markets currently operating in other regions of the United States.
Power Supply
Evergy has 14,700 MWs of owned generating capacity and renewable purchased power agreements. Evergy's
owned generation and purchased power from others, as a percentage of total MWhs generated and purchased, was
approximately 71% and 29%, respectively, over the last two years. Evergy purchases power to meet its customers'
needs, to satisfy firm power commitments or to meet renewable energy standards. Management believes Evergy
will be able to meet its future purchased power needs due to the coordination of planning and operations in the SPP
region and existing power purchase agreements; however, price and availability of power purchases may be
impacted during periods of high demand.
9
Evergy's total capacity by fuel type, including both owned generating capacity and purchased power agreements, is
detailed in the table below.
Fuel Type
Coal
Natural gas and oil
Wind (a)
Uranium
Solar, landfill gas and hydroelectric (b)
Total capacity
Estimated
MW Capacity
Percent of Total
Capacity
5,903
3,988
3,642
1,104
72
14,709
40 %
27
24
8
1
100 %
(a) MWs are based on nameplate capacity of the wind facility. Includes owned generating capacity of 579 MWs and long-term power purchase
agreements of approximately 3,063 MWs of wind generation that expire in 2028 through 2048. See Item 2, Properties, for additional
information.
(b) Includes a long-term power purchase agreement for approximately 60 MWs of hydroelectric generation that expires in 2023.
Evergy's projected peak summer demand for 2020 is approximately 10,367 MWs. Evergy expects to meet its
projected capacity requirements for the foreseeable future with its existing generation assets and power and capacity
purchases.
Evergy Kansas Central, Evergy Metro and Evergy Missouri West are members of the SPP. The SPP is a FERC-
approved RTO with the responsibility to ensure reliable power supply, adequate transmission infrastructure and
competitive wholesale electricity prices in the region. As SPP members, Evergy Kansas Central, Evergy Metro and
Evergy Missouri West are required to maintain a minimum reserve margin of 12%. This net positive supply of
capacity is maintained through generation asset ownership, capacity agreements, power purchase agreements and
peak demand reduction programs. The reserve margin is designed to support reliability of the region's electric
supply.
Environmental Matters
There have been, and management believes there will continue to be, policy, legal and regulatory efforts to
influence climate change, such as efforts to reduce greenhouse gas emissions (GHG), impose a tax on emissions and
create incentives for low-carbon generation and energy efficiency. These efforts, and climate change itself, have the
potential to adversely affect the Evergy Companies' results of operations, financial position and cash flows. See
Part I, Item 1A, Risk Factors, for additional information.
The Evergy Companies have taken, and will continue to take, proactive measures to mitigate the impact of climate
change on its businesses. For example, the Evergy Companies regularly conduct preparedness exercises for a
variety of disruptive events, including storms, which may become more frequent or intense due to climate change.
In addition, the Evergy Companies have invested, and will continue to invest, in grid resiliency. Much of the
Evergy Companies' infrastructure is aged, and grid resiliency efforts include building additional transmission and
distribution lines, replacing aged infrastructure and proactively managing the vegetation that can damage systems
during severe weather. The Evergy Companies also monitor water conditions at their generating facilities and focus
on water conservation at these facilities to address resource depletion.
Transforming Evergy's Generation Fleet
The Evergy Companies are committed to a long-term strategy to reduce carbon emissions in a cost-effective and
reliable manner and are targeting to achieve an 80% reduction of carbon emissions by 2050 from 2005 levels. The
trajectory and timing of reaching this goal could be impacted by political, legal and regulatory actions and
technological matters. Public attention is currently focused on reducing GHG emissions and closing coal-fired
generating units. Diversity of fuel supply has historically provided cost and reliability benefits. In addition, the
Evergy Companies must prudently utilize the generation assets that regulators have allowed the Evergy Companies
to include in rates and avoid "stranding" assets by prematurely closing facilities. The Evergy Companies use an
integrated resource plan, which is a detailed analysis that estimates factors that influence the future supply and
10
demand for electricity, to inform the manner in which they supply electricity. The integrated resource plan
considers forecasts of future electricity demand, fuel prices, transmission improvements, new generating capacity,
integration of renewables, energy storage, energy efficiency and demand response initiatives. Strategies that the
Evergy Companies have pursued include:
•
•
•
retiring fossil fuel generation;
developing renewable energy facilities;
collaborating with regulators to offer customers the opportunity to procure electricity produced with
renewable resources; and
•
investing in customer energy efficiency programs.
Since 2005, the Evergy Companies have added over 3,500 megawatts of renewables, while retiring more than 2,400
megawatts of fossil generation. The transition of their generation fleet has allowed the Evergy Companies to reduce
carbon emissions by almost 40% since 2005. The Evergy Companies are also committed to transparency. On its
website, www.evergy.com, Evergy provides quantitative and qualitative data regarding various environmental,
social and governance matters, including information related to emissions, waste and water. The contents of the
website and report are not incorporated into this filing.
See Note 15 to the consolidated financial statements for information regarding environmental matters.
Fuel
The fuel sources for Evergy's owned generation and purchased power agreements are coal, wind and other
renewable sources, uranium and natural gas and oil. The actual 2019 fuel mix and fuel cost in cents per net kilowatt
hour (kWh) delivered are outlined in the following table.
Fuel
Coal
Wind, hydroelectric, landfill gas and solar
Uranium
Natural gas and oil
Fuel Mix(a)
Actual
2019
50 %
27
18
5
Fuel cost in cents per
net kWh delivered (b)
Actual
2019
$2.03
2.36
0.60
2.91
Total
(a) Fuel mix based on percent of net MWhs generated by owned resources and delivered under renewable purchased power agreements.
(b) Fuel cost in cents per net kWh delivered includes purchased power costs associated with renewable purchased power agreements.
100 %
$1.94
Coal
During 2020, Evergy's generating units, including jointly-owned units, are projected to use approximately
17 million tons of coal. Evergy Kansas Central, Evergy Metro and Evergy Missouri West have entered into
coal-purchase contracts with various suppliers in Wyoming's Powder River Basin (PRB), the nation's
principal supply region of low-sulfur coal, and with local suppliers. The coal to be provided under these
contracts is expected to satisfy approximately 80% of the projected coal requirements for 2020 and
approximately 10% for 2021. The remainder of the coal requirements is expected to be fulfilled through
entering into additional contracts or spot market purchases.
Evergy Kansas Central, Evergy Metro and Evergy Missouri West have also entered into rail transportation
contracts with various railroads to transport coal from the PRB and local suppliers to their generating units.
The transportation services to be provided under these contracts are expected to satisfy almost all of the
projected transportation requirements for 2020 and approximately 75% for 2021. The contract rates adjust
for changes in railroad costs.
11
Nuclear Fuel
Evergy Kansas South and Evergy Metro each owns 47% of Wolf Creek, which is Evergy's only nuclear
generating unit. Wolf Creek purchases uranium and has it processed for use as fuel in its reactor. This
process involves conversion of uranium concentrates to uranium hexafluoride, enrichment of uranium
hexafluoride and fabrication of nuclear fuel assemblies. The owners of Wolf Creek have on hand or under
contract all of the uranium, uranium enrichment and conversion services needed to operate Wolf Creek
through 2027. The owners also have under contract all of the uranium fabrication required to operate Wolf
Creek through September 2025.
Natural Gas
Evergy purchases natural gas for use in its generating units primarily through spot market purchases. From
time to time, Evergy also may enter into contracts, including the use of derivatives, in an effort to manage
the cost of natural gas. For additional information about our exposure to commodity price risks, see Item
7A., Quantitative and Qualitative Disclosures About Market Risk.
Evergy Kansas Central maintains natural gas transportation arrangements with Kansas Gas Service and
Southern Star Central Gas Pipeline. The Kansas Gas Service arrangement has historically expired on April
30 of each year and is renegotiated for an additional one-year term. The Southern Star Central Gas Pipeline
arrangement expires based on the generating unit being served with expiration dates from 2022 to 2030.
Evergy Kansas Central, Inc.
Evergy Kansas Central, a Kansas corporation incorporated in 1924 and headquartered in Topeka, Kansas, is an
integrated, regulated electric utility that engages in the generation, transmission, distribution and sale of electricity.
Evergy Kansas Central serves approximately 716,200 customers located in central and eastern Kansas. Customers
include approximately 624,400 residences, 87,300 commercial firms, and 4,500 industrials, municipalities and other
electric utilities. Evergy Kansas Central's retail revenues averaged approximately 76% of its total operating
revenues over the last three years. Wholesale firm power, bulk power sales, transmission and miscellaneous electric
revenues accounted for the remainder of Evergy Kansas Central's revenues. Evergy Kansas Central is significantly
impacted by seasonality with approximately one-third of its retail revenues recorded in the third quarter.
Evergy Metro, Inc.
Evergy Metro, a Missouri corporation incorporated in 1922 and headquartered in Kansas City, Missouri, is an
integrated, regulated electric utility that engages in the generation, transmission, distribution and sale of electricity.
Evergy Metro serves approximately 558,200 customers located in western Missouri and eastern Kansas. Customers
include approximately 493,300 residences, 62,900 commercial firms, and 2,000 industrials, municipalities and other
electric utilities. Evergy Metro's retail revenues averaged approximately 92% of its total operating revenues over
the last three years. Wholesale firm power, bulk power sales and miscellaneous electric revenues accounted for the
remainder of Evergy Metro's revenues. Evergy Metro is significantly impacted by seasonality with approximately
one-third of its retail revenues recorded in the third quarter. Missouri and Kansas jurisdictional retail revenues for
Evergy Metro averaged approximately 56% and 44%, respectively, of total retail revenues over the last three years.
Employees
At December 31, 2019, the Evergy Companies had 4,617 employees, including 2,520 represented by five local
unions of the International Brotherhood of Electrical Workers (IBEW). Evergy also has a 94% indirect ownership
share in Wolf Creek, which, at December 31, 2019, had 858 employees, including 477 represented by a local union
of the IBEW and a local union of the United Government Security Officers of America (UGSOA). Evergy Kansas
Central has labor agreements with IBEW Locals 304 and 1523, representing power plant and transmission and
distribution workers (expires June 30, 2021). Evergy Metro has labor agreements with IBEW Local 1613,
representing clerical employees (expires March 31, 2021), with IBEW Local 1464, representing transmission and
distribution workers (expires January 31, 2021), and with IBEW Local 412, representing power plant workers
(expires February 28, 2021). Wolf Creek has labor agreements with IBEW Local 304 (expires September 20, 2021)
and UGSOA Local 252 (expires July 31, 2020).
12
Information About Evergy's Executive Officers
Set forth below is information relating to the executive officers of Evergy, Inc. Each executive officer holds the
same position with each of Evergy Kansas Central, Inc., Evergy Metro, Inc., Evergy Kansas South, Inc. and Evergy
Missouri West, Inc. as he or she does with Evergy, Inc. Executive officers serve at the pleasure of the board of
directors. There are no family relationships among any of the executive officers, nor any arrangements or
understandings between any executive officer and other persons pursuant to which he or she was appointed as an
executive officer.
Name
Terry Bassham (a)
Kevin E. Bryant (b)
Gregory A. Greenwood (c)
Anthony D. Somma (d)
Jerl L. Banning (e)
Charles A. Caisley (f)
Heather A. Humphrey (g)
Charles L. King (h)
Steven P. Busser (i)
Age
59
44
54
56
58
46
49
55
51
President and Chief Executive Officer
Current Position(s)
Executive Vice President and Chief Operating Officer
Executive Vice President, Strategy and Chief Administrative
Officer
Executive Vice President and Chief Financial Officer
Senior Vice President and Chief People Officer
Senior Vice President, Marketing and Public Affairs and Chief
Customer Officer
Senior Vice President, General Counsel and Corporate Secretary
Senior Vice President and Chief Technology Officer
Vice President - Risk Management and Controller
Year First
Assumed an
Officer
Position
2005
2006
2003
2006
2010
2011
2010
2013
2014
(a) Mr. Bassham was appointed President and Chief Executive Officer of Evergy, Inc. in June 2018. Mr. Bassham served as
Chairman of the Board of Great Plains Energy (2013-2018) and had served as Chief Executive Officer of Great Plains
Energy, Evergy Metro and Evergy Missouri West since 2012. He has served as President of each company since 2011. He
previously served as President and Chief Operating Officer of Great Plains Energy, Evergy Metro and Evergy Missouri
West (2011-2012) and as Executive Vice President - Utility Operations of Evergy Metro and Evergy Missouri West
(2010-2011). He was Executive Vice President - Finance and Strategic Development and Chief Financial Officer of Great
Plains Energy (2005-2010) and of Evergy Metro and Evergy Missouri West (2009-2010).
(b) Mr. Bryant was appointed Executive Vice President and Chief Operating Officer of Evergy, Inc. in June 2018. Mr. Bryant
previously served as Senior Vice President - Finance and Strategy and Chief Financial Officer of Great Plains Energy,
Evergy Metro and Evergy Missouri West (2015-2018). He previously served as Vice President - Strategic Planning of
Great Plains Energy, Evergy Metro and Evergy Missouri West (2014). He served as Vice President - Investor Relations and
Strategic Planning and Treasurer of Great Plains Energy, Evergy Metro and Evergy Missouri West (2013). He served as
Vice President - Investor Relations and Treasurer of Great Plains Energy, Evergy Metro and Evergy Missouri West
(2011-2013). He was Vice President - Strategy and Risk Management of Evergy Metro and Evergy Missouri West (2011)
and Vice President - Energy Solutions of Evergy Metro (2006-2011) and Evergy Missouri West (2008-2011).
(c) Mr. Greenwood was appointed Executive Vice President, Strategy and Chief Administrative Officer of Evergy, Inc. in June
2018. Mr. Greenwood previously served in the following officer roles for Evergy Kansas Central: Senior Vice President,
Strategy (2011-2018); Vice President, Major Construction Projects (2006-2011); and Treasurer (2003-2006). Mr.
Greenwood also served in the following roles for Evergy Kansas Central: Executive/Senior Director, Corporate Finance
(1999-2003); Director, Financial Strategy and Acting Director, Internal Audit (1999-2000); and Director, Financial Strategy
(1998-1999). Mr. Greenwood joined Evergy Kansas Central in 1993.
(d) Mr. Somma was appointed Executive Vice President and Chief Financial Officer of Evergy, Inc. in June 2018. Mr. Somma
previously served as Senior Vice President, Chief Financial Officer and Treasurer (2011-2018) for Evergy Kansas Central,
after having been appointed as Treasurer in 2006 and Vice President in 2009. He also served as Executive Director,
Generation (2004-2006), Executive Director, Finance (1998-1999) and Director, Corporate Strategy (1996-1998) of Evergy
Kansas Central, after having joined the company in 1994. From 1999 to 2004, Mr. Somma served in various leadership
roles with a former affiliate of Evergy Kansas Central, including Senior Vice President, Finance and Administration, Chief
Financial Officer and Secretary.
13
(e) Mr. Banning was appointed Senior Vice President and Chief People Officer of Evergy, Inc. in June 2018. Mr. Banning
previously served in the following officer roles for Evergy Kansas Central: Senior Vice President, Operations Support and
Administration (2015-2018); Vice President, Human Resources and IT (2014); and Vice President, Human Resources
(2010- 2013). Mr. Banning also served as Executive Director of Human Resources for Evergy Kansas Central
(2008-2010).
(f) Mr. Caisley was appointed Senior Vice President, Marketing and Public Affairs and Chief Customer Officer of Evergy, Inc.
in June 2018. Mr. Caisley served as Vice President - Marketing and Public Affairs of Great Plains Energy, Evergy Metro
and Evergy Missouri West (2011-2018). He was Senior Director of Public Affairs (2008-2011) and Director of
Governmental Affairs of Evergy Metro (2007-2008).
(g) Ms. Humphrey was appointed Senior Vice President, General Counsel and Corporate Secretary of Evergy, Inc. in June
2018. Ms. Humphrey previously served as Senior Vice President - Corporate Services and General Counsel of Great Plains
Energy, Evergy Metro and Evergy Missouri West (2016-2018). She previously served as General Counsel (2010-2016) and
Senior Vice President - Human Resources of Great Plains Energy, Evergy Metro and Evergy Missouri West (2012-2016).
She served as Vice President - Human Resources of Great Plains Energy, Evergy Metro and Evergy Missouri West
(2010-2012). She was Senior Director of Human Resources and Interim General Counsel of Great Plains Energy, Evergy
Metro and Evergy Missouri West (2010) and Managing Attorney of Evergy Metro (2007-2010).
(h) Mr. King was appointed Senior Vice President and Chief Technology Officer of Evergy, Inc. in February 2020. He
previously served as Senior Vice President, Information Technology and Chief Information Officer (2019) and Vice
President, Information Technology and Chief Information Officer (2018-2019) of Evergy, Inc. Prior to that, he served as
Vice President - Information Technology (2013-2018), as Senior Director of Information Technology Applications and
Delivery (2013) and Director of Information Technology Applications (2011-2013) of Evergy Metro and Evergy Missouri
West. Mr. King also served in various roles, including leadership roles, with Dish Network, CenturyLink, Sprint and
Accenture.
(i) Mr. Busser was appointed Vice President - Risk Management and Controller of Evergy, Inc. in June 2018. Mr. Busser was
appointed Vice President - Risk Management and Controller of Great Plains Energy, Evergy Metro and Evergy Missouri
West in 2016. He previously served as Vice President - Business Planning and Controller of Great Plains Energy, Evergy
Metro and Evergy Missouri West (2014-2016). He served as Vice President - Treasurer of El Paso Electric Company
(2011-2014). Prior to that, he served as Vice President - Treasurer and Chief Risk Officer (2006-2011) and Vice President -
Regulatory Affairs and Treasurer (2004-2006) of El Paso Electric Company.
ITEM 1A. RISK FACTORS
Utility Regulatory Risks:
Prices are established by regulators and may not be sufficient to result in a recovery of costs or provide for a
return on investment.
The prices that the FERC, KCC and MPSC authorize the utility subsidiaries of Evergy to charge significantly
influence the Evergy Companies' results of operations, financial position and cash flows.
In general, utilities are allowed to recover in customer rates costs that were prudently incurred to provide utility
service, plus a reasonable return on invested capital. There can be no assurance, however, that regulators will
determine costs to have been prudently incurred. Further, the amounts approved by the regulators may not be
sufficient to allow for a recovery of costs or provide for an adequate return on and of capital investments. Also,
amounts that were approved by regulators may be appealed, modified, limited or eliminated by subsequent
regulatory or legislative actions. A failure to recover costs or earn a reasonable return on invested capital could
have a material adverse effect on the results of operations, financial condition and cash flows of Evergy and its
utility subsidiaries.
The Evergy Companies are also exposed to cost-recovery shortfalls due to the inherent "regulatory lag" in the rate-
setting process. This is because utility rates are generally based on historical information and, except for certain
situations where regulators allow for recovery of expenses through use of a formula that tracks costs, are not subject
to adjustment between rate cases. In connection with the merger, Evergy Kansas Central and Evergy Metro agreed
14
to a five-year base rate moratorium in Kansas beginning in December 2018. See Note 2 to the consolidated
financial statements for additional information. In addition, effective as of January 1, 2019, Evergy Metro and
Evergy Missouri West elected into plant-in service accounting (PISA), which, by law, requires each company to
keep base rates constant for three years following Evergy Metro's and Evergy Missouri West's last general rate case
and limits the extent to which prices can increase thereafter. These and other factors may result in under-recovery
of costs or failure to earn the authorized return on investment, or both.
Failure to timely recover the full investment costs of capital projects, the impact of renewable energy and energy
efficiency programs, other utility costs and expenses due to regulatory disallowances, regulatory lag or other factors
could lead to lowered credit ratings, reduced access to capital markets, increased financing costs, lower flexibility
due to constrained financial resources and increased collateral security requirements or reductions or delays in
planned capital expenditures. In response to competitive, economic, political, legislative, public perception and
regulatory pressures, Evergy's utility subsidiaries may be subject to rate moratoriums, rate refunds, limits on rate
increases, lower allowed returns on investments or rate reductions, including phase-in plans designed to spread the
impact of rate increases over an extended period for the benefit of customers. Any of these results could have a
material adverse effect on the results of operations, financial condition and cash flows of the Evergy Companies.
Legislative and regulatory requirements may increase costs and result in compliance penalties.
FERC, the North American Electric Reliability Corporation (NERC) and SPP have implemented and enforce an
extensive set of transmission system reliability, cybersecurity and critical infrastructure protection standards that
apply to public utilities. The MPSC and KCC have the authority to implement utility operational standards and
requirements, such as vegetation management standards, facilities inspection requirements and quality of service
standards. In addition, Evergy is also subject to health, safety and other requirements enacted by the Occupational
Safety and Health Administration, the Department of Transportation, the Department of Labor and other federal and
state agencies. As discussed more fully under "Operational Risks," the NRC extensively regulates nuclear power
plants, including Wolf Creek. The costs of complying with existing, new or modified regulations, standards and
other requirements could have a material adverse effect on the results of operations, financial position and cash
flows of the Evergy Companies. Furthermore, regulatory changes could result in operational changes that increase
costs or adversely impact the Evergy Companies' prospects. In addition, failure to meet quality of service,
reliability, cybersecurity, critical infrastructure protection, operational or other standards and requirements could
expose the Evergy Companies to penalties, additional compliance costs or adverse rate consequences, any of which
could have a material adverse impact on their results of operations, financial position and cash flows.
Environmental Risks:
Costs to comply with environmental laws and regulations, including those relating to GHG emissions, are
significant and may adversely impact operations and financial results.
The Evergy Companies are subject to extensive and evolving federal, state and local environmental laws,
regulations and permit requirements relating to air and water quality, waste management and hazardous substance
disposal, protected natural resources (such as wetlands, endangered species and other protected wildlife) and health
and safety. For example, Evergy Kansas Central, Evergy Metro and Evergy Missouri West combust large amounts
of fossil fuels in the production of electricity, which results in significant emissions of carbon dioxide (CO2) and
other GHGs. Federal legislation regulates the emission of GHGs and numerous states and regions have adopted
programs to stabilize or reduce GHG emissions. The Environmental Protection Agency (EPA), the Kansas
Department of Health and Environment (KDHE) and the Missouri Department of Natural Resources (MDNR)
regulate emissions under the Clean Air Act Amendments of 1990 (CAA), water under the Clean Water Act (CWA)
and waste management under the Resource Conservation and Recovery Act (RCRA), among other laws and
regulations. See Note 15 to the consolidated financial statements for additional information.
Compliance with these laws, regulations and requirements requires significant capital and operating resources, and
the failure to comply could result in substantial fines, injunctive relief and other sanctions. In addition, there is a
risk of lawsuits alleging violations of environmental laws, regulations or requirements, claiming creation of a public
nuisance or other matters, and seeking injunctions or monetary damages or other relief.
15
Environmental permits are subject to periodic renewal, which may result in more stringent permit conditions and
limits. New facilities, or modifications of existing facilities, may require new environmental permits or
amendments to existing permits. Delays in the environmental permitting process, public opposition and challenges,
denials of permit applications, limits or conditions imposed in permits and the associated uncertainty may materially
adversely affect the cost and timing of projects, and thus materially adversely affect the results of operations,
financial position and cash flows of the Evergy Companies. In addition, compliance with environmental laws,
regulations and requirements could alter the way assets are managed, which in turn could result in retiring assets
earlier than expected, recording asset retirement obligations (AROs) or having a regulator disallow recovery of
costs that had been prudently incurred in connection with those assets.
Costs of compliance with environmental laws, regulations and requirements, or fines, penalties or negative lawsuit
outcomes, if not recovered in rates from customers, could have a material adverse effect on the results of operations,
financial position and cash flows of the Evergy Companies.
Financial Risks:
Financial market disruptions or declines in the Evergy Companies' credit ratings may increase financing costs
and limit access to the credit markets, which may adversely affect liquidity and financial results.
The Evergy Companies rely on funds from operations and access to the capital and credit markets to fund capital
expenditures and for working capital and liquidity. Disruption in capital or credit markets, increases in interest
rates, deterioration in the financial condition of the financial institutions on which the Evergy Companies rely, credit
rating downgrades, a decrease in the market price of Evergy's common stock or a decrease or disappearance in the
demand for debt securities issued by the Evergy Companies or subsidiaries could have material adverse effects on
the Evergy Companies. These effects could include, among others: reduced access to capital and increased cost of
borrowed funds and collateral requirements; dilution resulting from equity issuances at reduced prices; increased
nuclear decommissioning trust and pension and other post-retirement benefit plan funding requirements; reduced
ability to pay dividends; rate case disallowance of costs of capital; reductions in or delays of capital expenditures;
and limitations in the ability of Evergy to provide credit support for its subsidiaries. Further, Evergy Kansas Central
and Evergy Metro have outstanding tax-exempt bonds that may be put back to the respective issuer at the option of
the holders, which could adversely impact liquidity. In addition, market disruption and volatility could have an
adverse impact on Evergy's lenders, suppliers and other counterparties or customers, causing them to fail to meet
their obligations.
Evergy is a holding company and relies on the earnings of its subsidiaries to meet its financial obligations.
Evergy is a holding company with no significant operations of its own. The primary source of funds for payment of
dividends to its shareholders and its other financial obligations is dividends paid to it by its direct subsidiaries,
particularly Evergy Kansas Central, Evergy Metro and Evergy Missouri West. Evergy's subsidiaries are separate
legal entities and have no obligation to provide Evergy with funds. The ability of Evergy's subsidiaries to pay
dividends or make other distributions, and accordingly, Evergy's ability to pay dividends on its common stock and
meet its financial obligations, principally depends on the earnings and cash flows, capital requirements and general
financial position of its subsidiaries, as well as regulatory factors, financial covenants, general business conditions
and other matters.
In addition, the Evergy Companies are subject to certain corporate and regulatory restrictions and financial
covenants that could affect their ability to pay dividends. Under the Federal Power Act, Evergy Kansas Central,
Evergy Metro and Evergy Missouri West generally can pay dividends only out of retained earnings. In connection
with approval of the merger in Missouri, each of Evergy Metro and Evergy Missouri West agreed to not pay
dividends to Evergy if its credit rating falls below BBB- for S&P Global Ratings or Baa3 for Moody's Investor
Services. In connection with approval of the merger in Kansas, each of Evergy Kansas Central and Evergy Metro
agreed to not pay dividends to Evergy if (i) the payment would result in an increase in the utility's debt level
(excluding short-term debt and debt due within one year) above 60 percent of its total capitalization, absent
approval from the KCC or (ii) if its credit rating falls below BBB- for S&P Global Ratings or Baa3 for Moody's
Investor Services. As described elsewhere in this Form 10-K, the Evergy Companies are also required to maintain a
16
consolidated indebtedness to consolidated total capitalization ratio of not more than 0.65 to 1.00, which could
restrict the amount of dividends the Evergy Companies are permitted to pay. Evergy cannot guarantee dividends
will be paid in the future or that, if paid, dividends will satisfy announced targets or investor expectations or be paid
with the same frequency as in the past.
In addition, from time to time Evergy may guarantee debt obligations of its subsidiaries. Under the financing
agreements to which Evergy is a party, a guarantee of debt may be considered indebtedness for purposes of
complying with financial covenants that dictate the extent to which Evergy can borrow money, and any guarantee
payments could adversely affect Evergy's liquidity and ability to service its own debt obligations.
Increasing costs associated with defined benefit retirement and postretirement plans, health care plans and other
employee benefits could adversely affect Evergy's financial position and liquidity.
Evergy maintains defined benefit retirement and other post-retirement employee benefit plans for certain current
and former employees. The costs of these plans depend on a number of factors, including the rates of return on plan
assets, the level and nature of the provided benefits, discount rates, the interest rates used to measure required
minimum funding levels, changes in benefit design, changes in laws or regulations and the amount of any required
or voluntary contributions to the plans. The Evergy Companies have substantial unfunded liabilities under these
plans. Also, if the rate of retirements exceeds planned levels, these plans experience adverse market returns on
investments or interest rates fall, required or voluntary contributions to the plans could be material. In addition,
changes in accounting rules and assumptions related to future costs, returns on investments, interest rates and other
actuarial assumptions, including projected retirements, could have a significant adverse impact on the results of
operations, financial position and cash flows of the Evergy Companies.
The costs of providing health care benefits to employees and retirees have increased in recent years and may
continue to rise in the future. Future legislative changes related to health care could also cause significant changes
to benefit programs and costs. The increasing costs associated with health care plans could have a significant
adverse impact on the results of operations, financial position and cash flows of the Evergy Companies.
The use of derivative contracts could result in financial losses and impair liquidity.
The Evergy Companies use derivative instruments, such as swaps, options, futures and forwards, to manage
commodity and financial risks. Losses could be recognized as a result of volatility in the market values of these
contracts, if a counterparty fails to perform or if the underlying transactions, which the derivative instruments are
intended to hedge, fail to materialize. The valuation of these financial instruments can involve management's
judgment or the use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation
methods could affect the reported fair value of these contracts.
Tax legislation and an inability to utilize tax credits could adversely impact financial results and liquidity.
Tax laws and regulations can adversely affect, among other things, financial results, liquidity, credit ratings and the
valuation of assets, such as deferred income tax assets. Over the last several years, income tax obligations have
been reduced due to the use of bonus depreciation provisions that allow for an acceleration of deductions for tax
purposes and IRS guidance on tax deductions for repairs. The Tax Cuts and Jobs Act of 2017 (TCJA) eliminates
bonus depreciation for regulated utilities on new capital investments. The Evergy Companies regularly assess their
ability to utilize tax benefits, including those in the form of net operating loss, tax credit and other tax
carryforwards, that are recorded as deferred income tax assets on its balance sheets to determine whether a valuation
allowance is necessary. A reduction in, or disallowance of, these tax benefits could have an adverse impact on the
financial results and liquidity of the Evergy Companies. Additionally, changes in corporate tax rates or policy
changes, such as those resulting from the TCJA, as well as any inability to generate enough taxable income in the
future to utilize all tax benefits before they expire, could have an adverse impact on the financial results and
liquidity of the Evergy Companies.
In addition, the Evergy Companies construct and operate renewable energy facilities that generate tax credits that
reduce federal income tax obligations. The amount of tax credits is dependent on several factors, including the
amount of electricity produced and the applicable tax credit rate. A variety of operating and economic parameters,
including transmission constraints, adverse weather conditions and breakdown or failure of equipment, could
17
significantly reduce these tax credits, which could have an adverse impact on the financial results of the Evergy
Companies.
The anticipated benefits of the merger may not be realized.
The Evergy Companies have incurred, and expect to incur additional, significant costs associated with combining
the operations of Great Plains Energy and Evergy Kansas Central. Additional unanticipated costs may also be
incurred in the integration of the businesses of Great Plains Energy and Evergy Kansas Central. The Evergy
Companies expect the merger to produce various benefits, including, among other things, operating efficiencies and
cost savings. However, achieving the anticipated benefits is subject to a number of uncertainties, including:
•
•
•
•
the ability to efficiently and effectively combine operations of the merged companies;
general market and economic conditions;
general competitive factors in the marketplace; and
higher than expected costs required to achieve the anticipated benefits of the merger.
No assurance can be given that these benefits will be achieved or achieved in a timely manner. Integration costs
could have a material adverse impact on the results of the Evergy Companies, and a failure to achieve the
anticipated benefits of the merger could have a material adverse effect on the results of operations, financial position
and cash flows of the Evergy Companies. In addition, the Evergy Companies may encounter difficulties in
integrating the operations of the companies, including inconsistencies in standards, systems and controls, and
management's focus and resources may be diverted from ordinary business activities and opportunities in order to
focus on integration efforts. Any of the foregoing could have a material adverse effect on the Evergy Companies.
The price of Evergy common stock may experience volatility.
The price of Evergy common stock may be volatile. Some of the factors that could affect the price of Evergy
common stock are Evergy's earnings; estimates or statements by the investment community; the ability of the
Evergy Companies to implement their strategic plan or to realize the expected synergies and other benefits from the
merger; the ability of Evergy to deploy capital; actions by regulators; and speculation in the press or investment
community about the Evergy Companies' strategy, earnings per share or growth prospects, financial condition or
results of operations. Individuals or entities, such as activist shareholders and special interest groups, may also seek
to influence the Evergy Companies' strategic plan or take other actions that could disrupt the Evergy Companies'
business, financial results or operations and could adversely impact Evergy's stock price. General market conditions
and U.S. economic factors and political events unrelated to the performance of the Evergy may also affect Evergy's
stock price. For these reasons, shareholders should not rely on historical trends in the price of Great Plains Energy
or Evergy Kansas Central common stock to predict the price of Evergy's common stock or its financial results.
Evergy has recorded goodwill that could become impaired and adversely affect financial results.
As required by generally accepted accounting principles (GAAP), Evergy recorded a significant amount of goodwill
on its balance sheet in connection with completion of the merger. Evergy assesses goodwill for impairment on an
annual basis or whenever events or circumstances occur that would indicate a potential for impairment. If goodwill
is deemed to be impaired, Evergy may be required to incur non-cash charges that could materially adversely affect
its results of operations.
Customer and Weather-Related Risks:
Evergy's results of operations, financial position and cash flows can be materially affected by changes in
electricity consumption.
Change in customer behaviors in response to energy efficiency programs, changing conditions and preferences or
changes in the adoption of technologies could affect the consumption of energy by customers. Federal and state
programs exist to influence the way customers use energy and regulators have mandates to promote energy
efficiency. Conservation programs and customers' level of participation in the programs could impact the financial
results of the Evergy Companies in adverse ways.
18
Technological advances, energy efficiency and other energy conservation measures have reduced and will continue
to reduce customer electricity consumption. The Evergy Companies generate electricity at central station power
plants to achieve economies of scale and produce electricity at a competitive cost. Self-generation and distributed
generation technologies, including microturbines, wind turbines, fuel cells and solar cells, as well as those related to
the storage of energy produced by these systems, have become economically competitive with the manner and price
at which the Evergy Companies sell electricity. There is also a perception that generating or storing electricity
through these technologies is more environmentally friendly than generating electricity with fossil fuels. Increased
adoption of these technologies could reduce electricity demand and the pool of customers from whom fixed costs
are recovered, resulting in under recovery of the fixed costs of the Evergy Companies. Increased self-generation
and the related use of net energy metering, which allows self-generating customers to receive bill credits for surplus
power, could put upward price pressure on remaining customers. If the Evergy Companies are unable to adjust to
reduced electricity demand and increased self-generation and net energy metering, their financial condition and
results of operations could be adversely affected.
Changes in customer electricity consumption due to sustained financial market disruptions, downturns or
sluggishness in the economy or other factors may also adversely affect the results of operations, financial position
and cash flows of the Evergy Companies.
Weather is a major driver of the results of operations, financial position and cash flows of the Evergy Companies
and the Evergy Companies are subject to risks associated with climate change.
Weather conditions directly influence the demand for and price of electricity. The Evergy Companies are
significantly impacted by seasonality, and, due to energy demand created by air conditioning load, highest revenues
are typically recorded in the third quarter. Unusually mild winter or summer weather can adversely affect sales. In
addition, severe weather and events, including tornados, snow, fire, rain, flooding and ice storms, can be destructive
and cause outages and property damage that can result in increased expenses, lower revenues and additional capital
restoration costs. Storm reserves established by the Evergy Companies may be insufficient and rates may not be
adjusted in a timely manner, or at all, to recover these costs. Additionally, because many of the Evergy Companies'
generating stations utilize water for cooling, low water and flow levels can increase maintenance costs at these
stations, result in limited power production and require modifications to plant operations. High water conditions
can also impair planned deliveries of fuel to generating stations. Climate change may produce more frequent or
severe weather events, such as storms, droughts or floods and could also impact the economic health of Evergy's
service territories. An increase in the frequency or severity of extreme weather events or a deterioration in the
economic health of Evergy's service territories could have a material adverse effect on the results of operations,
financial position and cash flows of the Evergy Companies.
In addition, policy, legal and regulatory efforts to influence climate change, such as efforts to reduce GHG
emissions, impose a tax on emissions and create incentives for low-carbon generation and energy efficiency, could
result in reduced sales and require significant costs to respond to such efforts. These efforts could also result in the
early retirement of generation facilities, which could result in stranded costs if regulators disallow recovery of
investments that were prudent when originally made. The Evergy Companies are targeting to achieve an 80%
reduction of carbon emissions by 2050 from 2005 levels. The trajectory and timing of the goal could be impacted
by various factors, including policy, legal or regulatory actions, a lack of technological advancements or other
reasons. Any of the foregoing could adversely affect the results of operations, financial position and cash flows of
the Evergy Companies and the market prices of Evergy's common stock.
Operational Risks:
Operational risks may adversely affect the Evergy Companies.
The operation of electric generation, transmission, distribution and information systems involves many risks,
including breakdown or failure of equipment; aging infrastructure; operator error or contractor or subcontractor
failure; problems that delay or increase the cost of returning facilities to service after outages; limitations that may
be imposed by equipment conditions or environmental, safety or other regulatory requirements; fuel supply or fuel
transportation reductions or interruptions; labor disputes; difficulties with the implementation or operation of
19
information systems; transmission scheduling constraints; and catastrophic events such as fires, floods, droughts,
explosions, terrorism, severe weather, pandemics or other similar occurrences. Many of the Evergy Companies'
generation, transmission and distribution resources are aged, which increases the risk of unplanned outages, reduced
generation output and higher maintenance expense. Any equipment or system outage or constraint can, among
other things, reduce sales, increase costs and affect the ability to meet regulatory service metrics, customer
expectations and regulatory reliability and security requirements.
The Evergy Companies have general liability and property insurance to cover a portion of their facilities, but such
policies do not cover transmission or distribution systems, are subject to certain limits and deductibles and do not
include business interruption coverage. Insurance coverage may not be available in the future at reasonable costs or
on commercially reasonable terms, and the insurance proceeds received for any loss of, or any damage to, any
facilities may not be sufficient to restore the loss or damage.
These and other operating events may reduce revenues or increase costs, or both, and may materially affect the
results of operations, financial position and cash flows of the Evergy Companies.
Physical and cybersecurity breaches, criminal activity, terrorist attacks and other disruptions to facilities or
information technology infrastructure could interfere with operations, expose the Evergy Companies or their
customers or employees to a risk of loss, expose the Evergy Companies to legal or regulatory liability and cause
reputational and other harm.
The Evergy Companies rely upon information technology networks and systems to process, transmit and store
electronic information, and to manage or support a variety of business processes and activities, including the
generation, transmission and distribution of electricity, supply chain functions and the invoicing and collection of
payments from customers. The Evergy Companies also use information technology networks and systems to
record, process and summarize financial information and results of operations for internal reporting purposes and to
comply with financial reporting, legal and tax requirements. These networks and systems are in some cases owned
or managed by third-party service providers. In the ordinary course of business, the Evergy Companies collect,
store and transmit sensitive data including operating information, proprietary business information and personal
information belonging to customers and employees.
The Evergy Companies' information technology networks and infrastructure, as well as the networks and
infrastructure belonging to third-party service providers are vulnerable to damage, disruptions or shutdowns due to
attacks or breaches by hackers or other unauthorized third parties; error or malfeasance by one or more employees
or service providers; software or hardware upgrades; additions or replacements; malicious software code;
telecommunication failures; natural disasters or other catastrophic events. The occurrence of any of these events
could, among other things, impact the reliability or safety of the Evergy Companies' generation, transmission and
distribution systems; result in the erasure of data or render the Evergy Companies' equipment, or the equipment of
third-party service providers, unusable; impact the Evergy Companies' ability to conduct business in the ordinary
course; reduce sales; expose the Evergy Companies and their customers, employees and vendors to a risk of loss or
misuse of information; and result in legal claims or proceedings, liability or regulatory penalties, damage the Evergy
Companies' reputation or otherwise harm their business. The Evergy Companies can provide no assurance that they
will be able to identify and remediate all security or system vulnerabilities or that unauthorized access or error will
be identified and remediated.
The Evergy Companies are subject to laws and rules issued by multiple government agencies concerning
safeguarding and maintaining the confidentiality of their security, customer and business information. For example,
NERC has issued comprehensive regulations and standards surrounding the security of bulk power systems and is
continually in the process of developing updated and new requirements with which the utility industry must comply.
The NRC also has issued regulations and standards related to the protection of critical digital assets at nuclear
power plants. Compliance with NERC and NRC rules and standards, and rules and standards promulgated by other
regulatory agencies from time to time or future legislation, will increase the Evergy Companies' compliance costs
and their exposure to the potential risk of violations of these rules, standards or future legislation, which includes
potential financial penalties. Furthermore, the non-compliance of other utilities with applicable regulations or the
20
occurrence of a serious security event at other utilities could result in increased regulation or oversight, both of
which could increase the Evergy Companies' costs and impact their financial results.
Additionally, the Evergy Companies cannot predict the impact that any future information technology or malicious
attack may have on the energy industry in general. The electric utility industry, both within the United States and
internationally, has experienced physical and cybersecurity attacks on energy infrastructure such as power plants,
substations and related assets in the past, and there will likely be more attacks in the future. The Evergy Companies'
facilities and systems could be direct targets or indirect casualties of such attacks. The effects of such attacks could
include disruption to the Evergy Companies' generation, transmission and distribution systems or to the electrical
grid in general, reduced sales and could increase the cost of insurance coverage or result in a decline in the U.S.
economy. Any of the foregoing could have a material adverse impact on the Evergy Companies' operations or
financial results.
The cost and schedule of capital projects may materially change and expected performance may not be achieved.
The Evergy Companies' business is capital intensive and includes significant construction projects. The risks of any
capital project include: actual costs may exceed estimated costs; regulators may disallow, limit or delay the recovery
of all or part of the cost of, or a return on, a capital project; risks associated with the capital and credit markets to
fund projects; delays in receiving, or failure to receive, necessary permits, approvals and other regulatory
authorizations; unforeseen engineering problems or changes in project design or scope; the failure of suppliers and
contractors to perform as required under their contracts; inadequate availability or increased cost of labor or
materials, including commodities such as steel, copper and aluminum that may be subject to uncertain or increased
tariffs; inclement weather; new or changed laws, regulations and requirements, including environmental and health
and safety laws, regulations and requirements; and other events beyond the Evergy Companies' control may occur
that may materially affect the schedule, cost and performance of these projects.
These and other risks could cause the Evergy Companies to defer or limit capital expenditures, materially increase
the costs of capital projects, delay the in-service dates of projects, adversely affect the performance of the projects
and require the purchase of electricity on the wholesale market, at potentially more expensive prices, until the
projects are completed. These risks may significantly affect the Evergy Companies' results of operations, financial
position and cash flows.
The Evergy Companies are exposed to risks associated with the ownership and operation of a nuclear generating
unit, which could adversely impact the Evergy Companies' business and financial results.
Evergy indirectly owns 94% of Wolf Creek, with Evergy Kansas South and Evergy Metro each owning 47% of the
nuclear plant. The NRC has broad authority under federal law to impose licensing and safety-related requirements
for the operation of nuclear generation facilities, including Wolf Creek. In the event of non-compliance, the NRC
has the authority to impose fines, shut down the facilities, or both, depending upon its assessment of the severity of
the situation, until compliance is achieved. Additionally, the non-compliance of other nuclear facility operators with
applicable regulations or the occurrence of a serious nuclear incident anywhere in the world could result in
increased regulation of the nuclear industry. Such events could increase Wolf Creek's costs and impact the financial
results of the Evergy Companies or result in a shutdown of Wolf Creek.
An extended outage of Wolf Creek, whether resulting from NRC action, an incident at the plant or otherwise, could
have a material adverse effect on the results of operations, financial position and cash flows of the Evergy
Companies in the event replacement power and other costs are not recovered through rates or insurance. If a long-
term outage occurred, the state regulatory commissions could reduce rates by excluding the Wolf Creek investment
from rate base. Wolf Creek was constructed prior to 1986 and the age of Wolf Creek increases the risk of unplanned
outages and results in higher maintenance costs.
On an annual basis, Evergy Kansas South and Evergy Metro are required to contribute money to tax-qualified trusts
that were established to pay for decommissioning costs at the end of the unit's life. The amount of contributions
varies depending on estimates of decommissioning expenses and projected return on trust assets. If the actual return
on trust assets is below the projected level or actual decommissioning costs are higher than estimated, Evergy
21
Kansas South and Evergy Metro could be responsible for the balance of funds required and may not be allowed to
recover the balance through rates.
The Evergy Companies are also exposed to other risks associated with the ownership and operation of a nuclear
generating unit, including, but not limited to, (i) potential liability associated with the potential harmful effects on
the environment and human health resulting from the operation of a nuclear generating unit, (ii) the storage,
handling, disposal and potential release (by accident, through third-party actions or otherwise) of radioactive
materials and (iii) uncertainties with respect to contingencies and assessments if insurance coverage is
inadequate. Under the structure for insurance among owners of nuclear generating units, Evergy Kansas South and
Evergy Metro are also liable for potential retrospective premium assessments (subject to a cap) per incident at any
commercial reactor in the country and losses in excess of insurance coverage.
In addition, Wolf Creek is reliant on a sole supplier for fuel and related services. The supplier has in the past been
the subject of Chapter 11 reorganization proceedings, and an extended outage of Wolf Creek could occur if the
supplier is not able to perform under its contracts with Wolf Creek. Switching to another supplier could take an
extended amount of time and would require NRC approval. An extended outage at Wolf Creek could affect the
amount of Wolf Creek investment included in customer rates and could have a material impact on the Evergy
Companies' financial results.
The structure of the regional power market in which the Evergy Companies operate could have an adverse effect
on their results of operations, financial position and cash flows.
Evergy Kansas Central, Evergy Metro and Evergy Missouri West are members of the SPP regional transmission
organization, and each has transferred operational authority (but not ownership) of their transmission facilities to the
SPP. The SPP's Integrated Marketplace determines which generating units among market participants should run,
within the operating constraints of a unit, at any given time for maximum cost-effectiveness. In the event that
Evergy Kansas Central's, Evergy Metro's or Evergy Missouri West's generating units are not among the lowest cost
generating units operating within the market, each could experience decreased levels of wholesale electricity sales.
A market for Transmission Congestion Rights (TCR) is also included as part of the Integrated Marketplace. TCRs
are financial instruments used to hedge transmission congestion charges. Evergy Kansas Central, Evergy Metro and
Evergy Missouri West acquire TCRs for the purpose of hedging against transmission congestion charges. There is a
risk that the entities could incorrectly model the amount of TCRs needed, or that the TCRs acquired could be
ineffective in hedging against transmission congestion charges, either of which could lead to increased purchased
power costs.
The rules governing the various regional power markets, including the SPP, may change from time to time and such
changes could impact the costs and revenues of the Evergy Companies.
Litigation Risks:
The outcome of legal proceedings cannot be predicted. An adverse finding could have a material adverse effect
on the Evergy Companies' results of operations, financial position and cash flows.
The Evergy Companies are parties to various lawsuits and regulatory proceedings in the ordinary course of their
respective businesses. The outcome of these matters cannot be determined, nor, in many cases, can the liability that
could potentially result from each case be reasonably estimated. The liability that the Evergy Companies may incur
with respect to any of these cases may be in excess of amounts currently accrued and insured against with respect to
such matters and could adversely impact the financial results for the Evergy Companies.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
22
ITEM 2. PROPERTIES
Generation Resources
Station
Unit No.
Location
Year
Completed
Fuel
Evergy
Kansas
Central
Evergy
Metro
Evergy
Missouri
West
Total
Company
Generation
Renewable
Purchased
Power
Total
Generation
and
Renewable
Purchased
Power
Unit Capability (MW) By Owner(a)
Renewable
Generation:
Central Plains
Flat Ridge
Western Plains
Meridian Way
Ironwood
Post Rock
Cedar Bluff
Kay Wind
Ninnescah
Kingman 1
Kingman 2
Rolling Meadows
Hutch Solar
Cimarron II
Spearville 1
Spearville 2
Spearville 3
Gray County
Ensign
Waverly
Slate Creek
Rock Creek
Osborn
Pratt
Greenwood Solar
Prairie Queen
CNPPID (NE) -
Hydro
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Oklahoma
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Kansas
Missouri
Missouri
Kansas
Missouri
Kansas
2009
2009
2017
2008
2012
2012
2015
2015
2016
2016
2016
2010
2017
2012
2006
2010
2012
2001
2012
2016
2015
2017
2016
2018
2016
2019
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Landfill
Gas
Solar
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Solar
Wind
Nebraska
1941
Hydro
St Joseph Landfill
Missouri
2012
Landfill
Gas
Total Renewable Generation:
Nuclear:
Wolf Creek
1
(b)
Kansas
1985
Uranium
Total Nuclear:
23
99
50
281
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
430
552
552
—
—
—
—
—
—
—
—
—
—
—
—
—
—
101
48
—
—
—
—
—
—
—
—
—
—
—
—
149
552
552
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3
—
—
2
5
—
—
99
50
281
—
—
50 (e)
—
96 (e)
— 168 (e)
— 201 (e)
— 199 (e)
— 200 (e)
— 208 (e)
— 103 (e)
— 103 (e)
—
—
6 (e)
1 (e)
— 131 (f)
101
48
—
—
— 101 (f)
— 110 (g)
—
99 (g)
— 200 (f)
— 150 (f)
— 300 (h)
— 201 (h)
— 243 (h)
3
—
— 200 (h)
—
60 (f)
2
—
584
3,130
1,104
1,104
—
—
99
100
281
96
168
201
199
200
208
103
103
6
1
131
101
48
101
110
99
200
150
300
201
243
3
200
60
2
3,714
1,104
1,104
Station
Unit No.
Location
Year
Completed
Fuel
Evergy
Kansas
Central
Evergy
Metro
Evergy
Missouri
West
Total
Company
Generation
Renewable
Purchased
Power
Total
Generation
and
Renewable
Purchased
Power
Unit Capability (MW) By Owner(a)
1978, 1980
&1983
Coal
2,011
—
175
2,186
—
2,186
1960, 1971
Coal
486
—
Steam Turbines
1 & 2
(b)(c)
1973, 1977
Coal
699
699
Iatan
Missouri
Steam Turbines
1 & 2
(b)
1980, 2010
Coal
Hawthorn
Missouri
Steam Turbines
5
(d)
1969
Coal
—
—
—
—
486
—
1,398
—
981
288
1,269
—
564
3,196
2,244
—
463
564
5,903
—
—
486
1,398
1,269
564
5,903
Coal:
Jeffrey Energy
Center
Steam Turbines
1-3
(b)
Lawrence Energy
Center
Steam Turbines
4 & 5
La Cygne
Kansas
Kansas
Kansas
Total Coal:
Gas and Oil:
Emporia Energy
Center
Combustion
Turbines
Gordon Evans
Energy Center
Combustion
Turbines
Hutchinson Energy
Center
Combustion
Turbines
Spring Creek Energy
Center
Combustion
Turbines
State Line
Combined Cycle
Hawthorn
1 - 7
1 - 3
1 - 3
4
1 - 4
2-1, 2-2
& 2-3
(b)
Combined Cycle
6/9
Combustion
Turbines
West Gardner
Combustion
Turbines
Osawatomie
Combustion
Turbines
7 & 8
1 - 4
1
Kansas
Kansas
Kansas
Oklahoma
Missouri
Missouri
Kansas
Kansas
2008 - 2009
Natural
Gas
645
—
—
645
—
645
2000 - 2001
Natural
Gas
289
—
—
289
—
289
1974
1975
2001
2001
2000
2000
2003
2003
Natural
Gas
Oil
Natural
Gas
Natural
Gas
Natural
Gas
Natural
Gas
Natural
Gas
Natural
Gas
24
165
58
—
—
—
—
165
58
—
—
272
—
—
272
—
196
—
—
—
225
153
—
—
—
196
—
225
153
—
—
—
313
—
313
—
—
76
—
76
—
165
58
272
196
225
153
313
76
Total
Generation
and
Renewable
Purchased
Power
69
19
42
104
97
416
2
313
297
3,988
14,709
Unit Capability (MW) By Owner(a)
Station
Unit No.
Location
Year
Completed
Fuel
Evergy
Kansas
Central
Evergy
Metro
Evergy
Missouri
West
Total
Company
Generation
Renewable
Purchased
Power
Gas and Oil
(continued):
Ralph Green
Combustion
Turbines
Nevada
Combustion
Turbines
Lake Road
Combustion
Turbines
3
1
1 - 3
5 - 7
Steam Turbines
4
Northeast
Combustion
Turbines
Missouri
Missouri
Missouri
Missouri
1981
Natural
Gas
—
—
69
69
—
1974
Oil
—
—
19
19
—
1951, 1958
& 1962
Natural
Gas
1974, 1989
& 1990
1967
Oil
Natural
Gas
Oil
Oil
Natural
Gas
1985
2005
—
—
—
—
—
—
—
—
416
2
42
104
97
—
—
42
104
97
416
2
—
—
—
—
—
—
—
313
313
—
11 - 18
1972 - 1977
Black Start Unit
19
South Harper
Combustion
Turbines
Greenwood Energy
Center
Combustion
Turbines
Crossroads Energy
Center
Combustion
Turbines
Total Gas and Oil
1 - 3
1 - 4
1 - 4
Missouri
Missouri
Mississippi
1975 - 1979
Natural
Gas
—
—
237
237
—
237
2002
Natural
Gas
—
—
297
1,625
1,185
1,178
297
3,988
—
—
Total
(a) Capability (except for wind generating facilities) represents estimated 2020 net generating capacity. Capability for wind generating
11,579
3,130
1,646
5,803
4,130
facilities represents the nameplate capacity. Due to the intermittent nature of wind generation, these facilities are associated with a total of
1,404 MW of accredited generating capacity pursuant to SPP reliability standards.
(b) Share of a jointly owned unit.
(c) In 1987, Evergy Kansas South entered into a sale-leaseback transaction involving its 50% interest in the La Cygne Unit 2. Evergy and
Evergy Kansas Central consolidate the leasing entity as a variable interest entity (VIE). See Note 19 to the consolidated financial
statements for more information.
(d) Although the plant was completed in 1969, a new boiler, air quality control equipment and an uprated turbine were placed in service at the
Hawthorn Generating Station in 2001.
(e) Evergy Kansas Central renewable purchased power agreement.
(f) Evergy Metro renewable purchased power agreement.
(g) Evergy Missouri West renewable purchased power agreement.
(h) Evergy Metro and Evergy Missouri West renewable purchased power agreement.
Transmission and Distribution Resources
Evergy's electric transmission system interconnects with systems of other utilities for reliability and to permit
wholesale transactions with other electricity suppliers. Evergy has approximately 10,100 circuit miles of
25
transmission lines, 39,700 circuit miles of overhead distribution lines and 12,700 circuit miles of underground
distribution lines in Missouri and Kansas. Evergy has all material franchise rights necessary to sell electricity
within its retail service territory. Evergy's transmission and distribution systems are routinely monitored for
adequacy to meet customer needs. Management believes the current systems are adequate to serve customers.
General
Evergy's generating plants are located on property owned (or co-owned) by the Evergy Companies, except for
certain facilities that are located on easements or are contractually controlled. Evergy's service centers, electric
substations and a portion of its transmission and distribution systems are located on property owned or leased by
Evergy. Evergy's transmission and distribution systems are for the most part located above or underneath highways,
streets, other public places or property owned by others. Evergy believes that it has satisfactory rights to use those
places or properties in the form of permits, grants, easements, licenses or franchise rights; however, it has not
necessarily undertaken efforts to examine the underlying title to the land upon which the rights rest. Evergy's
headquarters are located in leased office space.
Substantially all of the fixed property and franchises of the Evergy Companies, which consist principally of electric
generating stations, electric transmission and distribution lines and systems, and buildings (subject to exceptions,
reservations and releases), are subject to mortgage indentures pursuant to which bonds have been issued and are
outstanding. See Note 13 to the consolidated financial statements for more information.
ITEM 3. LEGAL PROCEEDINGS
Other Proceedings
The Evergy Companies are parties to various lawsuits and regulatory proceedings in the ordinary course of their
respective businesses. For information regarding material lawsuits and proceedings, see Notes 5 and 15 to the
consolidated financial statements. Such information is incorporated herein by reference.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
26
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
EVERGY, INC.
Evergy's common stock is listed on the New York Stock Exchange under the symbol "EVRG." At February 24,
2020, Evergy's common stock was held by 22,695 shareholders of record.
Performance Graph
The following graph compares the performance of Evergy's common stock during the period that began on June 5,
2018 (the first day that Evergy's common stock traded), and ended on December 31, 2019, to the performance of the
Standard & Poor's 500 Index (S&P 500) and the Standard & Poor's Electric Utility Index (S&P 500 Electric
Utilities). The graph assumes a $100 investment in Evergy's common stock and in each of the indices at the
beginning of the period and a reinvestment of dividends paid on such investments throughout the period.
CUMULATIVE TOTAL RETURN
Based on an initial investment of $100 on June 5,
2018, with dividends reinvested
$150
$140
$130
$120
$110
$100
$90
$80
6/5/2018
12/31/2018
12/31/2019
Evergy, Inc
S&P 500 Index
S&P 500 Utilites Index
27
Purchases of Equity Securities
The following table provides information regarding purchases by Evergy of its equity securities that are registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (Exchange Act), during the three months
ended December 31, 2019.
Issuer Purchases of Equity Securities
Total Number of
Shares (or Units)
Purchased(a)
Average Price
Paid per Share
(or Unit)
—
628,929
635,720
1,264,649
(b)
(b)
Total Number of
Shares (or Units)
Purchased as
Part of Publicly
Announced Plans
or Programs
Maximum
Number of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs(a)
—
628,929
635,720
1,264,649
16,099,628
15,470,699
14,834,979
14,834,979
Month
October 1 - 31
November 1 - 30
December 1 - 31
Total
(a) In July 2018, the Evergy Board authorized the repurchase of up to 60 million shares of Evergy's common stock with no expiration date.
See Note 18 to the consolidated financial statements for additional information on Evergy's common stock repurchase program.
(b) In November 2019, a portion of the September 2019 accelerated share repurchase (ASR) agreement was settled, which resulted in the
delivery of 628,929 additional shares of Evergy common stock at no additional cost. The remainder of the September 2019 ASR agreement
was settled in December 2019, which resulted in the delivery of 635,720 additional shares of Evergy common stock at no additional cost.
In total, 7,815,204 shares were delivered under the September 2019 ASR agreement at an average price paid per share of $64.03.
Dividend Restrictions
For information regarding dividend restrictions, see Note 18 to the consolidated financial statements.
ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31
Evergy
Operating revenues
Net income
Net income attributable to Evergy, Inc.
Basic earnings per common share
Diluted earnings per common share
2019
2018(b)
2017(b)
2016(b)
2015(b)
(dollars in millions except per share amounts)
$
$
$
$
$
5,148
686
670
2.80
2.79
$
$
$
$
$
4,276
546
536
2.50
2.50
$
$
$
$
$
2,571
337
324
2.27
2.27
$
$
$
$
$
2,562
361
347
2.43
2.43
$
$
$
$
$
2,459
302
292
2.11
2.09
Total assets at year end
Total long-term obligations at year end (a)
$
Cash dividends per common share
(a) Includes long-term debt, current maturities of long-term debt, finance leases, operating leases, long-term debt of VIEs and current
$ 11,487
$ 11,624
$ 25,598
$ 25,976
1.735
3,846
7,472
9,200
3,699
1.52
1.60
1.93
$
$
$
$
$
$
$
$
$
$ 10,706
3,379
1.44
maturities of long-term debt of VIEs. Obligations related to operating leases are only included beginning in 2019 due to Evergy's adoption
of Topic 842, Leases. See Note 1 to the consolidated financial statements for additional information.
(b) On June 4, 2018, Evergy completed the mergers contemplated by the Amended Merger Agreement. The results of Great Plains Energy's
direct subsidiaries have been included in Evergy's results from the date of the closing of the merger and thereafter. Evergy amounts for
2017, 2016 and 2015 reflect the results of operation and financial position of Evergy Kansas Central as the accounting acquirer in the
merger transaction.
28
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following combined Management's Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) should be read in conjunction with the consolidated financial statements and accompanying notes in this
combined annual report on Form 10-K. None of the registrants make any representation as to information related
solely to Evergy, Evergy Kansas Central or Evergy Metro other than itself.
The following MD&A generally discusses 2019 and 2018 items and year-to-year comparisons between 2019 and
2018. Discussions of 2017 items and year-to-year comparisons between 2018 and 2017 can be found in MD&A in
Part II, Item 7, of the Evergy Companies' combined annual report on Form 10-K for the fiscal year ended December
31, 2018.
EXECUTIVE SUMMARY
EVERGY, INC.
Evergy is a public utility holding company incorporated in 2017 and headquartered in Kansas City, Missouri.
Evergy operates primarily through the following wholly-owned direct subsidiaries listed below. In September 2019,
these wholly-owned direct subsidiaries were rebranded and renamed under the Evergy brand name.
• Evergy Kansas Central, formerly known as Westar Energy, Inc., is an integrated, regulated electric utility
that provides electricity to customers in the state of Kansas. Evergy Kansas Central has one active wholly-
owned subsidiary with significant operations, Evergy Kansas South, formerly known as Kansas Gas and
Electric Company.
• Evergy Metro, formerly known as Kansas City Power & Light Company, is an integrated, regulated electric
utility that provides electricity to customers in the states of Missouri and Kansas.
• Evergy Missouri West, formerly known as KCP&L Greater Missouri Operations Company, is an integrated,
regulated electric utility that provides electricity to customers in the state of Missouri.
• Evergy Transmission Company, formerly known as GPE Transmission Holding Company, LLC, owns
13.5% of Transource with the remaining 86.5% owned by AEP Transmission Holding Company, LLC, a
subsidiary of AEP. Transource is focused on the development of competitive electric transmission projects.
Evergy Transmission Company accounts for its investment in Transource under the equity method.
Evergy Kansas Central also owns a 50% interest in Prairie Wind, which is a joint venture between Evergy Kansas
Central and subsidiaries of AEP and Berkshire Hathaway Energy Company. Prairie Wind owns a 108-mile, 345 kV
double-circuit transmission line that provides transmission service in the SPP. Evergy Kansas Central accounts for
its investment in Prairie Wind under the equity method.
Since the rebranding in September 2019, Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy
Missouri West have been conducting business in their respective service territories using the name Evergy.
Collectively, the Evergy Companies have approximately 14,700 MWs of owned generating capacity and renewable
purchased power agreements and engage in the generation, transmission, distribution and sale of electricity to
approximately 1.6 million customers in the states of Kansas and Missouri. The Evergy Companies assess financial
performance and allocate resources on a consolidated basis (i.e., operate in one segment).
29
Strategy
Evergy expects to continue operating its integrated utilities within the currently existing regulatory frameworks.
Evergy's objectives are to deliver value to shareholders through earnings and dividend growth; serve customers and
communities with cost-effective, reliable and clean energy; and maintain a rewarding and challenging work
environment for employees. Significant elements of Evergy's strategy to achieve these objectives include:
•
•
•
the realization of a total of approximately $595 million of potential net savings over the first five years of
operation of the combined company, which formed in June 2018, resulting from synergies that are expected
to be created as a result of the merger;
anticipated rate base investment of approximately $7.6 billion from 2020 through 2024; and
the reduction of carbon emissions by 80% by 2050 from 2005 levels through the continued growth of
Evergy's renewable energy portfolio and the retirement of older and less efficient fossil fuel plants. See
"Transforming Evergy's Generation Fleet" in Part I, Item 1, Business, for additional information.
In March 2020, the Evergy Board announced the creation of a Strategic Review & Operations Committee that will
explore ways to enhance long-term shareholder value (taking into account applicable legal and regulatory
requirements and any other relevant considerations), including through a potential strategic combination or an
enhanced long-term standalone operating plan and strategy. The committee is expected to complete its review and
make a recommendation to Evergy's Board in the first half of 2020.
See "Cautionary Statements Regarding Certain Forward-Looking Information" and Part I, Item 1A, Risk Factors,
for additional information.
Common Stock Repurchase Program
In July 2018, the Evergy Board authorized the repurchase of up to 60 million shares of Evergy's common stock.
Evergy has utilized various methods to effectuate the share repurchase program since its authorization, including the
repurchase of shares through ASR agreements and open market transactions. For 2019, Evergy had total
repurchases of common stock of $1,628.7 million and had repurchased 28.8 million shares under the repurchase
program. Since the start of the repurchase program in August 2018, Evergy has made total repurchases of common
stock of $2,671.0 million and has repurchased 45.2 million shares under the repurchase program. Evergy does not
anticipate making additional repurchases of common stock under its share repurchase program while the Strategic
Review & Operations Committee of the Evergy Board conducts its review of ways to enhance long-term
shareholder value, which is expected to conclude in the first half of 2020.
See Note 18 to the consolidated financial statements for more information regarding Evergy's common stock
repurchase program.
Great Plains Energy and Evergy Kansas Central Merger
Evergy was incorporated in 2017 as Monarch Energy, a wholly-owned subsidiary of Great Plains Energy. Prior to
the closing of the merger transactions, Monarch Energy changed its name to Evergy and did not conduct any
business activities other than those required for its formation and matters contemplated by the Amended Merger
Agreement. On June 4, 2018, in accordance with the Amended Merger Agreement, Great Plains Energy merged
into Evergy, with Evergy surviving the merger and King Energy merged into Evergy Kansas Central, with Evergy
Kansas Central surviving the merger. These merger transactions resulted in Evergy becoming the parent entity of
Evergy Kansas Central and the direct subsidiaries of Great Plains Energy, including Evergy Metro and Evergy
Missouri West. As a result of the closing of the merger transactions, each outstanding share of Great Plains Energy
common stock was converted into 0.5981 shares of Evergy common stock, resulting in the issuance of 128.9 million
shares. Additionally, each outstanding share of Evergy Kansas Central common stock was converted into 1 share of
Evergy common stock.
Evergy Kansas Central was determined to be the accounting acquirer in the merger and thus, the predecessor of
Evergy. Evergy had separate operations for the period beginning with the quarter ended June 30, 2018, and
references to amounts for periods after the closing of the merger relate to Evergy. The results of Great Plains
30
Energy's direct subsidiaries have been included in Evergy's results of operations from June 4, 2018, the date of the
closing of the merger, and thereafter.
See Note 2 to the consolidated financial statements for more information regarding the merger.
Regulatory Proceedings
See Note 5 to the consolidated financial statements for information regarding regulatory proceedings.
Earnings Overview
The following table summarizes Evergy's net income and diluted earnings per share (EPS).
Net income attributable to Evergy, Inc.
Earnings per common share, diluted
2019
2018
Change
(millions, except per share amounts)
$
669.9
$
535.8
$
134.1
2.79
2.50
0.29
Net income attributable to Evergy, Inc. increased in 2019 compared to 2018, primarily due to the inclusion of
Evergy Metro's and Evergy Missouri West's earnings in the first five months of 2019, merger-related costs and
reductions of revenue for customer bill credits incurred in June 2018 following the consummation of the merger,
lower operating and maintenance expenses at fossil-fuel generating units and lower administrative and general
expenses, partially offset by lower retail sales driven by unfavorable weather and higher depreciation expense.
Diluted EPS increased in 2019 compared to 2018, primarily due to the increase in net income attributable to Evergy,
Inc. discussed above, partially offset by a higher number of diluted weighted average common shares outstanding in
2019, which diluted EPS by $0.34 for 2019.
For additional information regarding the change in net income, refer to the Evergy Results of Operations section
within this MD&A.
Adjusted Earnings (non-GAAP) and Adjusted EPS (non-GAAP)
Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) for 2019 were $694.0 million or $2.89 per
share, respectively. For 2018, Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) were $680.9
million or $2.54 per share, respectively. In addition to net income attributable to Evergy, Inc., diluted EPS, pro
forma net income attributable to Evergy, Inc. and pro forma diluted EPS as prepared in accordance with GAAP,
Evergy's management uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and
EPS without the costs and/or benefits resulting from rebranding, voluntary severance and significant items related to
the Great Plains Energy and Evergy Kansas Central merger.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are intended to enhance an investor's overall
understanding of results. 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.
31
The following table provides a reconciliation between net income attributable to Evergy, Inc., diluted EPS, pro
forma net income attributable to Evergy, Inc. and pro forma diluted EPS as determined in accordance with GAAP
and adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP).
Earnings
(Loss) per
Diluted
Share
Earnings
(Loss)
Earnings
(Loss) per
Diluted
Share
Earnings
(Loss)
2019
2018
(millions, except per share amounts)
$
669.9
$
2.79 $
535.8
$
2.50
—
n/a
—
—
—
—
94.4
n/a
84.1
0.35
(0.50)
0.32
2.67
Net income attributable to Evergy, Inc.
Pro forma adjustments(a):
Great Plains Energy earnings prior to merger
Great Plains Energy shares prior to merger
Non-recurring merger costs and other
Pro forma net income attributable to Evergy, Inc.
$
669.9
$
2.79 $
714.3
$
Non-GAAP reconciling items:
12.1
19.8
Rebranding costs, pre-tax(b)
—
Voluntary severance costs, pre-tax(c)
0.09
Composite tax rate change(d)
(0.20)
Deferral of merger transition costs, pre-tax(e)
(0.11)
Inventory write-off at retiring generating units, pre-tax(f)
0.12
Income tax benefit(g)
(0.03)
2.54
Adjusted earnings (non-GAAP)
(a) Reflects pro forma adjustments made in accordance with Article 11 of Regulation S-X and ASC 805 - Business Combinations. See Note 2
to the consolidated financial statements in the Evergy Companies' combined 2018 annual report on Form 10-K for further information
regarding these adjustments.
—
23.5
(52.6)
(28.5)
31.0
(6.8)
680.9
—
(0.03)
2.89 $
—
(7.8)
694.0
0.05
0.08
—
—
—
—
$
$
$
(b) Reflects external costs incurred to rebrand the legacy Westar Energy and KCP&L utility brands to Evergy and are included in operating and
maintenance expense on the consolidated statements of comprehensive income.
(c) 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.
(d) Reflects the revaluation of Evergy Kansas Central's deferred income tax assets and liabilities based on the Evergy composite tax rate as a
result of the merger in June 2018 and are included in income tax expense on the consolidated statements of comprehensive income.
(e) Reflects the portion of the $47.8 million deferral of merger transition costs to a regulatory asset in June 2018 that related to costs incurred
prior to 2018. The remaining merger transition costs included within the $47.8 million deferral were both incurred and deferred in 2018
and did not impact earnings. This item is included in operating and maintenance expense on the consolidated statements of comprehensive
income.
(f) Reflects obsolete inventory write-offs for Evergy Kansas Central's Unit 7 at Tecumseh Energy Center, Units 3 and 4 at Murray Gill Energy
Center, Units 1 and 2 at Gordon Evans Energy Center, Evergy Metro's Montrose Station and Evergy Missouri West's Sibley Station and are
included in operating and maintenance expense on the consolidated statements of comprehensive income.
(g) Reflects an income tax effect calculated at a 26.1% statutory rate, with the exception of certain non-deductible items.
Wolf Creek Refueling Outage
Wolf Creek's most recent refueling outage began in September 2019 and the unit returned to service in November
2019. Wolf Creek's next refueling outage is planned to begin in the first quarter of 2021.
ENVIRONMENTAL MATTERS
See Note 15 to the consolidated financial statements for information regarding environmental matters.
RELATED PARTY TRANSACTIONS
See Note 17 to the consolidated financial statements for information regarding related party transactions.
32
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect reported amounts and related disclosures. Management considers an accounting estimate to
be critical if it requires assumptions to be made that were uncertain at the time the estimate was made and changes
in the estimate or different estimates that could have been used could have a material impact on Evergy's results of
operations and financial position. Management has identified the following accounting policies as critical to the
understanding of Evergy's results of operations and financial position. Management has discussed the development
and selection of these critical accounting policies with the Audit Committee of the Evergy Board.
Pensions
Evergy incurs significant costs in providing non-contributory defined pension benefits. The costs are measured
using actuarial valuations that are dependent upon numerous factors derived from actual plan experience and
assumptions of future plan experience.
Pension costs are impacted by actual employee demographics (including age, life expectancies, compensation levels
and employment periods), earnings on plan assets, the level of contributions made to the plan, and plan
amendments. In addition, pension costs are also affected by changes in key actuarial assumptions, including
anticipated rates of return on plan assets and the discount rates used in determining the projected benefit obligation
and pension costs.
The assumed rate of return on plan assets was developed based on the weighted-average of long-term returns
forecast for the expected portfolio mix of investments held by the plan. The assumed discount rate was selected
based on the prevailing market rate of fixed income debt instruments with maturities matching the expected timing
of the benefit obligation. These assumptions, updated annually at the measurement date, are based on
management's best estimates and judgment; however, material changes may occur if these assumptions differ from
actual events. See Note 10 to the consolidated financial statements for information regarding the assumptions used
to determine benefit obligations and net costs.
The following table reflects the sensitivities associated with a 0.5% increase or a 0.5% decrease in key actuarial
assumptions for Evergy's qualified pension plans. Each sensitivity reflects the impact of the change based on a
change in that assumption only.
Actuarial assumption
Discount rate
Rate of return on plan assets
Rate of compensation
Discount rate
Rate of return on plan assets
Rate of compensation
Change in
Assumption
0.5% increase
0.5% increase
0.5% increase
0.5% decrease
0.5% decrease
0.5% decrease
Impact on
Projected
Benefit
Obligation
Impact on
2020
Pension
Expense
(millions)
$
$ (197.7)
—
48.9
223.4
—
(45.7)
(20.2)
(8.2)
9.7
22.5
8.2
(9.0)
Pension expense for Evergy Kansas Central, Evergy Metro and Evergy Missouri West is recorded in accordance
with rate orders from the KCC and MPSC. The orders allow the difference between pension costs under GAAP and
pension costs for ratemaking to be recorded as a regulatory asset or liability with future ratemaking recovery or
refunds, as appropriate.
In 2019, Evergy's pension expense was $131.3 million under GAAP and $168.7 million for ratemaking. The impact
on 2020 pension expense in the table above reflects the impact on GAAP pension costs. Under the Evergy
Companies' rate agreements, any increase or decrease in GAAP pension expense is deferred to a regulatory asset or
33
liability for future ratemaking treatment. See Note 10 to the consolidated financial statements for additional
information regarding the accounting for pensions.
Market conditions and interest rates significantly affect the future assets and liabilities of the plan. It is difficult to
predict future pension costs, changes in pension liability and cash funding requirements due to the inherent
uncertainty of market conditions.
Revenue Recognition
Evergy recognizes revenue on the sale of electricity to customers over time as the service is provided in the amount
it has the right to invoice. Revenues recorded include electric services provided but not yet billed by Evergy.
Unbilled revenues are recorded for kWh usage in the period following the customers' billing cycle to the end of the
month. This estimate is based on net system kWh usage less actual billed kWhs. Evergy's estimated unbilled kWhs
are allocated and priced by regulatory jurisdiction across the rate classes based on actual billing rates. Evergy's
unbilled revenue estimate is affected by factors including fluctuations in energy demand, weather, line losses and
changes in the composition of customer classes. See Note 4 for the balance of unbilled receivables for Evergy as of
December 31, 2019 and 2018.
Regulatory Assets and Liabilities
Evergy has recorded assets and liabilities on its consolidated balance sheets resulting from the effects of the
ratemaking process, which would not otherwise be recorded under GAAP. Regulatory assets represent incurred
costs that are probable of recovery from future revenues. Regulatory liabilities represent future reductions in
revenues or refunds to customers.
Management regularly assesses whether regulatory assets and liabilities are probable of future recovery or refund by
considering factors such as decisions by the MPSC, KCC or FERC in Evergy's rate case filings; decisions in other
regulatory proceedings, including decisions related to other companies that establish precedent on matters
applicable to Evergy; and changes in laws and regulations. If recovery or refund of regulatory assets or liabilities is
not approved by regulators or is no longer deemed probable, these regulatory assets or liabilities are recognized in
the current period results of operations. Evergy's continued ability to meet the criteria for recording regulatory
assets and liabilities may be affected in the future by restructuring and deregulation in the electric industry or
changes in accounting rules. In the event that the criteria no longer applied to all or a portion of Evergy's
operations, the related regulatory assets and liabilities would be written off unless an appropriate regulatory
recovery mechanism were provided. Additionally, these factors could result in an impairment on utility plant assets.
See Note 5 to the consolidated financial statements for additional information.
Impairments of Assets and Goodwill
Long-lived assets are required to be reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable as prescribed under GAAP.
Accounting rules require goodwill to be tested for impairment annually and when an event occurs indicating the
possibility that an impairment exists. The goodwill impairment test consists of comparing the fair value of a
reporting unit to its carrying amount, including goodwill, to identify potential impairment. In the event that the
carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized for the difference
between the carrying amount of the reporting unit and its fair value. Evergy's consolidated operations are
considered one reporting unit for assessment of impairment, as management assesses financial performance and
allocates resources on a consolidated basis. The annual impairment test for the $2,336.6 million of goodwill from
the Great Plains Energy and Evergy Kansas Central merger was conducted on May 1, 2019. The fair value of the
reporting unit substantially exceeded the carrying amount, including goodwill. As a result, there was no impairment
of goodwill.
The determination of fair value for the reporting unit consisted of two valuation techniques: an income approach
consisting of a discounted cash flow analysis and a market approach consisting of a determination of reporting unit
invested capital using a market multiple derived from the historical earnings before interest, income taxes,
depreciation and amortization and market prices of the stock of peer companies. The results of the two techniques
34
were evaluated and weighted to determine a point within the range that management considered representative of
fair value for the reporting unit, which involves a significant amount of management judgment.
The discounted cash flow analysis is most significantly impacted by two assumptions: estimated future cash flows
and the discount rate applied to those cash flows. Management determines the appropriate discount rate to be based
on the reporting unit's weighted average cost of capital (WACC). The WACC takes into account both the return on
equity authorized by the KCC and MPSC and after-tax cost of debt. Estimated future cash flows are based on
Evergy's internal business plan, which assumes the occurrence of certain events in the future, such as the outcome
of future rate filings, future approved rates of return on equity, anticipated returns of and earnings on future capital
investments, continued recovery of cost of service and the renewal of certain contracts. Management also makes
assumptions regarding the run rate of operations, maintenance and general and administrative costs based on the
expected outcome of the aforementioned events. Should the actual outcome of some or all of these assumptions
differ significantly from the current assumptions, revisions to current cash flow assumptions could cause the fair
value of the Evergy reporting unit under the income approach to be significantly different in future periods and
could result in a future impairment charge to goodwill.
The market approach analysis is most significantly impacted by management's selection of relevant peer companies
as well as the determination of an appropriate control premium to be added to the calculated invested capital of the
reporting unit, as control premiums associated with a controlling interest are not reflected in the quoted market price
of a single share of stock. Management determines an appropriate control premium by using an average of control
premiums for recent acquisitions in the industry. Changes in results of peer companies, selection of different peer
companies and future acquisitions with significantly different control premiums could result in a significantly
different fair value of the Evergy reporting unit.
Income Taxes
Income taxes are accounted for using the asset/liability approach. Deferred tax assets and liabilities are determined
based on the temporary differences between the financial reporting and tax bases of assets and liabilities, applying
enacted statutory tax rates in effect for the year in which the differences are expected to reverse. Deferred
investment tax credits are amortized ratably over the life of the related property. Deferred tax assets are also
recorded for net operating losses, capital losses and tax credit carryforwards. Evergy is required to estimate the
amount of taxes payable or refundable for the current year and the deferred tax liabilities and assets for future tax
consequences of events reflected in Evergy's consolidated financial statements or tax returns. Actual results could
differ from these estimates for a variety of reasons including changes in income tax laws, enacted tax rates and
results of audits by taxing authorities. This process also requires management to make assessments regarding the
timing and probability of the ultimate tax impact from which actual results may differ. Evergy records valuation
allowances on deferred tax assets if it is determined that it is more likely than not that the asset will not be realized.
See Note 20 to the consolidated financial statements for additional information.
Asset Retirement Obligations
Evergy has recognized legal obligations associated with the disposal of long-lived assets that result from the
acquisition, construction, development or normal operation of such assets. Concurrent with the recognition of the
liability, the estimated cost of the ARO incurred at the time the related long-lived assets were either acquired, placed
in service or when regulations establishing the obligation became effective is also recorded to property, plant and
equipment, net on the consolidated balance sheets. The recording of AROs for regulated operations has no income
statement impact due to the deferral of the adjustments through the establishment of a regulatory asset or an offset
to a regulatory liability.
Evergy initially recorded AROs at fair value for the estimated cost to decommission Wolf Creek (94% indirect
share), retire wind generating facilities, dispose of asbestos insulating material at its power plants, remediate ash
disposal ponds and close ash landfills, among other items. ARO refers to a legal obligation to perform an asset
retirement activity in which the timing and/or method of settlement may be conditional on a future event that may or
may not be within the control of the entity. In determining Evergy's AROs, assumptions are made regarding
probable future disposal costs and the timing of their occurrence. A change in these assumptions could have a
significant impact on Evergy's AROs reflected on its consolidated balance sheets.
35
As of December 31, 2019 and 2018, Evergy had recorded AROs of $674.1 million and $687.1 million, respectively.
See Note 7 to the consolidated financial statements for more information regarding Evergy's AROs.
EVERGY RESULTS OF OPERATIONS
Evergy's results of operations and financial position are affected by a variety of factors including rate regulation,
fuel costs, weather, customer behavior and demand, the economy and competitive forces.
Substantially all of Evergy's revenues are subject to state or federal regulation. This regulation has a significant
impact on the price the Evergy Companies charge for electric service. Evergy's results of operations and financial
position are affected by its ability to align overall spending, both operating and capital, within the frameworks
established by its regulators.
Wholesale revenues are impacted by, among other factors, demand, cost and availability of fuel and purchased
power, price volatility, available generation capacity, transmission availability and weather.
The Evergy Companies primarily use coal and uranium for the generation of electricity for their customers and also
purchase power through purchase power agreements or on the open market. The prices for fuel used in generation
or the market price of purchased power can fluctuate significantly due to a variety of factors including supply,
demand, weather and the broader economic environment. Evergy Kansas Central, Evergy Metro and Evergy
Missouri West have fuel recovery mechanisms in their Kansas and Missouri jurisdictions, as applicable, that allow
them to defer and subsequently recover or refund, through customer rates, substantially all of the variance in net
energy costs from the amount set in base rates without a general rate case proceeding.
Weather significantly affects the amount of electricity that Evergy's customers use as electricity sales are seasonal.
As summer peaking utilities, the third quarter typically accounts for the greatest electricity sales by the Evergy
Companies. Hot summer temperatures and cold winter temperatures prompt more demand, especially among
residential and commercial customers, and to a lesser extent, industrial customers. Mild weather reduces customer
demand.
Energy efficiency investments by customers and the Evergy Companies also can affect the demand for electric
service. Through the Missouri Energy Efficiency Investment Act (MEEIA), Evergy Metro and Evergy Missouri
West offer energy efficiency and demand side management programs to their Missouri retail customers and recover
program costs, throughput disincentive, and as applicable, certain earnings opportunities in retail rates through a
rider mechanism.
The Evergy Companies' taxes other than income taxes, of which property taxes are a significant component, can
fluctuate significantly due to a variety of factors, including changes in taxable values and property tax rates. Evergy
Kansas Central and Evergy Metro's Kansas jurisdiction have property tax surcharges that allow them to defer and
subsequently recover or refund, through customer rates, substantially all of the variance in property tax costs from
the amounts set in base rates without a general rate case proceeding.
36
The following table summarizes Evergy's comparative results of operations.
2019
Change
2018
Change
2017
Operating revenues
Fuel and purchased power
SPP network transmission costs
Operating and maintenance
Depreciation and amortization
Taxes other than income tax
Income from operations
Other expense, net
Interest expense
Income tax expense
Equity in earnings of equity method investees, net of
income taxes
Net income
Less: Net income attributable to noncontrolling interests
Net income attributable to Evergy, Inc.
$
$ 5,147.8
1,265.0
251.3
1,218.5
861.7
365.5
1,185.8
(39.0)
374.0
97.0
9.8
685.6
15.7
669.9
(millions)
$ 4,275.9
1,078.7
259.9
1,115.8
618.8
269.1
933.6
(54.4)
279.6
59.0
$ 1,704.9
537.2
12.0
552.3
247.1
101.5
254.8
(27.6)
108.6
(92.2)
$ 2,571.0
541.5
247.9
563.5
371.7
167.6
678.8
(26.8)
171.0
151.2
5.4
546.0
10.2
535.8
$
(1.3)
209.5
(2.4)
211.9
$
6.7
336.5
12.6
323.9
$
871.9
186.3
(8.6)
102.7
242.9
96.4
252.2
15.4
94.4
38.0
4.4
139.6
5.5
134.1
$
$
Evergy Utility Gross Margin and MWh Sales
Utility gross margin is a financial measure that is not calculated in accordance with GAAP. Utility gross margin, as
used by the Evergy Companies, is defined as operating revenues less fuel and purchased power costs and amounts
billed by the SPP for network transmission costs. Expenses for fuel and purchased power costs, offset by wholesale
sales margin, are subject to recovery through cost adjustment mechanisms. As a result, changes in fuel and
purchased power costs are offset in operating revenues with minimal impact on net income. In addition, SPP
network transmission costs fluctuate primarily due to investments by SPP members for upgrades to the transmission
grid within the SPP RTO. As with fuel and purchased power costs, changes in SPP network transmission costs are
mostly reflected in the prices charged to customers with minimal impact on net income. See Note 3 to the
consolidated financial statements for additional information regarding the manner in which Evergy reflects SPP
revenues and expenses.
Management believes that utility gross margin provides a meaningful basis for evaluating the Evergy Companies'
operations across periods compared with operating revenues because utility gross margin excludes the revenue
effect of fluctuations in these expenses. Utility gross margin is used internally to measure performance against
budget and in reports for management and the Evergy Board. The Evergy Companies' definition of utility gross
margin may differ from similar terms used by other companies.
37
The following tables summarize Evergy's utility gross margin and MWhs sold.
Utility Gross Margin
Retail revenues
Residential
Commercial
Industrial
Other retail revenues
Total electric retail
Wholesale revenues
Transmission revenues
Other revenues
Operating revenues
2019
Change
2018
Change
2017
$
$ 1,908.1
1,781.6
621.6
47.1
4,358.4
327.5
309.2
152.7
5,147.8
(1,265.0)
(251.3)
$ 3,631.5
(millions)
$ 1,578.8
1,356.4
527.8
30.6
3,493.6
404.4
308.1
69.8
4,275.9
(1,078.7)
(259.9)
$ 2,937.3
329.3
425.2
93.8
16.5
864.8
(76.9)
1.1
82.9
871.9
(186.3)
8.6
694.2
$
777.5
644.7
114.9
7.8
1,544.9
73.2
23.3
63.5
1,704.9
(537.2)
(12.0)
$ 1,155.7
$
801.3
711.7
412.9
22.8
1,948.7
331.2
284.8
6.3
2,571.0
(541.5)
(247.9)
$ 1,781.6
Fuel and purchased power
SPP network transmission costs
Utility gross margin (a)
(a) Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin above.
$
MWh Sales
Retail MWh Sales
Residential
Commercial
Industrial
Other retail revenues
Total electric retail
Wholesale revenues
Operating revenues
2019
Change
2018
Change
2017
15,492
18,295
8,570
139
42,496
14,398
56,894
(thousands)
12,478
14,129
7,426
110
34,143
13,811
47,954
3,014
4,166
1,144
29
8,353
587
8,940
6,315
6,761
1,737
37
14,850
3,465
18,315
6,163
7,368
5,689
73
19,293
10,346
29,639
Evergy's utility gross margin increased $694.2 million in 2019 compared to 2018 driven by:
•
•
•
•
•
•
•
a $674.4 million increase due to the inclusion of Evergy Metro's and Evergy Missouri West's utility gross
margin in the first five months of 2019;
a $59.7 million increase in revenue due to one-time bill credits recorded by Evergy Kansas Central, Evergy
Metro and Evergy Missouri West in June 2018 as a result of conditions in the KCC and MPSC merger
orders; and
a $41.6 million increase from new Evergy Kansas Central, Evergy Metro and Evergy Missouri West retail
rates effective in 2018, net of a $124.2 million provision for rate refund recorded in 2018 for the change in
the corporate income tax rate caused by the TCJA; partially offset by
a $53.0 million decrease primarily due to lower Evergy Kansas Central, Evergy Metro and Evergy Missouri
West retail sales driven by cooler summer weather. For 2019 compared to 2018, cooling degree days
decreased 16%;
a $12.9 million decrease related to Evergy Kansas Central's transmission delivery charge (TDC) rider;
a $10.2 million decrease in revenue related to the granting of an Accounting Authority Order (AAO) by the
MPSC in October 2019 requiring Evergy Missouri West to record a regulatory liability for the estimated
amount of revenues it has collected from customers for certain costs related to Sibley Station since its
retirement in November 2018; and
a $5.4 million decrease for recovery of programs costs for energy efficiency programs under MEEIA,
which have a direct offset in operating and maintenance expense.
38
Operating and Maintenance
Evergy's operating and maintenance expense increased $102.7 million in 2019 compared to 2018 primarily driven
by:
•
•
•
a $279.9 million increase in operating and maintenance expense due to the inclusion of Evergy Metro's and
Evergy Missouri West's operating and maintenance expenses in the first five months of 2019;
$12.1 million of rebranding costs incurred in 2019 to rebrand the legacy Westar Energy and KCP&L utility
brands to Evergy; and
$11.8 million of Evergy Kansas Central, Evergy Metro and Evergy Missouri West voluntary severance
expenses incurred in 2019; partially offset by
•
$75.8 million of merger-related costs incurred in 2018, consisting of:
$51.0 million of merger consulting fees and fees for other outside services incurred, primarily
consisting of merger success fees;
$47.9 million of Evergy Kansas Central and Evergy Metro voluntary severance and change in
control payments as well as the recording of unrecognized equity compensation costs and the
incremental fair value associated with the vesting of outstanding Evergy Kansas Central equity
compensation awards in accordance with the Amended Merger Agreement; and
$24.7 million of unconditional charitable contributions and community support recorded by Evergy
in accordance with conditions in the KCC and MPSC merger orders; partially offset by
a $47.8 million decrease in operating and maintenance expense due to the deferral of merger
transition costs to a regulatory asset in June 2018 for future recovery by Evergy Kansas Central,
Evergy Metro and Evergy Missouri West in accordance with the KCC and MPSC merger orders;
•
a $62.1 million decrease in plant operating and maintenance expense at fossil-fuel generating units
primarily due to:
a $15.0 million decrease due to the retirement of Evergy Kansas Central's Unit 7 at Tecumseh
Energy Center, Units 3 and 4 at Murray Gill Energy Center, Units 1 and 2 at Gordan Evans Energy
Center and Evergy Metro's Montrose Station and Evergy Missouri West's Sibley Station in the
fourth quarter of 2018;
$31.0 million of Evergy Kansas Central, Evergy Metro and Evergy Missouri West obsolete
inventory write-offs at retiring fossil-fuel units in 2018;
$5.2 million of voluntary severance expenses incurred in the third quarter of 2018 by Evergy
Kansas Central, Evergy Metro and Evergy Missouri West related to their Local 1523 and Local 412
union voluntary exit programs; and
a $3.7 million decrease due to an extended maintenance outage at Evergy Metro's Iatan No. 2 in
2018; partially offset by
an $8.4 million increase due to the write-off of a regulatory asset for costs incurred during the
Jeffrey Energy Center (JEC) lease extension, see Note 5 to the consolidated financial statements;
•
•
•
a $35.6 million decrease in various administrative and general operating and maintenance expenses
primarily driven by a $15.3 million decrease in labor and employee benefits expense primarily due to lower
employee headcount and Evergy Kansas Central pension and post-retirement costs in 2019 and $10.6
million of voluntary severance expenses incurred in the third quarter of 2018 by Evergy Kansas Central and
Evergy Metro related to a Wolf Creek voluntary exit program;
a $9.5 million decrease in plant operating and maintenance expense at nuclear generating units related to
Wolf Creek;
a $9.3 million decrease in transmission and distribution operating and maintenance expense primarily due
to a higher level of Evergy Kansas Central vegetation management activity in 2018; and
39
•
a $5.4 million decrease in program costs for energy efficiency programs under MEEIA, which have a direct
offset in revenue.
Depreciation and Amortization
Evergy's depreciation and amortization increased $242.9 million in 2019 compared to 2018 driven by:
•
•
a $173.4 million increase due to the inclusion of Evergy Metro's and Evergy Missouri West's depreciation
expense in the first five months of 2019;
a $43.0 million increase primarily due to a change in depreciation rates as a result of Evergy Kansas
Central's and Evergy Metro's rate cases effective in 2018; and
•
a $26.5 million increase primarily due to capital additions at Evergy Kansas Central and Evergy Metro.
Taxes Other Than Income Tax
Evergy's taxes other than income tax increased $96.4 million in 2019 compared to 2018 primarily driven by:
•
a $75.7 million increase due to the inclusion of Evergy Metro and Evergy Missouri West amounts in the
first five months of 2019; and
•
a $22.9 million increase primarily due to increased Evergy Kansas Central property taxes.
Other Expense, Net
Evergy's other expense, net decreased $15.4 million in 2019 compared to 2018 primarily driven by:
•
•
•
•
a $12.4 million decrease due to recording higher Evergy Kansas Central corporate-owned life insurance
(COLI) benefits in 2019;
a $6.3 million decrease due to lower Evergy Kansas Central and Evergy Metro pension non-service costs in
2019; and
a $4.2 million decrease due to higher net unrealized gains in Evergy Kansas Central's rabbi trust in 2019;
partially offset by
a $9.5 million increase due to the inclusion of Evergy Metro and Evergy Missouri West amounts in the first
five months of 2019.
Interest Expense
Evergy's interest expense increased $94.4 million in 2019 compared to 2018 primarily driven by:
•
•
•
•
a $77.2 million increase due to the inclusion of Evergy Metro's and Evergy Missouri West's interest expense
and Evergy's interest expense associated with the assumption of legacy Great Plains Energy debt in the first
five months of 2019;
a $14.5 million increase due to Evergy's issuance of $1.6 billion of senior notes in September 2019; and
a $7.7 million increase primarily due to Evergy's borrowings under its $1.0 billion term loan credit
agreement in 2019; partially offset by
a $10.1 million net decrease due to the repayment of Evergy Metro's $400.0 million of 7.15% Mortgage
Bonds at maturity in April 2019, which decreased interest expense by $19.8 million, partially offset by a
$9.7 million increase due to Evergy Metro's issuance of $400.0 million of 4.125% Mortgage Bonds in
March 2019.
Income Tax Expense
Evergy's income tax expense increased $38.0 million in 2019 compared to 2018 primarily driven by:
•
a $52.6 million increase related to the revaluation of Evergy Kansas Central's deferred income tax assets
and liabilities based on the Evergy composite tax rate as a result of the merger in 2018; and
•
an $18.9 million increase due to higher Evergy Kansas Central pre-tax income; partially offset by
40
•
a $39.0 million decrease due to flow-through items primarily driven by higher amortization of excess
deferred income taxes.
EVERGY SIGNIFICANT BALANCE SHEET CHANGES
(December 31, 2019 compared to December 31, 2018)
• Evergy's cash and cash equivalents decreased $137.1 million primarily due to the repurchase of common
stock in connection with Evergy's share repurchase program. See Note 18 to the consolidated financial
statements for additional information on Evergy's share repurchase program.
• Evergy's income tax receivable increased by $17.5 million primarily due to the $37.9 million
reclassification of Evergy's 2019 alternative minimum tax (AMT) credits from deferred income taxes,
partially offset by the receipt of $18.6 million in 2019 related to Evergy's 2018 AMT tax credit.
• Evergy's regulatory assets - current decreased by $72.2 million primarily due to fuel recovery mechanism
recoveries exceeding under-collections at Evergy Metro and Evergy Missouri West by $30.7 million and
$24.3 million in 2019, respectively.
• Evergy's other assets increased by $115.0 million primarily due to $104.5 million of operating lease
right-of-use assets, as of December 31, 2019, that were recorded as a result of Topic 842, Leases in 2019.
See Note 1 to the consolidated financial statements for additional information on the new lease standard.
• Evergy's current maturities of long-term debt decreased by $454.3 million primarily due to the repayment
of Evergy Metro's $400.0 million of 7.15% Mortgage Bonds at maturity in April 2019.
• Evergy's notes payable and commercial paper decreased $176.7 million primarily due to a $162.5 million
decrease at Evergy Kansas Central due to the repayment of commercial paper with funds from operations
and a $56.6 million decrease at Evergy Missouri West primarily due to the repayment of commercial
paper with the proceeds from its issuance of $100.0 million of 3.74% Senior Notes in March 2019,
partially offset by a $20.0 million increase at Evergy, Inc. due to cash borrowings under its master credit
facility.
• Evergy's accounts payable increased $77.3 million primarily due to the timing of cash payments.
• Evergy's regulatory liabilities - current decreased $46.9 million primarily due to a $70.9 million refund to
customers of tax reform benefits at Evergy Kansas Central, Evergy Metro and Evergy Missouri West in
2019, partially offset by a $30.2 million increase in Evergy Kansas Central's regulatory liability for its
fuel recovery mechanism due to recoveries exceeding under-collections.
• Evergy's other liabilities - current increased $48.9 million primarily due to a $23.7 million increase in
funds received from customers for the construction of transmission assets at Evergy Kansas Central and
$15.6 million of operating lease liabilities, as of December 31, 2019, that were recorded as a result of the
adoption of Topic 842, Leases in 2019. See Note 1 to the consolidated financial statements for additional
information on the new lease standard.
• Evergy's long-term debt increased by $2,110.4 million primarily due to the issuance of Evergy's $1.6
billion of senior notes in September 2019 and Evergy Metro's issuance of $400.0 million of 4.125%
Mortgage Bonds in March 2019.
• Evergy's other liabilities - long-term increased $104.0 million primarily due to $82.4 million of operating
lease liabilities, as of December 31, 2019, that were recorded as a result of the adoption of Topic 842,
Leases in 2019. See Note 1 to the consolidated financial statements for additional information on the
new lease standard.
• Evergy's common stock decreased $1,614.8 million primarily due to the repurchase of common stock for
a total cost of approximately $1,628.7 million in 2019 pursuant to Evergy's share repurchase program.
See Note 18 to the consolidated financial statements for additional information on Evergy's share
repurchase program.
41
LIQUIDITY AND CAPITAL RESOURCES
Evergy relies primarily upon cash from operations, short-term borrowings, debt and equity issuances and its
existing cash and cash equivalents to fund its capital requirements. Evergy's capital requirements primarily
consist of capital expenditures, payment of contractual obligations and other commitments, the payment of
dividends to shareholders and the repurchase of common shares.
Capital Sources
Cash Flows from Operations
Evergy's cash flows from operations are driven by the regulated sale of electricity. These cash flows are relatively
stable but the timing and level of these cash flows can vary based on weather and economic conditions, future
regulatory proceedings, the timing of cash payments made for costs recoverable under regulatory mechanisms and
the time such costs are recovered, and unanticipated expenses such as unplanned plant outages and storms.
Short-Term Borrowings
As of December 31, 2019, Evergy had $1.9 billion of available borrowing capacity from its master credit facility.
The available borrowing capacity under the master credit facility consisted of $429.3 million for Evergy, Inc.,
$736.6 million for Evergy Kansas Central, $400.7 million for Evergy Metro and $354.5 million for Evergy
Missouri West. Evergy Kansas Central's, Evergy Metro's and Evergy Missouri West's borrowing capacity under
the master credit facility also supports their issuance of commercial paper. See Note 12 to the consolidated
financial statements for more information regarding the credit facility. Along with cash flows from operations and
receivable sales facilities, Evergy generally uses borrowings under its master credit facility and the issuance of
commercial paper to meet its day-to-day cash flow requirements. Evergy also had short-term borrowings under a
term loan credit agreement that was repaid in September 2019 and is discussed further below.
In March 2019, Evergy entered into a $1.0 billion, 6-month term loan credit agreement with a group of banks to
provide short-term financing for its common stock repurchase program. The agreement allowed for two term
loans during the 6-month term of the agreement, in an aggregate principal amount not to exceed the credit limit of
the agreement. At closing, Evergy borrowed $500.0 million under the agreement, allowing for one additional
term loan borrowing in a principal amount up to $500.0 million, which was subsequently utilized in June 2019.
In September 2019, Evergy repaid its $1.0 billion of borrowings under the term loan credit agreement with
proceeds from its issuance of $1.6 billion of senior notes in September 2019.
Long-Term Debt and Equity Issuances
From time to time, Evergy issues long-term debt and equity to repay short-term debt, refinance maturing long-
term debt and finance growth. As of December 31, 2019 and 2018, Evergy’s capital structure, excluding short-
term debt, was as follows:
Common equity
Noncontrolling interests
Long-term debt, including VIEs
December 31
2019
49%
<0%
51%
2018
57%
<0%
43%
Under stipulations with the MPSC and KCC, Evergy, Evergy Kansas Central and Evergy Metro are required to
maintain common equity at not less than 35%, 40% and 40%, respectively, of total capitalization. The master
credit facility and certain debt instruments of the Evergy Companies also contain restrictions that require the
maintenance of certain capitalization and leverage ratios. As of December 31, 2019, the Evergy Companies were
in compliance with these covenants.
Significant Debt Issuances
See Note 13 to the consolidated financial statements for information regarding significant debt issuances.
42
Credit Ratings
The ratings of the Evergy Companies' debt securities by the credit rating agencies impact the Evergy
Companies' liquidity, including the cost of borrowings under their master credit facility and in the capital
markets. The Evergy Companies view maintenance of strong credit ratings as vital to their access to and
cost of debt financing and, to that end, maintain an active and ongoing dialogue with the agencies with
respect to results of operations, financial position and future prospects. While a decrease in these credit
ratings would not cause any acceleration of the Evergy Companies' debt, it could increase interest charges
under the master credit facility. A decrease in credit ratings could also have, among other things, an
adverse impact, which could be material, on the Evergy Companies' access to capital, the cost of funds,
the ability to recover actual interest costs in state regulatory proceedings, the type and amounts of
collateral required under supply agreements and Evergy's ability to provide credit support for its
subsidiaries.
As of February 20, 2020, the major credit rating agencies rated the Evergy Companies' securities as
detailed in the following table.
Moody's
Investors Service(a)
S&P Global
Ratings(a)
Evergy
Outlook
Corporate Credit Rating
Senior Unsecured Debt
Evergy Kansas Central
Outlook
Corporate Credit Rating
Senior Secured Debt
Commercial Paper
Evergy Kansas South
Outlook
Corporate Credit Rating
Senior Secured Debt
Short-Term Rating
Evergy Metro
Outlook
Corporate Credit Rating
Senior Secured Debt
Senior Unsecured Debt
Commercial Paper
Evergy Missouri West
Outlook
Corporate Credit Rating
Senior Unsecured Debt
Commercial Paper
Stable
--
Baa2
Stable
Baa1
A2
P-2
Stable
Baa1
A2
P-2
Stable
Baa1
A2
Baa1
P-2
Stable
Baa2
Baa2
P-2
Stable
A-
BBB+
Stable
A-
A
A-2
Stable
A-
A
A-2
Stable
A
A+
A
A-1
Stable
A-
A-
A-2
(a)A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any
time by the assigning rating agency.
43
Shelf Registration Statements and Regulatory Authorizations
Evergy
In November 2018, Evergy filed an automatic shelf registration statement providing for the sale of
unlimited amounts of securities with the SEC, which expires in November 2021.
Evergy Kansas Central
In November 2018, Evergy Kansas Central filed an automatic shelf registration statement providing for
the sale of unlimited amounts of unsecured debt securities and First Mortgage Bonds (FMBs) with the
SEC, which expires in November 2021.
Evergy Metro
In November 2018, Evergy Metro filed an automatic shelf registration statement providing for the sale of
unlimited amounts of unsecured notes and mortgage bonds with the SEC, which expires in November
2021.
The following table summarizes the regulatory short-term and long-term debt financing authorizations for
Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West and the
remaining amount available under these authorizations as of December 31, 2019.
Type of Authorization
Commission Expiration Date
Authorization
Amount
Available Under
Authorization
Evergy Kansas Central &
Evergy Kansas South
Short-Term Debt
Evergy Metro
Short-Term Debt
Evergy Missouri West
Short-Term Debt
Long-Term Debt
FERC
December 2020
$1,250.0
$1,000.8
(in millions)
FERC
December 2020
$1,250.0
$1,050.7
FERC
FERC
December 2020
December 2020
$750.0
$100.0
$656.7
$—
In addition to the above regulatory authorizations, the Evergy Kansas Central, Evergy Kansas South and
Evergy Metro mortgages each contain provisions restricting the amount of FMBs or mortgage bonds, as
applicable, that can be issued by each entity. Evergy Kansas Central, Evergy Kansas South and Evergy
Metro must comply with these restrictions prior to the issuance of additional FMBs, general mortgage
bonds or other secured indebtedness.
Under the Evergy Kansas Central mortgage, the issuance of FMBs is subject to limitations based on the
amount of bondable property additions. In addition, so long as any bonds issued prior to January 1, 1997,
remain outstanding, the mortgage prohibits additional FMBs from being issued, except in connection with
certain refundings, unless Evergy Kansas Central’s unconsolidated net earnings available for interest,
depreciation and property retirement (which, as defined, does not include earnings or losses attributable to
the ownership of securities of subsidiaries), for a period of 12 consecutive months within 15 months
preceding the issuance, are not less than the greater of twice the annual interest charges on or 10% of the
principal amount of all FMBs outstanding after giving effect to the proposed issuance. As of
December 31, 2019, $305.4 million principal amount of additional FMBs could be issued under the most
restrictive provisions in the mortgage, except in connection with certain refundings.
Under the Evergy Kansas South mortgage, the amount of FMBs authorized is limited to a maximum
of $3.5 billion and the issuance of FMBs is subject to limitations based on the amount of bondable
property additions. In addition, the mortgage prohibits additional FMBs from being issued, except in
connection with certain refundings, unless Evergy Kansas South's net earnings before income taxes and
before provision for retirement and depreciation of property for a period of 12 consecutive months within
15 months preceding the issuance are not less than either two and one-half times the annual interest
44
charges on or 10% of the principal amount of all Evergy Kansas South FMBs outstanding after giving
effect to the proposed issuance. As of December 31, 2019, approximately $2,828.6 million principal
amount of additional Evergy Kansas South FMBs could be issued under the most restrictive provisions in
the mortgage, except in connection with certain refundings.
Under the General Mortgage Indenture and Deed of Trust dated as of December 1, 1986, as supplemented
(Evergy Metro Mortgage Indenture), additional Evergy Metro mortgage bonds may be issued on the basis
of 75% of property additions or retired bonds. As of December 31, 2019, approximately $4,923.3 million
principal amount of additional Evergy Metro mortgage bonds could be issued under the most restrictive
provisions in the mortgage.
Cash and Cash Equivalents
At December 31, 2019, Evergy had approximately $23.2 million of cash and cash equivalents on hand.
Capital Requirements
Capital Expenditures
Evergy requires significant capital investments and expects to need cash primarily for utility construction
programs designed to improve and expand facilities related to providing electric service, which include, but are
not limited to, expenditures to develop new transmission lines and improvements to power plants, transmission
and distribution lines and equipment. Evergy's capital expenditures were $1,210.1 million, $1,069.7 million and
$764.6 million in 2019, 2018 and 2017, respectively.
Capital expenditures projected for the next five years, excluding allowance for fund used during construction
(AFUDC) and including costs of removal, are detailed in the following table. This capital expenditure plan is
subject to continual review and change.
Generating facilities
Transmission and distribution facilities
General facilities
Total capital expenditures
2020
2021
2022
2023
2024
$
$
487
893
238
555
914
117
(millions)
$
563
886
122
$
455
867
92
$
263
1,006
94
$ 1,618
$ 1,586
$ 1,571
$ 1,414
$ 1,363
45
Contractual Obligations and Other Commitments
In the course of its business activities, the Evergy Companies enter into a variety of contracts and commercial
commitments. Some of these result in direct obligations reflected on Evergy's consolidated balance sheets while
others are commitments, some firm and some based on uncertainties, not reflected in Evergy's underlying
consolidated financial statements.
The information in the following table is provided to summarize Evergy's cash obligations and commercial
commitments.
Payment due by period
Long-term debt
Principal
Interest
Long-term debt of VIEs
Principal
Interest
Lease commitments
Operating leases
Finance leases
Pension and other post-retirement
plans (a)
Purchase commitments
2020
2021
2022
2023
2024
After 2024
Total
$
251.1
350.8
$
432.0
327.2
$
387.5
304.1
$
(millions)
439.5
288.9
$ 800.0
279.7
$ 6,642.9
3,930.7
$ 8,953.0
5,481.4
32.3
0.8
20.5
8.1
18.8
0.2
17.0
7.4
—
—
14.1
6.7
—
—
11.0
5.8
—
—
9.2
4.7
—
—
44.7
46.2
51.1
1.0
116.5
78.9
131.9
131.9
131.9
131.9
131.9
(a)
659.5
Fuel
Power
Other
137.0
47.4
42.3
Total contractual commitments (a)
$ 1,161.2
(a) Evergy expects to make contributions to the pension and other post-retirement plans beyond 2024 but the amounts are not yet
94.1
325.2
117.7
$ 11,201.5
486.9
47.3
147.7
$ 1,477.4
84.7
47.8
25.1
$ 1,034.7
83.2
47.6
30.0
$ 1,005.1
17.1
41.7
19.4
$ 1,303.7
903.0
557.0
382.2
$ 17,183.6
determined.
Long-term debt includes current maturities. Long-term debt principal excludes $80.7 million of unamortized net
discounts and debt issuance costs and a $125.5 million fair value adjustment recorded in connection with purchase
accounting for the Great Plains Energy and Evergy Kansas Central merger. Variable rate interest obligations are
based on rates as of December 31, 2019.
Operating lease commitments include leases for office buildings, computer equipment, operating facilities,
vehicles and rail cars to serve jointly-owned generating units where Evergy Kansas Central or Evergy Metro is the
managing partner and is reimbursed by other joint-owners for its proportionate share of the cost. Finance lease
commitments include obligations for both principal and interest.
Evergy expects to contribute $131.9 million to the pension and other post-retirement plans in 2020, of which the
majority is expected to be paid by Evergy Kansas Central and Evergy Metro. Additional contributions to the
plans are expected beyond 2024 in amounts at least sufficient to meet the greater of Employee Retirement Income
Security Act of 1974, as amended (ERISA) or regulatory funding requirements; however, these amounts have not
yet been determined. Amounts for years after 2020 are estimates based on information available in determining
the amount for 2020. Actual amounts for years after 2020 could be significantly different than the estimated
amounts in the table above.
Fuel commitments consist of commitments for nuclear fuel, coal and coal transportation costs. Power
commitments consist of certain commitments for renewable energy under power purchase agreements. Other
represents individual commitments entered into in the ordinary course of business.
Evergy has other insignificant long-term liabilities recorded on its consolidated balance sheet at December 31,
2019, which do not have a definitive cash payout date and are not included in the table above.
46
Common Stock Dividends
The amount and timing of dividends payable on Evergy's common stock are within the sole discretion of the
Evergy Board. The amount and timing of dividends declared by the Evergy Board will be dependent on
considerations such as Evergy's earnings, financial position, cash flows, capitalization ratios, regulation,
reinvestment opportunities and debt covenants. Evergy targets a long-term dividend payout ratio of 60% to 70%
of earnings. See Note 1 to the consolidated financial statements for information on the common stock dividend
declared by the Evergy Board in February 2020.
The Evergy Companies also have certain restrictions stemming from statutory requirements, corporate
organizational documents, covenants and other conditions that could affect dividend levels. See Note 18 to the
consolidated financial statements for further discussion of restrictions on dividend payments.
Common Stock Repurchase Program
In July 2018, the Evergy Board authorized the repurchase of up to 60 million shares of Evergy's common stock.
For 2019, Evergy had total repurchases of common stock of $1,628.7 million and had repurchased 28.8 million
shares under the repurchase program. Since the start of the repurchase program in August 2018, Evergy has made
total repurchases of common stock of $2,671.0 million and has repurchased 45.2 million shares under the
repurchase program. Evergy does not anticipate making additional repurchases of common stock under its share
repurchase program while the Strategic Review & Operations Committee of the Evergy Board conducts its review
of ways to enhance long-term shareholder value, which is expected to conclude in the first half of 2020.
See Note 18 to the consolidated financial statements for more information regarding Evergy's common stock
repurchase program.
Off-Balance Sheet Arrangements
In the ordinary course of business, Evergy and certain of its subsidiaries enter into various agreements providing
financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for
example, guarantees and letters of credit. These agreements are entered into primarily to support or enhance the
creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of
sufficient credit to accomplish the subsidiary's intended business purposes. In connection with the closing of the
merger, Evergy assumed the guarantees previously provided to Evergy Missouri West by Great Plains Energy.
The majority of these agreements guarantee Evergy's own future performance, so a liability for the fair value of
the obligation is not recorded.
At December 31, 2019, Evergy has provided $110.2 million of credit support for Evergy Missouri West as
follows:
• Evergy direct guarantees to Evergy Missouri West counterparties totaling $17.0 million, which expire in
2020, and
• Evergy's guarantee of Evergy Missouri West long-term debt totaling $93.2 million, which includes debt
with maturity dates ranging from 2020 to 2023.
Evergy has also guaranteed Evergy Missouri West's short-term debt, including its commercial paper program. At
December 31, 2019, Evergy Missouri West had $93.4 million of commercial paper outstanding. None of the
guaranteed obligations are subject to default or prepayment if Evergy Missouri West's credit ratings were
downgraded.
The Evergy Companies also have off-balance sheet arrangements in the form of letters of credit entered into in the
ordinary course of business.
47
Cash Flows
The following table presents Evergy's cash flows from operating, investing and financing activities.
Cash flows from operating activities
Cash flows from (used in) investing activities
Cash flows used in financing activities
2019
2018
(millions)
2017
$
1,749.0 $
(1,080.3)
(805.8)
1,497.8 $
197.4
(1,538.4)
912.7
(780.8)
(131.6)
Cash Flows from Operating Activities
Evergy's $251.2 million increase in cash flows from operating activities in 2019 compared to 2018 was primarily
driven by a $252.3 million increase due to the inclusion of Evergy Metro's and Evergy Missouri West's cash flows
from operating activities in the first five months of 2019 and $35.6 million of merger success fees paid by Evergy
and Evergy Kansas Central upon the completion of the merger in June 2018.
Cash Flows from (used in) Investing Activities
Evergy's cash flows used in investing activities increased $1,277.7 million in 2019 compared to 2018 primarily
driven by:
•
•
•
•
$1,154.2 million of cash acquired from Great Plains Energy in June 2018;
a $243.6 million increase in additions to property, plant and equipment due to the inclusion of Evergy
Metro and Evergy Missouri West activity in the first five months of 2019; and
$140.6 million in proceeds from the settlement of deal contingent interest rate swaps in June 2018;
partially offset by
an increase of $154.9 million in proceeds from COLI investments, primarily from Evergy Kansas Central
due to a higher number of policy settlements in 2019.
Cash Flows used in Financing Activities
Evergy's cash flows used in financing activities decreased $732.6 million in 2019 compared to 2018 primarily
driven by:
•
•
•
•
•
•
a $2,081.8 million increase in proceeds from long-term debt, net, as further described in Note 13 to the
consolidated financial statements; partially offset by
a $586.4 million increase of repurchased common stock under the common stock repurchase program, as
further described in Note 18 to the consolidated financial statements;
a $305.3 million increase in retirement of long-term debt, as further described in Note 13 to the
consolidated financial statements;
a $211.0 million decrease in collateralized short-term debt, net borrowings primarily due to the
establishment of Evergy Kansas Central’s receivable sale facility in the fourth quarter of 2018;
a $123.6 million increase in the repayment of borrowings from the cash surrender value of COLI,
primarily from Evergy Kansas Central due to a higher number of policy settlements in 2019; and
a $69.8 million payment for the settlement of Evergy's interest rate swap that was designated as a cash
flow hedge of its issuance of $800.0 million of 2.90% Senior Notes in September 2019.
48
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
EVERGY KANSAS CENTRAL, INC.
The below results of operations and related discussion for Evergy Kansas Central is presented in a reduced
disclosure format in accordance with General Instruction (I)(2)(a) to Form 10-K.
The following table summarizes Evergy Kansas Central's comparative results of operations.
Operating revenues
Fuel and purchased power
SPP network transmission costs
Operating and maintenance
Depreciation and amortization
Taxes other than income tax
Income from operations
Other expense, net
Interest expense
Income tax expense (benefit)
Equity in earnings of equity method investees, net of income taxes
Net income
Less: Net income attributable to noncontrolling interests
Net income attributable to Evergy Kansas Central, Inc.
2019
Change
2018
$ 2,507.4
493.0
251.3
530.5
443.8
192.3
596.5
(12.9)
177.0
52.1
4.6
359.1
15.7
343.4
$
(millions)
$ (107.5)
(106.2)
(8.6)
(110.2)
52.9
18.6
46.0
20.6
0.2
56.4
—
10.0
5.5
4.5
$
$ 2,614.9
599.2
259.9
640.7
390.9
173.7
550.5
(33.5)
176.8
(4.3)
4.6
349.1
10.2
338.9
$
Evergy Kansas Central Utility Gross Margin and MWh Sales
The following table summarizes Evergy Kansas Central's utility gross margin and MWhs sold.
Retail revenues
Residential
Commercial
Industrial
Other retail revenues
Total electric retail
Wholesale revenues
Transmission revenues
Other revenues
Operating revenues
Revenues and Expenses
Change
2018
2019
$ 793.9
709.1
401.3
21.0
1,925.3
239.9
273.3
68.9
2,507.4
(493.0)
(251.3)
$
(millions)
(52.5)
6.3
4.9
1.0
(40.3)
(106.2)
(15.6)
54.6
(107.5)
106.2
8.6
$ 846.4
702.8
396.4
20.0
1,965.6
346.1
288.9
14.3
2,614.9
(599.2)
(259.9)
MWhs Sold
Change
2019
2018
6,460
7,399
5,622
45
19,526
7,540
N/A
N/A
27,066
(thousands)
(276)
(97)
(20)
(13)
(406)
(2,629)
N/A
N/A
(3,035)
6,736
7,496
5,642
58
19,932
10,169
N/A
N/A
30,101
Fuel and purchased power
SPP network transmission costs
Utility gross margin (a)
(a)Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin under Evergy's Results of Operations.
$ 1,763.1
$ 1,755.8
7.3
$
Evergy Kansas Central's utility gross margin increased $7.3 million in 2019 compared to 2018 driven by:
•
a $27.9 million increase from new retail rates effective in September 2018, net of a $69.8 million provision
for rate refund recorded in 2018 for the change in the corporate income tax rate caused by the TCJA; and
49
•
•
a $23.1 million increase in revenue due to one-time bill credits recorded in June 2018 as a result of
conditions in the KCC merger order; partially offset by
a $30.9 million decrease primarily due to lower retail sales driven by cooler summer weather. For 2019
compared to 2018, cooling degree days decreased 15%; and
•
a $12.8 million decrease related to Evergy Kansas Central's TDC rider.
Evergy Kansas Central Operating and Maintenance
Evergy Kansas Central's operating and maintenance expense decreased $110.2 million in 2019 compared to 2018
primarily driven by:
•
$51.9 million of merger-related costs incurred in 2018, consisting of:
$44.2 million of voluntary severance and change in control payments as well as the recording of
unrecognized equity compensation costs and the incremental fair value associated with the vesting
of outstanding equity compensation awards in accordance with the Amended Merger Agreement;
and
$21.5 million of merger consulting fees and fees for other outside services incurred, primarily
consisting of merger success fees; partially offset by
a $13.8 million decrease in operating and maintenance expense due to the net reallocation of
incurred merger transition costs between Evergy Kansas Central, Evergy, Evergy Metro and Evergy
Missouri West and the subsequent deferral of these transition costs to a regulatory asset in June
2018 for future recovery by Evergy Kansas Central in accordance with the KCC merger order;
•
a $22.9 million decrease in plant operating and maintenance expense at fossil-fuel generating units
primarily due to:
$12.3 million of obsolete inventory write-offs at retiring fossil-fuel units in 2018;
a $7.3 million decrease due to the retirement of Evergy Kansas Central's Unit 7 at Tecumseh
Energy Center, Units 3 and 4 at Murray Gill Energy Center and Units 1 and 2 at Gordan Evans
Energy Center in the fourth quarter of 2018; and
$0.7 million of voluntary severance expenses incurred in 2018 related to the Local 1523 union
voluntary exit program; partially offset by
an $8.4 million increase due to the write-off of a regulatory asset for costs incurred during the JEC
lease extension, see Note 5 to the consolidated financial statements;
•
•
•
a $19.2 million decrease in various administrative and general operating and maintenance expenses
primarily driven by a $10.0 million decrease in labor and employee benefits expense primarily due to lower
employee headcount and pension and post-retirement costs in 2019 and $5.3 million of voluntary severance
expenses incurred in the third quarter of 2018 related to a Wolf Creek voluntary exit program;
a $9.6 million decrease in transmission and distribution operating and maintenance expense primarily due
to a higher level of vegetation management activity in 2018; and
a $6.3 million decrease in plant operating and maintenance expense at nuclear generating units related to
Wolf Creek; partially offset by
•
$9.3 million of voluntary severance expenses incurred in 2019.
Evergy Kansas Central Depreciation and Amortization
Evergy Kansas Central's depreciation and amortization expense increased $52.9 million in 2019 compared to 2018
driven by:
•
a $32.4 million increase primarily due to a change in depreciation rates as a result of Evergy Kansas
Central's rate case effective in September 2018; and
•
a $20.5 million increase primarily due to capital additions.
50
Evergy Kansas Central Taxes Other Than Income Tax
Evergy Kansas Central's taxes other than income tax increased $18.6 million in 2019 compared to 2018 primarily
driven by an $18.3 million increase in property taxes.
Evergy Kansas Central Other Expense, Net
Evergy Kansas Central's other expense, net decreased $20.6 million in 2019 compared to 2018 primarily driven by:
•
•
a $12.4 million decrease due to recording higher COLI benefits in 2019;
a $4.2 million decrease due to higher net unrealized gains in Evergy Kansas Central's rabbi trust in 2019;
and
•
a $3.4 million decrease due to lower pension non-service costs in 2019.
Evergy Kansas Central Income Tax Expense
Evergy Kansas Central's income tax expense increased $56.4 million in 2019 compared to 2018 driven by:
•
•
•
a $52.6 million increase related to the revaluation of deferred income tax assets and liabilities based on the
Evergy composite tax rate as a result of the merger in June 2018; and
an $18.9 million increase due to higher pre-tax income; partially offset by
a $5.3 million decrease due to flow-through items primarily driven by higher amortization of excess
deferred income taxes.
51
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
EVERGY METRO, INC.
The below results of operations and related discussion for Evergy Metro is presented in a reduced disclosure format
in accordance with General Instruction (I)(2)(a) to Form 10-K.
The following table summarizes Evergy Metro's comparative results of operations.
Operating revenues
Fuel and purchased power
Operating and maintenance
Depreciation and amortization
Taxes other than income tax
Income from operations
Other expense, net
Interest expense
Income tax expense
Net income
2019
Change
2018
$ 1,806.5
482.1
451.9
318.4
127.6
426.5
(15.8)
119.8
35.7
255.2
$
(millions)
(16.6)
$
(38.5)
(42.3)
37.1
10.4
16.7
10.1
(13.9)
(51.6)
92.3
$
$ 1,823.1
520.6
494.2
281.3
117.2
409.8
(25.9)
133.7
87.3
162.9
$
Evergy Metro Utility Gross Margin and MWh Sales
The following table summarizes Evergy Metro's utility gross margin and MWhs sold.
Revenues and Expenses
Change
2019
2018
(millions)
$
Retail revenues
Residential
Commercial
Industrial
Other retail revenues
Total electric retail
Wholesale revenues
Transmission revenues
Other revenues
Operating revenues
712.4
786.1
136.9
16.3
1,651.7
70.9
17.5
66.4
1,806.5
(482.1)
(23.2)
(8.7)
(1.9)
5.9
(27.9)
17.4
3.0
(9.1)
(16.6)
38.5
$
735.6
794.8
138.8
10.4
1,679.6
53.5
14.5
75.5
1,823.1
(520.6)
MWhs Sold
Change
2019
2018
5,425
7,623
1,713
75
14,836
6,098
N/A
N/A
20,934
(thousands)
(261)
(159)
(41)
(1)
(462)
1,081
N/A
N/A
619
5,686
7,782
1,754
76
15,298
5,017
N/A
N/A
20,315
Fuel and purchased power
Utility gross margin (a)
$
(a) Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin under Evergy's Results of Operations.
$ 1,324.4
$ 1,302.5
21.9
Evergy Metro's utility gross margin increased $21.9 million in 2019 compared to 2018 driven by:
•
•
•
•
a $40.4 million increase from new retail rates effective in December 2018, net of a $72.4 million provision
for rate refund recorded for 2018 for the change in the corporate income tax rate caused by the TCJA; and
a $22.4 million increase in revenue due to one-time bill credits recorded in June 2018 as a result of
conditions in the KCC and MPSC merger orders; partially offset by
a $30.9 million decrease primarily due to lower retail sales driven by cooler summer weather. For 2019
compared to 2018, cooling degree days decreased 18%; and
a $10.0 million decrease for recovery of programs costs for energy efficiency programs under MEEIA,
which have a direct offset in operating and maintenance expense.
52
Evergy Metro Operating and Maintenance
Evergy Metro's operating and maintenance expense decreased $42.3 million in 2019 compared to 2018 primarily
driven by:
•
a $26.4 million decrease in plant operating and maintenance expense at fossil-fuel generating units
primarily driven by:
a $10.9 million decrease due to the retirement of Montrose Station in 2018, which includes $7.3
million of obsolete inventory write-offs in 2018;
a $3.7 million decrease due to an extended maintenance outage at Iatan No. 2 in 2018; and
$3.2 million of voluntary severance expenses incurred in the third quarter of 2018 related to the
Local 412 union voluntary exit program;
•
•
•
•
•
•
a $23.8 million decrease in various administrative and general operating and maintenance expenses, which
includes $5.3 million of voluntary severance expenses incurred in the third quarter of 2018 related to a Wolf
Creek voluntary exit program and a $3.5 million decrease in injuries and damages expense primarily due to
an increase in estimated workers compensation losses recorded in 2018;
a $10.0 million decrease in program costs for energy efficiency programs under MEEIA, which have a
direct offset in revenue;
a $6.8 million decrease in plant operating and maintenance expense at nuclear generating units related to
Wolf Creek; and
$2.1 million of merger-related costs incurred in 2018; partially offset by
a $23.2 million increase in operating and maintenance expense due to the net reallocation of incurred
merger transition costs between Evergy Metro, Evergy, Evergy Kansas Central and Evergy Missouri West
and the subsequent deferral of these transition costs to a regulatory asset in June 2018 for future recovery
by Evergy Metro in accordance with the KCC and MPSC merger orders;
a $7.1 million increase in transmission and distribution operating and maintenance expense primarily due to
costs incurred from storms that occurred in January 2019; and
•
$6.8 million of voluntary severance expenses incurred in 2019.
Evergy Metro Depreciation and Amortization
Evergy Metro's depreciation and amortization increased $37.1 million in 2019 compared to 2018 primarily driven
by:
•
•
a $19.3 million increase primarily due to capital additions; and
a $17.8 million increase due to a change in depreciation rates effective in December 2018 as a result of
Evergy Metro's 2018 Kansas rate case.
Evergy Metro Taxes Other Than Income Tax
Evergy Metro's taxes other than income tax increased $10.4 million in 2019 compared to 2018 primarily driven by a
$7.9 million increase in property taxes.
Evergy Metro Interest Expense
Evergy Metro's interest expense decreased $13.9 million in 2019 compared to 2018 primarily driven by a $12.8
million net decrease due to the repayment of $400.0 million of 7.15% Mortgage Bonds at maturity in April 2019,
which decreased interest expense by $25.4 million, partially offset by a $12.6 million increase due to the issuance
of $400.0 million of 4.125% Mortgage Bonds in March 2019.
53
Evergy Metro Income Tax Expense
Evergy Metro's income tax expense decreased $51.6 million in 2019 compared to 2018 primarily driven by:
•
•
•
a $51.0 million decrease related to the revaluation of deferred income tax assets and liabilities based on the
Evergy composite tax rate as a result of the merger in June 2018; and
a $21.4 million decrease due to flow-through items primarily driven by higher amortization of excess
deferred income taxes; partially offset by
a $15.5 million increase related to the revaluation of deferred income tax assets and liabilities as a result of
the enactment of Missouri state income tax reform in June 2018; and
•
a $10.8 million increase due to higher pre-tax income.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the ordinary course of business, Evergy faces risks that are either non-financial or non-quantifiable. Such risks
principally include business, legal, operational and credit risks and are not represented in the following analysis.
See Part I, Item 1A, Risk Factors and Part II, Item 7, MD&A for further discussion of risk factors.
The Evergy Companies are exposed to market risks associated with commodity price and supply, interest rates and
equity prices. Commodity price risk is the potential adverse price impact related to the purchase or sale of
electricity and energy-related products. Credit risk is the potential adverse financial impact resulting from non-
performance by a counterparty of its contractual obligations. Interest rate risk is the potential adverse financial
impact related to changes in interest rates. In addition, Evergy's investments in trusts to fund nuclear plant
decommissioning and to fund non-qualified retirement benefits give rise to security price risk.
Management has established risk management policies and strategies to reduce the potentially adverse effects that
the volatility of the markets may have on Evergy's operating results. During the ordinary course of business, the
Evergy Companies' hedging strategies are reviewed to determine the hedging approach deemed appropriate based
upon the circumstances of each situation. Though management believes its risk management practices are effective,
it is not possible to identify and eliminate all risk. Evergy could experience losses, which could have a material
adverse effect on its results of operations or financial position, due to many factors, including unexpectedly large or
rapid movements or disruptions in the energy markets, regulatory-driven market rule changes and/or bankruptcy or
non-performance of customers or counterparties, and/or failure of underlying transactions that have been hedged to
materialize.
Hedging Strategies
From time to time, Evergy utilizes derivative instruments to execute risk management and hedging strategies.
Derivative instruments, such as futures, forward contracts, swaps or options, derive their value from underlying
assets, indices, reference rates or a combination of these factors. These derivative instruments include negotiated
contracts, which are referred to as over-the-counter derivatives, and instruments listed and traded on an exchange.
Commodity Price Risk
The Evergy Companies engage in the wholesale and retail sale of electricity and are exposed to risks associated with
the price of electricity and other energy-related products. Exposure to these risks is affected by a number of factors
including the quantity and availability of fuel used for generation and the quantity of electricity customers consume.
Customers' electricity usage could also vary from year to year based on the weather or other factors. Quantities of
fossil fuel used for generation vary from year to year based on the availability, price and deliverability of a given
fuel type as well as planned and unplanned outages at facilities that use fossil fuels. Evergy's exposure to
fluctuations in these factors is limited by the cost-based regulation of its regulated operations in Kansas and
Missouri as these operations are typically allowed to recover substantially all of these costs through cost-recovery
mechanisms, primarily through fuel recovery mechanisms. While there may be a delay in timing between when
these costs are incurred and when they are recovered through rates, changes from year to year generally do not have
a material impact on operating results.
54
Interest Rate Risk
Evergy manages interest rate risk and short- and long-term liquidity by limiting its exposure to variable interest rate
debt to a percentage of total debt, diversifying maturity dates and, from time to time, entering into interest rate
hedging transactions. At December 31, 2019, 3% of Evergy's long-term debt was variable rate debt. Evergy also
has short-term borrowings and current maturities of fixed rate debt that are exposed to interest rate risk. Evergy
computes and presents information regarding the sensitivity to changes in interest rates for variable rate debt and
current maturities of fixed rate debt by assuming a 100-basis-point change in the current interest rates applicable to
such debt over the remaining time the debt is outstanding.
Evergy had $1,113.7 million of variable rate debt, including notes payable, commercial paper and current maturities
of fixed rate debt as of December 31, 2019. A 100-basis-point change in interest rates applicable to this debt would
impact income before income taxes on an annualized basis by approximately $9.9 million.
Credit Risk
Evergy is exposed to counterparty credit risk largely in the form of accounts receivable from its retail and wholesale
electric customers and through executory contracts with market risk exposure. The credit risk associated with
accounts receivable from retail and wholesale customers is largely mitigated by Evergy's large number of individual
customers spread across diverse customer classes and the ability to recover bad debt expense in customer rates. The
Evergy Companies maintain credit policies and employ credit risk control mechanisms, such as letters of credit,
when necessary to minimize their overall credit risk and monitor exposure.
Investment Risk
Evergy maintains trust funds, as required by the NRC, to fund its 94% share of decommissioning the Wolf Creek
nuclear power plant and also maintains trusts to fund pension benefits as well as certain non-qualified retirement
benefits. As of December 31, 2019, these funds were primarily invested in a diversified mix of equity and debt
securities and reflected at fair value on Evergy's balance sheet. The equity securities in the trusts are exposed to
price fluctuations in equity markets and the value of debt securities are exposed to changes in interest rates and
other market factors.
As nuclear decommissioning costs are currently recovered in customer rates, Evergy defers both realized and
unrealized gains and losses for these securities as an offset to its regulatory asset for decommissioning Wolf Creek
and as such, fluctuations in the value of these securities do not impact earnings. A significant decline in the value of
pension or non-qualified retirement assets could require Evergy to increase funding of its pension plans in future
periods, which could adversely affect cash flows in those periods. In addition, a decline in the fair value of these
plan assets, in the absence of additional cash contributions to the plans by Evergy, could increase the amount of
pension cost required to be recorded in future periods by Evergy.
55
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Evergy, Inc.
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Equity
Evergy Kansas Central, Inc.
Consolidated Statements of Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Equity
Evergy Metro, Inc.
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Equity
Combined Notes to Consolidated Financial Statements
Summary of Significant Accounting Policies
Note 1:
Note 2: Merger of Great Plains Energy and Evergy Kansas Central
Note 3: Revenue
Note 4: Receivables
Note 5: Rate Matters and Regulation
Note 6: Goodwill
Note 7: Asset Retirement Obligations
Property, Plant & Equipment
Note 8:
Note 9:
Jointly-Owned Electric Utility Plants
Note 10: Pension Plans and Post-Retirement Benefits
Note 11: Equity Compensation
Note 12: Short-Term Borrowings and Short-Term Bank Lines of Credit
Note 13: Long-Term Debt
Note 14: Fair Value Measurements
Note 15: Commitments and Contingencies
Note 16: Guarantees
Note 17: Related Party Transactions and Relationships
Note 18: Shareholders' Equity
Note 19: Variable Interest Entities
Note 20: Taxes
Note 21: Leases
Note 22: Quarterly Operating Results (Unaudited)
56
57
60
61
62
63
65
66
67
68
70
71
72
73
75
76
77
85
90
93
94
101
101
102
103
104
116
120
121
124
129
133
133
135
136
137
143
146
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Evergy, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy, Inc. and subsidiaries (the "Company") as
of December 31, 2019 and 2018, the related consolidated statements of comprehensive income, changes in equity,
and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and the
financial statement schedules listed in the Index at Item 15 (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United
States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated March 2, 2020, expressed an unqualified opinion
on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our
opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 5 to
the financial statements
Critical Audit Matter Description
The Company is subject to rate regulation by the Kansas Corporation Commission and by the Missouri Public
Service Commission (collectively the "Commissions"), which have jurisdiction with respect to the rates of electric
distribution companies in Kansas and Missouri, respectively. Management has determined it meets the
requirements under accounting principles generally accepted in the United States of America to prepare its financial
statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the
57
economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant,
and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues;
operating and maintenance expense; and depreciation expense.
The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are
determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility
service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can
have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of
assets to be recovered by rates. The Commissions' regulation of rates is premised on the full recovery of prudently
incurred costs and a reasonable rate of return on invested capital. Decisions to be made by the Commissions in the
future will impact the accounting for regulated operations, including decisions about the amount of allowable costs
and return on invested capital included in rates and any refunds that may be required. While the Company has
indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions
will not approve (1) full recovery of the costs of providing utility service or (2) full recovery of all amounts invested
in the utility business and a reasonable return on that investment.
When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated
plant, which is dependent upon amounts that may be recovered through regulated rates, including any return.
Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early
retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that
the Company will recover its remaining investment in these retired generating plants with return. Auditing the
judgments related to the nature and likelihood of the retirement and the probability of recovering the generating
plant investment with a return involves especially subjective and complex judgment.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by
management to support its assertions about impacted account balances and disclosures and the high degree of
subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management
judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of
potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that
management's accounting judgments are based on assumptions about the outcome of future decisions by the
Commissions, auditing these judgments required specialized knowledge of accounting for rate regulation and the
rate setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the uncertainty of future decisions by the Commissions included the following,
among others:
• We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the
recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets
and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
• We tested the effectiveness of management's controls over the initial recognition of amounts as property,
plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory
developments that may affect the likelihood of recovering costs in future rates or of a future reduction in
rates, including Company management's determination of the likelihood of recovery of the full investment
of certain regulated plants and probability of refunding amounts previously collected from customers
related to certain regulated plants.
• We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances
recorded and regulatory developments.
• We evaluated external information and compared it to management's recorded regulatory asset and liability
balances for completeness. Such external information included relevant regulatory orders issued by the
Commissions for the Company and other public utilities in Kansas and Missouri, regulatory statutes,
interpretations, procedural memorandums, filings made by intervenors, and other publicly available
58
information to assess the likelihood of recovery in future rates or of a future reduction in rates based on
precedence of the Commissions' treatment of similar costs under similar circumstances.
• For regulatory matters in process, including those that could impact the early retirement of regulated plants,
we inspected the Company's filings with the Commissions and the filings with the Commissions by
intervenors that may impact the Company's future rates, for any evidence that might contradict
management's assertions.
• We evaluated the reasonableness of management's judgments for potential indicators of abandonment by
performing the following:
We inquired of management about property, plant, and equipment that may be abandoned.
We inspected the capital projects budget and construction-in-process listings and inquired of
management to identify projects that are designed to replace assets that may be retired prior to the
end of the useful life.
We inspected minutes of the board of directors and regulatory orders and other filings with the
Commissions to identify any evidence that may contradict management's assertion regarding
probability of an abandonment.
• We compared actual spend for projects that have been capitalized to property, plant, and equipment to
budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of
the cost of any capital projects. For significant projects that were over budget or if full recovery of project
costs is being challenged by intervenors, we evaluated management's assessment of the probability of a
disallowance. We tested selected costs included in the capitalized project costs for completeness and
accuracy.
• We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate,
regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory
liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are
probable of recovery or a future reduction in rates.
• We evaluated management's conclusions for the probable recovery of the retired regulated plant investment
with a return with the assistance of professionals in our firm having expertise in the application of
accounting guidance for early retirements of regulated plants. We evaluated management's conclusions
regarding the accounting for the abandonment of certain regulated plants and the impact of recent rate
orders on the accounting.
/s/ DELOITTE & TOUCHE LLP
Kansas City, Missouri
March 2, 2020
We have served as the Company's auditor since 2002.
59
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and the Board of Directors of Evergy Kansas Central, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy Kansas Central, Inc. and subsidiaries (the
"Company") as of December 31, 2019 and 2018, the related consolidated statements of income, changes in equity,
and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes and the
financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In
our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as
of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States
of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with
the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis
for our opinion.
/s/ DELOITTE & TOUCHE LLP
Kansas City, Missouri
March 2, 2020
We have served as the Company's auditor since 2002.
60
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholder and the Board of Directors of Evergy Metro, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Evergy Metro, Inc. and subsidiaries (the
"Company") as of December 31, 2019 and 2018, the related consolidated statements of comprehensive income,
changes in equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the
related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the
"financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally
accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with
the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis
for our opinion.
/s/ DELOITTE & TOUCHE LLP
Kansas City, Missouri
March 2, 2020
We have served as the Company's auditor since 2002.
61
EVERGY, INC.
Consolidated Statements of Comprehensive Income
Year Ended December 31
OPERATING REVENUES
OPERATING EXPENSES:
Fuel and purchased power
SPP network transmission costs
Operating and maintenance
Depreciation and amortization
Taxes other than income tax
Total Operating Expenses
INCOME FROM OPERATIONS
OTHER INCOME (EXPENSE):
Investment earnings
Other income
Other expense
Total Other Expense, Net
Interest expense
INCOME BEFORE INCOME TAXES
Income tax expense
Equity in earnings of equity method investees, net of income taxes
NET INCOME
Less: Net income attributable to noncontrolling interests
NET INCOME ATTRIBUTABLE TO EVERGY, INC.
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE
OUTSTANDING ATTRIBUTABLE TO EVERGY (see Note 1)
Basic earnings per common share
Diluted earnings per common share
AVERAGE COMMON SHARES OUTSTANDING
Basic
Diluted
COMPREHENSIVE INCOME
NET INCOME
OTHER COMPREHENSIVE INCOME
Derivative hedging activity
Loss on derivative hedging instruments
Income tax benefit
Net loss on derivative hedging instruments
Reclassification to expenses, net of tax
Derivative hedging activity, net of tax
Defined benefit pension plans
Net gain (loss) arising during period
Income tax expense (benefit)
Net gain (loss) arising during period, net of tax
Change in unrecognized pension expense, net of tax
Total other comprehensive loss
Comprehensive income
Less: comprehensive income attributable to noncontrolling interest
COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC.
$
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
62
2019
2018
2017
(millions, except per share amounts)
$
5,147.8
$
4,275.9
$
2,571.0
1,265.0
251.3
1,218.5
861.7
365.5
3,962.0
1,185.8
11.0
26.9
(76.9)
(39.0)
374.0
772.8
97.0
9.8
685.6
15.7
669.9
2.80
2.79
239.5
239.9
$
$
$
1,078.7
259.9
1,115.8
618.8
269.1
3,342.3
933.6
8.8
15.5
(78.7)
(54.4)
279.6
599.6
59.0
5.4
546.0
10.2
535.8
2.50
2.50
213.9
214.1
$
$
$
541.5
247.9
563.5
371.7
167.6
1,892.2
678.8
4.0
8.3
(39.1)
(26.8)
171.0
481.0
151.2
6.7
336.5
12.6
323.9
2.27
2.27
142.5
142.6
$
$
$
$
685.6
$
546.0
$
336.5
(64.4)
16.5
(47.9)
1.5
(46.4)
(0.8)
0.2
(0.6)
(0.6)
(47.0)
638.6
15.7
622.9
$
(5.4)
1.4
(4.0)
—
(4.0)
1.4
(0.4)
1.0
1.0
(3.0)
543.0
10.2
532.8
$
—
—
—
—
—
—
—
—
—
—
336.5
12.6
323.9
EVERGY, INC.
Consolidated Balance Sheets
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Receivables, net
Accounts receivable pledged as collateral
Fuel inventory and supplies
Income taxes receivable
Regulatory assets
Prepaid expenses and other assets
Total Current Assets
PROPERTY, PLANT AND EQUIPMENT, NET
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
OTHER ASSETS:
Regulatory assets
Nuclear decommissioning trust fund
Goodwill
Other
Total Other Assets
TOTAL ASSETS
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
December 31
2019
2018
(millions, except share amounts)
$
23.2
228.5
339.0
481.6
85.5
231.7
78.2
1,467.7
19,184.4
162.0
1,740.5
573.2
2,336.6
511.5
5,161.8
$ 25,975.9
$
160.3
193.7
365.0
511.0
68.0
303.9
79.1
1,681.0
18,782.5
169.2
1,757.9
472.1
2,338.9
396.5
4,965.4
$ 25,598.1
63
EVERGY, INC.
Consolidated Balance Sheets
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt
Current maturities of long-term debt of variable interest entities
Notes payable and commercial paper
Collateralized note payable
Accounts payable
Accrued taxes
Accrued interest
Regulatory liabilities
Asset retirement obligations
Other
Total Current Liabilities
LONG-TERM LIABILITIES:
Long-term debt, net
Long-term debt of variable interest entities, net
Deferred income taxes
Unamortized investment tax credits
Regulatory liabilities
Pension and post-retirement liability
Asset retirement obligations
Other
Total Long-Term Liabilities
Commitments and Contingencies (Note 15)
EQUITY:
Evergy, Inc. Shareholders' Equity:
Common stock - 600,000,000 shares authorized, without par value
226,641,443 and 255,326,252 shares issued, stated value
Retained earnings
Accumulated other comprehensive loss
Total Evergy, Inc. Shareholders' Equity
Noncontrolling Interests
Total Equity
TOTAL LIABILITIES AND EQUITY
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
December 31
2019
2018
(millions, except share amounts)
$
251.1
32.3
561.9
339.0
528.8
145.1
122.3
63.3
71.3
220.8
2,335.9
8,746.7
18.8
1,744.4
375.4
2,248.3
1,017.6
602.8
340.7
15,094.7
$
705.4
30.3
738.6
365.0
451.5
133.6
110.9
110.2
49.8
171.9
2,867.2
6,636.3
51.1
1,599.2
373.2
2,218.8
987.6
637.3
236.7
12,740.2
7,070.4
1,551.5
(50.0)
8,571.9
(26.6)
8,545.3
$ 25,975.9
8,685.2
1,346.0
(3.0)
10,028.2
(37.5)
9,990.7
$ 25,598.1
64
EVERGY, INC.
Consolidated Statements of Cash Flows
Year Ended December 31
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization
Amortization of nuclear fuel
Amortization of deferred refueling outage
Amortization of corporate-owned life insurance
Non-cash compensation
Net deferred income taxes and credits
Allowance for equity funds used during construction
Payments for asset retirement obligations
Equity in earnings of equity method investees, net of income taxes
Income from corporate-owned life insurance
Other
Changes in working capital items:
Accounts receivable
Accounts receivable pledged as collateral
Fuel inventory and supplies
Prepaid expenses and other current assets
Accounts payable
Accrued taxes
Other current liabilities
Changes in other assets
Changes in other liabilities
Cash Flows from Operating Activities
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment
Cash acquired from the merger with Great Plains Energy
Purchase of securities - trusts
Sale of securities - trusts
Investment in corporate-owned life insurance
Proceeds from investment in corporate-owned life insurance
Proceeds from settlement of interest rate swap
Other investing activities
Cash Flows from (used in) Investing Activities
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short term debt, net
Proceeds from term loan facility
Repayment of term loan facility
Collateralized short-term borrowings, net
Proceeds from long-term debt
Retirements of long-term debt
Retirements of long-term debt of variable interest entities
Payment for settlement of interest rate swap accounted for as a cash flow hedge
Borrowings against cash surrender value of corporate-owned life insurance
Repayment of borrowings against cash surrender value of corporate-owned life insurance
Cash dividends paid
Repurchase of common stock under repurchase plan
Distributions to shareholders of noncontrolling interests
Other financing activities
Cash Flows used in Financing Activities
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period
End of period
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
65
2019
$
685.6
2018
(millions)
$
546.0
2017
$ 336.5
861.7
51.4
25.5
19.8
16.3
121.5
(2.2)
(17.8)
(9.8)
(29.6)
(3.2)
(23.1)
26.0
29.9
43.4
16.9
(8.2)
(59.4)
79.8
(75.5)
1,749.0
(1,210.1)
—
(55.8)
47.3
(18.3)
161.7
—
(5.1)
(1,080.3)
(176.7)
1,000.0
(1,000.0)
(26.0)
2,372.7
(701.1)
(30.3)
(69.8)
59.4
(127.5)
(462.5)
(1,628.7)
(8.6)
(6.7)
(805.8)
(137.1)
618.8
43.6
21.2
22.6
29.9
124.2
(3.1)
(22.4)
(5.4)
(2.3)
(5.2)
265.1
(185.0)
54.7
(128.1)
56.7
(76.4)
92.0
66.8
(15.9)
1,497.8
(1,069.7)
1,154.2
(117.5)
117.7
(17.1)
6.8
140.6
(17.6)
197.4
(104.0)
—
—
185.0
290.9
(395.8)
(28.5)
—
56.5
(3.9)
(475.0)
(1,042.3)
—
(21.3)
(1,538.4)
156.8
371.7
32.2
16.1
20.6
8.8
149.6
(2.0)
(16.0)
(6.7)
(2.8)
(8.7)
(2.1)
—
7.2
55.8
10.0
9.2
(118.0)
32.0
19.3
912.7
(764.6)
—
(41.0)
41.2
(17.0)
4.2
—
(3.6)
(780.8)
(91.3)
—
—
—
296.2
(125.0)
(26.8)
—
55.1
(1.0)
(223.1)
—
(5.8)
(9.9)
(131.6)
0.3
160.3
23.2
$
3.5
160.3
$
3.2
3.5
$
EVERGY, INC.
Consolidated Statements of Changes in Equity
Evergy, Inc. Shareholders
Common
stock shares
Common
stock
Retained
earnings
AOCI
Non-
controlling
interests
Total
equity
(millions, except share amounts)
141,791,153 $ 2,727.3 $ 1,078.6 $
Balance as of December 31, 2016
Net income
Issuance of stock
Issuance of stock compensation and reinvested dividends, net of tax
withholding
Dividends declared on common stock ($1.60 per share)
Stock compensation expense
Deconsolidation of noncontrolling interests
Distributions to shareholders of noncontrolling interests
Balance as of December 31, 2017
Net income
Issuance of stock to Great Plains Energy shareholders
Issuance of restricted common stock
Issuance of stock compensation and reinvested dividends,
net of tax withholding
Dividends declared on common stock ($1.735 per share)
Dividend equivalents declared
Stock compensation expense
Repurchase of common stock
Derivative hedging activity, net of tax
Change in unrecognized pension expense, net of tax
Other
Balance as of December 31, 2018
Net income
Issuance of stock compensation and reinvested dividends,
net of tax withholding
Dividends declared on common stock ($1.93 per share)
Dividend equivalents declared
Stock compensation expense
Consolidation of noncontrolling interests
Distributions to shareholders of noncontrolling interests
Derivative hedging activity, net of tax
Change in unrecognized pension expense, net of tax
Balance as of December 31, 2019
—
12,131
290,991
—
—
—
—
142,094,275
—
—
0.6
(1.9)
—
8.8
—
—
2,734.8
—
128,947,518
6,979.9
122,505
—
533,273
(16.7)
—
—
—
(16,371,319)
—
—
—
255,326,252
—
111,849
—
—
—
—
—
29.9
(1,042.3)
—
—
(0.4)
8,685.2
—
(2.4)
—
—
16.3
—
—
—
—
—
—
—
—
323.9
—
—
(229.2)
—
—
—
1,173.3
535.8
—
—
—
(362.1)
(1.0)
—
—
—
—
—
1,346.0
669.9
—
(462.5)
(1.9)
—
—
—
—
—
—
226,641,443 $ 7,070.4 $ 1,551.5 $
— $
—
—
27.3 $ 3,833.2
336.5
12.6
0.6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(4.0)
1.0
—
(3.0)
—
—
—
—
—
—
—
—
(46.4)
(0.6)
(50.0) $
—
(1.9)
— (229.2)
—
(81.9)
(5.7)
(47.7)
10.2
8.8
(81.9)
(5.7)
3,860.4
546.0
— 6,979.9
—
—
—
(16.7)
— (362.1)
—
—
(1.0)
29.9
— (1,042.3)
(4.0)
—
1.0
—
—
(0.4)
9,990.7
(37.5)
15.7
685.6
—
(2.4)
— (462.5)
—
—
(1.9)
16.3
— (1,628.7)
3.8
(8.6)
—
3.8
(8.6)
(46.4)
—
(0.6)
(26.6) $ 8,545.3
Repurchase of common stock under repurchase plan
(28,796,658)
(1,628.7)
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
66
Year Ended December 31
OPERATING REVENUES
OPERATING EXPENSES:
Fuel and purchased power
SPP network transmission costs
Operating and maintenance
Depreciation and amortization
Taxes other than income tax
Total Operating Expenses
INCOME FROM OPERATIONS
OTHER INCOME (EXPENSE):
Investment earnings (loss)
Other income
Other expense
Total Other Expense, Net
Interest expense
EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Income
2019
2018
(millions)
2017
$
2,507.4
$
2,614.9
$
2,571.0
493.0
251.3
530.5
443.8
192.3
1,910.9
596.5
4.1
23.1
(40.1)
(12.9)
177.0
406.6
52.1
4.6
359.1
15.7
343.4
$
599.2
259.9
640.7
390.9
173.7
2,064.4
550.5
(0.6)
13.9
(46.8)
(33.5)
176.8
340.2
(4.3)
4.6
349.1
10.2
338.9
$
541.5
247.9
563.5
371.7
167.6
1,892.2
678.8
4.0
8.3
(39.1)
(26.8)
171.0
481.0
151.2
6.7
336.5
12.6
323.9
INCOME BEFORE INCOME TAXES
Income tax expense (benefit)
Equity in earnings of equity method investees, net of income taxes
NET INCOME
Less: Net income attributable to noncontrolling interests
NET INCOME ATTRIBUTABLE TO EVERGY KANSAS CENTRAL, INC.
$
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these
statements.
67
EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Receivables, net
Related party receivables
Accounts receivable pledged as collateral
Fuel inventory and supplies
Income taxes receivable
Regulatory assets
Prepaid expenses and other assets
Total Current Assets
PROPERTY, PLANT AND EQUIPMENT, NET
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
OTHER ASSETS:
Regulatory assets
Nuclear decommissioning trust fund
Other
Total Other Assets
TOTAL ASSETS
December 31
2019
2018
(millions, except share amounts)
$
5.2
140.4
9.9
171.0
266.4
30.4
93.3
34.3
750.9
9,864.9
162.0
$
44.5
84.3
2.6
185.0
276.8
42.7
97.1
35.0
768.0
9,718.3
169.2
730.4
272.5
266.0
1,268.9
$ 12,046.7
700.4
227.5
233.4
1,161.3
$ 11,816.8
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these
statements.
68
EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt
Current maturities of long-term debt of variable interest entities
Notes payable and commercial paper
Collateralized note payable
Accounts payable
Related party payables
Accrued taxes
Accrued interest
Regulatory liabilities
Asset retirement obligations
Other
Total Current Liabilities
LONG-TERM LIABILITIES:
Long-term debt, net
Long-term debt of variable interest entities, net
Deferred income taxes
Unamortized investment tax credits
Regulatory liabilities
Pension and post-retirement liability
Asset retirement obligations
Other
Total Long-Term Liabilities
Commitments and Contingencies (Note 15)
EQUITY:
Evergy Kansas Central, Inc. Shareholder's Equity:
Common stock - 1,000 shares authorized, $0.01 par value, 1 share issued
Retained earnings
Total Evergy Kansas Central, Inc. Shareholder's Equity
Noncontrolling Interests
Total Equity
TOTAL LIABILITIES AND EQUITY
December 31
2019
2018
(millions, except share amounts)
$
250.0
32.3
249.2
171.0
200.5
14.8
98.7
74.2
42.3
23.3
130.2
1,286.5
3,436.1
18.8
817.7
253.2
1,132.5
495.5
249.6
151.8
6,555.2
$
300.0
30.3
411.7
185.0
154.4
14.9
88.6
74.4
19.5
17.1
83.0
1,378.9
3,389.8
51.1
815.4
249.7
1,101.8
474.7
264.0
130.7
6,477.2
2,737.6
1,494.0
4,231.6
(26.6)
4,205.0
$ 12,046.7
2,737.6
1,260.6
3,998.2
(37.5)
3,960.7
$ 11,816.8
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these
statements.
69
EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Cash Flows
Year Ended December 31
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization
Amortization of nuclear fuel
Amortization of deferred refueling outage
Amortization of corporate-owned life insurance
Non-cash compensation
Net deferred income taxes and credits
Allowance for equity funds used during construction
Payments for asset retirement obligations
Equity in earnings of equity method investees, net of income taxes
Income from corporate-owned life insurance
Other
Changes in working capital items:
Accounts receivable
Accounts receivable pledged as collateral
Fuel inventory and supplies
Prepaid expenses and other current assets
Accounts payable
Accrued taxes
Other current liabilities
Changes in other assets
Changes in other liabilities
Cash Flows from Operating Activities
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment
Purchase of securities - trusts
Sale of securities - trusts
Investment in corporate-owned life insurance
Proceeds from investment in corporate-owned life insurance
Other investing activities
Cash Flows used in Investing Activities
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short term debt, net
Collateralized short-term debt, net
Proceeds from long-term debt
Retirements of long-term debt
Retirements of long-term debt of variable interest entities
Borrowings against cash surrender value of corporate-owned life insurance
Repayment of borrowings against cash surrender value of corporate-owned life insurance
Cash dividends paid
Distributions to shareholders of noncontrolling interests
Other financing activities
Cash Flows from (used in) Financing Activities
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period
End of period
2019
$ 359.1
2018
(millions)
$ 349.1
2017
$ 336.5
443.8
25.6
12.8
19.8
—
11.6
—
(14.8)
(4.6)
(29.0)
(5.5)
(65.9)
14.0
10.9
(11.7)
6.9
20.2
12.1
47.0
(29.5)
822.8
(596.1)
(21.8)
21.6
(17.6)
158.9
(3.2)
(458.2)
(162.5)
(14.0)
294.7
(300.0)
(30.3)
56.5
(125.4)
(110.0)
(8.6)
(4.3)
(403.9)
(39.3)
390.9
26.0
13.7
22.6
19.9
(2.2)
(2.9)
(12.0)
(4.6)
(2.3)
(5.4)
207.9
(185.0)
17.3
(134.2)
(17.6)
(24.1)
88.3
42.7
(36.2)
751.9
(713.3)
(99.4)
104.2
(17.1)
6.8
(8.6)
(727.4)
133.7
185.0
121.9
(121.9)
(28.5)
56.5
(3.9)
(305.1)
—
(21.2)
16.5
41.0
371.7
32.2
16.1
20.6
8.8
149.6
(2.0)
(16.0)
(6.7)
(2.8)
(8.7)
(2.1)
—
7.2
55.8
10.0
9.2
(118.0)
32.0
19.3
912.7
(764.6)
(41.0)
41.2
(17.0)
4.2
(3.6)
(780.8)
(91.3)
—
296.2
(125.0)
(26.8)
55.1
(1.0)
(223.1)
(5.8)
(9.9)
(131.6)
0.3
44.5
5.2
$
3.5
44.5
$
$
3.2
3.5
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these
statements.
70
EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Changes in Equity
Balance as of December 31, 2016
Net income
Issuance of stock
Issuance of stock for compensation and reinvested dividends, net of tax
withholding
Dividends declared on common stock
Stock compensation expense
Deconsolidation of noncontrolling interest
Distributions to shareholders of noncontrolling interests
Balance as of December 31, 2017
Net income
Issuance of stock for compensation and reinvested dividends, net of tax
withholding
Stock cancelled pursuant to Amended Merger Agreement
Dividends declared on common stock
Stock compensation expense
Other
Balance as of December 31, 2018
Net income
Dividends declared on common stock
Consolidation of noncontrolling interests
Distributions to shareholders of noncontrolling interests
Balance as of December 31, 2019
Evergy Kansas Central, Inc.
Shareholder
Common
stock shares
Common
stock
Retained
earnings
Non-
controlling
interests
Total
equity
(millions, except share amounts)
141,791,153 $ 2,727.3 $ 1,078.6 $
27.3 $ 3,833.2
—
12,131
—
0.6
290,991
(1.9)
—
—
—
—
8.8
—
—
142,094,275
—
—
2,734.8
—
323.9
12.6
—
—
(229.2)
—
—
—
1,173.3
338.9
—
—
—
—
(81.9)
(5.7)
(47.7)
10.2
336.5
0.6
(1.9)
(229.2)
8.8
(81.9)
(5.7)
3,860.4
349.1
516,990
(142,611,264)
—
—
—
(17.2)
—
—
19.9
0.1
2,737.6
—
—
—
—
—
—
(251.6)
—
—
1,260.6
343.4
(110.0)
—
—
1
—
—
—
—
1 $ 2,737.6 $ 1,494.0 $
(17.2)
—
—
—
(251.6)
—
19.9
—
0.1
—
3,960.7
(37.5)
359.1
15.7
(110.0)
—
3.8
3.8
(8.6)
(8.6)
(26.6) $ 4,205.0
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Consolidated Financial Statements are an integral part of these
statements.
71
EVERGY METRO, INC.
Consolidated Statements of Comprehensive Income
Year Ended December 31
OPERATING REVENUES
OPERATING EXPENSES:
Fuel and purchased power
Operating and maintenance
Depreciation and amortization
Taxes other than income tax
Total Operating Expenses
INCOME FROM OPERATIONS
OTHER INCOME (EXPENSE):
Investment earnings
Other income
Other expense
Total Other Expense, Net
Interest expense
INCOME BEFORE INCOME TAXES
Income tax expense
NET INCOME
COMPREHENSIVE INCOME
NET INCOME
OTHER COMPREHENSIVE INCOME
Derivative hedging activity
Reclassification to expenses, net of tax:
Derivative hedging activity, net of tax
Total other comprehensive income
COMPREHENSIVE INCOME
2019
2018
(millions)
2017
$
1,806.5
$
1,823.1
$
1,890.7
482.1
451.9
318.4
127.6
1,380.0
426.5
2.4
3.2
(21.4)
(15.8)
119.8
290.9
35.7
255.2
255.2
0.7
0.7
0.7
255.9
$
$
$
520.6
494.2
281.3
117.2
1,413.3
409.8
2.8
2.2
(30.9)
(25.9)
133.7
250.2
87.3
162.9
162.9
3.7
3.7
3.7
166.6
$
$
$
480.7
474.8
266.3
182.5
1,404.3
486.4
2.0
9.2
(50.8)
(39.6)
138.8
308.0
128.2
179.8
179.8
4.6
4.6
4.6
184.4
$
$
$
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
72
EVERGY METRO, INC.
Consolidated Balance Sheets
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Receivables, net
Related party receivables
Accounts receivable pledged as collateral
Fuel inventory and supplies
Income taxes receivable
Regulatory assets
Prepaid expenses
Other assets
Total Current Assets
PROPERTY, PLANT AND EQUIPMENT, NET
OTHER ASSETS:
Regulatory assets
Nuclear decommissioning trust fund
Other
Total Other Assets
TOTAL ASSETS
December 31
2019
2018
(millions, except share amounts)
$
2.0
48.1
93.9
118.0
163.0
8.7
95.4
22.8
15.0
566.9
6,839.0
$
2.6
62.7
101.8
130.0
177.6
—
130.9
20.1
16.8
642.5
6,688.1
464.4
300.7
134.1
899.2
$ 8,305.1
495.2
244.6
50.1
789.9
$ 8,120.5
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
73
EVERGY METRO, INC.
Consolidated Balance Sheets
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt
Notes payable and commercial paper
Collateralized note payable
Accounts payable
Related party payables
Accrued taxes
Accrued interest
Regulatory liabilities
Asset retirement obligations
Accrued compensation benefits
Other
Total Current Liabilities
LONG-TERM LIABILITIES:
Long-term debt, net
Deferred income taxes
Unamortized investment tax credits
Regulatory liabilities
Pension and post-retirement liability
Asset retirement obligations
Other
Total Long-Term Liabilities
Commitments and Contingencies (Note 15)
EQUITY:
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value
Retained earnings
Accumulated other comprehensive income
Total Equity
TOTAL LIABILITIES AND EQUITY
December 31
2019
2018
(millions, except share amounts)
$
—
199.3
118.0
233.6
4.6
38.8
26.7
11.4
36.1
45.1
34.0
747.6
2,525.0
642.8
119.6
792.2
499.7
217.5
180.0
4,976.8
$
400.0
176.9
130.0
211.1
—
39.7
28.9
52.8
29.2
52.5
17.2
1,138.3
2,130.1
631.8
120.7
794.3
491.9
231.8
81.8
4,482.4
1,563.1
1,012.8
4.8
2,580.7
$ 8,305.1
1,563.1
932.6
4.1
2,499.8
$ 8,120.5
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
74
EVERGY METRO, INC.
Consolidated Statements of Cash Flows
Year Ended December 31
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization
Amortization of nuclear fuel
Amortization of deferred refueling outage
Net deferred income taxes and credits
Allowance for equity funds used during construction
Payments for asset retirement obligations
Other
Changes in working capital items:
Accounts receivable
Accounts receivable pledged as collateral
Fuel inventory and supplies
Prepaid expenses and other current assets
Accounts payable
Accrued taxes
Other current liabilities
Changes in other assets
Changes in other liabilities
Cash Flows from Operating Activities
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment
Purchase of securities - trusts
Sale of securities - trusts
Other investing activities
Cash Flows used in Investing Activities
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short term debt, net
Collateralized short-term debt, net
Proceeds from long-term debt
Retirements of long-term debt
Cash dividends paid
Other financing activities
Cash Flows used in Financing Activities
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period
End of period
2019
$ 255.2
2018
(millions)
$ 162.9
2017
$ 179.8
318.4
25.9
12.8
(30.6)
(2.2)
(2.5)
0.3
37.0
12.0
14.6
28.0
9.1
(9.6)
(53.2)
33.7
(34.7)
614.2
(445.0)
(34.0)
25.7
9.0
(444.3)
22.4
(12.0)
393.2
(400.0)
(175.0)
0.9
(170.5)
(0.6)
281.3
26.2
13.5
48.6
(1.4)
(13.1)
3.9
36.5
—
19.4
7.2
(34.6)
16.1
10.4
42.9
37.9
657.7
(430.7)
(35.1)
27.1
4.8
(433.9)
8.0
—
465.6
(519.9)
(180.0)
2.9
(223.4)
0.4
266.3
32.1
18.3
82.5
(6.0)
(25.5)
7.5
13.8
(20.0)
(5.2)
8.4
11.7
9.1
(0.1)
31.7
6.5
610.9
(468.6)
(33.6)
30.3
0.9
(471.0)
34.6
20.0
296.2
(281.0)
(212.0)
—
(142.2)
(2.3)
2.6
2.0
$
2.2
2.6
$
4.5
2.2
$
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
75
EVERGY METRO, INC
Consolidated Statements of Changes in Equity
Balance as of December 31, 2016
Net income
Cumulative effect of adoption of ASU 2016-09
Dividends declared on common stock
Derivative hedging activity, net of tax
Balance as of December 31, 2017
Net income
Dividends declared on common stock
Derivative hedging activity, net of tax
Balance as of December 31, 2018
Net income
Dividends declared on common stock
Derivative hedging activity, net of tax
Balance as of December 31, 2019
Common
stock
shares
Common
Stock
Retained
earnings
AOCI - Net
gains
(losses) on
cash flow
hedges
Total
Equity
(millions, except share amounts)
1 $
—
—
—
—
1
—
—
—
1
—
—
—
1 $
1,563.1 $
—
—
—
—
1,563.1
—
—
—
1,563.1
—
—
—
1,563.1 $
982.6 $
179.8
(0.7)
(212.0)
—
949.7
162.9
(180.0)
—
932.6
255.2
(175.0)
—
1,012.8 $
(4.2) $
—
—
—
4.6
0.4
—
—
3.7
4.1
—
—
0.7
4.8 $
2,541.5
179.8
(0.7)
(212.0)
4.6
2,513.2
162.9
(180.0)
3.7
2,499.8
255.2
(175.0)
0.7
2,580.7
The disclosures regarding Evergy Metro included in the accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
76
EVERGY, INC.
EVERGY KANSAS CENTRAL, INC.
EVERGY METRO, INC.
Combined Notes to Consolidated Financial Statements
The notes to consolidated financial statements that follow are a combined presentation for Evergy, Inc., Evergy
Kansas Central, Inc. and Evergy Metro, Inc., all registrants under this filing. The terms "Evergy," "Evergy Kansas
Central," "Evergy Metro" and "Evergy Companies" are used throughout this report. "Evergy" refers to Evergy, Inc.
and its consolidated subsidiaries, unless otherwise indicated. "Evergy Kansas Central" refers to Evergy Kansas
Central, Inc. and its consolidated subsidiaries, unless otherwise indicated. "Evergy Metro" refers to Evergy Metro,
Inc. and its consolidated subsidiaries, unless otherwise indicated. "Evergy Companies" refers to Evergy, Evergy
Kansas Central and Evergy Metro, collectively, which are individual registrants within the Evergy consolidated
group.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Evergy is a public utility holding company incorporated in 2017 and headquartered in Kansas City, Missouri.
Evergy operates primarily through the following wholly-owned direct subsidiaries listed below. In September 2019,
these wholly-owned direct subsidiaries were rebranded and renamed under the Evergy brand name.
• Evergy Kansas Central, Inc. (Evergy Kansas Central), formerly known as Westar Energy, Inc., is an
integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Evergy
Kansas Central has one active wholly-owned subsidiary with significant operations, Evergy Kansas South,
Inc. (Evergy Kansas South), formerly known as Kansas Gas and Electric Company.
• Evergy Metro, Inc. (Evergy Metro), formerly known as Kansas City Power & Light Company, is an
integrated, regulated electric utility that provides electricity to customers in the states of Missouri and
Kansas.
• Evergy Missouri West, Inc. (Evergy Missouri West), formerly known as KCP&L Greater Missouri
Operations Company, is an integrated, regulated electric utility that provides electricity to customers in the
state of Missouri.
• Evergy Transmission Company, LLC (Evergy Transmission Company), formerly known as GPE
Transmission Holding Company, LLC, owns 13.5% of Transource Energy, LLC (Transource) with the
remaining 86.5% owned by AEP Transmission Holding Company, LLC, a subsidiary of American Electric
Power Company, Inc. (AEP). Transource is focused on the development of competitive electric
transmission projects. Evergy Transmission Company accounts for its investment in Transource under the
equity method.
Evergy Kansas Central also owns a 50% interest in Prairie Wind Transmission, LLC (Prairie Wind), which is a joint
venture between Evergy Kansas Central and subsidiaries of AEP and Berkshire Hathaway Energy Company. Prairie
Wind owns a 108-mile, 345 kV double-circuit transmission line that provides transmission service in the Southwest
Power Pool, Inc. (SPP). Evergy Kansas Central accounts for its investment in Prairie Wind under the equity
method.
Since the rebranding in September 2019, Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy
Missouri West have been conducting business in their respective service territories using the name Evergy.
Collectively, the Evergy Companies have approximately 14,700 MWs of owned generating capacity and renewable
purchased power agreements and engage in the generation, transmission, distribution and sale of electricity to
approximately 1.6 million customers in the states of Kansas and Missouri.
Evergy was incorporated in 2017 as Monarch Energy Holding, Inc. (Monarch Energy), a wholly-owned subsidiary
of Great Plains Energy Incorporated (Great Plains Energy). Prior to the closing of the merger transactions, Monarch
Energy changed its name to Evergy and did not conduct any business activities other than those required for its
77
formation and matters contemplated by the Amended and Restated Agreement and Plan of Merger, dated as of July
9, 2017, by and among Great Plains Energy, Evergy Kansas Central, Monarch Energy and King Energy, Inc. (King
Energy), a wholly-owned subsidiary of Monarch Energy (Amended Merger Agreement). On June 4, 2018, in
accordance with the Amended Merger Agreement, Great Plains Energy merged into Evergy, with Evergy surviving
the merger and King Energy merged into Evergy Kansas Central, with Evergy Kansas Central surviving the merger.
These merger transactions resulted in Evergy becoming the parent entity of Evergy Kansas Central and the direct
subsidiaries of Great Plains Energy, including Evergy Metro and Evergy Missouri West. See Note 2 for additional
information regarding the merger.
Principles of Consolidation
Evergy Kansas Central was determined to be the accounting acquirer in the merger and thus, the predecessor of
Evergy. Therefore, Evergy's consolidated financial statements reflect the results of operations of Evergy Kansas
Central for 2017. Evergy had separate operations for the period beginning with the quarter ended June 30, 2018,
and references to amounts for periods after the closing of the merger relate to Evergy. The results of Great Plains
Energy's direct subsidiaries have been included in Evergy's results of operations from the date of the closing of the
merger and thereafter.
Evergy Metro elected not to apply "push-down accounting" related to the merger, whereby the adjustments of assets
and liabilities to fair value and the resulting goodwill would be recorded on the financial statements of the acquired
subsidiary. These adjustments for Evergy Metro, as well as those related to the acquired assets and liabilities of
Great Plains Energy and its other direct subsidiaries, are only reflected on Evergy's consolidated financial
statements.
Each of Evergy's, Evergy Kansas Central's and Evergy Metro's consolidated financial statements includes the
accounts of their subsidiaries and variable interest entities (VIEs) of which they are the primary beneficiary.
Undivided interests in jointly-owned generation facilities are included on a proportionate basis. Intercompany
transactions have been eliminated. The Evergy Companies assess financial performance and allocate resources on a
consolidated basis (i.e., operate in one segment).
Use of Estimates
The process of preparing financial statements in conformity with generally accepted accounting principles (GAAP)
requires the use of estimates and assumptions that affect the reported amounts of certain types of assets, liabilities,
revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the
financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.
Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments with original maturities of three months or less at acquisition.
78
Fuel Inventory and Supplies
The Evergy Companies record fuel inventory and supplies at average cost. The following table separately states the
balances for fuel inventory and supplies.
Evergy
Fuel inventory
Supplies
Fuel inventory and supplies
Evergy Kansas Central
Fuel inventory
Supplies
Fuel inventory and supplies
Evergy Metro
Fuel inventory
Supplies
Fuel inventory and supplies
December 31
2019
2018
(millions)
146.4
335.2
481.6
80.2
186.2
266.4
46.1
116.9
163.0
$
$
$
$
$
$
168.9
342.1
511.0
87.8
189.0
276.8
57.8
119.8
177.6
$
$
$
$
$
$
Property, Plant and Equipment
The Evergy Companies record the value of property, plant and equipment, including that of VIEs, at cost. For plant,
cost includes contracted services, direct labor and materials, indirect charges for engineering and supervision and an
allowance for funds used during construction (AFUDC). AFUDC represents the allowed cost of capital used to
finance utility construction activity. AFUDC equity funds are included as a non-cash item in other income and
AFUDC borrowed funds are a reduction of interest expense. AFUDC is computed by applying a composite rate to
qualified construction work in progress. The rates used to compute gross AFUDC are compounded semi-annually.
The amounts of the Evergy Companies' AFUDC for borrowed and equity funds are detailed in the following table.
Evergy
AFUDC borrowed funds
AFUDC equity funds
Total
Evergy Kansas Central
AFUDC borrowed funds
AFUDC equity funds
Total
Evergy Metro(a)
AFUDC borrowed funds
AFUDC equity funds
Total
2019
2018
(millions)
2017
$
$
$
$
$
$
14.5
2.2
16.7
7.5
—
7.5
4.3
2.2
6.5
$
$
$
$
$
$
10.4
3.1
13.5
6.6
2.9
9.5
4.9
1.4
6.3
$
$
$
$
$
$
5.6
2.0
7.6
5.6
2.0
7.6
6.1
6.0
12.1
(a) Evergy Metro amounts are included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
The average rates used in the calculation of AFUDC are detailed in the following table.
Evergy Kansas Central
Evergy Metro
Evergy Missouri West
2019
3.0%
4.6%
3.7%
2018
3.3%
3.9%
2.9%
2017
2.3%
4.9%
1.9%
79
When property units are retired or otherwise disposed, the original cost, net of salvage, is charged to accumulated
depreciation. Repair of property and replacement of items not considered to be units of property are expensed as
incurred, except for planned refueling and maintenance outages at Wolf Creek Generating Station (Wolf Creek). As
authorized by regulators, the incremental maintenance cost incurred for such outages is deferred and amortized to
expense ratably over the period between planned outages.
Depreciation and Amortization
Depreciation and amortization of utility plant other than nuclear fuel is computed using the straight-line method
over the estimated lives of depreciable property based on rates approved by state regulatory authorities. Annual
depreciation rates average approximately 3%. See Note 8 for more details. Nuclear fuel is amortized to fuel
expense based on the quantity of heat produced during the generation of electricity.
The depreciable lives of Evergy's, Evergy Kansas Central's and Evergy Metro's property, plant and equipment are
detailed in the following table.
Evergy
Evergy Kansas Central
Evergy Metro
Generating facilities
Transmission facilities
Distribution facilities
Other
8
15
8
5
to
to
to
to
87
94
73
84
(years)
to
to
to
to
87
94
73
84
8
36
19
7
20
15
8
5
to
to
to
to
60
70
55
50
Plant to be Retired, Net
When the Evergy Companies retire utility plant, the original cost, net of salvage, is charged to accumulated
depreciation. However, when it becomes probable an asset will be retired significantly in advance of its original
expected useful life and in the near term, the cost of the asset and related accumulated depreciation is recognized as
a separate asset and a probable abandonment. If the asset is still in service, the net amount is classified as plant to
be retired, net on the consolidated balance sheets. If the asset is no longer in service, the net amount is classified as
a regulatory asset on the consolidated balance sheets.
The Evergy Companies must also assess the probability of full recovery of the remaining net book value of the
abandonment. The net book value that may be retained as an asset on the balance sheet for the abandonment is
dependent upon amounts that may be recovered through regulated rates, including any return. An impairment
charge, if any, would equal the difference between the remaining net book value of the asset and the present value of
the future revenues expected from the asset.
Evergy Missouri West has determined that its November 2018 retirement of Sibley No. 3 Unit meets the criteria to
be considered an abandonment. As of December 31, 2019, Evergy has classified the remaining Sibley No. 3 Unit
net book value of $130.5 million as retired generation facilities within regulatory assets on its consolidated balance
sheet. This regulatory asset is reduced by approximately $9 million of annual amortization expense which is an
amount equal to the annual depreciation expense for the asset reflected in retail rates.
In October 2019, the Missouri Public Service Commission (MPSC) granted the request of certain intervenors for an
Accounting Authority Order (AAO) that requires Evergy Missouri West to record a regulatory liability for all
revenues collected from customers for return on investment, non-fuel operations and maintenance costs, taxes
including accumulated deferred income taxes and all other costs associated with Sibley Station following the
station's retirement in November 2018 for consideration in Evergy Missouri West's next rate case, which is expected
to be completed no later than 2022. See Note 5 for additional information regarding the AAO.
Evergy Missouri West expects that the MPSC's decision in its next rate case regarding the AAO could impact the
valuation of its regulatory asset for retired generation facilities but as of December 31, 2019, has concluded that no
impairment is required based on the relevant facts and circumstances.
80
Nuclear Plant Decommissioning Costs
Nuclear plant decommissioning cost estimates are based on either the immediate dismantlement method or the
deferred dismantling method as determined by the State Corporation Commission of the State of Kansas (KCC) and
MPSC and include the costs of decontamination, dismantlement and site restoration. Based on these cost estimates,
Evergy Kansas Central and Evergy Metro each contribute to a tax-qualified trust fund to be used to decommission
Wolf Creek. Related liabilities for decommissioning are included on Evergy's, Evergy Kansas Central's and Evergy
Metro's consolidated balance sheets in asset retirement obligations (AROs).
As a result of the authorized regulatory treatment and related regulatory accounting, differences between the
decommissioning trust fund asset and the related ARO are recorded as a regulatory asset or liability. See Note 7 for
discussion of AROs including those associated with nuclear plant decommissioning costs.
Regulatory Accounting
Accounting standards are applied that recognize the economic effects of rate regulation. Accordingly, regulatory
assets and liabilities have been recorded when required by a regulatory order or based on regulatory precedent. See
Note 5 for additional information concerning regulatory matters.
Cash Surrender Value of Life Insurance
Amounts related to corporate-owned life insurance (COLI) are recorded on the consolidated balance sheets in other
long-terms assets and are detailed in the following table for Evergy. Substantially all of Evergy's COLI-related
balances relate to Evergy Kansas Central's COLI activity.
Evergy
Cash surrender value of policies
Borrowings against policies
Corporate-owned life insurance, net
December 31
2019
2018
$
$
(millions)
1,370.0
(1,237.1)
132.9
$
$
1,441.7
(1,306.9)
134.8
Increases in cash surrender value and death benefits are recorded in other income in the Evergy Companies'
consolidated statements of income and comprehensive income. Interest expense incurred on policy loans is offset
against the policy income. Income from death benefits is highly variable from period to period.
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of the following financial instruments
for which it was practicable to estimate that value.
Nuclear decommissioning trust fund - The Evergy Companies' nuclear decommissioning trust fund assets are
recorded at fair value based on quoted market prices of the investments held by the fund and/or valuation models.
Pension plans - For financial reporting purposes, the market value of plan assets is the fair value.
Revenue Recognition
The Evergy Companies recognize revenue on the sale of electricity to customers over time as the service is provided
in the amount they have the right to invoice. Revenues recorded include electric services provided but not yet billed
by the Evergy Companies. Unbilled revenues are recorded for kWh usage in the period following the customers'
billing cycle to the end of the month. This estimate is based on net system kWh usage less actual billed kWhs. The
Evergy Companies' estimated unbilled kWhs are allocated and priced by regulatory jurisdiction across the rate
classes based on actual billing rates. The Evergy Companies' unbilled revenue estimate is affected by factors
including fluctuations in energy demand, weather, line losses and changes in the composition of customer classes.
See Note 4 for the balance of unbilled receivables for each of Evergy, Evergy Kansas Central and Evergy Metro as
of December 31, 2019 and 2018.
81
The Evergy Companies also collect sales taxes and franchise fees from customers concurrent with revenue-
producing activities that are levied by state and local governments. These items are excluded from revenue, and
thus are not reflected on the consolidated statements of income and comprehensive income for Evergy, Evergy
Kansas Central and Evergy Metro.
See Note 3 for additional details regarding revenue recognition from sales of electricity by the Evergy Companies.
Allowance for Doubtful Accounts
The Evergy Companies determine their allowance for doubtful accounts based on the age of their receivables.
Receivables are charged off when they are deemed uncollectible, which is based on a number of factors including
specific facts surrounding an account and management's judgment.
Property Gains and Losses
Net gains and losses from the sale of assets and businesses and from asset impairments are recorded in operating
expenses.
Asset Impairments
Long-lived assets and finite-lived intangible assets subject to amortization are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum
of the undiscounted expected future cash flows from an asset to be held and used is less than the carrying value of
the asset, an asset impairment must be recognized in the financial statements. The amount of impairment
recognized is the excess of the carrying value of the asset over its fair value.
Goodwill and indefinite lived intangible assets are tested for impairment annually and when an event occurs
indicating the possibility that an impairment exists. The annual test must be performed at the same time each year.
The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount,
including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of
the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting
unit and its fair value. See Note 6 for additional details on goodwill.
Income Taxes
Income taxes are accounted for using the asset/liability approach. Deferred tax assets and liabilities are determined
based on the temporary differences between the financial reporting and tax bases of assets and liabilities, applying
enacted statutory tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets
are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some
portion of the deferred tax assets will not be realized.
The Evergy Companies recognize tax benefits based on a "more-likely-than-not" recognition threshold. In addition,
the Evergy Companies recognize interest accrued related to unrecognized tax benefits in interest expense and
penalties in operating expenses.
Evergy files a consolidated federal income tax return as well as unitary and combined income tax returns in several
state jurisdictions with Kansas and Missouri being the most significant. Income taxes for consolidated or combined
subsidiaries are allocated to the subsidiaries based on separate company computations of income or loss. Evergy
Kansas Central's and Evergy Metro's income tax provisions include taxes allocated based on their separate
company's income or loss.
The Evergy Companies have established a net regulatory liability for future refunds to be made to customers for the
over-collection of income taxes in rates. Tax credits are recognized in the year generated except for certain Evergy
Kansas Central, Evergy Metro and Evergy Missouri West investment tax credits that have been deferred and
amortized over the remaining service lives of the related properties.
82
Other Income (Expense), Net
The table below shows the detail of other expense for each of the Evergy Companies.
Evergy
Non-service cost component of net benefit cost
Other
Other expense
Evergy Kansas Central
Non-service cost component of net benefit cost
Other
Other expense
Evergy Metro(a)
Non-service cost component of net benefit cost
Other
Other expense
2019
2018
(millions)
2017
(55.6)
(21.3)
(76.9)
(20.1)
(20.0)
(40.1)
(20.9)
(0.5)
(21.4)
$
$
$
$
$
$
(47.8)
(30.9)
(78.7)
(23.5)
(23.3)
(46.8)
(25.9)
(5.0)
(30.9)
$
$
$
$
$
$
(20.0)
(19.1)
(39.1)
(20.0)
(19.1)
(39.1)
(42.7)
(8.1)
(50.8)
$
$
$
$
$
$
(a) Evergy Metro amounts are only included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
Earnings Per Share
To compute basic earnings per share (EPS), Evergy divides net income attributable to Evergy, Inc. by the weighted
average number of common shares outstanding. Diluted EPS includes the effect of issuable common shares
resulting from restricted share units (RSUs), performance shares and restricted stock. Evergy computes the dilutive
effects of potential issuances of common shares using the treasury stock method.
The following table reconciles Evergy's basic and diluted EPS.
Income
Net income
Less: Net income attributable to noncontrolling interests
Net income attributable to Evergy, Inc.
Common Shares Outstanding
Weighted average number of common shares outstanding - basic
Add: effect of dilutive securities
Diluted average number of common shares outstanding
Basic EPS
Diluted EPS
$
$
$
$
2019
2018
2017
$
(millions, except per share amounts)
685.6
15.7
669.9
546.0
10.2
535.8
$
$
$
239.5
0.4
239.9
2.80
2.79
$
$
213.9
0.2
214.1
2.50
2.50
$
$
336.5
12.6
323.9
142.5
0.1
142.6
2.27
2.27
Anti-dilutive shares excluded from the computation of diluted EPS for 2019 were 785 RSUs. There were no anti-
dilutive securities excluded from the computation of diluted EPS for 2018 and 2017.
83
Supplemental Cash Flow Information
Year Ended December 31
Evergy
Cash paid for (received from):
2019
2018
(millions)
2017
Interest on financing activities, net of amount capitalized
$
329.5
$
255.9
$
Interest on financing activities of VIEs
Income taxes, net of refunds
Non-cash investing transactions:
Property, plant and equipment additions (reductions)
Deconsolidation of property, plant and equipment of VIE
Non-cash financing transactions:
Issuance of stock for compensation and reinvested dividends
Deconsolidation of VIE
Year Ended December 31
Evergy Kansas Central
Cash paid for (received from):
Interest on financing activities of VIEs
Income taxes, net of refunds
Non-cash investing transactions:
Property, plant and equipment additions (reductions)
Deconsolidation of property, plant and equipment of VIE
Non-cash financing transactions:
Issuance of stock for compensation and reinvested dividends
Deconsolidation of VIE
Year Ended December 31
Evergy Metro(a)
Cash paid for (received from):
2019
2018
(millions)
2017
1.6
(5.2)
186.0
—
(0.3)
—
2.3
(0.9)
(7.8)
—
0.5
—
1.6
29.9
92.1
—
—
—
2.3
37.5
(32.5)
—
—
—
153.9
3.1
(12.7)
158.8
(72.9)
5.1
(83.1)
153.9
3.1
(12.7)
158.8
(72.9)
5.1
(83.1)
2019
2018
(millions)
2017
Interest on financing activities, net of amount capitalized
$
143.0
$
155.3
$
Interest on financing activities, net of amount capitalized
$
118.4
$
129.4
$
Income taxes, net of refunds
Non-cash investing transactions:
Property, plant and equipment additions
77.0
80.7
31.2
19.2
128.0
38.8
36.6
(a) Evergy Metro amounts are included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
See Note 2 for the non-cash information related to the merger transaction, including the fair value of Great Plains
Energy's assets acquired and liabilities assumed and the issuance of Evergy common stock.
Dividends Declared
In February 2020, Evergy's Board of Directors (Evergy Board) declared a quarterly dividend of $0.505 per share on
Evergy's common stock. The common dividend is payable March 20, 2020, to shareholders of record as of March
9, 2020.
In February 2020, Evergy Kansas Central's and Evergy Metro's Boards of Directors each declared cash dividends
payable to Evergy of $60.0 million, payable on March 19, 2020.
84
Recently Adopted Accounting Standards
Leases
In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires an entity that is a lessee to record a
right-of-use asset and a lease liability for lease payments on the balance sheet for all leases with terms longer than
12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of
expense recognition in the income statement. Lessor accounting remains largely unchanged. In January 2018, the
FASB issued ASU No. 2018-01, Leases: Land Easement Practical Expedient for Transition to Topic 842, which
permits entities to elect an optional transition practical expedient to not evaluate under Topic 842 land easements
that exist or expired before the entity's adoption of Topic 842 and that were not previously accounted for as leases
under Topic 840. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842,
Leases, which updates narrow aspects of the guidance issued in ASU No. 2016-02. Also in July 2018, the FASB
issued ASU No. 2018-11, Leases: Targeted Improvements, which provides an optional transition method that allows
entities to initially apply Topic 842 at the adoption date and recognize a cumulative-effect adjustment to the opening
balance of retained earnings in the period of adoption without restating prior periods. In December 2018, the FASB
issued ASU No. 2018-20, Leases: Narrow-Scope Improvements for Lessors, which is expected to reduce a lessor's
implementation and ongoing costs associated with applying ASU No. 2016-02. In March 2019, the FASB issued
ASU No. 2019-01, Leases: Codification Improvements, which clarifies certain lessor accounting and interim
reporting requirements. ASU No. 2016-02 and the subsequent amendments are effective for interim and annual
periods beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective
transition approach with an option to either adjust or not adjust comparative periods.
The Evergy Companies adopted the new guidance on January 1, 2019, without adjusting comparative periods for all
leases existing as of January 1, 2019, by electing the optional transition method permitted by ASU No. 2018-11. As
a result, Evergy, Evergy Kansas Central and Evergy Metro recorded an increase to assets and liabilities of
approximately $110 million, $40 million and $80 million, respectively, as of January 1, 2019. Evergy Kansas
Central and Evergy Metro have certain lease transactions between them for which the related assets and liabilities
are eliminated at consolidated Evergy. The adoption of Topic 842 did not have a material impact on the Evergy
Companies consolidated statements of income and comprehensive income and there was no cumulative-effect
adjustment recorded to the opening balance of retained earnings. The Evergy Companies also elected a practical
expedient to forgo reassessing existing or expired contracts as leases to determine whether each is in scope of Topic
842 and to forgo reassessing lease classification for existing and expired leases.
Revenue Recognition
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity
to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services
to customers. The ASU replaced most existing revenue recognition guidance in GAAP when it became effective.
The Evergy Companies adopted ASU No. 2014-09 and its related amendments (Accounting Standards Codification
(ASC) 606) on January 1, 2018, using the modified retrospective transition method for all contracts not completed
as of the date of adoption. Results for reporting periods beginning after January 1, 2018, are presented under ASC
606 while historical periods have not been adjusted and continue to be reported in accordance with the legacy
guidance in ASC 605 - Revenue Recognition. There was no cumulative effect adjustment to the opening balance of
retained earnings in 2018 for the Evergy Companies as a result of the adoption of the new guidance.
2. MERGER OF GREAT PLAINS ENERGY AND EVERGY KANSAS CENTRAL
Description of Merger Transaction
On June 4, 2018, Evergy completed the mergers contemplated by the Amended Merger Agreement. As a result of
the mergers, Great Plains Energy merged into Evergy, with Evergy surviving the merger and King Energy merged
into Evergy Kansas Central, with Evergy Kansas Central surviving the merger. Following the completion of these
mergers, Evergy Kansas Central and the direct subsidiaries of Great Plains Energy, including Evergy Metro and
Evergy Missouri West, became wholly-owned subsidiaries of Evergy.
The merger was structured as a merger of equals in a tax-free exchange of shares that involved no premium paid or
received with respect to either Great Plains Energy or Evergy Kansas Central. As a result of the closing of the
85
merger transaction, each outstanding share of Great Plains Energy common stock was converted into 0.5981 shares
of Evergy common stock and each outstanding share of Evergy Kansas Central common stock was converted into 1
share of Evergy common stock.
As provided in the Amended Merger Agreement, substantially all of Evergy Kansas Central's outstanding equity
compensation awards vested and were converted into a right to receive Evergy common stock and all of Great
Plains Energy's outstanding equity compensation awards were converted into equivalent Evergy awards subject to
the same terms and conditions at the Great Plains Energy merger exchange ratio of 0.5981.
Merger Related Regulatory Matters
KCC
In May 2018, the KCC approved Great Plains Energy's, Evergy Metro's and Evergy Kansas Central's joint
application for approval of the merger, including a settlement agreement that had been reached between Great
Plains Energy, Evergy Metro, Evergy Kansas Central, KCC staff and certain other intervenors in the case. Through
the joint application and settlement agreement, Great Plains Energy, Evergy Metro and Evergy Kansas Central
agreed to the conditions and obligations listed below, in addition to other organizational, financing, customer
service and civic responsibility commitments.
• Provide a total of $30.6 million of one-time bill credits to Kansas electric retail customers as soon as
practicable following the close of the merger and the completion of Evergy Kansas Central's and Evergy
Metro's current rate cases in Kansas. Of this total, $23.1 million of the credits relate to Evergy Kansas
Central's customers and the remaining $7.5 million of credits relate to Evergy Metro's Kansas customers.
• Provide a total of approximately $46 million in additional bill credits consisting of $11.5 million in annual
bill credits to Kansas electric retail customers from 2019 through 2022. Of the annual amount, $8.7 million
of the credits relate to Evergy Kansas Central's customers and the remaining $2.8 million of credits relate to
Evergy Metro's Kansas customers.
• Provide for the inclusion of a total of $30.0 million of merger-related savings in Evergy Kansas Central's
and Evergy Metro's current rate cases in Kansas. Of this total, $22.5 million of the savings are attributable
to Evergy Kansas Central with the remaining $7.5 million of savings attributable to Evergy Metro's Kansas
jurisdiction.
• A five-year base rate moratorium for Evergy Kansas Central and Evergy Metro in Kansas that commenced
following the conclusion of Evergy Metro's Kansas rate case in December 2018. The moratorium is subject
to certain conditions and does not include Evergy Kansas Central's or Evergy Metro's fuel recovery
mechanisms and certain other cost recovery mechanisms in Kansas.
• Require both Evergy Kansas Central and Evergy Metro to file rate cases in Kansas in a fashion that would
allow for updated electric utility rates to become effective upon the end of the five-year rate moratorium in
December 2023.
• Participate in an Earnings Review and Sharing Plan for the years 2019 through 2022, which may result in
Evergy Kansas Central and/or Evergy Metro being subject to refunding 50% of earned return on equity in
excess of authorized return on equity to their Kansas customers.
• Maintain charitable contributions and community involvement in the Kansas service territories of Evergy
Kansas Central and Evergy Metro at levels equal to or greater than their respective 2015 levels for 5 years
following the closing of the merger.
• Commit that Evergy Kansas Central's and Evergy Metro's retail electric base rates will not increase as a
result of the merger.
• Allow Evergy Kansas Central and Evergy Metro to recover a total of $30.9 million of merger transition
costs consisting of $23.2 million for Evergy Kansas Central and $7.7 million for Evergy Metro's Kansas
jurisdiction. Evergy Kansas Central and Evergy Metro have recorded these amounts as regulatory assets
and they are being recovered over a ten-year period.
86
MPSC
In May 2018, the MPSC approved Great Plains Energy's, Evergy Metro's, Evergy Missouri West's and Evergy
Kansas Central's joint application for approval of the merger, including two stipulations and agreements between
these companies, MPSC staff and certain other intervenors in the case. Through the joint application and
stipulations and agreements, Great Plains Energy, Evergy Metro, Evergy Missouri West and Evergy Kansas Central
agreed to the conditions and obligations listed below, in addition to other organizational, financing, customer
service and civic responsibility commitments.
• Provide a total of $29.1 million of one-time bill credits to Missouri electric retail customers within 120 days
following the close of the merger. Of this total, $14.9 million of the credits relate to Evergy Metro's
Missouri customers and the remaining $14.2 million of credits relate to Evergy Missouri West's customers.
• Commit that Evergy Metro's and Evergy Missouri West's retail electric base rates will not increase as a
result of the merger.
• Maintain charitable contributions and community involvement in the Missouri service territories of Evergy
Metro and Evergy Missouri West at levels equal to or greater than their respective 2015 levels for 5 years
following the closing of the merger.
• Provide a total of $3.0 million of support over 10 years to community agencies to promote low-income
weatherization efforts.
• Support the recovery of a total of $16.9 million of merger transition costs in Evergy Metro's and Evergy
Missouri West's 2018 rate cases, consisting of $9.7 million for Evergy Metro's Missouri jurisdiction and
$7.2 million for Evergy Missouri West. Evergy Metro and Evergy Missouri West recorded these amounts
as regulatory assets and they are being recovered over a ten-year period.
Accounting Charges and Deferrals Related to the Merger
The following pre-tax reductions of revenue, expenses and deferral were recognized following the consummation of
the merger and are included in the Evergy Companies' consolidated statements of income and comprehensive
income for 2018.
Description
One-time bill credits
Annual bill credits
Total impact to operating revenues
Income Statement Line
Item
Expected
Payment Period
Evergy
Evergy
Kansas
Central
(millions)
Evergy
Metro
Operating revenues
Operating revenues
2018 - 2019
2019 - 2022
Charitable contributions and
community support
Voluntary severance and accelerated
equity compensation
Operating and maintenance
2018 - 2027
Operating and maintenance
2018 - 2019
Other transaction and transition costs
Operating and maintenance
2018
Reallocation and deferral of merger
transition costs
Total impact to operating and
maintenance expense
Total
Operating and maintenance
n/a
(47.8)
(13.8)
(23.2)
$
$
75.8
$ (146.0) $
51.9
$
(82.9) $
(18.5)
(6.5)
Reductions of revenue related to customer bill credits and expenses related to charitable contributions and
community support were incurred as a result of conditions in the MPSC and KCC merger orders and were recorded
as liabilities in the amounts presented above following the consummation of the merger. Reductions of revenue for
87
$
$
$
(59.7) $
(10.5)
(70.2) $
(23.1) $
(7.9)
(31.0) $
(22.4)
(2.6)
(25.0)
24.7
$
— $
47.9
51.0
44.2
21.5
—
2.6
2.1
annual bill credits for Evergy Kansas Central's and Evergy Metro's Kansas electric retail customers are recognized
ratably in the twelve-month period preceding their payment.
Voluntary severance and accelerated equity compensation represent costs related to payments for voluntary
severance and change in control plans, as well as the recording of unrecognized equity compensation costs and the
incremental fair value associated with the vesting of outstanding Evergy Kansas Central equity compensation
awards.
Other transaction and transition costs include merger success fees and fees for other outside services incurred.
Reallocation and deferral of merger transition costs represents the net reallocation of incurred merger transition
costs between Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West and the subsequent deferral
of these transition costs to a regulatory asset for future recovery in accordance with the KCC and MPSC merger
orders.
Purchase Price
Based on an evaluation of the provisions of ASC 805, Business Combinations, Evergy Kansas Central was
determined to be the accounting acquirer in the merger. Pursuant to the Amended Merger Agreement, Great Plains
Energy's common stock shares were exchanged for Evergy common stock shares at the fixed exchange rate of
0.5981. The total consideration transferred in the merger is based on the closing stock price of Evergy Kansas
Central on June 4, 2018, and is calculated as follows.
Great Plains Energy common stock shares outstanding as of June 4, 2018
Great Plains Energy restricted stock awards outstanding as of June 4, 2018
Great Plains Energy shares to be converted to Evergy shares
Exchange ratio
Evergy common stock shares issued to Great Plains Energy shareholders
Closing price of Evergy Kansas Central common stock as of June 4, 2018
Fair value of Evergy shares issued to Great Plains Energy shareholders
Fair value of Great Plains Energy's equity compensation awards
Total purchase price
(millions, except share amounts)
215,800,074
(204,825)
215,595,249
0.5981
128,947,518
54.00
6,963.2
12.5
6,975.7
$
$
$
Great Plains Energy's equity compensation awards, including performance shares and restricted stock, were
replaced by equivalent Evergy equity compensation awards subject to substantially the same terms and conditions
upon the closing of the merger. In accordance with the accounting guidance in ASC 805, a portion of the fair value
of these awards is attributable to the purchase price as it represents consideration transferred in the merger.
Purchase Price Allocation
The fair value of Great Plains Energy's assets acquired and liabilities assumed as of June 4, 2018, was determined
based on significant estimates and assumptions that are judgmental in nature. Third-party valuation specialists were
engaged to assist in the valuation of these assets and liabilities.
The significant assets and liabilities recorded at fair values as of the merger date include long-term debt, asset
retirement obligations, pension and post-retirement plans, accumulated deferred income tax liabilities and certain
other long-term assets and liabilities.
The majority of Great Plains Energy's operations were subject to the rate-setting authority of the MPSC, the KCC
and the Federal Energy Regulatory Commission (FERC) and were accounted for pursuant to GAAP, including the
accounting guidance for regulated operations. The rate-setting and cost recovery provisions for Great Plains
Energy's regulated operations provided revenue derived from costs including a return on investment of assets and
liabilities included in rate base. Except for the significant assets and liabilities for which valuation adjustments
88
were made as discussed above, the fair values of Great Plains Energy's tangible and intangible assets and liabilities
subject to these rate-setting provisions approximated their carrying values and the assets and liabilities did not
reflect any adjustments to these amounts other than for amounts not included in rate base. The difference between
the fair value and pre-merger carrying amounts for Great Plains Energy's long-term debt, asset retirement
obligations and pension and post-retirement plans that were related to regulated operations were recorded as a
regulatory asset or liability. The excess of the purchase price over the estimated fair values of the assets acquired
and liabilities assumed were recognized as goodwill as of the merger date.
The final purchase price allocation to Great Plains Energy's assets and liabilities as of June 4, 2018, is detailed in
the following table.
Current assets
Property, plant and equipment, net
Goodwill
Other long-term assets, excluding goodwill
Total assets
Current liabilities
Long-term liabilities, excluding long-term debt
Long-term debt, net
Total liabilities
Total purchase price
(millions)
2,151.7
9,179.7
2,336.6
1,235.9
14,903.9
1,673.9
2,895.7
3,358.6
7,928.2
6,975.7
$
$
$
$
The purchase price allocation in the table above reflects refinements made to the preliminary fair values of long-
term liabilities, excluding long-term debt included in the Evergy Companies' combined 2018 annual report on Form
10-K. These refinements include adjustments associated with deferred income taxes that resulted in a decrease to
goodwill of $2.3 million.
Impact of Merger
The impact of Great Plains Energy's subsidiaries on Evergy's revenues in the consolidated statement of
comprehensive income for 2018 was an increase of $1,661.1 million. The impact of Great Plains Energy's
subsidiaries on Evergy's net income attributable to Evergy in the consolidated statement of comprehensive income
for 2018 was an increase of $236.2 million.
Evergy has incurred total merger-related costs, including reductions of revenue for customer bill credits, of $148.0
million for 2018 and $11.9 million for 2017.
89
Pro Forma Financial Information
The following unaudited pro forma financial information reflects the consolidated results of operations of Evergy as
if the merger transactions had taken place on January 1, 2017. The unaudited pro forma information was calculated
after applying Evergy's accounting policies and adjusting Great Plains Energy's results to reflect purchase
accounting adjustments.
The unaudited pro forma financial information has been presented for illustrative purposes only and is not
necessarily indicative of the consolidated results of operations that would have been achieved or the future
consolidated results of operations of Evergy.
Operating revenues
Net income attributable to Evergy, Inc.
Basic earnings per common share
Diluted earnings per common share
2018
2017
(millions, except per share amounts)
$
$
$
5,334.6
714.3
2.67
2.67
$
$
$
5,279.2
468.9
1.73
1.73
Evergy, Evergy Kansas Central and Great Plains Energy incurred non-recurring costs and a gain directly related to
the merger that have been excluded in the pro forma earnings presented above. On an after-tax basis, these non-
recurring merger-related costs and gain incurred by Evergy, Evergy Kansas Central and Great Plains Energy
included:
•
•
•
•
$74.7 million and $14.8 million in 2018 and 2017, respectively, of certain after-tax merger-related transition
and transaction costs;
$44.4 million in 2018 of after-tax reductions in operating revenues related to one-time customer bill credits;
$278.0 million of after-tax financing charges in 2017 related to Great Plains Energy's previously
contemplated acquisition of Evergy Kansas Central; and
$36.6 million and $7.3 million in 2018 and 2017, respectively, of after-tax mark-to-market gains on interest
rate swaps for which cash settlement was contingent upon the consummation of the merger.
3. REVENUE
Evergy's, Evergy Kansas Central's and Evergy Metro's revenues disaggregated by customer class are summarized in
the following tables.
Evergy
Revenues
Residential
Commercial
Industrial
Other retail
Total electric retail
Wholesale
Transmission
Industrial steam and other
Total revenue from contracts with customers
Other
Operating revenues
90
2019
2018
(millions)
$
$
$
$
1,908.1
1,781.6
621.6
47.1
4,358.4
327.5
309.2
24.5
5,019.6
128.2
5,147.8
$
$
$
$
1,578.8
1,356.4
527.8
30.6
3,493.6
404.4
308.1
17.9
4,224.0
51.9
4,275.9
Evergy Kansas Central
Revenues
Residential
Commercial
Industrial
Other retail
Total electric retail
Wholesale
Transmission
Other
Total revenue from contracts with customers
Other
Operating revenues
Evergy Metro(a)
Revenues
Residential
Commercial
Industrial
Other retail
Total electric retail
Wholesale
Transmission
Other
Total revenue from contracts with customers
2019
2018
(millions)
$
793.9
709.1
401.3
21.0
846.4
702.8
396.4
20.0
1,925.3
$
1,965.6
239.9
273.3
5.8
2,444.3
63.1
2,507.4
$
$
346.1
288.9
6.0
2,606.6
8.3
2,614.9
2019
2018
(millions)
$
712.4
786.1
136.9
16.3
735.6
794.8
138.8
10.4
1,651.7
$
1,679.6
70.9
17.5
2.8
53.5
14.5
4.4
1,742.9
$
1,752.0
$
$
$
$
$
$
$
Other
Operating revenues
(a) Evergy Metro amounts are included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
1,806.5
63.6
$
$
71.1
1,823.1
Retail Revenues
The Evergy Companies' retail revenues are generated by the regulated sale of electricity to their residential,
commercial and industrial customers within their franchised service territories. The Evergy Companies recognize
revenue on the sale of electricity to their customers over time as the service is provided in the amount they have a
right to invoice. Retail customers are billed on a monthly basis at the tariff rates approved by the KCC and MPSC
based on customer kWh usage.
Revenues recorded include electric services provided but not yet billed by the Evergy Companies. Unbilled
revenues are recorded for kWh usage in the period following the customers' billing cycle to the end of the month.
This estimate is based on net system kWh usage less actual billed kWhs. The Evergy Companies' estimated
unbilled kWhs are allocated and priced by regulatory jurisdiction across the rate classes based on actual billing
rates.
The Evergy Companies also collect sales taxes and franchise fees from customers concurrent with revenue-
producing activities that are levied by state and local governments. These items are excluded from revenue, and
thus not reflected on the statements of income and comprehensive income, for Evergy, Evergy Kansas Central and
Evergy Metro. Prior to the adoption of ASC 606 on January 1, 2018, Evergy Metro recorded sales taxes and
franchise fees collected from its Missouri customers gross on Evergy Metro's statements of comprehensive income
within operating revenues and taxes other than income taxes.
91
Wholesale Revenues
The Evergy Companies' wholesale revenues are generated by the sale of wholesale power and capacity in
circumstances when the power that the Evergy Companies generate is not required for customers in their service
territory. These sales primarily occur within the SPP Integrated Marketplace. The Evergy Companies also purchase
power from the SPP Integrated Marketplace and record sale and purchase activity on a net basis in wholesale
revenue or fuel and purchased power expense. In addition, the Evergy Companies sell wholesale power and
capacity through bilateral contracts to other counterparties, such as electric cooperatives, municipalities and other
electric utilities.
For both wholesale sales to the SPP Integrated Marketplace and through bilateral contracts, the Evergy Companies
recognize revenue on the sale of wholesale electricity to their customers over time as the service is provided in the
amount they have a right to invoice.
Wholesale sales within the SPP Integrated Marketplace are billed weekly based on the fixed transaction price
determined by the market at the time of the sale and the MWh quantity purchased. Wholesale sales from bilateral
contracts are billed monthly based on the contractually determined transaction price and the kWh quantity
purchased.
Transmission Revenues
The Evergy Companies' transmission revenues are generated by the use of their transmission networks by the SPP.
To enable optimal use of the diverse generating resources in the SPP region, the Evergy Companies, as well as other
transmission owners, allow the SPP to access and operate their transmission networks. As new transmission lines
are constructed, they are included in the transmission network available to the SPP. In exchange for providing
access, the SPP pays the Evergy Companies consideration determined by formula rates approved by FERC, which
include the cost to construct and maintain the transmission lines and a return on investment. The price for access to
the Evergy Companies' transmission networks are updated annually based on projected costs. Projections are
updated to actual costs and the difference is included in subsequent year's prices.
The Evergy Companies have different treatment for their legacy transmission facilities within the SPP, which results
in different levels of transmission revenue being received from the SPP. Evergy Kansas Central's transmission
revenues from SPP include amounts that Evergy Kansas Central pays to the SPP on behalf of its retail electric
customers for the use of Evergy Kansas Central's legacy transmission facilities. These transmission revenues are
mostly offset by SPP network transmission cost expense that Evergy Kansas Central pays on behalf of its retail
customers. Evergy Metro and Evergy Missouri West do not pay the SPP for their retail customers’ use of the
Evergy Metro and Evergy Missouri West legacy transmission facilities and correspondingly, their transmission
revenues also do not reflect the associated transmission revenue from the SPP.
The Evergy Companies recognize revenue on the sale of transmission service to their customers over time as the
service is provided in the amount they have a right to invoice. Transmission service to the SPP is billed monthly
based on a fixed transaction price determined by FERC formula transmission rates along with other SPP-specific
charges and the MW quantity purchased.
Industrial Steam and Other Revenues
Evergy's industrial steam and other revenues are primarily generated by the regulated sale of industrial steam to
Evergy Missouri West's steam customers. Evergy recognizes revenue on the sale of industrial steam to its
customers over time as the service is provided in the amount that it has the right to invoice. Steam customers are
billed on a monthly basis at the tariff rate approved by the MPSC based on customer MMBtu usage.
Optional Exemption
Evergy, Evergy Kansas Central and Evergy Metro do not disclose the value of unsatisfied performance obligations
on certain bilateral wholesale contracts with an original expected duration of greater than one year for which they
recognize revenue in the amount they have the right to invoice.
92
4. RECEIVABLES
The Evergy Companies' receivables are detailed in the following table.
December 31
2019
2018
Evergy
Customer accounts receivable - billed
Customer accounts receivable - unbilled
Other receivables
Allowance for doubtful accounts
Total
Evergy Kansas Central
Customer accounts receivable - billed
Customer accounts receivable - unbilled
Other receivables
Allowance for doubtful accounts
Total
Evergy Metro
Customer accounts receivable - billed
Customer accounts receivable - unbilled
Other receivables
Allowance for doubtful accounts
Total
$
$
$
$
$
$
(millions)
$
7.2
104.0
127.8
(10.5)
228.5
—
49.7
94.5
(3.8)
140.4
3.1
26.5
23.1
(4.6)
48.1
$
$
$
$
$
16.7
91.2
95.0
(9.2)
193.7
—
16.6
71.6
(3.9)
84.3
7.8
42.9
15.8
(3.8)
62.7
Evergy's, Evergy Kansas Central's and Evergy Metro's other receivables at December 31, 2019 and 2018, consisted
primarily of receivables from partners in jointly-owned electric utility plants, wholesale sales receivables and
certain receivables related to alternative revenue programs. As of December 31, 2019, other receivables for Evergy,
Evergy Kansas Central and Evergy Metro included receivables from contracts with customers of $42.0 million,
$37.7 million and $1.2 million, respectively. As of December 31, 2018, other receivables for Evergy, Evergy
Kansas Central and Evergy Metro included receivables from contracts with customers of $65.8 million, $55.9
million and $5.5 million, respectively.
The Evergy Companies recorded bad debt expense related to contracts with customers as summarized in the
following table.
2019
2018
(millions)
2017
Evergy
$
27.3
$
20.2
$
Evergy Kansas Central
Evergy Metro (a)
(a) Evergy Metro amounts are included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
13.1
13.7
7.3
8.5
10.3
10.3
7.6
Sale of Accounts Receivable
Evergy Kansas Central, Evergy Metro and Evergy Missouri West sell an undivided percentage ownership interest in
their retail electric accounts receivable to independent outside investors. These sales of the undivided percentage
ownership interests in accounts receivable to independent outside investors are accounted for as secured borrowings
with accounts receivable pledged as collateral and a corresponding short-term collateralized note payable
recognized on the balance sheets. At December 31, 2019 and 2018, Evergy's accounts receivable pledged as
collateral and the corresponding short-term collateralized note payable were $339.0 million and $365.0 million,
respectively. At December 31, 2019 and 2018, Evergy Kansas Central's accounts receivable pledged as collateral
and the corresponding short-term collateralized note payable were $171.0 million and $185.0 million, respectively.
93
At December 31, 2019 and 2018, Evergy Metro's accounts receivable pledged as collateral and the corresponding
short-term collateralized note payable were $118.0 million and $130.0 million, respectively.
Each receivable sale facility expires in September 2020. Evergy Kansas Central's facility allows for $185.0 million
in aggregate outstanding principal amount of borrowings from mid-October through mid-June and then $200.0
million from mid-June through the expiration date of the facility. Evergy Metro's facility allows for $130.0 million
in aggregate outstanding principal amount of borrowings at any time. Evergy Missouri West's facility allows for
$50.0 million in aggregate outstanding principal amount of borrowings from mid-November through mid-June and
then $65.0 million from mid-June through the expiration date of the facility.
5. RATE MATTERS AND REGULATION
KCC Proceedings
Evergy Kansas Central 2019 Transmission Delivery Charge (TDC)
In March 2019, the KCC issued an order adjusting Evergy Kansas Central's retail prices to include updated
transmission costs as reflected in the FERC transmission formula rate (TFR). The new prices were effective in
April 2019 and are expected to decrease Evergy Kansas Central's annual retail revenues by $7.7 million.
Evergy Metro 2019 TDC
In April 2019, the KCC issued an order adjusting Evergy Metro's retail prices to include updated transmission costs
as reflected in the FERC TFR. The new prices were effective in May 2019 and are expected to decrease Evergy
Metro's annual retail revenues by $8.3 million.
Evergy Kansas Central Fuel Recovery Mechanism Recovery of 8% of Jeffrey Energy Center (JEC)
As part of the non-unanimous stipulation and agreement approved by the KCC in September 2018 in Evergy
Kansas Central's 2018 rate case, it was agreed that in the event that Evergy Kansas Central purchased the 8%
ownership interest in JEC that it had historically leased from a trust it would be entitled to file a request with the
KCC to recover operating and maintenance and capital costs associated with the 8% ownership through its fuel
recovery mechanism as these amounts were not reflected in Evergy Kansas Central's rates established as part of the
2018 rate case.
In the first quarter of 2019, Evergy Kansas Central entered into an agreement with the trust to extend its lease of the
8% interest in JEC from the previous expiration date of January 2019 to August 2019 and to then purchase the 8%
ownership interest from the trust at the time the lease expired. Pursuant to the agreement, Evergy Kansas Central's
purchase of the 8% ownership interest of JEC closed in August 2019.
In March 2019, Evergy Kansas Central filed an application with the KCC to request recovery through its fuel
recovery mechanism of deferred lease expense and operating and maintenance expense incurred during the lease
extension and future operating and maintenance expense subsequent to the purchase of the 8% ownership interest in
JEC. In September 2019, the KCC issued an order finding that the lease extension and subsequent purchase of the
8% ownership interest by Evergy Kansas Central were not prudent and disallowed the recovery from retail
customers of all associated capital and operating costs that were incurred during the lease extension and will be
incurred in the future. The KCC order also provided that Evergy Kansas Central be allowed to retain any wholesale
electricity sales associated with the 8% ownership interest of JEC.
As a result of the KCC order in September 2019, Evergy and Evergy Kansas Central recorded an $8.4 million pre-
tax loss to operating and maintenance expense in their consolidated statements of income and comprehensive
income in 2019 associated with the write-off of a regulatory asset for the deferred lease expense and other operating
expenses.
Evergy Kansas Central and Evergy Metro Earnings Review and Sharing Plan (ERSP)
As part of their merger settlement agreement with the KCC, Evergy Kansas Central and Evergy Metro agreed to
participate in an ERSP for the years 2019 through 2022. Under the ERSP, Evergy Kansas Central's and Evergy
Metro's Kansas jurisdiction are required to refund to customers 50% of annual earnings in excess of their authorized
94
return on equity of 9.3% to the extent the excess earnings exceed the amount of Evergy Kansas Central's and
Evergy Metro's annual merger bill credits for the year being measured.
As of December 31, 2019, Evergy Kansas Central and Evergy Metro estimate their 2019 annual earnings will not
result in a significant refund obligation. Evergy Kansas Central and Evergy Metro expect to file their 2019 earnings
calculations with the KCC in March 2020. The final refund obligation, if any, will be decided by the KCC and
could vary from the current estimate.
MPSC Proceedings
Evergy Missouri West Other Proceedings
In December 2018, the Office of the Public Counsel (OPC) and the Midwest Energy Consumers Group (MECG)
filed a petition with the MPSC requesting an AAO that would require Evergy Missouri West to record a regulatory
liability for all revenues collected from customers for return on investment, non-fuel operations and maintenance
costs, taxes including accumulated deferred income taxes, and all other costs associated with Sibley Station
following the station’s retirement in November 2018.
In October 2019, the MPSC granted OPC's and MECG's request for an AAO and required Evergy Missouri West to
record to a regulatory liability the revenues discussed above for consideration in Evergy Missouri West's next rate
case, which is expected to be completed no later than 2022. Depending on the MPSC's decision in this next rate
case, Evergy Missouri West could be required to refund to customers all or a portion of amounts collected in
revenue for Sibley Station since December 2018 or, alternatively, could be required to make no refunds.
As a result of the MPSC order, Evergy has recorded a regulatory liability of $10.2 million as of December 31, 2019
for the estimated amount of revenues that Evergy Missouri West has collected from customers for Sibley Station
since December 2018 that Evergy has determined is probable of refund. Evergy expects that it will continue to
defer such amounts as collected from customers until new rates become effective in Evergy Missouri West's next
rate case.
The accrual for this estimated amount does not include certain revenues collected related to Sibley Station that
Evergy has determined to not be probable of refund in the next rate case based on the relevant facts and
circumstances. While Evergy has determined these additional revenues to not be probable of refund, the ultimate
resolution of this matter in Evergy Missouri West's next rate case is uncertain and could result in an estimated loss
of up to approximately $12 million in excess of the amount accrued per year until Evergy Missouri West's new rates
become effective. Evergy's regulatory liability for probable refunds as of December 31, 2019 and estimated loss in
excess of the amount accrued represent estimates that could change significantly based on ongoing developments
including as a result of an appeal of the MPSC order, decisions in other regulatory proceedings that establish
precedent applicable to this matter and positions of parties on this issue in a future Evergy Missouri West rate case.
FERC Proceedings
In October of each year, Evergy Kansas Central and Evergy Metro post an updated TFR that includes projected
transmission capital expenditures and operating costs for the following year. This rate is the most material and
significant component in the retail rate calculation for Evergy Kansas Central's and Evergy Metro's annual request
with the KCC to adjust retail prices to include updated transmission costs through the TDC.
Evergy Kansas Central TFR
In the most recent three years, the updated TFR was expected to adjust Evergy Kansas Central's annual transmission
revenues by approximately:
•
•
•
$6.8 million increase effective in January 2020;
$11.2 million decrease effective in January 2019; and
$2.3 million increase effective in January 2018.
95
Evergy Metro TFR
In the most recent three years, the updated TFR was expected to adjust Evergy Metro's annual transmission
revenues by approximately:
•
•
•
$1.7 million decrease effective in January 2020;
$2.8 million decrease effective in January 2019; and
$3.7 million increase effective in January 2018.
Regulatory Assets and Liabilities
The Evergy Companies have recorded assets and liabilities on their consolidated balance sheets resulting from the
effects of the ratemaking process, which would not otherwise be recorded if they were not regulated. Regulatory
assets represent incurred costs that are probable of recovery from future revenues. Regulatory liabilities represent
future reductions in revenues or refunds to customers.
Management regularly assesses whether regulatory assets and liabilities are probable of future recovery or refund by
considering factors such as decisions by the MPSC, KCC or FERC in Evergy Kansas Central's, Evergy Metro's and
Evergy Missouri West's rate case filings; decisions in other regulatory proceedings, including decisions related to
other companies that establish precedent on matters applicable to the Evergy Companies; and changes in laws and
regulations. If recovery or refund of regulatory assets or liabilities is not approved by regulators or is no longer
deemed probable, these regulatory assets or liabilities are recognized in the current period results of operations. The
Evergy Companies continued ability to meet the criteria for recording regulatory assets and liabilities may be
affected in the future by restructuring and deregulation in the electric industry or changes in accounting rules. In the
event that the criteria no longer applied to any or all of the Evergy Companies' operations, the related regulatory
assets and liabilities would be written off unless an appropriate regulatory recovery mechanism were provided.
Additionally, these factors could result in an impairment on utility plant assets.
96
The Evergy Companies' regulatory assets and liabilities are detailed in the following tables.
2019
Evergy
Kansas
Central
Evergy
December 31
Evergy
Metro
Evergy
(millions)
Regulatory Assets
Pension and post-retirement costs
$
Debt reacquisition costs
Debt fair value adjustment
Asset retirement obligations fair value
adjustment
Depreciation
Cost of removal
Asset retirement obligations
Analog meter unrecovered investment
Treasury yield hedges
Iatan No. 1 and common facilities
Iatan No. 2 construction accounting costs
Kansas property tax surcharge
Disallowed plant costs
La Cygne environmental costs
Deferred customer programs
Fuel recovery mechanisms
Solar rebates
Transmission delivery charge
Wolf Creek outage
Pension and other post-retirement benefit
non-service costs
Retired generation facilities
Merger transition costs
Other regulatory assets
Total
Less: current portion
795.9
105.8
112.0
114.3
55.3
129.3
167.1
29.9
22.6
7.1
26.1
21.7
14.8
13.7
18.0
34.7
39.8
—
31.0
31.8
130.5
42.3
28.5
1,972.2
(231.7)
$
359.9
$
330.7
$
97.3
—
—
55.3
94.4
52.8
29.9
22.6
—
—
18.7
14.8
11.2
6.2
—
—
—
15.5
7.4
—
20.3
17.4
7.5
—
—
—
34.9
79.4
—
—
2.8
13.1
3.0
—
2.5
8.3
16.6
9.0
—
15.5
15.6
—
15.6
5.3
808.2
113.5
134.5
111.4
58.0
102.4
171.9
35.6
23.7
7.4
26.8
33.1
15.0
14.8
19.9
91.2
45.2
0.8
21.8
13.6
159.9
47.0
6.1
2018
Evergy
Kansas
Central
$
343.7
104.1
—
—
58.0
65.7
49.5
35.6
23.7
—
—
23.7
15.0
12.2
7.0
7.1
—
—
10.9
5.2
—
22.6
13.5
Evergy
Metro
$
361.5
8.2
—
—
—
36.7
91.6
—
—
2.9
13.5
9.4
—
2.6
8.0
41.7
13.9
0.8
10.9
4.8
—
17.3
2.3
823.7
(93.3)
730.4
$
559.8
(95.4)
464.4
2,061.8
(303.9)
$ 1,757.9
$
797.5
(97.1)
700.4
$
626.1
(130.9)
495.2
Total noncurrent regulatory assets
$ 1,740.5
$
97
Regulatory Liabilities
2019
Evergy
Kansas
Central
Evergy
December 31
Evergy
Metro
Evergy
(millions)
2018
Evergy
Kansas
Central
Evergy
Metro
Taxes refundable through future rates
$ 1,656.5
$
856.4
$
568.9
$ 1,703.6
$
853.2
$
609.2
Deferred regulatory gain from sale
leaseback
Emission allowances
Nuclear decommissioning
Pension and post-retirement costs
Jurisdictional allowance for funds used
during construction
La Cygne leasehold dismantling costs
Cost of removal
Kansas tax credits
Purchase power agreement
Merger customer credits
Fuel recovery mechanisms
Sibley AAO
Refund of tax reform benefits
Other regulatory liabilities
Total
Less: current portion
53.6
50.1
267.3
59.3
28.7
29.6
49.1
17.0
7.4
—
34.1
10.2
—
48.7
2,311.6
(63.3)
Total noncurrent regulatory liabilities
$ 2,248.3
53.6
—
116.5
31.5
28.7
29.6
—
17.0
7.4
—
30.2
—
—
3.9
1,174.8
(42.3)
$ 1,132.5
$
—
50.1
150.8
20.3
—
—
—
—
—
—
—
—
—
13.5
803.6
(11.4)
792.2
59.1
54.1
188.2
53.4
30.3
29.5
48.1
16.5
8.8
7.5
—
—
70.9
59.0
59.1
—
84.5
28.3
30.3
29.5
—
16.5
8.8
—
—
—
7.2
3.9
2,329.0
(110.2)
$ 2,218.8
1,121.3
(19.5)
$ 1,101.8
$
—
54.1
103.7
25.1
—
—
—
—
—
7.5
—
—
36.3
11.2
847.1
(52.8)
794.3
The following summarizes the nature and period of recovery for each of the regulatory assets listed in the table
above.
Pension and post-retirement costs: Represents unrecognized gains and losses and prior service costs that will be
recognized in future net periodic pension and post-retirement costs, pension settlements amortized over various
periods and financial and regulatory accounting method differences that will be eliminated over the life of the
pension plans. Of these amounts, $735.4 million, $359.9 million and $312.9 million for Evergy, Evergy Kansas
Central and Evergy Metro, respectively, are not included in rate base and are amortized over various periods.
Additionally, $288.4 million, ($23.6) million and $131.1 million for Evergy, Evergy Kansas Central and Evergy
Metro, respectively, represent differences between pension and post-retirement costs under GAAP and pension and
post-retirement costs for ratemaking that will be recovered or refunded in future rates and differences in
accumulated unrecognized gains and losses and prior service costs between Evergy and Evergy Metro due to
Evergy Metro electing not to apply "push-down accounting" related to the merger.
Debt reacquisition costs: Includes costs incurred to reacquire and refinance debt. These costs are amortized over
the term of the new debt or the remaining lives of the old debt issuances if no new debt was issued and are not
included in rate base.
Debt fair value adjustment: Represents purchase accounting adjustments recorded to state the carrying value of
Evergy Metro and Evergy Missouri West long-term debt at fair value in connection with the merger. Amount is
amortized over the life of the related debt and is not included in rate base.
Asset retirement obligations fair value adjustment: Represents purchase accounting adjustments recorded to
state the carrying value of Evergy Metro and Evergy Missouri West AROs at fair value in connection with the
merger. Amount is amortized over the life of the related plant and is not included in rate base.
98
Depreciation: Represents the difference between regulatory depreciation expense and depreciation expense
recorded for financial reporting purposes. These assets are included in rate base and the difference is amortized
over the life of the related plant.
Cost of removal: Represents amounts spent, but not yet collected, to dispose of plant assets. This asset will
decrease as removal costs are collected in rates and is included in rate base.
Asset retirement obligations: Represents amounts associated with AROs as discussed further in Note 7. These
amounts are recovered over the life of the related plant and are not included in rate base.
Analog meter unrecovered investment: Represents the deferral of unrecovered investment of retired analog
meters. Of this amount, $21.6 million is not included in rate base for Evergy and Evergy Kansas Central and is
being amortized over a five-year period.
Treasury yield hedges: Represents the effective portion of treasury yield hedge transactions. Amortization of this
amount will be included in interest expense over the term of the related debt and is not included in rate base.
Iatan No. 1 and common facilities: Represents depreciation and carrying costs related to Iatan No. 1 and common
facilities. These costs are included in rate base and amortized over various periods.
Iatan No. 2 construction accounting costs: Represents the construction accounting costs related to Iatan No. 2.
These costs are included in rate base and amortized through 2059.
Kansas property tax surcharge: Represents actual costs incurred for property taxes in excess of amounts collected
in revenues. These costs are expected to be recovered over a one-year period and are not included in rate base.
Disallowed plant costs: The KCC originally disallowed certain costs related to the Wolf Creek plant. In 1987, the
KCC revised its original conclusion and provided for recovery of an indirect disallowance with no return on
investment. This regulatory asset represents the present value of the future expected revenues to be provided to
recover these costs, net of the amounts amortized.
La Cygne environmental costs: Represents the deferral of depreciation and amortization expense and associated
carrying charges related to the La Cygne Station environmental project. This amount will be amortized over the life
of the related asset and is included in rate base.
Deferred customer programs: Represents costs related to various energy efficiency programs that have been
accumulated and deferred for future recovery. Of these amounts, $10.2 million for Evergy and $8.3 million for
Evergy Metro are not included in rate base and are amortized over various periods.
Fuel recovery mechanisms: Represents the actual cost of fuel consumed in producing electricity and the cost of
purchased power in excess of the amounts collected from customers. This difference is expected to be recovered
over a one-year period and is not included in rate base.
Solar rebates: Represents costs associated with solar rebates provided to retail electric customers. These amounts
are not included in rate base and are amortized over various periods.
Transmission delivery charge: Represents costs associated with the transmission delivery charge. The amounts
are not included in rate base and are amortized over a one-year period.
Wolf Creek outage: Represents deferred expenses associated with Wolf Creek's scheduled refueling and
maintenance outages. These expenses are amortized during the period between planned outages and are not
included in rate base.
Pension and other post-retirement benefit non-service costs: Represents the non-service component of pension
and post-retirement net benefit costs that are capitalized as authorized by regulators. The amounts are included in
rate base and are recovered over the life of the related asset.
Retired generation facilities: Represents amounts to be recovered for facilities that have been retired and are
probable of recovery.
Merger transition costs: Represents recoverable transition costs related to the merger. The amounts are not
included in rate base and are recovered from retail customers through 2028.
99
Other regulatory assets: Includes various regulatory assets that individually are small in relation to the total
regulatory asset balance. These amounts have various recovery periods and are not included in rate base.
The following summarizes the nature and period of amortization for each of the regulatory liabilities listed in the
table above.
Taxes refundable through future rates: Represents the obligation to return to customers income taxes recovered
in earlier periods when corporate income tax rates were higher than current income tax rates. A large portion of this
amount is related to depreciation and will be returned to customers over the life of the applicable property.
Deferred regulatory gain from sale leaseback: Represents the gain Evergy Kansas South recorded on the 1987
sale and leaseback of its 50% interest in La Cygne Unit 2. The gain is amortized over the term of the lease.
Emission allowances: Represents deferred gains related to the sale of emission allowances to be returned to
customers.
Nuclear decommissioning: Represents the difference between the fair value of the assets held in the nuclear
decommissioning trust and the amount recorded for the accumulated accretion and depreciation expense associated
with the asset retirement obligation related to Wolf Creek.
Pension and post-retirement costs: Includes pension and post-retirement benefit obligations and expense
recognized in setting prices in excess of actual pension and post-retirement expense.
Jurisdictional allowance for funds used during construction: Represents AFUDC that is accrued subsequent to
the time the associated construction charges are included in prices and prior to the time the related assets are placed
in service. The AFUDC is amortized to depreciation expense over the useful life of the asset that is placed in
service.
La Cygne leasehold dismantling costs: Represents amounts collected but not yet spent on the contractual
obligation to dismantle a portion of La Cygne Unit 2. The obligation will be discharged as the unit is dismantled.
Cost of removal: Represents amount collected, but not yet spent, to dispose of plant assets. This liability will be
discharged as removal costs are incurred.
Kansas tax credits: Represents Kansas tax credits on investment in utility plant. Amounts will be credited to
customers subsequent to the realization of the credits over the remaining lives of the utility plant giving rise to the
tax credits.
Purchase power agreement: Represents the amount included in retail electric rates from customers in excess of
costs incurred under purchase power agreements. Amounts are amortized over a five-year period.
Merger customer credits: Represents one-time merger bill credits to Evergy Metro's Kansas electric retail
customers that were provided in the first quarter of 2019.
Fuel recovery mechanisms: Represents the amount collected from customers in excess of the actual cost of fuel
consumed in producing electricity and the cost of purchased power. This difference is expected to be refunded over
a one-year period and is not included in rate base.
Sibley AAO: Represents the estimated amount of revenues that Evergy Missouri West has collected from customers
for Sibley Station that Evergy has determined is probable of refund. These amounts were recorded in connection
with an AAO granted by the MPSC in October 2019 and deferred amounts will be considered by the MPSC in
Evergy Missouri West's next rate case.
Refund of tax reform benefits: Represents amounts collected from customers in 2018 related to federal income tax
in excess of the income tax owed by the Evergy Companies as a result of the lower federal income tax rate enacted
by the Tax Cuts and Jobs Act (TCJA) and were refunded to customers in 2019.
Other regulatory liabilities: Includes various regulatory liabilities that individually are relatively small in relation
to the total regulatory liability balance. These amounts will be credited over various periods.
100
6. GOODWILL
Accounting rules require goodwill to be tested for impairment annually and when an event occurs indicating the
possibility that an impairment exists. Evergy's impairment test for the $2,336.6 million of goodwill that was
recorded as a result of the Great Plains Energy and Evergy Kansas Central merger was conducted as of May 1,
2019. The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount,
including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of
the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting
unit and its fair value. Evergy's consolidated operations are considered one reporting unit for assessment of
impairment, as management assesses financial performance and allocates resources on a consolidated basis. The
determination of fair value of the reporting unit consisted of two valuation techniques: an income approach
consisting of a discounted cash flow analysis and a market approach consisting of a determination of reporting unit
invested capital using a market multiple derived from the historical earnings before interest, income taxes,
depreciation and amortization and market prices of the stock of peer companies. The results of the two techniques
were evaluated and weighted to determine a point within the range that management considered representative of
fair value for the reporting unit. The fair value of the reporting unit exceeded the carrying amount, including
goodwill. As a result, there was no impairment of goodwill.
7. ASSET RETIREMENT OBLIGATIONS
AROs associated with tangible long-lived assets are legal obligations that exist under enacted laws, statutes and
written or oral contracts, including obligations arising under the doctrine of promissory estoppel. These liabilities
are recognized at estimated fair value as incurred with a corresponding amount capitalized as part of the cost of the
related long-lived assets and depreciated over their useful lives. Accretion of the liabilities due to the passage of
time is recorded to a regulatory asset and/or liability. Changes in the estimated fair values of the liabilities are
recognized when known.
Evergy Kansas Central, Evergy Metro and Evergy Missouri West have AROs related to asbestos abatement and the
closure and post-closure care of ponds and landfills containing coal combustion residuals (CCRs). In addition,
Evergy Kansas Central and Evergy Metro have AROs related to decommissioning Wolf Creek and the retirement of
wind generation facilities.
The following table summarizes the change in the Evergy Companies' AROs.
Evergy
Evergy Kansas
Central
2019
2018
2019
2018
Evergy Metro(a)
2018
2019
$ 687.1
$ 405.1
$ 281.1
$ 405.1
$ 261.0
$ 266.3
(millions)
—
412.2
—
(22.3)
(17.8)
27.1
$ 674.1
(71.3)
7.4
(150.1)
(22.4)
34.9
$ 687.1
(49.8)
—
—
(12.4)
(14.8)
19.0
$ 272.9
(23.3)
—
7.4
(138.7)
(12.0)
19.3
$ 281.1
(17.1)
—
—
(9.9)
(2.5)
5.0
$ 253.6
(36.1)
—
—
(11.4)
(13.1)
19.2
$ 261.0
(29.2)
Beginning balance
Liabilities assumed upon merger with
Great Plains Energy
Liabilities incurred during the year
Revision in timing and/or estimates
Settlements
Accretion
Ending balance
Less: current portion
Total noncurrent asset retirement
obligation
$ 231.8
$ 637.3
(a) Evergy Metro amounts are only included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
$ 602.8
$ 249.6
$ 264.0
$ 217.5
See Note 2 for more information regarding Evergy Metro's and Evergy Missouri West's ARO liabilities that Evergy
assumed as a result of the merger.
101
In 2018, Evergy and Evergy Kansas Central recorded a $127.0 million revision in estimate primarily related to
Evergy Kansas Central's ARO to decommission its 47% indirect ownership share of Wolf Creek.
8. PROPERTY, PLANT AND EQUIPMENT
The following tables summarize the property, plant and equipment of Evergy, Evergy Kansas Central and Evergy
Metro.
December 31, 2019
Evergy
Evergy Kansas Central
Evergy Metro
Electric plant in service
$
27,768.8
Electric plant acquisition adjustment
Accumulated depreciation
Plant in service
Construction work in progress
Nuclear fuel, net
Plant to be retired, net (a)
740.6
(10,293.7)
18,215.7
839.2
128.5
1.0
(millions)
$
13,538.1
740.6
(4,951.5)
9,327.2
472.8
63.9
1.0
$
10,776.5
—
(4,272.0)
6,504.5
269.9
64.6
—
Net property, plant and equipment
$
19,184.4
$
9,864.9
$
6,839.0
December 31, 2018
Evergy
Evergy Kansas Central
Evergy Metro
Electric plant in service
$
26,916.7
Electric plant acquisition adjustment
Accumulated depreciation
Plant in service
Construction work in progress
Nuclear fuel, net
Plant to be retired, net (a)
740.6
(9,694.1)
17,963.2
685.2
133.1
1.0
(millions)
$
13,176.7
740.6
(4,642.8)
9,274.5
376.7
66.1
1.0
$
10,439.1
—
(4,022.4)
6,416.7
204.4
67.0
—
Net property, plant and equipment
$
18,782.5
$
9,718.3
$
6,688.1
(a) As of December 31, 2019 and 2018, represents the planned retirement of Evergy Kansas Central analog meters prior to the end of their
remaining useful lives.
The following table summarizes the property, plant and equipment of VIEs for Evergy and Evergy Kansas Central.
Electric plant of VIEs
Accumulated depreciation of VIEs
Net property, plant and equipment of VIEs
December 31
2019
2018
(millions)
$
$
392.1
(230.1)
162.0
$
$
392.1
(222.9)
169.2
102
Depreciation Expense
The Evergy Companies' depreciation expense is detailed in the following table.
2019
2018
(millions)
2017
Evergy (a)
Evergy Kansas Central (a)
Evergy Metro (b)
228.4
(a) Approximately $7.1 million, $7.1 million and $8.3 million of depreciation expense in 2019, 2018 and 2017, respectively, was attributable to
425.8
262.7
371.3
567.9
350.0
235.3
786.3
350.0
$
$
$
property, plant and equipment of VIEs.
(b) Evergy Metro amounts are only included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
9. JOINTLY-OWNED ELECTRIC UTILITY PLANTS
Evergy's, Evergy Kansas Central's and Evergy Metro's share of jointly-owned electric utility plants at December 31,
2019, are detailed in the following tables.
Evergy
Wolf Creek
Unit
La Cygne
Units (a)
Iatan No. 1
Unit
Iatan No. 2
Unit
Iatan
Common
(millions, except MW amounts)
Jeffrey
Energy
Center
State
Line
Evergy's share
94%
100%
88%
73%
79%
100%
40%
Utility plant in service
Accumulated
depreciation
Nuclear fuel, net
Construction work in
progress
2020 accredited
capacity-MWs
$ 3,827.8
$ 2,202.4
$ 718.9
$ 1,379.7
$ 484.3
$ 2,428.6
$ 114.6
1,835.3
128.6
141.4
1,104
751.6
—
21.0
1,398
269.2
—
54.4
616
447.2
—
23.5
650
116.4
—
9.4
NA
918.1
—
38.9
2,186
75.9
—
2.8
196
(a) The VIE consolidated by Evergy and Evergy Kansas Central holds its 50% leasehold interest in La Cygne Unit 2. This 50% leasehold
interest in La Cygne Unit 2 is reflected in the information provided above. See Note 19 for additional information.
Evergy Kansas Central
Evergy Kansas Central's share
Wolf Creek
Unit
La Cygne
Units (a)
Jeffrey
Energy
Center
(millions, except MW amounts)
47%
50%
92%
State
Line
40%
Utility plant in service
Accumulated depreciation
Nuclear fuel, net
Construction work in progress
2020 accredited capacity-MWs
(a) The VIE consolidated by Evergy and Evergy Kansas Central holds its 50% leasehold interest in La Cygne Unit 2. This 50% leasehold
$ 1,884.5
862.2
63.9
67.3
552
$ 2,223.4
832.5
—
34.9
2,011
$ 1,048.0
426.5
—
14.6
699
114.6
75.9
—
2.8
196
$
interest in La Cygne Unit 2 is reflected in the information provided above. See Note 19 for additional information.
103
Evergy Metro
Evergy Metro's share
Utility plant in service
Accumulated depreciation
Nuclear fuel, net
Construction work in progress
2020 accredited capacity-MWs
Wolf Creek
Unit
La Cygne
Units
Iatan No. 1
Unit
Iatan No. 2
Unit
Iatan
Common
47%
$ 1,943.3
973.1
64.7
74.1
552
(millions, except MW amounts)
70%
50%
55%
$ 1,154.4
325.1
—
6.4
699
$
575.1
214.9
—
25.9
490
$ 1,060.7
393.0
—
3.5
491
61%
$
390.1
99.8
—
1.3
NA
Each owner must fund its own portion of the plant's operating expenses and capital expenditures. The Evergy
Companies' share of direct expenses are included in the appropriate operating expense classifications in Evergy's,
Evergy Kansas Central's and Evergy Metro's consolidated financial statements.
10. PENSION PLANS AND POST-RETIREMENT BENEFITS
Evergy and certain of its subsidiaries maintain, and Evergy Kansas Central and Evergy Metro participate in,
qualified non-contributory defined benefit pension plans covering the majority of Evergy Kansas Central's and
Evergy Metro's employees as well as certain non-qualified plans covering certain active and retired officers. Evergy
is also responsible for its indirect 94% ownership share of Wolf Creek's defined benefit plans, consisting of Evergy
Kansas South's and Evergy Metro's respective 47% ownership shares.
For the majority of employees, pension benefits under these plans reflect the employees' compensation, years of
service and age at retirement. However, for the plan covering Evergy Kansas Central's employees, the benefits for
non-union employees hired between 2002 and the second quarter of 2018 and union employees hired beginning in
2012 are derived from a cash balance account formula. The plan was closed to future non-union employees in
2018. For the plans covering Evergy Metro's employees, the benefits for union employees hired beginning in 2014
are derived from a cash balance account formula and the plans were closed to future non-union employees in 2014.
Evergy and its subsidiaries also provide certain post-retirement health care and life insurance benefits for
substantially all retired employees of Evergy Kansas Central and Evergy Metro and their respective shares of Wolf
Creek's post-retirement benefit plans.
The Evergy Companies record pension and post-retirement expense in accordance with rate orders from the KCC
and MPSC that allow the difference between pension and post-retirement costs under GAAP and costs for
ratemaking to be recognized as a regulatory asset or liability. This difference between financial and regulatory
accounting methods is due to timing and will be eliminated over the life of the plans.
For 2019, Evergy and Evergy Metro recorded pension settlement charges of $15.6 million and $23.0 million,
respectively, as a result of accelerated pension distributions related to voluntary severance programs. Evergy and
Evergy Metro deferred substantially all of the charges to a regulatory asset and expect to recover these amounts over
future periods pursuant to regulatory agreements.
104
The following pension benefits tables provide information relating to the funded status of all defined benefit
pension plans on an aggregate basis as well as the components of net periodic benefit costs. For financial reporting
purposes, the market value of plan assets is the fair value. Net periodic benefit costs reflect total plan benefit costs
prior to the effects of capitalization and sharing with joint owners of power plants. Evergy Metro amounts are only
included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Change in projected benefit obligation (PBO)
(millions)
PBO at January 1, 2019
$ 2,553.4
$ 1,258.9
$ 1,272.4
$ 249.3
$ 133.6
$ 115.7
Service cost
Interest cost
Contribution by participants
Actuarial loss
Benefits paid
Settlements
Other
PBO at December 31, 2019
Change in plan assets
79.1
108.0
—
29.0
53.7
—
50.1
53.3
—
262.4
(180.5)
(96.6)
(7.6)
$ 2,718.2
120.3
(136.9)
—
(1.6)
$ 1,323.4
140.5
(42.3)
(96.6)
(6.0)
$ 1,371.4
2.5
10.5
8.8
20.9
(27.7)
—
—
1.1
5.6
1.9
9.5
(13.0)
—
—
1.4
4.9
6.9
11.4
(14.7)
—
—
$ 264.3
$ 138.7
$ 125.6
Fair value of plan assets at January 1, 2019
$ 1,603.4
$ 804.6
$ 798.8
$ 223.3
$ 109.7
$ 113.6
Actual return on plan assets
284.0
130.5
153.5
Contributions by employer and participants
Benefits paid
Settlements
Other
Fair value of plan assets at December 31, 2019
Funded status at December 31, 2019
125.2
(175.6)
(96.6)
(7.6)
$ 1,732.8
$ (985.4) $ (481.3) $ (480.7) $
82.2
(41.2)
(96.6)
(6.0)
$ 890.7
43.0
(134.4)
—
(1.6)
$ 842.1
30.0
13.2
(26.6)
—
—
20.0
3.5
(12.7)
—
—
$ 120.5
$ 239.9
10.0
9.7
(13.9)
—
—
(24.4) $
(18.2) $
$ 119.4
(6.2)
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Amounts recognized in the consolidated balance
sheets
Non-current asset
$
— $
— $
— $
(millions)
Current pension and other post-retirement liability
(5.6)
(3.0)
(1.3)
Noncurrent pension liability and other post-
retirement liability
Net amount recognized before regulatory treatment
Accumulated OCI or regulatory asset/liability
Net amount recognized at December 31, 2019
Amounts in accumulated OCI or regulatory asset/
liability not yet recognized as a component of net
periodic benefit cost:
(979.8)
(985.4)
454.1
(478.3)
(481.3)
354.9
$ (531.3) $ (126.4) $ (288.4) $
(479.4)
(480.7)
192.3
15.0
(1.9)
$
— $
(1.0)
(37.5)
(24.4)
(4.4)
(28.8) $
(17.2)
(18.2)
(2.9)
(21.1) $
15.0
(0.9)
(20.3)
(6.2)
(13.0)
(19.2)
Actuarial (gain) loss
Prior service cost
$ 439.7
$ 342.3
$ 189.4
14.4
12.6
2.9
Net amount recognized at December 31, 2019
$ 454.1
$ 354.9
$ 192.3
$
$
(5.7) $
1.3
(4.4) $
(4.2) $
1.3
(2.9) $
(4.9)
(8.1)
(13.0)
105
Change in projected benefit obligation (PBO)
(millions)
PBO at January 1, 2018
$ 1,367.0
$ 1,367.0
$ 1,331.7
$ 138.6
$ 138.6
$ 133.2
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Service cost
Interest cost
Contribution by participants
Plan amendments
Actuarial gain
Benefits paid
Obligations assumed upon merger with Great Plains
Energy
Other
PBO at December 31, 2018
Change in plan assets
Fair value of plan assets at January 1, 2018
Actual return on plan assets
Contributions by employer and participants
Benefits paid
Assets acquired upon merger with Great Plains
Energy
Other
Fair value of plan assets at December 31, 2018
Funded status at December 31, 2018
60.7
82.5
—
13.4
(98.8)
(137.9)
32.2
50.7
—
11.4
(100.1)
(97.9)
1,275.9
(9.4)
$ 2,553.4
—
(4.4)
$ 1,258.9
48.6
49.9
—
2.0
(89.6)
(70.2)
—
—
2.3
8.0
5.6
—
(11.3)
(17.3)
123.4
—
1.3
5.0
1.8
—
(2.6)
(10.5)
—
—
2.0
4.8
6.6
—
(18.0)
(12.9)
—
—
$ 1,272.4
$ 249.3
$ 133.6
$ 115.7
$ 887.0
(79.7)
114.5
(134.0)
$ 887.0
(30.9)
47.9
(95.0)
$ 848.4
(60.1)
80.3
(69.8)
$ 124.1
(7.5)
11.6
(16.7)
$ 124.1
(7.4)
3.2
(10.2)
$ 115.8
(1.2)
11.4
(12.4)
—
825.0
(9.4)
$ 1,603.4
$ (950.0) $ (454.3) $ (473.6) $
—
(4.4)
$ 804.6
$ 798.8
—
111.8
—
$ 223.3
—
—
$ 109.7
—
—
$ 113.6
(2.1)
(26.0) $
(23.9) $
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Amounts recognized in the consolidated balance
sheets
Non-current asset
$
— $
— $
— $
(millions)
Current pension and other post-retirement liability
(4.4)
(2.6)
(0.5)
Noncurrent pension liability and other post-
retirement liability
Net amount recognized before regulatory treatment
Accumulated OCI or regulatory asset/liability
Net amount recognized at December 31, 2018
Amounts in accumulated OCI or regulatory asset/
liability not yet recognized as a component of net
periodic benefit cost:
(945.6)
(950.0)
419.9
(451.7)
(454.3)
337.5
$ (530.1) $ (116.8) $ (243.5) $
(473.1)
(473.6)
230.1
17.5
(1.7)
$
— $
(0.9)
(41.8)
(26.0)
(6.0)
(32.0) $
(23.0)
(23.9)
0.8
(23.1) $
17.5
(0.8)
(18.8)
(2.1)
(19.1)
(21.2)
Actuarial (gain) loss
Prior service cost
$ 403.6
$ 323.2
$ 226.3
16.3
14.3
3.8
Net amount recognized at December 31, 2018
$ 419.9
$ 337.5
$ 230.1
$
$
(7.8) $
1.8
(6.0) $
(1.0) $
1.8
0.8
$
(11.0)
(8.1)
(19.1)
106
As of December 31, 2019 and 2018, Evergy's pension benefits include non-qualified benefit obligations of $49.4
million and $46.9 million, respectively, which are funded by trusts containing assets of $45.5 million and $43.8
million, respectively. As of December 31, 2019 and 2018, Evergy Kansas Central's pension benefits include non-
qualified benefit obligations of $26.0 million and $24.8 million, respectively, which are funded by trusts containing
assets of $31.7 million and $30.6 million, respectively. The assets in the aforementioned trusts are not included in
the table above. See Note 14 for more information on these amounts.
Year Ended December 31, 2019
Components of net periodic benefit costs
Service cost
Interest cost
Expected return on plan assets
Prior service cost
Recognized net actuarial (gain) loss
Settlement and special termination benefits
Net periodic benefit costs before regulatory
adjustment and intercompany allocations
Regulatory adjustment
Intercompany allocations
Net periodic benefit costs
Other changes in plan assets and benefit obligations
recognized in OCI or regulatory assets/liabilities
Current year net (gain) loss
Amortization of gain (loss)
Amortization of prior service cost
Total recognized in OCI or regulatory asset/liability
Total recognized in net periodic benefit costs and
OCI or regulatory asset/liability
Year Ended December 31, 2018
Components of net periodic benefit costs
Service cost
Interest cost
Expected return on plan assets
Prior service cost
Recognized net actuarial (gain) loss
Net periodic benefit costs before regulatory
adjustment and intercompany allocations
Regulatory adjustment
Intercompany allocations
Net periodic benefit costs
Other changes in plan assets and benefit obligations
recognized in OCI or regulatory assets/liabilities
Current year net (gain) loss
Amortization of gain (loss)
Prior service cost
Amortization of prior service cost
Total recognized in OCI or regulatory asset/liability
Total recognized in net periodic benefit costs and
OCI or regulatory asset/liability
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
$
$
79.1
108.0
(106.3)
1.9
33.0
15.6
131.3
37.4
n/a
168.7
84.7
(48.6)
(1.9)
34.2
$
$
29.0
53.7
(54.8)
1.7
25.5
—
55.1
3.0
—
58.1
44.6
(25.5)
(1.7)
17.4
(millions)
$
50.1
53.3
(48.9)
0.9
49.8
23.0
128.2
(19.2)
(34.4)
74.6
35.9
(72.8)
(0.9)
(37.8)
2.5
10.5
(10.0)
0.5
(1.2)
—
2.3
(3.4)
n/a
(1.1)
0.9
1.2
(0.5)
1.6
$
1.1
5.6
(6.7)
0.5
(0.6)
—
(0.1)
(3.0)
—
(3.1)
(3.8)
0.6
(0.5)
(3.7)
$ 202.9
$
75.5
$
36.8
$
0.5
$
(6.8) $
1.4
4.9
(3.3)
—
(1.4)
—
1.6
0.4
(0.4)
1.6
4.7
1.4
—
6.1
7.7
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
$
$
$
60.7
82.5
(86.4)
0.7
32.6
90.1
8.3
n/a
98.4
67.2
(32.6)
13.4
(0.7)
47.3
$
32.2
50.7
(55.9)
0.7
32.6
60.3
8.8
—
69.1
(13.2)
(32.6)
11.4
(0.7)
(35.1)
(millions)
$
48.6
49.9
(55.5)
0.7
45.1
88.8
0.7
(21.6)
67.9
25.9
(45.1)
2.0
(0.7)
(17.9)
2.3
8.0
(8.8)
0.5
(0.6)
1.4
(1.7)
n/a
(0.3)
4.9
0.6
—
(0.5)
5.0
$
1.3
5.0
(7.0)
0.5
(0.6)
(0.8)
(2.0)
—
(2.8)
11.7
0.6
—
(0.5)
11.8
2.0
4.8
(2.8)
0.1
(0.2)
3.9
(0.1)
(1.1)
2.7
(14.0)
0.2
—
(0.1)
(13.9)
$ 145.7
$
34.0
$
50.0
$
4.7
$
9.0
$ (11.2)
107
Year Ended December 31, 2017
Components of net periodic benefit costs
Service cost
Interest cost
Expected return on plan assets
Prior service cost
Recognized net actuarial (gain) loss
Settlement and special termination benefits
Net periodic benefit costs before regulatory
adjustment and intercompany allocations
Regulatory adjustment
Intercompany allocations
Net periodic benefit costs
Other changes in plan assets and benefit obligations
recognized in OCI or regulatory assets/liabilities
Current year net (gain) loss
Amortization of gain (loss)
Amortization of prior service cost
Total recognized in OCI or regulatory asset/liability
Total recognized in net periodic benefit costs and
OCI or regulatory asset/liability
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
$
$
28.7
52.4
(53.6)
0.7
26.9
0.4
55.5
14.5
n/a
70.0
47.1
(26.9)
(0.7)
19.5
$
28.7
52.4
(53.6)
0.7
26.9
0.4
55.5
14.5
—
70.0
47.1
(26.9)
(0.7)
19.5
(millions)
$
44.2
52.6
(51.2)
0.7
49.0
16.3
111.6
(9.2)
(37.1)
65.3
71.3
(64.9)
(0.7)
5.7
$
1.2
5.5
(6.9)
0.5
(0.8)
—
(0.5)
(1.9)
n/a
(2.4)
(5.8)
0.8
(0.5)
(5.5)
$
1.2
5.5
(6.9)
0.5
(0.8)
—
(0.5)
(1.9)
—
(2.4)
(5.8)
0.8
(0.5)
(5.5)
2.1
5.4
(2.5)
—
(0.5)
—
4.5
1.3
(1.5)
4.3
3.0
0.5
—
3.5
$
89.5
$
89.5
$
71.0
$
(7.9) $
(7.9) $
7.8
For financial reporting purposes, the estimated prior service cost and net actuarial (gain) loss for the defined benefit
plans are amortized from accumulated other comprehensive income (OCI) or a regulatory asset into net periodic
benefit cost. The Evergy Companies amortize prior service cost on a straight-line basis over the average future
service of the active employees (plan participants) benefiting under the plan. Evergy and Evergy Kansas Central
amortize the net actuarial (gain) loss on a straight-line basis over the average future service of active plan
participants benefiting under the plan without application of an amortization corridor. Evergy Metro amortizes the
net actuarial (gain) loss on a rolling five-year average basis. The estimated amounts to be amortized in 2020 are
detailed in the following table.
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Actuarial (gain) loss amortization
Prior service cost amortization
$
45.4
$
33.9
$
45.1
$
1.8
1.6
0.8
0.2
0.5
$
— $
0.5
(0.6)
—
(millions)
108
Pension and other post-retirement benefit plans with the PBO, ABO or accumulated other post-retirement benefit
obligation (APBO) in excess of the fair value of plan assets at year-end are detailed in the following tables.
December 31, 2019
ABO for all defined benefit pension plans
Pension plans with the PBO in excess of plan assets
Projected benefit obligation
Fair value of plan assets
Pension plans with the ABO in excess of plan assets
Accumulated benefit obligation
Fair value of plan assets
Other post-retirement benefit plans with the APBO in excess of plan assets
Accumulated other post-retirement benefit obligation
Fair value of plan assets
December 31, 2018
ABO for all defined benefit pension plans
Pension plans with the PBO in excess of plan assets
Projected benefit obligation
Fair value of plan assets
Pension plans with the ABO in excess of plan assets
Accumulated benefit obligation
Fair value of plan assets
Other post-retirement benefit plans with the APBO in excess of plan assets
Accumulated other post-retirement benefit obligation
Fair value of plan assets
Evergy
Evergy
Kansas
Central
(millions)
Evergy
Metro
$ 2,390.5
$ 1,196.8
$ 1,170.2
$ 2,718.2
$ 1,323.4
$ 1,371.4
1,732.8
842.1
890.7
$ 2,390.5
$ 1,196.8
$ 1,170.2
1,732.8
842.1
890.7
$
264.3
$
138.7
$
125.6
239.9
120.5
119.4
Evergy
Evergy
Kansas
Central
(millions)
Evergy
Metro
$ 2,257.9
$ 1,139.1
$ 1,096.7
$ 2,553.4
$ 1,258.9
$ 1,272.4
1,603.4
804.6
798.8
$ 2,257.9
$ 1,139.1
$ 1,096.7
1,603.4
804.6
798.8
$
249.3
$
133.6
$
223.3
109.7
57.7
38.2
The expected long-term rate of return on plan assets represents the Evergy Companies' estimate of the long-term
return on plan assets and is based on historical and projected rates of return for current and planned asset classes in
the plans' investment portfolios. Assumed projected rates of return for each asset class were selected after analyzing
historical experience and future expectations of the returns of various asset classes. Based on the target asset
allocation for each asset class, the overall expected rate of return for the portfolios was developed and adjusted for
the effect of projected benefits paid from plan assets and future plan contributions.
109
The following tables provide the weighted-average assumptions used to determine benefit obligations and net costs.
Weighted-average assumptions used to determine
the benefit obligation at December 31, 2019
Evergy
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Discount rate
Rate of compensation increase
3.62%
3.74%
3.61%
3.78%
3.64%
3.71%
3.56%
3.75%
3.54%
n/a
3.58%
3.75%
Weighted-average assumptions used to determine
the benefit obligation at December 31, 2018
Evergy
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Discount rate
Rate of compensation increase
4.35%
3.76%
4.35%
4.03%
4.36%
3.64%
4.33%
3.50%
4.33%
n/a
4.33%
3.50%
Weighted-average assumptions used to determine
net costs for the year ended December 31, 2019
Discount rate
Expected long-term return on plan assets
Rate of compensation increase
Weighted-average assumptions used to determine
net costs for the year ended December 31, 2018
Discount rate
Expected long-term return on plan assets
Rate of compensation increase
Pension Benefits
Evergy
Kansas
Central
4.35%
6.75%
4.03%
Evergy
4.35%
6.61%
3.76%
Evergy
Metro
4.36%
6.47%
3.64%
Pension Benefits
Evergy
Kansas
Central
3.73%
6.67%
4.00%
Evergy
3.73%
6.52%
3.92%
Evergy
Metro
3.72%
6.46%
3.62%
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
4.33%
6.00%
n/a
4.33%
4.44%
3.50%
Evergy
Metro
4.33%
2.94%
3.50%
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
3.73%
6.00%
n/a
3.67%
6.00%
3.50%
Evergy
Metro
3.64%
2.80%
3.50%
Evergy expects to contribute $128.1 million to the pension plans in 2020 to meet Employee Retirement Income
Security Act of 1974, as amended (ERISA) funding requirements and regulatory orders, of which $45.5 million is
expected to be paid by Evergy Kansas Central and $82.6 million is expected to be paid by Evergy Metro. The
Evergy Companies' funding policy is to contribute amounts sufficient to meet the ERISA funding requirements and
MPSC and KCC rate orders plus additional amounts as considered appropriate; therefore, actual contributions may
differ from expected contributions. Also in 2020, Evergy expects to contribute $3.8 million to the post-retirement
benefit plans, of which $0.8 million is expected to be paid by Evergy Kansas Central and $3.0 million is expected to
be paid by Evergy Metro.
110
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid
through 2029.
Pension Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
2020
2021
2022
2023
2024
2025-2029
$
180.6
182.4
181.1
181.8
185.0
918.2
$
$
95.1
95.6
93.3
91.5
91.9
(millions)
$
84.3
85.5
86.5
89.0
91.7
428.3
482.3
$
16.7
16.7
16.4
16.3
15.9
75.2
$
9.6
9.5
9.3
9.2
8.8
7.1
7.2
7.1
7.1
7.1
40.3
34.9
Evergy Kansas Central and Evergy Metro each maintain separate trusts for both their qualified pension and post-
retirement benefits. These plans are managed in accordance with prudent investor guidelines contained in the
ERISA requirements.
The primary objective of the Evergy Kansas Central pension plan is to provide a source of retirement income for its
participants and beneficiaries, and the primary financial objective of the plan is to improve its funded status. The
primary objective of the Evergy Kansas Central post-retirement benefit plan is growth in assets and the preservation
of principal, while minimizing interim volatility, to meet anticipated claims of plan participants.
The primary objective of the Evergy Metro pension plans is to meet or exceed the target rate of return for the plan
within a reasonable and prudent level of risk. The primary objective of the Evergy Metro post-retirement benefit
plans is to preserve capital, maintain sufficient liquidity and earn a consistent rate of return.
The investment strategies of both the Evergy Kansas Central and Evergy Metro pension and post-retirement plans
support the above objectives of the plans. The portfolios are invested, and periodically rebalanced, to achieve the
targeted allocations detailed below. The following table provides the target asset allocations by asset class for the
Evergy Kansas Central and Evergy Metro pension and other post-retirement plan assets.
Domestic equities
International equities
Bonds
Mortgage & asset backed securities
Real estate investments
Other investments
Pension Benefits
Post-Retirement Benefits
Evergy
Kansas
Central
Evergy
Metro
Evergy
Kansas
Central
Evergy
Metro
29%
20%
36%
—%
4%
11%
31%
21%
35%
—%
6%
7%
33%
22%
45%
—%
—%
—%
3%
—%
85%
4%
—%
8%
Fair Value Measurements
Evergy classifies recurring and non-recurring fair value measurements based on the fair value hierarchy as
discussed in Note 14. The following are descriptions of the valuation methods of the primary fair value
measurements disclosed below.
Domestic equities - consist of individually held domestic equity securities and domestic equity mutual funds.
Securities and funds, which are publicly quoted, are valued based on quoted prices in active markets and are
categorized as Level 1. Funds that are valued by fund administrators using the net asset value (NAV) per fund
111
share, derived from the quoted prices in active markets of the underlying securities are not classified within the fair
value hierarchy.
International equities - consist of individually held international equity securities and international equity mutual
funds. Securities and funds, which are publicly quoted, are valued based on quoted prices in active markets and are
categorized as Level 1. Funds that are valued by fund administrators using the NAV per fund share, derived from
the quoted prices in active markets of the underlying securities are not classified within the fair value hierarchy.
Bond funds - consist of funds maintained by investment companies that invest in various types of fixed income
securities consistent with the funds' stated objectives. Securities and funds, which are publicly quoted, are valued
based on quoted prices in active markets and are categorized as Level 1. Funds that are valued by fund
administrators using the NAV per fund share, derived from the quoted prices in active markets of the underlying
securities, are not classified within the fair value hierarchy.
Corporate bonds - consists of individually held, primarily domestic, corporate bonds that are traded in less than
active markets or priced with models using highly observable inputs that are categorized as Level 2.
U.S. Treasury and agency bonds - consists of individually held U.S. Treasury securities and U.S. agency bonds.
U.S. Treasury securities, which are publicly quoted, are valued based on quoted prices in active markets and are
categorized as a Level 1. U.S. agency bonds, which are publicly quoted, are traded in less than active markets or
priced with models using highly observable inputs and are categorized as Level 2.
Mortgage and asset backed securities - consists of individually held securities that are traded in less than active
markets or valued with models using highly observable inputs that are categorized as Level 2.
Real estate investments - consists of traded real estate investment trusts valued at the closing price reported on the
major market on which the trusts are traded and are categorized as Level 1 and institutional trust funds valued at
NAV per fund share and are not categorized in the fair value hierarchy.
Combination debt/equity/other fund - consists of a fund that invests in various types of debt, equity and other asset
classes consistent with the fund's stated objectives. The fund, which is publicly quoted, is valued based on quoted
prices in active markets and is categorized as Level 1.
Alternative investments - consists of investments in institutional trust and hedge funds that are valued by fund
administrators using the NAV per fund share, derived from the underlying investments of the fund, and are not
classified within the fair value hierarchy.
Short-term investments - consists of fund investments in high-quality, short-term, U.S. dollar-denominated
instruments with an average maturity of 60 days that are valued at NAV per fund share and are not categorized in
the fair value hierarchy.
Cash and cash equivalents - consists of investments with original maturities of three months or less when purchased
that are traded in active markets and are categorized as Level 1.
112
The fair values of the Evergy Companies' pension plan assets at December 31, 2019 and 2018, by asset category are
in the following tables.
Description
December 31
2019
Level 1
Fair Value Measurements Using
Level 2
(millions)
Level 3
Evergy Kansas Central Pension Plans
Domestic equities
International equities
Bond funds
Real estate investments
Combination debt/equity/other fund
Alternative investment funds
Short-term investments
Total
Evergy Metro Pension Plans
Domestic equities
International equities
Bond funds
Corporate bonds
U.S. Treasury and agency bonds
Mortgage and asset backed securities
Real estate investments
Combination debt/equity/other fund
Alternative investment funds
Cash and cash equivalents
Short-term investments
Other
Total
$
$
$
$
233.8
162.4
281.7
46.5
30.1
78.5
9.1
842.1
244.8
178.7
71.0
123.9
70.9
5.7
50.8
11.9
36.6
92.9
1.0
2.5
890.7
$
$
$
$
150.6
101.5
233.0
—
30.1
—
—
515.2
195.3
117.7
15.6
—
53.5
—
12.8
11.9
—
92.9
—
—
499.7
$
$
$
$
—
—
—
—
—
—
—
—
—
—
—
123.9
17.4
5.7
—
—
—
—
—
2.5
149.5
$
$
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Assets
measured
at NAV
$
$
$
$
83.2
60.9
48.7
46.5
—
78.5
9.1
326.9
49.5
61.0
55.4
—
—
—
38.0
—
36.6
—
1.0
—
241.5
113
Total
$
804.6
$
522.0
Description
Evergy Kansas Central Pension Plans
Domestic equities
International equities
Bond funds
Real estate investments
Combination debt/equity/other fund
Alternative investment funds
Short-term investments
Evergy Metro Pension Plans
Domestic equities
International equities
Bond funds
Corporate bonds
U.S. Treasury and agency bonds
Mortgage and asset backed securities
Real estate investments
Combination debt/equity/other fund
Alternative investment funds
Cash and cash equivalents
Other
Total
Fair Value Measurements Using
December 31
2018
Level 1
Level 2
(millions)
Assets
measured at
NAV
Level 3
$
215.0
$
144.7
$
138.7
296.4
44.8
30.1
73.6
6.0
91.8
255.4
—
30.1
—
—
$
238.1
150.9
67.4
123.6
69.9
5.5
48.2
13.5
31.6
49.8
0.3
$
198.6
104.0
19.3
—
52.4
—
12.6
13.5
—
49.8
—
$
$
$
$
$
—
—
—
—
—
—
—
—
—
—
—
123.6
17.5
5.5
—
—
—
—
0.3
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$
70.3
46.9
41.0
44.8
—
73.6
6.0
$ 282.6
$
39.5
46.9
48.1
—
—
—
35.6
—
31.6
—
—
$ 201.7
$
798.8
$
450.2
$
146.9
$
114
The fair values of the Evergy Companies' post-retirement plan assets at December 31, 2019 and 2018, by asset
category are in the following tables.
Description
December 31
2019
Level 1
Evergy Kansas Central Post-Retirement Benefit Plans
Domestic equities
International equities
Bond funds
Cash and cash equivalents
Total
Evergy Metro Post-Retirement Benefit Plans
Domestic equities
International equities
Bond funds
Corporate bonds
U.S. Treasury and agency bonds
Mortgage and asset backed securities
Cash and cash equivalents
Other
Total
$
40.5
26.0
52.9
1.1
$ 120.5
$
3.2
1.1
77.5
17.8
11.5
1.3
6.7
0.3
$ 119.4
$ —
—
—
1.1
1.1
$
$
3.2
1.1
0.1
—
4.1
—
6.7
—
$ 15.2
Fair Value Measurements Using
Level 2
(millions)
$ —
—
—
—
$ —
$ —
—
—
17.8
7.4
1.3
—
0.3
$ 26.8
Level 3
$ —
—
—
—
$ —
$ —
—
—
—
—
—
—
—
$ —
Assets
measured
at NAV
$ 40.5
26.0
52.9
—
$ 119.4
$ —
—
77.4
—
—
—
—
—
$ 77.4
Description
Evergy Kansas Central Post-Retirement Benefit Plans
Domestic equities
International equities
Bond funds
Short-term investments
Cash and cash equivalents
Total
Evergy Metro Post-Retirement Benefit Plans
Domestic equities
International equities
Bond funds
Corporate bonds
U.S. Treasury and agency bonds
Mortgage and asset backed securities
Cash and cash equivalents
Other
Total
Fair Value Measurements Using
December 31
2018
Level 1
Level 2
(millions)
Level 3
Assets
measured
at NAV
$
56.4
14.0
38.4
0.7
0.2
$ 109.7
$
2.5
0.9
75.0
17.4
10.3
2.5
4.7
0.3
$ —
$ —
$ —
$ 56.4
$
$
—
—
—
0.2
0.2
2.5
0.9
0.2
—
2.6
—
4.7
—
—
—
—
—
—
—
—
—
14.0
38.4
0.7
—
$ —
$ —
$ 109.5
$ —
$ —
$ —
—
—
17.4
7.7
2.5
—
0.3
—
—
—
—
—
—
—
—
74.8
—
—
—
—
—
$ 113.6
$ 10.9
$ 27.9
$ —
$ 74.8
115
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The
cost trend assumptions are detailed in the following tables.
Assumed annual health care cost growth rates as of December 31, 2019
Evergy
Health care cost trend rate assumed for next year
Rate to which the cost trend is assumed to decline (the ultimate trend rate)
Year that rate reaches ultimate trend
6.3%
4.5%
2027
Assumed annual health care cost growth rates as of December 31, 2018
Evergy
Health care cost trend rate assumed for next year
Rate to which the cost trend is assumed to decline (the ultimate trend rate)
Year that rate reaches ultimate trend
6.5%
4.5%
2027
Evergy
Kansas
Central
6.3%
4.5%
2027
Evergy
Kansas
Central
6.5%
4.5%
2027
Evergy
Metro
6.3%
4.5%
2027
Evergy
Metro
6.5%
4.5%
2027
The effects of a one-percentage point change in the assumed health care cost trend rates, holding all other
assumptions constant, at December 31, 2019, are detailed in the following table.
Effect of 1% increase
Effect on total service and interest component
Effect on post-retirement benefit obligation
Effect of 1% decrease
Effect on total service and interest component
Effect on post-retirement benefit obligation
Evergy
Evergy
Kansas
Central(a)
(millions)
Evergy
Metro
$
$
— $
— $
0.5
(0.1)
— $
— $
(0.4)
0.1
—
0.6
—
(0.5)
(a) Evergy Kansas Central includes only the effect of health care cost trend rates for Wolf Creek because the Evergy Kansas Central post-
retirement benefit plan includes a fixed monthly stipend for health care and therefore is not affected by changes in health care costs.
Employee Savings Plans
Evergy has defined contribution savings plans (401(k)) that cover substantially all employees. Evergy matches
employee contributions, subject to limits. The annual costs of the plans are detailed in the following table. Evergy
Metro amounts are only included in consolidated Evergy from June 4, 2018, the date of the closing of the merger,
and thereafter.
Evergy
Evergy Kansas Central
Evergy Metro
11. EQUITY COMPENSATION
2019
2018
2017
(millions)
$
17.6
$
16.3
$
9.6
8.0
9.9
8.3
9.7
9.7
7.7
Upon the consummation of the merger, Evergy assumed both Evergy Kansas Central's Long-Term Incentive and
Share Award plan (LTISA) and Great Plains Energy's Amended Long-Term Incentive Plan, which was renamed the
Evergy, Inc. Long-Term Incentive Plan. All outstanding share-based payment awards under Evergy Kansas
Central's LTISA vested at the closing of the merger transaction and were converted into a right to receive Evergy
common stock with the exception of certain RSUs and deferred director share units issued prior to the closing of the
merger to certain directors, officers and employees of Evergy Kansas Central. The vesting of these shares resulted
116
in the recognition of $14.6 million of compensation expense in Evergy's and Evergy Kansas Central's consolidated
statements of income and comprehensive income for 2018.
All of Great Plains Energy's outstanding performance shares, restricted stock, RSUs and director deferred share
units under Great Plains Energy's Amended Long-Term Incentive Plan were converted into equivalent Evergy
performance shares, restricted stock, RSUs and director deferred share units at Great Plains Energy's merger
exchange ratio of 0.5981. The estimated fair value of these converted awards that was allocated to the purchase
price was $12.5 million, after-tax. See Note 2 for more information regarding the merger.
The following table summarizes the Evergy Companies' equity compensation expense and the associated income tax
benefit.
Evergy
Equity compensation expense
Income tax benefit
Evergy Kansas Central
Equity compensation expense
Income tax benefit
Evergy Metro(a)
Equity compensation expense
Income tax benefit
2019
2018
(millions)
$
$
15.5
3.0
6.7
1.9
5.7
0.3
30.7
1.4
24.8
1.4
6.5
0.1
2017
$
8.9
3.5
8.9
3.5
4.2
1.6
(a) Evergy Metro amounts are only included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
Restricted Share Units
Evergy has utilized RSUs for new grants of stock-based compensation awards subsequent to the merger. RSU
awards are grants that entitle the holder to receive shares of common stock as the awards vest. These RSU awards
are defined as nonvested shares and do not include restrictions once the awards have vested. These RSUs either
take the form of RSUs with performance measures that vest upon expiration of the award term or RSUs with only
service requirements that vest solely upon the passage of time.
RSUs with Performance Measures
The payment of RSUs with performance measures is contingent upon achievement of specific performance goals
over a stated period of time as approved by the Compensation and Leadership Development Committee of the
Board. The numbers of RSUs with performances measures ultimately paid can vary from the numbers of RSUs
with performance measures initially granted depending on Evergy's performance over stated performance periods.
Compensation expense for RSUs with performance measures is calculated by recognizing the portion of the fair
value for each reporting period for which the requisite service has been rendered. Dividends are accrued over the
vesting period and paid in cash based on the number of RSUs with performance measures ultimately paid.
The fair value of RSUs with performance measures is estimated using the market value of Evergy's stock at the
valuation date and a Monte Carlo simulation technique that incorporates assumptions for inputs of expected
volatilities, dividend yield and risk-free rates. Expected volatility is based on daily stock price change during a
historical period commensurate with the remaining term of the performance period of the grant. The risk-free rate is
based upon the rate at the time of the evaluation for zero-coupon government bonds with a maturity consistent with
the remaining performance period of the grant. The dividend yield is based on the most recent dividends paid and
the actual closing stock price on the valuation date. For shares granted in 2019, inputs for expected volatility,
dividend yield and risk-free rates were 18%, 3.45% and 2.6%, respectively.
117
RSU activity for awards with performance measures for 2019 is summarized in the following table.
Beginning balance January 1, 2019
Granted
Forfeited
Ending balance December 31, 2019
* weighted-average
Nonvested
Restricted
Share Units
—
202,107
(4,857)
197,250
Grant Date
Fair Value*
$
—
37.87
37.87
37.87
At December 31, 2019, the remaining weighted-average contractual term related to RSU awards with performance
measures was 2.2 years. The weighted-average grant-date fair value of RSUs granted with performance measures
was $37.87 in 2019. At December 31, 2019, there was $5.4 million of unrecognized compensation expense related
to unvested RSUs with performance measures. No RSUs with performance measures vested in 2019.
RSUs with Only Service Requirements
Evergy measures the fair value of RSUs with only service requirements based on the fair market value of the
underlying common stock as of the grant date. RSU awards with only service conditions recognize compensation
expense by multiplying shares by the grant-date fair value related to the RSU and recognizing it on a straight-line
basis over the requisite service period for the entire award, including for those RSUs that have a graded vesting
schedule. Nonforfeitable dividend equivalents, or the rights to receive cash equal to the value of dividends paid on
Evergy's common stock, are paid on certain of these RSUs during the vesting period. Nonforfeitable dividend
equivalents are recorded directly to retained earnings.
RSU activity for awards with only service requirements for 2019 is summarized in the following table.
Beginning balance January 1, 2019
Granted
Vested
Forfeited
Ending balance December 31, 2019
* weighted-average
Nonvested
Restricted
Share Units
217,256
70,395
(48,767)
(5,534)
233,350
Grant Date
Fair Value*
$
54.07
54.47
54.20
54.23
54.16
At December 31, 2019, the remaining weighted-average contractual term related to RSU awards with only service
requirements was 1.1 years. The weighted-average grant-date fair value of RSUs granted with only service
requirements was $54.47, $52.16 and $53.25 in 2019, 2018 and 2017, respectively. At December 31, 2019, there
was $5.2 million of unrecognized compensation expense related to unvested RSUs. The total fair value of RSUs
with only service requirements that vested was $2.6 million, $16.0 million and $6.1 million in 2019, 2018 and 2017,
respectively.
Performance Shares
Evergy's performance shares represent legacy Great Plains Energy performance shares that converted into
equivalent Evergy performance shares at the closing of the merger transaction. The vesting of performance shares
is contingent upon achievement of specific performance goals over a stated period of time as approved by the
Compensation and Leadership Development Committee of the Evergy Board. The number of performance shares
ultimately vested can vary from the number of shares initially granted depending on Evergy's performance over
stated performance periods. Compensation expense for performance shares is calculated by recognizing the portion
of the grant date fair value for each reporting period for which the requisite service has been rendered. Dividends
are accrued over the vesting period and paid in cash based on the number of performance shares ultimately paid.
118
The fair value of performance share awards was estimated using the market value of Evergy Kansas Central's and
Great Plains Energy's common stock at the valuation date upon conversion at the merger and a Monte Carlo
simulation technique that incorporates assumptions for inputs of expected volatilities, dividend yield and risk-free
rates. Expected volatility was based on daily stock price change based on historical common stock information
during a historical period commensurate with the remaining term of the performance period of the grant. The risk-
free rate was based upon the rate at the time of the evaluation for zero-coupon government bonds with a maturity
consistent with the remaining performance period of the grant. The dividend yield was based on the most recent
dividends paid by Evergy Kansas Central, as Evergy's stock price assumed Evergy Kansas Central's stock price on a
forward basis, and the grant date stock price on the valuation date.
Performance share activity for 2019 is summarized in the following table. Performance adjustment represents the
difference between the number of shares of common stock related to performance shares ultimately issued from the
number of performance shares initially granted which can vary depending on Evergy's performance over a stated
period of time.
Beginning balance January 1, 2019
Vested
Forfeited
Performance adjustment
Ending balance December 31, 2019
* weighted-average
Performance
Shares
348,496
(69,317)
(6,481)
(44,442)
228,256
Grant Date
Fair Value*
$
63.80
46.11
69.65
42.97
73.06
At December 31, 2019, the remaining weighted-average contractual term was 0.5 years. There were no shares
granted in 2019. The weighted-average grant-date fair value of shares granted was $63.79 in 2018. At
December 31, 2019, there was $2.2 million of total unrecognized compensation expense, net of forfeiture rates,
related to performance shares granted under the Evergy, Inc. Long-Term Incentive Plan, which will be recognized
over the remaining weighted-average contractual term. The total fair value of performance shares vested was $3.2
million in 2019. There were no vested performance shares in 2018.
Restricted Stock
Evergy's restricted stock represents legacy Great Plains Energy restricted stock that converted into equivalent
Evergy restricted stock at the closing of the merger transaction. Restricted stock cannot be sold or otherwise
transferred by the recipient prior to vesting and has a value equal to the fair market value of the shares on the issue
date. Restricted stock shares vest over a stated period of time with accruing reinvested dividends subject to the
same restrictions. Compensation expense, calculated by multiplying shares by the grant-date fair value related to
restricted stock, is recognized on a straight-line basis over the requisite service period of the award.
Restricted stock activity for 2019 is summarized in the following table.
Beginning balance January 1, 2019
Vested
Forfeited
Ending balance December 31, 2019
* weighted-average
Nonvested
Restricted Stock
116,675
(38,404)
(2,161)
76,110
Grant Date
Fair Value*
$
54.03
54.35
53.88
53.87
At December 31, 2019, the remaining weighted-average contractual term was 0.7 years. There were no shares
granted in 2019. The weighted-average grant-date fair value of shares granted was $54.05 in 2018. At
December 31, 2019, there was $0.8 million of total unrecognized compensation expense, net of forfeiture rates,
related to nonvested restricted stock granted under the Evergy, Inc. Long-Term Incentive Plan, which will be
119
recognized over the remaining weighted-average contractual term. The total fair value of shares vested was $2.1
million and $0.3 million for 2019 and 2018, respectively.
12. SHORT-TERM BORROWINGS AND SHORT-TERM BANK LINES OF CREDIT
Evergy's $2.5 billion master credit facility expires in 2023. Evergy, Evergy Kansas Central, Evergy Metro and
Evergy Missouri West have borrowing capacity under the master credit facility with specific sublimits for each
borrower. These sublimits can be unilaterally adjusted by Evergy for each borrower provided the sublimits remain
within minimum and maximum sublimits as specified in the facility. A default by any borrower under the facility or
one of their significant subsidiaries on other indebtedness totaling more than $100.0 million constitutes a default by
that borrower under the facility. Under the terms of this facility, each of Evergy, Evergy Kansas Central, Evergy
Metro and Evergy Missouri West is required to maintain a total indebtedness to total capitalization ratio, as defined
in the facility, of not greater than 0.65 to 1.00 at all times. As of December 31, 2019, Evergy, Evergy Kansas
Central, Evergy Metro and Evergy Missouri West were in compliance with this covenant.
The following table summarizes the committed credit facilities (excluding receivable sale facilities discussed in
Note 4) available to the Evergy Companies as of December 31, 2019 and 2018.
Amounts Drawn
Credit
Facility
Commercial
Paper
Letters of
Credit
(millions)
Cash
Borrowings
Available
Borrowings
450.0
1,000.0
600.0
450.0
n/a
$
0.7 $
20.0 $
249.2
199.3
93.4
14.2
—
2.1
—
—
—
429.3
736.6
400.7
354.5
2,500.0 $
541.9 $
17.0 $
20.0 $
1,921.1
450.0
1,000.0
600.0
450.0
n/a
$
1.0 $
— $
411.7
176.9
150.0
18.3
2.7
2.1
—
—
—
449.0
570.0
420.4
297.9
Weighted Average
Interest Rate on
Short-Term
Borrowings
2.99%
2.07%
2.02%
2.02%
—%
3.08%
2.95%
3.00%
December 31, 2019
Evergy, Inc.
Evergy Kansas Central
Evergy Metro
Evergy Missouri West
Evergy
December 31, 2018
Evergy, Inc.
Evergy Kansas Central
Evergy Metro
Evergy Missouri West
$
$
$
Evergy
$
2,500.0 $
738.6 $
24.1 $
— $
1,737.3
In March 2019, Evergy entered into a $1.0 billion, 6-month term loan credit agreement with a group of banks to
provide short-term financing for its common stock repurchase program. The agreement allowed for two term loans
during the 6-month term of the agreement, in an aggregate principal amount not to exceed the credit limit of the
agreement. At closing, Evergy borrowed $500.0 million under the agreement, allowing for one additional term loan
borrowing in a principal amount up to $500.0 million, which was subsequently utilized in June 2019. In September
2019, Evergy repaid its $1.0 billion of borrowings under the term loan credit agreement with proceeds from its
issuance of $1.6 billion of senior notes in September 2019.
120
13. LONG-TERM DEBT
The Evergy Companies' long-term debt is detailed in the following tables.
Issuing Entity
Year Due
Evergy
Evergy
Kansas
Central
(millions)
Evergy
Metro
December 31, 2019
Mortgage Bonds
5.10% Series
3.25% Series
2.55% Series
3.10% Series
4.125% Series
4.10% Series
4.625% Series
4.25% Series
3.25% Series
6.15% Series
6.53% Series
6.64% Series
4.30% Series
2.95% EIRR bonds
4.125% Series
9.44% Series
Pollution Control Bonds
1.39% Series(b)
1.39% Series(b)
1.39% Series(b)
2.50% Series
1.39% Series(b)
1.39% Series(b)
1.432% Series 2007A and 2007B(b)
2.75% Series 2008
Senior Notes
3.15% Series(g)
3.65% Series(g)
6.05% Series (5.78% rate)(a)(g)
5.30% Series(g)
4.20% Series(g)
4.20% Series(g)
8.27% Series
3.49% Series A
4.06% Series B
4.74% Series C
3.74% Series
4.85% Series
5.292% Series
2.45% Series
2.90% Series (3.77% rate)(a)
Medium Term Notes
7.33% Series
7.17% Series
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Missouri West, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Missouri West, Inc.
Evergy Missouri West, Inc.
Evergy Missouri West, Inc.
Evergy Missouri West, Inc.
Evergy Missouri West, Inc.
Evergy, Inc.(f)
Evergy, Inc.(f)
Evergy, Inc.
Evergy, Inc.
Evergy Missouri West, Inc.
Evergy Missouri West, Inc.
Fair value adjustment(e)
Current maturities
Unamortized debt discount and debt issuance costs
Total excluding current maturities(d)
121
$
250.0
250.0
350.0
300.0
550.0
430.0
250.0
300.0
300.0
50.0
175.0
100.0
250.0
79.5
400.0
2.3
45.0
30.5
21.9
50.0
14.5
10.0
146.5
23.4
300.0
350.0
250.0
400.0
300.0
300.0
80.9
36.0
60.0
150.0
100.0
350.0
287.5
800.0
800.0
$
250.0
250.0
350.0
300.0
550.0
430.0
250.0
300.0
300.0
50.0
175.0
100.0
250.0
—
—
—
45.0
30.5
21.9
50.0
14.5
10.0
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
79.5
400.0
—
—
—
—
—
—
—
146.5
23.4
300.0
350.0
250.0
400.0
300.0
300.0
—
—
—
—
—
—
—
—
—
$
2020
2025
2026
2027
2042
2043
2043
2045
2049
2023
2037
2038
2044
2023
2049
2020-2021
2032
2032
2027
2031
2032
2032
2035
2038
2023
2025
2035
2041
2047
2048
2021
2025
2033
2043
2022
2021
2022
2024
2029
2023
2023
3.0
7.0
125.5
(251.1)
(80.7)
8,746.7
$
—
—
—
(250.0)
(40.8)
3,436.1
$
—
—
—
—
(24.4)
2,525.0
$
Issuing Entity
Year Due
Evergy
Evergy
Kansas
Central
(millions)
Evergy
Metro
December 31, 2018
Mortgage Bonds
5.10% Series
3.25% Series
2.55% Series
3.10% Series
4.125% Series
4.10% Series
4.625% Series
4.25% Series
6.70% Series
6.15% Series
6.53% Series
6.64% Series
4.30% Series
2.95% EIRR bonds
7.15% Series 2009A (8.59% rate)(a)
9.44% Series
Pollution Control Bonds
2.46% Series(b)
2.46% Series(b)
2.46% Series(b)
2.50% Series
2.46% Series(b)
2.46% Series(b)
1.865% Series 2007A and 2007B(b)
2.75% Series 2008
Senior Notes
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Missouri West, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas Central, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Kansas South, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Metro, Inc.
Evergy Missouri West, Inc.
Evergy Missouri West, Inc.
Evergy Missouri West, Inc.
Evergy Missouri West, Inc.
Evergy, Inc.(f)
Evergy, Inc.(f)
3.15% Series
3.65% Series
6.05% Series (5.78% rate)(a)
5.30% Series
4.20% Series
4.20% Series
8.27% Series
3.49% Series A
4.06% Series B
4.74% Series C
4.85% Series
5.292% Series
Medium Term Notes
7.33% Series
7.17% Series
Fair value adjustment(e)
Current maturities (c)
Unamortized debt discount and debt issuance costs
$
2020
2025
2026
2027
2042
2043
2043
2045
2019
2023
2037
2038
2044
2023
2019
2019-2021
2032
2032
2027
2031
2032
2032
2035
2038
2023
2025
2035
2041
2047
2048
2021
2025
2033
2043
2021
2022
$
250.0
250.0
350.0
300.0
550.0
430.0
250.0
300.0
300.0
50.0
175.0
100.0
250.0
79.5
400.0
3.4
45.0
30.5
21.9
50.0
14.5
10.0
146.5
23.4
300.0
350.0
250.0
400.0
300.0
300.0
80.9
36.0
60.0
150.0
350.0
287.5
$
250.0
250.0
350.0
300.0
550.0
430.0
250.0
300.0
300.0
50.0
175.0
100.0
250.0
—
—
—
45.0
30.5
21.9
50.0
14.5
10.0
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
79.5
400.0
—
—
—
—
—
—
—
146.5
23.4
300.0
350.0
250.0
400.0
300.0
300.0
—
—
—
—
—
—
Evergy Missouri West, Inc.
Evergy Missouri West, Inc.
3.0
7.0
144.8
(705.4)
(57.2)
6,636.3
(a) Rate after amortizing gains/losses recognized in OCI on settlements of interest rate hedging instruments.
(b) Variable rate.
(c) Evergy's current maturities total as of December 31, 2018, includes $4.3 million of fair value adjustments recorded in connection with
—
—
—
(300.0)
(37.1)
3,389.8
Total excluding current maturities(d)
2023
2023
—
—
—
(400.0)
(19.3)
2,130.1
$
$
$
purchase accounting for the merger transaction.
(d) At December 31, 2019 and 2018, does not include $50.0 million and $21.9 million of secured Series 2005 Environmental Improvement
Revenue Refunding (EIRR) bonds because the bonds were repurchased in September 2015 and are held by Evergy Metro.
(e) Represents the fair value adjustments recorded at Evergy consolidated related to the long-term debt of Great Plains Energy, Evergy Metro
and Evergy Missouri West in connection with purchase accounting for the merger transaction. This amount is not part of future principal
payments and will amortize over the remaining life of the associated debt instruments.
(f) Originally issued by Great Plains Energy but assumed by Evergy, Inc. as part of the merger transaction.
(g) Effectively secured pursuant to the General Mortgage Indenture and Deed of Trust dated as of December 1, 1986, as supplemented (Evergy
Metro Mortgage Indenture) through the issuance of collateral mortgage bonds issued to the trustee for the unsecured senior notes in March
2019.
122
The following table summarizes Evergy's and Evergy Kansas Central's long-term debt of VIEs.
December 31
2019
2018
2.398% due 2021
Current maturities
Total excluding current maturities
$
$
(millions)
$
$
51.1
(32.3)
18.8
81.4
(30.3)
51.1
Mortgage Bonds
The Evergy Kansas Central and Evergy Kansas South mortgages each contain provisions restricting the amount of
first mortgage bonds (FMBs) that could be issued by each entity. Evergy Kansas Central and Evergy Kansas South
must be in compliance with such restrictions prior to the issuance of additional first mortgage bonds or other
secured indebtedness. The amount of Evergy Kansas Central FMBs authorized by its Mortgage and Deed of Trust,
dated July 1, 1939, as supplemented, is subject to certain limitations as described below. The amount of Evergy
Kansas South FMBs authorized by the Evergy Kansas South Mortgage and Deed of Trust, dated April 1, 1940, as
supplemented and amended, is limited to a maximum of $3.5 billion, unless amended further. FMBs are secured by
utility assets. Amounts of additional FMBs that may be issued are subject to property, earnings and certain
restrictive provisions, except in connection with certain refundings, of each mortgage. As of December 31, 2019,
approximately $305.4 million and $2,828.6 million principal amounts of additional Evergy Kansas Central FMBs
or Evergy Kansas South FMBs, respectively, could be issued under the most restrictive provisions of their
mortgages.
Evergy Metro has issued mortgage bonds under the Evergy Metro Mortgage Indenture, which creates a mortgage
lien on substantially all of Evergy Metro's utility plant. Additional Evergy Metro bonds may be issued on the basis
of 75% of property additions or retired bonds. As of December 31, 2019, approximately $4,923.3 million principal
amount of additional Evergy Metro mortgage bonds could be issued under the most restrictive provisions in the
mortgage.
Evergy Missouri West has issued mortgage bonds under the General Mortgage Indenture and Deed of Trust dated
April 1, 1946, as supplemented, which creates a mortgage lien on a portion of Evergy Missouri West's utility plant.
In March 2019, Evergy Metro issued collateral mortgage bonds secured by the Evergy Metro Mortgage Indenture to
serve as collateral for Evergy Metro's obligations under the following outstanding unsecured senior notes:
•
•
•
•
•
•
$300.0 million of 3.15% Series, maturing in 2023;
$350.0 million of 3.65% Series, maturing in 2025;
$250.0 million of 6.05% Series, maturing in 2035;
$400.0 million of 5.30% Series, maturing in 2041;
$300.0 million of 4.20% Series, maturing in 2047; and
$300.0 million of 4.20% Series, maturing in 2048.
The collateral mortgage bonds were issued to the applicable trustee for the unsecured senior notes, are only payable
if Evergy Metro defaults on the underlying unsecured senior notes and do not increase the amount of outstanding
debt for Evergy Metro.
As a result of the above transactions, Evergy Metro's outstanding senior notes have effectively become secured by
the mortgage lien of the Evergy Metro Mortgage Indenture and rank equally and ratably with all of Evergy Metro's
mortgage bonds, regardless of series, from time to time issued and outstanding under the Evergy Metro Mortgage
Indenture.
Also in March 2019, Evergy Metro issued, at a discount, $400.0 million of 4.125% Mortgage Bonds, maturing in
2049. Evergy Metro also repaid its $400.0 million of 7.15% Mortgage Bonds at maturity in April 2019.
123
In June 2019, Evergy Kansas South repaid its $300.0 million of 6.70% FMBs at maturity.
In August 2019, Evergy Kansas Central issued, at a discount, $300.0 million of 3.25% FMBs, maturing in 2049.
Senior Notes
Under the terms of the note purchase agreement for Evergy Missouri West's Series A, B and C Senior Notes, Evergy
Missouri West is required to maintain a consolidated indebtedness to consolidated capitalization ratio, as defined in
the agreement, not greater than 0.65 to 1.00. In addition, Evergy Missouri West's priority debt, as defined in the
agreement, cannot exceed 15% of consolidated tangible net worth, as defined in the agreement. At December 31,
2019, Evergy Missouri West was in compliance with these covenants.
In March 2019, Evergy Missouri West issued $100.0 million of 3.74% Senior Notes, maturing in 2022, under a note
purchase agreement.
In September 2019, Evergy issued, at a discount, $800.0 million of 2.45% Senior Notes, maturing in 2024 and
$800.0 million of 2.90% Senior Notes, maturing in 2029.
Scheduled Maturities
Evergy's, Evergy Kansas Central's and Evergy Metro's long-term debt maturities and the long-term debt maturities
of VIEs for the next five years are detailed in the following table.
Evergy(a)
Evergy Kansas Central(a)
Evergy Metro
VIEs
(a) Excludes long-term debt maturities of VIEs.
14. FAIR VALUE MEASUREMENTS
2020
2021
2022
2023
2024
(millions)
$
251.1
$
432.0
$
387.5
$
439.5
$
800.0
250.0
—
32.3
—
—
18.8
—
—
—
50.0
379.5
—
—
—
—
Values of Financial Instruments
GAAP establishes a hierarchical framework for disclosing the transparency of the inputs utilized in measuring
assets and liabilities at fair value. Management's assessment of the significance of a particular input to the fair
value measurement requires judgment and may affect the classification of assets and liabilities within the fair value
hierarchy levels. In addition, the Evergy Companies measure certain investments that do not have a readily
determinable fair value at NAV, which are not included in the fair value hierarchy. Further explanation of these
levels and NAV is summarized below.
Level 1 – Quoted prices are available in active markets for identical assets or liabilities. The types of assets and
liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities
listed on public exchanges.
Level 2 – Pricing inputs are not quoted prices in active markets but are either directly or indirectly observable. The
types of assets and liabilities included in Level 2 are certain marketable debt securities, financial instruments traded
in less than active markets or other financial instruments priced with models using highly observable inputs.
Level 3 – Significant inputs to pricing have little or no transparency. The types of assets and liabilities included in
Level 3 are those with inputs requiring significant management judgment or estimation.
NAV - Investments that do not have a readily determinable fair value are measured at NAV. These investments do
not consider the observability of inputs and, therefore, they are not included within the fair value hierarchy. The
Evergy Companies include in this category investments in private equity, real estate and alternative investment
124
funds that do not have a readily determinable fair value. The underlying alternative investments include
collateralized debt obligations, mezzanine debt and a variety of other investments.
The Evergy Companies record cash and cash equivalents, accounts receivable and short-term borrowings on their
consolidated balance sheets at cost, which approximates fair value due to the short-term nature of these instruments.
Interest Rate Derivatives
The Evergy Companies are exposed to market risks arising from changes in interest rates and may use derivative
instruments to manage these risks. From time to time, risk management activities may include entering into interest
rate swap agreements to protect against unfavorable interest rate changes relating to forecasted debt transactions.
These interest rate swap agreements can be designated as cash flow hedges, in which case gains and losses on the
interest rate swaps are deferred in other comprehensive income to be recognized as an adjustment to interest
expense over the same period that the hedged interest payments affect earnings. The Evergy Companies classify all
cash inflows and outflows for interest rate swap agreements accounted for as cash flow hedges of forecasted debt
transactions as financing activities on their consolidated statements of cash flows.
In September 2019, Evergy issued $800.0 million of 2.90% Senior Notes maturing in 2029 and paid $69.8 million
to settle an interest rate swap agreement with a notional amount of $500.0 million that was designated as a cash
flow hedge of interest payments on the debt issuance. Evergy entered into the interest rate swap agreement in
December 2018. The $69.8 million pre-tax loss was recorded in other comprehensive loss on Evergy's consolidated
statements of comprehensive income and is being reclassified from accumulated other comprehensive loss to
interest expense over the ten-year term of the debt. For 2019, $2.0 million and ($0.5) million were reclassified from
accumulated other comprehensive loss to interest expense and income tax expense, respectively, on Evergy's
consolidated statements of comprehensive income. As of December 31, 2019, Evergy expects to amortize $5.2
million to earnings from accumulated other comprehensive loss over the next twelve months.
Fair Value of Long-Term Debt
The Evergy Companies measure the fair value of long-term debt using Level 2 measurements available as of the
measurement date. The book value and fair value of the Evergy Companies' long-term debt and long-term debt of
variable interest entities is summarized in the following table.
Long-term debt(a)
Evergy(b)
Evergy Kansas Central
Evergy Metro
Long-term debt of variable interest entities(a)
Evergy
December 31
2019
2018
Book Value
Fair Value
Book Value
Fair Value
(millions)
$
8,997.8
$
9,750.2
$
7,341.7
$
3,686.1
2,525.0
4,078.8
2,932.2
3,689.8
2,530.1
7,412.1
3,771.3
2,637.5
$
51.1
$
51.5
$
81.4
$
81.3
81.3
Evergy Kansas Central
(a) Includes current maturities.
(b) Book value as of December 31, 2019 and 2018, includes $125.5 million and $144.8 million, respectively, of fair value adjustments
51.1
51.5
81.4
recorded in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger, which are not part of
future principal payments and will amortize over the remaining life of the associated debt instrument.
125
Recurring Fair Value Measurements
The following tables include the Evergy Companies' balances of financial assets and liabilities measured at fair
value on a recurring basis.
Description
Evergy Kansas Central
Assets
Nuclear decommissioning trust(a)
Domestic equity funds
International equity funds
Core bond fund
High-yield bond fund
Emerging markets bond fund
Combination debt/equity/other fund
Alternative investments fund
Real estate securities fund
Cash equivalents
Total nuclear decommissioning trust
Rabbi trust
Core bond fund
Combination debt/equity/other fund
Cash equivalents
Total rabbi trust
Total
Evergy Metro
Assets
Nuclear decommissioning trust(a)
Equity securities
Debt securities
U.S. Treasury
U.S. Agency
State and local obligations
Corporate bonds
Foreign governments
Cash equivalents
Other
Total nuclear decommissioning trust
Self-insured health plan trust(b)
Equity securities
Debt securities
Cash and cash equivalents
Total self-insured health plan trust
Total
Other Evergy
Assets
Rabbi trusts
Fixed income fund
Cash and cash equivalents
Total rabbi trusts
Evergy
Assets
Nuclear decommissioning trust(a)
Rabbi trusts
Self-insured health plan trust(b)
Total
December 31, 2019
Level 1
Level 2
(millions)
Level 3
NAV
$
$
$
$
$
$
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.4
2.2
33.2
0.1
—
0.3
36.2
—
5.3
—
5.3
41.5
—
—
—
36.2
—
5.3
41.5
$
$
$
$
$
$
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$
$
$
$
$
$
$
$
7.5
—
—
—
—
—
23.9
12.6
—
44.0
25.3
6.3
—
31.6
75.6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
13.3
—
13.3
44.0
44.9
—
88.9
$
$
86.1
52.0
39.3
22.3
19.4
16.4
23.9
12.6
0.5
272.5
25.3
6.3
0.1
31.7
304.2
$
$
78.6
52.0
39.3
22.3
19.4
16.4
—
—
0.5
228.5
—
—
0.1
0.1
228.6
$
211.1
$
211.1
50.3
—
—
—
—
3.1
—
264.5
0.5
1.4
2.7
4.6
269.1
—
0.5
0.5
493.0
0.6
4.6
498.2
$
$
$
$
$
50.3
0.4
2.2
33.2
0.1
3.1
0.3
300.7
0.5
6.7
2.7
9.9
310.6
13.3
0.5
13.8
573.2
45.5
9.9
628.6
$
$
$
$
$
126
Description
Evergy Kansas Central
Assets
Nuclear decommissioning trust(a)
Domestic equity funds
International equity funds
Core bond fund
High-yield bond fund
Emerging markets bond fund
Combination debt/equity/other fund
Alternative investments fund
Real estate securities fund
Cash equivalents
Total nuclear decommissioning trust
Rabbi trust
Core bond fund
Combination debt/equity/other fund
Cash equivalents
Total rabbi trust
Total
Evergy Metro
Assets
Nuclear decommissioning trust(a)
Equity securities
Debt securities
U.S. Treasury
U.S. Agency
State and local obligations
Corporate bonds
Foreign governments
Cash equivalents
Other
Total nuclear decommissioning trust
Self-insured health plan trust(b)
Equity securities
Debt securities
Cash and cash equivalents
Total self-insured health plan trust
Total
Other Evergy
Assets
Rabbi trusts
Fixed income fund
Total rabbi trusts
Liabilities
Interest rate swaps(c)
Total
Evergy
Assets
Nuclear decommissioning trust(a)
Rabbi trust
Self-insured health plan trust(b)
Total
Liabilities
Interest rate swaps(c)
Total
December 31, 2018
Level 1
Level 2
(millions)
Level 3
NAV
$
$
70.6
36.2
37.5
18.9
15.4
12.9
24.1
11.8
0.1
227.5
24.8
5.6
0.2
30.6
258.1
$
$
63.9
36.2
37.5
18.9
15.4
12.9
—
—
0.1
184.9
—
—
0.2
0.2
185.1
$
166.6
$
166.6
42.1
0.4
2.1
30.9
0.1
1.7
0.7
244.6
0.5
3.9
8.0
12.4
257.0
13.2
13.2
5.4
5.4
472.1
43.8
12.4
528.3
5.4
5.4
$
$
$
$
$
$
$
$
$
42.1
—
—
—
—
1.7
0.7
211.1
0.5
0.3
8.0
8.8
219.9
—
—
—
—
396.0
0.2
8.8
405.0
—
—
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
0.4
2.1
30.9
0.1
—
—
33.5
—
3.6
—
3.6
37.1
—
—
5.4
5.4
33.5
—
3.6
37.1
5.4
5.4
$
$
$
$
$
$
$
$
$
$
$
$
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$
$
$
$
$
$
$
$
$
$
$
$
6.7
—
—
—
—
—
24.1
11.8
—
42.6
24.8
5.6
—
30.4
73.0
—
—
—
—
—
—
—
—
—
—
—
—
—
—
13.2
13.2
—
—
42.6
43.6
—
86.2
—
—
(a) Fair value is based on quoted market prices of the investments held by the trust and/or valuation models.
(b) Fair value is based on quoted market prices of the investments held by the trust. Debt securities classified as Level 1 are comprised of U.S.
Treasury securities. Debt securities classified as Level 2 are comprised of corporate bonds, U.S. Agency, state and local obligations, and
other asset-backed securities.
(c) The fair value of interest rate swaps are determined by calculating the net present value of expected payments and receipts under the
interest rate swaps using observable market inputs including interest rates and London Interbank Offered Rate (LIBOR) swap rates.
127
Certain Evergy and Evergy Kansas Central investments included in the table above are measured at NAV as they do
not have readily determinable fair values. In certain situations, these investments may have redemption restrictions.
The following table provides additional information on these Evergy and Evergy Kansas Central investments.
December 31, 2019
December 31, 2018
December 31, 2019
Fair
Value
Unfunded
Commitments
Fair
Value
Unfunded
Redemption
Length of
Commitments
Frequency
Settlement
(millions)
7.5
$
3.3
$
6.7
$
4.3
(a)
23.9
12.6
44.0
25.3
6.3
$
$
—
—
3.3
$
24.1
11.8
42.6
— $
24.8
—
5.6
$
$
31.6
$
— $
30.4
$
(a)
65 days
65 days
— Quarterly
— Quarterly
4.3
—
—
—
(c)
(c)
(c)
(c)
Evergy Kansas Central
Nuclear decommissioning trust:
Domestic equity funds
Alternative investments fund(b)
Real estate securities fund(b)
Total
Rabbi trust:
Core bond fund
Combination debt/equity/other
fund
Total
Other Evergy
Rabbi trusts:
$
$
$
$
Fixed income fund
$
13.3
$
— $
13.2
$
—
(c)
(c)
Total Evergy investments at NAV $
(a) This investment is in five long-term private equity funds that do not permit early withdrawal. Investments in these funds cannot be
86.2
88.9
4.3
3.3
$
$
$
distributed until the underlying investments have been liquidated, which may take years from the date of initial liquidation. Three funds
have begun to make distributions. The initial investment in the fourth and fifth fund occurred in 2016 and 2018, respectively. The fourth
fund's term is 15 years, subject to the general partner's right to extend the term for up to three additional one-year periods. The fifth fund's
term will be 15 years after the initial closing date, subject to additional extensions approved by a fund advisory committee to provide for an
orderly liquidation of fund investments and dissolution of the fund.
(b) There is a holdback on final redemptions.
(c) This investment can be redeemed immediately and is not subject to any restrictions on redemptions.
128
The Evergy Companies hold equity and debt investments classified as securities in various trusts including for the
purposes of funding the decommissioning of Wolf Creek and for the benefit of certain retired executive officers of
Evergy Kansas Central. The Evergy Companies record net realized and unrealized gains and losses on the nuclear
decommissioning trusts in regulatory liabilities on their consolidated balance sheets and record net realized and
unrealized gains and losses on the Evergy Companies' rabbi trusts in the consolidated statements of income and
comprehensive income.
The following table summarizes the net unrealized gains (losses) for the Evergy Companies' nuclear
decommissioning trusts and rabbi trusts.
Evergy Kansas Central
Nuclear decommissioning trust - equity securities
Rabbi trust - equity securities
Total
Evergy Metro(a)
Nuclear decommissioning trust - equity securities
Nuclear decommissioning trust - debt securities
Total
Evergy
Nuclear decommissioning trust - equity securities
Nuclear decommissioning trust - debt securities
Rabbi trusts - equity securities
Total
2019
2018
(millions)
2017
$
$
$
$
$
33.3
3.2
36.5
40.7
5.1
45.8
74.0
5.1
3.1
82.2
$
(31.8)
1.0
(30.8)
(20.7)
(2.5)
(23.2)
(54.1)
(0.5)
1.0
(53.6)
$
$
$
15.7
(14.3)
1.4
26.7
0.5
27.2
15.7
—
(14.3)
1.4
$
$
$
$
$
$
(a) Evergy Metro amounts are included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
15. COMMITMENTS AND CONTINGENCIES
Environmental Matters
Set forth below are descriptions of contingencies related to environmental matters that may impact the Evergy
Companies' operations or their financial results. Management's assessment of these contingencies, which are based
on federal and state statutes and regulations, and regulatory agency and judicial interpretations and actions, has
evolved over time. These laws and regulations can also change, restrict or otherwise impact the Evergy Companies'
operations or financial results in many ways, including the handling or disposal of waste material and the planning
for future construction activities. The failure to comply with these laws and regulations could result in the
assessment of administrative, civil and criminal penalties and/or the imposition of remedial requirements. The
Evergy Companies believe that all of their operations are in substantial compliance with current federal, state and
local environmental standards.
There are a variety of final and proposed laws and regulations that could have a material adverse effect on the
Evergy Companies' operations and consolidated financial results. Due in part to the complex nature of
environmental laws and regulations, the Evergy Companies are unable to assess the impact of potential changes that
may develop with respect to the environmental contingencies described below.
Cross-State Air Pollution Update Rule
In September 2016, the Environmental Protection Agency (EPA) finalized the Cross-State Air Pollution (CSAPR)
Update Rule. The final rule addresses interstate transport of nitrogen oxides emissions in 22 states including
Kansas, Missouri and Oklahoma during the ozone season and the impact from the formation of ozone on downwind
states with respect to the 2008 ozone National Ambient Air Quality Standards (NAAQS). In December 2018, the
EPA finalized a determination, known as the CSAPR Close-Out Rule, demonstrating the CSAPR Update Rule fully
addressed certain upwind states' 2008 ozone NAAQS interstate transport obligations. Various states and others
have challenged both the CSAPR Update Rule and the CSAPR Close-Out Rule in the U.S. Court of Appeals for the
129
D.C. Circuit (D.C. Circuit). In the fourth quarter of 2019, the D.C. Circuit granted these petitions and remanded a
portion of the CSAPR Update Rule back to the EPA and vacated the CSAPR Close-Out Rule in its entirety. Due to
the uncertainty in what the future CSAPR Update Rule will include, the Evergy Companies cannot determine the
impact on their operations or consolidated financial results, but it could be material.
Greenhouse Gases
Burning coal and other fossil fuels releases carbon dioxide (CO2) and other gases referred to as greenhouse gases
(GHG). Various regulations under the federal Clean Air Act Amendments of 1990 (CAA) limit CO2 and other GHG
emissions, and in addition, other measures are being imposed or offered by individual states, municipalities and
regional agreements with the goal of reducing GHG emissions.
In August 2018, the EPA published in the Federal Register proposed regulations, which contained (1) emission
guidelines for GHG emissions from existing electric utility generating units (EGUs), (2) revisions to emission
guideline implementing regulations and (3) revisions to the new source review (NSR) program. These emission
guidelines are better known as the Affordable Clean Energy (ACE) Rule. In July 2019, the EPA published in the
Federal Register the final ACE Rule with one significant change from the proposal. The NSR program revisions
were not included in the final version and are expected to be addressed in a future rulemaking. The ACE Rule
establishes emission guidelines for states to use in the development of plans to reduce GHG emissions from existing
coal-fired EGUs. This rule defines the "best system of emission reduction" (BSER) for GHG emissions from
existing coal-fired EGUs as on-site, heat-rate efficiency improvements. The final rule also provides states with a
list of candidate technologies that can be used to establish standards of performance and incorporate these
performance standards into state plans. In order for the states to be able to effectively implement the emission
guidelines contained in the ACE Rule, the EPA is finalizing new regulations under Section 111(d) of the CAA to
help clarify this process. The ACE Rule became effective in September 2019. In conjunction with the finalization
of the ACE Rule, the EPA repealed its previously adopted Clean Power Plan (CPP). Also in September 2019, the
D.C. Circuit granted motions to dismiss challenges to the CPP and challenges to EPA's denial of reconsideration of
the CPP.
Due to uncertainty regarding what future state implementation plans will require for compliance with the ACE Rule
as well as legal challenges that have been filed, the Evergy Companies cannot determine the impact on their
operations or consolidated financial results, but the cost to comply with the ACE Rule, should it be upheld and
implemented in its current or a substantially similar form, could be material.
Water
The Evergy Companies discharge some of the water used in generation and other operations containing substances
deemed to be pollutants. A November 2015 EPA rule establishes effluent limitations guidelines (ELG) and
standards for wastewater discharges, including limits on the amount of toxic metals and other pollutants that can be
discharged. Implementation timelines for this 2015 rule vary from 2018 to 2023. On November 22, 2019, the EPA
published a proposed modification to the ELG rule. The proposed rule modifies numeric limits for flue gas
desulfurization (FGD) wastewater and adds a 10% volumetric purge limit for bottom ash transport water. The
timeline for final FGD wastewater compliance is also delayed by two years to December 31, 2025. The Evergy
Companies are in the process of reviewing the proposed rule and the costs to comply with these changes could be
material.
In April 2019, the U.S. Court of Appeals for the 5th Circuit (5th Circuit) issued a ruling that vacates and remands
portions of the original ELG rule. Due to this ruling, future ELG modifications for the best available technology
economically achievable for legacy waste water and leachate are likely.
In October 2014, the EPA's final standards for cooling water intake structures at power plants to protect aquatic life
took effect. The standards, based on Section 316(b) of the federal Clean Water Act (CWA), require subject facilities
to choose among seven best available technology options to reduce fish impingement. In addition, some facilities
must conduct studies to assist permitting authorities to determine whether and what site-specific controls, if any,
would be required to reduce entrainment of aquatic organisms. The Evergy Companies' current analysis indicates
this rule will not have a significant impact on their coal plants that employ cooling towers or cooling lakes that can
130
be classified as closed cycle cooling and do not expect the impact from this rule to be material. Plants without
closed cycle cooling are under evaluation for compliance with these standards and may require additional controls
that could be material.
Evergy Metro holds a permit from the Missouri Department of Natural Resources (MDNR) covering water
discharge from its Hawthorn Station. The permit authorizes Evergy Metro to, among other things, withdraw water
from the Missouri River for cooling purposes and return the heated water to the Missouri River. Evergy Metro has
applied for a renewal of this permit and the EPA has submitted an interim objection letter regarding the allowable
amount of heat that can be contained in the returned water. Until this matter is resolved, Evergy Metro continues to
operate under its current permit. Evergy and Evergy Metro cannot predict the outcome of this matter; however,
while less significant outcomes are possible, this matter may require a reduction in generation, installation of
cooling towers or other technology to cool the water, or both, any of which could have a material impact on
Evergy's and Evergy Metro's operations and consolidated financial results.
Regulation of Coal Combustion Residuals
In the course of operating their coal generation plants, the Evergy Companies produce CCRs, including fly ash,
gypsum and bottom ash. The EPA published a rule to regulate CCRs in April 2015, that requires additional CCR
handling, processing and storage equipment and closure of certain ash disposal units.
In March 2019, the D.C. Circuit issued a ruling to grant the EPA's request to remand the Phase I, Part I CCR rule.
This was in response to a prior court ruling requiring the EPA to address un-lined surface impoundment closure
requirements. On December 2, 2019, the EPA published a proposed rule called the Part A CCR Rule. This proposal
reclassifies clay-lined surface impoundments from "lined" to "unlined" and establishes a deadline of August 31,
2020 to initiate closure. The prior rule included a deadline of October 31, 2020 for unlined impoundments to
initiate closure. In February 2020, the EPA released a pre-publication version of a proposed rule called the Part B
CCR Rule. This proposal includes a process to allow unlined impoundments to continue to operate if a
demonstration is made to prove that they are not adversely impacting groundwater, human health or the
environment. The proposal also includes clarification regarding ash used in the closure of landfills and surface
impoundments. The Evergy Companies are in the process of reviewing these proposed rules and the costs to
comply with these changes could be material.
The Evergy Companies have recorded AROs for their current estimates for the closure of ash disposal ponds, but
the revision of these AROs may be required in the future due to changes in existing CCR regulations, the results of
groundwater monitoring of CCR units or changes in interpretation of existing CCR regulations or changes in the
timing or cost to close ash disposal ponds. If revisions to these AROs are necessary, the impact on the Evergy
Companies' operations or consolidated financial results could be material.
Storage of Spent Nuclear Fuel
Under the Nuclear Waste Policy Act of 1982, the Department of Energy (DOE) is responsible for the permanent
disposal of spent nuclear fuel. In 2010, the DOE filed a motion with the Nuclear Regulatory Commission (NRC) to
withdraw its then pending application to construct a national repository for the disposal of spent nuclear fuel and
high-level radioactive waste at Yucca Mountain, Nevada. The NRC has not yet issued a final decision on the matter.
Wolf Creek has elected to build a dry cask storage facility to expand its existing on-site spent nuclear fuel storage,
which is expected to provide additional capacity prior to 2022. The Evergy Companies expect that the majority of
the costs to construct the dry cask storage facility that would not have otherwise been incurred had the DOE begun
accepting spent nuclear fuel will be reimbursed by the DOE. The Evergy Companies cannot predict when, or if, an
off-site storage site or alternative disposal site will be available to receive Wolf Creek's spent nuclear fuel and will
continue to monitor this activity.
Nuclear Insurance
Nuclear liability, property and accidental outage insurance is maintained for Wolf Creek. These policies contain
certain industry standard terms, conditions and exclusions, including, but not limited to, ordinary wear and tear and
war. An industry aggregate limit of $3.2 billion for nuclear events ($1.8 billion of non-nuclear events) plus any
131
reinsurance, indemnity or any other source recoverable by Nuclear Electric Insurance Limited (NEIL), provider of
property and accidental outage insurance, exists for acts of terrorism affecting Wolf Creek or any other NEIL
insured plant within 12 months from the date of the first act. In addition, participation is required in industry-wide
retrospect assessment programs as discussed below.
Nuclear Liability Insurance
Pursuant to the Price-Anderson Act, liability insurance includes coverage against public nuclear liability claims
resulting from nuclear incidents to the required limit of public liability, which is approximately $13.9 billion. This
limit of liability consists of the maximum available commercial insurance of $0.4 billion and the remaining $13.5
billion is provided through mandatory participation in an industry-wide retrospective assessment program. Under
this retrospective assessment program, the owners of Wolf Creek are jointly and severally subject to an assessment
of up to $137.6 million (Evergy's share is $129.2 million and each of Evergy Kansas Central's and Evergy Metro's is
$64.6 million), payable at no more than $20.5 million (Evergy's share is $19.2 million and each of Evergy Kansas
Central's and Evergy Metro's is $9.6 million) per incident per year per reactor for any commercial U.S. nuclear
reactor qualifying incident. Both the total and yearly assessment is subject to an inflationary adjustment based on
the Consumer Price Index and applicable premium taxes. In addition, the U.S. Congress could impose additional
revenue-raising measures to pay claims.
Nuclear Property and Accidental Outage Insurance
The owners of Wolf Creek carry decontamination liability, nuclear property damage and premature nuclear
decommissioning liability insurance for Wolf Creek totaling approximately $2.8 billion. Insurance coverage for
non-nuclear property damage accidents total approximately $2.3 billion. In the event of an extraordinary nuclear
accident, insurance proceeds must first be used for reactor stabilization and site decontamination in accordance with
a plan mandated by the NRC. The Evergy Companies' share of any remaining proceeds can be used to pay for
property damage or, if certain requirements are met, including decommissioning the plant, toward a shortfall in the
nuclear decommissioning trust fund. The owners also carry additional insurance with NEIL to help cover costs of
replacement power and other extra expenses incurred during a prolonged outage resulting from accidental property
damage at Wolf Creek. If significant losses were incurred at any of the nuclear plants insured under the NEIL
policies, the owners of Wolf Creek may be subject to retrospective assessments under the current policies of
approximately $33.2 million (Evergy's share is $31.2 million and each of Evergy Kansas Central's and Evergy
Metro's is $15.6 million).
Nuclear Insurance Considerations
Although the Evergy Companies maintain various insurance policies to provide coverage for potential losses and
liabilities resulting from an accident or an extended outage, the insurance coverage may not be adequate to cover the
costs that could result from a catastrophic accident or extended outage at Wolf Creek. Any substantial losses not
covered by insurance, to the extent not recoverable in prices, would have a material effect on the Evergy
Companies' consolidated financial results.
Contractual Commitments - Fuel, Power and Other
The Evergy Companies' contractual commitments at December 31, 2019, excluding pensions, long-term debt and
leases, are detailed in the following tables. See Notes 10, 13 and 21 for information regarding pension, long-term
debt and lease commitments, respectively.
Evergy
Purchase commitments
Fuel
Power
Other
Total contractual commitments
2020
2021
2022
2023
2024
After 2024
Total
$
$
486.9
47.3
147.7
681.9
$
$
137.0
47.4
42.3
226.7
$
$
83.2
47.6
30.0
160.8
(millions)
84.7
$
47.8
25.1
157.6
$
$
$
17.1
41.7
19.4
78.2
$
$
94.1
325.2
117.7
537.0
$
903.0
557.0
382.2
$ 1,842.2
132
Evergy Kansas Central
Purchase commitments
Fuel
Other
Total contractual commitments
Evergy Metro
2020
2021
2022
2023
2024
After 2024
Total
$
$
269.9
76.5
346.4
$
$
33.0
11.7
44.7
$
$
47.2
4.7
51.9
(millions)
45.7
$
3.0
48.7
$
$
$
11.5
0.2
11.7
$
$
59.0
—
59.0
$
$
466.3
96.1
562.4
2020
2021
2022
2023
2024
After 2024
Total
Purchase commitments
(millions)
Fuel
Power
Other
$
180.2
$
34.8
58.4
$
92.5
34.9
29.0
Total contractual commitments
$
273.4
$
156.4
$
36.0
35.1
24.2
95.3
$
$
39.0
35.3
21.6
95.9
$
$
5.6
29.2
18.7
53.5
$
35.1
$
388.4
225.4
112.9
394.7
264.8
$
373.4
$ 1,047.9
Fuel commitments consist of commitments for nuclear fuel, coal and coal transportation. Power commitments
consist of certain commitments for renewable energy under power purchase agreements. Other represents
individual commitments entered into in the ordinary course of business.
16. GUARANTEES
In the ordinary course of business, Evergy and certain of its subsidiaries enter into various agreements providing
financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for
example, guarantees and letters of credit. These agreements are entered into primarily to support or enhance the
creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of
sufficient credit to accomplish the subsidiary's intended business purposes. In connection with the closing of the
merger, Evergy assumed the guarantees previously provided to Evergy Missouri West by Great Plains Energy. The
majority of these agreements guarantee Evergy's own future performance, so a liability for the fair value of the
obligation is not recorded.
At December 31, 2019, Evergy has provided $110.2 million of credit support for Evergy Missouri West as follows:
• Evergy direct guarantees to Evergy Missouri West counterparties totaling $17.0 million, which expire in
2020, and
• Evergy's guarantee of Evergy Missouri West long-term debt totaling $93.2 million, which includes debt
with maturity dates ranging from 2020 to 2023.
Evergy has also guaranteed Evergy Missouri West's commercial paper program. At December 31, 2019, Evergy
Missouri West had $93.4 million of commercial paper outstanding. None of the guaranteed obligations are subject
to default or prepayment if Evergy Missouri West's credit ratings were downgraded.
17. RELATED PARTY TRANSACTIONS AND RELATIONSHIPS
In the normal course of business, Evergy Kansas Central, Evergy Metro and Evergy Missouri West engage in
related party transactions with one another. A summary of these transactions and the amounts associated with them
is provided below. Transactions between Evergy Kansas Central and either Evergy Metro or Evergy Missouri West
prior to June 4, 2018, the date of the merger, are not reflected below.
Jointly-Owned Plants and Shared Services
Evergy Metro employees manage Evergy Missouri West's business and operate its facilities at cost, including
Evergy Missouri West's 18% ownership interest in Evergy Metro's Iatan Nos. 1 and 2. The operating expenses and
capital costs billed from Evergy Metro to Evergy Missouri West were $172.8 million for 2019, $183.2 million for
2018 and $196.3 million for 2017.
133
Evergy Kansas Central employees manage JEC and operate its facilities at cost, including Evergy Missouri West's
8% ownership interest in JEC. The operating expenses and capital costs billed from Evergy Kansas Central to
Evergy Missouri West for JEC and other various business activities were $24.9 million for 2019 and $12.3 million
for 2018.
Evergy Metro employees manage La Cygne Station and operate its facilities at cost, including Evergy Kansas
Central's 50% interest in La Cygne Station. Evergy Metro and Evergy Kansas Central employees also provide one
another with shared service support, including costs related to human resources, information technology, accounting
and legal services. The operating expenses and capital costs billed from Evergy Metro to Evergy Kansas Central
were $154.9 million for 2019 and $82.9 million for 2018. The operating and capital costs billed from Evergy
Kansas Central to Evergy Metro were $40.6 million for 2019 and $17.5 million for 2018.
Money Pool
Evergy Metro and Evergy Missouri West are also authorized to participate in the Evergy, Inc. money pool, an
internal financing arrangement in which funds may be lent on a short-term basis to Evergy Metro and Evergy
Missouri West from Evergy, Inc. and between Evergy Metro and Evergy Missouri West. At December 31, 2019 and
2018, Evergy Metro had no outstanding receivables or payables under the money pool.
Related Party Net Receivables and Payables
The following table summarizes Evergy Kansas Central's and Evergy Metro's related party net receivables and
payables.
Evergy Kansas Central
Net receivable from Evergy Missouri West
Net payable to Evergy Metro
Net receivable from (payable to) Evergy
Evergy Metro
Net receivable from Evergy Missouri West
Net receivable from Evergy Kansas Central
Net receivable from (payable to) Evergy
December 31
2019
2018
(millions)
$
$
3.1
(14.9)
6.9
78.7
14.9
(4.3)
2.6
(13.5)
(1.4)
72.6
13.5
15.7
$
$
Tax Allocation Agreement
Evergy files a consolidated federal income tax return as well as unitary and combined income tax returns in several
state jurisdictions with Kansas and Missouri being the most significant. Income taxes for consolidated or combined
subsidiaries are allocated to the subsidiaries based on separate company computations of income or loss. As of
December 31, 2019 and 2018, Evergy Kansas Central had income taxes receivable from Evergy of $37.9 million
and $42.7 million, respectively. As of December 31, 2019 and 2018, Evergy Metro had income taxes payable to
Evergy of $14.1 million and $2.0 million, respectively.
Leases
Evergy Metro leases certain transmission equipment from Evergy Kansas Central. This lease was entered into prior
to the merger in an arms-length transaction and is accounted for as an operating lease. As of December 31, 2019,
Evergy Metro had a right-of-use asset of $29.5 million recorded within other long-term assets, $0.6 million of lease
liability recorded in other current liabilities and $28.9 million of lease liability recorded in other long-term liabilities
on its consolidated balance sheet related to this lease. The assets and liabilities related to this lease between Evergy
Kansas Central and Evergy Metro are eliminated at consolidated Evergy.
134
18. SHAREHOLDERS' EQUITY
Evergy's authorized capital stock consists of 600 million shares of common stock, without par value, and 12 million
shares of Preference Stock, without par value.
Evergy Registration Statements
In November 2018, Evergy filed an automatic shelf registration statement providing for the sale of unlimited
amounts of securities with the SEC, which expires in November 2021.
Evergy has registered shares of its common stock with the SEC for its Dividend Reinvestment and Direct Stock
Purchase Plan. Shares issued under the plan may be either newly issued shares or shares purchased on the open
market.
Evergy has registered shares of its common stock with the SEC for the Evergy, Inc. 401(k) Savings Plan. Shares
issued under the plans may be either newly issued shares or shares purchased on the open market.
Common Stock Repurchase Program
In July 2018, the Evergy Board authorized the repurchase of up to 60 million shares of Evergy's common stock.
Evergy has utilized various methods to effectuate the share repurchase program since its authorization, including the
repurchase of shares through accelerated share repurchase (ASR) agreements and open market transactions. Evergy
retires repurchased common stock shares in the period the shares are repurchased. For 2019, Evergy had total
repurchases of common stock of $1,628.7 million and had repurchased 28.8 million shares under the repurchase
program. Since the start of the repurchase program in August 2018, Evergy has made total repurchases of common
stock of $2,671.0 million and has repurchased 45.2 million shares under the repurchase program. Evergy does not
anticipate making additional repurchases of common stock under its share repurchase program while the Strategic
Review & Operations Committee of the Evergy Board conducts its review of ways to enhance long-term
shareholder value, which is expected to conclude in the first half of 2020.
The following table summarizes the ASRs completed as part of Evergy's common stock repurchase program.
Date ASR Entered
Final Settlement Date
August 2018
November 2018
March 2019
June 2019
September 2019
October/November 2018
$
February 2019
June 2019
September 2019
November/December 2019
Amount
(millions)
Shares
Delivered
450.0
475.0
450.0
500.0
500.0
7.9
8.3
7.8
8.1
7.8
Under the ASR agreements entered into with various financial institutions, Evergy was delivered a number of shares
of its common stock based on the amount of the ASR agreement and the average daily volume-weighted average
price of its common stock during the term of the ASR agreement, less a negotiated discount. Evergy reflects ASRs
as a repurchase of common stock in the period the shares are delivered for purposes of calculating earnings per
share and as forward contracts indexed to its own common stock. Evergy's ASRs have met all of the applicable
criteria for equity classification and therefore are not accounted for as derivative instruments.
Dividend Restrictions
Evergy depends on its subsidiaries to pay dividends on its common stock. The Evergy Companies have certain
restrictions stemming from statutory requirements, corporate organizational documents, covenants and other
conditions that could affect dividend levels or the ability to pay dividends.
The KCC order authorizing the merger transaction requires Evergy to maintain consolidated common equity of at
least 35% of total consolidated capitalization.
135
Under the Federal Power Act, Evergy Kansas Central, Evergy Metro and Evergy Missouri West generally can pay
dividends only out of retained earnings. Certain conditions in the MPSC and KCC orders authorizing the merger
transaction also require Evergy Kansas Central and Evergy Metro to maintain consolidated common equity of at
least 40% of total capitalization. Other conditions in the MPSC and KCC merger orders require Evergy Kansas
Central, Evergy Metro and Evergy Missouri West to maintain credit ratings of at least investment grade. If Evergy
Kansas Central's, Evergy Metro's or Evergy Missouri West's credit ratings are downgraded below the investment
grade level as a result of their affiliation with Evergy or any of Evergy's affiliates, the impacted utility shall not pay
a dividend to Evergy without KCC or MPSC approval or until the impacted utility's investment grade credit rating
has been restored.
The master credit facility of Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West and the note
purchase agreements for certain Evergy Missouri West senior notes contain covenants requiring the respective
company to maintain a consolidated indebtedness to consolidated total capitalization ratio of not more than 0.65 to
1.00 at all times.
As of December 31, 2019, all of Evergy's and Evergy Kansas Central's retained earnings and net income were free
of restrictions and Evergy Metro had a retained earnings restriction of $152.0 million. Evergy's subsidiaries had
restricted net assets of approximately $5.0 billion as of December 31, 2019. These restrictions are not expected to
affect the Evergy Companies' ability to pay dividends at the current level for the foreseeable future.
19. VARIABLE INTEREST ENTITIES
In determining the primary beneficiary of a VIE, the Evergy Companies assess the entity's purpose and design,
including the nature of the entity's activities and the risks that the entity was designed to create and pass through to
its variable interest holders. A reporting enterprise is deemed to be the primary beneficiary of a VIE if it has (a) the
power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (b) the
obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE.
The primary beneficiary of a VIE is required to consolidate the VIE. The trust holding an 8% interest in JEC was a
VIE until the expiration of a purchase option in July 2017 and then again during 2019 until the 8% interest was
purchased by Evergy Kansas Central in August 2019. The trust holding Evergy Kansas Central's 50% interest in La
Cygne Unit 2 is a VIE and Evergy Kansas Central remains the primary beneficiary of the trust.
All involvement with entities by the Evergy Companies is assessed to determine whether such entities are VIEs and,
if so, whether or not the Evergy Companies are the primary beneficiaries of the entities. The Evergy Companies
also continuously assess whether they are the primary beneficiary of the VIE with which they are involved.
Prospective changes in facts and circumstances may cause identification of the primary beneficiary to be
reconsidered.
8% Interest in JEC
Under an agreement that expired in August 2019, Evergy Kansas Central leased an 8% interest in JEC from a trust.
The trust was financed with an equity contribution from an owner participant and debt issued by the trust. The trust
was created specifically to purchase the 8% interest in JEC and lease it to a third party and did not hold any other
assets. Evergy Kansas Central met the requirements to be considered the primary beneficiary of the trust until July
2017, when a contractual option to purchase the 8% interest in the plant covered by the lease expired. Accordingly,
Evergy Kansas Central deconsolidated the trust in the third quarter of 2017. Evergy Kansas Central then
reconsolidated the trust as a VIE in the first quarter of 2019 following an agreement with the owner to purchase the
8% interest in JEC from the trust in August 2019. Evergy Kansas Central deconsolidated the trust for the final time
following the closing of this purchase in August 2019.
50% Interest in La Cygne Unit 2
Under an agreement that expires in September 2029, Evergy Kansas Central entered into a sale-leaseback
transaction with a trust under which the trust purchased Evergy Kansas Central's 50% interest in La Cygne Unit 2
and subsequently leased it back to Evergy Kansas Central. The trust was financed with an equity contribution from
an owner participant and debt issued by the trust. The trust was created specifically to purchase the 50% interest in
136
La Cygne Unit 2 and lease it back to Evergy Kansas Central and does not hold any other assets. Evergy Kansas
Central meets the requirements to be considered the primary beneficiary of the trust. In determining the primary
beneficiary of the trust, Evergy Kansas Central concluded that the activities of the trust that most significantly
impact its economic performance and that Evergy Kansas Central has the power to direct include (1) the operation
and maintenance of the 50% interest in La Cygne Unit 2 and (2) Evergy Kansas Central's ability to exercise a
purchase option at the end of the agreement at the lesser of fair value or a fixed amount. Evergy Kansas Central has
the potential to receive benefits from the trust that could potentially be significant if the fair value of the 50%
interest in La Cygne Unit 2 at the end of the agreement is greater than the fixed amount.
The following table summarizes the assets and liabilities related to the VIE described above that are recorded on
Evergy's and Evergy Kansas Central's consolidated balance sheets.
Assets:
Property, plant and equipment of variable interest entities, net
Liabilities:
Current maturities of long-term debt of variable interest entities
Accrued interest(a)
Long-term debt of variable interest entities, net
December 31
2019
2018
(millions)
$
$
$
$
162.0
32.3
0.3
18.8
169.2
30.3
0.5
51.1
(a) Included in accrued interest on Evergy's and Evergy Kansas Central's consolidated balance sheets.
All of the liabilities noted in the table above relate to the purchase of the property, plant and equipment of the VIE.
The assets of the VIE can be used only to settle obligations of the VIE and the VIE's debt holders have no recourse
to the general credit of Evergy and Evergy Kansas Central. Evergy and Evergy Kansas Central have not provided
financial or other support to the VIE and are not required to provide such support. Evergy and Evergy Kansas
Central did not record any gain or loss upon the initial consolidation of the VIE.
20. TAXES
Components of income tax expense are detailed in the following tables.
Evergy
Current income taxes
Federal
State
Total
Deferred income taxes
Federal
State
Total
Investment tax credit
Deferral
Amortization
Total
Income tax expense
2019
2018
2017
$
(39.5)
15.0
(24.5)
(millions)
(67.4)
$
2.2
(65.2)
93.2
27.5
120.7
5.2
(4.4)
0.8
97.0
$
$
160.1
(32.3)
127.8
—
(3.6)
(3.6)
59.0
$
$
0.1
0.4
0.5
122.8
30.7
153.5
—
(2.8)
(2.8)
151.2
137
Evergy Kansas Central
Current income taxes
Federal
State
Total
Deferred income taxes
Federal
State
Total
Investment tax credit
Deferral
Amortization
Total
Income tax expense (benefit)
Evergy Metro(a)
Current income taxes
Federal
State
Total
Deferred income taxes
Federal
State
Total
Investment tax credit
Amortization
Total
$
$
$
2019
2018
2017
(millions)
(0.3)
$
(1.8)
(2.1)
43.5
(42.9)
0.6
—
(2.8)
(2.8)
(4.3)
$
37.9
2.6
40.5
(8.9)
18.4
9.5
5.2
(3.1)
2.1
52.1
$
$
0.1
0.4
0.5
122.8
30.7
153.5
—
(2.8)
(2.8)
151.2
2019
2018
2017
(millions)
29.8
$
8.9
38.7
$
(3.4)
53.0
49.6
43.9
22.4
66.3
(24.5)
(5.0)
(29.5)
(1.1)
(1.1)
35.7
(1.0)
(1.0)
87.3
37.4
8.3
45.7
74.7
8.8
83.5
(1.0)
(1.0)
128.2
Income tax expense
$
(a)Evergy Metro amounts are included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
$
$
Effective Income Tax Rates
Effective income tax rates reflected in the financial statements and the reasons for their differences from the
statutory federal rates are detailed in the following tables.
Evergy
Federal statutory income tax
COLI policies
State income taxes
Flow through depreciation for plant-related differences
Federal tax credits
Non-controlling interest
AFUDC equity
Amortization of federal investment tax credits
Changes in uncertain tax positions, net
Federal or state tax rate change
Valuation allowance
Stock compensation
Officer compensation limitation
Other
Effective income tax rate
138
2019
2018
2017
21.0%
(1.8)
5.0
(4.5)
(4.9)
(0.4)
(0.1)
(0.5)
(0.2)
—
(1.0)
0.1
0.1
(0.4)
12.4%
21.0%
(1.9)
4.9
0.8
(6.4)
(0.4)
(0.1)
(0.6)
0.1
(8.7)
0.4
(0.4)
1.2
(0.2)
9.7%
35.0%
(3.1)
4.1
2.3
(6.9)
(0.9)
(0.2)
(0.6)
—
2.5
0.3
(0.9)
0.2
(0.8)
31.0%
Evergy Kansas Central
Federal statutory income tax
COLI policies
State income taxes
Flow through depreciation for plant-related differences
Federal tax credits
Non-controlling interest
AFUDC equity
Amortization of federal investment tax credits
Changes in uncertain tax positions, net
Federal or state tax rate change
Valuation allowance
Stock compensation
Officer compensation limitation
Other
Effective income tax rate
Evergy Metro(a)
Federal statutory income tax
COLI policies
State income taxes
Flow through depreciation for plant-related differences
Federal tax credits
AFUDC equity
Amortization of federal investment tax credits
Federal or state tax rate change
Valuation allowance
Stock compensation
Officer compensation limitation
Other
Effective income tax rate
2019
21.0%
(3.3)
5.3
(0.1)
(7.4)
(0.8)
(0.1)
(0.7)
(0.4)
—
(0.4)
(0.1)
—
(0.3)
12.7%
2018
21.0 %
(3.3)
5.0
1.6
(10.4)
(0.6)
(0.2)
(0.8)
0.1
(15.3)
0.5
(0.8)
1.8
0.2
(1.2)%
2017
35.0%
(3.1)
4.1
2.3
(6.9)
(0.9)
(0.2)
(0.6)
—
2.5
0.3
(0.9)
0.2
(0.8)
31.0%
2019
2018
2017
21.0%
(0.2)
4.7
(9.4)
(2.5)
(0.2)
(0.4)
—
—
—
0.3
(1.0)
12.3%
21.0%
(0.2)
5.5
(2.5)
(2.1)
(0.1)
(0.4)
14.1
—
—
0.6
(1.0)
34.9%
35.0%
(0.3)
3.8
0.5
(2.4)
(0.7)
(0.3)
5.3
0.4
0.2
0.1
—
41.6%
(a)Evergy Metro amounts are included in consolidated Evergy from June 4, 2018, the date of the closing of the merger, and thereafter.
139
Deferred Income Taxes
The tax effects of major temporary differences resulting in deferred income tax assets (liabilities) in the
consolidated balance sheets is in the following table.
Deferred tax assets:
2019
Evergy
Kansas
Central
Evergy
December 31
Evergy
Metro
Evergy
(millions)
2018
Evergy
Kansas
Central
Evergy
Metro
$
Tax credit carryforward
Income taxes refundable to customers, net
Deferred employee benefit costs
Net operating loss carryforward
Deferred state income taxes
Alternative minimum tax carryforward
Accrued liabilities
Other
$
$
548.9
466.3
197.0
163.4
64.4
37.9
80.4
183.2
Total deferred tax assets before valuation
allowance
Valuation allowances
Total deferred tax assets, net
1,741.5
(17.5)
1,724.0
337.3
234.3
93.4
23.1
64.4
13.4
14.5
99.1
879.5
—
879.5
$
204.4
176.2
120.4
61.9
—
—
29.1
55.1
647.1
—
647.1
$
508.1
478.1
215.4
383.3
62.5
73.4
82.6
193.5
1,996.9
(27.3)
1,969.6
$
307.1
233.1
89.6
60.7
62.5
26.7
13.6
101.7
895.0
(1.7)
893.3
194.0
186.9
118.3
119.2
—
—
32.8
46.7
697.9
—
697.9
Deferred tax liabilities:
Plant-related
Deferred employee benefit costs
Acquisition premium
Other
Total deferred tax liabilities
Net deferred income tax liabilities
(3,107.1)
(173.3)
(68.2)
(119.8)
(3,468.4)
(1,157.0)
(79.5)
—
(53.4)
(1,289.9)
$ (1,744.4) $ (817.7) $ (642.8) $ (1,599.2) $ (815.4) $
(1,491.6)
(89.6)
(72.6)
(54.9)
(1,708.7)
(3,164.9)
(199.9)
(72.6)
(131.4)
(3,568.8)
(1,481.7)
(93.4)
(68.2)
(53.9)
(1,697.2)
(1,199.7)
(86.1)
—
(43.9)
(1,329.7)
(631.8)
Tax Credit Carryforwards
At December 31, 2019 and 2018, Evergy had $379.0 million and $333.8 million, respectively, of federal general
business income tax credit carryforwards. At December 31, 2019 and 2018, Evergy Kansas Central had $168.8
million and $134.0 million, respectively, of federal general business income tax credit carryforwards. At
December 31, 2019 and 2018, Evergy Metro had $203.2 million and $192.8 million, respectively, of federal general
business income tax credit carryforwards. The carryforwards for Evergy, Evergy Kansas Central and Evergy Metro
relate primarily to wind production tax credits and advanced coal investment tax credits and expire in the years
2020 to 2039. Approximately $0.4 million of Evergy's credits are related to Low Income Housing credits that were
acquired in Great Plains Energy's acquisition of Evergy Missouri West. Due to federal limitations on the utilization
of income tax attributes acquired in the Evergy Missouri West acquisition, Evergy expects a portion of these credits
to expire unutilized and has provided a valuation allowance against $0.3 million of the federal income tax benefit.
140
The year of origin of Evergy's, Evergy Kansas Central's and Evergy Metro's related tax benefit amounts for federal
tax credit carryforwards as of December 31, 2019 are detailed in the following table.
Year of Origin
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Evergy
$
Amount of Benefit
Evergy Kansas
Central
(millions)
Evergy Metro
$
7.3
9.7
0.3
0.3
0.3
0.3
0.3
0.6
39.8
47.7
18.4
13.3
14.4
24.3
24.1
24.7
27.1
43.9
43.9
38.3
$
7.3
9.7
0.2
0.2
0.2
0.2
0.2
0.6
0.5
0.2
—
—
3.6
11.3
10.7
10.9
11.0
35.1
36.3
30.6
—
—
—
—
—
—
—
—
38.9
47.4
18.2
13.2
10.7
12.9
13.0
13.2
12.4
8.2
7.5
7.6
$
379.0
$
168.8
$
203.2
At December 31, 2019 and 2018, Evergy had $169.9 million and $174.3 million, respectively, of tax benefits related
to state income tax credit carryforwards. At December 31, 2019 and 2018, Evergy Kansas Central had $168.5
million and $173.1 million, respectively, of tax benefit related to state income tax credit carryforwards. At
December 31, 2019 and 2018, Evergy Metro had $1.2 million of tax benefits related to state income tax credit
carryforwards. The state income tax credits relate primarily to the Kansas high performance incentive program tax
credits and expire in the years 2024 to 2034.
Net Operating Loss Carryforwards
At December 31, 2019 and 2018, Evergy had $132.4 million and $324.2 million, respectively, of tax benefits related
to federal net operating loss (NOL) carryforwards. At December 31, 2019 and 2018, Evergy Kansas Central had
$12.3 million and $40.1 million, respectively, of tax benefits related to federal NOL carryforwards. At
December 31, 2019 and 2018, Evergy Metro had $56.2 million and $107.5 million, respectively, of tax benefits
related to federal NOL carryforwards. Approximately $51.1 million at December 31, 2019 are tax benefits related
to NOLs that were acquired in the Evergy Missouri West acquisition. Due to federal limitations on the utilization of
income tax attributes acquired in the Evergy Missouri West acquisition, Evergy expects a portion of these credits to
expire unutilized and has provided a valuation allowance against $7.1 million of the federal income tax benefit. The
federal NOL carryforwards expire in years 2023 to 2037.
141
The year of origin of Evergy's, Evergy Kansas Central's and Evergy Metro's related tax benefit amounts for federal
NOL carryforwards as of December 31, 2019 are detailed in the following table.
Year of Origin
Evergy
2005
2006
2014
2015
2016
2017
$
$
19.1
32.0
2.8
58.8
4.6
15.1
132.4
$
Amount of Benefit
Evergy Kansas
Central
(millions)
$
— $
Evergy Metro
—
—
0.9
55.3
—
—
56.2
—
0.2
—
—
12.1
12.3
$
In addition, Evergy also had deferred tax benefits of $31.0 million and $59.1 million related to state NOLs as of
December 31, 2019 and 2018, respectively. Evergy Kansas Central had deferred tax benefits of $10.8 million and
$20.6 million related to state NOLs as of December 31, 2019 and 2018, respectively. Evergy Metro had deferred
tax benefits of $5.7 million and $11.7 million related to state NOLs as of December 31, 2019 and 2018,
respectively. The state NOL carryforwards expire in years 2020 to 2038. Evergy does not expect to utilize $10.1
million of NOLs before the expiration date of the carryforwards of NOLs in certain states. Therefore, a valuation
allowance has been provided against $10.1 million of state tax benefits.
Alternative Minimum Tax Carryforwards
At December 31, 2019 and 2018, Evergy had $37.9 million and $73.4 million, respectively, of federal alternative
minimum tax (AMT) credit carryforwards. At December 31, 2019 and 2018, Evergy Kansas Central had $13.4
million and $26.7 million, respectively, of federal AMT carryforwards. These credits do not expire and can be used
to reduce taxes paid in the future or become refundable starting in 2018.
Valuation Allowances
Evergy is required to assess the ultimate realization of deferred tax assets using a "more likely than not" assessment
threshold. This assessment takes into consideration tax planning strategies within Evergy's control. As a result of
this assessment, Evergy has established a partial valuation allowance for federal and state tax NOL carryforwards
and tax credit carryforwards. During 2019, $9.8 million of tax benefit was recorded in continuing operations
primarily related to AMT credits and the expiration of certain state NOL carryforwards.
Federal Tax Reform
In December 2017, the U.S. Congress passed and President Donald Trump signed Public Law No. 115-97,
commonly referred to as the TCJA. The TCJA represents the first major reform in U.S. income tax law since 1986.
Most notably, the TCJA reduces the current top corporate income tax rate from 35% to 21% beginning in 2018,
repeals the corporate AMT, makes existing AMT tax credit carryforwards refundable, and changes the deductibility
and taxability of certain items, among other things. Prior to the change in tax rates that has been reflected in their
2018 rate cases, Evergy Kansas Central, Evergy Metro and Evergy Missouri West recovered the cost of income
taxes in rates from their customers based on the 35% federal corporate income tax rate.
In January 2018, the KCC issued an order requiring certain regulated public utilities, including Evergy Kansas
Central and Evergy Metro, to begin recording a regulatory liability for the difference between the new federal
corporate tax rate and amounts currently collected in rates. In the second quarter of 2018, Evergy Kansas Central
and Evergy Metro entered into settlement agreements with KCC staff and other intervenors in which they further
agreed to begin deferring any impacts of the TCJA on their excess accumulated deferred income taxes to a
regulatory liability. The KCC approved these settlement agreements in June 2018. Evergy Metro and Evergy
142
Missouri West had also recorded regulatory liabilities in 2018 due to the probability that they would also be required
to make similar refunds to their Missouri customers.
The final regulatory treatment of these regulatory liabilities for the refund of tax reform benefits was determined in
each of Evergy Kansas Central's, Evergy Metro's and Evergy Missouri West's rate cases with the KCC and MPSC.
See Note 5 for more information and the amounts of the regulatory liabilities recorded by the Evergy Companies.
Missouri Tax Reform
On June 1, 2018, the Missouri governor signed Senate Bill (S.B.) 884 into law. Most notably, S.B. 884 reduces the
corporate income tax rate from 6.25% to 4.0% beginning in 2020, provides for the mandatory use of the single sales
factor formula and eliminates intercompany transactions between corporations that file a consolidated Missouri
income tax return.
As a result of the change in the Missouri corporate income tax rate, Evergy Metro revalued and restated its deferred
income tax assets and liabilities as of June 1, 2018. Evergy Metro decreased its net deferred income tax liabilities
by $46.6 million, primarily consisting of a $28.8 million adjustment for the revaluation and restatement of deferred
income tax assets and liabilities included in Missouri jurisdictional rate base and a $9.9 million tax gross-up
adjustment for ratemaking purposes. The decrease to Evergy Metro's net deferred income tax liabilities included in
Missouri jurisdictional rate base were offset by a corresponding increase in regulatory liabilities. The net regulatory
liabilities will be amortized to customers over a period to be determined in a future rate case.
Evergy Metro recognized $15.5 million of income tax benefit primarily related to the difference between Evergy
Metro's revaluation of its deferred income tax assets and liabilities for financial reporting purposes and the amount
of the revaluation pertaining to Evergy Metro's Missouri jurisdictional rate base.
21. LEASES
The Evergy Companies lease office buildings, computer equipment, vehicles, rail cars, generating plant and other
property and equipment, including rail cars to serve jointly-owned generating units where Evergy Kansas Central or
Evergy Metro is the managing partner and is reimbursed by other joint-owners for the other owners' proportionate
share of the costs. Under GAAP, a contract is or contains a lease if the contract conveys the right to control the use
of identified property, plant or equipment for a period of time in exchange for consideration. The Evergy
Companies assess a contract as being or containing a lease if the contract identifies property, plant and equipment,
provides the lessee the right to obtain substantially all of the economic benefits from use of the property, plant and
equipment and provides the lessee the right to direct the use of the property, plant and equipment.
The Evergy Companies have entered into several agreements to purchase energy through renewable purchase power
agreements that are accounted for as leases that commenced prior to the application of Topic 842. Due to the
intermittent nature of renewable generation, these leases have significant variable lease payments not included in
the initial and subsequent measurement of the lease liability. Variable lease payments are expensed as incurred. In
addition, certain other contracts contain payment for activity that transfers a separate good or service such as
utilities or common area maintenance. The Evergy Companies have elected a practical expedient permitted by
GAAP to not separate such components of the lease from other lease components for all leases.
The Evergy, Evergy Kansas Central and Evergy Metro leases have remaining terms ranging from 1 to 19 years, 1 to
19 years and 1 to 26 years, respectively. Leases that have original lease terms of twelve months or less are not
recognized on the Evergy Companies’ balance sheets. Some leases have options to renew the lease or terminate
early at the election of the Evergy Companies. Judgment is applied at lease commencement to determine the
reasonably certain lease term based on then-current assumptions about use of the leased asset, market conditions
and terms in the contract. The judgment applied to determine the lease term can significantly impact the
measurement of the lease liability and right-of-use asset and lease classification.
The Evergy Companies typically discount lease payments over the term of the lease using their incremental
borrowing rates at lease commencement to measure its initial and subsequent lease liability. For leases that existed
143
at the initial application of Topic 842, the Evergy Companies used the incremental borrowing rates that
corresponded to the remaining lease term as of January 1, 2019.
Leases may be classified as either operating leases or finance leases. The lease classification is based on
assumptions of the lease term and discount rate, as discussed above, and the fair market value and economic life of
the leased asset. Operating leases recognize a consistent expense each period over the lease term, while finance
leases will result in the separate presentation of interest expense on the lease liability and amortization of the right-
of-use asset. Finance leases are treated as operating leases for rate-making purposes and as such, the Evergy
Companies defer to a regulatory asset or liability any material differences between expense recognition and the
timing of payments in order to match what is being recovered in customer rates.
The Evergy Companies’ lease expense is detailed in the following table.
Year Ended December 31, 2019
Finance lease costs
Amortization of right-of-use assets
Interest on lease liabilities
Operating lease costs
Short-term lease costs
Variable lease costs for renewable purchase power agreements
Total lease costs
Evergy
Evergy
Kansas
Central
(millions)
Evergy
Metro
$
$
5.2
$
5.0
$
2.9
23.8
4.0
313.0
348.9
$
2.7
13.2
1.2
130.8
152.9
$
0.1
0.1
9.2
2.6
129.2
141.2
Supplemental cash flow information related to the Evergy Companies' leases is detailed in the following table.
Year Ended December 31, 2019
Evergy
Cash paid for amounts included in the measurement of lease liabilities:
Evergy
Kansas
Central
(millions)
Evergy
Metro
Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases
Right-of-use assets obtained in exchange for new operating lease liabilities
Right-of-use assets obtained in exchange for new finance lease liabilities
$
21.7
$
13.7
$
2.8
5.0
10.4
8.3
2.6
4.8
6.1
8.3
9.9
0.1
0.1
2.4
—
144
Finance Leases
Right-of-use assets for finance leases are included in property, plant and equipment on the Evergy Companies’
balance sheets. Lease liabilities for finance leases are included in other current and other long-term liabilities.
Payments and other supplemental information for finance leases as of December 31, 2019, are detailed in the
following table.
2020
2021
2022
2023
2024
After 2024
Total finance lease payments
Amounts representing imputed interest
Present value of lease payments
Less: current portion
Total long-term obligations under finance leases
Right-of-use assets under finance leases included in property, plant and
equipment, net on the consolidated balance sheets
Weighted-average remaining lease term (years)
Weighted-average discount rate
Evergy
Evergy
Kansas
Central
(millions)
Evergy
Metro
$
$
$
$
$
$
8.1
7.4
6.7
5.8
4.7
46.2
78.9
(26.1)
52.8
(4.9)
47.9
302.8
14.3
5.6%
$
$
$
7.6
7.0
6.2
5.4
4.3
44.6
75.1
(25.0)
50.1
(4.7)
45.4
43.5
14.6
5.5%
0.2
0.2
0.2
0.2
0.2
0.9
1.9
(0.5)
1.4
(0.1)
1.3
1.4
8.7
7.6%
145
Operating Leases
Right-of-use assets for operating leases are included in other long-term assets on the Evergy Companies’ balance
sheets. Lease liabilities for operating leases are included in other current and other long-term liabilities. Lease
payments and other supplemental information for operating leases as of December 31, 2019, are detailed in the
following table.
2020
2021
2022
2023
2024
After 2024
Total operating lease payments
Amounts representing imputed interest
Present value of lease payments
Less: current portion
Total long-term obligations under operating leases
Right-of-use assets under operating leases included in other assets on the
consolidated balance sheets
Evergy
20.5
17.0
14.1
11.0
9.2
44.7
116.5
(18.5)
98.0
(15.6)
82.4
104.5
$
$
$
Evergy
Kansas
Central
(millions)
$
11.6
$
8.6
6.4
3.8
2.3
1.5
34.2
(2.3)
31.9
(9.1)
22.8
39.4
$
$
$
$
Weighted-average remaining lease term (years)
Weighted-average discount rate
8.8
3.8%
3.8
3.4%
22. QUARTERLY OPERATING RESULTS (UNAUDITED)
Evergy
Metro
10.7
10.1
9.3
8.8
8.5
82.8
130.2
(35.4)
94.8
(7.0)
87.8
76.6
15.8
4.2%
Evergy
2019
Operating revenue
Operating income
Net income
Net income attributable to Evergy, Inc.
Basic and diluted earnings per common share
2018
Operating revenue
Operating income
Net income
Net income attributable to Evergy, Inc.
Basic and diluted earnings per common share
Quarter
1st
2nd
3rd
4th
(millions, except per share amounts)
$ 1,216.9
209.6
103.4
99.5
0.39
$ 1,221.7
271.7
144.6
139.7
0.57
$
600.2
123.5
62.9
60.5
0.42
$
893.4
126.9
104.4
101.8
0.56
$ 1,577.6
538.7
370.9
366.8
1.56
$ 1,582.5
533.1
357.6
355.0
1.32
$ 1,131.6
165.8
66.7
63.9
0.28
$ 1,199.8
150.1
21.1
18.5
0.07
146
Evergy Kansas Central
2019
Operating revenue
Operating income
Net income
Net income attributable to Evergy Kansas Central, Inc.
2018
Operating revenue
Operating income
Net income
Net income attributable to Evergy Kansas Central, Inc.
Evergy Metro
2019
Operating revenue
Operating income
Net income
2018
Operating revenue
Operating income
Net income (loss)
Quarter
1st
2nd
3rd
4th
(millions)
$
$
585.5
127.6
67.2
62.3
650.9
76.1
77.6
75.0
$
$
749.0
242.4
168.2
164.1
764.8
256.9
178.0
175.4
$
$
576.1
102.2
55.4
52.6
599.0
94.0
30.6
28.0
596.8
124.3
68.3
64.4
600.2
123.5
62.9
60.5
Quarter
1st
2nd
3rd
4th
(millions)
425.4
56.9
16.0
397.1
61.0
20.2
$
$
437.0
101.9
59.4
452.2
114.7
24.6
$
$
568.8
215.5
151.9
559.6
189.4
120.3
$
$
375.3
52.2
27.9
414.2
44.7
(2.2)
$
$
$
$
Quarterly data is subject to seasonal fluctuations with peak periods occurring in the summer months. Evergy's
results reflect the results of operations of Evergy Kansas Central for all periods in 2018 and Evergy Metro and
Evergy Missouri West beginning with the quarter ended June 30, 2018. See Note 1 for more information.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
EVERGY
Disclosure Controls and Procedures
Evergy carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act). This evaluation was conducted under the supervision, and with the
participation, of Evergy's management, including the chief executive officer and chief financial officer, and
Evergy's disclosure committee. Based upon this evaluation, the chief executive officer and chief financial officer of
Evergy have concluded as of the end of the period covered by this report that the disclosure controls and procedures
of Evergy were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There has been no change in Evergy’s internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act) that occurred during the quarterly period ended December 31, 2019, that has
materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
147
Management's Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for Evergy. Under the supervision and with the
participation of Evergy’s chief executive officer and chief financial officer, management evaluated the effectiveness
of Evergy’s internal control over financial reporting as of December 31, 2019. Management used for this evaluation
the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion
or improper override of controls, material misstatements due to error or fraud may not be prevented or detected on a
timely basis. Therefore, even those systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Also, projections of any evaluation of the effectiveness
of internal control over financial reporting to future periods are subject to the risk that the controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Management has concluded that, as of December 31, 2019, Evergy’s internal control over financial reporting is
effective based on the criteria set forth in the COSO framework. Deloitte & Touche LLP, the independent registered
public accounting firm that audited the financial statements included in this annual report on Form 10-K, has issued
its attestation report on Evergy’s internal control over financial reporting, which is included below.
148
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Evergy, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Evergy, Inc. and subsidiaries (the "Company") as of
December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019,
based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated financial statements and financial statement schedules as of and for the year
ended December 31, 2019, of the Company and our report dated March 2, 2020, expressed an unqualified opinion
on those financial statements and financial statement schedules.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on
the Company's internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company's internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/DELOITTE & TOUCHE LLP
Kansas City, Missouri
March 2, 2020
149
EVERGY KANSAS CENTRAL
Disclosure Controls and Procedures
Evergy Kansas Central carried out an evaluation of its disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act). This evaluation was conducted under the supervision, and with
the participation, of Evergy Kansas Central's management, including the chief executive officer and chief financial
officer, and Evergy Kansas Central's disclosure committee. Based upon this evaluation, the chief executive officer
and chief financial officer of Evergy Kansas Central have concluded as of the end of the period covered by this
report that the disclosure controls and procedures of Evergy Kansas Central were effective at a reasonable assurance
level.
Changes in Internal Control Over Financial Reporting
There has been no change in Evergy Kansas Central's internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended December 31, 2019,
that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
Management's Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for Evergy Kansas Central. Under the
supervision and with the participation of Evergy Kansas Central’s chief executive officer and chief financial officer,
management evaluated the effectiveness of Evergy Kansas Central’s internal control over financial reporting as of
December 31, 2019. Management used for this evaluation the framework in Internal Control - Integrated
Framework (2013) issued by the COSO of the Treadway Commission.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion
or improper override of controls, material misstatements due to error or fraud may not be prevented or detected on a
timely basis. Therefore, even those systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Also, projections of any evaluation of the effectiveness
of internal control over financial reporting to future periods are subject to the risk that the controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Management has concluded that, as of December 31, 2019, Evergy Kansas Central’s internal control over financial
reporting is effective based on the criteria set forth in the COSO framework.
EVERGY METRO
Disclosure Controls and Procedures
Evergy Metro carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act). This evaluation was conducted under the supervision, and with the
participation, of Evergy Metro's management, including the chief executive officer and chief financial officer, and
Evergy Metro's disclosure committee. Based upon this evaluation, the chief executive officer and chief financial
officer of Evergy Metro have concluded as of the end of the period covered by this report that the disclosure
controls and procedures of Evergy Metro were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There has been no change in Evergy Metro's internal control over financial reporting (as defined in Rules 13a-15(f)
and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended December 31, 2019, that has
materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
Management's Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for Evergy Metro. Under the supervision and
with the participation of Evergy Metro’s chief executive officer and chief financial officer, management evaluated
the effectiveness of Evergy Metro’s internal control over financial reporting as of December 31, 2019. Management
150
used for this evaluation the framework in Internal Control - Integrated Framework (2013) issued by the COSO of
the Treadway Commission.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion
or improper override of controls, material misstatements due to error or fraud may not be prevented or detected on a
timely basis. Therefore, even those systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Also, projections of any evaluation of the effectiveness
of internal control over financial reporting to future periods are subject to the risk that the controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Management has concluded that, as of December 31, 2019, Evergy Metro’s internal control over financial reporting
is effective based on the criteria set forth in the COSO framework.
ITEM 9B. OTHER INFORMATION
Investors should note that the Evergy Companies announce material financial information in SEC filings, press
releases and public conference calls. In accordance with SEC guidelines, the Evergy Companies also use the
Investor Relations tab on their website, www.evergy.com, to communicate with investors. It is possible that the
financial and other information posted there could be deemed to be material information. The information on
Evergy's website is not part of this document.
PART III
Information required by Items 10-14 of Part III of this Form 10-K with respect to Evergy will be included in an
amendment to this Form 10-K, or incorporated by reference to Evergy's definitive proxy statement with respect to
its 2020 Annual Meeting of Shareholders (Proxy Statement) on or before April 29, 2020.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Evergy
The information required by this item will be included in an amendment to this Form 10-K or will be incorporated
by reference from the following sections of the Proxy Statement:
•
•
•
•
Information regarding the directors of Evergy will be contained in the Proxy Statement section titled
"Election of Directors."
If applicable, information regarding compliance with Section 16(a) of the Exchange Act will be contained
in the Proxy Statement section titled "Security Ownership of Directors, Management and Beneficial
Owners."
Information regarding the Audit Committee of Evergy will be contained in the Proxy Statement section
titled "Board Structure - Committees of the Board."
Information regarding Evergy's Code of Ethics will be contained in the Proxy Statement section titled
"Corporate Governance - Code of Ethics."
Information required by this item regarding Evergy's executive officers is contained in this report in Part I, Item 1 in
"Information About Evergy's Executive Officers."
Evergy Kansas Central and Evergy Metro
Other information required by this item regarding Evergy Kansas Central and Evergy Metro has been omitted in
reliance on General Instruction (I) to Form 10-K.
151
ITEM 11. EXECUTIVE COMPENSATION
Evergy
The information required by this item will be included in an amendment to this Form 10-K or will be incorporated
by reference to the following sections of the Proxy Statement: "Executive Compensation," "Director
Compensation," "Compensation Discussion and Analysis," "Compensation Committee Report" and "Director
Independence - Compensation Committee Interlocks and Insider Participation."
Evergy Kansas Central and Evergy Metro
Other information required by this item regarding Evergy Kansas Central and Evergy Metro has been omitted in
reliance on General Instruction (I) to Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Evergy
The information required by this item regarding security ownership of the directors and executive officers of Evergy
will be included in an amendment to this Form 10-K or will be incorporated by reference to the "Security
Ownership of Directors, Management and Beneficial Owners" section of the Proxy Statement.
Evergy Kansas Central and Evergy Metro
The information required by this item regarding Evergy Kansas Central and Evergy Metro has been omitted in
reliance on General Instruction (I) to Form 10-K.
Equity Compensation Plans
Upon the consummation of the merger, Evergy assumed both Evergy Kansas Central's LTISA and Great Plains
Energy's Amended Long-Term Incentive Plan, which was renamed the Evergy, Inc. Long-Term Incentive Plan. The
renamed Evergy Long-Term Incentive Plan permits the grant of restricted stock, restricted stock units, bonus shares,
stock options, stock appreciation rights, director shares, director deferred share units, performance shares and other
stock-based awards to directors, officers and other employees of Evergy.
The following table provides information, as of December 31, 2019, regarding the number of common shares to be
issued upon exercise of outstanding options, warrants and rights, their weighted average exercise price, and the
number of shares of common stock remaining available for future issuance. The table excludes shares issued or
issuable under any defined contribution savings plans.
Number of
securities
Number of securities
remaining available
for future issuance
to be issued upon
Weighted-average
under equity
exercise of
exercise price of
compensation plans
outstanding options,
outstanding options,
(excluding securities
warrants and rights warrants and rights
reflected in column (a))
(a)
(b)
(c)
673,320 (2)
—
673,320 (2)
$
$
— (3)
—
— (3)
1,937,404
—
1,937,404
Plan Category
Equity compensation plans approved by security holders (1)
Evergy Long-Term Incentive Plan
Equity compensation plans not approved by security holders
Total
(1)The Evergy Kansas Central, Inc. Long-Term Incentive and Share Award Plan will not be used for future awards. As of December 31, 2019,
there were approximately 87,126 RSUs with only service requirements outstanding under the plan, and approximately 360,368 units
outstanding that were deferred pursuant to the Evergy Kansas Central, Inc. non-employee deferred compensation program. Deferred units
will continue to receive deferred dividend equivalents in the form of additional deferred units until payouts pursuant to elections begin.
152
(2)Includes 228,256 performance shares at target performance levels, 146,224 RSUs with only service requirements, 197,250 RSUs with
performance measures and director deferred share units for 101,590 shares of Evergy common stock outstanding at December 31, 2019.
(3)The performance shares, RSUs and director deferred share units have no exercise price and therefore are not reflected in the weighted-
average exercise price.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Evergy
The information required by this item will be included in an amendment to this Form 10-K or will be incorporated
by reference to the "Director Independence" and "Related Party Transactions" sections of the Proxy Statement.
Evergy Kansas Central and Evergy Metro
The information required by this item regarding Evergy Kansas Central and Evergy Metro has been omitted in
reliance on General Instruction (I) to Form 10-K.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Evergy
The information required by this item regarding the independent auditors of Evergy and its subsidiaries will be
included in an amendment to this Form 10-K or will be incorporated by reference to the "Ratification of
Appointment of Independent Auditors" section of the Proxy Statement.
Evergy Kansas Central and Evergy Metro
The Audit Committee of the Evergy Board functions as the Audit Committee of Evergy Kansas Central and Evergy
Metro. The following tables set forth the aggregate fees billed by Deloitte & Touche LLP for audit services
rendered in connection with the consolidated financial statements and reports for 2019 and 2018 and for other
services rendered during 2019 and 2018 on behalf of Evergy Kansas Central and Evergy Metro, as well as all out-
of-pocket costs incurred in connection with these services:
Evergy Kansas Central
Fee Category
Audit Fees
Audit-Related Fees
Tax Fees
All Other Fees
Total Fees
Evergy Metro
Fee Category
Audit Fees
Audit-Related Fees
Tax Fees
All Other Fees
Total Fees
2019
2018
$ 2,044,100 $ 2,168,000
24,000
40,000
—
—
—
—
$ 2,068,100 $ 2,208,000
2019
2018
$ 1,503,000 $ 1,801,396
24,000
—
—
23,000
34,765
—
$ 1,527,000 $ 1,859,161
Audit Fees: Consists of fees billed for professional services rendered for the audits of the annual consolidated
financial statements of Evergy Kansas Central and Evergy Metro and reviews of the interim condensed consolidated
financial statements included in quarterly reports. Audit fees also include: services provided by Deloitte & Touche
LLP in connection with statutory and regulatory filings or engagements; audit reports on audits of the effectiveness
of internal control over financial reporting and other attest services, except those not required by statute or
153
regulation; services related to filings with the SEC, including comfort letters, consents and assistance with and
review of documents filed with the SEC; and accounting research in support of the audit.
Audit-Related Fees: Consists of fees billed for assurance and related services that are reasonably related to the
performance of the audit or review of consolidated financial statements of Evergy Kansas Central and Evergy Metro
and are not reported under "Audit Fees." These services include consultation concerning financial accounting and
reporting standards.
Tax Fees: Consists of fees billed for tax compliance and related support of tax returns and other tax services,
including assistance with tax audits, and tax research and planning.
All Other Fees: Consists of fees for all other services other than those described above.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services
The Audit Committee has adopted policies and procedures for the pre-approval of all audit services, audit-related
services, tax services and other services to be provided by the independent registered public accounting firm for
Evergy Kansas Central and Evergy Metro. Under these policies and procedures, the Audit Committee may pre-
approve certain types of services, up to the aggregate fee levels it sets. Any proposed service within a pre-approved
type of service that would cause the applicable fee level to be exceeded cannot be provided unless the Audit
Committee either amends the applicable fee level or specifically approves the proposed service. The Audit
Committee, as well, may specifically approve audit, audit-related, tax or other services on a case-by-case basis.
Pre-approval is generally provided for up to one year, unless the Audit Committee specifically provides for a
different period. Management provides quarterly updates to the Audit Committee regarding actual fees spent with
respect to pre-approved services. The Chair of the Audit Committee may pre-approve audit, audit-related, tax and
other services provided by the independent registered public accounting firm as required between meetings and
report such pre-approval at the next Audit Committee meeting.
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
PART IV
Financial Statements
Evergy, Inc.
a.
b.
c.
d.
e.
f.
Consolidated Statements of Comprehensive Income for the years ended December 31,
2019, 2018 and 2017
Consolidated Balance Sheets - December 31, 2019 and 2018
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018
and 2017
Consolidated Statements of Changes in Equity for the years ended December 31, 2019,
2018 and 2017
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Evergy Kansas Central, Inc.
g.
Consolidated Statements of Income for the years ended December 31, 2019, 2018 and
2017
154
Page No.
62
63
65
66
77
57
67
h.
i.
j.
k.
l.
Consolidated Balance Sheets - December 31, 2019 and 2018
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and
2017
Consolidated Statements of Changes in Equity for the years ended December 31, 2019,
2018 and 2017
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Evergy Metro, Inc.
m.
n.
o.
p.
q.
r.
Consolidated Statements of Comprehensive Income for the years ended December 31,
2019, 2018 and 2017
Consolidated Balance Sheets - December 31, 2019 and 2018
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018
and 2017
Consolidated Statements of Changes in Equity for the years ended December 31, 2019,
2018 and 2017
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Financial Statement Schedules
Evergy, Inc.
a.
b.
c.
Schedule I - Parent Company Financial Statements
Schedule II - Valuation and Qualifying Accounts and Reserves
Evergy Kansas Central, Inc.
Schedule II - Valuation and Qualifying Accounts and Reserves
Evergy Metro, Inc.
d.
Schedule II - Valuation and Qualifying Accounts and Reserves
68
70
71
77
60
72
73
75
76
77
61
169
173
173
174
155
Exhibits
Exhibit
Number
2.1
2.2
3.1
3.2
3.3
Description of Document
Agreement and Plan of Merger, dated May 29, 2016, by and
among Evergy Kansas Central, Inc. (formerly Westar Energy
Inc.), Great Plains Energy Incorporated and, from and after its
accession thereto, Merger Sub (as defined therein) (Exhibit 2.1 to
Great Plains Energy's Form 8-K filed on May 31, 2016).
Amended and Restated Merger Agreement, dated July 9, 2017, by
and among Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.), Great Plains Energy Incorporated, Monarch Energy
Holding, Inc., King Energy, Inc. and, solely for the purposes set
forth therein, GP Star, Inc. (Exhibit 2.1 to Great Plains Energy's
Form 8-K filed on July 10, 2017).
Registrant
Evergy
Evergy Kansas Central
Evergy
Evergy Kansas Central
* Amended and Restated Articles of Incorporation of Evergy, Inc.,
effective June 4, 2018 (Exhibit 3.1 to Form 8-K filed on June 4,
2018).
Evergy
* Amended and Restated By-laws of Evergy, Inc., effective
Evergy
November 27, 2019 (Exhibit 3.1 to Form 8-K filed on December
2, 2019).
* Amended and Restated Articles of Consolidation of Evergy Metro,
Inc., as amended September 16, 2019 (Exhibit 3.1 to Evergy
Metro's Form 10-Q for the quarter ended September 30, 2019).
Evergy Metro
3.4
* Amended and Restated By-laws of Evergy Metro, Inc., as
Evergy Metro
amended September 16, 2019 (Exhibit 3.2 to Evergy Metro's
Form 10-Q for the quarter ended September 30, 2019).
3.5
* Amended and Restated Articles of Incorporation of Evergy
Evergy Kansas Central
Kansas Central, Inc., as amended September 16, 2019 (Exhibit 3.3
to Evergy Kansas Central's Form 10-Q for the quarter ended
September 30, 2019).
3.6
4.1
4.2
* Amended and Restated By-laws of Evergy Kansas Central, Inc.,
as amended September 16, 2019 (Exhibit 3.4 to Evergy Kansas
Central's Form 10-Q for the quarter ended September 30, 2019).
Evergy Kansas Central
*
*
Indenture, dated June 1, 2004, between Evergy. Inc. (successor to
Great Plains Energy Incorporated) and BNY Midwest Trust
Company, as trustee (Exhibit 4.4 to Great Plains Energy's Form 8-
A/A filed on June 14, 2004).
First Supplemental Indenture, dated June 14, 2004, between
Evergy. Inc. (successor to Great Plains Energy Incorporated) and
BNY Midwest Trust Company, as trustee (Exhibit 4.5 to Great
Plains Energy's Form 8-A/A filed on June 14, 2004).
Evergy
Evergy
156
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
*
*
*
*
*
*
*
*
*
*
Second Supplemental Indenture, dated September 25, 2007,
between Evergy. Inc. (successor to Great Plains Energy
Incorporated) and The Bank of New York Trust Company, N.A.,
as trustee (Exhibit 4.1 to Great Plains Energy's Form 8-K filed on
September 26, 2007).
Third Supplemental Indenture, dated August 13, 2010, between
Evergy. Inc. (successor to Great Plains Energy Incorporated) and
The Bank of New York Mellon Trust Company, N.A., as trustee
(Exhibit 4.1 to Great Plains Energy's Form 8-K filed on August
13, 2010).
Fourth Supplemental Indenture, dated May 19, 2011, between
Evergy. Inc. (successor to Great Plains Energy Incorporated) and
The Bank of New York Mellon Trust Company, N.A., as trustee
(Exhibit 4.1 to Great Plains Energy's Form 8-K filed on May 19,
2011).
Fifth Supplemental Indenture, dated March 9, 2017, between
Evergy. Inc. (successor to Great Plains Energy Incorporated) and
The Bank of New York Trust Company, N.A. as trustee (Exhibit
4.1 to Great Plains Energy's Form 8-K filed on March 9, 2017).
Sixth Supplemental Indenture, dated June 4, 2018, by and among
Great Plains Energy Incorporated, Evergy, Inc. and The Bank of
New York Mellon Trust Company, N.A., as trustee (Exhibit 4.1 to
Evergy's Form 8-K filed on June 4, 2018).
Seventh Supplemental Indenture dated as of September 9, 2019
between Evergy, Inc. and The Bank of New York Mellon Trust
Company, N.A., as trustee (Exhibit 4.1 to Form 8-K filed on
September 9, 2019).
Subordinated Indenture, dated May 18, 2009, between Evergy.
Inc. (successor to Great Plains Energy Incorporated) and The
Bank of New York Mellon Trust Company, N.A., as trustee
(Exhibit 4.1 to Great Plains Energy's Form 8-K filed on May 19,
2009).
Supplemental Indenture No. 1, dated May 18, 2009, between
Evergy. Inc. (successor to Great Plains Energy Incorporated) and
The Bank of New York Mellon Trust Company, N.A., as trustee
(Exhibit 4.2 to Great Plains Energy's Form 8-K filed on May 19,
2009).
Supplemental Indenture No. 2, dated March 22, 2012, between
Evergy. Inc. (successor to Great Plains Energy Incorporated) and
The Bank of New York Mellon Trust Company, N.A., as trustee
(Exhibit 4.1 to Great Plains Energy's Form 8-K filed on March 23,
2012).
Supplemental Indenture No. 3, dated June 4, 2018, by and among
Great Plains Energy Incorporated, Evergy, Inc. and The Bank of
New York Mellon Trust Company, N.A., as trustee (Exhibit 4.2 to
Evergy's Form 8-K filed on June 4, 2018).
157
Evergy
Evergy
Evergy
Evergy
Evergy
Evergy
Evergy
Evergy
Evergy
Evergy
4.13
4.14
*
*
Indenture, dated August 24, 2001, between Evergy Missouri West
(formerly Aquila, Inc.) and BankOne Trust Company, N.A., as
trustee (Exhibit 4(d) to Registration Statement on Form S-3 (File
No. 333-68400) filed by Aquila, Inc. on August 27, 2001).
Second Supplemental Indenture, dated July 3, 2002, between
Missouri West, Inc. (formerly Aquila, Inc.) and BankOne Trust
Company, N.A., as trustee (Exhibit 4(c) to Form S-4 (File No.
333-100204) filed by Aquila, Inc. on September 30, 2002).
4.15
* General Mortgage and Deed of Trust, dated December 1, 1986,
between Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and UMB Bank, N.A. (formerly United Missouri Bank
of Kansas City, N.A.), as trustee (Exhibit 4.12 to Evergy Metro's
Form 10-K for the year ended December 31, 2017).
4.16
4.17
4.18
4.19
4.20
4.21
*
*
*
*
*
*
Fifth Supplemental Indenture, dated September 1, 1992, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and UMB Bank, N.A. (formerly United Missouri Bank
of Kansas City, N.A.), as trustee (Exhibit 4.13 to Evergy Metro's
Form 10-K for the year ended December 31, 2017).
Seventh Supplemental Indenture, dated October 1, 1993, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and UMB Bank, N.A. (formerly United Missouri Bank
of Kansas City, N.A.), as trustee (Exhibit 4.14 to Evergy Metro's
Form 10-K for the year ended December 31, 2017).
Eighth Supplemental Indenture, dated December 1, 1993, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and UMB Bank, N.A. (formerly United Missouri Bank
of Kansas City, N.A.), as trustee (Exhibit 4.15 to Evergy Metro's
Form 10-K for the year ended December 31, 2017).
Eleventh Supplemental Indenture, dated August 15, 2005, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and UMB Bank, N.A. (formerly United Missouri Bank
of Kansas City, N.A.), as trustee (Exhibit 4.2 to Evergy Metro's
Form 10-Q for the quarter ended September 30, 2005).
Thirteenth Supplemental Indenture, dated March 1, 2009, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and UMB Bank, N.A. (formerly United Missouri Bank
of Kansas City, N.A.), as trustee (Exhibit 4.3 to Evergy Metro's
Form 8-K filed on March 24, 2009).
Fourteenth Supplemental Indenture, dated March 1, 2009,
between Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and UMB Bank, N.A. (formerly United Missouri Bank
of Kansas City, N.A.), as trustee (Exhibit 4.4 to Evergy Metro's
Form 8-K filed on March 24, 2009).
Evergy
Evergy
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
158
4.22
4.23
4.24
4.25
4.26
4.27
4.28
4.29
4.30
4.31
*
*
*
*
*
*
*
*
*
*
Fifteenth Supplemental Indenture, dated June 30, 2011, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and UMB Bank, N.A. (formerly United Missouri Bank
of Kansas City, N.A.), as trustee (Exhibit 4.1 to Evergy Metro's
Form 10-Q for the quarter ended June 30, 2011).
Sixteenth Supplemental Indenture, March 1, 2019, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) UMB Bank N.A., as trustee (Exhibit 4.3 to Evergy's
Form 8-K filed on March 14, 2019).
Seventeenth Supplemental Indenture, dated March 27, 2019,
between Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and UMB Bank, N.A. (formerly United Missouri Bank
of Kansas City, N.A.), as trustee (Exhibit 4.1 to Evergy's Form 8-
K filed on March 27, 2019).
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Indenture, dated December 1, 2000, between Evergy Metro, Inc.
(formerly Kansas City Power & Light Company) and The Bank of
New York, as trustee (Exhibit 4(a) to Evergy Metro's Form 8-K
filed on December 18, 2000).
Evergy
Evergy Metro
Indenture, dated March 1, 2002, between Evergy Metro, Inc.
(formerly Kansas City Power & Light Company) and The Bank of
New York, as trustee (Exhibit 4.1.b. to Evergy Metro's Form 10-Q
for the quarter ended March 31, 2002).
Evergy
Evergy Metro
Supplemental Indenture No. 1, dated November 15, 2005,
between Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York, as trustee (Exhibit 4.2.j to
Evergy Metro's Form 10-K for the year ended December 31,
2005).
Evergy
Evergy Metro
Supplemental Indenture No. 2, dated March 1, 2019, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York Mellon, as trustee (Exhibit
4.2 to Evergy's Form 8-K filed on March 14, 2019).
Evergy
Evergy Metro
Indenture, dated May 1, 2007, between Evergy Metro, Inc.
(formerly Kansas City Power & Light Company) and The Bank of
New York Trust Company, N.A., as trustee (Exhibit 4.1 to Evergy
Metro's Form 8-K filed on June 4, 2007).
Evergy
Evergy Metro
Supplemental Indenture No. 1, dated June 4, 2007, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York Trust Company, N.A., as
trustee (Exhibit 4.2 to Evergy Metro's Form 8-K filed on June 4,
2007).
Supplemental Indenture No. 2, dated March 11, 2008, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York Trust Company, N.A., as
trustee (Exhibit 4.2 to Evergy Metro's Form 8-K filed on March
11, 2008).
Evergy
Evergy Metro
Evergy
Evergy Metro
159
4.32
4.33
4.34
4.35
4.36
4.37
*
*
*
*
*
*
Supplemental Indenture No. 3, dated September 20, 2011,
between Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York Mellon Trust Company,
N.A., trustee (Exhibit 4.1 to Evergy Metro's Form 8-K filed on
September 20, 2011).
Supplemental Indenture No. 4, dated March 14, 2013, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York Mellon Trust Company,
N.A., trustee (Exhibit 4.1 to Evergy Metro's Form 8-K filed on
March 14, 2013).
Supplemental Indenture No. 5, dated August 18, 2015, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York Mellon Trust Company,
N.A., trustee (Exhibit 4.1 to Everg Metro's Form 8-K filed on
August 18, 2015).
Supplemental Indenture No. 6, dated June 15, 2017, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York Mellon Trust Company,
N.A., as trustee (Exhibit 4.1 to Evergy Metro's Form 8-K filed on
June 15, 2017).
Supplemental Indenture No. 7, dated March 1, 2018, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York Mellon Trust Company,
N.A., as trustee (Exhibit 4.1 to Evergy Metro's Form 8-K filed on
March 1, 2018).
Supplemental Indenture No. 8, dated March 1, 2019, between
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company) and The Bank of New York Mellon Trust Company,
N.A., as trustee (Exhibit 4.1 to Evergy Metro's Form 8-K filed on
March 14, 2019).
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
4.38
* Note Purchase Agreement, dated August 16, 2013, among Evergy
Evergy
Missouri West, Inc. (formerly KCP&L Greater Missouri
Operations Company) and the purchasers party thereto (Exhibit
4.1 to Great Plains Energy's Form 8-K filed on August 19, 2013).
4.39
* Note Purchase Agreement dated February 12, 2019, among
Evergy
Evergy Missouri West, Inc. (formerly KCP&L Greater Missouri
Operations Company) and the purchasers party thereto (Exhibit
4.5 to Evergy's Form 10-Q for the quarter ended March 31, 2019).
4.40
* Mortgage and Deed of Trust, dated July 1, 1939, between Evergy
Kansas Central, Inc. (formerly Westar Energy, Inc. and The
Kansas Power and Light Company) and Harris Trust and Savings
Bank, as trustee (Exhibit 4.35 to Evergy Kansas Central's Form
10-K for the fiscal year ended December 31, 2018).
Evergy
Evergy Kansas Central
160
4.41
4.42
4.43
4.44
4.45
4.46
4.47
4.48
4.49
4.50
*
*
*
*
*
*
*
*
*
*
First Supplemental Indenture, dated July 1, 1939, between Evergy
Kansas Central, Inc. (formerly Westar Energy, Inc. and The
Kansas Power and Light Company) and Harris Trust and Savings
Bank, as trustee (Exhibit 4.36 to Evergy Kansas Central's Form
10-K for the fiscal year ended December 31, 2018).
Evergy
Evergy Kansas Central
Second Supplemental Indenture, dated April 1, 1949, between
Evergy Kansas Central, Inc. (formerly Westar Energy, Inc. and
The Kansas Power and Light Company) and Harris Trust and
Savings Bank, as trustee (Exhibit 4.37 to Evergy Kansas Central's
Form 10-K for the fiscal year ended December 31, 2018).
Evergy
Evergy Kansas Central
Sixth Supplemental Indenture, dated October 4, 1951, between
Evergy Kansas Central, Inc. (formerly Westar Energy, Inc. and
The Kansas Power and Light Company) and Harris Trust and
Savings Bank, as trustee (Exhibit 4.38 to Evergy Kansas Central's
Form 10-K for the fiscal year ended December 31, 2018).
Evergy
Evergy Kansas Central
Fourteenth Supplemental Indenture, dated May 1, 1976, between
Evergy Kansas Central, Inc. (formerly Westar Energy, Inc. and
The Kansas Power and Light Company) and Harris Trust and
Savings Bank, as trustee (Exhibit 4.39 to Evergy Kansas Central's
Form 10-K for the fiscal year ended December 31, 2018).
Evergy
Evergy Kansas Central
Twenty-Eighth Supplemental Indenture, dated July 1, 1992,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc. and Western Resources, Inc.) and Harris Trust and Savings
Bank, as trustee (Exhibit 4.40 to Evergy Kansas Central's Form
10-K for the fiscal year ended December 31, 2018).
Thirty-Second Supplemental Indenture, dated April 15, 1994,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc. and Western Resources, Inc.) and Harris Trust and Savings
Bank, as trustee (Exhibit 4(s) to Evergy Kansas Central's Form
10-K for the fiscal year ended December 31, 1994).
Thirty-Fourth Supplemental Indenture, dated June 28, 2000,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc. and Western Resources, Inc.) and Harris Trust and Savings
Bank, as trustee (Exhibit 4(v) to Evergy Kansas Central's Form
10-K for the fiscal year ended December 31, 2000).
Evergy
Evergy Kansas Central
Evergy
Evergy Kansas Central
Evergy
Evergy Kansas Central
Thirty-Sixth Supplemental Indenture, dated June 1, 2004, between
Evergy Kansas Central, Inc. (formerly Westar Energy Inc.) and
BNY Midwest Trust Company, as trustee (Exhibit 4.1 to Evergy
Kansas Central's Form 8-K filed on January 18, 2005).
Evergy
Evergy Kansas Central
Thirty-Eighth Supplemental Indenture, dated January 18, 2005,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and BNY Midwest Trust Company, as trustee (Exhibit 4.3 to
Evergy Kansas Central's Form 8-K filed on January 18, 2005).
Evergy
Evergy Kansas Central
Thirty-Ninth Supplemental Indenture, dated June 30, 2005,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and BNY Midwest Trust Company, as trustee (Exhibit 4.1 to
Evergy Kansas Central's Form 8-K filed on July 1, 2005).
Evergy
Evergy Kansas Central
161
4.51
4.52
4.53
4.54
4.55
4.56
4.57
4.58
4.59
*
*
*
*
*
*
*
*
*
Forty-Second Supplemental Indenture, dated March 1, 2012,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and The Bank of New York Mellon Trust Company, N.A., as
trustee (Exhibit 4.1 to Evergy Kansas Central's Form 8-K filed on
February 29, 2012).
Evergy
Evergy Kansas Central
Forty-Second Supplemental (Reopening) Indenture, dated May
17, 2012, between Evergy Kansas Central, Inc. (formerly Westar
Energy, Inc.) and The Bank of New York Mellon Trust Company,
N.A., as trustee (Exhibit 4.1 to Evergy Kansas Central's Form 8-K
filed on May 16, 2012).
Evergy
Evergy Kansas Central
Forty-Third Supplemental Indenture, dated March 28, 2013,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and The Bank of New York Mellon Trust Company, N.A., as
trustee (Exhibit 4.1 to Evergy Kansas Central's Form 8-K filed on
March 22, 2013).
Evergy
Evergy Kansas Central
Forty-Fourth Supplemental Indenture, dated August 19, 2013,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and The Bank of New York Mellon Trust Company, N.A., as
trustee (Exhibit 4.1 to Evergy Kansas Central's Form 8-K filed on
August 14, 2013).
Evergy
Evergy Kansas Central
Forty-Fifth Supplemental Indenture, dated November 13, 2015,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and The Bank of New York Mellon Trust Company, N.A., as
trustee (Exhibit 4.1 to Evergy Kansas Central's Form 8-K filed on
November 6, 2015).
Evergy
Evergy Kansas Central
Forty-Sixth Supplemental Indenture, dated June 20, 2016,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and The Bank of New York Mellon Trust Company, N.A., as
trustee (Exhibit 4.1 to Evergy Kansas Central's Form 8-K filed on
June 17, 2016).
Evergy
Evergy Kansas Central
Forty-Seventh Supplemental Indenture, dated March 6, 2017,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and The Bank of New York Mellon Trust Company, N.A., as
trustee (Exhibit 4.1 to Evergy Kansas Central's Form 8-K filed on
March 3, 2017).
Evergy
Evergy Kansas Central
Forty-Eighth Supplemental Indenture, dated June 4, 2018,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and The Bank of New York Mellon Trust Company, N.A., as
trustee (Exhibit 4.1 to Evergy Kansas Central's Form 8-K filed on
June 4, 2018).
Evergy
Evergy Kansas Central
Forty-Ninth Supplemental Indenture, dated August 19, 2019,
between Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) and The Bank of New York Mellon Trust Company, N.A., as
trustee (Exhibit 4.1 to Evergy Kansas Central's Form 8-K filed on
August 19, 2019).
Evergy
Evergy Kansas Central
162
4.60
4.61
*
*
Senior Indenture, dated August 1, 1998, between Evergy Kansas
Central, Inc. (formerly Westar Energy, Inc.) and Deutsche Bank
Trust Company Americas, as trustee, including Form of Senior
Note (Exhibit 4.1 to Evergy Kansas Central's Form 10-Q for the
quarter ended June 30, 1998).
Evergy
Evergy Kansas Central
Form of Subordinated Indenture between Evergy Kansas Central,
Inc. (formerly Westar Energy and The Bank of New York Mellon
Trust Company, N.A., as trustee, including Form of Subordinated
Note (Exhibit 4.3 to Evergy Kansas Central's Form S-3 filed on
March 18, 2016 (No. 333-210266)).
Evergy
Evergy Kansas Central
4.62
Description of Securities.
Evergy
Evergy Kansas Central
Evergy Metro
10.1
*+ Evergy, Inc. (successor to Great Plains Energy Incorporated)
Amended Long-Term Incentive Plan, as amended effective on
May 3, 2016 (Exhibit 10.4 to Great Plains Energy's Form 10-Q for
the quarter ended June 30, 2016).
10.2
*+ Evergy, Inc. (successor to Great Plains Energy Incorporated)
Long-Term Incentive Plan Awards Standards and Performance
Criteria Effective as of January 1, 2016 (Exhibit 10.3 to Great
Plains Energy's Form 10-Q for the quarter ended March 31, 2016).
10.3
*+ Evergy, Inc. (successor to Great Plains Energy Incorporated)
Long-Term Incentive Plan Awards Standards and Performance
Criteria Effective January 1, 2017 (Exhibit 10.3 to Great Plains
Energy's Form 10-Q for the quarter ended March 31, 2017).
10.4
*+ Evergy, Inc. (successor to Great Plains Energy Incorporated)
Long-Term Incentive Plan Awards Standards and Performance
Criteria Effective January 1, 2018 (Exhibit 10.3 to Great Plains
Energy's Form 10-Q for the quarter ended March 31, 2018).
10.5
*+ Form of Evergy, Inc. (successor to Great Plains Energy
Incorporated) 2016 three-year Performance Share Agreement
(Exhibit 10.1 to Great Plains Energy's Form 10-Q for the quarter
ended March 31, 2016).
10.6
*+ Form of Amendment to Appendix A to Evergy, Inc. (formerly
Great Plains Energy Incorporated) 2016 three-year Performance
Share Agreement (Exhibit 10.6 to Evergy's Form 10-K for the
fiscal year ended December 31, 2018).
10.7
*+ Form of Evergy, Inc. (successor to Great Plains Energy
Incorporated) 2016 Restricted Stock Agreement (Exhibit 10.2 to
Great Plains Energy's Form 10-Q for the quarter ended March 31,
2016).
10.8
*+ Form of Evergy, Inc. (successor to Great Plains Energy
Incorporated) 2017 three-year Performance Share Agreement
(Exhibit 10.1 to Great Plains Energy's Form 10-Q for the quarter
ended March 31, 2017).
163
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
10.9
*+ Form of Amendment to Appendix A to Evergy, Inc. (successor to
Great Plains Energy Incorporated) 2017 three-year Performance
Share Agreement (Exhibit 10.9 to Evergy's Form 10-K for the
fiscal year ended December 31, 2018).
10.10
*+ Form of Evergy, Inc. (successor to Great Plains Energy
Incorporated) 2017 Restricted Stock Agreement (Exhibit 10.2 to
Great Plains Energy's Form 10-Q for the quarter ended March 31,
2017).
10.11
*+ Form of Evergy, Inc. (successor to Great Plains Energy
Incorporated) 2018 three-year Performance Share Agreement
(Exhibit 10.1 to Great Plains Energy's Form 10-Q for the quarter
ended March 31, 2018).
10.12
*+ Form of Amendment to Appendix A to Evergy, Inc. (successor to
Great Plains Energy Incorporated) 2018 three-year Performance
Share Agreement (Exhibit 10.12 to Evergy's Form 10-K for the
fiscal year ended December 31, 2018).
10.13
*+ Form of Evergy, Inc. (successor to Great Plains Energy
Incorporated) 2018 Restricted Stock Agreement (Exhibit 10.2 to
Great Plains Energy's Form 10-Q for the quarter ended March 31,
2018).
10.14
*+ Form of Evergy, Inc. (successor to Great Plains Energy
Incorporated) 2018 Restricted Stock Unit Agreement (Exhibit 10.1
to Great Plains Energy's Form 8-K filed on June 4, 2018).
10.15
*+ Form of Evergy, Inc. (successor to Great Plains Energy
Incorporated) 2018 Cash Retention Payment Agreement (Exhibit
10.2 to Great Plains Energy's Form 8-K filed on June 4, 2018).
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
Evergy
Evergy Metro
10.16
10.17
*+ Evergy, Inc. Long-Term Incentive Plan (formerly the Great Plains
Energy Incorporated Long-Term Incentive Plan, as amended),
effective June 4, 2018 (Exhibit 99.1 to Evergy's Registration
Statement on Form S-8 filed on June 15, 2018 (File No.
333-225673)).
Evergy
Evergy Metro
Evergy Kansas Central
*+ Form of Evergy, Inc. 2019 Performance-Based Restricted Stock
Unit Agreement (Exhibit 10.1 to Evergy's Form 8-K filed on
February 15, 2019).
Evergy
Evergy Metro
Evergy Kansas Central
10.18
*+ Form of Evergy, Inc. 2019 Time-Based Restricted Stock Unit
Agreement (Exhibit 10.2 to Evergy's Form 8-K filed on February
15, 2019).
Evergy
Evergy Metro
Evergy Kansas Central
10.19
+
Form of Evergy, Inc. 2020 Performance-Based Restricted Stock
Unit Agreement.
Evergy
Evergy Metro
Evergy Kansas Central
164
10.20
+
Form of Evergy, Inc. 2020 Time-Based Restricted Stock Unit
Agreement.
10.21
*+ Evergy Kansas Central, Inc. (formerly Westar Energy, Inc.)
Amended and Restated Long-Term Incentive and Share Award
Plan, effective January 1, 2016 (Appendix B to Evergy Kansas
Central's Proxy Statement filed on April 1, 2016).
Evergy
Evergy Metro
Evergy Kansas Central
Evergy
Evergy Kansas Central
10.22
*+ Form of Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) 2018 Restricted Share Unit Agreement (Exhibit 10.1 to
Evergy Kansas Central's Form 8-K filed on June 4, 2018).
Evergy
Evergy Kansas Central
10.23
*+ Evergy, Inc. 2019 Annual Incentive Plan (Exhibit 10.5 to Evergy's
Form 10-Q for the quarter ended March 31, 2019).
10.24
+
Evergy, Inc. 2020 Annual Incentive Plan.
Evergy
Evergy Metro
Evergy Kansas Central
Evergy
Evergy Metro
Evergy Kansas Central
10.25
*+ Form of Indemnification Agreement with Evergy, Inc. officers and
directors (Exhibit 10.2 to Evergy's Form 10-Q for the quarter
ended September 30, 2018).
Evergy
Evergy Metro
Evergy Kansas Central
10.26
*+ Form of Evergy, Inc. (successor to Great Plains Energy
Incorporated) Change in Control Severance Agreement (Exhibit
10.1.e to Great Plains Energy's Form 10-Q for the quarter ended
September 30, 2006).
Evergy
Evergy Metro
10.27
*+ Form of Evergy Kansas Central, Inc. (formerly Westar Energy,
Inc.) Amended and Restated Change in Control Agreement
(Exhibit 10(g) to Evergy Kansas Central's Form 10-K for the
period ended December 31, 2015).
Evergy
Evergy Kansas Central
10.28
*+ Form of Evergy, Inc. Amended and Restated Change-in-Control
Severance Agreement (Exhibit 10.4 to Evergy's Form 10-Q for the
quarter ended March 31, 2019).
Evergy
Evergy Metro
Evergy Kansas Central
10.29
10.30
10.31
*+ Evergy, Inc. Executive Severance Plan, dated November 6, 2019
(Exhibit 10.1 to Evergy's Form 10-Q for the quarter ended
September 30, 2019).
Evergy
*+ Evergy, Inc. Supplemental Executive Retirement Plan, effective
June 4, 2018 (Exhibit 10.6 to Evergy's Form 10-Q for the quarter
ended June 30, 2018).
Evergy
Evergy Metro
Evergy Kansas Central
*+ Evergy Kansas Central, Inc. (formerly Westar Energy, Inc.)
Retirement Benefit Restoration Plan (Exhibit 10.1 to Evergy
Kansas Central's Form 8-K filed on April 2, 2010).
Evergy
Evergy Kansas Central
165
10.32
*+ Amendment dated December 12, 2018 to Evergy Kansas Central,
Inc. (formerly Westar Energy, Inc.) Retirement Benefit
Restoration Plan (Exhibit 10.35 to Evergy Kansas Central's Form
10-K for the fiscal year ended December 31, 2018).
Evergy
Evergy Kansas Central
10.33
*+ Evergy Kansas Central, Inc. (formerly Westar Energy, Inc.) Non-
Employee Director Nonqualified Deferred Compensation Plan, as
amended and restated May 17, 2018 (Exhibit 10.8 to Evergy
Kansas Central's Form 10-Q for the quarter ended June 30, 2018).
Evergy
Evergy Kansas Central
10.34
*+ Evergy, Inc. Nonqualified Deferred Compensation Plan, effective
June 4, 2018 (Exhibit 10.39 to Evergy's Form 10-K for the fiscal
year ended December 31, 2018).
Evergy
Evergy Metro
Evergy Kansas Central
10.35
*+ Summary of Evergy, Inc. Non-Employee Director Compensation
Evergy
(Exhibit 10.9 to Evergy's Form 10-Q for the quarter ended June
30, 2018).
10.36
* Credit Agreement, dated September 18, 2018, among Evergy, Inc.,
10.37
*
Evergy Metro, inc. (formerly Kansas City Power & Light
Company), Evergy Missouri West, Inc. (formerly KCP&L Greater
Missouri Operations Company), Evergy Kansas Central, Inc.
(formerrly Westar Energy, Inc.) , the several lenders from time to
time parties thereto, Wells Fargo Bank, National Association, as
Administrative Agent, Swingline Lender and Issuing Lender and
the other issuing lenders and agents party thereto (Exhibit 10.1 to
Evergy's Form 8-K filed September 18, 2018).
First Amendment, dated November 30, 2018, to Credit
Agreement, dated September 18, 2018, among Evergy, Inc.,
Evergy Metro, Inc. (formerly Kansas City Power & Light
Company), Evergy Missouri West (formerly KCP&L Greater
Missouri Operations Company), Evergy Kansas Central, Inc.
(formerly Westar Energy, Inc.), the several lenders from time to
time parties thereto, Wells Fargo Bank, National Association, as
Administrative Agent, Swingline Lender and Issuing Lender and
the other issuing lenders and agents party thereto (Exhibit 10.42 to
Evergy's Form 10-K for the fiscal year ended December 31,
2018).
10.38
*
Term Loan Agreement, dated March 15, 2019, by and among
Evergy, Inc., Wells Fargo Bank, National Association, as
Administrative Agent, and the lenders referred to therein (Exhibit
10.1 to Evergy's Form 8-K on March 15, 2019).
* Guaranty, dated July 15, 2008, issued by Evergy, Inc. (successor
to Great Plains Energy Incorporated) in favor of Union Bank of
California, N.A., as successor trustee, and the holders of the
Evergy Missouri West, Inc. (formerly Aquila, Inc.), 8.27% Senior
Notes due November 15, 2021 (Exhibit 10.6 to Great Plains
Energy's Form 8-K filed on July 18, 2008).
Evergy
Evergy Metro
Evergy Kansas Central
Evergy
Evergy Metro
Evergy Kansas Central
Evergy
Evergy
List of Subsidiaries.
Evergy
Evergy Kansas Central
Consent of Independent Registered Public Accounting Firm.
Evergy
166
10.39
21.1
23.1
23.2
23.3
24.1
24.2
24.3
31.1
31.2
31.3
31.4
31.5
31.6
32.1
32.2
32.3
Consent of Independent Registered Public Accounting Firm.
Evergy Metro
Consent of Independent Registered Public Accounting Firm.
Evergy Kansas Central
Powers of Attorney.
Powers of Attorney.
Powers of Attorney.
Evergy
Evergy Kansas Central
Evergy Metro
Rule 13a-14(a)/15d-14(a) Certification of Terry Bassham.
Evergy
Rule 13a-14(a)/15d-14(a) Certification of Anthony D. Somma.
Evergy
Rule 13a-14(a)/15d-14(a) Certification of Terry Bassham.
Evergy Metro
Rule 13a-14(a)/15d-14(a) Certification of Anthony D. Somma.
Evergy Metro
Rule 13a-14(a)/15d-14(a) Certification of Terry Bassham.
Evergy Kansas Central
Rule 13a-14(a)/15d-14(a) Certification of Anthony D. Somma.
Evergy Kansas Central
** Section 1350 Certifications.
** Section 1350 Certifications.
Evergy
Evergy Metro
** Section 1350 Certifications.
Evergy Kansas Central
101.INS
*** XBRL Instance Document.
n/a
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase
Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase
Document.
101.LAB
Inline XBRL Taxonomy Extension Labels Linkbase Document.
Evergy
Evergy Metro
Evergy Kansas Central
Evergy
Evergy Metro
Evergy Kansas Central
Evergy
Evergy Metro
Evergy Kansas Central
Evergy
Evergy Metro
Evergy Kansas Central
167
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
Document.
104
Cover Page Interactive Data File (embedded within the Inline
XBRL document).
Evergy
Evergy Metro
Evergy Kansas Central
Evergy
Evergy Metro
Evergy Kansas Central
* Filed with the SEC as exhibits to prior SEC filings and are incorporated herein by reference and made a part
hereof. The SEC filings and the exhibit number of the documents so filed, and incorporated herein by reference, are
stated in parenthesis in the description of such exhibit.
** Furnished and shall not be deemed filed for the purpose of Section 18 of the Exchange Act. Such document shall
not be incorporated by reference into any registration statement or other document pursuant to the Exchange Act or
the Securities Act of 1933, as amended, unless otherwise indicated in such registration statement or other document.
*** The instance document does not appear in the interactive data file because its XBRL tags are embedded within
the inline XBRL document.
+ Indicates management contract or compensatory plan or arrangement.
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K, and Evergy will furnish the omitted
schedules to the SEC upon request.
Copies of any of the exhibits filed with the SEC in connection with this report may be obtained from the applicable
registrant upon written request. The registrants agree to furnish to the SEC upon request any instrument with
respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of total assets
of such registrant and its subsidiaries on a consolidated basis.
168
Schedule I - Parent Company Financial Statements
EVERGY, INC.
Statements of Income of Parent Company
OPERATING EXPENSES:
Operating and maintenance
Total Operating Expenses
INCOME FROM OPERATIONS
OTHER INCOME (EXPENSE)
Equity in earnings from subsidiaries
Investment earnings
Other expense
Total Other Income, Net
Interest expense
INCOME BEFORE INCOME TAXES
Income tax benefit
NET INCOME
COMPREHENSIVE INCOME
NET INCOME
OTHER COMPREHENSIVE INCOME
Derivative hedging activity
Loss on derivative hedging instruments
Income tax benefit
Net loss on derivative hedging instruments
Reclassification to expenses, net of taxes
Derivative hedging activity, net of tax
Other comprehensive income from subsidiaries, net
Total other comprehensive loss
COMPREHENSIVE INCOME
2019
Period from June 4,
2018 through
December 31, 2018
$
(millions)
19.4
19.4
(19.4)
698.2
32.7
(0.1)
730.8
60.7
650.7
(13.7)
664.4
$
54.6
54.6
(54.6)
364.7
26.3
(2.6)
388.4
19.6
314.2
(10.7)
324.9
664.4
$
324.9
(64.4)
16.5
(47.9)
1.5
(46.4)
(0.6)
(47.0)
(5.4)
1.4
(4.0)
—
(4.0)
1.0
(3.0)
617.4
$
321.9
$
$
$
$
The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements.
169
December 31
2019
2018
(millions, except share amounts)
$
$
$
11.6
24.5
2.0
8.0
2.4
48.5
10,023.1
634.9
34.2
0.9
10,693.1
10,741.6
20.0
13.1
14.6
—
8.1
55.8
2,223.7
16.9
2,240.6
107.1
35.2
2.0
0.2
2.0
146.5
9,785.6
634.9
36.3
1.1
10,457.9
10,604.4
—
28.1
2.1
5.4
6.3
41.9
638.1
17.6
655.7
7,053.7
1,441.5
(50.0)
8,445.2
10,741.6
8,668.3
1,241.5
(3.0)
9,906.8
10,604.4
$
$
$
$
EVERGY, INC.
Balance Sheets of Parent Company
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Accounts receivable from subsidiaries
Notes receivable from subsidiaries
Income taxes receivable
Prepaid expenses and other assets
Total Current Assets
OTHER ASSETS:
Investment in subsidiaries
Note receivable from subsidiaries
Deferred income taxes
Other
Total Other Assets
TOTAL ASSETS
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Notes payable
Accounts payable to subsidiaries
Accrued interest
Derivative instruments
Other
Total Current Liabilities
LONG-TERM LIABILITIES:
Long-term debt, net
Other
Total Long-Term Liabilities
Commitments and Contingencies (Note 15)
EQUITY:
Evergy, Inc. Shareholders' Equity:
Common stock - 600,000,000 shares authorized, without par value, 226,641,443 shares issued
Retained earnings
Accumulated other comprehensive loss
Total shareholders' equity
TOTAL LIABILITIES AND EQUITY
The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements.
170
EVERGY, INC.
Statements of Cash Flows of Parent Company
2019
Period from June 4,
2018 through
December 31, 2018
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income
Adjustments to reconcile income to net cash from operating activities:
$
(millions)
664.4
$
Non-cash compensation
Net deferred income taxes and credits
Equity in earnings from subsidiaries
Other
Changes in working capital items:
Accounts receivable from subsidiaries
Income taxes receivable
Prepaid expenses and other current assets
Accounts payable to subsidiaries
Accrued taxes
Accrued interest
Other current liabilities
Cash dividends from subsidiaries
Changes in other assets
Changes in other liabilities
Cash Flows from Operating Activities
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Cash acquired from the merger with Great Plains Energy
Proceeds from interest rate swap
Cash Flows from Investing Activities
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short term debt, net
Proceeds from long-term debt
Payment for settlement of interest rate swap accounted for as a cash flow hedge
Cash dividends paid
Repurchase of common stock
Other financing activities
Cash Flows used in Financing Activities
NET CHANGE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS:
Beginning of period
End of period
16.3
21.4
(698.2)
2.1
8.9
(7.8)
(0.1)
(15.0)
—
12.5
1.7
460.0
0.2
(3.5)
462.9
—
—
—
20.0
1,585.0
(69.8)
(462.5)
(1,628.7)
(2.4)
(558.4)
(95.5)
$
107.1
11.6
$
The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements.
324.9
10.0
(6.3)
(364.7)
—
(8.5)
(0.2)
(1.0)
4.7
(35.2)
(13.6)
2.4
236.0
0.1
20.0
168.6
1,142.2
140.6
1,282.8
(56.1)
—
—
(245.9)
(1,042.3)
—
(1,344.3)
107.1
—
107.1
171
EVERGY, INC.
NOTES TO FINANCIAL STATEMENTS OF PARENT COMPANY
The Evergy, Inc. Notes to Consolidated Financial Statements in Part II, Item 8 should be read in conjunction with
the Evergy, Inc. Parent Company Financial Statements.
1. ORGANIZATION AND BASIS OF PRESENTATION
The Evergy, Inc. Parent Company Financial Statements have been prepared to comply with Rule 12-04 of
Regulation S-X.
Evergy, Inc. was incorporated in 2017 as Monarch Energy, a wholly-owned subsidiary of Great Plains Energy. Prior
to the closing of the merger transactions, Monarch Energy changed its name to Evergy, Inc. and did not conduct any
business activities other than those required for its formation and matters contemplated by the Amended Merger
Agreement. On June 4, 2018, in accordance with the Amended Merger Agreement, Great Plains Energy merged
into Evergy, Inc., with Evergy, Inc. surviving the merger and King Energy merged into Evergy Kansas Central, with
Evergy Kansas Central surviving the merger. These merger transactions resulted in Evergy, Inc. becoming the
parent entity of Evergy Kansas Central and the direct subsidiaries of Great Plains Energy, including Evergy Metro
and Evergy Missouri West.
See Note 2 to the consolidated financial statements for additional information regarding the merger.
Evergy, Inc. operates primarily through its wholly-owned direct subsidiaries. Evergy, Inc.'s investments in
subsidiaries are accounted for using the equity method. Fair value adjustments and goodwill related to the acquired
assets and liabilities of Great Plains Energy and its direct subsidiaries are only reflected on Evergy's consolidated
financial statements and as such, are not included in Evergy, Inc.'s Parent Company Financial Statements. See Note
1 to the consolidated financial statement for additional information.
2. LONG-TERM DEBT
See Note 13 to the consolidated financial statements for additional information on Evergy, Inc.'s long-term debt.
3. GUARANTEES
See Note 16 to the consolidated financial statements for additional information regarding Evergy, Inc.'s guarantees.
4. DIVIDENDS
Cash dividends paid to Evergy, Inc. by its subsidiaries were $460.0 million for the year ended December 31, 2019
and $236.0 million for the period from June 4, 2018 through December 31, 2018. See Note 18 to the consolidated
financial statements for information regarding the dividend restrictions of Evergy, Inc. and its subsidiaries.
172
Schedule II - Valuation and Qualifying Accounts and Reserves
Evergy, Inc.
Valuation and Qualifying Accounts
Years Ended December 31, 2019, 2018 and 2017
Additions
Balance At
Beginning
Charged
To Costs
And
Description
Of Period
Expenses
Year Ended December 31, 2019
Allowance for uncollectible accounts
Tax valuation allowance
Year Ended December 31, 2018
Allowance for uncollectible accounts
Tax valuation allowance
Year Ended December 31, 2017
Allowance for uncollectible accounts
$
$
$
9.2
27.3
6.7
—
$
$
27.2
0.6
20.7
2.2
6.7
$
10.5
Charged
To Other
Accounts
(millions)
12.4 (a)
—
16.9 (e)
26.8 (d)
7.0 (a)
$
$
$
Balance
At End
Deductions
Of Period
$
$
$
38.3 (b)
10.4 (c)
35.1 (b)
1.7 (c)
17.5 (b)
$
$
$
10.5
17.5
9.2
27.3
6.7
(a) Recoveries.
(b) Uncollectible accounts charged off.
(c) Reversal of tax valuation allowance.
(d) Primarily represents the addition of Great Plains Energy's allowance as of the date of the merger.
(e) Recoveries and the addition of Great Plains Energy's allowance as of the date of the merger.
Evergy Kansas Central, Inc.
Valuation and Qualifying Accounts
Years Ended December 31, 2019, 2018 and 2017
Additions
Balance At
Beginning
Charged
To Costs
And
Description
Of Period
Expenses
Year Ended December 31, 2019
Allowance for uncollectible accounts
Tax valuation allowance
Year Ended December 31, 2018
Allowance for uncollectible accounts
Tax valuation allowance
Year Ended December 31, 2017
Allowance for uncollectible accounts
(a) Recoveries.
(b) Uncollectible accounts charged off.
(c) Reversal of tax valuation allowance.
$
$
$
3.9
1.7
6.7
—
$
$
7.2
—
9.0
1.7
6.7
$
10.5
Charged
To Other
Accounts
(millions)
3.4 (a)
—
7.4 (a)
—
7.0 (a)
$
$
$
Balance
At End
Deductions
Of Period
$
$
$
10.7 (b)
1.7 (c)
19.2 (b)
—
17.5 (b)
$
$
$
3.8
—
3.9
1.7
6.7
173
Evergy Metro, Inc.
Valuation and Qualifying Accounts
Years Ended December 31, 2019, 2018 and 2017
Additions
Balance At
Beginning
Charged
To Costs
And
Description
Of Period
Expenses
Year Ended December 31, 2019
Allowance for uncollectible accounts
Year Ended December 31, 2018
Allowance for uncollectible accounts
Year Ended December 31, 2017
Allowance for uncollectible accounts
Tax valuation allowance
(a) Recoveries.
(b) Uncollectible accounts charged off.
(c) Reversal of tax valuation allowance.
$
$
$
3.8
2.2
1.8
—
$
$
$
13.7
13.1
7.5
1.2
Charged
To Other
Accounts
$
$
$
(millions)
6.3 (a)
4.4 (a)
5.6 (a)
—
Balance
At End
Deductions
Of Period
$
$
$
19.2 (b)
15.9 (b)
12.7 (b)
1.2 (c)
$
$
$
4.6
3.8
2.2
—
174
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: March 2, 2020
EVERGY, INC.
By: /s/ Terry Bassham
Terry Bassham
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
/s/ Terry Bassham
Terry Bassham
Director, President and Chief Executive Officer
(Principal Executive Officer)
Title
Date
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
March 2, 2020
/s/ Anthony D. Somma
Anthony D. Somma
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ Steven P. Busser
Steven P. Busser
Vice President - Risk Management and Controller
(Principal Accounting Officer)
Mark A. Ruelle*
Chairman of the Board of Directors
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Mollie Hale Carter*
Charles Q. Chandler IV*
Gary D. Forsee*
Scott D. Grimes*
Richard L. Hawley*
Thomas D. Hyde*
B. Anthony Isaac*
Sandra A.J. Lawrence*
Ann D. Murtlow*
Sandra J. Price*
John J. Sherman*
S. Carl Soderstrom Jr.*
John Arthur Stall*
*By
/s/ Terry Bassham
Terry Bassham
Attorney-in-Fact*
175
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: March 2, 2020
EVERGY KANSAS CENTRAL, INC.
By: /s/ Terry Bassham
Terry Bassham
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
/s/ Terry Bassham
Terry Bassham
Director, President and Chief Executive Officer
(Principal Executive Officer)
Title
Date
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
March 2, 2020
/s/ Anthony D. Somma
Anthony D. Somma
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ Steven P. Busser
Steven P. Busser
Vice President - Risk Management and Controller
(Principal Accounting Officer)
Mark A. Ruelle*
Chairman of the Board of Directors
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Mollie Hale Carter*
Charles Q. Chandler IV*
Gary D. Forsee*
Scott D. Grimes*
Richard L. Hawley*
Thomas D. Hyde*
B. Anthony Isaac*
Sandra A.J. Lawrence*
Ann D. Murtlow*
Sandra J. Price*
John J. Sherman*
S. Carl Soderstrom Jr.*
John Arthur Stall*
*By
/s/ Terry Bassham
Terry Bassham
Attorney-in-Fact*
176
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: March 2, 2020
EVERGY METRO, INC.
By: /s/ Terry Bassham
Terry Bassham
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
/s/ Terry Bassham
Terry Bassham
Director, President and Chief Executive Officer
(Principal Executive Officer)
Title
Date
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March 2, 2020
/s/ Anthony D. Somma
Anthony D. Somma
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ Steven P. Busser
Steven P. Busser
Vice President - Risk Management and Controller
(Principal Accounting Officer)
Mark A. Ruelle*
Chairman of the Board of Directors
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Mollie Hale Carter*
Charles Q. Chandler IV*
Gary D. Forsee*
Scott D. Grimes*
Richard L. Hawley*
Thomas D. Hyde*
B. Anthony Isaac*
Sandra A.J. Lawrence*
Ann D. Murtlow*
Sandra J. Price*
John J. Sherman*
S. Carl Soderstrom Jr.*
John Arthur Stall*
*By
/s/ Terry Bassham
Terry Bassham
Attorney-in-Fact*
177
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Directors and Officers
Board of Directors
Mark A. Ruelle
Chairman of the Board,
former President
and Chief Executive Officer
of Westar Energy
Charles Q. Chandler IV
Chairman, President and Chief
Executive Officer of INTRUST
Bank, N.A.
Kirkland B. Andrews
Chief Financial Officer,
NRG Energy, Inc.
Terry Bassham
President and
Chief Executive Officer
Mollie Hale Carter
Chairman, Chief Executive Officer
and President of FirstSun
Capital Bancorp; Chairman
of Sunflower Bank
Officers
Terry Bassham
President and
Chief Executive Officer
Kevin Bryant
Executive Vice President,
Chief Operating Officer
Greg Greenwood
Executive Vice President,
Strategy and Chief
Administrative Officer
Tony Somma
Executive Vice President,
Chief Financial Officer
Jerl Banning
Senior Vice President,
Chief People Officer
Gary D. Forsee
Former President, University
of Missouri System
Scott D. Grimes
Director, Chief Executive Officer
and Founder of Cardlytics, Inc.
Richard L. Hawley
Former Executive Vice President
and Chief Financial Officer
of Nicor, Inc. and Nicor Gas
Thomas D. Hyde
Former Executive Vice President
Legal, Compliance, Ethics and
Corporate Secretary of Wal-Mart
Stores, Inc.
Chuck Caisley
Senior Vice President,
Marketing, Public Affairs
and Chief Customer Officer
Heather Humphrey
Senior Vice President,
General Counsel and
Corporate Secretary
Charles King
Senior Vice President,
Chief Technology Officer
Bruce Akin
Vice President, Transmission
and Distribution
Jeff Beasley
Vice President,
Customer Operations
Shareholder Information
EVERGY, INC FORM 10-K
Evergy, Inc.’s 2019 annual report on form 10-K filed with the Securities
and Exchange Commission can be found in the Investor Relations
section of our website, www.evergy.com.
The 10-K is available at no charge
upon written request to:
Corporate Secretary
Evergy, Inc.
P.O. Box 418679
Kansas City, MO 64141-9679
MARKET INFORMATION
Evergy, Inc. common stock is traded on the New York Stock Exchange
under the ticker symbol “EVRG”. We had 23,708 registered shareholders
of record as of February 25, 2020.
WEBSITE
We have a website at www.evergy.com. Our Investor Relations section
includes our SEC filings, news releases, stock quotes, community and
environmental efforts, and information of general interest to investors.
Also located on the website are Governance Documents and Committee
Charters for the Board of Directors. These documents are available at
no charge upon written request to the Corporate Secretary.
FINANCIAL COMMUNITY INQUIRIES
Securities analyst and investment professionals seeking information
about Evergy, Inc. may contact Investor Relations at 785-575-8227.
B. Anthony Isaac
Former Senior Vice President
and Head of Select Service Strategy
and Development at Hyatt Hotels
Corporation
Paul M. Keglevic
Former Chief Executive Officer,
Energy Future Holdings
Sandra A.J. Lawrence
Former Executive Vice President
and Chief Administrative Officer
of Children’s Mercy Hospital
Ann D. Murtlow
President and Chief Executive
Officer of the United Way
of Central Indiana
Sandra J. Price
Former Senior Vice President
Human Resources,
Sprint Corporation
John J. Sherman
Chairman and Chief Executive
Officer, Kansas City Royals
Baseball Club
S. Carl Soderstrom Jr.
Former Senior Vice President
and Chief Financial Officer
for ArvinMeritor
John Arthur Stall
Former President NextEra
Energy, Inc. – Nuclear Division
John Bridson
Vice President,
Generation
Steve Busser
Vice President,
Risk Management
and Controller
Ellen Fairchild
Vice President,
Chief Compliance Officer
Deb Grunst
Vice President,
Information Technology
Darrin Ives
Vice President,
Regulatory Affairs
Maria Jenks
Vice President,
Supply Chain
Jeff Martin
Vice President, Customer
and Community Operations
Kevin Noblet
Vice President,
Safety and Operations Planning
Lori Wright
Vice President,
Corporate Planning, Investor
Relations and Treasurer
COMMON STOCK DIVIDEND
Quarter
First
Second
Third
Fourth
2019
$0.4750
$0.4750
$0.4750
$0.5050
2018
*
*
$0.4600
$0.4750
TWO-YEAR COMMON STOCK HISTORY
Quarter
First
Second
Third
Fourth
2019
High Low
$59.940
$61.540
$67.810
$66.540
$54.570
$56.330
$59.540
$61.970
2018
High
*
*
$59.280
$61.100
Low
*
*
$54.170
$54.260
* For legacy Great Plains Energy and Westar Energy dividend amounts and stock prices,
please visit the Investor Relations section of our website, www.evergy.com.
ANNUAL MEETING OF SHAREHOLDERS
Evergy, Inc.’s annual meeting of shareholders will be held at 10:00 a.m., May 5,
2020 at Evergy, Inc., Cedar Point Training Facility, 10058 Raytown Road,
Kansas City, MO 64134.
REGISTERED SHAREHOLDER INQUIRIES &
TRANSFER AGENT & STOCK REGISTRANT
For account information or assistance, including change of address,
stock transfer, dividend payments, duplicate accounts, or to report
a lost certificate, please contact our transfer agent, Computershare at:
Computershare Trust Company, N.A., P. O. Box 505000, Louisville, KY
40233-5000, Telephone: 866-239-8177.
Evergy, Inc.
P.O. Box 418679
Kansas City, Missouri
64141-9679
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