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Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 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_______
https://cdn.kscope.io/1fdc7d33234d70933499978efb756b3a-evergylogoa04.jpg
 
 
Exact name of registrant as specified in its charter,
 
 
Commission
 
state of incorporation, address of principal
 
I.R.S. Employer
File Number
 
executive offices and telephone number
 
Identification Number
 
 
 
 
 
001-38515
 
EVERGY, INC.
 
82-2733395
 
 
(a Missouri corporation)
 
 
 
 
1200 Main Street
 
 
 
 
Kansas City, Missouri  64105
 
 
 
 
(816) 556-2200
 
 
 
 
 
 
 
001-03523
 
WESTAR ENERGY, INC.
 
48-0290150
 
 
(a Kansas corporation)
 
 
 
 
818 South Kansas Avenue
 
 
 
 
Topeka, Kansas 66612
 
 
 
 
(785) 575-6300
 
 
 
 
 
 
 
000-51873
 
KANSAS CITY POWER & LIGHT COMPANY
 
44-0308720
 
 
(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)
 
Name of each exchange on which registered
Evergy, Inc. common stock
 
EVRG
 
New York Stock Exchange
 
 
 
 
 




Table of Contents


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.
 
 
 
 
Yes
x
 
 
No
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Westar Energy, Inc.
 
 
 
 
Yes
x
 
 
No
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kansas City Power & Light Company
 
 
 
 
Yes
x
 
 
No
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted 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 and post such files).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evergy, Inc.
 
 
 
 
Yes
x
 
 
No
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Westar Energy, Inc.
 
 
 
 
Yes
x
 
 
No
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kansas City Power & Light Company
 
 
 
 
Yes
x
 
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
Large Accelerated Filer
 
Accelerated Filer
 
Non-accelerated Filer
 
Smaller Reporting Company
 
Emerging Growth Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evergy, Inc.
 
x
 
 
 
☐
 
 
 
☐
 
 
 
☐
 
 
 
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Westar Energy, Inc.
 
☐
 
 
 
☐
 
 
 
x
 
 
 
☐
 
 
 
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kansas City Power & Light Company
 
☐
 
 
 
☐
 
 
 
x
 
 
 
☐
 
 
 
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 pursuant to Section 13(a) of the Exchange Act.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evergy, Inc.
 
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Westar Energy, Inc.
 
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kansas City Power & Light Company
 
☐
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evergy, Inc.
 
 
 
 
Yes
☐
 
 
No
x
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Westar Energy, Inc.
 
 
 
 
Yes
☐
 
 
No
x
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kansas City Power & Light Company
 
 
 
 
Yes
☐
 
 
No
x
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On May 3, 2019, Evergy, Inc. had 244,098,475 shares of common stock outstanding.  On May 3, 2019 Kansas City Power & Light Company and Westar Energy, Inc. each had one share of common stock outstanding and held by Evergy, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Westar Energy, Inc. and Kansas City Power & Light Company meet the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format.
This combined Quarterly Report on Form 10-Q is provided by the following registrants: Evergy, Inc. (Evergy), Westar Energy, Inc. (Westar Energy) and Kansas City Power & Light Company (KCP&L) (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.
This report should be read in its entirety.  No one section of the report deals with all aspects of the subject matter.  It should be read in conjunction with the consolidated financial statements and related notes and with the management's discussion and analysis of financial condition and results of operations included in the 2018 Form 10-K for each of Evergy, Westar Energy and KCP&L.


Table of Contents


TABLE OF CONTENTS
 
 
 
Page Number
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 1:
 
Note 2:
 
Note 3:
 
Note 4:
 
Note 5:
 
Note 6:
 
Note 7:
 
Note 8:
 
Note 9:
 
Note 10:
 
Note 11:
 
Note 12:
 
Note 13:
Item 2.
Item 3.
Item 4.
 
 
 
 
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 
 
 
 
 
 

3
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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 the expected financial and operational benefits of the merger of Great Plains Energy Incorporated (Great Plains Energy) and Westar Energy that resulted in the creation of Evergy (including cost savings, operational efficiencies and the impact of the merger on earnings per share), cost estimates of capital projects, dividend growth, share repurchases, balance sheet and credit ratings, rebates to customers, the outcome of regulatory and legal proceedings, employee issues and other matters affecting future operations.
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Evergy Companies are providing a number of important factors that could cause actual results to differ materially from the provided forward-looking information. These important factors include: future economic conditions and any related impact on sales, prices and costs; prices and availability of electricity in wholesale markets; market perception of the energy industry and the Evergy Companies; changes in business strategy or operations; the impact of unpredictable 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 rates that Westar Energy and KCP&L (or other regulated subsidiaries of Evergy) can charge for electricity; 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; 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; the impact of climate change, including reduced demand for coal-based energy because of actual or perceived climate impacts and the development of alternate energy sources; 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; 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; weather conditions, including weather-related damage and the impact on sales, prices and costs; cost, availability, quality and timely provision of equipment, supplies, labor and fuel; the inherent uncertainties in estimating the effects of weather, economic conditions, climate change and other factors on customer consumption and financial results; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution or other projects; the Evergy Companies' ability to successfully 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 increased costs of retirement, health care and other benefits; the possibility that the expected value creation from the merger will not be realized, or will not be realized within the expected time period; difficulties related to the integration of the two companies; disruption from the merger making it more difficult to maintain relationships with customers, employees, regulators or suppliers; the diversion of management time; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Part II, Item 1A, Risk Factors included in this report, together with the risk factors included in the Evergy Companies' combined 2018 Form 10-K under Part I, Item 1A, 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.

4
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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
 
Affordable Clean Energy
AEP
 
American Electric Power Company, Inc.
AFUDC
 
Allowance for Funds Used During Construction
Amended Merger Agreement
 
Amended and Restated Agreement and Plan of Merger, dated as of July 9, 2017, by and among Great Plains Energy, Westar Energy, Monarch Energy Holding, Inc. and King Energy, Inc.
ARO
 
Asset Retirement Obligation
ASC
 
Accounting Standards Codification
ASR
 
Accelerated share repurchase
ASU
 
Accounting Standards Update
BSER
 
Best system of emission reduction
CCRs
 
Coal combustion residuals
CAA
 
Clean Air Act Amendments of 1990
CO2
 
Carbon dioxide
COLI
 
Corporate-owned life insurance
CPP
 
Clean Power Plan
CWA
 
Clean Water Act
D.C. Circuit
 
U.S. Court of Appeals for the D.C. Circuit
EGU
 
Electric utility generating unit
ELG
 
Effluent limitations guidelines
EPA
 
Environmental Protection Agency
EPS
 
Earnings per common share
ERISA
 
Employee Retirement Income Security Act of 1974, as amended
ERSP
 
Earnings Review and Sharing Plan
Evergy
 
Evergy, Inc. and its consolidated subsidiaries
Evergy Board
 
Evergy Board of Directors
Evergy Companies
 
Evergy, Westar Energy, and KCP&L, collectively, which are individual registrants within the Evergy consolidated group
Exchange Act
 
The Securities Exchange Act of 1934, as amended
FASB
 
Financial Accounting Standards Board
FERC
 
The Federal Energy Regulatory Commission
GAAP
 
Generally Accepted Accounting Principles
GHG
 
Greenhouse gas
GMO
 
KCP&L Greater Missouri Operations Company, a wholly-owned subsidiary of Evergy
GPETHC
 
GPE Transmission Holding Company LLC, a wholly-owned subsidiary of Evergy
Great Plains Energy
 
Great Plains Energy Incorporated
KCC
 
The State Corporation Commission of the State of Kansas
KCP&L
 
Kansas City Power & Light Company, a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
KCP&L Mortgage Indenture
 
KCP&L General Mortgage Indenture and Deed of Trust dated as of December 1, 1986, as supplemented
KDHE
 
Kansas Department of Health & Environment
KGE
 
Kansas Gas and Electric Company, a wholly-owned subsidiary of Westar Energy

5
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Abbreviation or Acronym
 
Definition
King Energy
 
King Energy, Inc., a wholly-owned subsidiary of Evergy
MDNR
 
Missouri Department of Natural Resources
MECG
 
Midwest Energy Consumers Group
MEEIA
 
Missouri Energy Efficiency Investment Act
Monarch Energy
 
Monarch Energy Holding, Inc.
MPSC
 
Public Service Commission of the State of Missouri
MW
 
Megawatt
MWh
 
Megawatt hour
NAAQs
 
National Ambient Air Quality Standards
NAV
 
Net Asset Value
NO2
 
Nitrogen dioxide
NRC
 
Nuclear Regulatory Commission
NSR
 
New source review
OPC
 
Office of the Public Counsel
PISA
 
Plant-in service accounting
PM
 
Particulate matter
Prairie Wind
 
Prairie Wind Transmission, LLC, 50% owned by Westar Energy
RSU
 
Restricted share unit
RTO
 
Regional transmission organization
SEC
 
Securities and Exchange Commission
SO2
 
Sulfur dioxide
SPP
 
Southwest Power Pool, Inc.
TCJA
 
Tax Cuts and Jobs Act
TFR
 
Transmission formula rate
Transource
 
Transource Energy, LLC and its subsidiaries, 13.5% owned by GPETHC
VIE
 
Variable interest entity
Westar Energy
 
Westar Energy, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
WIIN
 
Water Infrastructure Improvements for the Nation
Wolf Creek
 
Wolf Creek Generating Station
WOTUS
 
Waters of the United States


6
Table of Contents


PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

EVERGY, INC.
Consolidated Balance Sheets
(Unaudited)
 
 
 
 
 
March 31
 
December 31
 
2019
 
2018
ASSETS
(millions, except share amounts)
CURRENT ASSETS:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
133.6

 
 
 
$
160.3

 
Restricted cash
 
414.3

 
 
 
—

 
Receivables, net
 
164.8

 
 
 
193.7

 
Accounts receivable pledged as collateral
 
359.0

 
 
 
365.0

 
Fuel inventory and supplies
 
466.5

 
 
 
511.0

 
Income taxes receivable
 
56.7

 
 
 
68.0

 
Regulatory assets
 
266.5

 
 
 
303.9

 
Prepaid expenses and other assets
 
66.2

 
 
 
79.1

 
Total Current Assets
 
1,927.6

 
 
 
1,681.0

 
PROPERTY, PLANT AND EQUIPMENT, NET
 
18,838.1

 
 
 
18,782.5

 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
 
171.1

 
 
 
169.2

 
OTHER ASSETS:
 
 

 
 
 
 

 
Regulatory assets
 
1,731.6

 
 
 
1,757.9

 
Nuclear decommissioning trust fund
 
518.3

 
 
 
472.1

 
Goodwill
 
2,338.9

 
 
 
2,338.9

 
Other
 
535.1

 
 
 
396.5

 
Total Other Assets
 
5,123.9

 
 
 
4,965.4

 
TOTAL ASSETS
 
$
26,060.7

 
 
 
$
25,598.1

 
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

7
Table of Contents


EVERGY, INC.
Consolidated Balance Sheets
(Unaudited)
 
 
 
March 31
 
December 31
 
2019
 
2018
LIABILITIES AND EQUITY
(millions, except share amounts)
CURRENT LIABILITIES:
 
 
 
 
 
 
 
Current maturities of long-term debt
 
$
701.1

 
 
 
$
705.4

 
Current maturities of long-term debt of variable interest entities
 
32.3

 
 
 
30.3

 
Notes payable and commercial paper
 
1,311.0

 
 
 
738.6

 
Collateralized note payable
 
359.0

 
 
 
365.0

 
Accounts payable
 
293.7

 
 
 
451.5

 
Accrued taxes
 
222.5

 
 
 
133.6

 
Accrued interest
 
150.2

 
 
 
110.9

 
Regulatory liabilities
 
34.5

 
 
 
110.2

 
Asset retirement obligations
 
52.6

 
 
 
49.8

 
Other
 
178.5

 
 
 
171.9

 
Total Current Liabilities
 
3,335.4

 
 
 
2,867.2

 
LONG-TERM LIABILITIES:
 
 

 
 
 
 

 
Long-term debt, net
 
7,125.9

 
 
 
6,636.3

 
Long-term debt of variable interest entities, net
 
18.8

 
 
 
51.1

 
Deferred income taxes
 
1,603.8

 
 
 
1,599.2

 
Unamortized investment tax credits
 
372.4

 
 
 
373.2

 
Regulatory liabilities
 
2,249.2

 
 
 
2,218.8

 
Pension and post-retirement liability
 
994.3

 
 
 
987.6

 
Asset retirement obligations
 
645.8

 
 
 
637.3

 
Other
 
323.4

 
 
 
236.7

 
Total Long-Term Liabilities
 
13,333.6

 
 
 
12,740.2

 
Commitments and Contingencies (Note 9)
 


 
 
 


 
EQUITY:
 
 
 
 
 
 
 
Evergy, Inc. Shareholders' Equity:
 
 
 
 
 
 
 
Common stock - 600,000,000 shares authorized, without par value
244,838,786 and 255,326,252 shares issued, stated value
 
8,110.4

 
 
 
8,685.2

 
Retained earnings
 
1,325.7

 
 
 
1,346.0

 
Accumulated other comprehensive loss
 
(13.2
)
 
 
 
(3.0
)
 
Total Evergy, Inc. Shareholders' Equity
 
9,422.9

 
 
 
10,028.2

 
Noncontrolling Interests
 
(31.2
)
 
 
 
(37.5
)
 
Total Equity
 
9,391.7

 
 
 
9,990.7

 
TOTAL LIABILITIES AND EQUITY
 
$
26,060.7

 
 
 
$
25,598.1

 
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

8
Table of Contents


EVERGY, INC.
Consolidated Statements of Comprehensive Income
(Unaudited)
 
 
 
Three Months Ended March 31
 
2019
 
2018
 
 
(millions, except per share amounts)
OPERATING REVENUES
 
$
1,216.9

 
$
600.2

OPERATING EXPENSES:
 
 
 
 
Fuel and purchased power
 
330.0

 
135.5

SPP network transmission costs
 
63.5

 
67.6

Operating and maintenance
 
306.9

 
140.1

Depreciation and amortization
 
213.6

 
89.6

Taxes other than income tax
 
93.3

 
43.9

Total Operating Expenses
 
1,007.3

 
476.7

INCOME FROM OPERATIONS
 
209.6

 
123.5

OTHER INCOME (EXPENSE):
 
 
 
 
Investment earnings (loss)
 
3.2

 
(0.4
)
Other income
 
8.2

 
2.0

Other expense
 
(19.4
)
 
(10.6
)
Total Other Income (Expense), Net
 
(8.0
)
 
(9.0
)
Interest expense
 
91.1

 
43.8

INCOME BEFORE INCOME TAXES
 
110.5

 
70.7

Income tax expense
 
9.3

 
9.2

Equity in earnings of equity method investees, net of income taxes
 
2.2

 
1.4

NET INCOME
 
103.4

 
62.9

Less: Net income attributable to noncontrolling interests
 
3.9

 
2.4

NET INCOME ATTRIBUTABLE TO EVERGY, INC.
 
$
99.5

 
$
60.5

BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY (see Note 1)
 
 
 
 
Basic earnings per common share
 
$
0.39

 
$
0.42

Diluted earnings per common share
 
$
0.39

 
$
0.42

AVERAGE COMMON SHARES OUTSTANDING
 
 
 
 
Basic
 
252.8

 
142.6

Diluted
 
253.0

 
142.7

COMPREHENSIVE INCOME
 
 
 
 
NET INCOME
 
$
103.4

 
$
62.9

Derivative hedging activity
 
 
 
 
Loss on derivative hedging instruments
 
(13.8
)
 
—

Income tax benefit
 
3.6

 
—

Net loss on derivative hedging instruments
 
(10.2
)
 
—

Derivative hedging activity, net of tax
 
(10.2
)
 
—

Total other comprehensive loss
 
(10.2
)
 
—

Comprehensive income
 
93.2

 
62.9

Less: comprehensive income attributable to noncontrolling interest
 
3.9

 
2.4

COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC.
 
$
89.3

 
$
60.5

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.


9
Table of Contents


EVERGY, INC.
Consolidated Statements of Cash Flows
(Unaudited)
 
 
 
 
Three Months Ended March 31
2019
 
2018
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
(millions)
Net income
$
103.4

 
$
62.9

Adjustments to reconcile income to net cash from operating activities:
 
 
 
Depreciation and amortization
213.6

 
89.6

Amortization of nuclear fuel
14.6

 
7.7

Amortization of deferred refueling outage
6.5

 
4.0

Amortization of corporate-owned life insurance
6.6

 
5.5

Non-cash compensation
5.4

 
2.5

Net deferred income taxes and credits
(2.0
)
 
3.8

Allowance for equity funds used during construction
(0.2
)
 
(1.1
)
Payments for asset retirement obligations
(1.2
)
 
(1.9
)
Equity in earnings of equity method investees, net of income taxes
(2.2
)
 
(1.4
)
Income from corporate-owned life insurance
(9.9
)
 
(0.7
)
Other
(1.3
)
 
(1.4
)
Changes in working capital items:
 
 
 
Accounts receivable
26.6

 
46.2

Accounts receivable pledged as collateral
6.0

 
—

Fuel inventory and supplies
44.6

 
6.9

Prepaid expenses and other current assets
35.5

 
(0.1
)
Accounts payable
(119.4
)
 
(24.2
)
Accrued taxes
100.2

 
48.7

Other current liabilities
(74.7
)
 
(11.8
)
Changes in other assets
12.8

 
0.7

Changes in other liabilities
(2.8
)
 
23.7

Cash Flows from Operating Activities
362.1

 
259.6

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 

 
 

Additions to property, plant and equipment
(309.0
)
 
(174.8
)
Purchase of securities - trusts
(17.9
)
 
(85.4
)
Sale of securities - trusts
15.4

 
86.1

Investment in corporate-owned life insurance
(2.1
)
 
(1.0
)
Proceeds from investment in corporate-owned life insurance
40.9

 
2.6

Other investing activities
1.3

 
(1.6
)
Cash Flows used in Investing Activities
(271.4
)
 
(174.1
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 

 
 

Short term debt, net
572.4

 
14.1

Collateralized short-term borrowings, net
(6.0
)
 
—

Proceeds from long-term debt
494.0

 
—

Retirements of long-term debt
(1.1
)
 
—

Retirements of long-term debt of variable interest entities
(30.3
)
 
(28.5
)
Borrowings against cash surrender value of corporate-owned life insurance
0.6

 
0.7

Repayment of borrowings against cash surrender value of corporate-owned life insurance
(30.1
)
 
(1.7
)
Cash dividends paid
(119.8
)
 
(57.4
)
Repurchase of common stock under repurchase plan
(578.3
)
 
—

Other financing activities
(4.5
)
 
(4.9
)
Cash Flows from (used in) Financing Activities
296.9

 
(77.7
)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
387.6

 
7.8

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
 
 
 
Beginning of period, including restricted cash of $0.0 and $0.1, respectively
160.3

 
3.5

End of period, including restricted cash of $414.3 and $0.1, respectively
$
547.9

 
$
11.3

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

10
Table of Contents


EVERGY, INC.
Consolidated Statements of Changes in Equity
(Unaudited)
 
 
 
 
 
 
 
 
Evergy, Inc. Shareholders
 
 
 
Common stock shares
Common stock
Retained earnings
AOCI
Non-controlling interests
Total equity
 
(millions, except share amounts)
Balance as of December 31, 2017
142,094,275

$
2,734.8

$
1,173.3

$
—

$
(47.7
)
$
3,860.4

Net income
—

—

60.5

—

2.4

62.9

Issuance of stock for compensation and reinvested dividends, net of tax withholding
138,828

(3.7
)
—

—

—

(3.7
)
Dividends declared on common stock ($0.40 per share)
—

—

(57.7
)
—

—

(57.7
)
Stock compensation expense
—

2.5

—

—

—

2.5

Balance as of March 31, 2018
142,233,103

$
2,733.6

$
1,176.1

$
—

$
(45.3
)
$
3,864.4

 
 
 
 
 
 
 
Balance as of December 31, 2018
255,326,252

$
8,685.2

$
1,346.0

$
(3.0
)
$
(37.5
)
$
9,990.7

Net income
—

—

99.5

—

3.9

103.4

Issuance of stock for compensation and reinvested dividends, net of tax withholding
60,594

(1.6
)
—

—

—

(1.6
)
Dividends declared on common stock ($0.475 per share)
—

—

(119.8
)
—

—

(119.8
)
Stock compensation expense
—

5.4

—

—

—

5.4

Repurchase of common stock under repurchase plan
(10,548,060
)
(578.3
)
—

—

—

(578.3
)
Consolidation of noncontrolling interests
—

—

—

—

3.8

3.8

Distributions to shareholders of noncontrolling interests
—

—

—

—

(1.4
)
(1.4
)
Derivative hedging activity, net of tax
—

—

—

(10.2
)
—

(10.2
)
Other
—

(0.3
)
—

—

—

(0.3
)
Balance as of March 31, 2019
244,838,786

$
8,110.4

$
1,325.7

$
(13.2
)
$
(31.2
)
$
9,391.7

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.


11
Table of Contents


WESTAR ENERGY, INC.
Consolidated Balance Sheets
(Unaudited)
 
 
 
 
 
March 31
 
December 31
 
2019
 
2018
ASSETS
(millions, except share amounts)
CURRENT ASSETS:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
3.0

 
 
 
$
44.5

 
Receivables, net
 
90.4

 
 
 
84.3

 
Related party receivables
 
2.5

 
 
 
2.6

 
Accounts receivable pledged as collateral
 
185.0

 
 
 
185.0

 
Fuel inventory and supplies
 
255.0

 
 
 
276.8

 
Income taxes receivable
 
32.0

 
 
 
42.7

 
Regulatory assets
 
85.2

 
 
 
97.1

 
Prepaid expenses and other assets
 
25.6

 
 
 
35.0

 
Total Current Assets
 
678.7

 
 
 
768.0

 
PROPERTY, PLANT AND EQUIPMENT, NET
 
9,726.4

 
 
 
9,718.3

 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET
 
171.1

 
 
 
169.2

 
OTHER ASSETS:
 
 

 
 
 
 

 
Regulatory assets
 
696.4

 
 
 
700.4

 
Nuclear decommissioning trust fund
 
248.4

 
 
 
227.5

 
Other
 
291.9

 
 
 
233.4

 
Total Other Assets
 
1,236.7

 
 
 
1,161.3

 
TOTAL ASSETS
 
$
11,812.9

 
 
 
$
11,816.8

 
The disclosures regarding Westar Energy included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

12
Table of Contents


WESTAR ENERGY, INC.
Consolidated Balance Sheets
(Unaudited)
 
 
 
March 31
 
December 31
 
2019
 
2018
LIABILITIES AND EQUITY
(millions, except share amounts)
CURRENT LIABILITIES:
 
 
 
 
 
 
 
Current maturities of long-term debt
 
$
300.0

 
 
 
$
300.0

 
Current maturities of long-term debt of variable interest entities
 
32.3

 
 
 
30.3

 
Notes payable and commercial paper
 
413.8

 
 
 
411.7

 
Collateralized note payable
 
185.0

 
 
 
185.0

 
Accounts payable
 
129.5

 
 
 
154.4

 
Related party payables
 
8.8

 
 
 
14.9

 
Accrued taxes
 
137.4

 
 
 
88.6

 
Accrued interest
 
93.2

 
 
 
74.4

 
Regulatory liabilities
 
15.3

 
 
 
19.5

 
Asset retirement obligations
 
17.1

 
 
 
17.1

 
Other
 
71.2

 
 
 
83.0

 
Total Current Liabilities
 
1,403.6

 
 
 
1,378.9

 
LONG-TERM LIABILITIES:
 
 

 
 
 
 

 
Long-term debt, net
 
3,390.0

 
 
 
3,389.8

 
Long-term debt of variable interest entities, net
 
18.8

 
 
 
51.1

 
Deferred income taxes
 
813.7

 
 
 
815.4

 
Unamortized investment tax credits
 
249.2

 
 
 
249.7

 
Regulatory liabilities
 
1,118.5

 
 
 
1,101.8

 
Pension and post-retirement liability
 
473.6

 
 
 
474.7

 
Asset retirement obligations
 
268.2

 
 
 
264.0

 
Other
 
155.9

 
 
 
130.7

 
Total Long-Term Liabilities
 
6,487.9

 
 
 
6,477.2

 
Commitments and Contingencies (Note 9)
 


 
 
 


 
EQUITY:
 
 

 
 
 
 
 
Westar Energy, Inc. Shareholder's Equity:
 
 

 
 
 
 

 
Common stock - 1,000 shares authorized, $0.01 par value, 1 share issued
 
2,737.6

 
 
 
2,737.6

 
Retained earnings
 
1,215.0

 
 
 
1,260.6

 
Total Westar Energy, Inc. Shareholder's Equity
 
3,952.6

 
 
 
3,998.2

 
Noncontrolling Interests
 
(31.2
)
 
 
 
(37.5
)
 
Total Equity
 
3,921.4

 
 
 
3,960.7

 
TOTAL LIABILITIES AND EQUITY
 
$
11,812.9

 
 
 
$
11,816.8

 
The disclosures regarding Westar Energy included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.


13
Table of Contents


WESTAR ENERGY, INC.
Consolidated Statements of Income
(Unaudited)
 
 
 
 
 
Three Months Ended March 31
 
2019
 
2018
 
(millions)
OPERATING REVENUES
 
$
596.8

 
$
600.2

OPERATING EXPENSES:
 
 
 
 
Fuel and purchased power
 
122.7

 
135.5

SPP network transmission costs
 
63.5

 
67.6

Operating and maintenance
 
128.6

 
140.1

Depreciation and amortization
 
109.8

 
89.6

Taxes other than income tax
 
47.9

 
43.9

Total Operating Expenses
 
472.5

 
476.7

INCOME FROM OPERATIONS
 
124.3

 
123.5

OTHER INCOME (EXPENSE):
 
 
 
 
Investment earnings (loss)
 
1.5

 
(0.4
)
Other income
 
7.3

 
2.0

Other expense
 
(10.6
)
 
(10.6
)
Total Other Income (Expense), Net
 
(1.8
)
 
(9.0
)
Interest expense
 
44.9

 
43.8

INCOME BEFORE INCOME TAXES
 
77.6

 
70.7

Income tax expense
 
10.5

 
9.2

Equity in earnings of equity method investees, net of income taxes
 
1.2

 
1.4

NET INCOME
 
68.3

 
62.9

Less: Net income attributable to noncontrolling interests
 
3.9

 
2.4

NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC.
 
$
64.4

 
$
60.5

The disclosures regarding Westar Energy included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.


14
Table of Contents


WESTAR ENERGY, INC.
Consolidated Statements of Cash Flows
(Unaudited)
 
Three Months Ended March 31
2019
 
2018
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
(millions)
Net income
$
68.3

 
$
62.9

Adjustments to reconcile income to net cash from operating activities:
 
 
 
Depreciation and amortization
109.8

 
89.6

Amortization of nuclear fuel
7.3

 
7.7

Amortization of deferred refueling outage
3.2

 
4.0

Amortization of corporate-owned life insurance
6.6

 
5.5

Non-cash compensation
—

 
2.5

Net deferred income taxes and credits
(0.3
)
 
3.8

Allowance for equity funds used during construction
—

 
(1.1
)
Payments for asset retirement obligations
(0.3
)
 
(1.9
)
Equity in earnings of equity method investees, net of income taxes
(1.2
)
 
(1.4
)
Income from corporate-owned life insurance
(9.3
)
 
(0.7
)
Other
(1.4
)
 
(1.4
)
Changes in working capital items:
 
 
 
Accounts receivable
(7.9
)
 
46.2

Fuel inventory and supplies
21.9

 
6.9

Prepaid expenses and other current assets
14.8

 
(0.1
)
Accounts payable
(7.2
)
 
(24.2
)
Accrued taxes
59.5

 
48.7

Other current liabilities
(18.9
)
 
(11.8
)
Changes in other assets
4.6

 
0.7

Changes in other liabilities
(7.0
)
 
23.7

Cash Flows from Operating Activities
242.5

 
259.6

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 

 
 

Additions to property, plant and equipment
(151.7
)
 
(174.8
)
Purchase of securities - trusts
(7.5
)
 
(85.4
)
Sale of securities - trusts
7.2

 
86.1

Investment in corporate-owned life insurance
(2.1
)
 
(1.0
)
Proceeds from investment in corporate-owned life insurance
40.3

 
2.6

Other investing activities
(0.1
)
 
(1.6
)
Cash Flows used in Investing Activities
(113.9
)
 
(174.1
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 

 
 

Short term debt, net
2.1

 
14.1

Retirements of long-term debt of variable interest entities
(30.3
)
 
(28.5
)
Borrowings against cash surrender value of corporate-owned life insurance
0.6

 
0.7

Repayment of borrowings against cash surrender value of corporate-owned life insurance
(30.1
)
 
(1.7
)
Cash dividends paid
(110.0
)
 
(57.4
)
Other financing activities
(2.4
)
 
(4.9
)
Cash Flows used in Financing Activities
(170.1
)
 
(77.7
)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(41.5
)
 
7.8

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
 
 
 
Beginning of period, including restricted cash of $0.0 and $0.1, respectively
44.5

 
3.5

End of period, including restricted cash of $0.0 and $0.1, respectively
$
3.0

 
$
11.3

The disclosures regarding Westar Energy included in the accompanying Unaudited Notes to Consolidated Financial Statements are an integral part of these statements.

15
Table of Contents


WESTAR ENERGY, INC.
Consolidated Statements of Changes in Equity
(Unaudited)
 
 
 
 
 
 
 
Westar Energy, Inc. Shareholders
 
 
 
Common stock shares
Common stock
Retained earnings
Non-controlling interests
Total equity
 
(millions, except share amounts)
Balance as of December 31, 2017
142,094,275

$
2,734.8

$
1,173.3

$
(47.7
)
$
3,860.4

Net income
—

—

60.5

2.4

62.9

Issuance of stock for compensation and reinvested dividends, net of tax withholding
138,828

(3.7
)
—

—

(3.7
)
Dividends declared on common stock
—

—

(57.7
)
—

(57.7
)
Stock compensation expense
—

2.5

—

—

2.5

Balance as of March 31, 2018
142,233,103

$
2,733.6

$
1,176.1

$
(45.3
)
$
3,864.4

 
 
 
 
 
 
Balance as of December 31, 2018
1

$
2,737.6

$
1,260.6

$
(37.5
)
$
3,960.7

Net income
—

—

64.4

3.9

68.3

Dividends declared on common stock
—

—

(110.0
)
—

(110.0
)
Consolidation of noncontrolling interests
—

—

—

3.8

3.8

Distributions to shareholders of noncontrolling interests
—

—

—

(1.4
)
(1.4
)
Balance as of March 31, 2019
1

$
2,737.6

$
1,215.0

$
(31.2
)
$
3,921.4

The disclosures regarding Westar Energy included in the accompanying Unaudited Notes to Consolidated Financial Statements are an integral part of these statements.


16
Table of Contents


KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
(Unaudited)
 
 
 
 
 
March 31
 
December 31
 
2019
 
2018
ASSETS
(millions, except share amounts)
CURRENT ASSETS:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
2.8

 
 
 
$
2.6

 
Restricted cash
 
414.3

 
 
 
—

 
Receivables, net
 
41.8

 
 
 
62.7

 
Related party receivables
 
81.2

 
 
 
101.8

 
Accounts receivable pledged as collateral
 
124.0

 
 
 
130.0

 
Fuel inventory and supplies
 
159.3

 
 
 
177.6

 
Regulatory assets
 
111.4

 
 
 
130.9

 
Prepaid expenses and other assets
 
35.0

 
 
 
36.9

 
Total Current Assets
 
969.8

 
 
 
642.5

 
PROPERTY, PLANT AND EQUIPMENT, NET
 
6,714.1

 
 
 
6,688.1

 
OTHER ASSETS:
 
 

 
 
 
 

 
Regulatory assets
 
471.2

 
 
 
495.2

 
Nuclear decommissioning trust fund
 
269.9

 
 
 
244.6

 
Other
 
140.1

 
 
 
50.1

 
Total Other Assets
 
881.2

 
 
 
789.9

 
TOTAL ASSETS
 
$
8,565.1

 
 
 
$
8,120.5

 
The disclosures regarding KCP&L included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

17
Table of Contents


KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
(Unaudited)
 
 
 
March 31
 
December 31
 
2019
 
2018
LIABILITIES AND EQUITY
(millions, except share amounts)
CURRENT LIABILITIES:
 
 
 
 
 
 
 
Current maturities of long-term debt
 
$
400.0

 
 
 
$
400.0

 
Notes payable and commercial paper
 
176.0

 
 
 
176.9

 
Collateralized note payable
 
124.0

 
 
 
130.0

 
Accounts payable
 
131.2

 
 
 
211.1

 
Accrued taxes
 
77.1

 
 
 
39.7

 
Accrued interest
 
41.1

 
 
 
28.9

 
Regulatory liabilities
 
8.1

 
 
 
52.8

 
Asset retirement obligations
 
29.7

 
 
 
29.2

 
Other
 
75.6