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 | ||||
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 | ☒ | No | ☐ | ||||||||||||||||
Westar Energy, Inc. | Yes | ☒ | No | ☐ | ||||||||||||||||
Kansas City Power & Light Company | Yes | ☒ | No | ☐ | ||||||||||||||||
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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 | ☒ | No | ☐ | ||||||||||||||||
Westar Energy, Inc. | Yes | ☒ | No | ☐ | ||||||||||||||||
Kansas City Power & Light Company | Yes | ☒ | 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. | ☒ | ☐ | ☐ | ☐ | ☐ | |||||||||||||||
Westar Energy, Inc. | ☒ | ☐ | ☐ | ☐ | ☐ | |||||||||||||||
Kansas City Power & Light 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 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 | ☒ | ||||||||||||||||
Westar Energy, Inc. | Yes | ☐ | No | ☒ | ||||||||||||||||
Kansas City Power & Light Company | Yes | ☐ | No | ☒ | ||||||||||||||||
On October 31, 2018, Evergy, Inc. had 263,455,083 shares of common stock outstanding. On October 31, 2018, 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. |
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: | |||
Note 14: | |||
Note 15: | |||
Note 16: | |||
Note 17: | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 1. | |||
Item 1A. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 5. | |||
Item 6. | |||
Abbreviation or Acronym | Definition | |
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. | |
AMT | Alternative Minimum Tax | |
ARO | Asset Retirement Obligation | |
ASC | Accounting Standards Codification | |
ASU | Accounting Standards Update | |
CCRs | Coal combustion residuals | |
Clean Air Act | Clean Air Act Amendments of 1990 | |
CO2 | Carbon dioxide | |
COLI | Corporate-owned life insurance | |
CWA | Clean Water Act | |
DOE | Department of Energy | |
EIRR | Environmental Improvement Revenue Refunding | |
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 | |
FMBs | First mortgage bonds | |
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 | 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 Receivables Company | Kansas City Power & Light Receivables Company, a wholly-owned subsidiary of KCP&L | |
KDHE | Kansas Department of Health & Environment | |
KGE | Kansas Gas and Electric Company, a wholly-owned subsidiary of Westar Energy | |
King Energy | King Energy, Inc., a wholly-owned subsidiary of Evergy | |
kWh | Kilowatt hour |
Abbreviation or Acronym | Definition | |
MEEIA | Missouri Energy Efficiency Investment Act | |
MMBtu | Millions of British thermal units | |
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 | |
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. | |
TFR | Transmission formula rate | |
Transource | Transource Energy, LLC and its subsidiaries, 13.5% owned by GPETHC | |
VIE | Variable interest entity | |
WCNOC | Wolf Creek Nuclear Operating Corporation | |
Westar Energy | Westar Energy, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries | |
Wolf Creek | Wolf Creek Generating Station | |
WOTUS | Waters of the United States |
EVERGY, INC. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
September 30 | December 31 | ||||||||||
2018 | 2017 | ||||||||||
ASSETS | (millions, except share amounts) | ||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 679.7 | $ | 3.4 | |||||||
Receivables, net | 496.5 | 290.7 | |||||||||
Accounts receivable pledged as collateral | 195.0 | — | |||||||||
Fuel inventory and supplies | 520.9 | 293.6 | |||||||||
Income taxes receivable | 20.8 | — | |||||||||
Regulatory assets | 332.5 | 99.5 | |||||||||
Prepaid expenses and other assets | 73.6 | 39.8 | |||||||||
Total Current Assets | 2,319.0 | 727.0 | |||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 18,836.0 | 9,553.8 | |||||||||
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET | 170.9 | 176.3 | |||||||||
OTHER ASSETS: | |||||||||||
Regulatory assets | 1,518.1 | 685.4 | |||||||||
Nuclear decommissioning trust fund | 518.0 | 237.1 | |||||||||
Goodwill | 2,333.5 | — | |||||||||
Other | 379.7 | 244.8 | |||||||||
Total Other Assets | 4,749.3 | 1,167.3 | |||||||||
TOTAL ASSETS | $ | 26,075.2 | $ | 11,624.4 |
EVERGY, INC. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
September 30 | December 31 | ||||||||||
2018 | 2017 | ||||||||||
LIABILITIES AND EQUITY | (millions, except share amounts) | ||||||||||
CURRENT LIABILITIES: | |||||||||||
Current maturities of long-term debt | $ | 709.6 | $ | — | |||||||
Current maturities of long-term debt of variable interest entities | 30.3 | 28.5 | |||||||||
Notes payable and commercial paper | 675.9 | 275.7 | |||||||||
Collateralized note payable | 195.0 | — | |||||||||
Accounts payable | 303.7 | 204.2 | |||||||||
Accrued dividends | — | 53.8 | |||||||||
Accrued taxes | 282.1 | 87.7 | |||||||||
Accrued interest | 119.6 | 72.7 | |||||||||
Regulatory liabilities | 117.2 | 11.6 | |||||||||
Other | 225.8 | 89.5 | |||||||||
Total Current Liabilities | 2,659.2 | 823.7 | |||||||||
LONG-TERM LIABILITIES: | |||||||||||
Long-term debt, net | 6,639.8 | 3,687.6 | |||||||||
Long-term debt of variable interest entities, net | 51.1 | 81.4 | |||||||||
Deferred income taxes | 1,536.0 | 815.7 | |||||||||
Unamortized investment tax credits | 378.9 | 257.1 | |||||||||
Regulatory liabilities | 2,357.1 | 1,094.0 | |||||||||
Pension and post-retirement liability | 949.7 | 491.2 | |||||||||
Asset retirement obligations | 622.7 | 380.0 | |||||||||
Other | 231.9 | 133.3 | |||||||||
Total Long-Term Liabilities | 12,767.2 | 6,940.3 | |||||||||
Commitments and Contingencies (Note 12) | |||||||||||
EQUITY: | |||||||||||
Evergy, Inc. Shareholders' Equity: | |||||||||||
Common stock - 600,000,000 shares authorized, without par value, 264,797,584 shares issued (275,000,000 shares authorized, $5 par value, 142,094,275 shares issued as of December 31, 2017) | 9,236.4 | 2,734.8 | |||||||||
Retained earnings | 1,452.5 | 1,173.3 | |||||||||
Total Evergy, Inc. Shareholders' Equity | 10,688.9 | 3,908.1 | |||||||||
Noncontrolling Interests | (40.1 | ) | (47.7 | ) | |||||||
Total Equity | 10,648.8 | 3,860.4 | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | 26,075.2 | $ | 11,624.4 |
EVERGY, INC. | ||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended September 30 | Year to Date September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(millions, except per share amounts) | ||||||||||||||||
OPERATING REVENUES | $ | 1,582.5 | $ | 794.3 | $ | 3,076.1 | $ | 1,976.2 | ||||||||
OPERATING EXPENSES: | ||||||||||||||||
Fuel and purchased power | 383.7 | 189.8 | 748.9 | 415.4 | ||||||||||||
SPP network transmission costs | 58.4 | 62.6 | 194.4 | 185.0 | ||||||||||||
Operating and maintenance | 330.4 | 140.6 | 754.2 | 415.6 | ||||||||||||
Depreciation and amortization | 193.9 | 94.6 | 411.6 | 277.3 | ||||||||||||
Taxes other than income tax | 83.0 | 41.8 | 183.5 | 126.4 | ||||||||||||
Total Operating Expenses | 1,049.4 | 529.4 | 2,292.6 | 1,419.7 | ||||||||||||
INCOME FROM OPERATIONS | 533.1 | 264.9 | 783.5 | 556.5 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Investment earnings | 4.9 | 1.0 | 6.2 | 3.5 | ||||||||||||
Other income | 1.6 | 3.9 | 5.3 | 5.7 | ||||||||||||
Other expense | (30.8 | ) | (11.5 | ) | (55.2 | ) | (29.6 | ) | ||||||||
Total Other Income (Expense), Net | (24.3 | ) | (6.6 | ) | (43.7 | ) | (20.4 | ) | ||||||||
Interest expense | 89.1 | 43.4 | 191.3 | 128.2 | ||||||||||||
INCOME BEFORE INCOME TAXES | 419.7 | 214.9 | 548.5 | 407.9 | ||||||||||||
Income tax expense | 64.1 | 55.8 | 28.3 | 112.6 | ||||||||||||
Equity in earnings of equity method investees, net of income taxes | 2.0 | 1.6 | 4.7 | 4.9 | ||||||||||||
NET INCOME | 357.6 | 160.7 | 524.9 | 300.2 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 2.6 | 2.4 | 7.6 | 10.2 | ||||||||||||
NET INCOME ATTRIBUTABLE TO EVERGY, INC. | $ | 355.0 | $ | 158.3 | $ | 517.3 | $ | 290.0 | ||||||||
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY (see Note 1) | ||||||||||||||||
Basic earnings per common share | $ | 1.32 | $ | 1.11 | $ | 2.61 | $ | 2.03 | ||||||||
Diluted earnings per common share | $ | 1.32 | $ | 1.11 | $ | 2.61 | $ | 2.03 | ||||||||
AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING | ||||||||||||||||
Basic | 268.6 | 142.5 | 197.9 | 142.5 | ||||||||||||
Diluted | 268.8 | 142.5 | 198.0 | 142.5 |
EVERGY, INC. | |||||||||
Consolidated Statements of Cash Flows | |||||||||
(Unaudited) | |||||||||
Year to Date September 30 | 2018 | 2017 | |||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: | (millions) | ||||||||
Net income | $ | 524.9 | $ | 300.2 | |||||
Adjustments to reconcile income to net cash from operating activities: | |||||||||
Depreciation and amortization | 411.6 | 277.3 | |||||||
Amortization of nuclear fuel | 28.6 | 24.2 | |||||||
Amortization of deferred refueling outage | 14.7 | 12.1 | |||||||
Amortization of deferred regulatory gain from sale leaseback | (4.1 | ) | (4.1 | ) | |||||
Amortization of corporate-owned life insurance | 17.2 | 15.7 | |||||||
Non-cash compensation | 25.2 | 6.7 | |||||||
Net deferred income taxes and credits | 47.8 | 127.0 | |||||||
Allowance for equity funds used during construction | (2.4 | ) | (1.1 | ) | |||||
Payments for asset retirement obligations | (15.9 | ) | (1.9 | ) | |||||
Equity in earnings of equity method investees, net of income taxes | (4.7 | ) | (4.9 | ) | |||||
Other | (1.9 | ) | (5.3 | ) | |||||
Changes in working capital items: | |||||||||
Accounts receivable | (34.9 | ) | (19.7 | ) | |||||
Accounts receivable pledged as collateral | (15.0 | ) | — | ||||||
Fuel inventory and supplies | 44.6 | 15.5 | |||||||
Prepaid expenses and other current assets | (3.4 | ) | 55.5 | ||||||
Accounts payable | (58.5 | ) | (10.0 | ) | |||||
Accrued taxes | 119.0 | 35.6 | |||||||
Other current liabilities | 38.9 | (108.5 | ) | ||||||
Changes in other assets | 26.0 | 22.9 | |||||||
Changes in other liabilities | 33.9 | 5.5 | |||||||
Cash Flows from Operating Activities | 1,191.6 | 742.7 | |||||||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | |||||||||
Additions to property, plant and equipment | (698.3 | ) | (564.6 | ) | |||||
Cash acquired from the merger with Great Plains Energy | 1,154.2 | — | |||||||
Purchase of securities - trusts | (107.0 | ) | (15.3 | ) | |||||
Sale of securities - trusts | 110.2 | 15.9 | |||||||
Investment in corporate-owned life insurance | (16.2 | ) | (16.2 | ) | |||||
Proceeds from investment in corporate-owned life insurance | 6.5 | 2.1 | |||||||
Proceeds from settlement of interest rate swap | 140.6 | — | |||||||
Other investing activities | (15.2 | ) | (3.3 | ) | |||||
Cash Flows from (used in) Investing Activities | 574.8 | (581.4 | ) | ||||||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | |||||||||
Short term debt, net | (166.7 | ) | (177.7 | ) | |||||
Collateralized short-term borrowings, net | 15.0 | — | |||||||
Proceeds from long-term debt | 22.9 | 296.2 | |||||||
Retirements of long-term debt | (127.4 | ) | (125.0 | ) | |||||
Retirements of long-term debt of variable interest entities | (28.5 | ) | (26.8 | ) | |||||
Repayment of capital leases | (2.9 | ) | (2.6 | ) | |||||
Borrowings against cash surrender value of corporate-owned life insurance | 55.1 | 53.4 | |||||||
Repayment of borrowings against cash surrender value of corporate-owned life insurance | (3.9 | ) | — | ||||||
Distributions to shareholders of noncontrolling interests | — | (5.8 | ) | ||||||
Cash dividends paid | (350.4 | ) | (166.3 | ) | |||||
Repurchase of common stock | (486.1 | ) | — | ||||||
Other financing activities | (17.2 | ) | (6.4 | ) | |||||
Cash Flows (used in) Financing Activities | (1,090.1 | ) | (161.0 | ) | |||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 676.3 | 0.3 | |||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | |||||||||
Beginning of period, including restricted cash of $0.1 and $0.1, respectively | 3.5 | 3.2 | |||||||
End of period, including restricted cash of $0.1 and $0.1, respectively | $ | 679.8 | $ | 3.5 |
EVERGY, INC. | ||||||||||||||||||
Consolidated Statements of Changes in Equity | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Evergy, Inc. Shareholders | ||||||||||||||||||
Common stock shares | Common stock | Retained earnings | Non-controlling interests | Total equity | ||||||||||||||
(millions, except share amounts) | ||||||||||||||||||
Balance as of December 31, 2016 | 141,791,153 | $ | 2,727.3 | $ | 1,078.6 | $ | 27.3 | $ | 3,833.2 | |||||||||
Net income | — | — | 290.0 | 10.2 | 300.2 | |||||||||||||
Issuance of stock | 12,131 | 0.6 | — | — | 0.6 | |||||||||||||
Issuance of stock for compensation and reinvested dividends | 290,892 | 4.9 | — | — | 4.9 | |||||||||||||
Tax withholding related to stock compensation | — | (7.0 | ) | — | — | (7.0 | ) | |||||||||||
Dividends declared on common stock ($1.20 per share) | — | — | (172.1 | ) | — | (172.1 | ) | |||||||||||
Stock compensation expense | — | 6.7 | — | — | 6.7 | |||||||||||||
Deconsolidation of noncontrolling interests | — | — | — | (81.9 | ) | (81.9 | ) | |||||||||||
Distributions to shareholders of noncontrolling interests | — | — | — | (5.7 | ) | (5.7 | ) | |||||||||||
Balance as of September 30, 2017 | 142,094,176 | $ | 2,732.5 | $ | 1,196.5 | $ | (50.1 | ) | $ | 3,878.9 | ||||||||
Balance as of December 31, 2017 | 142,094,275 | $ | 2,734.8 | $ | 1,173.3 | $ | (47.7 | ) | $ | 3,860.4 | ||||||||
Net income | — | — | 517.3 | 7.6 | 524.9 | |||||||||||||
Issuance of stock to Great Plains Energy shareholders | 128,947,518 | 6,979.9 | — | — | 6,979.9 | |||||||||||||
Issuance of restricted common stock | 122,505 | — | — | — | — | |||||||||||||
Issuance of stock for compensation and reinvested dividends | 528,359 | 0.4 | — | — | 0.4 | |||||||||||||
Tax withholding related to stock compensation | — | (17.2 | ) | — | — | (17.2 | ) | |||||||||||
Dividends declared on common stock ($1.26 per share) | — | — | (237.5 | ) | — | (237.5 | ) | |||||||||||
Dividend equivalents declared | — | — | (0.6 | ) | — | (0.6 | ) | |||||||||||
Stock compensation expense | — | 25.2 | — | — | 25.2 | |||||||||||||
Repurchase of common stock | (6,895,073 | ) | (486.1 | ) | — | — | (486.1 | ) | ||||||||||
Other | — | (0.6 | ) | — | — | (0.6 | ) | |||||||||||
Balance as of September 30, 2018 | 264,797,584 | $ | 9,236.4 | $ | 1,452.5 | $ | (40.1 | ) | $ | 10,648.8 |
WESTAR ENERGY, INC. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
September 30 | December 31 | ||||||||||
2018 | 2017 | ||||||||||
ASSETS | (millions, except share amounts) | ||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 3.3 | $ | 3.4 | |||||||
Receivables, net | 347.5 | 290.7 | |||||||||
Related party receivables | 0.7 | — | |||||||||
Fuel inventory and supplies | 268.7 | 293.6 | |||||||||
Regulatory assets | 120.4 | 99.5 | |||||||||
Prepaid expenses and other assets | 31.9 | 39.8 | |||||||||
Total Current Assets | 772.5 | 727.0 | |||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 9,637.5 | 9,553.8 | |||||||||
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET | 170.9 | 176.3 | |||||||||
OTHER ASSETS: | |||||||||||
Regulatory assets | 693.7 | 685.4 | |||||||||
Nuclear decommissioning trust fund | 245.8 | 237.1 | |||||||||
Other | 227.3 | 244.8 | |||||||||
Total Other Assets | 1,166.8 | 1,167.3 | |||||||||
TOTAL ASSETS | $ | 11,747.7 | $ | 11,624.4 |
WESTAR ENERGY, INC. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
September 30 | December 31 | ||||||||||
2018 | 2017 | ||||||||||
LIABILITIES AND EQUITY | (millions, except share amounts) | ||||||||||
CURRENT LIABILITIES: | |||||||||||
Current maturities of long-term debt | $ | 300.0 | $ | — | |||||||
Current maturities of long-term debt of variable interest entities | 30.3 | 28.5 | |||||||||
Notes payable and commercial paper | 326.3 | 275.7 | |||||||||
Accounts payable | 135.1 | 204.2 | |||||||||
Related party payables | 73.9 | — | |||||||||
Accrued dividends | — | 53.8 | |||||||||
Accrued taxes | 144.9 | 87.7 | |||||||||
Accrued interest | 65.3 | 72.7 | |||||||||
Regulatory liabilities | 91.6 | 11.6 | |||||||||
Other | 109.4 | 89.5 | |||||||||
Total Current Liabilities | 1,276.8 | 823.7 | |||||||||
LONG-TERM LIABILITIES: | |||||||||||
Long-term debt, net | 3,389.7 | 3,687.6 | |||||||||
Long-term debt of variable interest entities, net | 51.1 | 81.4 | |||||||||
Deferred income taxes | 787.1 | 815.7 | |||||||||
Unamortized investment tax credits | 255.1 | 257.1 | |||||||||
Regulatory liabilities | 1,136.9 | 1,094.0 | |||||||||
Pension and post-retirement liability | 465.2 | 491.2 | |||||||||
Asset retirement obligations | 257.8 | 380.0 | |||||||||
Other | 127.8 | 133.3 | |||||||||
Total Long-Term Liabilities | 6,470.7 | 6,940.3 | |||||||||
Commitments and Contingencies (Note 12) | |||||||||||
EQUITY: | |||||||||||
Westar Energy, Inc. Shareholder's Equity: | |||||||||||
Common stock - 1,000 shares authorized, $0.01 par value, 1 share issued (275,000,000 shares authorized, $5 par value, and 142,094,275 shares issued as of December 31, 2017) | 2,737.6 | 2,734.8 | |||||||||
Retained earnings | 1,302.7 | 1,173.3 | |||||||||
Total Westar Energy, Inc. Shareholder's Equity | 4,040.3 | 3,908.1 | |||||||||
Noncontrolling Interests | (40.1 | ) | (47.7 | ) | |||||||
Total Equity | 4,000.2 | 3,860.4 | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | 11,747.7 | $ | 11,624.4 |
WESTAR ENERGY, INC. | ||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended September 30 | Year to Date September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(millions) | ||||||||||||||||
OPERATING REVENUES | $ | 764.8 | $ | 794.3 | $ | 2,015.9 | $ | 1,976.2 | ||||||||
OPERATING EXPENSES: | ||||||||||||||||
Fuel and purchased power | 169.7 | 189.8 | 463.2 | 415.4 | ||||||||||||
SPP network transmission costs | 58.4 | 62.6 | 194.4 | 185.0 | ||||||||||||
Operating and maintenance | 141.7 | 140.6 | 491.4 | 415.6 | ||||||||||||
Depreciation and amortization | 95.9 | 94.6 | 281.6 | 277.3 | ||||||||||||
Taxes other than income tax | 42.2 | 41.8 | 128.8 | 126.4 | ||||||||||||
Total Operating Expenses | 507.9 | 529.4 | 1,559.4 | 1,419.7 | ||||||||||||
INCOME FROM OPERATIONS | 256.9 | 264.9 | 456.5 | 556.5 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Investment earnings | — | 1.0 | (0.4 | ) | 3.5 | |||||||||||
Other income | 1.3 | 3.9 | 4.9 | 5.7 | ||||||||||||
Other expense | (15.2 | ) | (11.5 | ) | (36.1 | ) | (29.6 | ) | ||||||||
Total Other Income (Expense), Net | (13.9 | ) | (6.6 | ) | (31.6 | ) | (20.4 | ) | ||||||||
Interest expense | 43.9 | 43.4 | 132.1 | 128.2 | ||||||||||||
INCOME BEFORE INCOME TAXES | 199.1 | 214.9 | 292.8 | 407.9 | ||||||||||||
Income tax expense (benefit) | 22.4 | 55.8 | (22.0 | ) | 112.6 | |||||||||||
Equity in earnings of equity method investees, net of income taxes | 1.3 | 1.6 | 3.7 | 4.9 | ||||||||||||
NET INCOME | 178.0 | 160.7 | 318.5 | 300.2 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 2.6 | 2.4 | 7.6 | 10.2 | ||||||||||||
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC. | $ | 175.4 | $ | 158.3 | $ | 310.9 | $ | 290.0 |
WESTAR ENERGY, INC. | ||||||||
Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
Year to Date September 30 | 2018 | 2017 | ||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: | (millions) | |||||||
Net income | $ | 318.5 | $ | 300.2 | ||||
Adjustments to reconcile income (loss) to net cash from operating activities: | ||||||||
Depreciation and amortization | 281.6 | 277.3 | ||||||
Amortization of nuclear fuel | 18.6 | 24.2 | ||||||
Amortization of deferred refueling outage | 10.5 | 12.1 | ||||||
Amortization of deferred regulatory gain from sale leaseback | (4.1 | ) | (4.1 | ) | ||||
Amortization of corporate-owned life insurance | 17.2 | 15.7 | ||||||
Non-cash compensation | 19.9 | 6.7 | ||||||
Net deferred income taxes and credits | (34.2 | ) | 127.0 | |||||
Allowance for equity funds used during construction | (2.4 | ) | (1.1 | ) | ||||
Payments for asset retirement obligations | (10.6 | ) | (1.9 | ) | ||||
Equity in earnings of equity method investees, net of income taxes | (3.7 | ) | (4.9 | ) | ||||
Other | (1.9 | ) | (5.3 | ) | ||||
Changes in working capital items: | ||||||||
Accounts receivable | (50.6 | ) | (19.7 | ) | ||||
Fuel inventory and supplies | 25.4 | 15.5 | ||||||
Prepaid expenses and other current assets | (7.0 | ) | 55.5 | |||||
Accounts payable | 36.2 | (10.0 | ) | |||||
Accrued taxes | 74.4 | 35.6 | ||||||
Other current liabilities | 23.2 | (108.5 | ) | |||||
Changes in other assets | 22.9 | 22.9 | ||||||
Changes in other liabilities | (26.7 | ) | 5.5 | |||||
Cash Flows from Operating Activities | 707.2 | 742.7 | ||||||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | ||||||||
Additions to property, plant and equipment | (510.3 | ) | (564.6 | ) | ||||
Purchase of securities - trusts | (96.1 | ) | (15.3 | ) | ||||
Sale of securities - trusts | 101.2 | 15.9 | ||||||
Investment in corporate-owned life insurance | (16.2 | ) | (16.2 | ) | ||||
Proceeds from investment in corporate-owned life insurance | 6.5 | 2.1 | ||||||
Other investing activities | (8.1 | ) | (3.3 | ) | ||||
Cash Flows (used in) Investing Activities | (523.0 | ) | (581.4 | ) | ||||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | ||||||||
Short term debt, net | 48.3 | (177.7 | ) | |||||
Proceeds from long-term debt | — | 296.2 | ||||||
Retirements of long-term debt | — | (125.0 | ) | |||||
Retirements of long-term debt of variable interest entities | (28.5 | ) | (26.8 | ) | ||||
Repayment of capital leases | (2.9 | ) | (2.6 | ) | ||||
Borrowings against cash surrender value of corporate-owned life insurance | 55.1 | 53.4 | ||||||
Repayment of borrowings against cash surrender value of corporate-owned life insurance | (3.9 | ) | — | |||||
Distributions to shareholders of noncontrolling interests | — | (5.8 | ) | |||||
Cash dividends paid | (235.1 | ) | (166.3 | ) | ||||
Other financing activities | (17.3 | ) | (6.4 | ) | ||||
Cash Flows (used in) Financing Activities | (184.3 | ) | (161.0 | ) | ||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (0.1 | ) | 0.3 | |||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||||||||
Beginning of period, including restricted cash of $0.1 and $0.1, respectively | 3.5 | 3.2 | ||||||
End of period, including restricted cash of $0.1 and $0.1, respectively | $ | 3.4 | $ | 3.5 |
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, 2016 | 141,791,153 | $ | 2,727.3 | $ | 1,078.6 | $ | 27.3 | $ | 3,833.2 | |||||||||
Net income | — | — | 290.0 | 10.2 | 300.2 | |||||||||||||
Issuance of stock | 12,131 | 0.6 | — | — | 0.6 | |||||||||||||
Issuance of stock for compensation and reinvested dividends | 290,892 | 4.9 | — | — | 4.9 | |||||||||||||
Tax withholding related to stock compensation | — | (7.0 | ) | — | — | (7.0 | ) | |||||||||||
Dividends declared on common stock ($1.20 per share) | — | — | (172.1 | ) | — | (172.1 | ) | |||||||||||
Stock compensation expense | — | 6.7 | — | — | 6.7 | |||||||||||||
Deconsolidation of noncontrolling interests | — | — | — | (81.9 | ) | (81.9 | ) | |||||||||||
Distributions to shareholders of noncontrolling interests | — | — | — | (5.7 | ) | (5.7 | ) | |||||||||||
Balance as of September 30, 2017 | 142,094,176 | $ | 2,732.5 | $ | 1,196.5 | $ | (50.1 | ) | $ | 3,878.9 | ||||||||
Balance as of December 31, 2017 | 142,094,275 | $ | 2,734.8 | $ | 1,173.3 | $ | (47.7 | ) | $ | 3,860.4 | ||||||||
Net income | — | — | 310.9 | 7.6 | 318.5 | |||||||||||||
Issuance of stock for compensation and reinvested dividends | 516,990 | — | — | — | — | |||||||||||||
Stock cancelled pursuant to Amended Merger Agreement | (142,611,264 | ) | — | — | — | — | ||||||||||||
Tax withholding related to stock compensation | — | (17.2 | ) | — | — | (17.2 | ) | |||||||||||
Dividends declared on common stock | — | — | (181.5 | ) | — | (181.5 | ) | |||||||||||
Stock compensation expense | — | 19.9 | — | — | 19.9 | |||||||||||||
Other | — | 0.1 | — | — | 0.1 | |||||||||||||
Balance as of September 30, 2018 | 1 | $ | 2,737.6 | $ | 1,302.7 | $ | (40.1 | ) | $ | 4,000.2 |
KANSAS CITY POWER & LIGHT COMPANY | |||||||||||
Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
September 30 | December 31 | ||||||||||
2018 | 2017 | ||||||||||
ASSETS | (millions, except share amounts) | ||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | 3.4 | $ | 2.2 | |||||||
Receivables, net | 102.9 | 106.3 | |||||||||
Related party receivables | 142.2 | 84.7 | |||||||||
Accounts receivable pledged as collateral | 130.0 | 130.0 | |||||||||
Fuel inventory and supplies | 183.8 | 197.0 | |||||||||
Income taxes receivable | — | 5.4 | |||||||||
Regulatory assets | 145.6 | 153.6 | |||||||||
Prepaid expenses and other assets | 35.7 | 27.6 | |||||||||
Total Current Assets | 743.6 | 706.8 | |||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 6,660.3 | 6,565.6 | |||||||||
OTHER ASSETS: | |||||||||||
Regulatory assets | 479.5 | 545.1 | |||||||||
Nuclear decommissioning trust fund | 272.2 | 258.4 | |||||||||
Other | 54.5 | 48.0 | |||||||||
Total Other Assets | 806.2 | 851.5 | |||||||||
TOTAL ASSETS | $ | 8,210.1 | $ | 8,123.9 |
KANSAS CITY POWER & LIGHT COMPANY | |||||||||||
Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
September 30 | December 31 | ||||||||||
2018 | 2017 | ||||||||||
LIABILITIES AND EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Current maturities of long-term debt | $ | 400.0 | $ | 350.0 | |||||||
Notes payable and commercial paper | 209.2 | 167.5 | |||||||||
Collateralized note payable | 130.0 | 130.0 | |||||||||
Accounts payable, net | 132.9 | 249.0 | |||||||||
Related party payables | 3.2 | — | |||||||||
Accrued taxes | 121.5 | 29.0 | |||||||||
Accrued interest | 39.5 | 32.4 | |||||||||
Regulatory liabilities | 15.3 | 8.3 | |||||||||
Other | 98.5 | 98.3 | |||||||||
Total Current Liabilities | 1,150.1 | 1,064.5 | |||||||||
LONG-TERM LIABILITIES: | |||||||||||
Long-term debt, net | 2,129.9 | 2,232.2 | |||||||||
Deferred income taxes | 619.6 | 616.1 | |||||||||
Unamortized investment tax credits | 120.9 | 121.8 | |||||||||
Regulatory liabilities | 862.9 | 770.9 | |||||||||
Pension and post-retirement liability | 522.3 | 512.2 | |||||||||
Asset retirement obligations | 222.7 | 231.4 | |||||||||
Other | 80.7 | 61.6 | |||||||||
Total Long-Term Liabilities | 4,559.0 | 4,546.2 | |||||||||
Commitments and Contingencies (Note 12) | |||||||||||
EQUITY: | |||||||||||
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value | 1,563.1 | 1,563.1 | |||||||||
Retained earnings | 934.8 | 949.7 | |||||||||
Accumulated other comprehensive income | 3.1 | 0.4 | |||||||||
Total Equity | 2,501.0 | 2,513.2 | |||||||||
TOTAL LIABILITIES AND EQUITY | $ | 8,210.1 | $ | 8,123.9 |
KANSAS CITY POWER & LIGHT COMPANY | ||||||||||||||||
Consolidated Statements of Comprehensive Income | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended September 30 | Year to Date September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(millions) | ||||||||||||||||
OPERATING REVENUES | $ | 559.6 | $ | 595.7 | $ | 1,408.9 | $ | 1,474.3 | ||||||||
OPERATING EXPENSES: | ||||||||||||||||
Fuel and purchased power | 142.4 | 143.9 | 392.4 | 367.3 | ||||||||||||
Operating and maintenance | 127.3 | 114.3 | 354.5 | 350.7 | ||||||||||||
Depreciation and amortization | 71.9 | 66.3 | 209.0 | 199.9 | ||||||||||||
Taxes other than income tax | 28.6 | 51.4 | 87.9 | 140.2 | ||||||||||||
Total Operating Expenses | 370.2 | 375.9 | 1,043.8 | 1,058.1 | ||||||||||||
INCOME FROM OPERATIONS | 189.4 | 219.8 | 365.1 | 416.2 | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Investment earnings | 0.7 | 0.5 | 2.1 | 1.5 | ||||||||||||
Other income | 0.2 | 2.2 | 1.7 | 5.4 | ||||||||||||
Other expense | (9.0 | ) | (11.9 | ) | (22.9 | ) | (40.7 | ) | ||||||||
Total Other Income (Expense), Net | (8.1 | ) | (9.2 | ) | (19.1 | ) | (33.8 | ) | ||||||||
Interest expense | 33.0 | 34.3 | 100.6 | 105.5 | ||||||||||||
INCOME BEFORE INCOME TAXES | 148.3 | 176.3 | 245.4 | 276.9 | ||||||||||||
Income tax expense | 28.0 | 62.2 | 80.3 | 99.0 | ||||||||||||
NET INCOME | $ | 120.3 | $ | 114.1 | $ | 165.1 | $ | 177.9 | ||||||||
COMPREHENSIVE INCOME | ||||||||||||||||
NET INCOME | $ | 120.3 | $ | 114.1 | $ | 165.1 | $ | 177.9 | ||||||||
OTHER COMPREHENSIVE INCOME: | ||||||||||||||||
Derivative hedging activity | ||||||||||||||||
Reclassification to expenses, net of tax: | 0.8 | 1.2 | 2.7 | 3.8 | ||||||||||||
Derivative hedging activity, net of tax | 0.8 | 1.2 | 2.7 | 3.8 | ||||||||||||
Total Other Comprehensive Income | 0.8 | 1.2 | 2.7 | 3.8 | ||||||||||||
COMPREHENSIVE INCOME | $ | 121.1 | $ | 115.3 | $ | 167.8 | $ | 181.7 |
KANSAS CITY POWER & LIGHT COMPANY | |||||||
Consolidated Statements of Cash Flows | |||||||
(Unaudited) | |||||||
Year to Date September 30 | 2018 | 2017 | |||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: | (millions) | ||||||
Net income | $ | 165.1 | $ | 177.9 | |||
Adjustments to reconcile income to net cash from operating activities: | |||||||
Depreciation and amortization | 209.0 | 199.9 | |||||
Amortization of nuclear fuel | 18.7 | 24.1 | |||||
Amortization of deferred refueling outage | 10.3 | 13.7 | |||||
Net deferred income taxes and credits | 25.2 | 32.6 | |||||
Allowance for equity funds used during construction | (1.2 | ) | (3.4 | ) | |||
Payments for asset retirement obligations | (9.9 | ) | (14.9 | ) | |||
Other | 2.7 | 6.3 | |||||
Changes in working capital items: | |||||||
Accounts receivable | (41.0 | ) | (19.5 | ) | |||
Accounts receivable pledged as collateral | — | (20.0 | ) | ||||
Fuel inventory and supplies | 13.2 | 3.6 | |||||
Prepaid expenses and other current assets | (3.6 | ) | 8.9 | ||||
Accounts payable | (97.7 | ) | (75.1 | ) | |||
Accrued taxes | 97.9 | 122.7 | |||||
Other current liabilities | 8.5 | 9.9 | |||||
Changes in other assets | 28.3 | 52.6 | |||||
Changes in other liabilities | 79.0 | 7.3 | |||||
Cash Flows from Operating Activities | 504.5 | 526.6 | |||||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | |||||||
Additions to property, plant and equipment | (310.6 | ) | (317.1 | ) | |||
Purchase of securities - trusts | (27.9 | ) | (23.8 | ) | |||
Sale of securities - trusts | 22.5 | 21.3 | |||||
Other investing activities | 3.4 | 0.8 | |||||
Cash Flows (used in) Investing Activities | (312.6 | ) | (318.8 | ) | |||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | |||||||
Short term debt, net | 40.3 | (60.9 | ) | ||||
Collateralized short-term borrowings, net | — | 20.0 | |||||
Proceeds from long-term debt | 319.5 | 296.2 | |||||
Retirements of long-term debt | (373.4 | ) | (281.0 | ) | |||
Cash dividends paid | (180.0 | ) | (182.0 | ) | |||
Other financing activities | 2.9 | — | |||||
Cash Flows (used in) Financing Activities | (190.7 | ) | (207.7 | ) | |||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 1.2 | 0.1 | |||||
CASH AND CASH EQUIVALENTS: | |||||||
Beginning of period | 2.2 | 4.5 | |||||
End of period | $ | 3.4 | $ | 4.6 |
KANSAS CITY POWER & LIGHT COMPANY | ||||||||||||||||||
Consolidated Statements of Changes in Equity | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Common stock shares | Common stock | Retained earnings | AOCI - Net gains (losses) on cash flow hedges | Total equity | ||||||||||||||
(millions, except share amounts) | ||||||||||||||||||
Balance as of December 31, 2016 | 1 | $ | 1,563.1 | $ | 982.6 | $ | (4.2 | ) | $ | 2,541.5 | ||||||||
Net income | — | — | 177.9 | — | 177.9 | |||||||||||||
Cumulative effect of adoption of ASU 2016-09 | — | — | (0.7 | ) | — | (0.7 | ) | |||||||||||
Dividends declared on common stock | — | — | (182.0 | ) | — | (182.0 | ) | |||||||||||
Derivative hedging activity, net of tax | — | — | — | 3.8 | 3.8 | |||||||||||||
Balance as of September 30, 2017 | 1 | $ | 1,563.1 | $ | 977.8 | $ | (0.4 | ) | $ | 2,540.5 | ||||||||
Balance as of December 31, 2017 | 1 | $ | 1,563.1 | $ | 949.7 | $ | 0.4 | $ | 2,513.2 | |||||||||
Net income | — | — | 165.1 | — | 165.1 | |||||||||||||
Dividends declared on common stock | — | — | (180.0 | ) | — | (180.0 | ) | |||||||||||
Derivative hedging activity, net of tax | — | — | — | 2.7 | 2.7 | |||||||||||||
Balance as of September 30, 2018 | 1 | $ | 1,563.1 | $ | 934.8 | $ | 3.1 | $ | 2,501.0 |
• | Westar Energy is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Westar Energy has one active wholly-owned subsidiary with significant operations, Kansas Gas and Electric Company (KGE). |
• | KCP&L is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas. KCP&L has one active wholly-owned subsidiary, Kansas City Power & Light Receivables Company (KCP&L Receivables Company). |
• | KCP&L Greater Missouri Operations Company (GMO) is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri. GMO also provides regulated steam service to certain customers in the St. Joseph, Missouri area. GMO has one active wholly-owned subsidiary, GMO Receivables Company. |
• | GPE Transmission Holding Company, LLC (GPETHC) 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. GPETHC accounts for its investment in Transource under the equity method. |
Year to Date | ||||||||||
September 30, 2017 | ||||||||||
As Filed | Updated | |||||||||
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: | (in millions) | |||||||||
Adjustments to reconcile income to net cash from operating activities: | ||||||||||
Amortization of other | $ | 23.4 | $ | — | ||||||
Amortization of deferred refueling outage | — | 13.7 | ||||||||
Deferred income taxes, net | 33.4 | — | ||||||||
Investment tax credit amortization | (0.8 | ) | — | |||||||
Net deferred income taxes and credits | — | 32.6 | ||||||||
Payments for asset retirement obligations | — | (14.9 | ) | |||||||
Other(a) | (16.0 | ) | 6.3 | |||||||
Changes in working capital items: | ||||||||||
Fuel inventory and supplies | — | 3.6 | ||||||||
Fuel inventories(a) | 10.8 | — | ||||||||
Materials and supplies(a) | (7.2 | ) | — | |||||||
Prepaid expenses and other current assets | — | 8.9 | ||||||||
Accrued interest(a) | 8.1 | — | ||||||||
Other current liabilities | — | 9.9 | ||||||||
Changes in other assets | — | 52.6 | ||||||||
Changes in other liabilities | — | 7.3 | ||||||||
Deferred refueling outage costs(a) | 12.1 | — | ||||||||
Pension and post-retirement benefit obligations(a) | 48.6 | — | ||||||||
Fuel recovery mechanisms(a) | 7.6 | — | ||||||||
Total reclassifications | $ | 120.0 | $ | 120.0 | ||||||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | ||||||||||
Additions to property, plant and equipment | $ | — | $ | (317.1 | ) | |||||
Utility capital expenditures | (295.1 | ) | — | |||||||
Allowance for borrowed funds used during construction | (4.2 | ) | — | |||||||
Other investing activities | (17.0 | ) | 0.8 | |||||||
Total reclassifications | $ | (316.3 | ) | $ | (316.3 | ) |
September 30 | December 31 | |||||||||
2018 | 2017 | |||||||||
Evergy | (millions) | |||||||||
Fuel inventory | $ | 163.1 | $ | 94.1 | ||||||
Supplies | 357.8 | 199.5 | ||||||||
Fuel inventory and supplies | $ | 520.9 | $ | 293.6 | ||||||
Westar Energy | ||||||||||
Fuel inventory | $ | 84.9 | $ | 94.1 | ||||||
Supplies | 183.8 | 199.5 | ||||||||
Fuel inventory and supplies | $ | 268.7 | $ | 293.6 | ||||||
KCP&L(a) | ||||||||||
Fuel inventory | $ | 54.6 | $ | 71.0 | ||||||
Supplies | 129.2 | 126.0 | ||||||||
Fuel inventory and supplies | $ | 183.8 | $ | 197.0 |
September 30, 2018 | Evergy | Westar Energy | KCP&L | |||||||||
(millions) | ||||||||||||
Electric plant in service | $ | 27,290.0 | $ | 13,236.1 | $ | 10,594.2 | ||||||
Electric plant acquisition adjustment | 740.6 | 740.6 | — | |||||||||
Accumulated depreciation | (10,168.2 | ) | (4,838.9 | ) | (4,172.3 | ) | ||||||
Plant in service | 17,862.4 | 9,137.8 | 6,421.9 | |||||||||
Construction work in progress | 723.5 | 443.6 | 183.4 | |||||||||
Nuclear fuel, net | 109.1 | 54.1 | 55.0 | |||||||||
Plant to be retired, net(b) | 141.0 | 2.0 | — | |||||||||
Property, plant and equipment, net | $ | 18,836.0 | $ | 9,637.5 | $ | 6,660.3 | ||||||
December 31, 2017 | Evergy | Westar Energy | KCP&L(a) | |||||||||
(millions) | ||||||||||||
Electric plant in service | $ | 12,954.3 | $ | 12,954.3 | $ | 10,213.2 | ||||||
Electric plant acquisition adjustment | 739.0 | 739.0 | — | |||||||||
Accumulated depreciation | (4,651.7 | ) | (4,651.7 | ) | (4,070.3 | ) | ||||||
Plant in service | 9,041.6 | 9,041.6 | 6,142.9 | |||||||||
Construction work in progress | 434.9 | 434.9 | 350.3 | |||||||||
Nuclear fuel, net | 71.4 | 71.4 | 72.4 | |||||||||
Plant to be retired, net(b) | 5.9 | 5.9 | — | |||||||||
Property, plant and equipment, net | $ | 9,553.8 | $ | 9,553.8 | $ | 6,565.6 |
Three Months Ended September 30 | Year to Date September 30 | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Income | (millions, except per share amounts) | ||||||||||||||
Net income | $ | 357.6 | $ | 160.7 | $ | 524.9 | $ | 300.2 | |||||||
Less: net income attributable to noncontrolling interests | 2.6 | 2.4 | 7.6 | 10.2 | |||||||||||
Net income attributable to Evergy, Inc. | 355.0 | 158.3 | 517.3 | 290.0 | |||||||||||
Less: net income allocated to RSUs | 0.2 | 0.3 | 0.4 | 0.5 | |||||||||||
Net income allocated to common stock | $ | 354.8 | $ | 158.0 | $ | 516.9 | $ | 289.5 | |||||||
Common Shares Outstanding | |||||||||||||||
Weighted average equivalent common shares outstanding - basic | 268.6 | 142.5 | 197.9 | 142.5 | |||||||||||
Add: effect of dilutive securities | 0.2 | — | 0.1 | — | |||||||||||
Weighted average equivalent common shares outstanding - diluted | 268.8 | 142.5 | 198.0 | 142.5 | |||||||||||
Basic and Diluted EPS | $ | 1.32 | $ | 1.11 | $ | 2.61 | $ | 2.03 |
Year to Date September 30 | 2018 | 2017 | ||||||
Evergy | (millions) | |||||||
Cash paid for (received from): | ||||||||
Interest, net of amounts capitalized | $ | 148.7 | $ | 109.0 | ||||
Interest of VIEs | 2.3 | 3.1 | ||||||
Income taxes, net of refunds | 0.6 | (12.6 | ) | |||||
Non-cash investing transactions: | ||||||||
Property, plant and equipment additions (reductions) | (24.8 | ) | 112.5 | |||||
Deconsolidation of property, plant and equipment of VIE | — | (72.9 | ) | |||||
Non-cash financing transactions: | ||||||||
Issuance of stock for compensation and reinvested dividends | 0.4 | 4.9 | ||||||
Deconsolidation of VIE | — | (83.1 | ) | |||||
Assets acquired through capital leases | 0.1 | 4.6 | ||||||
Westar Energy | ||||||||
Cash paid for (received from): | ||||||||
Interest, net of amounts capitalized | $ | 110.5 | $ | 109.0 | ||||
Interest of VIEs | 2.3 | 3.1 | ||||||
Income taxes, net of refunds | — | (12.6 | ) | |||||
Non-cash investing transactions: | ||||||||
Property, plant and equipment additions (reductions) | (42.0 | ) | 112.5 | |||||
Deconsolidation of property, plant and equipment of VIE | — | (72.9 | ) | |||||
Non-cash financing transactions: | ||||||||
Issuance of stock for compensation and reinvested dividends | — | 4.9 | ||||||
Deconsolidation of VIE | — | (83.1 | ) | |||||
Assets acquired through capital leases | 0.1 | 4.6 | ||||||
KCP&L(a) | ||||||||
Cash paid for (received from): | ||||||||
Interest, net of amounts capitalized | $ | 87.6 | $ | 88.6 | ||||
Income taxes, net of refunds | 28.4 | 4.9 | ||||||
Non-cash investing transactions: | ||||||||
Property, plant and equipment additions | 15.2 | 15.5 |
Three Months Ended | Year to Date | ||||||||||||||||||||||
September 30, 2017 | September 30, 2017 | ||||||||||||||||||||||
As Previously Reported(b) | Effect of Change | As Reported | As Previously Reported(b) | Effect of Change | As Reported | ||||||||||||||||||
Evergy | (millions) | ||||||||||||||||||||||
Operating and maintenance expense | $ | 145.5 | $ | (4.9 | ) | $ | 140.6 | $ | 430.6 | $ | (15.0 | ) | $ | 415.6 | |||||||||
Total operating expenses | 534.3 | (4.9 | ) | 529.4 | 1,434.7 | (15.0 | ) | 1,419.7 | |||||||||||||||
Income from operations | 260.0 | 4.9 | 264.9 | 541.5 | 15.0 | 556.5 | |||||||||||||||||
Other expense | (6.6 | ) | (4.9 | ) | (11.5 | ) | (14.6 | ) | (15.0 | ) | (29.6 | ) | |||||||||||
Total other income (expense), net | (1.7 | ) | (4.9 | ) | (6.6 | ) | (5.4 | ) | (15.0 | ) | (20.4 | ) | |||||||||||
Westar Energy | |||||||||||||||||||||||
Operating and maintenance expense | $ | 145.5 | $ | (4.9 | ) | $ | 140.6 | $ | 430.6 | $ | (15.0 | ) | $ | 415.6 | |||||||||
Total operating expenses | 534.3 | (4.9 | ) | 529.4 | 1,434.7 | (15.0 | ) | 1,419.7 | |||||||||||||||
Income from operations | 260.0 | 4.9 | 264.9 | 541.5 | 15.0 | 556.5 | |||||||||||||||||
Other expense | (6.6 | ) | (4.9 | ) | (11.5 | ) | (14.6 | ) | (15.0 | ) | (29.6 | ) | |||||||||||
Total other income (expense), net | (1.7 | ) | (4.9 | ) | (6.6 | ) | (5.4 | ) | (15.0 | ) | (20.4 | ) | |||||||||||
KCP&L(a) | |||||||||||||||||||||||
Operating and maintenance expense | $ | 124.2 | $ | (9.9 | ) | $ | 114.3 | $ | 385.0 | $ | (34.3 | ) | $ | 350.7 | |||||||||
Total operating expenses | 385.8 | (9.9 | ) | 375.9 | 1,092.4 | (34.3 | ) | 1,058.1 | |||||||||||||||
Income from operations | 209.9 | 9.9 | 219.8 | 381.9 | 34.3 | 416.2 | |||||||||||||||||
Other expense | (2.0 | ) | (9.9 | ) | (11.9 | ) | (6.4 | ) | (34.3 | ) | (40.7 | ) | |||||||||||
Total other income (expense), net | 0.7 | (9.9 | ) | (9.2 | ) | 0.5 | (34.3 | ) | (33.8 | ) |
• | 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 Westar Energy's and KCP&L's current rate cases in Kansas. Of this total, $23.1 million of the credits relate to Westar Energy customers and the remaining $7.5 million of credits relate to KCP&L 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 |
• | Provide for the inclusion of a total of $30.0 million of merger-related savings in Westar Energy's and KCP&L's current rate cases in Kansas. Of this total, $22.5 million of the savings are attributable to Westar Energy with the remaining $7.5 million of savings attributable to KCP&L's Kansas jurisdiction. |
• | A five year base rate moratorium for Westar Energy and KCP&L in Kansas that will commence following the conclusion of KCP&L's current Kansas rate case, expected in December 2018. The moratorium is subject to certain conditions and does not include Westar Energy's or KCP&L's fuel recovery mechanisms and certain other cost recovery mechanisms in Kansas. |
• | Require both Westar Energy and KCP&L 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 (ERSP) for the years 2019 through 2022, which may result in Westar Energy and/or KCP&L 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 Westar Energy and KCP&L at levels equal to or greater than their respective 2015 levels for 5 years following the closing of the merger. |
• | Commit that Westar Energy's and KCP&L's retail electric base rates will not increase as a result of the merger. |
• | Allow Westar Energy and KCP&L to recover a total of $30.9 million of merger transition costs consisting of $23.2 million for Westar Energy and $7.7 million for KCP&L's Kansas jurisdiction. Westar Energy and KCP&L have recorded these amounts as regulatory assets and the settlement agreement stipulates that they will be recovered over a ten year period. |
• | 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 KCP&L Missouri customers and the remaining $14.2 million of credits relate to GMO customers. |
• | Commit that KCP&L's and GMO'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 KCP&L and GMO 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 KCP&L's and GMO's current rate cases, consisting of $9.7 million for KCP&L's Missouri jurisdiction and $7.2 million for GMO. KCP&L and GMO have recorded these amounts as regulatory assets and it is expected that they will be recovered over a ten year period. |
Description | Income Statement Line Item | Expected Payment Period | Evergy | Westar Energy | KCP&L | |||||||||
(millions) | ||||||||||||||
One-time bill credits | Operating revenues | 2018 - 2019 | $ | (59.7 | ) | $ | (23.1 | ) | $ | (22.4 | ) | |||
Annual bill credits | Operating revenues | 2019 - 2022 | (7.6 | ) | (5.8 | ) | (1.9 | ) | ||||||
Total impact to operating revenues | $ | (67.3 | ) | $ | (28.9 | ) | $ | (24.3 | ) | |||||
Charitable contributions and community support | Operating and maintenance | 2018 - 2027 | $ | 24.7 | $ | — | $ | — | ||||||
Voluntary severance and accelerated equity compensation | Operating and maintenance | 2018 - 2019 | 40.7 | 40.7 | — | |||||||||
Other transaction and transition costs | Operating and maintenance | 2018 | 47.0 | 20.4 | 1.7 | |||||||||
Reallocation and deferral of merger transition costs | Operating and maintenance | n/a | (47.8 | ) | (13.3 | ) | (23.9 | ) | ||||||
Total impact to operating and maintenance expense | $ | 64.6 | $ | 47.8 | $ | (22.2 | ) | |||||||
Total | $ | (131.9 | ) | $ | (76.7 | ) | $ | (2.1 | ) |
(millions, except share amounts) | ||||
Great Plains Energy common stock shares outstanding as of June 4, 2018 | 215,800,074 | |||
Great Plains Energy restricted stock awards outstanding as of June 4, 2018 | (204,825 | ) | ||
Great Plains Energy shares to be converted to Evergy shares | 215,595,249 | |||
Exchange ratio | 0.5981 | |||
Evergy common stock shares issued to Great Plains Energy shareholders | 128,947,518 | |||
Closing price of Westar Energy common stock as of June 4, 2018 | $ | 54.00 | ||
Fair value of Evergy shares issued to Great Plains Energy shareholders | $ | 6,963.2 | ||
Fair value of Great Plains Energy's equity compensation awards | 12.5 | |||
Total purchase price | $ | 6,975.7 |
(millions) | ||||
Current assets | $ | 2,151.7 | ||
Property, plant and equipment, net | 9,179.7 | |||
Goodwill | 2,333.5 | |||
Other long-term assets, excluding goodwill | 1,235.9 | |||
Total assets | $ | 14,900.8 | ||
Current liabilities | 1,673.9 | |||
Long-term liabilities, excluding long-term debt | 2,892.6 | |||
Long-term debt, net | 3,358.6 | |||
Total liabilities | $ | 7,925.1 | ||
Total purchase price | $ | 6,975.7 |
Three Months Ended September 30 | Year to Date September 30 | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(millions, except per share amounts) | |||||||||||||||
Operating revenues | $ | 1,582.5 | $ | 1,651.5 | $ | 4,134.8 | $ | 4,086.7 | |||||||
Net income attributable to Evergy, Inc. | 360.2 | 321.8 | 694.5 | 543.3 | |||||||||||
Basic earnings per common share | $ | 1.34 | $ | 1.19 | $ | 2.56 | $ | 2.00 | |||||||
Diluted earnings per common share | $ | 1.34 | $ | 1.19 | $ | 2.55 | $ | 2.00 |
Three Months Ended September 30, 2018 | Evergy | Westar Energy | KCP&L | ||||||||
Revenues | (millions) | ||||||||||
Residential | $ | 647.1 | $ | 270.5 | $ | 243.5 | |||||
Commercial | 530.5 | 217.4 | 231.1 | ||||||||
Industrial | 173.4 | 111.9 | 39.1 | ||||||||
Other retail | 10.9 | 5.4 | 2.7 | ||||||||
Total electric retail | $ | 1,361.9 | $ | 605.2 | $ | 516.4 | |||||
Wholesale | 118.5 | 82.4 | 29.9 | ||||||||
Transmission | 80.6 | 72.2 | 3.8 | ||||||||
Industrial steam and other | 6.0 | 1.5 | 0.7 | ||||||||
Total revenue from contracts with customers | $ | 1,567.0 | $ | 761.3 | $ | 550.8 | |||||
Other | 15.5 | 3.5 | 8.8 | ||||||||
Operating revenues | $ | 1,582.5 | $ | 764.8 | $ | 559.6 | |||||
Year to Date September 30, 2018 | Evergy | Westar Energy | KCP&L(a) | ||||||||
Revenues | (millions) | ||||||||||
Residential | $ | 1,169.4 | $ | 671.9 | $ | 585.4 | |||||
Commercial | 945.0 | 542.8 | 609.2 | ||||||||
Industrial | 375.5 | 297.2 | 105.4 | ||||||||
Other retail | 21.5 | 15.3 | 7.7 | ||||||||
Total electric retail | $ | 2,511.4 | $ | 1,527.2 | $ | 1,307.7 | |||||
Wholesale | 302.4 | 263.7 | 38.5 | ||||||||
Transmission | 227.6 | 216.3 | 11.0 | ||||||||
Industrial steam and other | 10.0 | 4.6 | 3.0 | ||||||||
Total revenue from contracts with customers | $ | 3,051.4 | $ | 2,011.8 | $ | 1,360.2 | |||||
Other | 24.7 | 4.1 | 48.7 | ||||||||
Operating revenues | $ | 3,076.1 | $ | 2,015.9 | $ | 1,408.9 |
September 30 | December 31 | |||||||||
2018 | 2017 | |||||||||
Evergy | (millions) | |||||||||
Customer accounts receivable - billed | $ | 231.7 | $ | 165.4 | ||||||
Customer accounts receivable - unbilled | 191.1 | 76.6 | ||||||||
Other receivables | 82.4 | 55.4 | ||||||||
Allowance for doubtful accounts | (8.7 | ) | (6.7 | ) | ||||||
Total | $ | 496.5 | $ | 290.7 | ||||||
Westar Energy | ||||||||||
Customer accounts receivable - billed | $ | 194.0 | $ | 165.4 | ||||||
Customer accounts receivable - unbilled | 96.7 | 76.6 | ||||||||
Other receivables | 60.7 | 55.4 | ||||||||
Allowance for doubtful accounts | (3.9 | ) | (6.7 | ) | ||||||
Total | $ | 347.5 | $ | 290.7 | ||||||
KCP&L (a) | ||||||||||
Customer accounts receivable - billed | $ | 25.3 | $ | 1.6 | ||||||
Customer accounts receivable - unbilled | 66.6 | 67.6 | ||||||||
Other receivables | 14.5 | 39.3 | ||||||||
Allowance for doubtful accounts | (3.5 | ) | (2.2 | ) | ||||||
Total | $ | 102.9 | $ | 106.3 |
Three Months Ended September 30 | Year to Date September 30 | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(millions) | |||||||||||||||
Evergy | $ | 4.5 | $ | 2.0 | $ | 10.6 | $ | 5.4 | |||||||
Westar Energy | 1.1 | 2.0 | 6.2 | 5.4 | |||||||||||
KCP&L (a) | 3.9 | 2.8 | 7.5 | 6.0 |
Evergy | Westar Energy | KCP&L(a) | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||
(millions) | ||||||||||||||||||||||||||||||
Beginning balance, January 1 | $ | 405.1 | $ | 324.0 | $ | 405.1 | $ | 324.0 | $ | 266.3 | $ | 278.0 | ||||||||||||||||||
Liabilities assumed upon merger with Great Plains Energy | 412.2 | — | — | — | — | — | ||||||||||||||||||||||||
Liabilities incurred during the year | 7.4 | 13.5 | 7.4 | 13.5 | — | — | ||||||||||||||||||||||||
Revision in timing and/or estimates | (138.6 | ) | 66.8 | (133.0 | ) | 66.8 | (5.7 | ) | 0.3 | |||||||||||||||||||||
Settlements | (15.9 | ) | (16.0 | ) | (10.6 | ) | (16.0 | ) | (9.9 | ) | (25.5 | ) | ||||||||||||||||||
Accretion | 22.1 | 16.8 | 14.0 | 16.8 | 12.6 | 13.5 | ||||||||||||||||||||||||
Ending balance | $ | 692.3 | $ | 405.1 | $ | 282.9 | $ | 405.1 | $ | 263.3 | $ | 266.3 | ||||||||||||||||||
Less: current portion | (69.6 | ) | (25.1 | ) | (25.1 | ) | (25.1 | ) | (40.6 | ) | (34.9 | ) | ||||||||||||||||||
Total noncurrent asset retirement obligation | $ | 622.7 | $ | 380.0 | $ | 257.8 | $ | 380.0 | $ | 222.7 | $ | 231.4 |
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
Three Months Ended September 30, 2018 | Evergy | Westar Energy | KCP&L | Evergy | Westar Energy | KCP&L | |||||||||||||||||
Components of net periodic benefit costs | (millions) | ||||||||||||||||||||||
Service cost | $ | 20.2 | $ | 8.0 | $ | 9.1 | $ | 0.7 | $ | 0.4 | $ | 0.4 | |||||||||||
Interest cost | 26.3 | 12.7 | 9.4 | 2.5 | 1.2 | 0.8 | |||||||||||||||||
Expected return on plan assets | (27.0 | ) | (13.9 | ) | (10.6 | ) | (2.5 | ) | (1.8 | ) | (0.4 | ) | |||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 0.3 | 0.2 | 0.2 | 0.1 | 0.1 | — | |||||||||||||||||
Recognized net actuarial (gain)/loss | 8.1 | 8.1 | 8.4 | (0.1 | ) | (0.1 | ) | — | |||||||||||||||
Net periodic benefit costs before regulatory adjustment | 27.9 | 15.1 | 16.5 | 0.7 | (0.2 | ) | 0.8 | ||||||||||||||||
Regulatory adjustment | 2.6 | 2.8 | 0.7 | (0.4 | ) | (0.4 | ) | 0.1 | |||||||||||||||
Net periodic benefit costs | $ | 30.5 | $ | 17.9 | $ | 17.2 | $ | 0.3 | $ | (0.6 | ) | $ | 0.9 | ||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
Year to Date September 30, 2018 | Evergy | Westar Energy | KCP&L(a) | Evergy | Westar Energy | KCP&L(a) | |||||||||||||||||
Components of net periodic benefit costs | (millions) | ||||||||||||||||||||||
Service cost | $ | 40.4 | $ | 24.1 | $ | 27.4 | $ | 1.5 | $ | 1.0 | $ | 1.1 | |||||||||||
Interest cost | 56.2 | 38.1 | 28.3 | 5.4 | 3.7 | 2.5 | |||||||||||||||||
Expected return on plan assets | (59.3 | ) | (41.9 | ) | (31.7 | ) | (6.2 | ) | (5.2 | ) | (1.4 | ) | |||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 0.6 | 0.5 | 0.4 | 0.3 | 0.3 | — | |||||||||||||||||
Recognized net actuarial (gain)/loss | 24.4 | 24.4 | 25.1 | (0.4 | ) | (0.4 | ) | (0.1 | ) | ||||||||||||||
Net periodic benefit costs before regulatory adjustment | 62.3 | 45.2 | 49.5 | 0.6 | (0.6 | ) | 2.1 | ||||||||||||||||
Regulatory adjustment | 8.4 | 8.4 | 2.1 | (1.3 | ) | (1.3 | ) | (0.2 | ) | ||||||||||||||
Net periodic benefit costs | $ | 70.7 | $ | 53.6 | $ | 51.6 | $ | (0.7 | ) | $ | (1.9 | ) | $ | 1.9 |
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
Three Months Ended September 30, 2017 | Evergy | Westar Energy | KCP&L(a) | Evergy | Westar Energy | KCP&L(a) | |||||||||||||||||
Components of net periodic benefit costs | (millions) | ||||||||||||||||||||||
Service cost | $ | 7.2 | $ | 7.2 | $ | 8.1 | $ | 0.3 | $ | 0.3 | $ | 0.4 | |||||||||||
Interest cost | 13.1 | 13.1 | 9.8 | 1.4 | 1.4 | 0.9 | |||||||||||||||||
Expected return on plan assets | (13.4 | ) | (13.4 | ) | (9.5 | ) | (1.8 | ) | (1.8 | ) | (0.4 | ) | |||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 0.1 | 0.1 | 0.2 | 0.1 | 0.1 | — | |||||||||||||||||
Recognized net actuarial (gain)/loss | 6.7 | 6.7 | 8.9 | (0.2 | ) | (0.2 | ) | (0.1 | ) | ||||||||||||||
Net periodic benefit costs before regulatory adjustment | 13.7 | 13.7 | 17.5 | (0.2 | ) | (0.2 | ) | 0.8 | |||||||||||||||
Regulatory adjustment | 3.6 | 3.6 | 0.2 | (0.4 | ) | (0.4 | ) | (0.1 | ) | ||||||||||||||
Net periodic benefit costs | $ | 17.3 | $ | 17.3 | $ | 17.7 | $ | (0.6 | ) | $ | (0.6 | ) | $ | 0.7 | |||||||||
(a) KCP&L amounts are not included in consolidated Evergy for the three months ended September 30, 2017. | |||||||||||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
Year to Date September 30, 2017 | Evergy | Westar Energy | KCP&L(a) | Evergy | Westar Energy | KCP&L(a) | |||||||||||||||||
Components of net periodic benefit costs | (millions) | ||||||||||||||||||||||
Service cost | $ | 21.5 | $ | 21.5 | $ | 24.4 | $ | 0.9 | $ | 0.9 | $ | 1.1 | |||||||||||
Interest cost | 39.3 | 39.3 | 29.4 | 4.2 | 4.2 | 2.8 | |||||||||||||||||
Expected return on plan assets | (40.2 | ) | (40.2 | ) | (28.6 | ) | (5.2 | ) | (5.2 | ) | (1.3 | ) | |||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service cost | 0.5 | 0.5 | 0.4 | 0.3 | 0.3 | — | |||||||||||||||||
Recognized net actuarial (gain)/loss | 20.2 | 20.2 | 26.7 | (0.6 | ) | (0.6 | ) | (0.3 | ) | ||||||||||||||
Net periodic benefit costs before regulatory adjustment | 41.3 | 41.3 | 52.3 | (0.4 | ) | (0.4 | ) | 2.3 | |||||||||||||||
Regulatory adjustment | 10.6 | 10.6 | 4.3 | (1.4 | ) | (1.4 | ) | 0.9 | |||||||||||||||
Net periodic benefit costs | $ | 51.9 | $ | 51.9 | $ | 56.6 | $ | (1.8 | ) | $ | (1.8 | ) | $ | 3.2 |
Three Months Ended September 30 | Year to Date September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Evergy | (millions) | |||||||||||||||
Equity compensation expense | $ | 4.3 | $ | 2.1 | $ | 26.0 | $ | 6.7 | ||||||||
Income tax (expense) benefit | (1.5 | ) | 0.8 | 1.9 | 2.6 | |||||||||||
Westar Energy | ||||||||||||||||
Equity compensation expense | $ | 2.0 | $ | 2.1 | $ | 22.6 | $ | 6.7 | ||||||||
Income tax (expense) benefit | (1.0 | ) | 0.8 | 2.1 | 2.6 | |||||||||||
KCP&L(a) | ||||||||||||||||
Equity compensation expense | $ | 1.6 | $ | 1.2 | $ | 4.8 | $ | 2.9 | ||||||||
Income tax (expense) benefit | (0.7 | ) | 0.4 | (0.1 | ) | 1.2 |
Performance Shares | Grant Date Fair Value* | |||||||||
Beginning balance January 1, 2018 | — | $ | — | |||||||
Converted Great Plains Energy awards upon merger | 351,708 | 63.79 | ||||||||
Forfeited | (3,212 | ) | 63.44 | |||||||
Ending balance September 30, 2018 | 348,496 | 63.80 |
Nonvested Restricted Stock | Grant Date Fair Value* | |||||||||
Beginning balance January 1, 2018 | — | $ | — | |||||||
Converted Great Plains Energy awards upon merger | 122,505 | 54.05 | ||||||||
Vested | (4,222 | ) | 54.50 | |||||||
Forfeited | (1,070 | ) | 54.04 | |||||||
Ending balance September 30, 2018 | 117,213 | 54.03 |
Nonvested Restricted Share Units | Grant Date Fair Value* | |||||||||
Beginning balance January 1, 2018 | 255,964 | $ | 46.09 | |||||||
Granted | 222,465 | 52.16 | ||||||||
Converted Great Plains Energy awards upon merger | 82,331 | 53.77 | ||||||||
Vested | (342,599 | ) | 46.81 | |||||||
Forfeited | (905 | ) | 50.73 | |||||||
Ending balance September 30, 2018 | 217,256 | 54.07 |
Amounts Drawn | |||||||||||||||||
Credit Facility | Commercial Paper | Letters of Credit | Cash Borrowings | Available Borrowings | Weighted Average Interest Rate on Short-Term Borrowings | ||||||||||||
September 30, 2018 | (millions) | ||||||||||||||||
Evergy, Inc. | $ | 450.0 | n/a | $ | 1.0 | $ | — | $ | 449.0 | —% | |||||||
Westar Energy | 1,000.0 | 326.3 | 18.3 | — | 655.4 | 2.42% | |||||||||||
KCP&L | 600.0 | 209.2 | 2.7 | — | 388.1 | 2.50% | |||||||||||
GMO | 450.0 | 140.4 | 2.1 | — | 307.5 | 2.46% | |||||||||||
Evergy | $ | 2,500.0 | $ | 675.9 | $ | 24.1 | $ | — | $ | 1,800.0 | |||||||
December 31, 2017 | |||||||||||||||||
Westar Energy(b) | $ | 979.3 | $ | 275.7 | $ | 11.8 | $ | — | $ | 691.8 | 1.83% | ||||||
KCP&L(a) | 600.0 | 167.5 | 2.7 | — | 429.8 | 1.95% | |||||||||||
Evergy | 979.3 | 275.7 | 11.8 | — | 691.8 | 1.83% |
• | $350.0 million of 4.85% unsecured Senior Notes; and |
• | $287.5 million of 5.292% unsecured Senior Notes. |
September 30, 2018 | December 31, 2017 | |||||||||||||||
Book Value | Fair Value | Book Value | Fair Value | |||||||||||||
Long-term debt(a) | (millions) | |||||||||||||||
Evergy(b) | $ | 7,349.4 | $ | 7,362.2 | $ | 3,687.6 | $ | 4,010.6 | ||||||||
Westar Energy | 3,689.7 | 3,750.8 | 3,687.6 | 4,010.6 | ||||||||||||
KCP&L(c) | 2,529.9 | 2,611.3 | 2,582.2 | 2,799.1 | ||||||||||||
Long-term debt of variable interest entities(a) | ||||||||||||||||
Evergy | $ | 81.4 | $ | 80.7 | $ | 109.9 | $ | 110.8 | ||||||||
Westar Energy | 81.4 | 80.7 | 109.9 | 110.8 |
Description | September 30 2018 | Level 1 | Level 2 | Level 3 | NAV | ||||||||||||||||||||
Westar Energy | (millions) | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Nuclear decommissioning trust(a) | |||||||||||||||||||||||||
Domestic equity funds | $ | 80.9 | $ | 74.7 | $ | — | $ | — | $ | 6.2 | |||||||||||||||
International equity funds | 42.3 | 42.3 | — | — | — | ||||||||||||||||||||
Core bond fund | 36.8 | 36.8 | — | — | — | ||||||||||||||||||||
High-yield bond fund | 20.1 | 20.1 | — | — | — | ||||||||||||||||||||
Emerging markets bond fund | 15.5 | 15.5 | — | — | — | ||||||||||||||||||||
Combination debt/equity/other fund | 14.8 | 14.8 | — | — | — | ||||||||||||||||||||
Alternative investments fund | 23.6 | — | — | — | 23.6 | ||||||||||||||||||||
Real estate securities fund | 11.5 | — | — | — | 11.5 | ||||||||||||||||||||
Cash equivalents | 0.3 | 0.3 | — | — | — | ||||||||||||||||||||
Total nuclear decommissioning trust | 245.8 | 204.5 | — | — | 41.3 | ||||||||||||||||||||
Rabbi trust | |||||||||||||||||||||||||
Core bond fund | 24.9 | — | — | — | 24.9 | ||||||||||||||||||||
Combination debt/equity/other fund | 6.2 | — | — | — | 6.2 | ||||||||||||||||||||
Cash equivalents | 0.1 | 0.1 | — | — | — | ||||||||||||||||||||
Total rabbi trust | 31.2 | 0.1 | — | — | 31.1 | ||||||||||||||||||||
Total | $ | 277.0 | $ | 204.6 | $ | — | $ | — | $ | 72.4 | |||||||||||||||
KCP&L | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Nuclear decommissioning trust(a) | |||||||||||||||||||||||||
Equity securities | $ | 195.2 | $ | 195.2 | $ | — | $ | — | $ | — | |||||||||||||||
Debt securities | |||||||||||||||||||||||||
U.S. Treasury | 39.5 | 39.5 | — | — | — | ||||||||||||||||||||
U.S. Agency | 0.4 | — | 0.4 | — | — | ||||||||||||||||||||
State and local obligations | 2.1 | — | 2.1 | — | — | ||||||||||||||||||||
Corporate bonds | 32.3 | — | 32.3 | — | — | ||||||||||||||||||||
Foreign governments | 0.1 | — | 0.1 | — | — | ||||||||||||||||||||
Cash equivalents | 1.5 | 1.5 | — | — | — | ||||||||||||||||||||
Other | 1.1 | 1.1 | — | — | — | ||||||||||||||||||||
Total nuclear decommissioning trust | 272.2 | 237.3 | 34.9 | — | — | ||||||||||||||||||||
Self-insured health plan trust(b) | |||||||||||||||||||||||||
Equity securities | 0.5 | 0.5 | — | — | — | ||||||||||||||||||||
Debt securities | 3.1 | 0.3 | 2.8 | — | — | ||||||||||||||||||||
Cash and cash equivalents | 9.4 | 9.4 | — | — | — | ||||||||||||||||||||
Total self-insured health plan trust | 13.0 | 10.2 | 2.8 | — | — | ||||||||||||||||||||
Total | $ | 285.2 | $ | 247.5 | $ | 37.7 | $ | — | $ | — | |||||||||||||||
Other Evergy | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Rabbi trusts | |||||||||||||||||||||||||
Fixed income fund | $ | 13.5 | $ | — | $ | — | $ | — | $ | 13.5 | |||||||||||||||
Total rabbi trusts | $ | 13.5 | $ | — | $ | — | $ | — | $ | 13.5 | |||||||||||||||
Evergy | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Nuclear decommissioning trust (a) | $ | 518.0 | $ | 441.8 | $ | 34.9 | $ | — | $ | 41.3 | |||||||||||||||
Rabbi trusts | 44.7 | 0.1 | — | — | 44.6 | ||||||||||||||||||||
Self-insured health plan trust (b) | 13.0 | 10.2 | 2.8 | — | — | ||||||||||||||||||||
Total | $ | 575.7 | $ | 452.1 | $ | 37.7 | $ | — | $ | 85.9 |
Description | December 31 2017 | Level 1 | Level 2 | Level 3 | NAV | ||||||||||||||||||||
Westar Energy | (millions) | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Nuclear decommissioning trust(a)(c) | |||||||||||||||||||||||||
Domestic equity funds | $ | 73.8 | $ | — | $ | 68.7 | $ | — | $ | 5.1 | |||||||||||||||
International equity funds | 47.9 | — | 47.9 | — | — | ||||||||||||||||||||
Core bond fund | 33.3 | — | 33.3 | — | — | ||||||||||||||||||||
High-yield bond fund | 18.1 | — | 18.1 | — | — | ||||||||||||||||||||
Emerging markets bond fund | 17.3 | — | 17.3 | — | — | ||||||||||||||||||||
Combination debt/equity/other fund | 14.1 | — | 14.1 | — | — | ||||||||||||||||||||
Alternative investments fund | 21.7 | — | — | — | 21.7 | ||||||||||||||||||||
Real estate securities fund | 10.8 | — | — | — | 10.8 | ||||||||||||||||||||
Cash equivalents | 0.1 | 0.1 | — | — | — | ||||||||||||||||||||
Total nuclear decommissioning trust | 237.1 | 0.1 | 199.4 | — | 37.6 | ||||||||||||||||||||
Rabbi trust(c) | |||||||||||||||||||||||||
Core bond fund | 27.3 | — | 27.3 | — | — | ||||||||||||||||||||
Combination debt/equity/other fund | 6.8 | — | 6.8 | — | — | ||||||||||||||||||||
Cash equivalents | 0.2 | 0.2 | — | — | — | ||||||||||||||||||||
Total rabbi trust | 34.3 | 0.2 | 34.1 | — | — | ||||||||||||||||||||
Total | $ | 271.4 | $ | 0.3 | $ | 233.5 | $ | — | $ | 37.6 | |||||||||||||||
KCP&L(d) | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Nuclear decommissioning trust (a) | |||||||||||||||||||||||||
Equity securities | $ | 183.8 | $ | 183.8 | $ | — | $ | — | $ | — | |||||||||||||||
Debt securities | |||||||||||||||||||||||||
U.S. Treasury | 35.3 | 35.3 | — | — | — | ||||||||||||||||||||
U.S. Agency | 0.4 | — | 0.4 | — | — | ||||||||||||||||||||
State and local obligations | 2.1 | — | 2.1 | — | — | ||||||||||||||||||||
Corporate bonds | 34.1 | — | 34.1 | — | — | ||||||||||||||||||||
Foreign governments | 0.1 | — | 0.1 | — | — | ||||||||||||||||||||
Cash equivalents | 2.5 | 2.5 | — | — | — | ||||||||||||||||||||
Other | 0.1 | 0.1 | — | — | — | ||||||||||||||||||||
Total nuclear decommissioning trust | 258.4 | 221.7 | 36.7 | — | — | ||||||||||||||||||||
Self-insured health plan trust(b) | |||||||||||||||||||||||||
Equity securities | 0.5 | 0.5 | — | — | — | ||||||||||||||||||||
Debt securities | 2.7 | 0.3 | 2.4 | — | — | ||||||||||||||||||||
Cash and cash equivalents | 7.7 | 7.7 | — | — | — | ||||||||||||||||||||
Total self-insured health plan trust | 10.9 | 8.5 | 2.4 | — | — | ||||||||||||||||||||
Total | $ | 269.3 | $ | 230.2 | $ | 39.1 | $ | — | $ | — | |||||||||||||||
Evergy | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Nuclear decommissioning trust(a)(c) | $ | 237.1 | $ | 0.1 | $ | 199.4 | $ | — | $ | 37.6 | |||||||||||||||
Rabbi trust(c) | 34.3 | 0.2 | 34.1 | — | — | ||||||||||||||||||||
Total | $ | 271.4 | $ | 0.3 | $ | 233.5 | $ | — | $ | 37.6 |
(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) | In the second quarter of 2018, Evergy and Westar Energy re-evaluated the classification, within the fair value hierarchy, of their various fund investments within both Westar Energy's nuclear decommissioning trust and rabbi trusts. As a result, Evergy and Westar Energy determined that certain fund investments within the nuclear decommissioning trust in the amount of $199.4 million as of December 31, 2017, should have been classified as Level 1, instead of Level 2. This determination is based on the fact that the fair value of these funds is based on daily published prices at which Evergy and Westar Energy are able to redeem their investments without restriction on a daily basis. Evergy and Westar Energy also determined that certain fund investments within their rabbi trusts in the amount of $34.1 million as of December 31, 2017, should have been measured using the NAV per share (or its equivalent) practical expedient, instead of as a Level 2 investment. This determination is based on the fact that these funds do not meet the definition of readily determinable fair value due to the absence of a published NAV. Evergy and Westar Energy have determined that these errors are immaterial to their current and previously filed financial reports and accordingly, have not revised prior periods but have reflected the changes in fair value hierarchy classification as of September 30, 2018. |
(d) | KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. |
September 30, 2018 | December 31, 2017 | September 30, 2018 | |||||||||||||||||
Fair | Unfunded | Fair | Unfunded | Redemption | Length of | ||||||||||||||
Value | Commitments | Value | Commitments | Frequency | Settlement | ||||||||||||||
Westar Energy | (millions) | ||||||||||||||||||
Nuclear decommissioning trust: | |||||||||||||||||||
Domestic equity funds | $ | 6.2 | $ | 4.8 | $ | 5.1 | $ | 2.8 | (a) | (a) | |||||||||
Alternative investments fund(b) | 23.6 | — | 21.7 | — | Quarterly | 65 days | |||||||||||||
Real estate securities fund(b) | 11.5 | — | 10.8 | — | Quarterly | 65 days | |||||||||||||
Total | $ | 41.3 | $ | 4.8 | $ | 37.6 | $ | 2.8 | |||||||||||
Rabbi trust: | |||||||||||||||||||
Core bond fund | $ | 24.9 | $ | — | $ | — | $ | — | (c) | (c) | |||||||||
Combination debt/equity/other fund | 6.2 | — | — | — | (c) | (c) | |||||||||||||
Total | $ | 31.1 | $ | — | $ | — | $ | — | |||||||||||
Other Evergy | |||||||||||||||||||
Rabbi trusts: | |||||||||||||||||||
Fixed income fund(d) | $ | 13.5 | $ | — | $ | — | $ | — | (c) | (c) | |||||||||
Total Evergy investments at NAV | $ | 85.9 | $ | 4.8 | $ | 37.6 | $ | 2.8 |
(a) | This investment is in five long-term private equity funds that do not permit early withdrawal. Investments in these funds cannot be 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 the second quarter of 2016 and first quarter of 2018, respectively. The fourth fund's term is 15 years, subject to the general partner's right to extend the 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 the 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. |
(d) | This investment is recorded at GMO. GMO amounts are not included in consolidated Evergy as of December 31, 2017. |
Three Months Ended September 30 | Year to Date September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Westar Energy | (millions) | |||||||||||||||
Nuclear decommissioning trust - equity securities | $ | 6.5 | $ | 7.7 | $ | (6.4 | ) | $ | 22.2 | |||||||
Rabbi trust | 3.7 | 16.5 | 3.2 | 19.0 | ||||||||||||
Total | $ | 10.2 | $ | 24.2 | $ | (3.2 | ) | $ | 41.2 | |||||||
KCP&L(a) | ||||||||||||||||
Nuclear decommissioning trust - equity securities | $ | 8.6 | $ | 6.9 | $ | 9.1 | $ | 17.8 | ||||||||
Nuclear decommissioning trust - debt securities | (0.5 | ) | — | (2.8 | ) | 0.7 | ||||||||||
Total | $ | 8.1 | $ | 6.9 | $ | 6.3 | $ | 18.5 | ||||||||
Evergy | ||||||||||||||||
Nuclear decommissioning trust - equity securities | $ | 15.1 | $ | 7.7 | $ | 1.1 | $ | 22.2 | ||||||||
Nuclear decommissioning trust - debt securities | (0.5 | ) | — | (0.8 | ) | — | ||||||||||
Rabbi trusts | 3.7 | 16.5 | 3.1 | 19.0 | ||||||||||||
Total | $ | 18.3 | $ | 24.2 | $ | 3.4 | $ | 41.2 |
• | Evergy direct guarantees to GMO counterparties totaling $17.0 million, which expire in 2020, and |
• | Evergy's guarantee of GMO long-term debt totaling $94.3 million, which includes debt with maturity dates ranging from 2019 to 2023. |
September 30 | December 31 | |||||||||
2018 | 2017 | |||||||||
Westar Energy | (millions) | |||||||||
Net receivable from GMO | $ | 0.7 | $ | — | ||||||
Net payable to KCP&L | (59.3 | ) | — | |||||||
Net payable to Evergy | (14.6 | ) | — | |||||||
KCP&L | ||||||||||
Net receivable from GMO | $ | 63.3 | $ | 65.8 | ||||||
Net receivable from Westar Energy | 59.3 | — | ||||||||
Net receivable from Evergy | 16.4 | — | ||||||||
Net receivable from Great Plains Energy | — | 18.9 |
September 30 | December 31 | |||||||
2018 | 2017 | |||||||
Assets: | (millions) | |||||||
Property, plant and equipment of variable interest entities, net | $ | 170.9 | $ | 176.3 | ||||
Liabilities: | ||||||||
Current maturities of long-term debt of variable interest entities | $ | 30.3 | $ | 28.5 | ||||
Accrued interest(a) | — | 0.7 | ||||||
Long-term debt of variable interest entities, net | 51.1 | 81.4 |
(a) | Included in accrued interest on Evergy's and Westar Energy's consolidated balance sheets. |
Evergy | ||||||||||||||
Three Months Ended September 30 | Year to Date September 30 | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Current income taxes | (millions) | |||||||||||||
Federal | $ | (30.3 | ) | $ | (16.7 | ) | $ | (21.5 | ) | $ | (14.5 | ) | ||
State | 1.5 | — | 1.9 | 0.4 | ||||||||||
Total | (28.8 | ) | (16.7 | ) | (19.6 | ) | (14.1 | ) | ||||||
Deferred income taxes | ||||||||||||||
Federal | 70.6 | 58.8 | 86.0 | 101.7 | ||||||||||
State | 23.3 | 14.3 | (35.7 | ) | 27.0 | |||||||||
Total | 93.9 | 73.1 | 50.3 | 128.7 | ||||||||||
Investment tax credit amortization | (1.0 | ) | (0.6 | ) | (2.4 | ) | (2.0 | ) | ||||||
Income tax expense | $ | 64.1 | $ | 55.8 | $ | 28.3 | $ | 112.6 |
Westar Energy | ||||||||||||||
Three Months Ended September 30 | Year to Date September 30 | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Current income taxes | (millions) | |||||||||||||
Federal | $ | 8.0 | $ | (16.7 | ) | $ | 18.9 | $ | (14.5 | ) | ||||
State | (9.2 | ) | — | (6.7 | ) | 0.4 | ||||||||
Total | (1.2 | ) | (16.7 | ) | 12.2 | (14.1 | ) | |||||||
Deferred income taxes | ||||||||||||||
Federal | 12.3 | 58.8 | 15.4 | 101.7 | ||||||||||
State | 12.0 | 14.3 | (47.6 | ) | 27.0 | |||||||||
Total | 24.3 | 73.1 | (32.2 | ) | 128.7 | |||||||||
Investment tax credit amortization | (0.7 | ) | (0.6 | ) | (2.0 | ) | (2.0 | ) | ||||||
Income tax expense (benefit) | $ | 22.4 | $ | 55.8 | $ | (22.0 | ) | $ | 112.6 |
KCP&L | ||||||||||||||
Three Months Ended September 30 | Year to Date September 30 | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Current income taxes | (millions) | |||||||||||||
Federal | $ | 20.7 | $ | 41.8 | $ | 43.5 | $ | 56.2 | ||||||
State | 6.8 | 7.6 | 11.6 | 10.2 | ||||||||||
Total | 27.5 | 49.4 | 55.1 | 66.4 | ||||||||||
Deferred income taxes | ||||||||||||||
Federal | (1.9 | ) | 10.3 | (23.4 | ) | 27.2 | ||||||||
State | 2.7 | 2.8 | 49.4 | 6.2 | ||||||||||
Total | 0.8 | 13.1 | 26.0 | 33.4 | ||||||||||
Investment tax credit amortization | (0.3 | ) | (0.3 | ) | (0.8 | ) | (0.8 | ) | ||||||
Income tax expense | $ | 28.0 | $ | 62.2 | $ | 80.3 | $ | 99.0 |
Evergy | ||||||||||
Three Months Ended September 30 | Year to Date September 30 | |||||||||
2018 | 2017 | 2018 | 2017 | |||||||
Federal statutory income tax rate | 21.0 | % | 35.0 | % | 21.0 | % | 35.0 | % | ||
Effect of: | ||||||||||
COLI policies | (2.4 | ) | (4.6 | ) | (2.4 | ) | (4.5 | ) | ||
State income taxes | 4.6 | 4.3 | 4.7 | 4.3 | ||||||
Flow through depreciation for plant-related differences | (1.5 | ) | 2.3 | (1.6 | ) | 2.8 | ||||
Federal tax credits | (7.5 | ) | (7.1 | ) | (7.5 | ) | (7.0 | ) | ||
Non-controlling interest | (0.4 | ) | (0.5 | ) | (0.4 | ) | (0.8 | ) | ||
AFUDC equity | (0.1 | ) | (0.2 | ) | (0.1 | ) | (0.2 | ) | ||
Amortization of federal investment tax credits | (0.6 | ) | (0.6 | ) | (0.6 | ) | (0.6 | ) | ||
State tax rate change | 0.1 | — | (9.5 | ) | — | |||||
Valuation allowance | — | — | 0.4 | — | ||||||
Stock compensation | — | — | (0.5 | ) | (1.0 | ) | ||||
Officer compensation limitation | 1.2 | — | 1.2 | — | ||||||
Other | 0.8 | (2.8 | ) | 0.4 | (0.7 | ) | ||||
Effective income tax rate | 15.2 | % | 25.8 | % | 5.1 | % | 27.3 | % |
Westar Energy | ||||||||||
Three Months Ended September 30 | Year to Date September 30 | |||||||||
2018 | 2017 | 2018 | 2017 | |||||||
Federal statutory income tax rate | 21.0 | % | 35.0 | % | 21.0 | % | 35.0 | % | ||
Effect of: | ||||||||||
COLI policies | (4.0 | ) | (4.6 | ) | (4.0 | ) | (4.5 | ) | ||
State income taxes | 1.1 | 4.3 | 3.3 | 4.3 | ||||||
Flow through depreciation for plant-related differences | 1.5 | 2.3 | 0.3 | 2.8 | ||||||
Federal tax credits | (11.8 | ) | (7.1 | ) | (11.7 | ) | (7.0 | ) | ||
Non-controlling interest | (0.6 | ) | (0.5 | ) | (0.7 | ) | (0.8 | ) | ||
AFUDC equity | (0.1 | ) | (0.2 | ) | (0.1 | ) | (0.2 | ) | ||
Amortization of federal investment tax credits | (0.8 | ) | (0.6 | ) | (0.8 | ) | (0.6 | ) | ||
Changes in uncertain tax positions, net | 0.1 | — | 0.1 | — | ||||||
State tax rate change | — | — | (17.7 | ) | — | |||||
Valuation allowance | — | — | 0.6 | — | ||||||
Stock compensation | — | — | (0.9 | ) | (1.0 | ) | ||||
Officer compensation limitation | 1.9 | — | 1.9 | — | ||||||
Other | 2.9 | (2.8 | ) | 1.3 | (0.7 | ) | ||||
Effective income tax rate | 11.2 | % | 25.8 | % | (7.4 | )% | 27.3 | % |
KCP&L | ||||||||||
Three Months Ended September 30 | Year to Date September 30 | |||||||||
2018 | 2017 | 2018 | 2017 | |||||||
Federal statutory income tax rate | 21.0 | % | 35.0 | % | 21.0 | % | 35.0 | % | ||
Effect of: | ||||||||||
COLI policies | (0.2 | ) | (0.3 | ) | (0.2 | ) | (0.3 | ) | ||
State income taxes | 5.0 | 3.9 | 5.1 | 3.9 | ||||||
Flow through depreciation for plant-related differences | (4.9 | ) | 0.1 | (4.9 | ) | 0.2 | ||||
Federal tax credits | (1.9 | ) | (3.1 | ) | (1.8 | ) | (2.6 | ) | ||
AFUDC equity | — | (0.7 | ) | (0.1 | ) | (0.7 | ) | |||
Amortization of federal investment tax credits | (0.4 | ) | (0.4 | ) | (0.4 | ) | (0.4 | ) | ||
State tax rate change | — | — | 14.5 | — | ||||||
Valuation allowance | — | 0.6 | — | 0.4 | ||||||
Stock compensation | — | 0.1 | — | 0.2 | ||||||
Officer compensation limitation | 0.7 | — | 0.5 | — | ||||||
Other | (0.4 | ) | 0.1 | (1.0 | ) | 0.1 | ||||
Effective income tax rate | 18.9 | % | 35.3 | % | 32.7 | % | 35.8 | % |
• | Westar Energy is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Westar Energy has one active wholly-owned subsidiary with significant operations, KGE. |
• | KCP&L is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas. KCP&L has one active wholly-owned subsidiary, KCP&L Receivables Company. |
• | GMO is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri. GMO also provides regulated steam service to certain customers in the St. Joseph, Missouri area. GMO has one active wholly-owned subsidiary, GMO Receivables Company. |
• | GPETHC 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. GPETHC accounts for its investment in Transource under the equity method. |
• | the realization of a total of approximately $600 million of potential net savings from 2018 through 2022 resulting from synergies that are expected to be created as a result of the merger; |
• | the repurchase of approximately 60 million outstanding shares of Evergy common stock by mid-2020; |
• | anticipated rate base investment of approximately $6 billion from 2018 through 2022; |
• | the continued growth of Evergy's renewable energy portfolio as the Evergy Companies retire older and less efficient fossil fuel plants; and |
• | implementing the rate orders received and to be received by the KCC and MPSC by year-end 2018. |
Three Months Ended September 30 | Year to Date September 30 | ||||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||||
(millions, except per share amounts) | |||||||||||||||||||||||
Net income attributable to Evergy, Inc. | $ | 355.0 | $ | 158.3 | $ | 196.7 | $ | 517.3 | $ | 290.0 | $ | 227.3 | |||||||||||
Earnings per common share, diluted | 1.32 | 1.11 | 0.21 | 2.61 | 2.03 | 0.58 |
Three Months Ended September 30 | Year to Date September 30 | ||||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||||
(millions) | |||||||||||||||||||||||
Operating revenues | $ | 1,582.5 | $ | 794.3 | $ | 788.2 | $ | 3,076.1 | $ | 1,976.2 | $ | 1,099.9 | |||||||||||
Fuel and purchased power | 383.7 | 189.8 | 193.9 | 748.9 | 415.4 | 333.5 | |||||||||||||||||
SPP network transmission costs | 58.4 | 62.6 | (4.2 | ) | 194.4 | 185.0 | 9.4 | ||||||||||||||||
Other operating expenses | 413.4 | 182.4 | 231.0 | 937.7 | 542.0 | 395.7 | |||||||||||||||||
Depreciation and amortization | 193.9 | 94.6 | 99.3 | 411.6 | 277.3 | 134.3 | |||||||||||||||||
Income from operations | 533.1 | 264.9 | 268.2 | 783.5 | 556.5 | 227.0 | |||||||||||||||||
Other income (expense), net | (24.3 | ) | (6.6 | ) | (17.7 | ) | (43.7 | ) | (20.4 | ) | (23.3 | ) | |||||||||||
Interest expense | 89.1 | 43.4 | 45.7 | 191.3 | 128.2 | 63.1 | |||||||||||||||||
Income tax expense | 64.1 | 55.8 | 8.3 | 28.3 | 112.6 | (84.3 | ) | ||||||||||||||||
Equity in earnings of equity method investees, net of income taxes | 2.0 | 1.6 | 0.4 | 4.7 | 4.9 | (0.2 | ) | ||||||||||||||||
Net income | 357.6 | 160.7 | 196.9 | 524.9 | 300.2 | 224.7 | |||||||||||||||||
Less: Net income attributable to noncontrolling interests | 2.6 | 2.4 | 0.2 | 7.6 | 10.2 | (2.6 | ) | ||||||||||||||||
Net income attributable to Evergy, Inc. | $ | 355.0 | $ | 158.3 | $ | 196.7 | $ | 517.3 | $ | 290.0 | $ | 227.3 |
Revenues and Expenses | MWhs Sold | |||||||||||||||||||
Three Months Ended September 30 | 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||
Retail revenues | (millions) | (thousands) | ||||||||||||||||||
Residential | $ | 647.1 | $ | 275.9 | $ | 371.2 | 4,839 | 2,081 | 2,758 | |||||||||||
Commercial | 530.5 | 218.1 | 312.4 | 5,259 | 2,156 | 3,103 | ||||||||||||||
Industrial | 173.4 | 117.3 | 56.1 | 2,365 | 1,563 | 802 | ||||||||||||||
Other retail revenues | 10.9 | 4.9 | 6.0 | 40 | 12 | 28 | ||||||||||||||
Total electric retail | 1,361.9 | 616.2 | 745.7 | 12,503 | 5,812 | 6,691 | ||||||||||||||
Wholesale revenues | 118.5 | 103.5 | 15.0 | 3,883 | 3,128 | 755 | ||||||||||||||
Transmission revenues | 80.6 | 70.8 | 9.8 | N/A | N/A | N/A | ||||||||||||||
Other revenues | 21.5 | 3.8 | 17.7 | N/A | N/A | N/A | ||||||||||||||
Operating revenues | 1,582.5 | 794.3 | 788.2 | 16,386 | 8,940 | 7,446 | ||||||||||||||
Fuel and purchased power | (383.7 | ) | (189.8 | ) | (193.9 | ) | ||||||||||||||
SPP network transmission costs | (58.4 | ) | (62.6 | ) | 4.2 | |||||||||||||||
Utility gross margin (a) | $ | 1,140.4 | $ | 541.9 | $ | 598.5 | ||||||||||||||
(a) Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin above. | ||||||||||||||||||||
Revenues and Expenses | MWhs Sold | |||||||||||||||||||
Year to Date September 30 | 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||
Retail revenues | (millions) | (thousands) | ||||||||||||||||||
Residential | $ | 1,169.4 | $ | 626.8 | $ | 542.6 | 9,047 | 4,828 | 4,219 | |||||||||||
Commercial | 945.0 | 543.4 | 401.6 | 9,794 | 5,588 | 4,206 | ||||||||||||||
Industrial | 375.5 | 316.0 | 59.5 | 5,345 | 4,319 | 1,026 | ||||||||||||||
Other retail revenues | 21.5 | 17.2 | 4.3 | 75 | 56 | 19 | ||||||||||||||
Total electric retail | 2,511.4 | 1,503.4 | 1,008.0 | 24,261 | 14,791 | 9,470 | ||||||||||||||
Wholesale revenues | 302.4 | 256.2 | 46.2 | 9,789 | 7,612 | 2,177 | ||||||||||||||
Transmission revenues | 227.6 | 213.0 | 14.6 | N/A | N/A | N/A | ||||||||||||||
Other revenues | 34.7 | 3.6 | 31.1 | N/A | N/A | N/A | ||||||||||||||
Operating revenues | 3,076.1 | 1,976.2 | 1,099.9 | 34,050 | 22,403 | 11,647 | ||||||||||||||
Fuel and purchased power | (748.9 | ) | (415.4 | ) | (333.5 | ) | ||||||||||||||
SPP network transmission costs | (194.4 | ) | (185.0 | ) | (9.4 | ) | ||||||||||||||
Utility gross margin (a) | $ | 2,132.8 | $ | 1,375.8 | $ | 757.0 | ||||||||||||||
(a) Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin above. |
• | a $603.7 million increase due to the inclusion of KCP&L's and GMO's utility gross margin; and |
• | a $25.1 million increase primarily due to higher Westar Energy retail sales driven by warmer summer weather. For the three months ended September 30, 2018, compared to the same period in 2017, cooling degree days increased 17%; partially offset by |
• | a $28.1 million refund obligation recorded at Westar Energy for the change in the corporate income tax rate caused by the passage of the Tax Cuts and Jobs Act. See Note 17 to the consolidated financial statements for additional information; and |
• | a $2.2 million obligation recorded at Westar Energy for one-time annual bill credits as a result of conditions in the KCC merger order. See Note 2 to the consolidated financial statements for additional information. |
• | a $774.5 million increase due to the inclusion of KCP&L's and GMO's utility gross margin beginning in June 2018; and |
• | a $77.7 million increase primarily due to higher Westar Energy retail sales driven by warmer spring and summer weather and colder winter weather. For year to date September 30, 2018, compared to the same period in 2017, cooling degree days increased 32% and heating degree days increased 29%; partially offset by |
• | a $66.3 million refund obligation recorded at Westar Energy for the change in the corporate income tax rate caused by the passage of the Tax Cuts and Jobs Act. See Note 17 to the consolidated financial statements for additional information; and |
• | a $28.9 million obligation recorded at Westar Energy for one-time and annual bill credits as a result of conditions in the KCC merger order. See Note 2 to the consolidated financial statements for additional information. |
• | a $183.9 million increase in operating and maintenance expense due to the inclusion of KCP&L's and GMO's operating and maintenance expenses; |
• | a $40.7 million increase in taxes other than income taxes due to the inclusion of KCP&L and GMO amounts; |
• | $7.1 million of merger-related costs incurred following the close of the merger, consisting of: |
◦ | $0.8 million of Westar Energy voluntary severance expenses incurred; and |
◦ | $6.3 million of merger consulting fees and fees for other outside services incurred; and |
• | a $5.5 million increase due to Westar Energy's 47% share of voluntary severance expenses incurred related to the Wolf Creek voluntary exit program. |
• | a $245.6 million increase in operating and maintenance expense due to the inclusion of KCP&L's and GMO's operating and maintenance expenses beginning in June 2018, excluding the deferral of merger transition costs discussed below; |
• | $64.6 million of merger-related costs incurred following the close of the merger in June 2018, consisting of: |
◦ | $24.7 million of unconditional charitable contributions and community support recorded by Evergy in accordance with conditions in the KCC and MPSC merger orders; |
◦ | $40.7 million of Westar Energy change in control payments, voluntary severance and the recording of unrecognized equity compensations costs and the incremental fair value associated with the vesting of outstanding Westar Energy equity compensation awards in accordance with the Amended Merger Agreement; and |
◦ | $47.0 million of merger consulting fees and fees for other outside services incurred, primarily consisting of merger success fees; 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 Westar Energy, KCP&L and GMO in accordance with the KCC and MPSC merger orders; |
• | a $54.6 million increase in taxes other than income taxes due to the inclusion of KCP&L and GMO amounts beginning in June 2018; |
• | $12.3 million of obsolete inventory write-offs for Westar Energy's Unit 7 at Tecumseh Energy Center, Units 3 and 4 at Murray Gill Energy Center and Units 1 and 2 at Gordon Evans Energy Center, which were retired in the fourth quarter of 2018; and |
• | a $5.5 million increase due to Westar Energy's 47% share of voluntary severance expenses incurred related to the Wolf Creek voluntary exit program. |
• | an $11.7 million increase due to the inclusion of KCP&L and GMO amounts; and |
• | a $1.0 million decrease in Westar Energy's investment earnings primarily due to a decrease in interest and dividend income. |
• | a $14.6 million increase due to the inclusion of KCP&L and GMO amounts beginning in June 2018; and |
• | a $3.9 million decrease in Westar Energy's investment earnings primarily due to a decrease in interest and dividend income. |
• | a $41.5 million increase as a result of the inclusion of income tax expense related to Evergy, Inc. and the subsidiaries of Great Plains Energy; partially offset by |
• | a $25.9 million decrease in Westar Energy's income tax expense as a result of the decrease in the federal statutory income tax rate in 2018; and |
• | a $6.9 million decrease due to lower Westar Energy pre-tax income. |
• | a $53.2 million decrease related to the revaluation of Westar Energy's deferred income tax assets and liabilities based on the Evergy composite tax rate as a result of the merger; |
• | a $47.5 million decrease due to lower Westar Energy pre-tax income; and |
• | a $38.1 million decrease in Westar Energy's income tax expense as a result of the decrease in the federal statutory income tax rate in 2018; partially offset by |
• | a $50.2 million increase as a result of the inclusion of income tax expense related to Evergy, Inc. and the subsidiaries of Great Plains Energy beginning in June 2018. |
Total Change | Change Due to Merger | Remaining Change | |||||||||
Assets | (in millions) | ||||||||||
Cash and cash equivalents | $ | 676.3 | $ | 1,154.2 | $ | (477.9 | ) | ||||
Accounts receivable, net | 205.8 | 155.6 | 50.2 | ||||||||
Accounts receivable pledged as collateral | 195.0 | 180.0 | 15.0 | ||||||||
Fuel inventories and supplies | 227.3 | 271.5 | (44.2 | ) | |||||||
Income taxes receivable | 20.8 | — | 20.8 | ||||||||
Regulatory assets - current | 233.0 | 207.8 | 25.2 | ||||||||
Prepaid expenses and other assets | 33.8 | 41.5 | (7.7 | ) | |||||||
Property, plant and equipment, net | 9,282.2 | 9,179.7 | 102.5 | ||||||||
Property, plant and equipment of variable interest entities, net | (5.4 | ) | — | (5.4 | ) | ||||||
Regulatory assets | 832.7 | 829.1 | 3.6 | ||||||||
Nuclear decommissioning trust | 280.9 | 261.3 | 19.6 | ||||||||
Goodwill | 2,333.5 | 2,333.5 | — | ||||||||
Other | 134.9 | 145.5 | (10.6 | ) | |||||||
Liabilities | |||||||||||
Current maturities of long-term debt | 709.6 | 415.3 | 294.3 | ||||||||
Current maturities of long-term debt of variable interest entities | 1.8 | — | 1.8 | ||||||||
Notes payable and commercial paper | 400.2 | 561.0 | (160.8 | ) | |||||||
Collateralized note payable | 195.0 | 180.0 | 15.0 | ||||||||
Accounts payable | 99.5 | 191.4 | (91.9 | ) | |||||||
Accrued dividends | (53.8 | ) | — | (53.8 | ) | ||||||
Accrued taxes | 194.4 | 82.0 | 112.4 | ||||||||
Accrued interest | 46.9 | 48.0 | (1.1 | ) | |||||||
Regulatory liabilities - current | 105.6 | 17.7 | 87.9 | ||||||||
Other current liabilities | 136.3 | 119.1 | 17.2 | ||||||||
Long-term debt, net | 2,952.2 | 3,358.6 | (406.4 | ) | |||||||
Long-term debt of variable interest entities, net | (30.3 | ) | — | (30.3 | ) | ||||||
Deferred income taxes | 720.3 | 665.1 | 55.2 | ||||||||
Unamortized investment tax credits | 121.8 | 124.3 | (2.5 | ) | |||||||
Regulatory liabilities | 1,263.1 | 1,172.9 | 90.2 | ||||||||
Pension and post-retirement liability | 458.5 | 477.3 | (18.8 | ) | |||||||
Asset retirement obligations | 242.7 | 366.1 | (123.4 | ) | |||||||
Other long-term liabilities | 98.6 | 83.1 | 15.5 |
• | Evergy's cash and cash equivalents decreased $477.9 million primarily due to the repurchase of common stock for a total cost of $486.1 million in connection with Evergy's share repurchase program. |
• | Evergy's receivables, net increased $50.2 million primarily due to seasonal increases in customer accounts receivable. |
• | Evergy's current maturities of long-term debt increased by $294.3 million primarily due to the reclassification of KGE's $300.0 million of 6.70% Series First Mortgage Bonds from long-term to current. |
• | Evergy's notes payable and commercial paper decreased $160.8 million primarily due to the repayment of commercial paper with funds from operations at KCP&L and GMO. |
• | Evergy's accounts payable decreased $91.9 million primarily due to the timing of cash payments. |
• | Evergy's accrued dividends decreased $53.8 million due to the timing of payment for Westar Energy's common stock dividend declared in August 2018, which was paid in September 2018, and its common stock dividend declared in November 2017, which was paid in January 2018. |
• | Evergy's accrued taxes increased $112.4 million primarily due to the timing of property tax payments. |
• | Evergy's current regulatory liabilities increased $87.9 million primarily due to $79.0 million of refund obligations recorded by Westar Energy consisting of $55.9 million related to the Tax Cuts and Jobs Act and $23.1 million related to one-time customer merger bill credits. |
• | Evergy's long-term debt decreased by $406.4 million primarily due to the reclassification of KGE's $300.0 million of 6.70% Series First Mortgage Bonds from long-term to current and the redemption of $104.0 million of GMO's Series A and B Senior Notes in the third quarter of 2018. |
• | Evergy's long-term debt of variable interest entities, net decreased $30.3 million primarily due to the VIE that holds the La Cygne Unit 2 leasehold interest having made principal payments totaling $28.5 million. |
• | Evergy's asset retirement obligations decreased $123.4 million primarily due to a $127.0 million decrease in Evergy's and Westar Energy's AROs for a revision in estimate primarily related to Westar Energy's ARO to decommission its 47% ownership share of Wolf Creek. See Note 6 to the consolidated financial statements for additional information. |
September 30 | December 31 | ||
2018 | 2017 | ||
Common equity | 59% | 51% | |
Noncontrolling interests | <0% | <0% | |
Long-term debt, including VIEs | 41% | 49% |
Moody's | S&P Global | ||||||
Investors Service | Ratings | ||||||
Evergy | |||||||
Outlook | Stable | Stable | |||||
Corporate Credit Rating | -- | A- | |||||
Senior Unsecured Debt | Baa2 | BBB+ | |||||
Westar Energy | |||||||
Outlook | Stable | Stable | |||||
Corporate Credit Rating | Baa1 | A- | |||||
Senior Secured Debt | A2 | A | |||||
Commercial Paper | P-2 | A-2 | |||||
KGE | |||||||
Outlook | Stable | Stable | |||||
Corporate Credit Rating | Baa1 | A- | |||||
Senior Secured Debt | A2 | A | |||||
KCP&L | |||||||
Outlook | Stable | Stable | |||||
Corporate Credit Rating | Baa1 | A- | |||||
Senior Secured Debt | A2 | A | |||||
Senior Unsecured Debt | Baa1 | A- | |||||
Commercial Paper | P-2 | A-2 | |||||
GMO | |||||||
Outlook | Stable | Stable | |||||
Corporate Credit Rating | Baa2 | A- | |||||
Senior Unsecured Debt | Baa2 | A- | |||||
Commercial Paper | P-2 | A-2 |
Type of Authorization | Commission | Expiration Date | Authorization Amount | Available Under Authorization |
Westar Energy & KGE | (in millions) | |||
Short-Term Debt | FERC | February 2020 | $1,000.0 | $673.7 |
KCP&L | ||||
Short-Term Debt | FERC | December 2018 | $1,000.0 | $790.8 |
Long-Term Debt | MPSC | September 2019 | $750.0 | $450.0 |
GMO | ||||
Short-Term Debt | FERC | March 2020 | $750.0 | $609.6 |
• | Evergy direct guarantees to GMO counterparties totaling $17.0 million, which expire in 2020, and |
• | Evergy's guarantee of GMO long-term debt totaling $94.3 million, which includes debt with maturity dates ranging from 2019 to 2023. |
Year to Date September 30 | 2018 | 2017 | ||||
(in millions) | ||||||
Cash flows from operating activities | $ | 1,191.6 | $ | 742.7 | ||
Cash flows from (used in) investing activities | 574.8 | (581.4 | ) | |||
Cash flows used in financing activities | (1,090.1 | ) | (161.0 | ) |
Year to Date September 30 | |||||||||||
2018 | 2017 | Change | |||||||||
(millions) | |||||||||||
Operating revenues | $ | 2,015.9 | $ | 1,976.2 | $ | 39.7 | |||||
Fuel and purchased power | 463.2 | 415.4 | 47.8 | ||||||||
SPP network transmission costs | 194.4 | 185.0 | 9.4 | ||||||||
Other operating expenses | 620.2 | 542.0 | 78.2 | ||||||||
Depreciation and amortization | 281.6 | 277.3 | 4.3 | ||||||||
Income from operations | 456.5 | 556.5 | (100.0 | ) | |||||||
Other income (expense), net | (31.6 | ) | (20.4 | ) | (11.2 | ) | |||||
Interest expense | 132.1 | 128.2 | 3.9 | ||||||||
Income tax expense (benefit) | (22.0 | ) | 112.6 | (134.6 | ) | ||||||
Equity in earnings of equity method investees, net of income taxes | 3.7 | 4.9 | (1.2 | ) | |||||||
Net income | 318.5 | 300.2 | 18.3 | ||||||||
Less: Net income attributable to noncontrolling interests | 7.6 | 10.2 | (2.6 | ) | |||||||
Net income attributable to Westar Energy, Inc. | $ | 310.9 | $ | 290.0 | $ | 20.9 |
Revenues and Expenses | MWhs Sold | |||||||||||||||||||
Year to Date September 30 | 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||
Retail revenues | (millions) | (thousands) | ||||||||||||||||||
Residential | $ | 671.9 | $ | 626.8 | $ | 45.1 | 5,349 | 4,828 | 521 | |||||||||||
Commercial | 542.8 | 543.4 | (0.6 | ) | 5,797 | 5,588 | 209 | |||||||||||||
Industrial | 297.2 | 316.0 | (18.8 | ) | 4,275 | 4,319 | (44 | ) | ||||||||||||
Other retail revenues | 15.3 | 17.2 | (1.9 | ) | 45 | 56 | (11 | ) | ||||||||||||
Total electric retail | 1,527.2 | 1,503.4 | 23.8 | 15,466 | 14,791 | 675 | ||||||||||||||
Wholesale revenues | 263.7 | 256.2 | 7.5 | 7,560 | 7,612 | (52 | ) | |||||||||||||
Transmission revenues | 216.3 | 213.0 | 3.3 | N/A | N/A | N/A | ||||||||||||||
Other revenues | 8.7 | 3.6 | 5.1 | N/A | N/A | N/A | ||||||||||||||
Operating revenues | 2,015.9 | 1,976.2 | 39.7 | 23,026 | 22,403 | 623 | ||||||||||||||
Fuel and purchased power | (463.2 | ) | (415.4 | ) | (47.8 | ) | ||||||||||||||
SPP network transmission costs | (194.4 | ) | (185.0 | ) | (9.4 | ) | ||||||||||||||
Utility gross margin (a) | $ | 1,358.3 | $ | 1,375.8 | $ | (17.5 | ) |
(a) | Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin under Evergy's Results of Operations. |
• | a $66.3 million refund obligation for the change in the corporate income tax rate caused by the passage of the Tax Cuts and Jobs Act. See Note 17 to the consolidated financial statements for additional information; and |
• | a $28.9 million obligation for one-time and annual bill credits as a result of conditions in the KCC merger order. See Note 2 to the consolidated financial statements for additional information; partially offset by |
• | a $77.7 million increase primarily due to higher retail sales driven by warmer spring and summer weather and colder winter weather. For year to date September 30, 2018, compared to the same period in 2017, cooling degree days increased 31% and heating degree days increased 27%. |
• | $47.8 million of merger-related costs incurred following the close of the merger in June 2018, consisting of: |
◦ | $40.7 million of change in control payments, voluntary severance and the recording of unrecognized equity compensation costs and the incremental fair value associated with the vesting of outstanding Westar Energy equity compensation awards in accordance with the Amended Merger Agreement; and |
◦ | $20.4 million of merger consulting fees and fees for other outside services incurred, primarily consisting of merger success fees; partially offset by |
◦ | a $13.3 million decrease in operating and maintenance expense due to the net reallocation of incurred merger transition costs between Westar Energy, Evergy, KCP&L and GMO and the subsequent deferral of these transition costs to a regulatory asset in June 2018 for future recovery by Westar Energy in accordance with the KCC merger order; |
• | $12.3 million of obsolete inventory write-offs for Westar Energy's Unit 7 at Tecumseh Energy Center, Units 3 and 4 at Murray Gill Energy Center and Units 1 and 2 at Gordon Evans Energy Center, which were retired in the fourth quarter of 2018; and |
• | a $5.5 million increase due to Westar Energy's 47% share of voluntary severance expenses incurred related to the Wolf Creek voluntary exit program. |
• | a $3.9 million increase in pension non-service costs; and |
• | a $3.9 million decrease in investment earnings primarily due to a decrease in interest and dividend income. |
• | a $53.2 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; |
• | a $47.5 million decrease due to lower pre-tax income; and |
• | a $38.1 million decrease as a result of the decrease in the federal statutory income tax rate in 2018. |
Year to Date September 30 | |||||||||||
2018 | 2017 | Change | |||||||||
(millions) | |||||||||||
Operating revenues | $ | 1,408.9 | $ | 1,474.3 | $ | (65.4 | ) | ||||
Fuel and purchased power | 392.4 | 367.3 | 25.1 | ||||||||
Other operating expenses | 442.4 | 490.9 | (48.5 | ) | |||||||
Depreciation and amortization | 209.0 | 199.9 | 9.1 | ||||||||
Income from operations | 365.1 | 416.2 | (51.1 | ) | |||||||
Other income (expense), net | (19.1 | ) | (33.8 | ) | 14.7 | ||||||
Interest expense | 100.6 | 105.5 | (4.9 | ) | |||||||
Income tax expense | 80.3 | 99.0 | (18.7 | ) | |||||||
Net income | $ | 165.1 | $ | 177.9 | $ | (12.8 | ) |
Revenues and Expenses | MWhs Sold | |||||||||||||||||||
Year to Date September 30 | 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||
Retail revenues | (millions) | (thousands) | ||||||||||||||||||
Residential | $ | 585.4 | $ | 573.7 | $ | 11.7 | 4,480 | 4,034 | 446 | |||||||||||
Commercial | 609.2 | 651.1 | (41.9 | ) | 5,931 | 5,730 | 201 | |||||||||||||
Industrial | 105.4 | 118.9 | (13.5 | ) | 1,333 | 1,330 | 3 | |||||||||||||
Other retail revenues | 7.7 | 8.3 | (0.6 | ) | 56 | 53 | 3 | |||||||||||||
Total electric retail | 1,307.7 | 1,352.0 | (44.3 | ) | 11,800 | 11,147 | 653 | |||||||||||||
Wholesale revenues | 38.5 | 74.7 | (36.2 | ) | 3,753 | 5,198 | (1,445 | ) | ||||||||||||
Transmission revenues | 11.0 | 12.2 | (1.2 | ) | N/A | N/A | N/A | |||||||||||||
Other revenues | 51.7 | 35.4 | 16.3 | N/A | N/A | N/A | ||||||||||||||
Operating revenues | 1,408.9 | 1,474.3 | (65.4 | ) | 15,553 | 16,345 | (792 | ) | ||||||||||||
Fuel and purchased power | (392.4 | ) | (367.3 | ) | (25.1 | ) | ||||||||||||||
Utility gross margin (a) | $ | 1,016.5 | $ | 1,107.0 | $ | (90.5 | ) |
(a) | Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin under Evergy's Results of Operations. |
• | a $64.5 million refund obligation for the change in the corporate income tax rate caused by the passage of the Tax Cuts and Jobs Act. See Note 17 to the consolidated financial statements for additional information; |
• | $56.0 million of sales taxes and franchise fees collected from KCP&L Missouri customers in 2017, which as part of KCP&L's adoption of ASC 606, are now presented net in revenue in 2018; and |
• | a $24.3 million obligation for one-time and annual bill credits as a result of conditions in the MPSC and KCC merger orders. See Note 2 to the consolidated financial statements for additional information; partially offset by |
• | a $54.3 million increase primarily due to higher retail sales driven by warmer spring and summer weather and colder winter weather. For year to date September 30, 2018, compared to the same period in 2017, cooling degree days increased 34% and heating degree days increased 30%. |
• | a $55.8 million decrease in taxes other than income tax due to sales taxes and franchise fees collected from KCP&L Missouri customers in 2017, which, as part of KCP&L's adoption of ASC 606, Revenue from Contracts with Customers, are now presented net in revenue in 2018; and |
• | a $23.9 million decrease in operating and maintenance expense due to the net reallocation of incurred merger transition costs between KCP&L, Evergy, Westar Energy and GMO and the subsequent deferral of these transition costs to a regulatory asset for future recovery by KCP&L in accordance with the KCC and MPSC merger orders; partially offset by |
• | a $9.0 million increase due to KCP&L's 47% share of voluntary severance expenses incurred related to the Wolf Creek voluntary exit program as well as KCP&L's Local 412 union voluntary exit program; |
• | a $5.4 million increase in transmission and distribution operating and maintenance expense; and |
• | a $3.6 million increase in injuries and damages expense primarily due to an increase in estimated worker's compensation losses. |
• | a $31.5 million decrease in income tax expense as a result of the decrease in the federal statutory income tax rate in 2018; |
• | a $15.5 million decrease 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; |
• | a $13.1 million decrease in income tax expense due to an increase in flow-through items primarily consisting of amortization of regulatory liabilities for excess deferred income taxes generated as a result of the enactment of the Tax Cuts and Jobs Act in December 2017; and |
• | a $12.3 million decrease due to lower pre-tax income; partially offset by |
• | a $51.0 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. |
Issuer Purchases of Equity Securities | ||||||||||
Month | Total Number of Shares (or Units) Purchased(a) | Average Price Paid per Share (or Unit) | 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) | ||||||
July 1 - 31 | — | $ | — | — | N/A | |||||
August 1 - 31 | 6,496,849 | (b) | 6,496,849 | 53,503,151 | ||||||
September 1 - 30 | 398,224 | 57.25 | 398,224 | 53,104,927 | ||||||
Total | 6,895,073 | (b) | 6,895,073 | 53,104,927 |
Exhibit Number | Description of Document | Registrant | ||
10.1 | * | Evergy Westar Energy KCP&L | ||
10.2 | + | Evergy Westar Energy KCP&L | ||
10.3 | + | Evergy Westar Energy KCP&L | ||
31.1 | Evergy | |||
31.2 | Evergy | |||
31.3 | KCP&L | |||
31.4 | KCP&L | |||
31.5 | Westar Energy | |||
31.6 | Westar Energy | |||
32.1 | ** | Evergy | ||
32.2 | ** | KCP&L | ||
32.3 | ** | Westar Energy | ||
101.INS | XBRL Instance Document. | Evergy Westar Energy KCP&L | ||
101.SCH | XBRL Taxonomy Extension Schema Document. | Evergy Westar Energy KCP&L | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | Evergy Westar Energy KCP&L | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | Evergy Westar Energy KCP&L | ||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document. | Evergy Westar Energy KCP&L | ||
Exhibit Number | Description of Document | Registrant | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | Evergy Westar Energy KCP&L |
EVERGY, INC. | ||
Dated: | November 7, 2018 | By: /s/ Anthony D. Somma |
(Anthony D. Somma) | ||
(Executive Vice President and Chief Financial Officer) |
WESTAR ENERGY, INC. | ||
Dated: | November 7, 2018 | By: /s/ Anthony D. Somma |
(Anthony D. Somma) | ||
(Executive Vice President and Chief Financial Officer) |
KANSAS CITY POWER & LIGHT COMPANY | ||
Dated: | November 7, 2018 | By: /s/ Anthony D. Somma |
(Anthony D. Somma) | ||
(Executive Vice President and Chief Financial Officer) |
EVERGY, INC. | ||
By: | ||
Name: | ||
Title: | ||
INDEMNITEE | ||
1. | I have reviewed this quarterly report on Form 10-Q of Evergy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 7, 2018 | /s/ Terry Bassham |
Terry Bassham President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Evergy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 7, 2018 | /s/Anthony D. Somma |
Anthony D. Somma Executive Vice President and Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Kansas City Power & Light Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 7, 2018 | /s/ Terry Bassham | ||
Terry Bassham President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Kansas City Power & Light Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 7, 2018 | /s/ Anthony D. Somma |
Anthony D. Somma Executive Vice President and Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Westar Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 7, 2018 | /s/ Terry Bassham | ||
Terry Bassham President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Westar Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 7, 2018 | /s/ Anthony D. Somma |
Anthony D. Somma Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Terry Bassham | |
Name: Title: | Terry Bassham President and Chief Executive Officer |
Date: | November 7, 2018 |
/s/Anthony D. Somma | |
Name: Title: | Anthony D. Somma Executive Vice President and Chief Financial Officer |
Date: | November 7, 2018 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Terry Bassham | |
Name: Title: | Terry Bassham President and Chief Executive Officer |
Date: | November 7, 2018 |
/s/ Anthony D. Somma | |
Name: Title: | Anthony D. Somma Executive Vice President and Chief Financial Officer |
Date: | November 7, 2018 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Terry Bassham | |
Name: Title: | Terry Bassham President and Chief Executive Officer |
Date: | November 7, 2018 |
/s/ Anthony D. Somma | |
Name: Title: | Anthony D. Somma Executive Vice President and Chief Financial Officer |
Date: | November 7, 2018 |
Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Oct. 31, 2018 |
|
Entity information [Abstract] | ||
Entity Registrant Name | EVERGY, INC. | |
Entity Central Index Key | 0001711269 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 263,455,083 | |
Entity Current Reporting Status | Yes |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Shareholder's equity | ||
Common stock - shares authorized (in shares) | 600,000,000 | 275,000,000 |
Common stock - par value (in dollars per share) | $ 0 | $ 5 |
Common stock - shares issued (in shares) | 264,797,584 | 142,094,275 |
Westar Energy Inc [Member] | ||
Shareholder's equity | ||
Common stock - shares authorized (in shares) | 1,000 | 275,000,000 |
Common stock - par value (in dollars per share) | $ 0.01 | $ 5 |
Common stock - shares issued (in shares) | 1 | 142,094,275 |
KCPL [Member] | ||
Shareholder's equity | ||
Common stock - shares authorized (in shares) | 1,000 | 1,000 |
Common stock - shares issued (in shares) | 1 | 1 |
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Restricted cash | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Westar Energy Inc [Member] | ||||
Restricted cash | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Consolidated Statements of Changes in Equity - USD ($) $ in Millions |
Total |
Common Stock [Member] |
Retained Earnings [Member] |
Noncontrolling Interest [Member] |
Westar Energy Inc [Member] |
Westar Energy Inc [Member]
Common Stock [Member]
|
Westar Energy Inc [Member]
Retained Earnings [Member]
|
Westar Energy Inc [Member]
Noncontrolling Interest [Member]
|
KCPL [Member] |
KCPL [Member]
Common Stock [Member]
|
KCPL [Member]
Retained Earnings [Member]
|
KCPL [Member]
AOCI - Net gains (losses) on cash flow hedges [Member]
|
---|---|---|---|---|---|---|---|---|---|---|---|---|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Cumulative effect of adoption of ASU 2016-09 | $ (0.7) | $ (0.7) | ||||||||||
Beginning balance (in shares) at Dec. 31, 2016 | 141,791,153 | 141,791,153 | 1 | |||||||||
Beginning balance at Dec. 31, 2016 | $ 3,833.2 | $ 2,727.3 | $ 1,078.6 | $ 27.3 | $ 3,833.2 | $ 2,727.3 | $ 1,078.6 | $ 27.3 | 2,541.5 | $ 1,563.1 | 982.6 | $ (4.2) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 300.2 | 290.0 | 10.2 | 300.2 | 290.0 | 10.2 | 177.9 | 177.9 | ||||
Issuance of stock | 0.6 | $ 0.6 | 0.6 | $ 0.6 | ||||||||
Issuance of stock (in shares) | 12,131 | 12,131 | ||||||||||
Issuance of stock for compensation and reinvested dividends (in shares) | 290,892 | 290,892 | ||||||||||
Issuance of stock for compensation and reinvested dividends | 4.9 | $ 4.9 | 4.9 | $ 4.9 | ||||||||
Tax withholding related to stock compensation | (7.0) | (7.0) | (7.0) | (7.0) | ||||||||
Dividends declared on common stock | (172.1) | (172.1) | (172.1) | (172.1) | (182.0) | (182.0) | ||||||
Stock compensation expense | 6.7 | $ 6.7 | 6.7 | $ 6.7 | ||||||||
Deconsolidation of noncontrolling interests | (81.9) | (81.9) | (81.9) | (81.9) | ||||||||
Distributions to shareholders of noncontrolling interests | (5.7) | (5.7) | (5.7) | (5.7) | ||||||||
Derivative hedging activity, net of tax | 3.8 | 3.8 | ||||||||||
Ending balance (in shares) at Sep. 30, 2017 | 142,094,176 | 142,094,176 | 1 | |||||||||
Ending balance at Sep. 30, 2017 | 3,878.9 | $ 2,732.5 | 1,196.5 | (50.1) | 3,878.9 | $ 2,732.5 | 1,196.5 | (50.1) | 2,540.5 | $ 1,563.1 | 977.8 | (0.4) |
Beginning balance (in shares) at Dec. 31, 2017 | 142,094,275 | 142,094,275 | 1 | |||||||||
Beginning balance at Dec. 31, 2017 | 3,860.4 | $ 2,734.8 | 1,173.3 | (47.7) | 3,860.4 | $ 2,734.8 | 1,173.3 | (47.7) | 2,513.2 | $ 1,563.1 | 949.7 | 0.4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 524.9 | 517.3 | 7.6 | 318.5 | 310.9 | 7.6 | 165.1 | 165.1 | ||||
Issuance of stock to Great Plains Energy shareholders (in shares) | 128,947,518 | |||||||||||
Issuance of stock to Great Plains Energy shareholders | 6,979.9 | $ 6,979.9 | ||||||||||
Issuance of restricted common stock (in shares) | 122,505 | |||||||||||
Issuance of stock for compensation and reinvested dividends (in shares) | 528,359 | 516,990 | ||||||||||
Issuance of stock for compensation and reinvested dividends | 0.4 | $ 0.4 | 0.0 | |||||||||
Tax withholding related to stock compensation | (17.2) | (17.2) | (17.2) | $ (17.2) | ||||||||
Dividends declared on common stock | (237.5) | (237.5) | (181.5) | (181.5) | (180.0) | (180.0) | ||||||
Dividend equivalents declared | (0.6) | (0.6) | ||||||||||
Stock compensation expense | 25.2 | 25.2 | 19.9 | $ 19.9 | ||||||||
Repurchase of common stock | (486.1) | $ (486.1) | ||||||||||
Repurchase of common stock | (6,895,073) | |||||||||||
Stock cancelled pursuant to Amended Merger Agreement (in shares) | (142,611,264) | |||||||||||
Stock cancelled pursuant to Amended Merger Agreement | 0.0 | |||||||||||
Derivative hedging activity, net of tax | 2.7 | 2.7 | ||||||||||
Other | (0.6) | $ (0.6) | 0.1 | $ 0.1 | ||||||||
Ending balance (in shares) at Sep. 30, 2018 | 264,797,584 | 1 | 1 | |||||||||
Ending balance at Sep. 30, 2018 | $ 10,648.8 | $ 9,236.4 | $ 1,452.5 | $ (40.1) | $ 4,000.2 | $ 2,737.6 | $ 1,302.7 | $ (40.1) | $ 2,501.0 | $ 1,563.1 | $ 934.8 | $ 3.1 |
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
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Dividends declared on common stock (in dollars per share) | $ 1.26 | $ 1.20 |
Westar Energy Inc [Member] | ||
Dividends declared on common stock (in dollars per share) | $ 1.20 |
Organization and Basis of Presentation |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Basis of Presentation | 1. ORGANIZATION AND BASIS OF PRESENTATION 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:
Westar Energy also owns a 50% interest in Prairie Wind Transmission, LLC (Prairie Wind), which is a joint venture between Westar Energy and affiliates of AEP and Berkshire Hathaway Energy Company. Prairie Wind owns a 108-mile, 345 kV double-circuit transmission line that is now being used to provide transmission service in the Southwest Power Pool, Inc. (SPP). Westar Energy accounts for its investment in Prairie Wind under the equity method. Westar Energy and KGE conduct business in their respective service territories using the name Westar Energy. KCP&L and GMO conduct business in their respective service territories using the name KCP&L. Collectively, the Evergy Companies have approximately 12,300 MWs of owned generating capacity 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 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, Westar Energy, 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 Westar Energy, with Westar Energy surviving the merger. These merger transactions resulted in Evergy becoming the parent entity of Westar Energy and the direct subsidiaries of Great Plains Energy, including KCP&L and GMO. See Note 2 for additional information regarding the merger. Principles of Consolidation Westar Energy 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 Westar Energy for the three months ended and year to date September 30, 2017 and the financial position of Westar Energy as of December 31, 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. KCP&L and Westar Energy will continue to maintain their current reporting requirements as Securities and Exchange Commission (SEC) registrants. KCP&L has 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 KCP&L, as well as those related to the acquired assets and liabilities of Great Plains Energy and its other direct subsidiaries, are reflected at consolidated Evergy. Each of Evergy's, Westar Energy's and KCP&L'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). In preparing financial statements that conform to generally accepted accounting principles (GAAP), management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. These unaudited consolidated financial statements have been prepared in accordance with GAAP for the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. Because the unaudited consolidated financial statements and notes do not include all of the information and notes required by GAAP for annual financial statements, the unaudited consolidated financial statements and other information included in this quarterly report should be read in conjunction with the Westar Energy First Quarter 2018 Quarterly Report on Form 10-Q, the Great Plains Energy and KCP&L combined First Quarter 2018 Quarterly Report on Form 10-Q, the Westar Energy 2017 Form 10-K and the Great Plains Energy and KCP&L combined 2017 Form 10-K. Certain changes in classification and corresponding reclassification of prior period data were made in Evergy's, Westar Energy's and KCP&L's unaudited consolidated balance sheets, statements of income and comprehensive income and unaudited statements of cash flows for comparative purposes. Evergy reflects the classifications of Westar Energy as the accounting acquirer in the merger. These reclassifications did not affect Evergy's, Westar Energy's or KCP&L's net income or Evergy's, Westar Energy's or KCP&L's cash flows from operations, investing or financing. Most significantly for Westar Energy's consolidated balance sheets as of December 31, 2017 was the reclassification of $50.2 million from accrued employee benefits (currently reported as pension and post-retirement liability) to other long-term liabilities. Most significantly for KCP&L's consolidated balance sheets, current regulatory assets and liabilities have been presented separately from the non-current portions in each respective consolidated balance sheet where recovery or refund is expected within the next 12 months. The table below summarizes KCP&L's reclassifications related to operating and investing activities for its consolidated statement of cash flows for year to date September 30, 2017.
(a)Previously reported within Note 3 to the consolidated financial statements of the Great Plains Energy and KCP&L combined Third Quarter 2017 Quarterly Report on Form 10-Q. Fuel Inventory and Supplies The Evergy Companies record fuel inventory and supplies at average cost. The balances for fuel inventory and supplies are stated separately in the table below.
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. Property, Plant and Equipment The following tables summarize the property, plant and equipment of Evergy, Westar Energy and KCP&L.
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. (b) As of September 30, 2018, represents the planned retirement of GMO's Sibley No. 3 Unit and Westar Energy analog meters prior to the end of their remaining useful lives. As of December 31, 2017, represents the planned retirement of Westar Energy analog meters prior to the end of their remaining useful lives. Earnings Per Share Evergy has participating securities in the form of unvested restricted share units (RSUs) with nonforfeitable rights to dividend equivalents that receive dividends on an equal basis with dividends declared on common stock. As a result, Evergy applies the two-class method of computing basic and diluted earnings per share (EPS). To compute basic EPS, Evergy divides the earnings allocated to common stock by the weighted average number of common shares outstanding. Diluted EPS includes the effect of issuable common shares resulting from RSUs with forfeitable rights to dividend equivalents, 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.
There were no anti-dilutive securities excluded from the computation of diluted EPS for the three months ended and year to date September 30, 2018 and 2017. Dividends Declared In November 2018, Evergy's Board of Directors (Evergy Board) declared a quarterly dividend of $0.475 per share on Evergy's common stock. The common dividend is payable December 20, 2018, to shareholders of record as of November 29, 2018. In November 2018, Westar Energy's Board of Directors declared a cash dividend payable to Evergy of $70.0 million, payable on December 19, 2018. Supplemental Cash Flow Information
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. 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. New Accounting Standards Intangibles - Internal-Use Software In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for recording implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. An entity in a hosting arrangement that is a service contract will need to determine which project stage (that is, preliminary project stage, application development stage or post-implementation stage) an implementation activity relates. Costs for implementation activities in the application development stage are recorded as a prepaid asset depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are incurred. Costs that are recorded to a prepaid asset are to be expensed over the term of the hosting arrangement. The new guidance is effective for annual periods beginning after December 15, 2019 and interim periods within those fiscal years. The new guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted. The Evergy Companies are currently evaluating the new guidance including the timing of adoption. Compensation - Retirement Benefits In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits, which requires an employer to disaggregate the service cost component from the other components of net benefit cost. The service cost component is to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The non-service cost components are to be reported separately from service costs and outside of a subtotal of income from operations. The amendments in this update allow only the service cost component to be eligible for capitalization as part of utility plant. The non-service cost components that are no longer eligible for capitalization as part of utility plant will be recorded as a regulatory asset. The new guidance is to be applied retrospectively for the presentation of service cost and non-service cost components in the income statement and prospectively for the capitalization of the service cost component and is effective for interim and annual periods beginning after December 15, 2017. The Evergy Companies adopted ASU No. 2017-07 on January 1, 2018, and accordingly have retrospectively adjusted prior periods. The Evergy Companies utilized the practical expedient that allows for the use of amounts disclosed in Note 7 for applying the retrospective presentation to the 2017 consolidated statements of income and comprehensive income. The following table reflects the retrospective adjustments in the line items of the Evergy Companies' consolidated statements of income and comprehensive income associated with the adoption of ASU No. 2017-07.
(a) KCP&L amounts are not included in consolidated Evergy for the three months ended and year to date September 30, 2017. (b) Certain Evergy, Westar Energy, and KCP&L as previously reported amounts have been adjusted to reflect reclassification adjustments made for comparative purposes as discussed further in Principles of Consolidation above and that have no impact on net income. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Among other clarifications, the guidance requires that cash proceeds received from the settlement of corporate-owned life insurance (COLI) policies be classified as cash inflows from investing activities and that cash payments for premiums on COLI policies may be classified as cash outflows for investing activities, operating activities or a combination of both. Retrospective application is required. The Evergy Companies adopted the guidance effective January 1, 2018, which resulted in retrospective reclassification of cash proceeds of $1.9 million from the settlement of COLI policies from cash inflows from operating activities to cash inflows from investing activities for year to date September 30, 2017, for Evergy and Westar Energy. In addition, cash payments of $2.3 million for premiums on COLI policies were reclassified from cash outflows used in operating activities to cash outflows used in investing activities for the same period for Evergy and Westar Energy. The adoption of ASU No. 2016-15 did not have a material impact on KCP&L. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash, which requires that the statement of cash flows explains the change for the period of restricted cash and restricted cash equivalents along with cash and cash equivalents. The guidance requires a retrospective transition method and is effective for fiscal years beginning after December 15, 2017. The Evergy Companies adopted the guidance effective January 1, 2018. As a result, Evergy and Westar Energy adjusted amounts previously reported for cash and cash equivalents to include restricted cash which resulted in an increase to beginning and ending cash, cash equivalents and restricted cash of $0.1 million for year to date September 30, 2017. The adoption of ASU No. 2016-18 did not have a material impact on KCP&L. 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. The new guidance is 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 plan to adopt the new guidance on January 1, 2019, without adjusting comparative periods. In 2016, management began evaluating current leases to assess the initial impact on Evergy's consolidated financial results. The Evergy Companies continue to evaluate the guidance and disclosure requirements and believe application of the guidance will result in an increase to the assets and liabilities on their consolidated balance sheets, with minimal impact to their consolidated statements of income and comprehensive income. In addition, management is evaluating the Evergy Companies' internal controls over financial reporting as needed to ensure that they remain effective after implementation. The standard permits an entity to elect a practical expedient for existing or expired contracts to forgo reassessing leases to determine whether each is in scope of the new standard and to forgo reassessing lease classification. The Evergy Companies expect to elect this practical expedient upon implementation. In July 2018, the FASB issued ASU No. 2018-11, which provides entities an optional transition method to apply ASU No. 2016-02 as of the date of initial application of the standard rather than as of the earliest period presented. The Evergy Companies are evaluating this update and have not yet determined if they will elect to use this optional transition method. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which generally requires equity investments to be measured at fair value with changes in fair value recognized in net income. Under the new standard, equity securities are no longer to be classified as available-for-sale or trading securities. The guidance requires a modified retrospective transition method. This guidance is effective for fiscal years beginning after December 15, 2017; accordingly, the Evergy Companies adopted the new standard on January 1, 2018, without a material impact on their consolidated financial statements. 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. In August 2015, the FASB issued ASU No. 2015-14, deferring the effective date of ASU No. 2014-09 one year, from January 1, 2017, to January 1, 2018. 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 (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. The impact to both operating revenues and taxes other than income taxes on KCP&L's statements of comprehensive income in 2018 as a result of adopting ASC 606 was a decrease of $22.1 million and $59.7 million for the three months ended and year to date September 30, 2018, respectively. This impact was related to sales taxes and franchise fees collected from KCP&L's Missouri customers, which prior to ASC 606, were recorded gross on KCP&L's statements of comprehensive income. See Note 3 for more information on revenue from contracts with customers. |
Merger of Great Plains Energy and Westar Energy |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger of Great Plains Energy and Westar Energy | 2. MERGER OF GREAT PLAINS ENERGY AND WESTAR ENERGY 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 Westar Energy, with Westar Energy surviving the merger. Following the completion of these mergers, Westar Energy and the direct subsidiaries of Great Plains Energy, including KCP&L and GMO, 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 Westar Energy. 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 Westar Energy common stock was converted into 1 share of Evergy common stock. As provided in the Amended Merger Agreement, substantially all of Westar Energy'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 State Corporation Commission of the State of Kansas (KCC) approved Great Plains Energy's, KCP&L's and Westar Energy's joint application for approval of the merger, including a settlement agreement that had been reached between Great Plains Energy, KCP&L, Westar Energy, KCC staff and certain other intervenors in the case. Through the joint application and settlement agreement, Great Plains Energy, KCP&L and Westar Energy agreed to the conditions and obligations listed below, in addition to other organizational, financing, customer service and civic responsibility commitments.
MPSC In May 2018, the Public Service Commission of the State of Missouri (MPSC) approved Great Plains Energy's, KCP&L's, GMO's and Westar Energy'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, KCP&L, GMO and Westar Energy agreed to the conditions and obligations listed below, in addition to other organizational, financing, customer service and civic responsibility commitments.
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 year to date September 30, 2018.
Reductions of revenue and expenses related to customer bill credits, 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. 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 Westar Energy 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, Westar Energy, KCP&L and GMO 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, Westar Energy 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 Westar Energy on June 4, 2018 and is calculated as follows.
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 fair values of Great Plains Energy's assets acquired and liabilities assumed utilized for the purchase price allocation are preliminary to the extent that additional information is obtained about facts and circumstances that existed as of the acquisition date. The significant assets and liabilities for which preliminary valuation amounts are reflected as of the filing of this combined Form 10-Q include the fair value of acquired 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 are subject to the rate-setting authority of the MPSC, KCC and The Federal Energy Regulatory Commission (FERC) and are 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 provide 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 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 approximate their carrying values and the assets and liabilities do 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 was recognized as goodwill as of the merger date. The preliminary purchase price allocation to Great Plains Energy's assets and liabilities as of June 4, 2018 is detailed in the following table.
Impact of Merger The impact of Great Plains Energy's subsidiaries on Evergy's revenues in the consolidated statements of income for the three months ended and year to date September 30, 2018 was an increase of $817.6 million and $1,060.2 million, respectively. The impact of Great Plains Energy's subsidiaries on Evergy's net income attributable to Evergy in the consolidated statements of income for the three months ended and year to date September 30, 2018 was an increase of $178.8 million and $239.0 million, respectively. Evergy has incurred total merger-related costs, including reductions of revenue for customer bill credits, of $10.3 million and $134.3 million for the three months ended and year to date September 30, 2018, respectively, and $7.9 million and $8.9 million for the three months ended and year to date September 30, 2017, respectively. 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.
Evergy, Westar Energy and Great Plains Energy incurred non-recurring costs directly related to the merger that have been excluded in the pro forma earnings presented above. After-tax non-recurring merger-related costs incurred by Evergy, Westar Energy and Great Plains Energy were $5.2 million and $73.4 million for the three months ended and year to date September 30, 2018, respectively, and $6.0 million and $9.4 million for the three months ended and year to date September 30, 2017, respectively. |
Revenue |
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Revenue | 3. REVENUE Evergy's, Westar Energy's and KCP&L's revenues disaggregated by customer class are summarized in the following tables.
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. 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, Westar Energy and KCP&L. Prior to the adoption of ASC 606, KCP&L recorded sales taxes and franchise fees collected from its Missouri customers gross on KCP&L's statements of comprehensive income within operating revenues and taxes other than income taxes. 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. With regards to the SPP Integrated Marketplace, wholesale sales are billed weekly based on the fixed transaction price determined by the market at the time of the sale and the MWh quantity purchased. With regards to bilateral contracts, wholesale sales 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, which the Evergy Companies allow the SPP to access and operate on their behalf and the behalf of other SPP participants. 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. Westar Energy's transmission revenues from SPP include amounts that Westar Energy pays to the SPP on behalf of its retail electric customers for the use of Westar Energy's legacy transmission facilities. These transmission revenues are mostly offset by SPP network transmission cost expense that Westar Energy pays on behalf of its retail customers. KCP&L and GMO do not pay the SPP for their retail customers’ use of the KCP&L and GMO 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 GMO'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, Westar Energy and KCP&L 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. |
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Receivables | 4. RECEIVABLES The Evergy Companies' receivables are detailed in the following table.
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. Evergy's, Westar Energy's and KCP&L's other receivables at September 30, 2018 and December 31, 2017 consisted primarily of receivables from partners in jointly-owned electric utility plants and wholesale sales receivables. As of September 30, 2018, other receivables for Evergy, Westar Energy and KCP&L included receivables from contracts with customers of $57.7 million, $52.8 million and $1.0 million, respectively. The Evergy Companies recorded bad debt expense related to contracts with customers as summarized in the following table.
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. Sale of Accounts Receivable – KCP&L and GMO KCP&L and GMO sell all of their retail electric accounts receivable to their wholly-owned subsidiaries, KCP&L Receivables Company and GMO Receivables Company, respectively, which in turn sell an undivided percentage ownership interest in the accounts receivable to Victory Receivables Corporation, an independent outside investor. Each of KCP&L Receivables Company's and GMO Receivables Company's sale of the undivided percentage ownership interest in accounts receivable to Victory Receivables Corporation is accounted for as a secured borrowing with accounts receivable pledged as collateral and a corresponding short-term collateralized note payable recognized on the balance sheets. At September 30, 2018, Evergy's accounts receivable pledged as collateral and the corresponding short-term collateralized note payable were $195.0 million. At September 30, 2018 and December 31, 2017, KCP&L's accounts receivable pledged as collateral and the corresponding short-term collateralized note payable were $130.0 million. KCP&L's receivable sale facility expires in September 2019 and allows for $130.0 million in aggregate outstanding principal amount of borrowings at any time. GMO's receivable sale facility expires in September 2019 and 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 mid-November. |
Rate Matters and Regulation |
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Regulated Operations [Abstract] | |
Rate Matters and Regulation | 5. RATE MATTERS AND REGULATION KCC Proceedings Westar Energy 2018 Transmission Delivery Charge In March 2018, the KCC issued an order adjusting Westar Energy's retail prices to include updated transmission costs as reflected in the FERC transmission formula rate (TFR). The new prices were effective in April 2018 and are expected to increase Westar Energy's annual retail revenues by $31.5 million. In August 2018, Westar Energy filed an updated Transmission Delivery Charge (TDC) tariff with the KCC to reflect the reduction in revenue requirement that occurred as a result of the Tax Cuts and Jobs Act. The updated filing requested new prices decreasing Westar Energy's annual retail revenues by approximately $20 million. In October 2018, the KCC issued an order approving the request with the new prices effective October 30, 2018. Westar Energy 2018 Rate Case Proceedings In February 2018, Westar Energy filed an application with the KCC to request a two-step change in rates, a decrease to retail revenues of approximately $2 million in September 2018 followed by an increase in retail revenues of approximately $54 million in February 2019, with a return on equity of 9.85% and a rate-making equity ratio of 51.6%. The request reflects costs associated with the completion of the Western Plains Wind Farm, the expiration of wholesale contracts currently reflected in retail prices as offsets to retail cost of service, the expiration of production tax credits from prior wind investments and an updated depreciation study, partially offset by the impact of the Tax Cuts and Jobs Act and a portion of the savings from the merger with Great Plains Energy. In June 2018, Westar Energy, the KCC staff and several other intervenors in the case reached a non-unanimous stipulation and agreement to settle all outstanding issues in the case. The stipulation and agreement provides for a decrease to retail revenues of $66.0 million, before rebasing property tax expense, with a return on equity of 9.3%, a rate-making equity ratio of 51.46% and does not include a second step revenue requirement change as included in Westar Energy's initial application. The stipulation and agreement also provides for an approximately $16 million increase associated with rebasing property tax expense, an approximately $46 million increase in depreciation expense, allows for the recovery of an approximately $41 million wholesale contract that expires in 2019 through Westar Energy's fuel recovery mechanism and reflects customer benefits related to the impacts of the Tax Cuts and Jobs Act, including a one-time bill credit of approximately $50 million to be provided to customers following the conclusion of the rate case. In September 2018, the KCC issued an order approving the non-unanimous stipulation and agreement. The rates established by the order took effect on September 27, 2018. KCP&L 2018 Rate Case Proceedings In May 2018, KCP&L filed an application with the KCC to request an increase to its retail revenues of $26.2 million before rebasing property tax expense, with a return on equity of 9.85% and a rate-making equity ratio of 49.8%. The request reflects the impact of the Tax Cuts and Jobs Act and increases in infrastructure investment costs. KCP&L also requested an additional $6.7 million increase associated with rebasing property tax expense. In October 2018, KCP&L, the KCC staff and other intervenors reached a unanimous settlement agreement to settle all outstanding issues in the case. The settlement agreement provides for a decrease to retail revenues of $10.7 million before rebasing property tax expense, with a return on equity of 9.3%, a rate-making equity ratio of 49.09% and a one-time bill credit of $36.9 million for customer benefits related to the impacts of the Tax Cuts and Jobs Act. The unanimous settlement agreement is subject to the approval of the KCC. The new rates are expected to go into effect in December 2018. MPSC Proceedings KCP&L 2018 Rate Case Proceedings In January 2018, KCP&L filed an application with the MPSC to request an increase to its retail revenues of $8.9 million before rebasing fuel and purchased power expense, with a return on equity of 9.85% and a rate-making equity ratio of 50.03%. The request reflects the impact of the Tax Cuts and Jobs Act and increases in infrastructure investment costs, transmission related costs and property tax costs. KCP&L also requested an additional $7.5 million increase associated with rebasing fuel and purchased power expense. In September 2018, KCP&L, MPSC staff and other intervenors in the case reached several non-unanimous stipulations and agreements to settle all outstanding issues in the case. The stipulations and agreements provide for a decrease to retail revenues of $21.1 million and a one-time customer benefit of $38.7 million related to the impact of the Tax Cuts and Jobs Act, which will be offset against existing KCP&L regulatory assets. The final amount of the one-time customer benefit related to the impact of the Tax Cuts and Jobs Act is dependent on the effective date of new rates. In October 2018, the MPSC issued an order approving the non-unanimous stipulations and agreements. The rates established by the order are expected to take effect no later than December 2018. GMO 2018 Rate Case Proceedings In January 2018, GMO filed an application with the MPSC to request a decrease to its retail revenues of $2.4 million before rebasing fuel and purchased power expense, with a return on equity of 9.85% and a rate-making equity ratio of 54.4%. The request reflects the impact of the Tax Cuts and Jobs Act and increases in infrastructure investment costs and transmission related costs. GMO also requested a $21.7 million increase associated with rebasing fuel and purchased power expense. In September 2018, GMO, MPSC staff and other intervenors in the case reached several non-unanimous stipulations and agreements to settle all outstanding issues in the case. The stipulations and agreements provide for a decrease to retail revenues of $24.0 million and a one-time bill credit of $29.3 million for customer benefits related to the impacts of the Tax Cuts and Jobs Act. The final amount of the one-time customer bill credit related to the impact of the Tax Cuts and Jobs Act is dependent on the effective date of new rates. In October 2018, the MPSC issued an order approving the non-unanimous stipulations and agreements. The rates established by the order are expected to take effect no later than December 2018. FERC Proceedings Westar Energy's TFR, effective in January 2018, includes projected 2018 transmission capital expenditures and operating costs and was expected to increase annual transmission revenues by $25.5 million. Due to the passage of the Tax Cuts and Jobs Act, Westar Energy requested permission from FERC to retroactively reflect the reduction in the federal corporate income tax rate in its 2018 prices. In April 2018, FERC granted the request and Westar Energy has recorded a regulatory liability as of September 30, 2018 of $5.9 million related to this request. It is estimated the revised TFR will increase 2018 revenues by $2.3 million when compared to 2017. Westar Energy's TFR, effective in January 2019, includes projected 2019 transmission capital expenditures and operating costs and is expected to decrease annual transmission revenues by $11.2 million when compared to 2018. |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | 6. ASSET RETIREMENT OBLIGATIONS 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, Westar Energy and KCP&L record the current portion of AROs within other current liabilities on their consolidated balance sheets. Westar Energy, KCP&L and GMO have AROs related to asbestos abatement and the closure and post-closure care of ponds and landfills containing coal combustion residuals (CCRs). In addition, Westar Energy and KCP&L have AROs related to decommissioning Wolf Creek Generating Station (Wolf Creek) and the retirement of wind generation facilities. Certain of the Evergy Companies' generating stations or other facilities may contain asbestos due to the age of the facilities, but no confirmation or measurement of the total amount of asbestos could be determined as of September 30, 2018. Due to the inability to reasonably estimate the quantities or the amount of disturbance that will be necessary during dismantlement at the end of the life of a plant or facility, the fair value of this ARO cannot be reasonably estimated at this time. Management will continue to monitor the obligation and will recognize a liability in the period in which sufficient information becomes available to reasonably estimate its fair value. The following table summarizes the change in the Evergy Companies' AROs for the periods ending September 30, 2018 and December 31, 2017.
(a) KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. See Note 2 for more information regarding KCP&L's and GMO's ARO liabilities that Evergy assumed as a result of the merger. In June 2018, Evergy and Westar Energy recorded a $127.0 million revision in estimate primarily related to Westar Energy's ARO to decommission its 47% ownership share of Wolf Creek. |
Pension Plans and Other Employee Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans and Other Employee Benefits | 7. PENSION PLANS AND OTHER EMPLOYEE BENEFITS Evergy and certain of its subsidiaries maintain, and Westar Energy and KCP&L participate in, qualified non-contributory defined benefit pension plans covering the majority of Westar Energy's and KCP&L's employees as well as certain non-qualified plans covering certain active and retired officers. Evergy is also responsible for its 94% share of Wolf Creek Nuclear Operating Corporation (WCNOC) defined benefit plans, consisting of Westar Energy's and KCP&L's respective 47% 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 Westar Energy'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. For the plans covering KCP&L'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 Westar Energy and KCP&L and their respective shares of WCNOC'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. The following tables provide the components of net periodic benefit costs prior to the effects of capitalization and sharing with joint owners of power plants.
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018.
(a) KCP&L amounts are not included in consolidated Evergy for year to date September 30, 2017. The components of net periodic benefit costs other than the service cost component are included in other expense on the Evergy Companies' consolidated statements of income and comprehensive income. Year to date September 30, 2018, Evergy, Westar Energy and KCP&L made pension contributions of $53.1 million, $43.1 million and $23.7 million, respectively. Evergy's year to date September 30, 2018 pension contributions consist of Westar Energy's year to date September 30, 2018 contributions and KCP&L's contributions made following the closing of the merger in June 2018. Evergy expects to make additional pension contributions of $66.3 million in 2018 to satisfy the Employee Retirement Income Security Act of 1974, as amended (ERISA) funding requirements and KCC and MPSC rate orders, of which $4.9 million is expected to be paid by Westar Energy and $61.4 million is expected to be paid by KCP&L. Also in 2018, Evergy and KCP&L expect to make contributions of $4.6 million to the post-retirement benefit plans. |
Equity Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Compensation | 8. EQUITY COMPENSATION Upon the consummation of the merger, Evergy assumed both Westar Energy'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 Westar Energy'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 issued prior to the closing of the merger to certain officers and employees of Westar Energy. The vesting of these shares resulted in the recognition of $14.6 million of compensation expense in Evergy's and Westar Energy's consolidated statements of income for year to date September 30, 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 (expense) benefit.
(a) KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. Performance Shares 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 either Great Plains Energy's performance prior to the closing of the merger transaction or Evergy's performance based on the stated performance period of the awards. 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. The fair value of the converted Great Plains Energy performance share awards was estimated using the market value of Westar Energy's and Great Plains Energy's common 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 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 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 by Westar Energy, as Evergy's stock price assumes Westar Energy's stock price on a forward basis, and the grant date stock price on the valuation date. For the Great Plains Energy performance shares converted into Evergy awards upon the closing of the merger, inputs for expected volatility, dividend yield, and risk-free rates were 16.6% - 18.5% , 2.96% and 1.8% - 2.6%, respectively. Evergy and Westar Energy did not have any performance share awards issued and outstanding prior to the close of the merger. Performance share activity for year to date September 30, 2018 is summarized in the following table.
* weighted-average At September 30, 2018, the remaining weighted-average contractual term was 1.3 years. There were no shares granted for the three months ended September 30, 2018 and 2017, respectively. The weighted-average grant-date fair value of shares granted was $63.79 year to date September 30, 2018. At September 30, 2018, there was $10.6 million of total unrecognized compensation expense, net of forfeiture rates, related to converted Great Plains Energy performance shares granted under its Amended Long-Term Incentive Plan, which will be recognized over the remaining weighted-average contractual term. Restricted Stock 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. Evergy and Westar Energy did not have any restricted stock awards issued and outstanding prior to the close of the merger. Restricted stock activity for year to date September 30, 2018 is summarized in the following table.
* weighted-average At September 30, 2018, the remaining weighted-average contractual term was 1.4 years. There were no shares granted for the three months ended September 30, 2018 and 2017, respectively. The weighted-average grant-date fair value of shares granted was $54.05 year to date September 30, 2018. At September 30, 2018, there was $3.1 million of total unrecognized compensation expense, net of forfeiture rates, related to converted Great Plains Energy restricted stock granted under its Amended Long-Term Incentive Plan, which will be recognized over the remaining weighted-average contractual term. The total fair value of shares vested was $0.2 million for the three months ended and year to date September 30, 2018. Restricted Share Units Evergy and Westar Energy have historically used RSUs for their stock-based compensation awards. 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 have either taken the form of RSUs with only service requirements that vest solely upon the passage of time or RSUs with performance measures that vest upon expiration of the award term. All issued and outstanding Evergy and Westar Energy RSU awards with performance measures vested in connection with the closing of the merger transaction in June 2018. 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 dividends equivalents are recorded directly to retained earnings. RSU activity for awards with only service requirements for year to date September 30, 2018 is summarized in the following table.
* weighted-average At September 30, 2018, the remaining weighted-average contractual term related to RSU awards with only service requirements was 1.7 years. There were no RSUs granted for the three months ended September 30, 2018 and 2017, respectively. The weighted-average grant-date fair value of RSUs granted with only service requirements was $52.16 and $53.25 year to date September 30, 2018, and 2017, respectively. At September 30, 2018, there was $9.5 million of unrecognized compensation expense related to unvested RSUs. There were no RSUs with only service requirements that vested for the three months ended September 30, 2018. The total fair value of RSUs with only service requirements that vested year to date September 30, 2018 was $16.0 million. The total fair value of RSUs with only service requirements that vested for the three months ended and year to date September 30, 2017 was $0.2 million and $3.8 million, respectively. |
Short-term Borrowings and Short-term Bank Lines of Credit |
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Short-term Borrowings and Short-term Bank Lines of Credit [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term Borrowings and Short-term Bank Lines of Credit | 9. SHORT-TERM BORROWINGS AND SHORT-TERM BANK LINES OF CREDIT In September 2018, Evergy entered into a $2.5 billion master credit facility which expires in 2023. Evergy, Westar Energy, KCP&L and GMO 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 under the facility. Under the terms of this facility, each of Evergy, Westar Energy, KCP&L and GMO 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 September 30, 2018, Evergy, Westar Energy, KCP&L and GMO were in compliance with this covenant. In connection with the entry into the master credit facility, each of Evergy (as successor to Great Plains Energy), Westar Energy, KCP&L and GMO terminated its existing credit facilities in September 2018. The following table summarizes the committed credit facilities (excluding receivable sale facilities) available to the Evergy Companies as of September 30, 2018 and December 31, 2017.
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. (b) $20.7 million of Westar Energy's $730.0 million and $270.0 million revolving credit facilities expired in September 2017. |
Long-Term Debt |
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Long-Term Debt | 10. LONG-TERM DEBT As of September 30, 2018, Evergy's outstanding long-term debt, including current maturities, includes $3,659.7 million related to KCP&L, GMO and the assumed long-term debt of Great Plains Energy discussed further below. This amount also includes $153.0 million of fair value adjustments recorded in connection with purchase accounting for the merger transaction, which are not part of future principal payments and will amortize over the remaining life of the associated debt instruments. See Note 2 for more information regarding the merger transaction. The series of long-term debt obligations originally issued by Great Plains Energy and assumed by Evergy, Inc. as part of the merger transaction were:
KCP&L Senior Notes In March 2018, KCP&L issued, at a discount, $300.0 million of 4.20% unsecured Senior Notes, maturing in 2048. KCP&L also repaid its $350.0 million of 6.375% unsecured Senior Notes at maturity in March 2018. KCP&L EIRR Bond Remarketing In July 2018, KCP&L remarketed its unsecured Series 2008 Environmental Improvement Revenue Refunding (EIRR) bonds maturing in 2038 totaling $23.4 million at a fixed rate of 2.75% through June 30, 2022. GMO Senior Notes As a result of the consummation of the merger transaction, a change in control provision in GMO's Series A, B and C Senior Notes was triggered that allowed holders a one-time option to elect for early repayment of their notes at par value, plus accrued interest. Several holders of GMO's Series A and B Senior Notes elected this option and in July 2018, GMO redeemed $89.0 million of its Series A Senior Notes and $15.0 million of its Series B Senior Notes. |
Fair Value Measurements |
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Fair Value Measurements | 11. FAIR VALUE MEASUREMENTS 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 net asset value (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 include 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 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. 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.
(a) Includes current maturities. (b) Book value as of September 30, 2018 includes $153.0 million of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy and Westar Energy merger, which are not part of future principal payments and will amortize over the remaining life of the associated debt instrument. See Note 2 for more information regarding the merger transaction. (c) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. 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.
Certain Evergy and Westar Energy 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 Westar Energy investments.
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 Westar Energy. 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 Westar Energy's rabbi trust in the consolidated statements of income. The following table summarizes the net unrealized gains (losses) for the Evergy Companies' nuclear decommissioning trusts and rabbi trusts.
(a) KCP&L amounts are only included in consolidated Evergy from the date of the merger, June 4, 2018 through September 30, 2018. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. COMMITMENTS AND CONTINGENCIES Contractual Commitments For information regarding long-term contractual commitments, including fuel and purchased power commitments, see Note 14 of the Westar Energy 2017 Form 10-K and Note 15 of the Great Plains Energy and KCP&L combined 2017 Form 10-K. Environmental Matters Set forth below are descriptions of contingencies related to environmental matters that may impact the Evergy Companies 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. 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 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). Starting with the 2017 ozone season, the final rule revised the existing ozone season allowance budgets for Missouri and Oklahoma and established an ozone season budget for Kansas. In June 2018, the EPA proposed that the Cross-State Air Pollution Update Rule satisfied the "Good Neighbor" obligations for the 2008 ozone NAAQS and therefore the EPA is proposing no additional reduction in the current ozone season allowance budgets. Various states and others are challenging the Cross-State Air Pollution Update Rule in the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) but the rule remains in effect. It is not expected that this rule will have a material impact on the Evergy Companies' operations and consolidated financial results. National Ambient Air Quality Standards Under the Clean Air Act Amendments of 1990 (Clean Air Act), the EPA sets NAAQS for certain emissions known as the “criteria pollutants” considered harmful to public health and the environment, including two classes of particulate matter (PM), ozone, nitrogen dioxide (NO2) (a precursor to ozone), carbon monoxide and sulfur dioxide (SO2), which result from fossil fuel combustion. Areas meeting the NAAQS are designated attainment areas while those that do not meet the NAAQS are considered nonattainment areas. Each state must develop a plan to bring nonattainment areas into compliance with the NAAQS. NAAQS must be reviewed by the EPA at five-year intervals. In October 2015, the EPA strengthened the ozone NAAQS by lowering the standards from 75 ppb to 70 ppb. In September 2016, the Kansas Department of Health & Environment (KDHE) recommended to the EPA that they designate eight counties in the state of Kansas as in attainment with the standard, and each remaining county in Kansas as attainment/unclassifiable. Also, in September 2016, the Missouri Department of Natural Resources (MDNR) recommended to the EPA that they designate all Missouri counties in KCP&L's and GMO's service territories as attainment/unclassifiable. In November 2017, the EPA designated all counties in the State of Kansas as well as the Missouri counties in KCP&L's and GMO's service territories as attainment/unclassifiable. It is not expected that this will have a material impact on the Evergy Companies' consolidated financial results. In December 2012, the EPA strengthened an existing NAAQS for one class of PM. In December 2014, the EPA designated the entire state of Kansas and those portions of Missouri served by KCP&L and GMO as attainment/unclassifiable with the standard. It is not expected that this will have a material impact on the Evergy Companies' operations or consolidated financial results. The Evergy Companies continue to communicate with their regulatory agencies regarding these standards and evaluate what impact the revised NAAQS could have on their operations and consolidated financial results. If areas surrounding the Evergy Companies' facilities are designated in the future as nonattainment and/or it is required to install additional equipment to control emissions at facilities of the Evergy Companies, it could have a material impact on the operations and consolidated financial results of the Evergy Companies. 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 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 October 2015, the EPA published a rule establishing new source performance standards (NSPS) for GHGs that limit CO2 emissions for new, modified and reconstructed coal and natural gas fueled electric generating units to various levels per MWh depending on various characteristics of the units. Legal challenges to the GHG NSPS have been filed in the D.C. Circuit by various states and industry members. Also in October 2015, the EPA published a rule establishing guidelines for states to regulate CO2 emissions from existing power plants. The standards for existing plants are known as the Clean Power Plan (CPP). Under the CPP, interim emissions performance rates must be achieved beginning in 2022 and final emissions performance rates must be achieved by 2030. Legal challenges to the CPP were filed by groups of states and industry members, including Westar Energy, in the D.C. Circuit. The CPP was stayed by the Supreme Court in February 2016 and, accordingly, is not currently being implemented by the states. In April 2017, the EPA published in the Federal Register a notice of withdrawal of the proposed CPP federal plan, proposed model trading rules and proposed Clean Energy Incentive Program design details. Also in April 2017, the EPA published a notice in the Federal Register that it was initiating administrative reviews of the CPP and the GHG NSPS. In October 2017, the EPA issued a proposed rule to repeal the CPP. The proposed rule indicates the CPP exceeds EPA’s authority and the EPA has not determined whether they will issue a replacement rule. The EPA solicited comments on the legal interpretations contained in this rulemaking. In December 2017, the EPA issued an advance notice of proposed rulemaking to solicit feedback on specific areas of the CPP that could be changed. 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. The proposed emission guidelines are better known as the Affordable Clean Energy (ACE) Rule. The ACE Rule would establish emission guidelines for states to use in the development of plans to reduce GHG emissions from existing coal-fired EGUs. The ACE Rule is also the replacement rule for the CPP. The ACE rule proposes to determine the “best system of emission reduction” for GHG emissions from existing coal-fired EGUs as on-site, heat-rate efficiency improvements. The proposed 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 proposed emission guidelines contained in the ACE Rule, the EPA is proposing new regulations under 111(d) of the Clean Air Act to help clarify this process. In addition, the EPA is proposing revisions to the NSR program that will reduce the likelihood of triggering NSR for proposed heat-rate efficiency improvement projects at existing coal-fired EGUs. The EPA accepted comments on these three proposed regulatory changes until October 31, 2018. Due to the future uncertainty of the CPP and ACE rules, the Evergy Companies cannot determine the impact on their operations or consolidated financial results, but the cost to comply with the CPP, should it be upheld and implemented in its current or a substantially similar form, or ACE 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. This water may contain substances deemed to be pollutants. Revised rules governing such discharges from coal-fired power plants were issued in November 2015. The final 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 these requirements vary from 2018 to 2023. In April 2017, the EPA announced it is reconsidering the ELG rule and court challenges have been placed in abeyance pending the EPA's review. In September 2017, the EPA finalized a rule to postpone the compliance dates for the new, more stringent, effluent limitations and pretreatment standards for bottom ash transport water and flue gas desulfurization wastewater. These compliance dates have been postponed for two years while the EPA completes its administrative reconsideration of the ELG rule. The Evergy Companies are evaluating the final rule and related developments and cannot predict the resulting impact on their operations or consolidated financial results, but believe costs to comply could be material if the rule is implemented in its current or substantially similar form. In October 2014, the EPA's final standards for cooling 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 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. KCP&L holds a permit from MDNR covering water discharge from its Hawthorn Station. The permit authorizes KCP&L to, among other things, withdraw water from the Missouri River for cooling purposes and return the heated water to the Missouri River. KCP&L 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, KCP&L continues to operate under its current permit. Evergy and KCP&L 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 KCP&L's operations and consolidated financial results. In June 2015, the EPA along with the U.S. Army Corps of Engineers issued a final rule, effective August 2015, defining the Waters of the United States (WOTUS) for purposes of the CWA. This rulemaking has the potential to impact all programs under the CWA. Expansion of regulated waterways is possible under the rule depending on regulating authority interpretation, which could impact several permitting programs. Various states and others have filed lawsuits challenging the WOTUS rule. In February 2018, the EPA and the U.S. Army Corps of Engineers finalized a rule adding an applicability date to the 2015 rule, which makes the implementation date of the rule February 2020. In July 2017, the EPA and the U.S. Army Corps of Engineers published in the Federal Register a proposed rule that would, if implemented, reinstate the definition of WOTUS that existed prior to the June 2015 expansion of the definition. Final action on the proposed rule is expected in 2018 as it is currently at the Office of Management and Budget for inter-agency review. The Evergy Companies are currently evaluating the WOTUS rule and related developments but do not believe the rule, if upheld and implemented in its current or substantially similar form, will have a material impact on the Evergy Companies' operations or 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. Some of this ash production is recycled, principally by selling to the aggregate industry. The EPA published a rule to regulate CCRs in April 2015, which will require additional CCR handling, processing and storage equipment and closure of certain ash disposal units. The Water Infrastructure Improvements for the Nation (WIIN) Act allows states to achieve delegated authority for CCR rules from the EPA. This has the potential to impact compliance options. In July 2018, the KDHE submitted a CCR permit program application to the EPA under authority of the WIIN Act. Final action on the application by the EPA is expected to occur within one year from the application date. MDNR is working on a rule revision which will allow the state to apply for authority over the federal CCR regulation. The application is expected to be submitted to the EPA in early 2019. Similar to the process in Kansas, this would allow Missouri state regulators to gain control of the CCR program. It will take up to one year from submittal of the Missouri application for EPA to take final action and grant authority to the state. On July 30, 2018, the EPA published in the Federal Register a final rule called the Phase I CCR Remand Rule in order to modify portions of the 2015 rulemaking. The Phase I rule provides a timeline extension for unlined impoundments and landfills that must close due to groundwater impacts or location restrictions. The rule also sets risk-based limits for certain groundwater constituents where a maximum contaminant level did not previously exist. These rule modifications add flexibility when assessing compliance. On August 21, 2018, the D.C. Circuit court issued a ruling in the CCR rule litigation between the Utility Solid Waste Activities Group, the EPA and environmental organizations. Portions of the rule were vacated and were remanded back to EPA for potential modification. Potential revisions to remanded sections could force all unlined surface impoundments to close regardless of groundwater conditions. Any changes to the rule based on this court decision will require additional rulemaking from the EPA. 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, changes in interpretation of existing CCR regulations, the results of groundwater monitoring of CCR units, 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. An NRC board denied the DOE's motion to withdraw its application and the DOE appealed that decision to the full NRC. In 2011, the NRC issued an evenly split decision on the appeal and also ordered the licensing board to close out its work on the DOE's application by the end of 2011 due to a lack of funding. These agency actions prompted the states of Washington and South Carolina, and a county in South Carolina, to file a lawsuit in a federal Court of Appeals asking the court to compel the NRC to resume its license review and to issue a decision on the license application. In August 2013, the court ordered the NRC to resume its review of the DOE's application. The NRC has not yet issued its decision. 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 2025. Wolf Creek has finalized a settlement agreement through 2019 with the DOE for reimbursement of costs to construct this facility that would not have otherwise been incurred had the DOE begun accepting spent nuclear fuel. The Evergy Companies expect the majority of the remaining cost to construct the dry cask storage facility that would not have otherwise been incurred 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. |
Guarantees |
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Guarantees [Abstract] | |||||||||
Guarantees | 13. 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. The majority of these agreements guarantee the company's own future performance, so a liability for the fair value of the obligation is not recorded. In connection with the merger transaction, Evergy assumed the guarantees previously provided to GMO by Great Plains Energy. At September 30, 2018, Evergy has provided $111.3 million of credit support for GMO as follows:
Evergy has also guaranteed GMO's commercial paper program. At September 30, 2018, GMO had $140.4 million of commercial paper outstanding. |
Related Party Transactions and Relationships |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions and Relationships | 14. RELATED PARTY TRANSACTIONS AND RELATIONSHIPS In the normal course of business, Westar Energy, KCP&L and GMO engage in related party transactions with one another. A summary of these transactions and the amounts associated with them is provided below. All related party transaction amounts between Westar Energy and either KCP&L or GMO only reflect activity between June 4, 2018, the date of the merger, and September 30, 2018. Jointly-Owned Plants and Shared Services KCP&L employees manage GMO's business and operate its facilities at cost, including GMO's 18% ownership interest in KCP&L's Iatan Nos. 1 and 2. The operating expenses and capital costs billed from KCP&L to GMO were $43.4 million and $139.6 million, respectively, for the three months ended and year to date September 30, 2018. These costs totaled $49.2 million and $145.0 million, respectively, for the three months ended and year to date September 30, 2017. Westar Energy employees manage Jeffrey Energy Center and operate its facilities at cost, including GMO's 8% ownership interest in Jeffrey Energy Center. The operating expenses and capital costs billed from Westar Energy to GMO for Jeffrey Energy Center and other various business activities were $0.8 million and $4.5 million, respectively, for the three months ended and year to date September 30, 2018. KCP&L employees manage La Cygne Station and operate its facilities at cost, including Westar Energy's 50% ownership interest in La Cygne Station. KCP&L and Westar Energy 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 KCP&L to Westar Energy were $35.5 million and $50.8 million, respectively, for the three months ended and year to date September 30, 2018. The operating and capital costs billed from Westar Energy to KCP&L were $4.8 million and $10.8 million, respectively, for the three months ended and year to date September 30, 2018. Money Pool KCP&L and GMO are also authorized to participate in the Evergy money pool, an internal financing arrangement in which funds may be lent on a short-term basis to KCP&L and GMO from Evergy and between KCP&L and GMO. At September 30, 2018 and December 31, 2017, KCP&L had no outstanding receivables or payables under the money pool. The following table summarizes Westar Energy's and KCP&L's related party net receivables and payables.
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 September 30, 2018, Westar Energy and KCP&L had income taxes payable to Evergy of $4.4 million and $21.4 million, respectively. |
Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | 15. 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. In September 2018, Evergy 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. In June 2018, Evergy registered shares of its common stock with the SEC for the Great Plains Energy 401(k) Savings Plan and Westar Energy, Inc. Employees' 401(k) Savings Plan, among other compensation plans, that Evergy assumed in connection with the merger transaction. Shares issued under the plans may be either newly issued shares or shares purchased on the open market. Common Stock Repurchase Plan In July 2018, the Evergy Board authorized the repurchase of up to 60 million shares of Evergy's common stock. Although this repurchase authorization has no expiration date, Evergy expects to repurchase the 60 million shares by mid-2020. Evergy plans to utilize various methods to effectuate the share repurchase program, including but not limited to, a series of transactions that may include accelerated share repurchases, open market transactions or other means, subject to market conditions and applicable legal requirements. The repurchase program may be suspended, discontinued or resumed at any time. Year to date September 30, 2018, Evergy had total repurchases of common stock of approximately $486 million and had repurchased 6.9 million shares under the repurchase program, which included shares repurchased under accelerated share repurchase (ASR) agreements which had not reached final settlement as of September 30, 2018, and are discussed further below. Evergy retires repurchased common stock shares in the period the shares are repurchased. In August 2018, Evergy entered into two ASR agreements with financial institutions to purchase $450.0 million of Evergy common stock. In August 2018, the financial institutions delivered to Evergy 6.3 million shares of common stock, representing a partial settlement of the contracts, based on then-current market prices and Evergy paid a total of $450.0 million. The upfront payment was recorded as a reduction to Evergy, Inc. shareholders' equity on Evergy's consolidated balance sheets and as a repurchase of common stock on Evergy's consolidated statements of cash flows. The final number of shares of Evergy common stock that Evergy may receive or be required to remit upon final settlement of the ASR agreements will be based on the average daily volume weighted-average price of Evergy common stock during the term of the ASR agreements, less a negotiated discount. Final settlement of each ASR agreement will occur by the end of November 2018 but may occur earlier at the option of the financial institutions. In October 2018, one of the ASR agreements was settled early at the option of the financial institution, which resulted in the delivery to Evergy of 848,226 additional shares of Evergy common stock at no additional cost. Evergy expects that the final settlement of the remaining ASR agreement will also result in the delivery of additional shares of common stock to Evergy at no additional cost. Evergy reflects the 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. The ASRs meet 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. Further, Evergy's master credit facility requires it to maintain a consolidated indebtedness to consolidated capitalization ratio of not more than 0.65 to 1.00 at all times. Under the Federal Power Act, Westar Energy, KCP&L and GMO generally can pay dividends only out of retained earnings. Certain conditions in the MPSC and KCC orders authorizing the merger transaction also require Westar Energy and KCP&L to maintain consolidated common equity of at least 40% of total capitalization. Other conditions in the MPSC and KCC merger orders require Westar Energy, KCP&L and GMO to maintain credit ratings of at least investment grade. If Westar Energy's, KCP&L's or GMO'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 common dividend without KCC or MPSC approval or until the impacted utility's investment grade credit rating has been restored. The master credit facility of Evergy, Westar Energy, KCP&L and GMO and the note purchase agreement for GMO's Series A, B and C 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 September 30, 2018, all of Evergy's and Westar Energy's retained earnings and net income were free of restrictions and KCP&L had a retained earnings restriction of $227.4 million. Evergy's subsidiaries had restricted net assets of approximately $5.2 billion as of September 30, 2018. These restrictions are not expected to affect the Evergy Companies' ability to pay dividends at the current level for the foreseeable future. |
Variable Interest Entities |
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Variable Interest Entities | 16. 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 Jeffrey Energy Center was a VIE until the expiration of a purchase option in July 2017. The trust holding KGE's 50% interest in La Cygne Unit 2 is a VIE and KGE 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 Jeffrey Energy Center Under an agreement that expires in January 2019, Westar Energy leases an 8% interest in Jeffrey Energy Center 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 Jeffrey Energy Center and lease it to a third party, and does not hold any other assets. Westar Energy 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, Westar Energy deconsolidated the trust in the third quarter of 2017. 50% Interest in La Cygne Unit 2 Under an agreement that expires in September 2029, KGE entered into a sale-leaseback transaction with a trust under which the trust purchased KGE's 50% interest in La Cygne Unit 2 and subsequently leased it back to KGE. 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 La Cygne Unit 2 and lease it back to KGE, and does not hold any other assets. KGE meets the requirements to be considered the primary beneficiary of the trust. In determining the primary beneficiary of the trust, KGE concluded that the activities of the trust that most significantly impact its economic performance and that KGE has the power to direct include (1) the operation and maintenance of the 50% interest in La Cygne Unit 2 and (2) KGE's ability to exercise a purchase option at the end of the agreement at the lesser of fair value or a fixed amount. KGE 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 Westar Energy'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 Westar Energy. Evergy and Westar Energy have not provided financial or other support to the VIE and are not required to provide such support. Evergy and Westar Energy did not record any gain or loss upon the initial consolidation of the VIE. |
Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | 17. TAXES Components of income tax expense are detailed in the following tables.
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.
The decrease in Evergy's state tax rate change for year to date September 30, 2018, compared to the same period in 2017, is primarily due to the revaluation of Westar Energy's state deferred income tax assets and liabilities based on the Evergy composite tax rate as a result of the merger.
The decrease in Westar Energy's state tax rate change for year to date September 30, 2018, compared to the same period in 2017, is primarily due to the revaluation of Westar Energy's state deferred income tax assets and liabilities based on the Evergy composite tax rate as a result of the merger.
The increase in KCP&L's state tax rate change for year to date September 30, 2018, compared to the same period in 2017, is primarily due to the revaluation of KCP&L's state deferred income tax assets and liabilities based on the Evergy composite tax rate as a result of the merger, partially offset by a revaluation of KCP&L's state deferred income tax assets and liabilities as a result of the enactment of Missouri state income tax reform in June 2018. 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 Tax Cuts and Jobs Act. The Tax Cuts and Jobs Act represents the first major reform in U.S. income tax law since 1986. Most notably, the Tax Cuts and Jobs Act reduces the current top corporate income tax rate from 35% to 21% beginning in 2018, repeals the corporate Alternative Minimum Tax (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,Westar Energy, KCP&L and GMO 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 Westar Energy and KCP&L, to begin recording a regulatory liability for the difference between the new corporate tax rate and amounts currently collected in rates. In May 2018 and June 2018, Westar Energy and KCP&L entered into settlement agreements with KCC staff and other intervenors in which they further agreed to begin deferring any impacts of the Tax Cuts and Jobs Act on their excess accumulated deferred income taxes to a regulatory liability. The KCC approved these settlement agreements in June 2018. KCP&L and GMO 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 was determined in each of Westar Energy's, KCP&L's and GMO's rate cases with the KCC and MPSC. See Note 5 for more information. As of September 30, 2018, Evergy, Westar Energy and KCP&L had recorded regulatory liabilities for refunds to customers related to the impacts of the Tax Cuts and Jobs Act of $155.1 million, $66.3 million and $64.6 million, respectively. 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, KCP&L revalued and restated its deferred income tax assets and liabilities as of June 1, 2018. KCP&L 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 KCP&L'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. KCP&L recognized $15.5 million of income tax benefit primarily related to the difference between KCP&L's revaluation of its deferred income tax assets and liabilities for financial reporting purposes and the amount of the revaluation pertaining to KCP&L's Missouri jurisdictional rate base. |
Organization and Basis of Presentation (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | Principles of Consolidation Westar Energy 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 Westar Energy for the three months ended and year to date September 30, 2017 and the financial position of Westar Energy as of December 31, 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. KCP&L and Westar Energy will continue to maintain their current reporting requirements as Securities and Exchange Commission (SEC) registrants. KCP&L has 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 KCP&L, as well as those related to the acquired assets and liabilities of Great Plains Energy and its other direct subsidiaries, are reflected at consolidated Evergy. Each of Evergy's, Westar Energy's and KCP&L'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). In preparing financial statements that conform to generally accepted accounting principles (GAAP), management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. These unaudited consolidated financial statements have been prepared in accordance with GAAP for the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. Because the unaudited consolidated financial statements and notes do not include all of the information and notes required by GAAP for annual financial statements, the unaudited consolidated financial statements and other information included in this quarterly report should be read in conjunction with the Westar Energy First Quarter 2018 Quarterly Report on Form 10-Q, the Great Plains Energy and KCP&L combined First Quarter 2018 Quarterly Report on Form 10-Q, the Westar Energy 2017 Form 10-K and the Great Plains Energy and KCP&L combined 2017 Form 10-K. Certain changes in classification and corresponding reclassification of prior period data were made in Evergy's, Westar Energy's and KCP&L's unaudited consolidated balance sheets, statements of income and comprehensive income and unaudited statements of cash flows for comparative purposes. Evergy reflects the classifications of Westar Energy as the accounting acquirer in the merger. These reclassifications did not affect Evergy's, Westar Energy's or KCP&L's net income or Evergy's, Westar Energy's or KCP&L's cash flows from operations, investing or financing. Most significantly for Westar Energy's consolidated balance sheets as of December 31, 2017 was the reclassification of $50.2 million from accrued employee benefits (currently reported as pension and post-retirement liability) to other long-term liabilities. Most significantly for KCP&L's consolidated balance sheets, current regulatory assets and liabilities have been presented separately from the non-current portions in each respective consolidated balance sheet where recovery or refund is expected within the next 12 months. |
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Fuel Inventory and Supplies | Fuel Inventory and Supplies The Evergy Companies record fuel inventory and supplies at average cost. |
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Earnings Per Share | Earnings Per Share Evergy has participating securities in the form of unvested restricted share units (RSUs) with nonforfeitable rights to dividend equivalents that receive dividends on an equal basis with dividends declared on common stock. As a result, Evergy applies the two-class method of computing basic and diluted earnings per share (EPS). To compute basic EPS, Evergy divides the earnings allocated to common stock by the weighted average number of common shares outstanding. Diluted EPS includes the effect of issuable common shares resulting from RSUs with forfeitable rights to dividend equivalents, performance shares and restricted stock. Evergy computes the dilutive effects of potential issuances of common shares using the treasury stock method. |
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New Accounting Standards | New Accounting Standards Intangibles - Internal-Use Software In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for recording implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. An entity in a hosting arrangement that is a service contract will need to determine which project stage (that is, preliminary project stage, application development stage or post-implementation stage) an implementation activity relates. Costs for implementation activities in the application development stage are recorded as a prepaid asset depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are incurred. Costs that are recorded to a prepaid asset are to be expensed over the term of the hosting arrangement. The new guidance is effective for annual periods beginning after December 15, 2019 and interim periods within those fiscal years. The new guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption is permitted. The Evergy Companies are currently evaluating the new guidance including the timing of adoption. Compensation - Retirement Benefits In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits, which requires an employer to disaggregate the service cost component from the other components of net benefit cost. The service cost component is to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The non-service cost components are to be reported separately from service costs and outside of a subtotal of income from operations. The amendments in this update allow only the service cost component to be eligible for capitalization as part of utility plant. The non-service cost components that are no longer eligible for capitalization as part of utility plant will be recorded as a regulatory asset. The new guidance is to be applied retrospectively for the presentation of service cost and non-service cost components in the income statement and prospectively for the capitalization of the service cost component and is effective for interim and annual periods beginning after December 15, 2017. The Evergy Companies adopted ASU No. 2017-07 on January 1, 2018, and accordingly have retrospectively adjusted prior periods. The Evergy Companies utilized the practical expedient that allows for the use of amounts disclosed in Note 7 for applying the retrospective presentation to the 2017 consolidated statements of income and comprehensive income. The following table reflects the retrospective adjustments in the line items of the Evergy Companies' consolidated statements of income and comprehensive income associated with the adoption of ASU No. 2017-07.
(a) KCP&L amounts are not included in consolidated Evergy for the three months ended and year to date September 30, 2017. (b) Certain Evergy, Westar Energy, and KCP&L as previously reported amounts have been adjusted to reflect reclassification adjustments made for comparative purposes as discussed further in Principles of Consolidation above and that have no impact on net income. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Among other clarifications, the guidance requires that cash proceeds received from the settlement of corporate-owned life insurance (COLI) policies be classified as cash inflows from investing activities and that cash payments for premiums on COLI policies may be classified as cash outflows for investing activities, operating activities or a combination of both. Retrospective application is required. The Evergy Companies adopted the guidance effective January 1, 2018, which resulted in retrospective reclassification of cash proceeds of $1.9 million from the settlement of COLI policies from cash inflows from operating activities to cash inflows from investing activities for year to date September 30, 2017, for Evergy and Westar Energy. In addition, cash payments of $2.3 million for premiums on COLI policies were reclassified from cash outflows used in operating activities to cash outflows used in investing activities for the same period for Evergy and Westar Energy. The adoption of ASU No. 2016-15 did not have a material impact on KCP&L. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash, which requires that the statement of cash flows explains the change for the period of restricted cash and restricted cash equivalents along with cash and cash equivalents. The guidance requires a retrospective transition method and is effective for fiscal years beginning after December 15, 2017. The Evergy Companies adopted the guidance effective January 1, 2018. As a result, Evergy and Westar Energy adjusted amounts previously reported for cash and cash equivalents to include restricted cash which resulted in an increase to beginning and ending cash, cash equivalents and restricted cash of $0.1 million for year to date September 30, 2017. The adoption of ASU No. 2016-18 did not have a material impact on KCP&L. 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. The new guidance is 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 plan to adopt the new guidance on January 1, 2019, without adjusting comparative periods. In 2016, management began evaluating current leases to assess the initial impact on Evergy's consolidated financial results. The Evergy Companies continue to evaluate the guidance and disclosure requirements and believe application of the guidance will result in an increase to the assets and liabilities on their consolidated balance sheets, with minimal impact to their consolidated statements of income and comprehensive income. In addition, management is evaluating the Evergy Companies' internal controls over financial reporting as needed to ensure that they remain effective after implementation. The standard permits an entity to elect a practical expedient for existing or expired contracts to forgo reassessing leases to determine whether each is in scope of the new standard and to forgo reassessing lease classification. The Evergy Companies expect to elect this practical expedient upon implementation. In July 2018, the FASB issued ASU No. 2018-11, which provides entities an optional transition method to apply ASU No. 2016-02 as of the date of initial application of the standard rather than as of the earliest period presented. The Evergy Companies are evaluating this update and have not yet determined if they will elect to use this optional transition method. Financial Instruments In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which generally requires equity investments to be measured at fair value with changes in fair value recognized in net income. Under the new standard, equity securities are no longer to be classified as available-for-sale or trading securities. The guidance requires a modified retrospective transition method. This guidance is effective for fiscal years beginning after December 15, 2017; accordingly, the Evergy Companies adopted the new standard on January 1, 2018, without a material impact on their consolidated financial statements. 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. In August 2015, the FASB issued ASU No. 2015-14, deferring the effective date of ASU No. 2014-09 one year, from January 1, 2017, to January 1, 2018. 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 (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. The impact to both operating revenues and taxes other than income taxes on KCP&L's statements of comprehensive income in 2018 as a result of adopting ASC 606 was a decrease of $22.1 million and $59.7 million for the three months ended and year to date September 30, 2018, respectively. This impact was related to sales taxes and franchise fees collected from KCP&L's Missouri customers, which prior to ASC 606, were recorded gross on KCP&L's statements of comprehensive income. See Note 3 for more information on revenue from contracts with customers. |
Organization and Basis of Presentation (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Reclassifications | The table below summarizes KCP&L's reclassifications related to operating and investing activities for its consolidated statement of cash flows for year to date September 30, 2017.
(a)Previously reported within Note 3 to the consolidated financial statements of the Great Plains Energy and KCP&L combined Third Quarter 2017 Quarterly Report on Form 10-Q. |
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Schedule of Fuel Inventory and Supplies | The balances for fuel inventory and supplies are stated separately in the table below.
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. |
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Summary of Property, Plant and Equipment | The following tables summarize the property, plant and equipment of Evergy, Westar Energy and KCP&L.
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. (b) As of September 30, 2018, represents the planned retirement of GMO's Sibley No. 3 Unit and Westar Energy analog meters prior to the end of their remaining useful lives. As of December 31, 2017, represents the planned retirement of Westar Energy analog meters prior to the end of their remaining useful lives. |
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Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles Evergy's basic and diluted EPS.
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Supplemental Cash Flow Information |
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. |
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Schedule of Retrospective Adjustments | The following table reflects the retrospective adjustments in the line items of the Evergy Companies' consolidated statements of income and comprehensive income associated with the adoption of ASU No. 2017-07.
(a) KCP&L amounts are not included in consolidated Evergy for the three months ended and year to date September 30, 2017. (b) Certain Evergy, Westar Energy, and KCP&L as previously reported amounts have been adjusted to reflect reclassification adjustments made for comparative purposes as discussed further in Principles of Consolidation above and that have no impact on net income. |
Merger of Great Plains Energy and Westar Energy (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Pre-tax Costs and Deferrals and Purchase Price Allocation | 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 year to date September 30, 2018.
The total consideration transferred in the merger is based on the closing stock price of Westar Energy on June 4, 2018 and is calculated as follows.
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Schedule of Assets Acquired and Liabilities Assumed | The preliminary purchase price allocation to Great Plains Energy's assets and liabilities as of June 4, 2018 is detailed in the following table.
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Unaudited Pro Forma Financial Information | 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.
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Revenue (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Evergy's, Westar Energy's and KCP&L's revenues disaggregated by customer class are summarized in the following tables.
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. |
Receivables (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Receivables | The Evergy Companies' receivables are detailed in the following table.
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. |
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Summary of Bad Debt Expense | The Evergy Companies recorded bad debt expense related to contracts with customers as summarized in the following table.
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. |
Asset Retirement Obligations (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Change in Asset Retirement Obligation | The following table summarizes the change in the Evergy Companies' AROs for the periods ending September 30, 2018 and December 31, 2017.
(a) KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. |
Pension Plans and Other Employee Benefits (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The following tables provide the components of net periodic benefit costs prior to the effects of capitalization and sharing with joint owners of power plants.
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018.
(a) KCP&L amounts are not included in consolidated Evergy for year to date September 30, 2017. |
Equity Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity compensation expense and associated income tax benefits | The following table summarizes the Evergy Companies' equity compensation expense and the associated income tax (expense) benefit.
(a) KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018, through September 30, 2018. |
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Performance share activity | Performance share activity for year to date September 30, 2018 is summarized in the following table.
* weighted-average |
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Restricted stock activity | Restricted stock activity for year to date September 30, 2018 is summarized in the following table.
* weighted-average |
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Restricted stock unit activity | RSU activity for awards with only service requirements for year to date September 30, 2018 is summarized in the following table.
* weighted-average |
Short-term Borrowings and Short-term Bank Lines of Credit (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-term Debt [Table Text Block] | The following table summarizes the committed credit facilities (excluding receivable sale facilities) available to the Evergy Companies as of September 30, 2018 and December 31, 2017.
(a) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. (b) $20.7 million of Westar Energy's $730.0 million and $270.0 million revolving credit facilities expired in September 2017. |
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying value and fair value of debt instruments | 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.
(a) Includes current maturities. (b) Book value as of September 30, 2018 includes $153.0 million of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy and Westar Energy merger, which are not part of future principal payments and will amortize over the remaining life of the associated debt instrument. See Note 2 for more information regarding the merger transaction. (c) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017. |
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Fair value of assets and liabilities | The following tables include the Evergy Companies' balances of financial assets and liabilities measured at fair value on a recurring basis.
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Fair value investments, entities that calculate NAV | The following table provides additional information on these Evergy and Westar Energy investments.
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Fair value recurring gain (loss) included in earnings | The following table summarizes the net unrealized gains (losses) for the Evergy Companies' nuclear decommissioning trusts and rabbi trusts.
(a) KCP&L amounts are only included in consolidated Evergy from the date of the merger, June 4, 2018 through September 30, 2018. |
Related Party Transactions and Relationships (Tables) |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party receivables and payables | The following table summarizes Westar Energy's and KCP&L's related party net receivables and payables.
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Variable Interest Entities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The following table summarizes the assets and liabilities related to the VIE described above that are recorded on Evergy's and Westar Energy's consolidated balance sheets.
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Taxes (Tables) |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | Components of income tax expense are detailed in the following tables.
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Schedule of Effective Income Tax Rate Reconciliation | 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.
The decrease in Evergy's state tax rate change for year to date September 30, 2018, compared to the same period in 2017, is primarily due to the revaluation of Westar Energy's state deferred income tax assets and liabilities based on the Evergy composite tax rate as a result of the merger.
The decrease in Westar Energy's state tax rate change for year to date September 30, 2018, compared to the same period in 2017, is primarily due to the revaluation of Westar Energy's state deferred income tax assets and liabilities based on the Evergy composite tax rate as a result of the merger.
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Organization and Basis of Presentation - Fuel Inventory and Supplies (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory [Line Items] | ||
Fuel inventory | $ 163.1 | $ 94.1 |
Supplies | 357.8 | 199.5 |
Fuel inventory and supplies | 520.9 | 293.6 |
Westar Energy Inc [Member] | ||
Inventory [Line Items] | ||
Fuel inventory | 84.9 | 94.1 |
Supplies | 183.8 | 199.5 |
Fuel inventory and supplies | 268.7 | 293.6 |
KCPL [Member] | ||
Inventory [Line Items] | ||
Fuel inventory | 54.6 | 71.0 |
Supplies | 129.2 | 126.0 |
Fuel inventory and supplies | $ 183.8 | $ 197.0 |
Organization and Basis of Presentation - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Income | ||||
Net income | $ 357.6 | $ 160.7 | $ 524.9 | $ 300.2 |
Less: Net income attributable to noncontrolling interests | 2.6 | 2.4 | 7.6 | 10.2 |
NET INCOME | 355.0 | 158.3 | 517.3 | 290.0 |
Less: net income allocated to RSUs | 0.2 | 0.3 | 0.4 | 0.5 |
Net income allocated to common stock | $ 354.8 | $ 158.0 | $ 516.9 | $ 289.5 |
Common Shares Outstanding | ||||
Weighted average equivalent common shares outstanding - basic (in shares) | 268.6 | 142.5 | 197.9 | 142.5 |
Add: effect of dilutive securities (in shares) | 0.2 | 0.0 | 0.1 | 0.0 |
Weighted average equivalent common shares outstanding - diluted (in shares) | 268.8 | 142.5 | 198.0 | 142.5 |
Basic and Diluted EPS | ||||
Basic and Diluted EPS (in dollars per share) | $ 1.32 | $ 1.11 | $ 2.61 | $ 2.03 |
Organization and Basis of Presentation - Antidilutive Securities (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | 0 | 0 |
Organization and Basis of Presentation Organization and Basis of Presentation - Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Millions |
9 Months Ended | ||
---|---|---|---|
Nov. 07, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Dividends Payable [Line Items] | |||
Dividends declared on common stock (in dollars per share) | $ 1.26 | $ 1.20 | |
Subsequent Event [Member] | |||
Dividends Payable [Line Items] | |||
Dividends declared on common stock (in dollars per share) | $ 0.475 | ||
Westar Energy Inc [Member] | |||
Dividends Payable [Line Items] | |||
Dividends declared on common stock (in dollars per share) | $ 1.20 | ||
Westar Energy Inc [Member] | Subsequent Event [Member] | |||
Dividends Payable [Line Items] | |||
Dividends Payable | $ 70.0 |
Merger of Great Plains Energy and Westar Energy - Purchase Price Allocation (Details) $ / shares in Units, $ in Millions |
Jun. 04, 2018
USD ($)
$ / shares
shares
|
---|---|
Business Acquisition [Line Items] | |
Common stock outstanding (in shares) | 215,800,074 |
Awards outstanding (in shares) | (204,825) |
Great Plains Energy shares to be converted to Evergy shares (in shares) | 215,595,249 |
Great Plains Energy [Member] | |
Business Acquisition [Line Items] | |
Exchange ratio | 0.5981 |
Number of shares issued (in shares) | 128,947,518 |
Closing price (in dollars per share) | $ / shares | $ 54.00 |
Total purchase price | $ | $ 6,975.7 |
Common Stock [Member] | Great Plains Energy [Member] | |
Business Acquisition [Line Items] | |
Fair value of shares issued | $ | 6,963.2 |
Stock Compensation Plan [Member] | Great Plains Energy [Member] | |
Business Acquisition [Line Items] | |
Fair value of shares issued | $ | $ 12.5 |
Merger of Great Plains Energy and Westar Energy - Schedule Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Jun. 04, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 2,333.5 | $ 0.0 | |
Great Plains Energy [Member] | |||
Business Acquisition [Line Items] | |||
Current assets | $ 2,151.7 | ||
Property, plant and equipment, net | 9,179.7 | ||
Goodwill | 2,333.5 | ||
Other long-term assets, excluding goodwill | 1,235.9 | ||
Total assets | 14,900.8 | ||
Current liabilities | 1,673.9 | ||
Long-term liabilities, excluding long-term debt | 2,892.6 | ||
Long-term debt, net | 3,358.6 | ||
Total liabilities | 7,925.1 | ||
Total purchase price | $ 6,975.7 |
Merger of Great Plains Energy and Westar Energy - Unaudited Pro Forma Financial Information (Details) - Great Plains Energy [Member] - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Business Acquisition [Line Items] | ||||
Operating revenues | $ 1,582.5 | $ 1,651.5 | $ 4,134.8 | $ 4,086.7 |
Net income attributable to Evergy, Inc. | $ 360.2 | $ 321.8 | $ 694.5 | $ 543.3 |
Basic earnings per common share (in dollars per share) | $ 1.34 | $ 1.19 | $ 2.56 | $ 2.00 |
Diluted earnings per common share (in dollars per share) | $ 1.34 | $ 1.19 | $ 2.55 | $ 2.00 |
Receivables - Narrative (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Other receivables, contracts with customers | $ 57.7 | |
Sale Of Accounts Receivable - KCPL and GMO | ||
Accounts receivable pledged as collateral | 195.0 | $ 0.0 |
Collateralized note payable | 195.0 | 0.0 |
Westar Energy Inc [Member] | ||
Other receivables, contracts with customers | 52.8 | |
KCPL [Member] | ||
Other receivables, contracts with customers | 1.0 | |
Sale Of Accounts Receivable - KCPL and GMO | ||
Accounts receivable pledged as collateral | 130.0 | 130.0 |
Collateralized note payable | 130.0 | $ 130.0 |
Maximum amount of outstanding principal under receivables agreement | 130.0 | |
KCPL Greater Missouri Operations [Member] | ||
Sale Of Accounts Receivable - KCPL and GMO | ||
Maximum amount of outstanding principal under receivables agreement from mid-November to mid-June | 50.0 | |
Maximum amount of outstanding principal under receivables agreement from mid-June to mid-November | $ 65.0 |
Receivables - Summary of Bad Debt Expense (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Impairment losses recognized on receivables | $ 4.5 | $ 2.0 | $ 10.6 | $ 5.4 |
Westar Energy Inc [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Impairment losses recognized on receivables | 1.1 | 2.0 | 6.2 | 5.4 |
KCPL [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Impairment losses recognized on receivables | $ 3.9 | $ 2.8 | $ 7.5 | $ 6.0 |
Guarantees (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Guarantor Obligations [Line Items] | |
Origin and purpose | 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. |
Maximum exposure | $ 111.3 |
Direct Guarantee [Member] | |
Guarantor Obligations [Line Items] | |
Origin and purpose | direct guarantees to GMO counterparties |
Maximum exposure | $ 17.0 |
Obligations term | expire in 2020 |
Guarantee of Indebtedness of Others [Member] | Long-term Debt [Member] | |
Guarantor Obligations [Line Items] | |
Origin and purpose | guarantee of GMO long-term debt |
Maximum exposure | $ 94.3 |
Obligations term | maturity dates ranging from 2019 to 2023 |
Guarantee of Indebtedness of Others [Member] | Commercial Paper [Member] | |
Guarantor Obligations [Line Items] | |
Origin and purpose | guaranteed GMO's commercial paper program |
Maximum exposure | $ 140.4 |
Income Tax Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Current income taxes | ||||
Federal | $ (30.3) | $ (16.7) | $ (21.5) | $ (14.5) |
State | 1.5 | 0.0 | 1.9 | 0.4 |
Total | (28.8) | (16.7) | (19.6) | (14.1) |
Deferred income taxes | ||||
Federal | 70.6 | 58.8 | 86.0 | 101.7 |
State | 23.3 | 14.3 | (35.7) | 27.0 |
Total | 93.9 | 73.1 | 50.3 | 128.7 |
Investment tax credit amortization | (1.0) | (0.6) | (2.4) | (2.0) |
Income tax expense | $ 64.1 | $ 55.8 | $ 28.3 | $ 112.6 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Federal statutory income tax (in hundredths) | 21.00% | 35.00% | 21.00% | 35.00% |
COLI policies | (2.40%) | (4.60%) | (2.40%) | (4.50%) |
State income taxes | 4.60% | 4.30% | 4.70% | 4.30% |
Flow through depreciation for plant-related differences | (1.50%) | 2.30% | (1.60%) | 2.80% |
Federal tax credits | (7.50%) | (7.10%) | (7.50%) | (7.00%) |
Non-controlling interest | (0.40%) | (0.50%) | (0.40%) | (0.80%) |
AFUDC Equity | (0.10%) | (0.20%) | (0.10%) | (0.20%) |
Amortization of federal investment tax credits | (0.60%) | (0.60%) | (0.60%) | (0.60%) |
State tax rate change | 0.10% | 0.00% | (9.50%) | 0.00% |
Valuation allowance | 0.00% | 0.00% | 0.40% | 0.00% |
Stock compensation | 0.00% | 0.00% | (0.50%) | (1.00%) |
Officer compensation limitation | 1.20% | 0.00% | 1.20% | 0.00% |
Other | 0.80% | (2.80%) | 0.40% | (0.70%) |
Effective income tax rate (in hundredths) | 15.20% | 25.80% | 5.10% | 27.30% |
Westar Energy Inc [Member] | ||||
Current income taxes | ||||
Federal | $ 8.0 | $ (16.7) | $ 18.9 | $ (14.5) |
State | (9.2) | 0.0 | (6.7) | 0.4 |
Total | (1.2) | (16.7) | 12.2 | (14.1) |
Deferred income taxes | ||||
Federal | 12.3 | 58.8 | 15.4 | 101.7 |
State | 12.0 | 14.3 | (47.6) | 27.0 |
Total | 24.3 | 73.1 | (32.2) | 128.7 |
Investment tax credit amortization | (0.7) | (0.6) | (2.0) | (2.0) |
Income tax expense | $ 22.4 | $ 55.8 | $ (22.0) | $ 112.6 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Federal statutory income tax (in hundredths) | 21.00% | 35.00% | 21.00% | 35.00% |
COLI policies | (4.00%) | (4.60%) | (4.00%) | (4.50%) |
State income taxes | 1.10% | 4.30% | 3.30% | 4.30% |
Flow through depreciation for plant-related differences | 1.50% | 2.30% | 0.30% | 2.80% |
Federal tax credits | (11.80%) | (7.10%) | (11.70%) | (7.00%) |
Non-controlling interest | (0.60%) | (0.50%) | (0.70%) | (0.80%) |
AFUDC Equity | (0.10%) | (0.20%) | (0.10%) | (0.20%) |
Amortization of federal investment tax credits | (0.80%) | (0.60%) | (0.80%) | (0.60%) |
Changes In Uncertain Tax Positions, Net | 0.10% | 0.00% | 0.10% | 0.00% |
State tax rate change | 0.00% | 0.00% | (17.70%) | 0.00% |
Valuation allowance | 0.00% | 0.00% | 0.60% | 0.00% |
Stock compensation | 0.00% | 0.00% | (0.90%) | (1.00%) |
Officer compensation limitation | 1.90% | 0.00% | 1.90% | 0.00% |
Other | 2.90% | (2.80%) | 1.30% | (0.70%) |
Effective income tax rate (in hundredths) | 11.20% | 25.80% | (7.40%) | 27.30% |
KCPL [Member] | ||||
Current income taxes | ||||
Federal | $ 20.7 | $ 41.8 | $ 43.5 | $ 56.2 |
State | 6.8 | 7.6 | 11.6 | 10.2 |
Total | 27.5 | 49.4 | 55.1 | 66.4 |
Deferred income taxes | ||||
Federal | (1.9) | 10.3 | (23.4) | 27.2 |
State | 2.7 | 2.8 | 49.4 | 6.2 |
Total | 0.8 | 13.1 | 26.0 | 33.4 |
Investment tax credit amortization | (0.3) | (0.3) | (0.8) | (0.8) |
Income tax expense | $ 28.0 | $ 62.2 | $ 80.3 | $ 99.0 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||||
Federal statutory income tax (in hundredths) | 21.00% | 35.00% | 21.00% | 35.00% |
COLI policies | (0.20%) | (0.30%) | (0.20%) | (0.30%) |
State income taxes | 5.00% | 3.90% | 5.10% | 3.90% |
Flow through depreciation for plant-related differences | (4.90%) | 0.10% | (4.90%) | 0.20% |
Federal tax credits | (1.90%) | (3.10%) | (1.80%) | (2.60%) |
AFUDC Equity | 0.00% | (0.70%) | (0.10%) | (0.70%) |
Amortization of federal investment tax credits | (0.40%) | (0.40%) | (0.40%) | (0.40%) |
State tax rate change | 0.00% | 0.00% | 14.50% | 0.00% |
Valuation allowance | 0.00% | 0.60% | 0.00% | 0.40% |
Stock compensation | 0.00% | 0.10% | 0.00% | 0.20% |
Officer compensation limitation | 0.70% | 0.00% | 0.50% | 0.00% |
Other | (0.40%) | 0.10% | (1.00%) | 0.10% |
Effective income tax rate (in hundredths) | 18.90% | 35.30% | 32.70% | 35.80% |
Taxes Tax Reform (Details) - USD ($) $ in Millions |
Jun. 01, 2018 |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Regulatory liabilities | $ 2,357.1 | $ 1,094.0 | |
Revenue Subject to Refund [Member] | |||
Regulatory liabilities | 155.1 | ||
Westar Energy Inc [Member] | |||
Regulatory liabilities | 1,136.9 | 1,094.0 | |
Westar Energy Inc [Member] | Revenue Subject to Refund [Member] | |||
Regulatory liabilities | 66.3 | ||
KCPL [Member] | |||
Regulatory liabilities | 862.9 | $ 770.9 | |
Decrease in net deferred income tax liabilities due to tax reform | $ 46.6 | ||
Decrease in net deferred income tax liabilities for revaluation of deferred income tax assets and liabilities in rate base | 28.8 | ||
Decrease in net deferred income tax liabilities for tax gross-up adjustment for ratemaking purposes due to tax reform | 9.9 | ||
Income tax benefit from tax reform | $ 15.5 | ||
KCPL [Member] | Revenue Subject to Refund [Member] | |||
Regulatory liabilities | $ 64.6 |
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