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Cover and table of contents
10-K 1 evrg-12312018x10k.htm 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
| 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 |
| Each of the following classes or series of securities registered pursuant to Section 12(b) of the Act is registered on the New York Stock Exchange: | ||||||
| Registrant | Title of each class | |||||
| Evergy, Inc. | Common Stock, without par value | |||||
| Securities registered pursuant to Section 12(g) of the Act: Westar Energy, Inc. Common Stock $0.01 par value and Kansas City Power & Light Company Common Stock without par value. | ||||||
| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | ||||||||||||||||||||
| Evergy, Inc. | Yes | x | No | o | ||||||||||||||||
| Westar Energy, Inc. | Yes | o | No | x | ||||||||||||||||
| Kansas City Power & Light Company | Yes | o | No | x | ||||||||||||||||
| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. | ||||||||||||||||||||
| Evergy, Inc. | Yes | o | No | x | ||||||||||||||||
| Westar Energy, Inc. | Yes | o | No | x | ||||||||||||||||
| Kansas City Power & Light Company | Yes | o | No | x | ||||||||||||||||
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | ||||||||||||||||||||
| Evergy, Inc. | Yes | x | No | o | ||||||||||||||||
| Westar Energy, Inc. | Yes | x | No | o | ||||||||||||||||
| Kansas City Power & Light Company | Yes | x | No | o | ||||||||||||||||
| Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). | ||||||||||||||||||||
| Evergy, Inc. | Yes | x | No | o | ||||||||||||||||
| Westar Energy, Inc. | Yes | x | No | o | ||||||||||||||||
| Kansas City Power & Light Company | Yes | x | No | o | ||||||||||||||||
| Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. | ||||||||||||||||||||
| Evergy, Inc. | x | |||||||||||||||||||
| Westar Energy, Inc. | x | |||||||||||||||||||
| Kansas City Power & Light Company | x | |||||||||||||||||||
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. | ||||||||||||||||||||
| Large Accelerated Filer | Accelerated Filer | Non-accelerated Filer | Smaller Reporting Company | Emerging Growth Company | ||||||||||||||||
| Evergy, Inc. | x | o | o | o | o | |||||||||||||||
| Westar Energy, Inc. | o | o | x | o | o | |||||||||||||||
| Kansas City Power & Light Company | o | o | x | o | o | |||||||||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ||||||||||||||||||||
| Evergy, Inc. | o | |||||||||||||||||||
| Westar Energy, Inc. | o | |||||||||||||||||||
| Kansas City Power & Light Company | o | |||||||||||||||||||
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | ||||||||||||||||||||
| Evergy, Inc. | Yes | o | No | x | ||||||||||||||||
| Westar Energy, Inc. | Yes | o | No | x | ||||||||||||||||
| Kansas City Power & Light Company | Yes | o | No | x |
| The aggregate market value of the voting and non-voting common equity held by non-affiliates of Evergy, Inc. (based on the closing price of its common stock on the New York Stock Exchange on June 30, 2018) was approximately $15,236,578,926. All of the common equity of Westar Energy, Inc. and Kansas City Power & Light Company is held by Evergy, Inc. | ||||||||||||||||||||
| On February 15, 2019, Evergy, Inc. had 254,630,033 shares of common stock outstanding. | ||||||||||||||||||||
| On February 15, 2019, Westar Energy, Inc. and Kansas City Power & Light Company 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 (I)(1)(a) and (b) of Form 10-K and are therefore filing this Form 10-K with the reduced disclosure format. | ||||||||||||||||||||
| Documents Incorporated by Reference | ||||||||||||||||||||
| Portions of the 2019 annual meeting proxy statement of Evergy, Inc. to be filed with the Securities and Exchange Commission are incorporated by reference in Part III of this report. |
This combined annual report on Form 10-K is provided by the following registrants: Evergy, Inc. (Evergy), Westar Energy, Inc. (Westar Energy) and Kansas City Power & Light Company (KCP&L) (collectively, the Evergy Companies). Information relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.
CAUTIONARY STATEMENTS REGARDING CERTAIN FORWARD-LOOKING INFORMATION
Statements made in this report that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, statements relating to the expected financial and operational benefits of the merger of Great Plains Energy Incorporated (Great Plains Energy) and Westar Energy that resulted in the creation of Evergy (including cost savings, operational efficiencies and the impact of the merger on earnings per share), cost estimates of capital projects, dividend growth, share repurchases, balance sheet and credit ratings, rebates to customers, the outcome of regulatory and legal proceedings, employee issues and other matters affecting future operations.
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Evergy Companies are providing a number of important factors that could cause actual results to differ materially from the provided forward-looking information. These important factors include: future economic conditions and any related impact on sales, prices and costs; prices and availability of electricity in wholesale markets; market perception of the energy industry and the Evergy Companies; changes in business strategy or operations; the impact of unpredictable federal, state and local political, legislative, judicial and regulatory actions or developments, including deregulation, re-regulation and restructuring of the electric utility industry; decisions of regulators regarding rates that Westar Energy and KCP&L (or other regulated subsidiaries of Evergy) can charge for electricity; changes in applicable laws, regulations, rules, principles or practices, or the interpretations thereof, governing tax, accounting and environmental matters, including air and water quality and waste management and disposal; changes in the energy trading markets in which the Evergy Companies participate, including retroactive repricing of transactions by regional transmission organizations and independent system operators; the impact of climate change, including reduced demand for coal-based energy because of actual or perceived climate impacts and the development of alternate energy sources; financial market conditions and performance, including changes in interest rates and credit spreads and in availability and cost of capital and the effects on derivatives and hedges, nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of terrorist acts, including cyber terrorism; ability to carry out marketing and sales plans; weather conditions, including weather-related damage and the impact on sales, prices and costs; cost, availability, quality and timely provision of equipment, supplies, labor and fuel; the inherent uncertainties in estimating the effects of weather, economic conditions, climate change and other factors on customer consumption and financial results; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution or other projects; the Evergy Companies' ability to successfully manage their transmission and distribution development plans and transmission joint ventures; the inherent risks associated with the ownership and operation of a nuclear facility, including environmental, health, safety, regulatory and financial risks; workforce risks, including increased costs of retirement, health care and other benefits; the possibility that the expected value creation from the merger will not be realized, or will not be realized within the expected time period; difficulties related to the integration of the two companies; disruption from the merger making it more difficult to maintain relationships with customers, employees, regulators or suppliers; the diversion of management time; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Part I, Item 1A, Risk Factors included in this report should be carefully read for further understanding of potential risks for the Evergy Companies. Other sections of this report and other periodic reports filed by the Evergy Companies with the Securities and Exchange Commission (SEC) should also be read for more information regarding risk factors. Each forward-looking statement speaks only as of the date of the particular statement. The Evergy Companies undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
GLOSSARY OF TERMS
The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report.
| 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 | |
| ASR | Accelerated share repurchase | |
| ASU | Accounting Standards Update | |
| CCRs | Coal combustion residuals | |
| CAA | Clean Air Act Amendments of 1990 | |
| CO2 | Carbon dioxide | |
| COLI | Corporate-owned life insurance | |
| CPP | Clean Power Plan | |
| CWA | Clean Water Act | |
| 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 | |
| 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 | |
| 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 | |
| LTISA | Long-Term Incentive and Share Award plan | |
| 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. | |
| TCJA | Tax Cuts and Jobs Act | |
| TCR | Transmission Congestion Rights | |
| TFR | Transmission formula rate | |
| Transource | Transource Energy, LLC and its subsidiaries, 13.5% owned by GPETHC | |
| WACC | Weighted average cost of capital | |
| VIE | Variable interest entity | |
| Westar Energy | Westar Energy, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries | |
| WIIN | Water Infrastructure Improvements for the Nation | |
| Wolf Creek | Wolf Creek Generating Station | |
| WOTUS | Waters of the United States |
PART I