0001711269 evrg:EvergyKansasCentralIncMember evrg:EvergyMetroIncMember 2019-12-31
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X]☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2018March 31, 2020
or
[  ]☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______to_______
evergylogoa14.jpg
  Exact name of registrant as specified in its charter,  
Commission state of incorporation, address of principal I.R.S. Employer
File Number executive offices and telephone number Identification Number
     
001-38515 EVERGY, INC. 82-2733395
(a Missouri corporation)
1200 Main Street
Kansas City, Missouri 64105
(816) 556-2200
(a Missouri corporation)
1200 Main Street
Kansas City, Missouri  64105
(816) 556-2200
     
001-03523 WESTAR ENERGY,EVERGY KANSAS CENTRAL, INC. 48-0290150
(a Kansas corporation)
818 South Kansas Avenue
Topeka, Kansas 66612
(785) 575-6300
(a Kansas corporation)
818 South Kansas Avenue
Topeka, Kansas 66612
(785) 575-6300
     
000-51873 KANSAS CITY POWER & LIGHT COMPANYEVERGY METRO, INC. 44-0308720
(a Missouri corporation)
1200 Main Street
Kansas City, Missouri 64105
(816) 556-2200

  (a Missouri corporation)      Securities registered pursuant to Section 12(b) of the Act:  
Title of each class 1200 Main StreetTrading Symbol(s) Name of each exchange on which registered
Evergy, Inc. common stock Kansas City, Missouri  64105EVRG 
(816) 556-2200New York Stock Exchange
     



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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
                     
Evergy, Inc.   Yes☒x  No☐          
                     
Westar Energy, Inc.    
Evergy Kansas Central, Inc.Yes☒x  No☐          
                     
Kansas City Power & Light Company    
Evergy Metro, Inc.Yes☒x  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☒x  No☐          
                     
Westar Energy, Inc.    
Evergy Kansas Central, Inc.Yes☒x  No☐          
                     
Kansas City Power & Light Company    
Evergy Metro, Inc.Yes☒x  No☐          
                     
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
           
Evergy, Inc.Large Accelerated FilerxAccelerated Filer☐Non-accelerated Filer☐Smaller Reporting Company☐Emerging Growth Company☐
                     
Evergy Kansas Central, Inc.☒Large Accelerated Filer☐Accelerated Filer☐Non-accelerated FilerxSmaller Reporting Company☐Emerging Growth Company☐
                     
Westar Energy, Inc. ☒   ☐  
Evergy Metro, Inc.Large Accelerated Filer☐Accelerated Filer☐Non-accelerated FilerxSmaller Reporting Company☐Emerging Growth Company☐
       
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,Evergy Kansas Central, Inc. ☐                  
                     
Kansas City Power & Light CompanyEvergy Metro, Inc. ☐                  
                     
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
                     
Evergy, Inc.   Yes☐  No☒x          
                     
Westar Energy,Evergy Kansas Central, Inc.   Yes☐  No☒x          
                     
Kansas City Power & Light CompanyEvergy Metro, Inc.   Yes☐  No☒x          
                     
On July 31, 2018, Evergy, Inc. had 271,687,849 shares of common stock outstanding.  On July 31, 2018, Kansas City Power & Light Company and Westar Energy, Inc. each had one share of common stock outstanding and held by Evergy, Inc.
       
On May 1, 2020, Evergy, Inc. had 226,740,469 shares of common stock outstanding.  On May 1, 2020, Evergy Metro, Inc. and Evergy Kansas Central, Inc. each had 1 share of common stock outstanding and held by Evergy, Inc.
Westar Energy,
Evergy Kansas Central, Inc. and Kansas City Power & Light CompanyEvergy Metro, Inc. meet the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format.

This combined Quarterly Report on Form 10-Q is provided by the following registrants: Evergy, Inc. (Evergy), Westar Energy,Evergy Kansas Central, Inc. (Westar Energy)(Evergy Kansas Central) and Kansas City Power & Light Company (KCP&L)Evergy Metro, Inc. (Evergy Metro) (collectively, the Evergy Companies). Information relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.
This report should be read in its entirety.  No one section of the report deals with all aspects of the subject matter.  It should be read in conjunction with the Westar Energy First Quarter 2018 Quarterly Report on Form 10-Q,consolidated financial statements and related notes and with the Great Plains Energy Incorporated (Great Plains Energy)management's discussion and KCP&L combined First Quarter 2018 Quarterly Report on Form 10-Q,analysis of financial condition and results of operations included in the Westar Energy 20172019 Form 10-K for each of Evergy, Evergy Kansas Central and the Great Plains Energy and KCP&L combined 2017 Form 10-K.Evergy Metro.



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TABLE OF CONTENTS
   Page Number
Cautionary Statements Regarding Certain Forward-Looking Information
4
Glossary of Terms
56
  
Part I - Financial Information
 
   
Item 1.
Financial Statements
 
 
Evergy, Inc.
 
 
Unaudited Consolidated Balance Sheets
78
 
Unaudited Consolidated Statements of Comprehensive Income
9
Unaudited Consolidated Statements of Cash Flows
10
 
Unaudited Consolidated Statements of Changes in EquityCash Flows
11
 
Westar Energy, Inc.
Unaudited Consolidated Balance SheetsStatements of Changes in Equity
12
 
Evergy Kansas Central, Inc.
Unaudited Consolidated Statements of IncomeBalance Sheets
1413
 
Unaudited Consolidated Statements of Cash FlowsIncome
15
 
Unaudited Consolidated Statements of Changes in EquityCash Flows
16
 
Kansas City Power & Light Company
Unaudited Consolidated Balance SheetsStatements of Changes in Equity
17
 
Evergy Metro, Inc.
Unaudited Consolidated Statements of Comprehensive IncomeBalance Sheets
18
 
Unaudited Consolidated Statements of Comprehensive Income
20
Unaudited Consolidated Statements of Cash Flows
1921
 
Unaudited Consolidated Statements of Changes in Equity
2022
    
 
Combined Notes to Unaudited Consolidated Financial Statements for Evergy, Inc., Westar Energy,Evergy Kansas Central, Inc. and Kansas City Power & Light CompanyEvergy Metro, Inc.
2123
 Note 1:
Organization and Basis of Presentation
2123
 Note 2:
Merger of Great Plains Energy and Westar EnergyRevenue
27
Note 3:
Receivables
28
 Note 3:4:
RevenueRate Matters and Regulation
30
Note 5:
Pension Plans and Post-Retirement Benefits
31
Note 6:
Short-Term Borrowings and Short-Term Bank Lines of Credit
33
 Note 4:7:
ReceivablesLong-Term Debt
35
Note 5:
Rate Matters and Regulation
36
Note 6:
Asset Retirement Obligations
37
Note 7:
Pension Plans and Other Employee Benefits
3833
 Note 8:
Equity CompensationFair Value Measurements
4034
 Note 9:
Short-Term BorrowingsCommitments and Short-Term Bank Lines of CreditContingencies
4339
 Note 10:
Long-Term DebtRelated Party Transactions and Relationships
4442
 Note 11:
Fair Value MeasurementsTaxes
45
Note 12:
Commitments and Contingencies
50
Note 13:
Guarantees
53
Note 14:
Related Party Transactions and Relationships
54
Note 15:
Shareholders' Equity
55
Note 16:
Variable Interest Entities
56
Note 17:
Taxes
5743
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
6045
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
7857
Item 4.
Controls and Procedures
8058
    
Part II - Other Information
 
   
Item 1.
Legal Proceedings
8158
Item 1A.
Risk Factors
8159
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
8260
Item 3.
Defaults Upon Senior Securities
8260
Item 4.
Mine Safety Disclosures
8261
Item 5.
Other Information
8261
Item 6.
Exhibits
8362
    
Signatures
  
8665
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CAUTIONARY STATEMENTS REGARDING CERTAIN FORWARD-LOOKING INFORMATION
Statements made in this report that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, statements relating to the merger of Great Plains Energy and Westar Energy that resulted in the creation of Evergy,our strategic plan, including, those that relate to the expected financial and operational benefits of the merger to the companies and their shareholders (including cost savings, operational efficiencies and the impact of the merger onwithout limitation, earnings per share), cost estimates of capital projects,share and dividend growth share repurchases, balance sheettargets, operating and credit ratings, rebates to customers, employee issuesmaintenance expense savings goals and future capital allocation plans; the outcome of regulatory and legal proceedings; and other matters relating to expected financial performance or affecting future operations. Forward-looking statements are often accompanied by forward-looking words such as "anticipates," "believes," "expects," "estimates," "forecasts," "should," "seeks," "intends," "proposed," "projects," "planned," "outlook," "remain confident," "goal," "will" or other words of similar meaning. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the forward-looking information.
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Evergy Companies are providing a number of importantrisks, uncertainties and other factors that could cause actual results to differ materially from the provided forward-looking information. These importantrisks, uncertainties and other factors include: futureinclude, but are not limited to: economic and weather conditions in regional, national and international markets and their effectsany impact on sales, prices and costs; prices and availability of electricity in regional and national wholesale markets; market perception of the energy industry, Evergy, Westar Energy and KCP&L; changes in business strategy operations or development plans;operations; the outcomeimpact of contract negotiations for goods and services; effects of current or proposedfederal, state and federallocal political, legislative, judicial and regulatory actions or developments, including but not limited to, deregulation, re-regulation and restructuring of the electric utility industry; decisions of regulators regarding, among other things, customer rates that Westar Energy and KCP&L (or other regulated subsidiariesthe prudency of Evergy) can charge for electricity; adverseoperational decisions such as capital expenditures and asset retirements; changes in applicable laws, regulations, rules, principles or practices, or the interpretations thereof, governing tax, accounting and environmental matters, including but not limited to, air and water quality;quality and waste management and disposal; the impact of climate change, including increased frequency and severity of significant weather events and reduced demand for coal-based energy; prices and availability of electricity in wholesale markets; market perception of the energy industry and the Evergy Companies; the impact of the Coronavirus (COVID-19) pandemic on, among other things, sales, results of operations, financial condition, liquidity and cash flows, and also on operational issues, such as the availability and ability of our employees and suppliers to perform the functions that are necessary to operate the Evergy Companies; changes in the energy trading markets in which the Evergy Companies participate, including retroactive repricing of transactions by regional transmission organizations (RTO) and independent system operators; financial market conditions and performance, including but not limited to, changes in interest rates and credit spreads and in availability and cost of capital and the effects on derivatives and hedges, nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; the transition to a replacement for the London Interbank Offered Rate (LIBOR) benchmark interest rate; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of terrorist acts, including but not limited to, cyber terrorism; ability to carry out marketing and sales plans; weather conditions including, but not limited to, weather-related damage and their effects on sales, prices and costs; cost, availability, quality and deliverabilitytimely provision of fuel; the inherent uncertainties in estimating the effects of weather, economic conditionsequipment, supplies, labor and other factors on customer consumption and financial results;fuel; 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; Evergy'sthe Evergy Companies' ability to successfully manage itstheir transmission and distribution development plans and transmission joint ventures; the inherent risks associated with the ownership and operation of a nuclear facility, including but not limited to, environmental, health, safety, regulatory and financial risks; workforce risks, including but not limitedthose related to increased costs of, or changes in, retirement, health care and other benefits; disruption, costs and uncertainties caused by or related to the actions of individuals or entities, such as activist shareholders or special interest groups, that seek to influence Evergy's strategic plan, financial results or operations; the possibility that the expected value creation from the merger of Great Plains Energy Incorporated (Great Plains Energy) and Evergy Kansas Central that resulted in the creation of Evergy will not be realized, or will not be realized within the expected time period; difficulties related to the integration, including the diversion of the two companies; disruption from the merger making it more difficult to maintainmanagement time; difficulties in maintaining relationships with customers, employees, regulators or suppliers; the diversion of management time; and other risks and uncertainties.

This list of factors is not all-inclusive because it is not possible to predict all factors. Part II, Item 1A, Risk Factors included in this report, together with the risk factors included in the Westar Energy 2017 Form 10-K and the Great Plains Energy and KCP&LEvergy Companies' combined 20172019 Form 10-K under Part I, Item 1A, should be carefully read for further understanding of potential risks for the Evergy Companies. Other sections of this report and other periodic reports filed by the Evergy Companies with the Securities and Exchange Commission (SEC) should also be read for more information regarding risk factors. Each
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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.otherwise, except as required by law.
AVAILABLE INFORMATION
The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at sec.gov. Additionally, information about the Evergy Companies, including their combined annual reports on Form 10-K, combined quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed with the SEC, is also available through the Evergy Companies' website, www.evergy.com. Such reports are accessible at no charge and are made available as soon as reasonably practical after such material is filed with or furnished to the SEC.
Investors should note that the Evergy Companies announce material financial information in SEC filings, press releases and public conference calls. In accordance with SEC guidelines, the Evergy Companies also use the Investor Relations tab on their website, www.evergy.com, to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on Evergy's website is not part of this document.
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GLOSSARY OF TERMS
The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report.
Abbreviation or Acronym Definition
   
ACEAffordable Clean Energy
AEP American Electric Power Company, Inc.
AFUDC Allowance for Funds Used During Constructionfunds used during construction
Amended Merger AgreementAmended 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.
AMTAlternative Minimum Tax
AROAROs Asset Retirement Obligationretirement obligations
ASCBSER Accounting Standards CodificationBest system of emission reduction
ASUAccounting Standards Update
CCRsCoal combustion residuals
Clean Air ActCAA Clean Air Act Amendments of 1990
CWACCRs Clean Water ActCoal combustion residuals
CO2
 Carbon dioxide
COLI Corporate-owned life insurance
CPPClean Power Plan
CWAClean Water Act
D.C. CircuitU.S. Court of Appeals for the D.C. Circuit
DOE Department of Energy
EIRRELG Environmental Improvement Revenue RefundingEffluent limitations guidelines
EPA Environmental Protection Agency
EPS Earnings per common share
ERISA Employee Retirement Income Security Act of 1974, as amended
ERSP Earnings Review and Sharing Plan
Evergy Evergy, Inc. and its consolidated subsidiaries
Evergy Board Evergy Board of Directors
Evergy Companies Evergy, Westar Energy,Evergy Kansas Central, and KCP&L,Evergy Metro, collectively, which are individual registrants within the Evergy consolidated group
Evergy Kansas CentralEvergy Kansas Central, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
Evergy Kansas SouthEvergy Kansas South, Inc., a wholly-owned subsidiary of Evergy Kansas Central
Evergy MetroEvergy Metro, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
Evergy Missouri WestEvergy Missouri West, Inc., a wholly-owned subsidiary of Evergy
Evergy Transmission CompanyEvergy Transmission Company, LLC
Exchange Act The Securities Exchange Act of 1934, as amended
FASB Financial Accounting Standards Board
FERC The Federal Energy Regulatory Commission
FMBsFMB First mortgage bondsMortgage Bond
GAAP Generally Accepted Accounting Principles
GHG Greenhouse gas
GMOKCP&L Greater Missouri Operations Company, a wholly-owned subsidiary of Evergy
GPETHCGPE Transmission Holding Company LLC, a wholly-owned subsidiary of Evergy
Great Plains Energy Great Plains Energy Incorporated
JECJeffrey Energy Center
KCC State Corporation Commission of the State of Kansas
KCP&LkV Kansas City Power & Light Company, a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
KCP&L Receivables CompanyKansas City Power & Light Receivables Company, a wholly-owned subsidiary of KCP&L
KDHEKansas Department of Health & Environment
KGEKansas Gas and Electric Company, a wholly-owned subsidiary of Westar Energy
King EnergyKing Energy, Inc., a wholly-owned subsidiary of EvergyKilovolt
kWh Kilowatt hour
MDNRMissouri Department of Natural Resources
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Abbreviation or Acronym Definition
MECGMidwest Energy Consumers Group
MEEIA Missouri Energy Efficiency Investment Act
MMBtuMillions of British thermal units
Monarch EnergyMonarch Energy Holding, Inc.
MPSC Public Service Commission of the State of Missouri
MW Megawatt
MWh Megawatt hour
NAAQsNAAQS National Ambient Air Quality Standards
NAV Net Asset Value
NO2
Nitrogen dioxide
NRC Nuclear Regulatory Commission
PMNSR Particulate matterNew source review
OCIOther comprehensive income
OPCOffice of the Public Counsel
PISAPlant-in service accounting
Prairie Wind Prairie Wind Transmission, LLC, 50% owned by Westar EnergyEvergy Kansas Central
RSU Restricted share unit
RTO Regional transmission organization
SEC Securities and Exchange Commission
SO2
Sulfur dioxide
SPP Southwest Power Pool, Inc.
TDCTransmission delivery charge
TFR Transmission formula rate
Transource Transource Energy, LLC and its subsidiaries, 13.5% owned by GPETHCEvergy Transmission Company
VIE Variable interest entity
WCNOCWolf Creek Nuclear Operating Corporation
Westar EnergyWestar Energy, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
Wolf Creek Wolf Creek Generating Station
WOTUSWaters of the United States

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PART I
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS


EVERGY, INC.Consolidated Balance Sheets(Unaudited)
      
June 30 December 31March 31 December 31
2018 20172020 2019
ASSETS(millions, except share amounts)(millions, except share amounts)
CURRENT ASSETS:          
Cash and cash equivalents $1,280.1
 $3.4
  $304.4
 $23.2
 
Receivables, net 488.7
 290.7
 
Receivables, net of allowance for credit losses of $11.5 and $10.5, respectively 189.2
 228.5
 
Accounts receivable pledged as collateral 195.0
 —
  322.0
 339.0
 
Fuel inventory and supplies 539.9
 293.6
  498.9
 481.6
 
Income taxes receivable 110.5
 85.5
 
Regulatory assets 347.7
 99.5
  228.2
 231.7
 
Prepaid expenses and other assets 85.9
 39.8
  79.6
 78.2
 
Total Current Assets 2,937.3
 727.0
  1,732.8
 1,467.7
 
PROPERTY, PLANT AND EQUIPMENT, NET 18,819.9
 9,553.8
  19,223.2
 19,184.4
 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET 172.7
 176.3
  160.3
 162.0
 
OTHER ASSETS:  
  
   
  
 
Regulatory assets 1,537.9
 685.4
  1,714.5
 1,740.5
 
Nuclear decommissioning trust fund 498.2
 237.1
  497.4
 573.2
 
Goodwill 2,333.7
 —
  2,336.6
 2,336.6
 
Other 359.6
 244.8
  519.9
 511.5
 
Total Other Assets 4,729.4
 1,167.3
  5,068.4
 5,161.8
 
TOTAL ASSETS $26,659.3
 $11,624.4
  $26,184.7
 $25,975.9
 
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.Consolidated Balance Sheets(Unaudited)
 
June 30 December 31March 31 December 31
2018 20172020 2019
LIABILITIES AND EQUITY(millions, except share amounts)(millions, except share amounts)
CURRENT LIABILITIES:          
Current maturities of long-term debt $819.3
 $—
  $1.1
 $251.1
 
Current maturities of long-term debt of variable interest entities 30.3
 28.5
  18.8
 32.3
 
Notes payable and commercial paper 1,079.3
 275.7
  1,055.0
 561.9
 
Collateralized note payable 195.0
 —
  322.0
 339.0
 
Accounts payable 327.6
 204.2
  298.1
 528.8
 
Accrued dividends —
 53.8
 
Accrued taxes 210.3
 87.7
  226.3
 145.1
 
Accrued interest 82.0
 72.7
  137.3
 122.3
 
Regulatory liabilities 89.5
 11.6
  56.4
 63.3
 
Asset retirement obligations 69.0
 71.3
 
Accrued compensation and benefits 71.4
 59.2
 
Other 244.6
 89.5
  142.3
 161.6
 
Total Current Liabilities 3,077.9
 823.7
  2,397.7
 2,335.9
 
LONG-TERM LIABILITIES:  
  
   
  
 
Long-term debt, net 6,641.1
 3,687.6
  8,993.5
 8,746.7
 
Long-term debt of variable interest entities, net 51.1
 81.4
  —
 18.8
 
Deferred income taxes 1,436.3
 815.7
  1,796.7
 1,744.4
 
Unamortized investment tax credits 379.9
 257.1
  373.2
 375.4
 
Regulatory liabilities 2,361.8
 1,094.0
  2,156.1
 2,248.3
 
Pension and post-retirement liability 959.1
 491.2
  1,012.6
 1,017.6
 
Asset retirement obligations 627.9
 380.0
  611.6
 602.8
 
Other 228.8
 133.3
  337.9
 340.7
 
Total Long-Term Liabilities 12,686.0
 6,940.3
  15,281.6
 15,094.7
 
Commitments and Contingencies (Note 12) 

 

 
Commitments and Contingencies (Note 9) 


 


 
EQUITY:          
Evergy, Inc. Shareholders' Equity:          
Common stock - 600,000,000 and 275,000,000 shares authorized, $0 and $5 par value per share
271,687,743 and 142,094,275 shares issued, respective to each date		 9,718.1
 2,734.8
 
Common stock - 600,000,000 shares authorized, without par value
226,738,748 and 226,641,443 shares issued, stated value		 7,072.2
 7,070.4
 
Retained earnings 1,220.0
 1,173.3
  1,505.7
 1,551.5
 
Accumulated other comprehensive loss (48.7) (50.0) 
Total Evergy, Inc. Shareholders' Equity 10,938.1
 3,908.1
  8,529.2
 8,571.9
 
Noncontrolling Interests (42.7) (47.7)  (23.8) (26.6) 
Total Equity 10,895.4
 3,860.4
  8,505.4
 8,545.3
 
TOTAL LIABILITIES AND EQUITY $26,659.3
 $11,624.4
  $26,184.7
 $25,975.9
 
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Statements of Income
Consolidated Statements of Comprehensive IncomeConsolidated Statements of Comprehensive Income
(Unaudited)
      
 Three Months Ended
June 30		 Year to Date
June 30
 2018 2017 2018 2017
Three Months Ended March 31 2020 2019
 (millions, except per share amounts) (millions, except per share amounts)
OPERATING REVENUES $893.4
 $609.3
 $1,493.6
 $1,181.9
 $1,116.7
 $1,216.9
OPERATING EXPENSES:            
Fuel and purchased power 229.7
 111.8
 365.2
 225.6
 258.2
 330.0
SPP network transmission costs 68.4
 61.8
 136.0
 122.4
 62.0
 63.5
Operating and maintenance 283.8
 139.6
 423.8
 275.0
 288.2
 306.9
Depreciation and amortization 128.0
 94.0
 217.7
 182.7
 218.5
 213.6
Taxes other than income tax 56.6
 41.9
 100.5
 84.6
 92.3
 93.3
Total Operating Expenses 766.5
 449.1
 1,243.2
 890.3
 919.2
 1,007.3
INCOME FROM OPERATIONS 126.9
 160.2
 250.4
 291.6
 197.5
 209.6
OTHER INCOME (EXPENSE):            
Investment earnings 1.6
 1.1
 1.3
 2.5
Investment earnings (loss) (0.8) 3.2
Other income 1.7
 0.5
 3.7
 1.8
 2.3
 8.2
Other expense (13.8) (7.7) (24.4) (18.1) (22.7) (19.4)
Total Other Income (Expense) (10.5) (6.1) (19.4) (13.8)
Total Other Expense, Net (21.2) (8.0)
Interest expense 58.4
 43.7
 102.2
 84.8
 96.2
 91.1
INCOME BEFORE INCOME TAXES 58.0
 110.4
 128.8
 193.0
 80.1
 110.5
Income tax expense (benefit) (45.0) 35.9
 (35.8) 56.8
Income tax expense 10.1
 9.3
Equity in earnings of equity method investees, net of income taxes 1.4
 1.5
 2.7
 3.3
 2.2
 2.2
NET INCOME 104.4
 76.0
 167.3
 139.5
 72.2
 103.4
Less: Net income attributable to noncontrolling interests 2.6
 3.9
 5.0
 7.8
 2.8
 3.9
NET INCOME ATTRIBUTABLE TO EVERGY, INC. $101.8
 $72.1
 $162.3
 $131.7
 $69.4
 $99.5
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY (see Note 1)        
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY, INC. (see Note 1)    
Basic earnings per common share $0.56
 $0.50
 $1.00
 $0.92
 $0.31
 $0.39
Diluted earnings per common share $0.56
 $0.50
 $1.00
 $0.92
 $0.31
 $0.39
AVERAGE EQUIVALENT COMMON SHARES OUTSTANDING        
AVERAGE COMMON SHARES OUTSTANDING    
Basic 180.9
 142.5
 161.9
 142.5
 227.1
 252.8
Diluted 181.0
 142.6
 162.0
 142.6
 227.5
 253.0
DIVIDENDS DECLARED PER COMMON SHARE $0.40
 $0.40
 $0.80
 $0.80
COMPREHENSIVE INCOME    
NET INCOME $72.2
 $103.4
Derivative hedging activity    
Loss on derivative hedging instruments —
 (13.8)
Income tax benefit —
 3.6
Net loss on derivative hedging instruments —
 (10.2)
Reclassification to expenses, net of tax 1.3
 —
Derivative hedging activity, net of tax 1.3
 (10.2)
Total other comprehensive income (loss) 1.3
 (10.2)
Comprehensive income 73.5
 93.2
Less: comprehensive income attributable to noncontrolling interest 2.8
 3.9
COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC. $70.7
 $89.3
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY, INC.
Consolidated Statements of Cash FlowsConsolidated Statements of Cash Flows Consolidated Statements of Cash Flows
(Unaudited)
       
Year to Date June 302018 2017 
Three Months Ended March 312020 2019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)(millions)
Net income$167.3
 $139.5
 $72.2
 $103.4
Adjustments to reconcile income to net cash from operating activities:       
Depreciation and amortization217.7
 182.7
 218.5
 213.6
Amortization of nuclear fuel13.7
 15.9
 14.4
 14.6
Amortization of deferred refueling outage8.3
 8.1
 6.3
 6.5
Amortization of deferred regulatory gain from sale leaseback(2.7) (2.7) 
Amortization of corporate-owned life insurance9.2
 8.9
 6.5
 6.6
Non-cash compensation20.0
 4.6
 4.6
 5.4
Net deferred income taxes and credits(45.0) 53.9
 8.1
 (2.0)
Allowance for equity funds used during construction(1.7) (0.8) (1.8) (0.2)
Payments for asset retirement obligations(8.2) (1.4) (3.1) (1.2)
Equity in earnings of equity method investees, net of income taxes(2.7) (3.3) (2.2) (2.2)
Income from corporate-owned life insurance(1.9) (9.9)
Other(0.4) (1.5) 0.3
 (1.3)
Changes in working capital items:       
Accounts receivable(24.7) 14.2
 42.6
 26.6
Accounts receivable pledged as collateral(15.0) —
 17.0
 6.0
Fuel inventory and supplies25.5
 (2.3) (17.1) 44.6
Prepaid expenses and other current assets(29.2) 37.0
 0.4
 35.5
Accounts payable(41.7) (20.0) (153.4) (119.4)
Accrued taxes67.8
 11.0
 83.0
 100.2
Other current liabilities(1.6) (103.3) (9.4) (74.7)
Changes in other assets(17.3) 15.6
 39.4
 12.8
Changes in other liabilities57.9
 7.6
 (3.8) (2.8)
Cash Flows from Operating Activities397.2
 363.7
 320.6
 362.1
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: 
  
  
  
Additions to property, plant and equipment(435.2) (383.6) (354.4) (309.0)
Cash acquired from the merger with Great Plains Energy1,154.2
 —
 
Purchase of securities - trusts(96.0) (12.1) (18.8) (17.9)
Sale of securities - trusts101.1
 13.5
 15.0
 15.4
Investment in corporate-owned life insurance(15.9) (15.8) (2.0) (2.1)
Proceeds from investment in corporate-owned life insurance4.7
 1.7
 30.8
 40.9
Proceeds from settlement of interest rate swap140.6
 —
 
Other investing activities(6.6) (3.2) (4.0) 1.3
Cash Flows used in Investing Activities846.9
 (399.5) (333.4) (271.4)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: 
  
  
  
Short term debt, net242.6
 (37.6) 493.1
 572.4
Collateralized short-term debt, net15.0
 —
 
Collateralized short-term borrowings, net(17.0) (6.0)
Proceeds from long-term debt—
 296.3
 —
 494.0
Retirements of long-term debt—
 (125.0) (1.1) (1.1)
Retirements of long-term debt of variable interest entity(28.5) (26.8) 
Repayment of capital leases(1.9) (1.7) 
Retirements of long-term debt of variable interest entities(32.3) (30.3)
Borrowings against cash surrender value of corporate-owned life insurance53.9
 52.3
 —
 0.6
Repayment of borrowings against cash surrender value of corporate-owned life insurance(3.0) —
 (27.8) (30.1)
Issuance of common stock—
 0.6
 
Distributions to shareholders of noncontrolling interests—
 (5.8) 
Cash dividends paid(228.3) (109.4) (114.5) (119.8)
Repurchase of common stock under repurchase plan—
 (578.3)
Other financing activities(17.2) (7.0) (6.4) (4.5)
Cash Flows (used in) from Financing Activities32.6
 35.9
 
Cash Flows from Financing Activities294.0
 296.9
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH1,276.7
 0.1
 281.2
 387.6
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:       
Beginning of period, including restricted cash of $0.1 and $0.1, respectively3.5
 3.2
 
End of period, including restricted cash of $0.1 and $0.1, respectively$1,280.2
 $3.3
 
Beginning of period, including restricted cash of $0.0 and $0.0, respectively23.2
 160.3
End of period, including restricted cash of $0.0 and $414.3, respectively$304.4
 $547.9
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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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, 2016141,791,153
 $2,727.3
 $1,078.6
 $27.3
 $3,833.2
Net income—
 —
 131.7
 7.8
 139.5
Issuance of stock12,131
 0.6
 —
 —
 0.6
Issuance of stock for compensation and reinvested dividends290,103
 4.8
 —
 —
 4.8
Tax withholding related to stock compensation—
 (7.0) —
 —
 (7.0)
Dividends declared on common stock ($0.80 per share)—
 —
 (115.1) —
 (115.1)
Stock compensation expense—
 4.6
 —
 —
 4.6
Distributions to shareholders of noncontrolling interests—
 —
 —
 (5.7) (5.7)
Balance as of June 30, 2017142,093,387
 $2,730.3
 $1,095.2
 $29.4
 $3,854.9
          
Balance as of December 31, 2017142,094,275
 $2,734.8
 $1,173.3
 $(47.7) $3,860.4
Net income—
 —
 162.3
 5.0
 167.3
Issuance of stock to Great Plains Energy shareholders128,947,518
 6,979.9
 —
 —
 6,979.9
Issuance of restricted common stock122,505
 —
 —
 —
 —
Issuance of stock for compensation and reinvested dividends523,445
 0.2
 —
 —
 0.2
Tax withholding related to stock compensation—
 (17.2) —
 —
 (17.2)
Dividends declared on common stock ($0.80 per share)—
 —
 (115.5) —
 (115.5)
Stock compensation expense—
 21.8
 —
 —
 21.8
Other—
 (1.4) (0.1) —
 (1.5)
Balance as of June 30, 2018271,687,743
 $9,718.1
 $1,220.0
 $(42.7) $10,895.4
EVERGY, INC.
Consolidated Statements of Changes in Equity
(Unaudited)
       
 Evergy, Inc. Shareholders  
 Common stock sharesCommon stockRetained earningsAOCINon-controlling interestsTotal equity
 (millions, except share amounts)
Balance as of December 31, 2018255,326,252
$8,685.2
$1,346.0
$(3.0)$(37.5)$9,990.7
Net income—
—
99.5
—
3.9
103.4
Issuance of stock compensation and reinvested dividends, net of tax withholding60,594
(1.6)—
—
—
(1.6)
Dividends declared on common stock ($0.475 per share)—
—
(119.8)—
—
(119.8)
Stock compensation expense—
5.4
—
—
—
5.4
Repurchase of common stock under repurchase plan(10,548,060)(578.3)—
—
—
(578.3)
Consolidation of noncontrolling interests—
—
—
—
3.8
3.8
Distributions to shareholders of noncontrolling interests—
—
—
—
(1.4)(1.4)
Derivative hedging activity, net of tax—
—
—
(10.2)—
(10.2)
Other—
(0.3)—
—
—
(0.3)
Balance as of March 31, 2019244,838,786
$8,110.4
$1,325.7
$(13.2)$(31.2)$9,391.7
       
Balance as of December 31, 2019226,641,443
$7,070.4
$1,551.5
$(50.0)$(26.6)$8,545.3
Net income—
—
69.4
—
2.8
72.2
Issuance of stock compensation and reinvested dividends, net of tax withholding97,305
(3.0)—
—
—
(3.0)
Dividends declared on common stock ($0.505 per share)—
—
(114.5)—
—
(114.5)
Dividend equivalents declared—
—
(0.7)—
—
(0.7)
Stock compensation expense—
4.6
—
—
—
4.6
Derivative hedging activity, net of tax—
—
—
1.3
—
1.3
Other—
0.2
—
—
—
0.2
Balance as of March 31, 2020226,738,748
$7,072.2
$1,505.7
$(48.7)$(23.8)$8,505.4
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.





Table of Contents






WESTAR ENERGY, INC.
EVERGY KANSAS CENTRAL, INC.EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets(Unaudited)
      
June 30 December 31March 31 December 31
2018 20172020 2019
ASSETS(millions, except share amounts)(millions, except share amounts)
CURRENT ASSETS:          
Cash and cash equivalents $3.3
 $3.4
  $73.0
 $5.2
 
Receivables, net 305.6
 290.7
 
Receivables, net of allowance for credit losses of $4.1 and $3.8, respectively 142.4
 140.4
 
Related party receivables 3.2
 —
  1.3
 9.9
 
Accounts receivable pledged as collateral 159.0
 171.0
 
Fuel inventory and supplies 267.0
 293.6
  270.9
 266.4
 
Income taxes receivable 33.6
 30.4
 
Regulatory assets 122.0
 99.5
  95.2
 93.3
 
Prepaid expenses and other assets 45.0
 39.8
  35.8
 34.3
 
Total Current Assets 746.1
 727.0
  811.2
 750.9
 
PROPERTY, PLANT AND EQUIPMENT, NET 9,614.1
 9,553.8
  9,852.0
 9,864.9
 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET 172.7
 176.3
  160.3
 162.0
 
OTHER ASSETS:  
  
   
  
 
Regulatory assets 704.1
 685.4
  721.7
 730.4
 
Nuclear decommissioning trust fund 237.1
 237.1
  240.2
 272.5
 
Other 219.2
 244.8
  273.2
 266.0
 
Total Other Assets 1,160.4
 1,167.3
  1,235.1
 1,268.9
 
TOTAL ASSETS $11,693.3
 $11,624.4
  $12,058.6
 $12,046.7
 
The disclosures regarding Westar EnergyEvergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents






WESTAR ENERGY, INC.
EVERGY KANSAS CENTRAL, INC.EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets(Unaudited)
 
June 30 December 31March 31 December 31
2018 20172020 2019
LIABILITIES AND EQUITY(millions, except share amounts)(millions, except share amounts)
CURRENT LIABILITIES:          
Current maturities of long-term debt $300.0
 $—
  $—
 $250.0
 
Current maturities of long-term debt of variable interest entities 30.3
 28.5
  18.8
 32.3
 
Notes payable and commercial paper 488.2
 275.7
  370.0
 249.2
 
Collateralized note payable 159.0
 171.0
 
Accounts payable 137.2
 204.2
  125.7
 200.5
 
Related party payables 37.8
 —
  16.8
 14.8
 
Accrued dividends —
 53.8
 
Accrued taxes 114.2
 87.7
  143.6
 98.7
 
Accrued interest 45.4
 72.7
  85.1
 74.2
 
Regulatory liabilities 34.5
 11.6
  41.1
 42.3
 
Asset retirement obligations 23.3
 23.3
 
Other 117.6
 89.5
  123.1
 130.2
 
Total Current Liabilities 1,305.2
 823.7
  1,106.5
 1,286.5
 
LONG-TERM LIABILITIES:  
  
   
  
 
Long-term debt, net 3,389.0
 3,687.6
  3,686.7
 3,436.1
 
Long-term debt of variable interest entities, net 51.1
 81.4
  —
 18.8
 
Deferred income taxes 763.1
 815.7
  832.5
 817.7
 
Unamortized investment tax credits 255.7
 257.1
  251.2
 253.2
 
Regulatory liabilities 1,173.9
 1,094.0
  1,091.0
 1,132.5
 
Pension and post-retirement liability 477.5
 491.2
  481.8
 495.5
 
Asset retirement obligations 262.7
 380.0
  254.2
 249.6
 
Other 126.9
 133.3
  154.5
 151.8
 
Total Long-Term Liabilities 6,499.9
 6,940.3
  6,751.9
 6,555.2
 
Commitments and Contingencies (Note 12) 

 

 
Commitments and Contingencies (Note 9) 


 


 
EQUITY:  
     
   
Westar Energy, Inc. Shareholder's Equity:  
  
 
Common stock - 1,000 shares authorized, $0.01 par value per share and 1 share issued; 275,000,000 shares authorized, $5 par value per share, and 142,094,275 shares issued and outstanding, respective to each date 2,737.6
 2,734.8
 
Evergy Kansas Central, Inc. Shareholder's Equity:  
  
 
Common stock - 1,000 shares authorized, $0.01 par value, 1 share issued 2,737.6
 2,737.6
 
Retained earnings 1,193.3
 1,173.3
  1,486.4
 1,494.0
 
Total Westar Energy, Inc. Shareholder's Equity 3,930.9
 3,908.1
 
Total Evergy Kansas Central, Inc. Shareholder's Equity 4,224.0
 4,231.6
 
Noncontrolling Interests (42.7) (47.7)  (23.8) (26.6) 
Total Equity 3,888.2
 3,860.4
  4,200.2
 4,205.0
 
TOTAL LIABILITIES AND EQUITY $11,693.3
 $11,624.4
  $12,058.6
 $12,046.7
 
The disclosures regarding Westar EnergyEvergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.


Table of Contents






WESTAR ENERGY, INC.
EVERGY KANSAS CENTRAL, INC.EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Income(Unaudited)
 
Three Months Ended
 June 30
 
Year to Date
June 30
  
 2018 2017 2018 2017
Three Months Ended March 31 2020 2019
 (millions) (millions)
OPERATING REVENUES $650.9
 $609.3
 $1,251.1
 $1,181.9
 $560.1
 $596.8
OPERATING EXPENSES:            
Fuel and purchased power 158.0
 111.8
 293.5
 225.6
 99.2
 122.7
SPP network transmission costs 68.4
 61.8
 136.0
 122.4
 62.0
 63.5
Operating and maintenance 209.7
 139.6
 349.7
 275.0
 123.7
 128.6
Depreciation and amortization 96.1
 94.0
 185.7
 182.7
 112.1
 109.8
Taxes other than income tax 42.6
 41.9
 86.6
 84.6
 48.6
 47.9
Total Operating Expenses 574.8
 449.1
 1,051.5
 890.3
 445.6
 472.5
INCOME FROM OPERATIONS 76.1
 160.2
 199.6
 291.6
 114.5
 124.3
OTHER INCOME (EXPENSE):            
Investment earnings —
 1.1
 (0.4) 2.5
Investment earnings (loss) (1.7) 1.5
Other income 1.6
 0.5
 3.6
 1.8
 2.1
 7.3
Other expense (10.4) (7.7) (20.9) (18.1) (11.5) (10.6)
Total Other Income (Expense) (8.8) (6.1) (17.7) (13.8)
Total Other Expense, Net (11.1) (1.8)
Interest expense 44.4
 43.7
 88.2
 84.8
 41.6
 44.9
INCOME BEFORE INCOME TAXES 22.9
 110.4
 93.7
 193.0
 61.8
 77.6
Income tax expense (benefit) (53.6) 35.9
 (44.4) 56.8
Income tax expense 7.8
 10.5
Equity in earnings of equity method investees, net of income taxes 1.1
 1.5
 2.4
 3.3
 1.2
 1.2
NET INCOME 77.6
 76.0
 140.5
 139.5
 55.2
 68.3
Less: Net income attributable to noncontrolling interests 2.6
 3.9
 5.0
 7.8
 2.8
 3.9
NET INCOME ATTRIBUTABLE TO WESTAR ENERGY, INC. $75.0
 $72.1
 $135.5
 $131.7
NET INCOME ATTRIBUTABLE TO EVERGY KANSAS CENTRAL, INC. $52.4
 $64.4
The disclosures regarding Westar EnergyEvergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.



Table of Contents






WESTAR ENERGY, INC.
EVERGY KANSAS CENTRAL, INC.EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Cash Flows(Unaudited)
   
Year to Date June 302018 2017
Three Months Ended March 312020 2019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)(millions)
Net income$140.5
 $139.5
$55.2
 $68.3
Adjustments to reconcile income to net cash from operating activities:      
Depreciation and amortization185.7
 182.7
112.1
 109.8
Amortization of nuclear fuel11.2
 15.9
7.2
 7.3
Amortization of deferred refueling outage7.3
 8.1
3.1
 3.2
Amortization of deferred regulatory gain from sale leaseback(2.7) (2.7)
Amortization of corporate-owned life insurance9.2
 8.9
6.5
 6.6
Non-cash compensation20.0
 4.6
Net deferred income taxes and credits(57.9) 53.9
(16.0) (0.3)
Allowance for equity funds used during construction(1.7) (0.8)(1.9) —
Payments for asset retirement obligations(7.2) (1.4)(0.2) (0.3)
Equity in earnings of equity method investees, net of income taxes(2.4) (3.3)(1.2) (1.2)
Income from corporate-owned life insurance(1.9) (9.3)
Other(1.4) (1.5)(1.4) (1.4)
Changes in working capital items:      
Accounts receivable(9.3) 14.2
9.1
 (7.9)
Accounts receivable pledged as collateral12.0
 —
Fuel inventory and supplies26.9
 (2.3)(4.3) 21.9
Prepaid expenses and other current assets(23.2) 37.0
(1.2) 14.8
Accounts payable2.8
 (20.0)(26.3) (7.2)
Accrued taxes43.6
 11.0
68.4
 59.5
Other current liabilities(36.9) (103.3)(11.0) (18.9)
Changes in other assets2.4
 15.6
13.9
 4.6
Changes in other liabilities26.8
 7.6
(10.5) (7.0)
Cash Flows from Operating Activities333.7
 363.7
211.6
 242.5
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: 
  
 
  
Additions to property, plant and equipment(367.7) (383.6)(158.2) (151.7)
Purchase of securities - trusts(92.5) (12.1)(6.0) (7.5)
Sale of securities - trusts98.4
 13.5
4.4
 7.2
Investment in corporate-owned life insurance(15.9) (15.8)(2.0) (2.1)
Proceeds from investment in corporate-owned life insurance4.7
 1.7
30.8
 40.3
Other investing activities(7.7) (3.2)0.2
 (0.1)
Cash Flows used in Investing Activities(380.7) (399.5)(130.8) (113.9)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: 
  
 
  
Short term debt, net212.5
 (37.6)120.8
 2.1
Proceeds from long-term debt—
 296.3
Retirements of long-term debt—
 (125.0)
Collateralized short-term debt, net(12.0) —
Retirements of long-term debt of variable interest entities(28.5) (26.8)(32.3) (30.3)
Repayment of capital leases(1.9) (1.7)
Borrowings against cash surrender value of corporate-owned life insurance53.9
 52.3
—
 0.6
Repayment of borrowings against cash surrender value of corporate-owned life insurance(3.0) —
(27.8) (30.1)
Issuance of common stock—
 0.6
Distributions to shareholders of noncontrolling interests—
 (5.8)
Cash dividends paid(169.0) (109.4)(60.0) (110.0)
Other financing activities(17.2) (7.0)(1.7) (2.4)
Cash Flows (used in) from Financing Activities46.8
 35.9
Cash Flows used in Financing Activities(13.0) (170.1)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(0.2) 0.1
67.8
 (41.5)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:      
Beginning of period, including restricted cash of $0.1 and $0.1, respectively3.5
 3.2
End of period, including restricted cash of $0.1 and $0.1, respectively$3.3
 $3.3
Beginning of period5.2
 44.5
End of period$73.0
 $3.0
The disclosures regarding Westar EnergyEvergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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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, 2016141,791,153
 $2,727.3
 $1,078.6
 $27.3
 $3,833.2
Net income—
 —
 131.7
 7.8
 139.5
Issuance of stock12,131
 0.6
 —
 —
 0.6
Issuance of stock for compensation and reinvested dividends290,103
 4.8
 —
 —
 4.8
Tax withholding related to stock compensation—
 (7.0) —
 —
 (7.0)
Dividends declared on common stock ($0.80 per share)—
 —
 (115.1) —
 (115.1)
Stock compensation expense—
 4.6
 —
 —
 4.6
Distributions to shareholders of noncontrolling interests—
 —
 —
 (5.7) (5.7)
Balance as of June 30, 2017142,093,387
 $2,730.3
 $1,095.2
 $29.4
 $3,854.9
          
Balance as of December 31, 2017142,094,275
 $2,734.8
 $1,173.3
 $(47.7) $3,860.4
Net income—
 —
 135.5
 5.0
 140.5
Issuance of stock for compensation and reinvested dividends516,990
 —
 —
 —
 —
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 ($0.80 per share)—
 —
 (115.5) —
 (115.5)
Stock compensation expense—
 19.9
 —
 —
 19.9
Other—
 0.1
 —
 —
 0.1
Balance as of June 30, 20181
 $2,737.6
 $1,193.3
 $(42.7) $3,888.2
EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Changes in Equity
(Unaudited)
      
 Evergy Kansas Central, Inc. Shareholder  
 Common stock sharesCommon stockRetained earningsNon-controlling interestsTotal equity
 (millions, except share amounts)
Balance as of December 31, 20181
$2,737.6
$1,260.6
$(37.5)$3,960.7
Net income—
—
64.4
3.9
68.3
Dividends declared on common stock—
—
(110.0)—
(110.0)
Consolidation of noncontrolling interests—
—
—
3.8
3.8
Distributions to shareholders of noncontrolling interests—
—
—
(1.4)(1.4)
Balance as of March 31, 20191
$2,737.6
$1,215.0
$(31.2)$3,921.4
      
Balance as of December 31, 20191
$2,737.6
$1,494.0
$(26.6)$4,205.0
Net income—
—
52.4
2.8
55.2
Dividends declared on common stock—
—
(60.0)—
(60.0)
Balance as of March 31, 20201
$2,737.6
$1,486.4
$(23.8)$4,200.2
The disclosures regarding Westar EnergyEvergy Kansas Central included in the accompanying Unaudited Notes to Consolidated Financial Statements are an integral part of these statements.

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EVERGY METRO, INC.
Consolidated Balance Sheets
(Unaudited)
    
 March 31 December 31
 2020 2019
ASSETS(millions, except share amounts)
CURRENT ASSETS:       
Cash and cash equivalents $125.1
   $2.0
 
Receivables, net of allowance for credit losses of $5.2 and $4.6, respectively 33.4
   48.1
 
Related party receivables 129.3
   93.9
 
Accounts receivable pledged as collateral 113.0
   118.0
 
Fuel inventory and supplies 175.1
   163.0
 
Income taxes receivable —
   8.7
 
Regulatory assets 100.4
   95.4
 
Prepaid expenses 22.1
   22.8
 
Other assets 16.8
   15.0
 
Total Current Assets 715.2
   566.9
 
PROPERTY, PLANT AND EQUIPMENT, NET 6,864.0
   6,839.0
 
OTHER ASSETS:  
    
 
Regulatory assets 448.3
   464.4
 
Nuclear decommissioning trust fund 257.2
   300.7
 
Other 131.5
   134.1
 
Total Other Assets 837.0
   899.2
 
TOTAL ASSETS $8,416.2
   $8,305.1
 
The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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KANSAS CITY POWER & LIGHT COMPANY
Consolidated Balance Sheets
(Unaudited)
    
 June 30 December 31
 2018 2017
ASSETS(millions, except share amounts)
CURRENT ASSETS:       
Cash and cash equivalents $4.0
   $2.2
 
Receivables, net 124.5
   106.3
 
Related party receivables 108.3
   84.7
 
Accounts receivable pledged as collateral 130.0
   130.0
 
Fuel inventory and supplies 197.1
   197.0
 
Income taxes receivable —
   5.4
 
Regulatory assets 159.1
   153.6
 
Prepaid expenses and other assets 33.3
   27.6
 
Total Current Assets 756.3
   706.8
 
PROPERTY, PLANT AND EQUIPMENT, NET 6,670.3
   6,565.6
 
OTHER ASSETS:  
    
 
Regulatory assets 489.0
   545.1
 
Nuclear decommissioning trust fund 261.1
   258.4
 
Other 54.9
   48.0
 
Total Other Assets 805.0
   851.5
 
TOTAL ASSETS $8,231.6
   $8,123.9
 
EVERGY METRO, INC.
Consolidated Balance Sheets
(Unaudited)
  
 March 31 December 31
 2020 2019
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:       
Notes payable and commercial paper $460.0
   $199.3
 
Collateralized note payable 113.0
   118.0
 
Accounts payable 135.2
   233.6
 
Related party payables 1.5
   4.6
 
Accrued taxes 69.1
   38.8
 
Accrued interest 36.1
   26.7
 
Regulatory liabilities 7.0
   11.4
 
Asset retirement obligations 34.8
   36.1
 
Accrued compensation and benefits 47.7
   45.1
 
Other 32.2
   34.0
 
Total Current Liabilities 936.6
   747.6
 
LONG-TERM LIABILITIES:  
    
 
Long-term debt, net 2,525.4
   2,525.0
 
Deferred income taxes 642.8
   642.8
 
Unamortized investment tax credits 119.3
   119.6
 
Regulatory liabilities 739.7
   792.2
 
Pension and post-retirement liability 508.0
   499.7
 
Asset retirement obligations 221.4
   217.5
 
Other 176.8
   180.0
 
Total Long-Term Liabilities 4,933.4
   4,976.8
 
Commitments and Contingencies (Note 9) 


   


 
EQUITY:  
    
 
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value 1,563.1
   1,563.1
 
Retained earnings 978.4
   1,012.8
 
Accumulated other comprehensive income 4.7
   4.8
 
Total Equity 2,546.2
   2,580.7
 
TOTAL LIABILITIES AND EQUITY $8,416.2
   $8,305.1
 
LIABILITIES AND EQUITY 
CURRENT LIABILITIES:       
Current maturities of long-term debt $400.0
   $350.0
 
Notes payable and commercial paper 322.4
   167.5
 
Collateralized note payable 130.0
   130.0
 
Accounts payable 151.1
   249.0
 
Accrued taxes 98.8
   29.0
 
Accrued interest 27.6
   32.4
 
Regulatory liabilities 30.5
   8.3
 
Other 108.7
   98.3
 
Total Current Liabilities 1,269.1
   1,064.5
 
LONG-TERM LIABILITIES:  
    
 
Long-term debt, net 2,129.8
   2,232.2
 
Deferred income taxes 613.5
   616.1
 
Unamortized investment tax credits 121.2
   121.8
 
Regulatory liabilities 834.4
   770.9
 
Pension and post-retirement liability 521.2
   512.2
 
Asset retirement obligations 223.5
   231.4
 
Other 79.0
   61.6
 
Total Long-Term Liabilities 4,522.6
   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 874.5
   949.7
 
Accumulated other comprehensive income 2.3
   0.4
 
Total Equity 2,439.9
   2,513.2
 
TOTAL LIABILITIES AND EQUITY $8,231.6
   $8,123.9
 
The disclosures regarding KCP&LEvergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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KANSAS CITY POWER & LIGHT COMPANY
EVERGY METRO, INC.EVERGY METRO, INC.
Consolidated Statements of Comprehensive Income(Unaudited)
      
 
Three Months Ended
 June 30
 
Year to Date
June 30
 2018 2017 2018 2017
Three Months Ended March 31 2020 2019
 (millions) (millions)
OPERATING REVENUES $452.2
 $482.7
 $849.3
 $878.6
 $375.5
 $425.4
OPERATING EXPENSES:      
  
    
Fuel and purchased power 132.5
 130.2
 250.0
 223.4
 92.5
 134.9
Operating and maintenance 104.5
 113.8
 227.2
 236.4
 105.9
 122.0
Depreciation and amortization 70.2
 68.3
 137.1
 133.6
 81.4
 78.9
Taxes other than income tax 30.3
 44.2
 59.3
 88.8
 32.0
 32.7
Total Operating Expenses 337.5
 356.5
 673.6
 682.2
 311.8
 368.5
INCOME FROM OPERATIONS 114.7
 126.2
 175.7
 196.4
 63.7
 56.9
OTHER INCOME (EXPENSE):            
Investment earnings 0.8
 0.5
 1.4
 1.0
 0.5
 0.8
Other income (1.5) 1.2
 1.5
 3.2
 —
 0.8
Other expense (6.0) (14.7) (13.9) (28.8) (7.4) (5.0)
Total Other Income (Expense) (6.7) (13.0) (11.0) (24.6)
Total Other Expense, Net (6.9) (3.4)
Interest expense 34.6
 35.6
 67.6
 71.2
 28.6
 33.8
INCOME BEFORE INCOME TAXES 73.4
 77.6
 97.1
 100.6
 28.2
 19.7
Income tax expense 48.8
 28.0
 52.3
 36.8
 2.6
 3.7
NET INCOME $24.6
 $49.6
 $44.8
 $63.8
 $25.6
 $16.0
COMPREHENSIVE INCOME            
NET INCOME $24.6
 $49.6
 $44.8
 $63.8
 $25.6
 $16.0
OTHER COMPREHENSIVE INCOME:            
Derivative hedging activity            
Reclassification to expenses, net of tax: 1.0
 1.3
 1.9
 2.6
Reclassification to expenses, net of tax (0.1) 0.9
Derivative hedging activity, net of tax 1.0
 1.3
 1.9
 2.6
 (0.1) 0.9
Total Other Comprehensive Income 1.0
 1.3
 1.9
 2.6
Total other comprehensive income (loss) (0.1) 0.9
COMPREHENSIVE INCOME $25.6
 $50.9
 $46.7
 $66.4
 $25.5
 $16.9
The disclosures regarding KCP&LEvergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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KANSAS CITY POWER & LIGHT COMPANY
EVERGY METRO, INC.EVERGY METRO, INC.
Consolidated Statements of Cash Flows(Unaudited)
      
Year to Date June 302018 2017
Three Months Ended March 312020 2019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)(millions)
Net income$44.8
 $63.8
$25.6
 $16.0
Adjustments to reconcile income to net cash from operating activities:  

   
Depreciation and amortization137.1
 133.6
81.4
 78.9
Amortization of nuclear fuel11.2
 15.9
7.2
 7.4
Amortization of deferred refueling outage7.1
 9.1
3.2
 3.2
Net deferred income taxes and credits24.7
 19.8
(10.2) (5.0)
Allowance for equity funds used during construction(1.1) (1.7)0.1
 (0.2)
Payments for asset retirement obligations(6.3) (8.1)(1.3) (0.8)
Other1.5
 4.4
(0.1) 0.6
Changes in working capital items:      
Accounts receivable(33.3) (1.3)(22.3) 41.9
Accounts receivable pledged as collateral5.0
 6.0
Fuel inventory and supplies(0.1) 4.9
(12.1) 18.3
Prepaid expenses and other current assets(11.6) (8.7)(8.2) 19.2
Accounts payable(86.3) (90.6)(76.0) (66.8)
Accrued taxes75.2
 56.7
39.0
 37.4
Other current liabilities19.4
 (2.9)8.3
 (31.9)
Changes in other assets10.9
 40.6
17.7
 8.9
Changes in other liabilities50.7
 8.0
7.9
 9.2
Cash Flows from Operating Activities243.9
 243.5
65.2
 142.3
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: 
  
 
  
Additions to property, plant and equipment(225.2) (193.4)(135.7) (114.7)
Purchase of securities - trusts(20.4) (13.6)(12.8) (10.3)
Sale of securities - trusts16.2
 12.0
10.6
 8.2
Other investing activities2.9
 (0.4)0.1
 1.9
Cash Flows used in Investing Activities(226.5) (195.4)(137.8) (114.9)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: 
  
 
  
Short term debt, net154.9
 38.9
260.7
 (0.9)
Collateralized short-term debt, net(5.0) (6.0)
Proceeds from long-term debt296.6
 296.5
—
 394.0
Retirements of long-term debt(350.0) (250.0)
Cash dividends paid(120.0) (132.0)(60.0) —
Other financing activities2.9
 —
Cash Flows (used in) from Financing Activities(15.6) (46.6)
NET CHANGE IN CASH AND CASH EQUIVALENTS1.8
 1.5
CASH AND CASH EQUIVALENTS:   
Beginning of period2.2
 4.5
End of period$4.0
 $6.0
Cash Flows from Financing Activities195.7
 387.1
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH123.1
 414.5
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:   
Beginning of period, including restricted cash of $0.0 and $0.0, respectively2.0
 2.6
End of period, including restricted cash of $0.0 and $414.3, respectively$125.1
 $417.1
The disclosures regarding KCP&LEvergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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KANSAS CITY POWER & LIGHT COMPANY
EVERGY METRO, INCEVERGY METRO, INC
Consolidated Statements of Changes in Equity(Unaudited)
          
Common stock shares Common stock Retained earnings AOCI - Net gains (losses) on cash flow hedges Total equity Common stock shares Common Stock Retained earnings AOCI - Net gains (losses) on cash flow hedges Total Equity
(millions, except share amounts) (millions, except share amounts)
Balance as of December 31, 20161
 $1,563.1
 $982.6
 $(4.2) $2,541.5
Balance as of December 31, 20181
$1,563.1
$932.6
$4.1
$2,499.8
Net income—
 —
 63.8
 —
 63.8
—
—
16.0
—
16.0
Cumulative effect of adoption of ASU 2016-09—
 —
 (0.7) —
 (0.7)
Dividends declared on common stock—
 —
 (132.0) —
 (132.0)
Derivative hedging activity, net of tax—
 —
 —
 2.6
 2.6
—
—
—
0.9
0.9
Balance as of June 30, 20171
 $1,563.1
 $913.7
 $(1.6) $2,475.2
Balance as of March 31, 20191
$1,563.1
$948.6
$5.0
$2,516.7
           
Balance as of December 31, 20171
 $1,563.1
 $949.7
 $0.4
 $2,513.2
Balance as of December 31, 20191
$1,563.1
$1,012.8
$4.8
$2,580.7
Net income—
 —
 44.8
 —
 44.8
—
—
25.6
—
25.6
Dividends declared on common stock—
 —
 (120.0) —
 (120.0)—
—
(60.0)—
(60.0)
Derivative hedging activity, net of tax—
 —
 —
 1.9
 1.9
—
—
—
(0.1)(0.1)
Balance as of June 30, 20181
 $1,563.1
 $874.5
 $2.3
 $2,439.9
Balance as of March 31, 20201
$1,563.1
$978.4
$4.7
$2,546.2
The disclosures regarding KCP&LEvergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
WESTAR ENERGY,EVERGY KANSAS CENTRAL, INC.
KANSAS CITY POWER & LIGHT COMPANYEVERGY METRO, INC.
Combined Notes to Unaudited Consolidated Financial Statements
The notes to unaudited consolidated financial statements that follow are a combined presentation for Evergy, Inc., Westar Energy,Evergy Kansas Central, Inc. and Kansas City Power & Light Company,Evergy Metro, Inc., all registrants under this filing.  The terms "Evergy," "Westar Energy,"Evergy Kansas Central," "KCP&L""Evergy Metro" and "Evergy Companies" are used throughout this report.  "Evergy" refers to Evergy, Inc. and its consolidated subsidiaries, unless otherwise indicated.  "Westar Energy""Evergy Kansas Central" refers to Westar Energy,Evergy Kansas Central, Inc. and its consolidated subsidiaries. "KCP&L"subsidiaries, unless otherwise indicated. "Evergy Metro" refers to Kansas City Power & Light CompanyEvergy Metro, Inc. and its consolidated subsidiaries.subsidiaries, unless otherwise indicated. "Evergy Companies" refers to Evergy, Westar Energy,Evergy Kansas Central, and KCP&L,Evergy Metro, collectively, which are individual registrants within the Evergy consolidated group. The Evergy Companies' interim financial statements reflect all adjustments (which include normal, recurring adjustments) that are necessary, in the opinion of management, for a fair presentation of the results for the interim periods presented.  
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:subsidiaries listed below.
Westar EnergyEvergy Kansas Central, Inc. (Evergy Kansas Central) is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Westar EnergyEvergy Kansas Central has one1 active wholly-owned subsidiary with significant operations, Evergy Kansas Gas and Electric Company (KGE)South, Inc. (Evergy Kansas South).
KCP&LEvergy Metro, Inc. (Evergy Metro) 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 GreaterEvergy Missouri Operations Company (GMO)West, Inc. (Evergy Missouri West) 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.
GPEEvergy Transmission Holding Company, LLC (GPETHC)(Evergy Transmission Company) 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, IncInc. (AEP). Transource is focused on the development of competitive electric transmission projects. GPETHCEvergy Transmission Company accounts for its investment in Transource under the equity method.
Westar EnergyEvergy Kansas Central also owns a 50% interest in Prairie Wind Transmission, LLC (Prairie Wind), which is a joint venture between Westar EnergyEvergy Kansas Central and Electric Transmission America, LLC, which itself is a joint venture between affiliatessubsidiaries 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 provideprovides transmission service in the Southwest Power Pool, Inc. (SPP). Westar EnergyEvergyKansas Central accounts for its investment in Prairie Wind under the equity method.


Westar EnergyEvergy Kansas Central, Evergy Kansas South, Evergy Metro and KGEEvergy Missouri West 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.Evergy. Collectively, the Evergy Companies have approximately 13,10014,700 MWs of owned generating capacity and renewable purchased power agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri.
Evergy was incorporated in 2017 as Monarch Energy Holding, Inc. (Monarch Energy), a wholly-owned subsidiary of Great Plains Energy Incorporated (Great Plains Energy). Prior to the closing of the merger transactions, Monarch Energy changed its name to Evergy and did not conduct any business activities other than those required for its formation and matters contemplated by the Amended and Restated Agreement and Plan of Merger, dated as of July
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9, 2017, by and among Great Plains Energy, Westar Energy, Monarch Energy and King Energy, Inc. (King Energy), a wholly-owned subsidiaryBasis of Monarch Energy (Amended Merger Agreement). On June 4, 2018,Presentation
These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the Amended Merger Agreement, Great Plains Energy merged intoinstructions 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 and should be read in conjunction with the consolidated financial statements in the Evergy withCompanies' combined 2019 Form 10-K.
These unaudited consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary to fairly present the unaudited consolidated financial statements for each of the Evergy survivingCompanies for these interim periods. In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the mergerreported amounts of assets and King Energy merged into Westar Energy, with Westar Energy survivingliabilities, the merger. These merger transactions resulted in Evergy becoming the parent entityreported amounts of Westar Energyrevenues and expenses, and the direct subsidiariesdisclosure of Great Plains Energy, including KCP&Lcontingent assets and GMO. See Note 2 for additional information regardingliabilities at the merger.date of the financial statements. Actual results could differ from those estimates.
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 June 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'sEvergy Kansas Central's and KCP&L'sEvergy Metro's unaudited 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 one1 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
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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 June 30, 2017.
   Year to Date
   June 30, 2017
   As FiledUpdated
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:  (in millions)
Adjustments to reconcile income to net cash from operating activities:    
Amortization of other  $15.7
$—
Amortization of deferred refueling outage  —
9.1
Deferred income taxes, net  20.3
—
Investment tax credit amortization  (0.5)—
Net deferred income taxes and credits  —
19.8
Payments for asset retirement obligations  —
(8.1)
Other(a)
  (13.0)4.4
Changes in working capital items:    
Fuel inventory and supplies  —
4.9
Fuel inventories(a)
  9.4
—
Materials and supplies(a)
  (4.5)—
Prepaid expenses and other current assets  —
(8.7)
Accrued interest(a)
  (1.6)—
Other current liabilities  —
(2.9)
Changes in other assets  —
40.6
Changes in other liabilities  —
8.0
Deferred refueling outage costs(a)
  8.1
—
Pension and post-retirement benefit obligations(a)
  36.8
—
Fuel recovery mechanisms(a)
  (3.6)—
Total reclassifications  $67.1
$67.1
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:    
Additions to property, plant and equipment  $—
$(193.4)
Utility capital expenditures  (181.4)—
Allowance for borrowed funds used during construction  (2.4)—
Other investing activities  (10.0)(0.4)
Total reclassifications  $(193.8)$(193.8)
(a)Previously reported within Note 3 to the consolidated financial statements of the Great Plains Energy and KCP&L combined Second Quarter 2017 Quarterly Report on Form 10-Q.
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Fuel Inventory and Supplies
The Evergy Companies record fuel inventory and supplies at average cost. The following table separately states the balances for fuel inventory and supplies are stated separately in the table below.supplies.
  March 31
2020		  December 31
2019		 
Evergy (millions) 
Fuel inventory $166.4
  $146.4
 
Supplies 332.5
  335.2
 
Fuel inventory and supplies $498.9
  $481.6
 
Evergy Kansas Central   
Fuel inventory $87.6
  $80.2
 
Supplies 183.3
  186.2
 
Fuel inventory and supplies $270.9
  $266.4
 
Evergy Metro  
   
 
Fuel inventory $57.9
  $46.1
 
Supplies 117.2
  116.9
 
Fuel inventory and supplies $175.1
  $163.0
 

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 June 30December 31
  2018  2017 
Evergy (millions) 
Fuel inventory $182.9
  $94.1
 
Supplies 357.0
  199.5
 
Fuel inventory and supplies $539.9
  $293.6
 
Westar Energy   
Fuel inventory $82.5
  $94.1
 
Supplies 184.5
  199.5
 
Fuel inventory and supplies $267.0
  $293.6
 
KCP&L(a)
  
   
 
Fuel inventory $68.8
  $71.0
 
Supplies 128.3
  126.0
 
Fuel inventory and supplies $197.1
  $197.0
 
(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 EnergyEvergy Kansas Central and KCP&L.Evergy Metro.
June 30, 2018 Evergy Westar Energy 
KCP&L(a)
March 31, 2020 Evergy Evergy Kansas Central Evergy Metro
 (millions) (millions) 
Electric plant in service $27,158.2
 $13,181.2
 $10,541.0
 $27,995.1
 $13,634.9
 $10,865.3
 
Electric plant acquisition adjustment 740.6
 740.6
 —
 740.6
 740.6
 —
 
Accumulated depreciation (10,055.2) (4,793.7) (4,124.6)  (10,460.3) (5,034.6) (4,340.8) 
Plant in service 17,843.6
 9,128.1
 6,416.4
Plant in service, net  18,275.4
   9,340.9
   6,524.5
 
Construction work in progress 705.3
 417.9
 191.7
 831.0
 452.6
 281.2
 
Nuclear fuel, net 123.5
 61.3
 62.2
 115.9
 57.6
 58.3
 
Plant to be retired, net(b)
 147.5
 6.8
 —
Plant to be retired, net(a)
  0.9
 0.9
 —
 
Property, plant and equipment, net $18,819.9
 $9,614.1
 $6,670.3
 $19,223.2
  $9,852.0
   $6,864.0
 
             
December 31, 2017 Evergy Westar Energy 
KCP&L(a)
December 31, 2019 Evergy Evergy Kansas Central Evergy Metro
 (millions)  (millions) 
Electric plant in service $12,954.3
 $12,954.3
 $10,213.2
 $27,768.8
 $13,538.1
 $10,776.5
 
Electric plant acquisition adjustment 739.0
 739.0
 —
 740.6
 740.6
 —
 
Accumulated depreciation (4,651.7) (4,651.7) (4,070.3)  (10,293.7) (4,951.5) (4,272.0) 
Plant in service 9,041.6
 9,041.6
 6,142.9
Plant in service, net  18,215.7
   9,327.2
 6,504.5
 
Construction work in progress 434.9
 434.9
 350.3
 839.2
 472.8
 269.9
 
Nuclear fuel, net 71.4
 71.4
 72.4
 128.5
 63.9
 64.6
 
Plant to be retired, net(b)
 5.9
 5.9
 —
Plant to be retired, net(a)
  1.0
 1.0
 —
 
Property, plant and equipment, net $9,553.8
 $9,553.8
 $6,565.6
  $19,184.4
   $9,864.9
 $6,839.0
 
(a) KCP&L amounts are not included in consolidated Evergy as As of March 31, 2020, and December 31, 2017.
(b) As of June 30, 2018,2019, represents the planned retirement of GMO's Sibley No. 3 Unit and Westar EnergyEvergy Kansas Central analog meters prior to the end of their remaining useful lives. As
Other Income (Expense), Net
The table below shows the detail of December 31, 2017, representsother expense for each of the planned retirement of Westar Energy analog meters prior to the end of their remaining useful lives.Evergy Companies.
Three Months Ended March 312020 2019
Evergy(millions)
Non-service cost component of net benefit cost$(16.2) $(13.1)
Other(6.5) (6.3)
Other expense$(22.7) $(19.4)
Evergy Kansas Central   
Non-service cost component of net benefit cost$(5.6) $(4.4)
Other(5.9) (6.2)
Other expense$(11.5) $(10.6)
Evergy Metro   
Non-service cost component of net benefit cost$(6.9) $(5.1)
Other(0.5) 0.1
Other expense$(7.4) $(5.0)

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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 computingTo compute basic and diluted earnings per share (EPS).
To compute basic EPS,, Evergy divides the earnings allocatednet income attributable to common stockEvergy, Inc. 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,restricted share units (RSUs), performance shares and restricted stock. Evergy computes the dilutive effects of potential issuances of common shares using the treasury stock method.


The following table reconciles Evergy's basic and diluted EPS.
Three Months Ended March 312020 2019
Income(millions, except per share amounts)
Net income$72.2
 $103.4
Less: Net income attributable to noncontrolling interests2.8
 3.9
Net income attributable to Evergy, Inc.$69.4
 $99.5
Common Shares Outstanding   
Weighted average number of common shares outstanding - basic227.1
 252.8
Add: Effect of dilutive securities0.4
 0.2
Weighted average number of common shares outstanding - dilutive227.5
 253.0
Basic and Diluted EPS$0.31
 $0.39

 Three Months Ended
June 30		 Year to Date
June 30
 2018 2017 2018 2017
Income(millions, except per share amounts)
Net income$104.4
 $76.0
 $167.3
 $139.5
Less: net income attributable to noncontrolling interests2.6
 3.9
 5.0
 7.8
Net income attributable to Evergy, Inc.101.8
 72.1
 162.3
 131.7
Less: net income allocated to RSUs0.1
 0.2
 0.2
 0.2
Net income allocated to common stock$101.7
 $71.9
 $162.1
 $131.5
Common Shares Outstanding   
  
  
Weighted average equivalent common shares outstanding - basic180.9
 142.5
 161.9
 142.5
Add: effect of dilutive securities0.1
 0.1
 0.1
 0.1
Weighted average equivalent common shares outstanding - diluted181.0
 142.6
 162.0
 142.6
Basic and Diluted EPS$0.56
 $0.50
 $1.00
 $0.92
Anti-dilutive shares excluded from the computation of diluted EPS for the three months ended March 31, 2020 were 175,991 RSUs with performance measures and 58,714 RSUs with only service requirements. There were no0 anti-dilutive securities excluded from the computation of diluted EPS for the three months ended June 30, 2018 and for the three months ended and year to date June 30, 2017. Anti-dilutive shares excluded from the computation of diluted EPS for year to date June 30, 2018 were 172,431 performance shares.March 31, 2019.
Dividends Declared
In August 2018,May 2020, Evergy's Board of Directors (Evergy Board) declared a quarterly dividend of $0.46$0.505 per share on Evergy's common stock. The common dividend is payable September 20, 2018,June 19, 2020, to shareholders of record as of August 29, 2018.May 20, 2020.
In August 2018, Westar Energy's Board of Directors and KCP&L'sMay 2020, Evergy Kansas Central's Board of Directors declared a cash dividendsdividend payable to Evergy of $66.0 million and $60.0 million, respectively, payable on September 19, 2018.June 18, 2020.
TableIn May 2020, Evergy Metro's Board of Contents


Directors declared a cash dividend payable to Evergy of $20.0 million, payable on June 18, 2020.
Supplemental Cash Flow Information
Year to Date June 30 2018 2017
Evergy (millions)
Cash paid for (received from):    
Interest, net of amounts capitalized $93.8
 $76.0
Interest of VIEs 1.3
 1.7
Income taxes, net of refunds —
 (12.7)
Non-cash investing transactions:    
Property, plant and equipment additions (reductions) (37.1) 89.9
Non-cash financing transactions:    
Issuance of stock for compensation and reinvested dividends 0.2
 4.8
Assets acquired through capital leases 0.1
 3.1
Westar Energy  
Cash paid for (received from):    
Interest, net of amounts capitalized $77.5
 $76.0
Interest of VIEs 1.3
 1.7
Income taxes, net of refunds —
 (12.7)
Non-cash investing transactions:    
Property, plant and equipment additions (reductions) (37.2) 89.9
Non-cash financing transactions:    
Issuance of stock for compensation and reinvested dividends —
 4.8
Assets acquired through capital leases 0.1
 3.1
KCP&L(a)
  
Cash paid for (received from):    
Interest, net of amounts capitalized $68.3
 $66.6
Income taxes, net of refunds (7.4) (10.1)
Non-cash investing transactions:    
Property, plant and equipment additions 22.2
 26.5
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through June 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
Compensation - Retirement Benefits
In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 statement of income.
Evergy    
Three Months Ended March 31 2020 2019
Cash paid for (received from): (millions)
Interest, net of amounts capitalized $86.5
 $59.3
Interest of VIEs 0.6
 1.0
Income taxes, net of refunds 0.2
 (0.1)
Right-of-use assets obtained in exchange for new operating lease liabilities 2.6
 2.2
Non-cash investing transactions:    
Property, plant and equipment additions 75.7
 47.1
Non-cash financing transactions:    
Issuance of stock for compensation and reinvested dividends 0.9
 0.5
Right-of-use assets obtained in exchange for new finance lease liabilities 3.1
 2.3
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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.
 
Three Months Ended
 June 30, 2017
 
Year to Date
June 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$144.7
 $(5.1) $139.6
 $285.1
 $(10.1) $275.0
Total operating expenses454.2
 (5.1) 449.1
 900.4
 (10.1) 890.3
Income from operations155.1
 5.1
 160.2
 281.5
 10.1
 291.6
Other expense(2.6) (5.1) (7.7) (8.0) (10.1) (18.1)
Total other income (expense)(1.0) (5.1) (6.1) (3.7) (10.1) (13.8)
Westar Energy          
Operating and maintenance expense$144.7
 $(5.1) $139.6
 $285.1
 $(10.1) $275.0
Total operating expenses454.2
 (5.1) 449.1
 900.4
 (10.1) 890.3
Income from operations155.1
 5.1
 160.2
 281.5
 10.1
 291.6
Other expense(2.6) (5.1) (7.7) (8.0) (10.1) (18.1)
Total other income (expense)(1.0) (5.1) (6.1) (3.7) (10.1) (13.8)
KCP&L(a)
          
Operating and maintenance expense$126.2
 $(12.4) $113.8
 $260.8
 $(24.4) $236.4
Total operating expenses368.9
 (12.4) 356.5
 706.6
 (24.4) 682.2
Income from operations113.8
 12.4
 126.2
 172.0
 24.4
 196.4
Other expense(2.3) (12.4) (14.7) (4.4) (24.4) (28.8)
Total other income (expense)(0.6) (12.4) (13.0) (0.2) (24.4) (24.6)
(a) KCP&L amounts are not included in consolidated Evergy for the three months ended and year to date June 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 $1.5 million from the settlement of COLI policies from cash inflows from operating activities to cash inflows from investing activities for year to date June 30, 2017, for Evergy and Westar Energy.  In addition, cash payments of $1.9 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 June 30, 2017. The adoption of ASU No. 2016-18 did not have a material impact on KCP&L.
Evergy Kansas Central    
Three Months Ended March 31 2020 2019
Cash paid for (received from): (millions)
Interest, net of amounts capitalized $37.4
 $32.6
Interest of VIEs 0.6
 1.0
Income taxes, net of refunds 0.2
 —
Right-of-use assets obtained in exchange for new operating lease liabilities 2.6
 —
Non-cash investing transactions:    
Property, plant and equipment additions 52.5
 27.1
Non-cash financing transactions:    
Right-of-use assets obtained in exchange for new finance lease liabilities 1.9
 2.3
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Evergy Metro    
Three Months Ended March 31 2020 2019
Cash paid for (received from): (millions)
Interest, net of amounts capitalized $18.7
 $19.6
Right-of-use assets obtained in exchange for new operating lease liabilities —
 2.2
Non-cash investing transactions:    
Property, plant and equipment additions 17.8
 15.9
Non-cash financing transactions:    
Right-of-use assets obtained in exchange for new finance lease liabilities 1.2
 —


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 is required to be applied using a modified retrospective approach.  The Evergy Companies plan to adopt the new guidance on January 1, 2019. 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 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. The Evergy Companies also continue to monitor unresolved industry issues, including renewables and power purchase agreements, and will analyze the related impact. 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 $19.7 million and $37.6 million for the three months ended and year to date June 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.
2. MERGER OF GREAT PLAINS ENERGY AND WESTAR ENERGY
Description of 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
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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 social responsibility commitments.
Provide a total of $30.6 million of one-time bill credits to Kansas electric retail customers as soon as practicable following the close of the merger and the completion of Westar Energy's and KCP&L's current rate cases in Kansas. Of this total, $23.1 million of the credits will be provided to Westar Energy customers with the remaining $7.5 million of credits to be provided 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 of the credits will be provided to Westar Energy customers with the remaining $2.8 million of credits to be provided to KCP&L Kansas customers.
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.
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.
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.
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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 social responsibility commitments.
Provide a total of $29.1 million of one-time bill credits to Missouri electric retail customers within 120 days following the close of the merger. Of this total, $14.9 million of the credits will be provided to KCP&L Missouri customers with the remaining $14.2 million of credits to be provided 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.
Accounting Charges and Deferrals Related to the Merger
The following pre-tax reductions of revenue, expenses and deferral were recognized in June 2018 following the consummation of the merger and are included in the Evergy Companies' consolidated statements of income and comprehensive income for the three months ended and year to date June 30, 2018.
DescriptionIncome Statement Line ItemExpected Payment Period Evergy Westar Energy KCP&L
    (millions)
One-time bill creditsOperating revenues2018 - 2019 $(59.7) $(23.1) $(22.4)
Annual bill creditsOperating revenues2019 - 2022 (4.8) (3.6) (1.2)
Total impact to operating revenues   $(64.5) $(26.7) $(23.6)
         
Charitable contributions and community supportOperating and maintenance2018 - 2027 $24.7
 $—
 $—
Voluntary severance and accelerated equity compensationOperating and maintenance2018 39.9
 39.9
 —
Other transaction and transition costsOperating and maintenance2018 40.7
 19.0
 0.6
Reallocation and deferral of merger transition costsOperating and maintenancen/a (47.8) (13.8) (23.2)
Total impact to operating and maintenance expense   $57.5
 $45.1
 $(22.6)
Total   $(122.0) $(71.8) $(1.0)
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 in June 2018 upon 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
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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.
  (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

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.
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The preliminary purchase price allocation to Great Plains Energy's assets and liabilities as of June 4, 2018 is detailed in the following table.
  (millions)
Current assets $2,151.7
Property, plant and equipment, net 9,179.7
Goodwill 2,333.7
Other long-term assets, excluding goodwill 1,235.9
Total assets $14,901.0
Current liabilities 1,673.9
Long-term liabilities, excluding long-term debt 2,892.8
Long-term debt, net 3,358.6
Total liabilities $7,925.3
Total purchase price $6,975.7
Impact of Merger
The impact of Great Plains Energy's subsidiaries on Evergy's revenues and net income attributable to Evergy in the consolidated statements of income for the three months and year to date June 30, 2018, was an increase of $242.6 million and $60.2 million, respectively.
Evergy has incurred total merger-related costs, including reductions of revenue for customer bill credits, of $123.3 million and $124.0 million for the three months ended and year to date June 30, 2018, respectively, and $0.5 million and $1.0 million for the three months ended and year to date June 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.
 Three Months Ended
June 30		 Year to Date
June 30
 2018 2017 2018 2017
 (millions, except per share amounts)
Operating revenues$1,365.9
 $1,291.9
 $2,552.3
 $2,435.2
Net income attributable to Evergy, Inc.243.7
 160.7
 335.6
 246.6
Basic earnings per common share$0.90
 $0.59
 $1.24
 $0.91
Diluted earnings per common share$0.90
 $0.59
 $1.23
 $0.91
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 $68.5 million and $69.2 million for the three months ended and year to date June 30, 2018, respectively, and $1.0 million and $3.3 million for the three months ended and year to date June 30, 2017, respectively.
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3. REVENUE
Evergy's, Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's revenues disaggregated by customer class are summarized in the following tables.
Three Months Ended June 30, 2018Evergy Westar Energy 
KCP&L(a)
Revenues(millions)
Residential$342.0
 $221.1
 $187.0
Commercial259.1
 170.0
 196.3
Industrial108.6
 91.8
 34.1
Other retail6.4
 5.7
 2.3
Total electric retail$716.1
 $488.6
 $419.7
Wholesale89.7
 87.1
 5.5
Transmission75.1
 72.2
 3.9
Industrial steam and other2.2
 1.3
 2.3
Total revenue from contracts with customers$883.1
 $649.2
 $431.4
Other10.3
 1.7
 20.8
Operating revenues$893.4
 $650.9
 $452.2
      
Year to Date June 30, 2018Evergy Westar Energy 
KCP&L(a)
Revenues(millions)
Residential$522.3
 $401.4
 $341.9
Commercial414.5
 325.4
 378.1
Industrial202.1
 185.3
 66.3
Other retail10.6
 9.9
 5.0
Total electric retail$1,149.5
 $922.0
 $791.3
Wholesale183.9
 181.3
 8.6
Transmission147.0
 144.1
 7.2
Industrial steam and other4.0
 3.1
 2.3
Total revenue from contracts with customers$1,484.4
 $1,250.5
 $809.4
Other9.2
 0.6
 39.9
Operating revenues$1,493.6
 $1,251.1
 $849.3
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through June 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.
Three Months Ended March 31, 2020Evergy Evergy Kansas Central Evergy Metro
Revenues (millions) 
Residential $402.5
   $167.8
   $147.4
 
Commercial 384.7
   151.1
   172.1
 
Industrial 140.6
   92.1
   30.1
 
Other retail 10.6
   4.7
   3.5
 
Total electric retail $938.4
   $415.7
   $353.1
 
Wholesale 63.5
   54.8
   6.8
 
Transmission 75.6
   68.2
   3.1
 
Industrial steam and other 8.4
   3.5
   0.4
 
Total revenue from contracts with customers $1,085.9
   $542.2
   $363.4
 
Other 30.8
   17.9
   12.1
 
Operating revenues $1,116.7
   $560.1
   $375.5
 
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Three Months Ended March 31, 2019Evergy Evergy Kansas Central Evergy Metro
Revenues (millions) 
Residential $451.7
   $192.3
   $164.2
 
Commercial 413.5
   164.3
   183.8
 
Industrial 147.0
   98.4
   29.7
 
Other retail 9.8
   5.1
   2.6
 
Total electric retail $1,022.0
   $460.1
   $380.3
 
Wholesale 83.1
   61.3
   18.1
 
Transmission 76.7
   69.2
   3.1
 
Industrial steam and other 3.3
   1.7
   1.4
 
Total revenue from contracts with customers $1,185.1
   $592.3
   $402.9
 
Other 31.8
   4.5
   22.5
 
Operating revenues $1,216.9
   $596.8
   $425.4
 



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.
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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4.3. RECEIVABLES
The Evergy Companies' receivables are detailed in the following table.
  March 31
2020		 December 31
2019
Evergy (millions)
Customer accounts receivable - billed $3.9
 $7.2
Customer accounts receivable - unbilled 63.6
 104.0
Other receivables 133.2
 127.8
Allowance for credit losses (11.5) (10.5)
Total $189.2
 $228.5
Evergy Kansas Central  
Customer accounts receivable - billed $—
 $—
Customer accounts receivable - unbilled 26.1
 49.7
Other receivables 120.4
 94.5
Allowance for credit losses (4.1) (3.8)
Total $142.4
 $140.4
Evergy Metro  
  
Customer accounts receivable - billed $3.3
 $3.1
Customer accounts receivable - unbilled 16.9
 26.5
Other receivables 18.4
 23.1
Allowance for credit losses (5.2) (4.6)
Total $33.4
 $48.1

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 June 30December 31
  2018  2017 
Evergy (millions) 
Customer accounts receivable - billed $194.3
  $165.4
 
Customer accounts receivable - unbilled 240.5
  76.6
 
Other receivables 67.7
  55.4
 
Allowance for doubtful accounts (13.8)  (6.7) 
Total $488.7
  $290.7
 
Westar Energy   
Customer accounts receivable - billed $173.7
  $165.4
 
Customer accounts receivable - unbilled 95.8
  76.6
 
Other receivables 42.3
  55.4
 
Allowance for doubtful accounts (6.2)  (6.7) 
Total $305.6
  $290.7
 
KCP&L (a)
  
   
 
Customer accounts receivable - billed $15.0
  $1.6
 
Customer accounts receivable - unbilled 95.5
  67.6
 
Other receivables 18.0
  39.3
 
Allowance for doubtful accounts (4.0)  (2.2) 
Total $124.5
  $106.3
 

(a) KCP&L amounts are not included in consolidatedEvergy's, Evergy as of December 31, 2017.

Evergy's, Westar Energy'sKansas Central's and KCP&L'sEvergy Metro's other receivables at June 30, 2018March 31, 2020 and December 31, 20172019, consisted primarily of receivables from partners in jointly-owned electric utility plants, and wholesale sales receivables. As of June 30, 2018,receivables and receivables related to alternative revenue programs. The Evergy Companies' other receivables for Evergy, Westar Energy and KCP&Lalso included receivables from contracts with customers of $41.4 million, $36.6 million and $1.4 million, respectively.
The Evergy Companies' recorded bad debt expense related to contracts with customers as summarized in the following table.
 March 31
2020		 December 31
2019
 (millions)
Evergy$45.8
 $42.0
Evergy Kansas Central43.9
 37.7
Evergy Metro1.3
 1.2

Allowance for Credit Losses
Historical loss information generally provides the basis for the Evergy Companies' assessment of expected credit losses. The Evergy Companies use an aging of accounts receivable method to assess historical loss information. When historical experience may not fully reflect the Evergy Companies' expectations about the future, the Evergy Companies will adjust historical loss information, as necessary, to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information. The Evergy Companies have made an insignificant adjustment to their allowance for credit losses as of March 31, 2020 to reflect their belief that historical loss information does not reflect current conditions that have resulted from the economic slowdown resulting from the Coronavirus (COVID-19) pandemic.

Receivables are charged off when they are deemed uncollectible, which is based on a number of factors including specific facts surrounding an account and management's judgment.

The change in the Evergy Companies' allowance for credit losses is summarized in the following table.
 Three Months Ended
June 30		 Year to Date
June 30
 2018 2017 2018 2017
 (millions)
Evergy$2.1
 $0.2
 $6.1
 $3.4
Westar Energy1.1
 0.2
 5.1
 3.4
KCP&L (a)
1.9
 1.7
 3.6
 3.2
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through June 30, 2018.
Three Months Ended March 312020 2019
Evergy(millions)
Beginning balance$10.5
 $9.2
Credit loss expense2.7
 3.8
Write-offs(5.0) (6.5)
Recoveries of prior write-offs3.3
 3.3
Ending balance$11.5
 $9.8
Evergy Kansas Central   
Beginning balance$3.8
 $3.9
Credit loss expense0.8
 (0.5)
Write-offs(1.2) (0.2)
Recoveries of prior write-offs0.7
 1.0
Ending balance$4.1
 $4.2
Evergy Metro   
Beginning balance$4.6
 $3.8
Credit loss expense1.4
 2.8
Write-offs(2.6) (4.2)
Recoveries of prior write-offs1.8
 1.6
Ending balance$5.2
 $4.0
Sale of Accounts Receivable – KCP&L
Evergy Kansas Central, Evergy Metro 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 turnEvergy Missouri West sell an undivided percentage ownership interest in thetheir retail electric 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 isinvestors. These sales are accounted for as a secured borrowing
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borrowings with accounts receivable pledged as collateral and a corresponding short-term collateralized note payable recognized on the balance sheets.  At June 30, 2018, Evergy'sThe Evergy Companies' accounts receivable pledged as collateral and the corresponding short-term collateralized note payable were $195.0 million. At June 30, 2018 and December 31, 2017, KCP&L's accountsare summarized in the following table.
 March 31
2020		 December 31
2019
 (millions)
Evergy$322.0
 $339.0
Evergy Kansas Central159.0
 171.0
Evergy Metro113.0
 118.0

Each receivable pledged as collateral and the corresponding short-term collateralized note
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payable were $130.0 million. KCP&L's agreementsale facility expires in September 20182020. Evergy Kansas Central's facility allows for $185.0 million in aggregate outstanding principal amount of borrowings from mid-October through mid-June and then $200.0 million from mid-June through the expiration date of the facility. Evergy Metro's facility allows for $130.0 million in aggregate outstanding principal amount of borrowings at any time. GMO's agreement expires in September 2018 andEvergy Missouri West's facility allows for $50.0 million in aggregate outstanding principal amount of borrowings from mid-November through mid-June and then $65.0 million from mid-June through mid-November.the expiration date of the facility.
5.4. RATE MATTERS AND REGULATION
KCC Proceedings
Westar Energy 2018Evergy Kansas Central 2020 Transmission Delivery Charge (TDC)
In March 2018,2020, the State Corporation Commission of the State of Kansas (KCC) issued an order adjusting Evergy Kansas Central's retail prices to include updated transmission costs as reflected in the Federal Energy Regulatory Commission (FERC) transmission formula rate (TFR). The new prices were effective in April 2020 and are expected to increase Evergy Kansas Central's annual retail revenues by $3.5 million.
Evergy Metro 2020 TDC
In April 2020, the KCC issued an order adjusting Westar Energy'sEvergy Metro's retail prices to include updated transmission costs as reflected in the FERC transmission formula rate (TFR).TFR. The new prices were effective in April 2018May 2020 and are expected to increase Westar Energy'sdecrease Evergy Metro's annual retail revenues by $31.5$2.7 million.
Westar Energy 2018 Rate Case ProceedingsEvergy Kansas Central and Evergy Metro Earnings Review and Sharing Plan (ERSP)
In February 2018, Westar Energy filed an applicationAs part of their merger settlement agreement with the KCC, Evergy Kansas Central and Evergy Metro agreed to request a two-step changeparticipate in rates, a decreasean ERSP for the years 2019 through 2022. Under the ERSP, Evergy Kansas Central's and Evergy Metro's Kansas jurisdiction are required to retail revenuesrefund to customers 50% of approximately $2 millionannual earnings in September 2018 followed by an increase in retail revenuesexcess of approximately $54 million in February 2019, with atheir authorized return on equity of 9.85%9.3% to the extent the excess earnings exceed the amount of Evergy Kansas Central's and a rate-making equity ratioEvergy Metro's annual merger bill credits for the year being measured.
Evergy Kansas Central's and Evergy Metro's 2019 calculations 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 the 10-year period for 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 approximately $66 million, before rebasing property tax expense, with aannual earnings did not exceed their authorized return on equity of 9.3%, and therefore did not result in any customer refund obligations. These calculations were filed with the KCC in April 2020. As of March 31, 2020, Evergy Kansas Central and Evergy Metro estimate their 2020 annual earnings will not result in a rate-making equity ratiorefund obligation. The final refund obligations for 2019 and 2020, if any, will be decided by the KCC and could vary from the current estimates.
Evergy Kansas Central and Evergy Metro COVID-19 Accounting Authority Order (AAO) Request
In May 2020, Evergy Kansas Central and Evergy Metro filed a request for an AAO with the KCC that would allow for the extraordinary costs and financial impacts incurred by the companies as a result of 51.46%the COVID-19 pandemic to be considered for future recovery from customers as part of their next rate case. A decision by the KCC regarding the AAO request is expected in the second half of 2020.
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MPSC Proceedings
Evergy Missouri West Other Proceedings
In December 2018, the Office of the Public Counsel (OPC) and the Midwest Energy Consumers Group (MECG) filed a petition with the Public Service Commission of the State of Missouri (MPSC) requesting an AAO that would require Evergy Missouri West to record a regulatory liability for all revenues collected from customers for return on investment, non-fuel operations and maintenance costs, taxes including accumulated deferred income taxes, and all other costs associated with Sibley Station following the station’s retirement in November 2018.
In October 2019, the MPSC granted OPC's and MECG's request for an AAO and required Evergy Missouri West to record to a regulatory liability the revenues discussed above for consideration in Evergy Missouri West's next rate case, which is expected to be completed no later than 2022. Depending on the MPSC's decision in this next rate case, Evergy Missouri West could be required to refund to customers all or a portion of amounts collected in revenue for Sibley Station since December 2018 or, alternatively, could be required to make no refunds.
As a result of the MPSC order, Evergy has recorded a regulatory liability of $12.9 million as of March 31, 2020 for the estimated amount of revenues that Evergy Missouri West has collected from customers for Sibley Station since December 2018 that Evergy has determined is probable of refund. Evergy expects that it will continue to defer such amounts as collected from customers until new rates become effective in Evergy Missouri West's next rate case.
The accrual for this estimated amount does not include certain revenues collected related to Sibley Station that Evergy has determined to not be probable of refund in the next rate case based on the relevant facts and circumstances. While Evergy has determined these additional revenues to not be probable of refund, the ultimate resolution of this matter in Evergy Missouri West's next rate case is uncertain and could result in an estimated loss of up to approximately $12 million per year in excess of the amount accrued until Evergy Missouri West's new rates become effective. Evergy's regulatory liability for probable refunds as of March 31, 2020 and estimated loss in excess of the amount accrued represent estimates that could change significantly based on ongoing developments including as 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 recoveryresult 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 impactsappeal of the Tax CutsMPSC order, decisions in other regulatory proceedings that establish precedent applicable to this matter and Jobs Act, includingpositions of parties on this issue in a one-time bill credit of approximately $50 million to be provided to customers following the conclusion of thefuture Evergy Missouri West rate case.
The non-unanimous stipulationEvergy Metro and agreement is subject to the approval of the KCC. An evidentiary hearing in the case occurred in July 2018 and new rates are expected to go into effect in September 2018.
KCP&L 2018 Rate Case ProceedingsEvergy Missouri West COVID-19 AAO Request
In May 2018, KCP&L2020, Evergy Metro and Evergy Missouri West filed a request for an applicationAAO with the KCC to request an increase to its retail revenues of $26.2 million before rebasing property tax expense, withMPSC that would allow for the extraordinary costs and financial impacts incurred by the companies as a return on equity of 9.85% and a rate-making equity ratio of 49.8%. The request reflects the impactresult 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.
AsCOVID-19 pandemic to be considered for future recovery from customers as part of the merger settlement agreement reached among Westar Energy, Great Plains Energy, KCP&L, KCC staff and several other intervenors discussed further in Note 2, certain parties agreed to accept specific merger-contingent conditions or take particular positions in thetheir next rate case. Among these conditions, KCP&L agreed to accept a 9.3% return on equity and a limited amount of merger-related savings and transition costs included in its rate request. If KCC approves KCP&L's rate request with these merger-related conditions, KCP&L estimates that its increase in retail revenues will be approximately $16 million, compared withA decision by the $26.2 million increase originally requested.

Testimony from the KCC staff and other partiesMPSC regarding the caseAAO request is expected in October 2018, with an evidentiary hearing to occur later in October 2018 and new rates expected to go into effect in December 2018.
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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.
Testimony from MPSC staff and other parties regarding the case was filed in June 2018. The MPSC staff’s testimony recommended a return on equity range from 9.0% to 10.0% and a decrease to retail revenues of $19.1 million. The outcome of the KCP&L Missouri rate case will likely be different from either of the positions of KCP&L or MPSC staff, though the decision of the MPSC cannot be predicted.
An evidentiary hearing in the case is expected to occur in September 2018 with new rates expected to go into effect in 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.
Testimony from MPSC staff and other parties regarding the case was filed in June 2018. The MPSC staff’s testimony recommended a return on equity range from 9.0% to 10.0% and a decrease to retail revenues of $34.8 million. The outcome of the GMO rate case will likely be different from either of the positions of GMO or MPSC staff, though the decision of the MPSC cannot be predicted.
An evidentiary hearing in the case is expected to occur in September 2018 with new rates expected to go into effect in December 2018.2020.
FERC Proceedings
Westar Energy'sEvergy Kansas Central TFR
Evergy Kansas Central's TFR, effective in January 2018,2020, includes projected 20182020 transmission capital expenditures and operating costs and wasis expected to increase annual transmission revenues by $25.5 million. Due$6.8 million when compared to 2019. This rate is the passage of the Tax Cutsmost material and Jobs Act, Westar Energy requested permission from FERC to retroactively reflect the reductionsignificant component in the federal corporate income taxretail rate in its 2018 prices. In April 2018, FERC granted the request and Westar Energy has recorded a regulatory liability as of June 30, 2018 of $7.8 million. This updated rate will provide the basiscalculation for a newEvergy Kansas Central's annual request with the KCC to retroactively adjust Westar Energy's retail prices to include updated transmission costs. Itcosts through the TDC.
Evergy Metro TFR
Evergy Metro's TFR, effective in January 2020, includes projected 2020 transmission capital expenditures and operating costs and is estimated the revised TFR will increase 2018expected to decrease annual transmission revenues by $2.3$1.7 million when compared to 2017.2019. This rate is the most material and significant component in the retail rate calculation for Evergy Metro's annual request with the KCC to adjust retail prices to include updated transmission costs through the TDC.
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.
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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 amount of asbestos could be determined as of June 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 June 30, 2018 and December 31, 2017.
  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 (127.0)  66.8
  (127.0)  66.8
  —
  0.3
 
Settlements (8.2)  (16.0)  (7.2)  (16.0)  (6.3)  (25.5) 
Accretion 10.8
  16.8
  9.5
  16.8
  6.7
  13.5
 
Ending balance $700.3
  $405.1
  $287.8
  $405.1
  $266.7
  $266.3
 
Less: current portion (72.4)  (25.1)  (25.1)  (25.1)  (43.2)  (34.9) 
Total noncurrent asset retirement obligation $627.9
  $380.0
  $262.7
  $380.0
  $223.5
  $231.4
 
(a) KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through June 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.
7.5. PENSION PLANS AND OTHER EMPLOYEEPOST-RETIREMENT BENEFITS
Evergy and certain of its subsidiaries maintain, and Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro participate in, qualified non-contributory defined benefit pension plans covering the majority of Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's employees as well as certain non-qualified plans covering certain active and retired officers. Evergy
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is also responsible for its indirect 94% ownership share of Wolf Creek Nuclear Operating Corporation (WCNOC)Generating Station's (Wolf Creek) defined benefit plans, consisting of Westar Energy'sEvergy Kansas South's and KCP&L'sEvergy Metro's respective 47% ownership shares.
For the majority of employees, pension benefits under these plans reflect the employees' compensation, years of service and age at retirement. However, for the plan covering Westar Energy'sEvergy Kansas Central's employees, the benefits for non-union employees hired between 2002 and the second quarter of 2018 and union employees hired beginning in 2012 are derived from a cash balance account formula. The plan was closed to future non-union employees in 2018. For the plans covering KCP&L'sEvergy Metro's employees, the benefits for union employees hired beginning in 2014 are derived from a cash balance account formula and the plans were closed to future non-union employees in 2014.
Evergy and its subsidiaries also provide certain post-retirement health care and life insurance benefits for substantially all retired employees of Westar EnergyEvergy Kansas Central and KCP&LEvergy Metro and their respective shares of WCNOC'sWolf Creek's post-retirement benefit plans.
The Evergy Companies record pension and post-retirement expense in accordance with rate orders from the KCC and MPSC that allow the difference between pension and post-retirement costs under GAAP and costs for
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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.
 Pension Benefits Post-Retirement Benefits
Three Months Ended March 31, 2020Evergy Evergy Kansas Central Evergy Metro Evergy Evergy Kansas Central Evergy Metro
Components of net periodic benefit costs(millions)
Service cost$19.6
 $6.8
 $12.8
 $0.7
 $0.3
 $0.4
Interest cost24.4
 11.8
 12.6
 2.3
 1.2
 1.1
Expected return on plan assets(26.7) (13.3) (14.1) (2.3) (1.7) (0.7)
Prior service cost0.4
 0.4
 0.2
 0.1
 0.1
 —
Recognized net actuarial (gain)/loss11.4
 8.4
 11.3
 0.1
 —
 (0.1)
Net periodic benefit costs before regulatory adjustment and intercompany allocations29.1
 14.1
 22.8
 0.9
 (0.1) 0.7
Regulatory adjustment9.9
 0.4
 1.4
 (0.9) (0.7) —
Intercompany allocations—
 —
 (6.2) —
 —
 0.2
Net periodic benefit costs (income)$39.0
 $14.5
 $18.0
 $—
 $(0.8) $0.9

Pension Benefits Post-Retirement BenefitsPension Benefits Post-Retirement Benefits
Three Months Ended June 30, 2018Evergy Westar Energy 
KCP&L(a)
 Evergy Westar Energy 
KCP&L(a)
Three Months Ended March 31, 2019Evergy Evergy Kansas Central Evergy Metro Evergy Evergy Kansas Central Evergy Metro
Components of net periodic benefit costs(millions)(millions)
Service cost$12.2
 $8.1
 $9.1
 $0.5
 $0.3
 $0.4
$19.1
 $7.3
 $11.8
 $0.6
 $0.3
 $0.3
Interest cost17.2
 12.7
 9.4
 1.7
 1.3
 0.8
27.5
 13.4
 14.1
 2.6
 1.4
 1.2
Expected return on plan assets(18.3) (14.0) (10.6) (2.0) (1.7) (0.5)(27.1) (13.7) (12.3) (2.4) (1.7) (0.7)
Amortization of unrecognized:           
Prior service cost0.1
 0.1
 0.1
 0.1
 0.1
 —
0.5
 0.4
 0.2
 0.1
 0.1
 —
Recognized net actuarial (gain)/loss8.1
 8.1
 8.4
 (0.2) (0.2) —
6.9
 6.4
 12.2
 (0.3) (0.1) (0.4)
Net periodic benefit costs before regulatory adjustment19.3
 15.0
 16.4
 0.1
 (0.2) 0.7
Net periodic benefit costs before regulatory adjustment and intercompany allocations26.9
 13.8
 26.0
 0.6
 —
 0.4
Regulatory adjustment3.0
 2.8
 0.7
 (0.5) (0.5) (0.2)(0.1) 0.5
 (0.6) (0.7) (0.8) 0.1
Net periodic benefit costs$22.3
 $17.8
 $17.1
 $(0.4) $(0.7) $0.5
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through June 30, 2018.
           
Pension Benefits Post-Retirement Benefits
Year to Date June 30, 2018Evergy Westar Energy 
KCP&L(a)
 Evergy Westar Energy 
KCP&L(a)
Components of net periodic benefit costs(millions)
Service cost$20.2
 $16.1
 $18.3
 $0.8
 $0.6
 $0.7
Interest cost29.9
 25.4
 18.9
 2.9
 2.5
 1.7
Expected return on plan assets(32.3) (28.0) (21.1) (3.7) (3.4) (1.0)
Amortization of unrecognized:           
Prior service cost0.3
 0.3
 0.2
 0.2
 0.2
 —
Recognized net actuarial (gain)/loss16.3
 16.3
 16.7
 (0.3) (0.3) (0.1)
Net periodic benefit costs before regulatory adjustment34.4
 30.1
 33.0
 (0.1) (0.4) 1.3
Regulatory adjustment5.8
 5.6
 1.4
 (0.9) (0.9) (0.3)
Net periodic benefit costs$40.2
 $35.7
 $34.4
 $(1.0) $(1.3) $1.0
Intercompany allocations—
 —
 (6.9) —
 —
 (0.1)
Net periodic benefit costs (income)$26.8
 $14.3
 $18.5
 $(0.1) $(0.8) $0.4
(a) KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through June 30, 2018.


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 Pension Benefits Post-Retirement Benefits
Three Months Ended June 30, 2017Evergy 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 cost13.1
 13.1
 9.8
 1.4
 1.4
 1.0
Expected return on plan assets(13.4) (13.4) (9.5) (1.7) (1.7) (0.4)
Amortization of unrecognized:           
Prior service cost0.2
 0.2
 0.1
 0.1
 0.1
 —
Recognized net actuarial (gain)/loss6.7
 6.7
 8.9
 (0.2) (0.2) (0.1)
Net periodic benefit costs before regulatory adjustment13.8
 13.8
 17.4
 (0.1) (0.1) 0.9
Regulatory adjustment3.5
 3.5
 2.2
 (0.5) (0.5) 0.4
Net periodic benefit costs$17.3
 $17.3
 $19.6
 $(0.6) $(0.6) $1.3
(a) KCP&L amounts are not included in consolidated Evergy for the three months ended and year to date June 30, 2017.
            
 Pension Benefits Post-Retirement Benefits
Year to Date June 30, 2017Evergy Westar Energy 
KCP&L(a)
 Evergy Westar Energy 
KCP&L(a)
Components of net periodic benefit costs(millions)
Service cost$14.3
 $14.3
 $16.3
 $0.6
 $0.6
 $0.7
Interest cost26.2
 26.2
 19.6
 2.8
 2.8
 1.9
Expected return on plan assets(26.8) (26.8) (19.1) (3.4) (3.4) (0.9)
Amortization of unrecognized:           
Prior service cost0.4
 0.4
 0.2
 0.2
 0.2
 —
Recognized net actuarial (gain)/loss13.5
 13.5
 17.8
 (0.4) (0.4) (0.2)
Net periodic benefit costs before regulatory adjustment27.6
 27.6
 34.8
 (0.2) (0.2) 1.5
Regulatory adjustment7.0
 7.0
 4.1
 (1.0) (1.0) 1.0
Net periodic benefit costs$34.6
 $34.6
 $38.9
 $(1.2) $(1.2) $2.5
(a) KCP&L amounts are not included in consolidated Evergy for the three months ended and year to date June 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 June 30, 2018,For the three months ended March 31, 2020, Evergy, Evergy Kansas Central and Westar EnergyEvergy Metro made pension contributions of $25.0$21.4 million, $18.0 million and KCP&L made pension contributions of $13.7 million.$3.4 million, respectively. Evergy expects to make additional pension contributions of $88.8$106.7 million in 20182020 to satisfy the Employee Retirement Income Security Act of 1974, as amended (ERISA) funding requirements and KCC and MPSC rate orders, of which $17.4$27.5 million is expected to be paid by Westar EnergyEvergy Kansas Central and $71.4$79.2 million is expected to be paid by KCP&L.Evergy Metro. Also in 2018,2020, Evergy, Evergy Kansas Central and KCP&LEvergy Metro expect to make contributions of $4.6$3.8 million, $0.8 million and $3.0 million, respectively, to the post-retirement benefit plans.
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 restricted share units (RSU) 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 the three months ended and year to date June 30, 2018.

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All of Great Plains Energy's outstanding performance shares, restricted stock, restricted share units and director deferred share units under Great Plains Energy's Amended Long-Term Incentive Plan were converted into equivalent Evergy performance shares, restricted stock, restricted share units and director deferred share units at Great Plains Energy's merger exchange ratio of 0.5981. The estimated fair value of these converted awards that was allocated to the purchase price was $12.5 million, after-tax. See Note 2 for more information regarding the merger.
The following table summarizes the Evergy Companies' equity compensation expense and the associated income tax benefit.
  Three Months Ended
June 30		 Year to Date
June 30
   
  2018 2017 2018 2017
Evergy (millions)
Equity compensation expense $19.3
 $2.1
 $21.7
 $4.6
Income tax benefit 2.9
 0.8
 3.4
 1.8
Westar Energy        
Equity compensation expense $18.2
 $2.1
 $20.6
 $4.6
Income tax benefit 2.6
 0.8
 3.1
 1.8
KCP&L(a)
    
  
  
Equity compensation expense $2.0
 $0.9
 $3.2
 $1.7
Income tax benefit 0.4
 0.4
 0.6
 0.8
(a) KCP&L amounts are only included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through June 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 Evergy's Board of Directors. 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.
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Performance share activity for year to date June 30, 2018 is summarized in the following table.
 
Performance
Shares
 
Grant Date
Fair Value*
Beginning balance January 1, 2018 —
   $—
 
Converted Great Plains Energy awards upon merger 351,708
   63.79
 
Ending balance June 30, 2018 351,708
   63.79
 
* weighted-average
At June 30, 2018, the remaining weighted-average contractual term was 1.5 years.  The weighted-average grant-date fair value of shares granted was $63.79for the three months ended andyear to date June 30, 2018. At June 30, 2018, there was $12.8 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 June 30, 2018 is summarized in the following table.
 
Nonvested
Restricted Stock
 
Grant Date
Fair Value*
Beginning balance January 1, 2018 —
   $—
 
Converted Great Plains Energy awards upon merger 122,505
   54.05
 
Vested (1,316)   54.50
 
Ending balance June 30, 2018 121,189
   54.04
 
* weighted-average
At June 30, 2018, the remaining weighted-average contractual term was 1.7 years.  The weighted-average grant-date fair value of shares granted was $54.05 for the three months ended and year to date June 30, 2018. At June 30, 2018, there was $3.7 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.
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
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Evergy's common stock, are paid on 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 June 30, 2018 is summarized in the following table.
 
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 (704)   49.73
 
Ending balance June 30, 2018 217,457
   54.07
 
* weighted-average
At June 30, 2018, the remaining weighted-average contractual term related to RSU awards with only service requirements was 1.9 years.  The weighted-average grant-date fair value of RSUs granted with only service requirements was $54.07 for the three months ended June 30, 2018. There were no RSUs granted for the three months ended June 30, 2017. The weighted-average grant-date fair value of RSUs granted with only service requirements was $52.16 and $53.25 year to date June 30, 2018, and 2017, respectively. At June 30, 2018, there was $11.2 million of unrecognized compensation expense related to unvested RSUs. The total fair value of RSUs with only service requirements that vested for the three months ended and year to date June 30, 2018 was $12.3 million and $16.0 million, respectively. The total fair value of RSUs that vested for the three months ended and year to date June 30, 2017 was $0.1 million and $3.6 million, respectively.
9.6. SHORT-TERM BORROWINGS AND SHORT-TERM BANK LINES OF CREDIT
The following table summarizesEvergy's $2.5 billion master credit facility expires in 2023. Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West have borrowing capacity under the committed credit facilities available to the Evergy Companies as of June 30, 2018 and December 31, 2017.
  Amounts Drawn   
 Credit FacilityCommercial PaperLetters of CreditCash BorrowingsAvailable Borrowings Weighted Average Interest Rate on Short-Term Borrowings
June 30, 2018(millions)  
Evergy, Inc.$200.0
n/a$1.0
$60.0
$139.0
 3.60%
Westar Energy(b)
979.3
488.2
18.3
—
472.8
 2.40%
KCP&L600.0
322.4
2.7
—
274.9
 2.49%
GMO450.0
208.7
2.0
—
239.3
 2.38%
Evergy$2,229.3
$1,019.3
$24.0
$60.0
$1,126.0
  
        
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%
Evergy979.3
275.7
11.8
—
691.8
 1.83%
(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.
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Evergy, Inc.'s $200.0 Million Revolving Credit Facility
Evergy, Inc. assumed the Great Plains Energy $200.0 million revolvingmaster credit facility with a group of banks that expiresspecific 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 October 2019 concurrent with the closing of the merger transaction.  The facility's terms permit transfers of unused commitments between this facility and the KCP&L and GMO facilities discussed below, with the total amount of the facility not exceeding $400.0 million at any one time.  facility. A default by Evergyany borrower under the facility or anyone of its significant subsidiaries on other indebtedness totaling more than $50.0$100.0 million isconstitutes a default by that borrower under the facility. Under the terms of this facility, each of Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West is required to maintain a consolidatedtotal indebtedness to consolidatedtotal capitalization ratio, as defined in the facility, of not greater than 0.65 to 1.00 at all times. At June 30, 2018, As of March 31, 2020, Evergy, was Evergy Kansas Central, Evergy Metro and Evergy Missouri West were in compliance with this covenant.
Westar Energy's $730.0 Million and $270.0 Million Revolving Credit Facilities and Commercial Paper
Westar Energy's $730.0 million and $270.0 million revolvingThe following table summarizes the committed credit facilities with a group(excluding receivable sale facilities discussed in Note 3) available to the Evergy Companies as of banks provides support for its issuance of commercial paperMarch 31, 2020 and other general corporate purposes and expire in September 2019 and February 2019, respectively. In September 2017, $20.7 million of the $730.0 million revolving credit facility expired. The aggregate amount of borrowings under the $730.0 million and $270.0 million facilities may be increased to $1.0 billion and $400.0 million, respectively, subject to lender participation and no default on the facilities. All borrowings under the facilities are secured by KGE first mortgage bonds. A default by Westar Energy or KGE on other indebtedness totaling more than $25.0 million is a default under the facilities. Under the terms of these facilities, Westar Energy is required to maintain a consolidated indebtedness to consolidated capitalization ratio as defined in the facilities, not greater than 0.65 to 1.00 at all times. At June 30, 2018, Westar Energy was in compliance with this covenant.  December 31, 2019.
KCP&L's and GMO's $600.0 Million and $450.0 Million Credit Facilities and Commercial Paper
  Amounts Drawn   
 Credit FacilityCommercial PaperLetters of CreditCash BorrowingsAvailable Borrowings Weighted Average Interest Rate on Short-Term Borrowings
March 31, 2020(millions)  
Evergy, Inc.$450.0
n/a$0.7
$55.0
$394.3
 1.98%
Evergy Kansas Central1,000.0
—
24.5
370.0
605.5
 2.09%
Evergy Metro600.0
—
—
460.0
140.0
 1.96%
Evergy Missouri West450.0
—
2.1
170.0
277.9
 2.22%
Evergy$2,500.0
$—
$27.3
$1,055.0
$1,417.7
  
        
December 31, 2019       
Evergy, Inc.$450.0
n/a$0.7
$20.0
$429.3
 2.99%
Evergy Kansas Central1,000.0
249.2
14.2
—
736.6
 2.07%
Evergy Metro600.0
199.3
—
—
400.7
 2.02%
Evergy Missouri West450.0
93.4
2.1
—
354.5
 2.02%
Evergy$2,500.0
$541.9
$17.0
$20.0
$1,921.1
 
KCP&L's $600.0 million revolving credit facility and GMO's $450.0 million revolving credit facility with a group of banks provides support for their issuance of commercial paper and other general corporate purposes and expire in October 2019.  KCP&L and GMO may each transfer up to $200.0 million of unused commitments between Evergy's facility and KCP&L's and GMO's facilities.  A default by KCP&L or GMO on other indebtedness totaling more than $50.0 million is a default under the facilities.  Under the terms of these facilities, KCP&L and GMO are required to maintain a consolidated indebtedness to consolidated capitalization ratio, as defined in the facilities, not greater than 0.65 to 1.00 at all times.  At June 30, 2018, KCP&L and GMO were in compliance with these covenants.  
10.7. LONG-TERM DEBT
As of June 30, 2018, Evergy's outstanding long-term debt, including current maturities, includes approximately $3,771 million related to KCP&L, GMO and the assumed long-term debt of Great Plains Energy discussed further below. This amount also includes approximately $161 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:
$350.0 million of 4.85% unsecured Senior Notes; and
$287.5 million of 5.292% unsecured Senior Notes.
KCP&L Senior NotesMortgage Bonds
In March 2018, KCP&LApril 2020, Evergy Kansas Central issued, at a discount, $300.0$500.0 million of 4.20% unsecured Senior Notes,3.45% First Mortgage Bonds (FMBs), maturing in 2048. KCP&L also repaid2050 and issued a notice of redemption for its $350.0$250.0 million of 6.375% unsecured Senior Notes at5.10% FMBs, which had an original maturity date of July 2020. The proceeds from the issuance of Evergy Kansas Central's $500.0 million of 3.45% FMBs will be used to redeem the $250.0 million of 5.10% FMBs 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.May 2020 and for general corporate purposes.
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GMO Senior Notes
As a result of the consummationissuance 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. The window to elect this option expired prior to June 30, 2018. Several holders of GMO's Series A and B Senior Notes elected this option and in the third quarter of 2018, GMO redeemed $89.0$500.0 million of 3.45% FMBs discussed above, Evergy Kansas Central has the intent and ability to refinance its Series A Senior Notes and $15.0$250.0 million of its Series B Senior Notes. The $104.0 million aggregate principal amount of Series A5.10% FMBs and Series B Senior Notes that were redeemed in the third quarter of 2018 are classifiedhas reflected this issuance within long-term debt, net rather than current maturities of long-term debt on Evergy's and Evergy Kansas Central's consolidated balance sheetsheets as of June 30, 2018.March 31, 2020.
11.8. 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 includeincluded 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.
Interest Rate Derivatives
The Evergy Companies are exposed to market risks arising from changes in interest rates and may use derivative instruments to manage these risks. From time to time, risk management activities may include entering into interest rate swap agreements to protect against unfavorable interest rate changes relating to forecasted debt transactions. These interest rate swap agreements can be designated as cash flow hedges, in which case gains and losses on the interest rate swaps are deferred in other comprehensive income to be recognized as an adjustment to interest expense over the same period that the hedged interest payments affect earnings. The Evergy Companies classify all cash inflows and outflows for interest rate swap agreements accounted for as cash flow hedges of forecasted debt transactions as financing activities on their consolidated statements of cash flows.
In September 2019, Evergy issued $800.0 million of 2.90% Senior Notes maturing in 2029 and paid $69.8 million to settle an interest rate swap agreement with a notional amount of $500.0 million that was designated as a cash flow hedge of interest payments on the debt issuance. The $69.8 million pre-tax loss was recorded in accumulated other comprehensive loss on Evergy's consolidated balance sheet and is being reclassified to interest expense over the ten-year term of the debt. For the three months ended March 31, 2020, $1.7 million and ($0.4) million were reclassified from accumulated other comprehensive loss to interest expense and income tax expense, respectively, on Evergy's consolidated statements of comprehensive income. As of March 31, 2020, Evergy expects to amortize $5.2 million to earnings from accumulated other comprehensive loss over the next twelve months.
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Fair Value of Long-Term Debt
The Evergy Companies measure the fair value of long-term debt using Level 2 measurements available as of the measurement date. The book value and fair value of the Evergy Companies' long-term debt and long-term debt of variable interest entities is summarized in the following table.
 June 30, 2018 December 31, 2017 March 31, 2020 December 31, 2019
 Book Value Fair Value Book Value Fair Value Book Value Fair Value Book Value Fair Value
Long-term debt(a) (millions) (millions)
Evergy(a)(b)
 $7,460.4
 $7,567.3
 $3,687.6
 $4,010.6
 $8,994.6
 $9,438.8
 $8,997.8
 $9,750.2
Westar Energy 3,689.0
 3,804.7
 3,687.6
 4,010.6
KCP&L(b)
 2,529.8
 2,651.4
 2,582.2
 2,799.1
Evergy Kansas Central 3,686.7
 4,188.7
 3,686.1
 4,078.8
Evergy Metro 2,525.4
 2,613.8
 2,525.0
 2,932.2
Long-term debt of variable interest entities(a)                
Evergy $81.4
 $80.9
 $109.9
 $110.8
 $18.8
 $18.9
 $51.1
 $51.5
Westar Energy 81.4
 80.9
 109.9
 110.8
Evergy Kansas Central 18.8
 18.9
 51.1
 51.5
(a) Includes current maturities.
(b) Book value as of June 30, 2018March 31, 2020 and December 31, 2019, includes approximately $161$121.7 million and $125.5 million, respectively, of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy Incorporated (Great Plains Energy) and Westar EnergyEvergy Kansas Central 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.
(b) KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.


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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.
DescriptionJune 30
2018		 Level 1 Level 2Level 3NAVMarch 31, 2020 Level 1 Level 2Level 3NAV
Westar Energy (millions)
Evergy Kansas Central (millions)
Assets                      
Nuclear decommissioning trust(a)
                      
Domestic equity funds $74.6
 $69.3
 $—
 $—
 $5.3
  $70.7
 $63.5
 $—
 $—
 $7.2
 
International equity funds 42.2
 42.2
 —
 —
 —
  41.9
 41.9
 —
 —
 —
 
Core bond fund 36.6
 36.6
 —
 —
 —
  37.9
 37.9
 —
 —
 —
 
High-yield bond fund 19.6
 19.6
 —
 —
 —
  18.8
 18.8
 —
 —
 —
 
Emerging markets bond fund 15.5
 15.5
 —
 —
 —
  16.3
 16.3
 —
 —
 —
 
Combination debt/equity/other fund 14.0
 14.0
 —
 —
 —
  13.9
 13.9
 —
 —
 —
 
Alternative investments fund 23.2
 —
 —
 —
 23.2
  25.3
 —
 —
 —
 25.3
 
Real estate securities fund 11.3
 —
 —
 —
 11.3
  12.8
 —
 —
 —
 12.8
 
Cash equivalents 0.1
 0.1
 —
 —
 —
  2.6
 2.6
 —
 —
 —
 
Total nuclear decommissioning trust 237.1
 197.3
 —
 —
 39.8
  240.2
 194.9
 —
 —
 45.3
 
Rabbi trust                      
Core bond fund 25.2
 —
 —
 —
 25.2
  23.4
 —
 —
 —
 23.4
 
Combination debt/equity/other fund 6.3
 —
 —
 —
 6.3
  5.9
 —
 —
 —
 5.9
 
Cash equivalents 0.1
 0.1
 —
 —
 —
 
Total rabbi trust 31.5
 —
 —
 —
 31.5
  29.4
 0.1
 —
 —
 29.3
 
Total $268.6
 $197.3
 $—
 $—
 $71.3
  $269.6
 $195.0
 $—
 $—
 $74.6
 
KCP&L           
Evergy Metro           
Assets                      
Nuclear decommissioning trust(a)
                      
Equity securities $185.2
 $185.2
 $—
 $—
 $—
  $161.2
 $161.2
 $—
 $—
 $—
 
Debt securities 

          

         
U.S. Treasury 38.4
 38.4
 —
 —
 —
  53.2
 53.2
 —
 —
 —
 
U.S. Agency 0.4
 —
 0.4
 —
 —
  0.5
 —
 0.5
 —
 —
 
State and local obligations 2.1
 —
 2.1
 —
 —
  2.1
 —
 2.1
 —
 —
 
Corporate bonds 32.7
 —
 32.7
 —
 —
  35.7
 —
 35.7
 —
 —
 
Foreign governments 0.1
 —
 0.1
 —
 —
  0.1
 —
 0.1
 —
 —
 
Cash equivalents 1.5
 1.5
 —
 —
 —
  3.7
 3.7
 —
 —
 —
 
Other 0.7
 0.7
 —
 —
 —
  0.7
 —
 0.7
 —
 —
 
Total nuclear decommissioning trust 261.1
 225.8
 35.3
 —
 —
  257.2
 218.1
 39.1
 —
 —
 
Self-insured health plan trust(b)
                      
Equity securities 0.5
 0.5
 —
 —
 —
  0.4
 0.4
 —
 —
 —
 
Debt securities 2.1
 0.1
 2.0
 —
 —
  6.5
 1.4
 5.1
 —
 —
 
Cash and cash equivalents 10.3
 10.3
 —
 —
 —
  5.0
 5.0
 —
 —
 —
 
Total self-insured health plan trust 12.9
 10.9
 2.0
 —
 —
  11.9
 6.8
 5.1
 —
 —
 
Total $274.0
 $236.7
 $37.3
 $—
 $—
  $269.1
 $224.9
 $44.2
 $—
 $—
 
Other Evergy                      
Assets                      
Rabbi trusts                      
Fixed income fund $13.9
 $—
 $—
 $—
 $13.9
  $13.2
 $—
 $—
 $—
 $13.2
 
Cash and cash equivalents 0.5
 0.5
 —
 —
 —
 
Total rabbi trusts $13.9
 $—
 $—
 $—
 $13.9
  $13.7
 $0.5
 $—
 $—
 $13.2
 
Evergy  
  
  
  
     
  
  
  
   
Assets  
  
  
  
     
  
  
  
   
Nuclear decommissioning trust (a)
 $498.2
 $423.1
 $35.3
 $—
 $39.8
  $497.4
 $413.0
 $39.1
 $—
 $45.3
 
Rabbi trusts 45.4
 —
 —
 —
 45.4
  43.1
 0.6
 —
 —
 42.5
 
Self-insured health plan trust (b)
 12.9
 10.9
 2.0
 —
 —
  11.9
 6.8
 5.1
 —
 —
 
Total $556.5
 $434.0
 $37.3
 $—
 $85.2
  $552.4
 $420.4
 $44.2
 $—
 $87.8
 
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DescriptionDecember 31, 2019Level 1Level 2Level 3NAV 
Evergy Kansas Central (millions) 
Assets                
Nuclear decommissioning trust(a)
                
Domestic equity funds $86.1
  $78.6
  $—
  $—
  $7.5
  
International equity funds 52.0
  52.0
  —
  —
  —
  
Core bond fund 39.3
  39.3
  —
  —
  —
  
High-yield bond fund 22.3
  22.3
  —
  —
  —
  
Emerging markets bond fund 19.4
  19.4
  —
  —
  —
  
Combination debt/equity/other fund 16.4
  16.4
  —
  —
  —
  
Alternative investments fund 23.9
  —
  —
  —
  23.9
  
Real estate securities fund 12.6
  —
  —
  —
  12.6
  
Cash equivalents 0.5
  0.5
  —
  —
  —
  
Total nuclear decommissioning trust 272.5
  228.5
  —
  —
  44.0
  
Rabbi trust                
Core bond fund 25.3
  —
  —
  —
  25.3
  
Combination debt/equity/other fund 6.3
  —
  —
  —
  6.3
  
Cash equivalents 0.1
  0.1
  —
  —
  —
  
Total rabbi trust 31.7
  0.1
  —
  —
  31.6
  
Total $304.2
  $228.6
  $—
  $—
  $75.6
  
Evergy Metro                
Assets                
Nuclear decommissioning trust(a)
                
Equity securities $211.1
  $211.1
  $—
  $—
  $—
  
Debt securities  
   
   
   
   
  
U.S. Treasury 50.3
  50.3
  —
  —
  —
  
U.S. Agency 0.4
  —
  0.4
  —
  —
  
State and local obligations 2.2
  —
  2.2
  —
  —
  
Corporate bonds 33.2
  —
  33.2
  —
  —
  
Foreign governments 0.1
  —
  0.1
  —
  —
  
Cash equivalents 3.1
  3.1
  —
  —
  —
  
Other 0.3
  —
  0.3
  —
  —
  
Total nuclear decommissioning trust 300.7
  264.5
  36.2
  —
  —
  
Self-insured health plan trust(b)
                
Equity securities 0.5
  0.5
  —
  —
  —
  
Debt securities 6.7
  1.4
  5.3
  —
  —
  
Cash and cash equivalents 2.7
  2.7
  —
  —
  —
  
Total self-insured health plan trust 9.9
  4.6
  5.3
  —
  —
  
Total $310.6
  $269.1
  $41.5
  $—
  $—
  
Other Evergy                
Assets                
Rabbi trusts                
Fixed income fund $13.3
  $—
  $—
  $—
  $13.3
  
Cash and cash equivalents 0.5
  0.5
  —
  —
  —
  
Total rabbi trusts $13.8
  $0.5
  $—
  $—
  $13.3
  
Evergy  
   
   
   
     
Assets  
   
   
   
     
Nuclear decommissioning trust(a)
 $573.2
  $493.0
  $36.2
  $—
  $44.0
  
Rabbi trust 45.5
  0.6
  —


—
  44.9
  
Self-insured health plan trust(b)
 9.9
  4.6
  5.3
  —
  —
  
Total $628.6
  $498.2
  $41.5
  $—
  $88.9
  
DescriptionDecember 31
2017		Level 1Level 2Level 3NAV
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 net asset value (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 June 30, 2018.
(d)
KCP&L amounts are not included in consolidated Evergy as of December 31, 2017.
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Certain Evergy and Westar EnergyEvergy Kansas Central investments included in the table above are measured at NAV as they do not have readily determinable fair values. In certain situations, these investments may have redemption restrictions.
The following table provides additional information on these Evergy and Westar EnergyEvergy Kansas Central investments.
June 30, 2018 December 31, 2017 June 30, 2018March 31, 2020 December 31, 2019 March 31, 2020
Fair Unfunded Fair Unfunded Redemption Length ofFair Unfunded Fair Unfunded Redemption Length of
Value Commitments Value Commitments Frequency SettlementValue Commitments Value Commitments Frequency Settlement
Westar Energy(millions) 
Evergy Kansas Central(millions) 
Nuclear decommissioning trust:    
Domestic equity funds$5.3
 $5.1
 $5.1
 $2.8
 (a) (a)$7.2
 $3.2
 $7.5
 $3.3
 (a) (a)
Alternative investments fund(b)
23.2
 —
 21.7
 —
 Quarterly 65 days25.3
 —
 23.9
 —
 Quarterly 65 days
Real estate securities fund(b)
11.3
 —
 10.8
 —
 Quarterly 65 days12.8
 —
 12.6
 —
 Quarterly 65 days
Total$39.8
 $5.1
 $37.6
 $2.8
 $45.3
 $3.2
 $44.0
 $3.3
 
Rabbi trust:                
Core bond fund$25.2
 $—
 $—
 $—
 (c) (c)$23.4
 $—
 $25.3
 $—
 (c) (c)
Combination debt/equity/other fund6.3
 —
 —
 —
 (c) (c)5.9
 —
 6.3
 —
 (c) (c)
Total$31.5
 $—
 $—
 $—
 $29.3
 $—
 $31.6
 $—
 
Other Evergy                
Rabbi trusts:                
Fixed income fund(d)
$13.9
 $—
 $—
 $—
 (c) (c)$13.2
 $—
 $13.3
 $—
 (c) (c)
Total Evergy investments at NAV$85.2
 $5.1
 $37.6
 $2.8
 $87.8
 $3.2
 $88.9
 $3.3
 
(a) 
This investment is in five5 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. ThreeNaN 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 three3 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 Committeea fund advisory committee to provide for an orderly liquidation of fund investments and dissolution of the fund.
(b) 
There is a holdback on final redemptions.
(c) 
This investment can be redeemed immediately and is not subject to any restrictions on redemptions.
(d)
This investment is recorded at GMO. GMO amounts are not included in consolidated Evergy as of December 31, 2017.
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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.Evergy Kansas Central. The Evergy Companies record net realized and unrealized gains and losses on the nuclear decommissioning trusts in regulatory liabilities on their consolidated balance sheets and record net realized and unrealized gains and losses on Westar Energy'sthe Evergy Companies' rabbi trusttrusts in the consolidated statements of income and comprehensive income.
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The following table summarizes the net unrealized gains (losses) for the Evergy Companies' nuclear decommissioning trusts and rabbi trusts.
Three Months Ended March 31 2020 2019
Evergy (millions)
Nuclear decommissioning trust - equity securities $(89.3) $37.9
Nuclear decommissioning trust - debt securities 3.0
 2.1
Rabbi trusts - equity securities (2.0) 0.5
Total $(88.3) $40.5
Evergy Kansas Central    
Nuclear decommissioning trust - equity securities $(38.1) $17.2
Rabbi trusts - equity securities (2.1) 1.3
Total $(40.2) $18.5
Evergy Metro    
Nuclear decommissioning trust - equity securities $(51.2) $20.7
Nuclear decommissioning trust - debt securities 3.0
 2.1
Total $(48.2) $22.8
  Three Months Ended
June 30		 Year to Date
June 30
  2018 2017 2018 2017
Westar Energy (millions)
Nuclear decommissioning trust - equity securities $(12.8) $5.5
 $(12.9) $14.5
Rabbi trust (0.1) 1.1
 (0.5) 2.5
Total $(12.9) $6.6
 $(13.4) $17.0
KCP&L(a)
        
Nuclear decommissioning trust - equity securities $4.1
 $3.7
 $0.5
 $10.9
Nuclear decommissioning trust - debt securities (0.7) 0.5
 (2.3) 0.7
Total $3.4
 $4.2
 $(1.8) $11.6
Evergy        
Nuclear decommissioning trust - equity securities $(13.9) $5.5
 $(14.0) $14.5
Nuclear decommissioning trust - debt securities (0.3) —
 (0.3) —
Rabbi trusts (0.2) 1.1
 (0.6) 2.5
Total $(14.4) $6.6
 $(14.9) $17.0
(a) KCP&L amounts are only included in consolidated Evergy from the date of the merger, June 4, 2018 through June 30, 2018.
12.9. 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 CompaniesCompanies' operations or their financial results. Management's assessment of these contingencies, which are based on federal and state statutes and regulations, and regulatory agency and judicial interpretations and actions, has evolved over time. These laws and regulations can also change, restrict or otherwise impact the Evergy Companies' operations or financial results in many ways, including the handling or disposal of waste material and the planning for future construction activities. The failure to comply with these laws and regulations could result in the assessment of administrative, civil and criminal penalties and/or the imposition of remedial requirements. The Evergy Companies believe that all of their operations are in substantial compliance with current federal, state and local environmental standards.
There are a variety of final and proposed laws and regulations that could have a material adverse effect on the Evergy CompaniesCompanies' operations and consolidated financial results. Due in part to the complex nature of environmental laws and regulations, the Evergy Companies are unable to assess the impact of potential changes that may develop with respect to the environmental contingencies described below.
Cross-State Air Pollution Update Rule
In September 2016, the Environmental Protection Agency (EPA) finalized the Cross-State Air Pollution (CSAPR) Update Rule. The final rule addresses interstate transport of nitrogen oxides emissions in 22 states including Kansas, Missouri and Oklahoma during the ozone season and the impact from the formation of ozone on downwind states with respect to the 2008 ozone National Ambient Air Quality Standards (NAAQS). Starting withIn December 2018, the 2017EPA finalized a determination, known as the CSAPR Close-Out Rule, demonstrating the CSAPR Update Rule fully addressed certain upwind states' 2008 ozone season, the final rule revised the existing ozone season allowance budgets for Missouri and Oklahoma and established an ozone season budget for Kansas.NAAQS interstate transport obligations. Various states and others are challenginghave challenged both the ruleCSAPR Update Rule and the CSAPR Close-Out Rule in the U.S. Court of Appeals for the D.C. Circuit but(D.C. Circuit). In the rule remains in effect. It is not expected that this rule will havefourth quarter of 2019, the D.C. Circuit granted these petitions and remanded a material impact onportion of the Evergy Companies' operations and consolidated financial results.
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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) recommendedCSAPR Update Rule back to the EPA that they designate eight countiesand vacated the CSAPR Close-Out Rule in the stateits entirety. The impact 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 impactany future CSAPR Rules on the Evergy Companies' operations or consolidated financial results.
The Evergy Companies continue to communicate with their regulatory agencies regarding these standardsresults cannot be determined 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.

be material.
Greenhouse Gases
Burning coal and other fossil fuels releases carbon dioxide (CO2) and other gases referred to as greenhouse gases (GHG).  Various regulations under the federal Clean Air Act Amendments of 1990 (CAA) limit CO2 and other GHG
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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,August 2018, the EPA published in the Federal Register a notice of withdrawal ofproposed 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 proposed CPP federal plan, proposed model trading rules and proposednew source review (NSR) program. These emission guidelines are better known as the Affordable Clean Energy Incentive Program design details. Also in April 2017,(ACE) Rule. In July 2019, the EPA published a notice in the Federal Register the final ACE Rule with one significant change from the proposal. The NSR program revisions were not included in the final version of the ACE Rule and are expected to be addressed in a future rulemaking. The ACE Rule establishes emission guidelines for states to use in the development of plans to reduce GHG emissions from existing coal-fired EGUs. This rule defines the "best system of emission reduction" (BSER) for GHG emissions from existing coal-fired EGUs as on-site, heat-rate efficiency improvements. The final rule also provides states with a list of candidate technologies that it was initiating administrative reviewscan be used to establish standards of performance and incorporate these performance standards into state plans. In order for the states to be able to effectively implement the emission guidelines contained in the ACE Rule, the EPA is finalizing new regulations under Section 111(d) of the CAA to help clarify this process. The ACE Rule became effective in September 2019. In conjunction with the finalization of the ACE Rule, the EPA repealed its previously adopted Clean Power Plan (CPP). Also, in September 2019, the D.C. Circuit granted motions to dismiss challenges to the CPP and the GHG NSPS.
In October 2017, the EPA issued a proposed rulechallenges to repealEPA's denial of reconsideration of 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.
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In December 2017, the EPA issued an advance notice of proposed rulemaking. This proposed rulemaking was issued by the EPA because it is considering the possibility of changing certain aspects of the CPP and the EPA solicited feedback on specific areas that could be changed.
In July 2018, the EPA submitted to the White House a proposed rule titled "State Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units." This is the replacement rule for the CPP. The proposed rule is currently with the Office of Management and Budget for interagency review.
Due to uncertainty regarding what future state implementation plans will require for compliance with the future uncertainty of the CPP,ACE Rule as well as legal challenges that have been filed, the Evergy Companies cannot determine the impact of the rule on their operations or consolidated financial results, but the cost to comply with the CPP,ACE Rule, should it be upheld and implemented in its current or a substantially similar form, could be material.
Water
The Evergy Companies'Companies discharge some of the water used in generation and other operations. This water may containoperations containing substances deemed to be pollutants. Revised rules governing such discharges from coal-fired power plants were issued inA November 2015. The final2015 EPA rule establishes effluent limitations guidelines (ELG) and standards for wastewater discharges, including limits on the amount of toxic metals and other pollutants that can be discharged. Implementation timelines for these requirementsthis 2015 rule vary from 2018 to 2023. In April 2017,2019, the U.S. Court of Appeals for the 5th Circuit (5th Circuit) issued a ruling that vacates and remands portions of the original ELG rule. Due to this ruling, future ELG modifications for the best available technology economically achievable for the legacy wastewater and leachate are likely.
In November 2019, the EPA announced it is reconsideringpublished a proposed modification to the ELG rule. The proposed rule modifies numeric limits for flue gas desulfurization (FGD) wastewater and court challenges have been placed in abeyance pending the EPA’s review. In September 2017, the EPA finalizedadded a rule to postpone the compliance dates for the new, more stringent, effluent limitations and pretreatment standards10% volumetric purge limit for bottom ash transport water and flue gas desulfurization wastewater. Thesewater. The timeline for final FGD wastewater compliance dates have been postponed forwas also delayed by two years while the EPA completes its administrative reconsideration of the ELG rule.to December 31, 2025. The Evergy Companies are evaluatingin the finalprocess of reviewing the proposed rule and related developments and cannot predict the resulting impact on their operations or consolidated financial results, but believe costs to comply with these changes could be material if the rule is implemented in its current or substantially similar form.material.
In October 2014, the EPA’sEPA's final standards for cooling water intake structures at power plants to protect aquatic life took effect. The standards, based on Section 316(b) of the federal Clean Water Act (CWA), require subject facilities to choose among seven best available technology options to reduce fish impingement. In addition, some facilities must conduct studies to assist permitting authorities in determiningto 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. The Evergy Companies' generating plantsPlants without closed cycle cooling are under evaluation for compliance with these standards and may require additional controls, thatthe costs of which could have a material impact on the be material.
Evergy Companies' operations and consolidated financial results.
KCP&LMetro holds a permit from MDNRthe Missouri Department of Natural Resources (MDNR) covering water discharge from its Hawthorn Station.  The permit authorizes KCP&LEvergy Metro to, among other things, withdraw water from the Missouri River for cooling purposes and return the heated water to the Missouri River.  KCP&LEvergy Metro has applied for a renewal of this permit and the EPA has submitted an interim objection letter regarding the allowable
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amount of heat that can be contained in the returned water.  Until this matter is resolved, KCP&LEvergy Metro continues to operate under its current permit. Evergy and KCP&LEvergy Metro cannot predict the outcome of this matter; however, while less significant outcomes are possible, this matter may require a reduction in generation, installation of cooling towers or other technology to cool the water, or both, any of which could have a material impact on Evergy's and KCP&L'sEvergy Metro's operations and consolidated financial results.  
In June 2015,April 2020, the EPA along withU.S. District Court for the District of Montana (District Court of Montana) ruled that the U.S. Army Corps of Engineers issuedEngineers' (Corps) reissuance of Nationwide Permit 12 (NWP 12) in 2017 violated the Endangered Species Act (ESA). The District Court of Montana determined that the Corps failed to initiate consultation under ESA to ensure that discharge activities under NWP 12 complied with the ESA. As a final rule, effective August 2015, definingresult, the WatersDistrict Court of Montana remanded NWP 12 to the Corps, vacated NWP 12 pending completion of the United States (WOTUS) for purposes ofESA consultation process and enjoined the CWA. This rulemaking has the potential to impact all programsCorps from authorizing any dredge or fill activities 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. 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 publishedNWP 12. The Evergy Companies utilize NWP 12 in the Federal Register a proposed rule that would, if implemented, reinstate the definitionregulatory approval of WOTUS that existed prior to the June 2015 expansionvarious types of the
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definition. Final action on the proposed rule is expected in 2018.projects. The Evergy Companies are currently evaluatingin the WOTUS ruleprocess of reviewing the ruling and related developments but do not believeresulting actions of the rule, if upheldCorps and implemented in its current or substantially similar form, will have a materialthe impact onto the Evergy Companies' operations orand consolidated financial results.results could be material.
Regulation of Coal Combustion Residuals
In the course of operating their coal generation plants, the Evergy Companies produce CCRs,coal combustion residuals (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 the Evergy Companies believe will requirethat requires additional CCR handling, processing and storage equipment and closure of certain ash disposal units. Impacts
In March 2019, the D.C. Circuit issued a ruling to operations will be dependent ongrant the development of groundwater monitoring of CCR units being completed in 2017 and 2018. The Water Infrastructure Improvements for the Nation Act allows states to achieve delegated authority for CCR rules from the EPA. This has the potential to impact compliance options. Electric generation industry participants requested and the EPA has granted aEPA's request to reconsider portions of the final CCR regulation. In March 2018, the EPA proposedremand the Phase I, Part I CCR Remand Rulerule. This was in orderresponse to modify portions of the 2015 rulemaking. This rule was signed bya prior court ruling requiring the EPA to address un-lined surface impoundment closure requirements. On December 2, 2019, the EPA published a proposed rule called the Part A CCR Rule. This proposal reclassifies clay-lined surface impoundments from "lined" to "unlined" and establishes a deadline of August 31, 2020 to initiate closure. The prior rule included a deadline of October 31, 2020 for unlined impoundments to initiate closure. In March 2020, the EPA published a proposed rule called the Part B CCR Rule. This proposal includes a process to allow unlined impoundments to continue to operate if a demonstration is made to prove that they are not adversely impacting groundwater, human health or the environment. The proposal also includes clarification regarding ash used in the Federal Registerclosure of landfills and surface impoundments. The Evergy Companies are in July 2018the process of reviewing these proposed rules and introduces additional flexibility in CCR compliance. the costs to comply with these changes could be material.
The Evergy Companies have recorded AROsasset retirement obligations (AROs) for their current estimates for the closure of ash disposal ponds, but the revision of these AROs may be required in the future due to changes in existing CCR regulations, the results of groundwater monitoring of CCR units or changes in interpretation of existing CCR regulations or changes in the timing or cost to close ash disposal ponds. If revisions to these AROs are necessary, the impact on the Evergy Companies' operations or consolidated financial results could be material.
Storage of Spent Nuclear Fuel
Under the Nuclear Waste Policy Act of 1982, the Department of Energy (DOE) is responsible for the permanent disposal of spent nuclear fuel. In 2010, the DOE filed a motion with the Nuclear Regulatory Commission (NRC) to withdraw its then pending application to construct a national repository for the disposal of spent nuclear fuel and high-level radioactive waste at Yucca Mountain, Nevada. 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.a final decision on the matter.
Wolf Creek has elected to build a dry cask storage facility to expand its existing on-site spent nuclear fuel storage, which is expected to provide additional capacity prior to 2025. Wolf Creek has finalized a settlement agreement through 2019 with2022. The Evergy Companies expect that the DOE for reimbursementmajority of the costs to construct thisthe dry cask storage 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 incurredfuel 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’sCreek's spent nuclear fuel and will continue to monitor this activity.
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.
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At June 30, 2018, Evergy has provided $112.3 million of credit support for GMO as follows:
Evergy direct guarantees to GMO counterparties totaling $18.0 million, which expire in 2018, and
Evergy's guarantee of GMO long-term debt totaling $94.3 million, which includes debt with maturity dates ranging from 2019 to 2023.
Evergy has also guaranteed GMO's commercial paper program. At June 30, 2018, GMO had $208.7 million of commercial paper outstanding.
14.10. RELATED PARTY TRANSACTIONS AND RELATIONSHIPS
In the normal course of business, Westar Energy, KCP&LEvergy Kansas Central, Evergy Metro and GMOEvergy Missouri West 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 June 30, 2018.
Jointly-Owned Plants and Shared Services
KCP&LEvergy Metro employees manage GMO'sEvergy Missouri West's business and operate its facilities at cost, including GMO'sEvergy Missouri West's 18% ownership interest in KCP&L'sEvergy Metro's Iatan Nos. 1 and 2.  The operating expenses and capital costs billed from KCP&L to GMO were $49.8 million and $96.2 million, respectively, for the three months ended and year to date June 30, 2018. These costs totaled $47.9 million and $95.8 million, respectively, for the three months ended and year to date June 30, 2017.
Westar EnergyEvergy Kansas Central employees manage Jeffrey Energy Center (JEC) and operate its facilities at cost, including GMO'sEvergy Missouri West'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 $3.7 million for the three months ended and year to date June 30, 2018.
KCP&LJEC. Evergy Metro employees manage La Cygne Station and operate its facilities at cost, including Westar Energy'sEvergy Kansas Central's 50% ownership interest in La Cygne Station. KCP&LEvergy Metro and Westar EnergyEvergy Kansas Central employees also provide one another with shared service support, including costs related to human resources, information technology, accounting and legal services.
The operating expenses and capital costs billed from KCP&L to Westar Energy were $15.3 million for jointly-owned plants and shared services are detailed in the three months ended and year to date June 30, 2018. The operating and capital costs billed from Westar Energy to KCP&L were $6.0 million for the three months ended and year to date June 30, 2018.following table.
Three Months Ended March 31 2020 2019
  (millions)
Evergy Metro billings to Evergy Missouri West $39.3
 $42.0
Evergy Kansas Central billings to Evergy Missouri West 4.3
 6.3
Evergy Metro billings to Evergy Kansas Central 48.1
 31.5
Evergy Kansas Central billings to Evergy Metro 15.0
 7.4

Money Pool
KCP&LEvergy Metro and GMOEvergy Missouri West are also authorized to participate in the Evergy, Inc. money pool, which is an internal financing arrangement in which funds may be lent on a short-term basis to KCP&LEvergy Metro and GMOEvergy Missouri West from Evergy, Inc. and between KCP&LEvergy Metro and GMO.Evergy Missouri West. At June 30, 2018March 31, 2020 and December 31, 2017, KCP&L2019, Evergy Metro had no0 outstanding receivables or payables under the money pool.

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Related Party Net Receivables and Payables
The following table summarizes Westar Energy'sEvergy Kansas Central's and KCP&L'sEvergy Metro's related party net receivables and payables.
  March 31 December 31
  2020 2019
Evergy Kansas Central (millions)
Net receivable from Evergy Missouri West $1.3
 $3.1
Net payable to Evergy Metro (16.1) (14.9)
Net receivable from (payable to) Evergy (0.7) 6.9
     
Evergy Metro    
Net receivable from Evergy Missouri West $85.2
 $78.7
Net receivable from Evergy Kansas Central 16.1
 14.9
Net receivable from (payable to) Evergy 26.5
 (4.3)
  June 30  December 31 
  2018  2017 
Westar Energy (millions) 
Net receivable from GMO $0.2
  $—
 
Net payable to KCP&L (32.8)  —
 
Net payable to Evergy (2.0)  —
 
       
KCP&L      
Net receivable from GMO $56.4
  $65.8
 
Net receivable from Westar Energy 32.8
  —
 
Net receivable from Evergy 19.1
  —
 
Net receivable from Great Plains Energy —
  18.9
 

Tax Allocation Agreement
Evergy files a consolidated federal income tax return as well as unitary and combined income tax returns in several statesstate 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 June 30, 2018, Westar EnergyMarch 31, 2020 and KCP&LDecember 31, 2019, Evergy Kansas Central had income taxes receivable from Evergy of $33.6
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million and $37.9 million, respectively. As of March 31, 2020 and December 31, 2019, Evergy Metro had income taxes payable to Evergy of $13.4$4.2 million and $29.5$14.1 million, respectively.
Leases
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.
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 thatMetro leases certain transmission equipment from Evergy assumed in connection withKansas Central. This lease was entered into prior to the merger transaction. Shares issued underin an arms-length transaction and is accounted for as an operating lease. The right-of-use asset related to this lease is recorded within other long-term assets and the plans may be either newly issued shares or shares purchasedcurrent and long-term lease liabilities are recorded within other current liabilities and other long-term liabilities, respectively, on the open market.
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.consolidated balance sheet. The repurchase program may be suspended, discontinued or resumed at any time.
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 capitalization. Further, Evergy's revolving 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
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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 revolving credit agreements of 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 June 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 $297.2 million. Evergy's subsidiaries had restricted net assets of approximately $5.8 billion as of June 30, 2018. These restrictions are not expected to affect the Evergy Companies' ability to pay dividends at the current level for the foreseeable future.
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 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.
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 thatthis lease between Evergy Kansas Central and Evergy Metro are recordedeliminated at consolidated Evergy. As of March 31, 2020, Evergy Metro had a right-of-use asset of $29.3 million, a current lease liability of $0.7 million and a long-term lease liability of $28.6 million on Evergy's and Westar Energy'sits consolidated balance sheets.
  June 30 December 31
  2018 2017
Assets: (millions)
Property, plant and equipment of variable interest entities, net $172.7
 $176.3
Liabilities:    
Current maturities of long-term debt of variable interest entities $30.3
 $28.5
Accrued interest(a)
 0.5
 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.
Tablesheet related to this lease. As of Contents


AllDecember 31, 2019, Evergy Metro had a right-of-use asset of the liabilities noted in the table above relate$29.5 million, a current lease liability of $0.6 million and a long-term lease liability of $28.9 million on its consolidated balance sheet related 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.this lease.
17.11. TAXES
Components of income tax expense are detailed in the following tables.
Evergy  
Three Months Ended
June 30		Year to Date
June 30
2018 20172018 2017
Three Months Ended March 312020 2019
Current income taxes(millions)(millions)
Federal$8.6
 $0.5
$8.8
 $2.2
$2.4
 $11.9
State0.4
 0.2
0.4
 0.4
(0.4) (0.6)
Total9.0
 0.7
9.2
 2.6
2.0
 11.3
Deferred income taxes    
  
   
Federal9.5
 27.9
15.4
 42.9
6.0
 (7.3)
State(62.7) 7.9
(59.0) 12.7
2.8
 6.3
Total(53.2) 35.8
(43.6) 55.6
8.8
 (1.0)
Investment tax credit amortization(0.8) (0.6)(1.4) (1.4)(0.7) (1.0)
Income tax expense (benefit)$(45.0) $35.9
$(35.8) $56.8
Income tax expense$10.1
 $9.3
Westar Energy     
Three Months Ended
June 30		Year to Date
June 30
2018 20172018 2017
Evergy Kansas Central   
Three Months Ended March 312020 2019
Current income taxes(millions)(millions)
Federal$10.7
 $0.5
$10.9
 $2.2
$24.2
 $10.4
State2.5
 0.2
2.5
 0.4
(0.4) 0.4
Total13.2
 0.7
13.4
 2.6
23.8
 10.8
Deferred income taxes    
  
   
Federal(2.8) 27.9
3.1
 42.9
(18.2) (3.2)
State(63.3) 7.9
(59.6) 12.7
2.6
 3.6
Total(66.1) 35.8
(56.5) 55.6
(15.6) 0.4
Investment tax credit amortization(0.7) (0.6)(1.3) (1.4)(0.4) (0.7)
Income tax expense (benefit)$(53.6) $35.9
$(44.4) $56.8
Income tax expense$7.8
 $10.5
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Evergy Metro 
Three Months Ended March 312020 2019
Current income taxes(millions)
Federal$11.6
 $7.9
State1.2
 0.8
Total12.8
 8.7
Deferred income taxes 
  
Federal(9.5) (5.2)
State(0.4) 0.4
Total(9.9) (4.8)
Investment tax credit amortization(0.3) (0.2)
Income tax expense$2.6
 $3.7
KCP&L  
 Three Months Ended
June 30		Year to Date
June 30
 2018 20172018 2017
Current income taxes(millions)
Federal$24.1
 $14.5
$22.8
 $14.4
State5.3
 2.6
4.8
 2.6
Total29.4
 17.1
27.6
 17.0
Deferred income taxes 
  
 
  
Federal(25.1) 9.1
(21.5) 16.9
State44.7
 2.0
46.7
 3.4
Total19.6
 11.1
25.2
 20.3
Investment tax credit amortization(0.2) (0.2)(0.5) (0.5)
Income tax expense$48.8
 $28.0
$52.3
 $36.8

Effective Income Tax Rates
Effective income tax rates reflected in the financial statements and the reasons for their differences from the statutory federal rates are detailed in the following tables.
Evergy   
Three Months Ended March 312020 2019
Federal statutory income tax rate21.0 % 21.0 %
Effect of:   
COLI policies(1.6) (1.8)
State income taxes2.3
 4.6
Flow through depreciation for plant-related differences(3.9) (4.4)
Federal tax credits(4.5) (3.9)
Non-controlling interest(0.3) (0.3)
AFUDC equity(0.3) —
Amortization of federal investment tax credits(0.5) (0.5)
Valuation allowance—
 (7.0)
Stock compensation0.1
 0.1
Officer compensation limitation0.1
 0.2
Other(0.2) 0.2
Effective income tax rate12.2 % 8.2 %

Evergy     
Three Months Ended
June 30		Year to Date
June 30
2018 20172018 2017
Evergy Kansas Central   
Three Months Ended March 312020 2019
Federal statutory income tax rate21.0 % 35.0 %21.0 % 35.0 %21.0 % 21.0 %
Effect of:        
COLI policies(1.9) (4.3)(2.5) (4.3)(3.1) (3.2)
State income taxes6.2
 4.7
5.1
 4.3
2.7
 5.0
Flow through depreciation for plant-related differences(5.5) 2.9
(2.0) 3.3
—
 (0.1)
Federal tax credits(5.5) (7.1)(7.7) (7.0)(6.6) (6.1)
Non-controlling interest(0.3) (1.1)(0.4) (1.1)(0.6) (0.6)
AFUDC equity0.1
 —
(0.1) (0.1)(0.4) (0.1)
Amortization of federal investment tax credits(0.6) (0.5)(0.6) (0.5)(0.7) (0.7)
State tax rate change(89.1) —
(40.3) —
Valuation allowance1.1
 —
1.6
 —
—
 (2.1)
Stock compensation(2.9) —
(1.9) (2.1)(0.1) (0.1)
Other1.8
 2.5
0.6
 1.4
0.1
 0.3
Effective income tax rate(75.6)% 32.1 %(27.2)% 28.9 %12.3 % 13.3 %
The decrease in Evergy's state tax rate change for the three months ended and year to date, June 30, 2018, compared to the same periods 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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Evergy Metro   
Three Months Ended March 312020 2019
Federal statutory income tax rate21.0 % 21.0 %
Effect of:   
COLI policies—
 (0.1)
State income taxes2.2
 4.9
Flow through depreciation for plant-related differences(7.7) (7.2)
Federal tax credits(2.4) (1.5)
AFUDC equity(0.2) —
Amortization of federal investment tax credits(0.4) (0.3)
Stock compensation(3.6) 1.0
Officer compensation limitation—
 0.3
Other0.4
 0.3
Effective income tax rate9.3 % 18.4 %
Westar Energy      
 Three Months Ended
June 30		Year to Date
June 30
 2018 20172018 2017
Federal statutory income tax rate21.0 % 35.0 %21.0 % 35.0 %
Effect of:      
COLI policies(6.9) (4.3)(4.0) (4.3)
State income taxes18.8
 4.7
7.8
 4.3
Flow through depreciation for plant-related differences(11.2) 2.9
(2.1) 3.3
Federal tax credits(18.1) (7.1)(11.6) (7.0)
Non-controlling interest(1.1) (1.1)(0.7) (1.1)
AFUDC equity—
 —
(0.1) (0.1)
Amortization of federal investment tax credits(1.3) (0.5)(0.8) (0.5)
State tax rate change(219.6) —
(54.8) —
Valuation allowance0.6
 —
1.7
 —
Stock compensation(7.2) —
(2.6) (2.1)
Other1.2
 2.5
(0.1) 1.4
Effective income tax rate(223.8)% 32.1 %(46.3)% 28.9 %
The decrease in Westar Energy's state tax rate change for the three months ended and year to date, June 30, 2018, compared to the same periods 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.
KCP&L      
 Three Months Ended
June 30		Year to Date
June 30
 2018 20172018 2017
Federal statutory income tax rate21.0 % 35.0 %21.0 % 35.0 %
Effect of:      
COLI policies(0.2) (0.3)(0.2) (0.3)
State income taxes5.4
 3.8
5.3
 3.9
Flow through depreciation for plant-related differences(4.2) 0.6
(4.9) 0.5
Federal tax credits(1.8) (1.8)(1.8) (1.8)
AFUDC equity(0.1) (0.7)(0.2) (0.7)
Amortization of federal investment tax credits(0.4) (0.4)(0.4) (0.4)
State tax rate change48.5
 —
36.6
 —
Stock compensation—
 (0.1)—
 0.3
Other(1.8) —
(1.6) 0.1
Effective income tax rate66.4 % 36.1 %53.8 % 36.6 %
The increase in KCP&L's state tax rate change for the three months ended and year to date, June 30, 2018, compared to the same periods 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
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existing AMT tax credit carryforwards refundable, and changes the deductibility and taxability of certain items, among other things. Westar Energy, KCP&L and GMO currently recover the cost of income taxes in rates from their customers based on the 35% federal corporate income tax rate.
In January 2018, 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. KCC approved these settlement agreements in June 2018. As outlined in the settlement agreements, the final treatment of these regulatory liabilities will be determined by KCC as part of Westar Energy's and KCP&L's current Kansas rate cases.

As a result of the KCC order and settlement agreements discussed above and the probability that KCP&L and GMO will be required to make similar refunds to their Missouri customers, Evergy, Westar Energy and KCP&L have recorded regulatory liabilities for anticipated refunds to customers as of June 30, 2018 of $93.5 million, $38.2 million and $39.8 million, respectively. The actual regulatory treatment of tax reform and these regulatory liabilities will not be known until orders specifying the treatment are received from KCC and the MPSC and any amounts ultimately refunded to customers could differ from the amounts recorded.
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.
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following combined Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the consolidated financial statements and accompanying notes in this combined Quarterly Report on Form 10-Q 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&LEvergy Companies' combined 20172019 Form 10-K. None of the registrants make any representation as to information related solely to Evergy, Westar EnergyEvergy Kansas Central or KCP&LEvergy Metro other than itself.
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EVERGY, INC.
EXECUTIVE SUMMARY
Evergy Inc. 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:subsidiaries listed below.
Westar EnergyEvergy Kansas Central is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Westar EnergyEvergy Kansas Central has one active wholly-owned subsidiary with significant operations, KGE.Evergy Kansas South.
KCP&LEvergy Metro 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.
GMOEvergy Missouri West 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.
GPETHCEvergy Transmission Company owns 13.5% of Transource Energy, LLC 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. GPETHCEvergy Transmission Company accounts for its investment in Transource under the equity method.
Westar EnergyEvergy Kansas Central also owns a 50% interest in Prairie Wind, which is a joint venture between Westar EnergyEvergy Kansas Central and Electric Transmission America, LLC, which itself is a joint venture between affiliatessubsidiaries 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 provideprovides transmission service in the SPP. Westar EnergyEvergy Kansas Central accounts for its investment in Prairie Wind under the equity method.
Westar EnergyEvergy Kansas Central, Evergy Kansas South, Evergy Metro and KGEEvergy Missouri West 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.Evergy. Collectively, the Evergy Companies have approximately 13,10014,700 MWs of owned generating capacity and renewable purchased power agreements and engage in the
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generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri. The Evergy Companies assess financial performance and allocate resources on a consolidated basis (i.e., operate in one segment).
Great Plains EnergyImpact of COVID-19
The COVID-19 pandemic has had a significant impact on the way that the Evergy Companies conduct their operations, including the implementation of social distancing and Westar Energy Mergerother preventative protocols and the direction of employees to work remotely when possible. Further, the continued spread of COVID-19 and efforts to contain the virus, such as quarantines or closures or reduced operations of businesses, governmental agencies and other institutions, has caused and could continue to cause an economic slowdown or recession, result in significant disruptions or reductions in various public, commercial or industrial activities and cause employee absences. In the states of Missouri and Kansas as well as certain counties and municipalities within the Evergy Companies' service territory, "stay-at-home" orders were in effect for substantially all of April 2020. Some of the orders remain in effect, and management expects that the restrictions will be lifted or could be reinstated at varying times in the future.
Given the timing of the "stay-at-home" orders in Missouri and Kansas and preventative efforts to contain the virus in mid-to-late March 2020 to early April 2020, the Evergy was incorporatedCompanies did not experience a significant impact to their results of operations in 2017 as Monarch Energy,the first quarter of 2020 related to COVID-19. See Item 2 MD&A, Liquidity and Capital Resources section for a wholly-owned subsidiarydiscussion regarding the disruption and volatility in the financial markets related to COVID-19 and the impact on Evergy's capital requirements and liquidity during the first quarter of Great Plains Energy. Prior2020.
Subsequent to the closingfirst quarter of 2020, Evergy anticipates an overall reduction in demand and the shifting of usage away from customers with higher load requirements, such as industrial and commercial customers, towards customers with relatively lower load requirements, such as residential customers. Of Evergy's total 2019 revenues, approximately 37% were from residential customers with approximately 47% from commercial and industrial customers. The KCC and MPSC have established different prices for the Evergy Companies' residential, commercial and industrial customers and a similar change in demand across each customer class will have a different impact on earnings. Management estimates that a 1% change in demand for residential, commercial and industrial customers will impact Evergy's 2020 earnings by approximately $10 million, $8 million and $2 million, respectively. As a result, the impacts to Evergy's earnings of a reduction in demand from industrial or commercial customers could be partially offset by an increase in demand from residential customers, to the extent such an increase occurs.
The Evergy Companies have also temporarily implemented policies, and may in the future implement additional policies, that are intended to ease the financial burden of the merger transactions, Monarch Energy changed its namepandemic on customers, such as temporarily extending payment options, eliminating late payment fees and eliminating disconnections for non-payment, which could lead to higher levels of credit loss expense and lower levels of operating cash flows compared with historical levels for the Evergy Companies and did not conduct any business activities other than those requiredcould also lead to the repayment of portions of the Evergy Companies' borrowings under receivable sale facilities.
Finally, the Evergy Companies have incurred expenses, and will continue to incur expenses, related to monitoring the COVID-19 pandemic and modifying operations in response to the pandemic that are recorded in operating and maintenance expense.
In May 2020, Evergy Kansas Central, Evergy Metro and Evergy Missouri West filed requests for its formationAAOs with the KCC and matters contemplatedMPSC, as applicable, that would allow for the extraordinary costs and financial impacts incurred by the Amended Merger Agreement. On June 4, 2018, in accordance with the Amended Merger Agreement, Great Plains Energy merged into Evergy, with Evergy surviving the merger and King Energy merged into 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. Ascompanies as a result of the closingCOVID-19 pandemic to be considered for future recovery from customers as part of their next rate case.  Decisions by the merger transactions, each outstanding share of Great Plains Energy common stock was converted into 0.5981 shares of Evergy common stock, resultingKCC and MPSC regarding the AAO requests are expected in the issuancesecond half of 128.9 million shares. Additionally, each outstanding share2020. 

Evergy's management is actively monitoring, and will continue to monitor, the evolving impact of Westar Energy common stock was converted into 1 share of Evergy common stock.
Westar Energy was determined to be the accounting acquirer and thus, the predecessor of Evergy. Therefore, Evergy's accompanying consolidated financial statements reflect theCOVID-19 on its results of operations of Westar Energy for the three months ended and yearany developments affecting its workforce and suppliers and will take additional actions as it believes are warranted. The extent to date June 30, 2017which COVID-19 and the factors noted above may impact the results of
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operations, 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,condition and references to amounts for periods after the closingliquidity of the merger relate to Evergy. The results of Great Plains Energy's direct subsidiaries have been included in Evergy's results of operations fromEvergy Companies will depend on future developments that are highly uncertain and cannot be predicted, including new information concerning the dateseverity and duration of the closing of the merger and thereafter.
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KCP&L has elected not to apply "push-down accounting" related to the merger, whereby the adjustments of assets and liabilities to fair valueCOVID-19 outbreak and the resulting goodwill would be recorded on the financial statementsactions taken to contain it or to seek recovery 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.impact, among others.
See Note 2 to the consolidated financial statements"Cautionary Statements Regarding Certain Forward-Looking Information" and Part II, Item 1A, Risk Factors, for more information regarding the merger.
Share Repurchase Program
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.
Missouri Legislation
On June 1, 2018, Missouri S.B. 564 was signed into law by the Governor of Missouri. Most notably, S.B. 564 includes a plant-in service accounting (PISA) provision that can be elected by Missouri electric utilities to defer to a regulatory asset and recover 85% of depreciation expense and associated return on investment for qualifying electric plant rate base additions. Qualifying electric plant includes all rate base additions with the exception of new coal, nuclear or natural gas generating units or rate base additions that increase revenues by allowing service to new customer premises. The deferred depreciation and return in the associated regulatory asset, except for any prudence disallowances, are required to be included in determining the utility's rate base during subsequent general rate proceedings subject to a 3% compound annual growth rate limitation on future electric rates compared with the utility's rates in effect prior to electing PISA. Utilities that elect the PISA provision can make qualifying deferrals of depreciation and return through December 2023, with a potential extension through December 2028 subject to MPSC approval. KCP&L and GMO are currently evaluating the provisions of S.B. 564.additional information.
Strategy
Evergy expects to continue operating its vertically integrated utilities within theirthe currently existing regulatory frameworks. Evergy's objectives are to deliver value to shareholders through attractive earnings and dividend growth; serve customers and communities with cost-effective, reliable service,and clean energy and fewer and lower rate increases;energy; and maintain a rewarding and challenging work environment for employees. Significant elements of Evergy's strategy to achieve these objectives include:
the realization of a total of approximately $600$595 million of potential net savings fromover the first five years of operation of the combined company, which formed in June 2018, through 2022 resulting from synergies that are expected to be created as a result of the Westar Energy and Great Plains Energy merger;
the repurchase of approximately 60 million outstanding shares of Evergy common stock by mid-2020;
anticipated rate base investment of approximately $6$7.6 billion from 20182020 through 2022;2024; and
the reduction of carbon emissions by 80% by 2050 from 2005 levels through the continued growth of Evergy's renewable energy portfolio asand the Evergy Companies retireretirement of older and less efficient fossil fuel plants. See "Transforming Evergy's Generation Fleet" in Part I, Item 1, Business, of the Evergy Companies' combined 2019 Form 10-K, for additional information.
In March 2020, the Evergy Board announced the creation of a Strategic Review & Operations Committee that will explore ways to enhance long-term shareholder value (taking into account applicable legal and regulatory requirements and any other relevant considerations), including through a potential strategic combination or an enhanced long-term standalone operating plan and strategy. The committee is expected to complete its review and make a recommendation to Evergy's Board by July 2020.
See "Cautionary Statements Regarding Certain Forward-Looking Information" and Part II, Item 1A, Risk Factors, for additional information.
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Earnings Overview
The following table summarizes Evergy's net income and diluted EPS.
 
Three Months Ended
 June 30
 
Year to Date
 June 30
 2018 2017 Change 2018 2017 Change
 (millions, except per share amounts)
Net income attributable to Evergy, Inc.$101.8
 $72.1
 $29.7
 $162.3
 $131.7
 $30.6
Earnings per common share, diluted0.56
 0.50
 0.06
 1.00
 0.92
 0.08
Net income and diluted EPS increased for the three months ended and year to date June 30, 2018, compared to the same periods in 2017, primarily due to the inclusion of KCP&L's and GMO's earnings beginning in June 2018, higher Westar Energy retail sales driven by favorable weather and lower income tax expense, partially offset by merger-related costs and reductions of revenue for customer bill credits incurred in June 2018 following the consummation of the merger.
In addition, a higher number of diluted weighted average common shares outstanding due to the issuance of common shares to Great Plains Energy shareholders as a result of the merger diluted earnings per share by $0.15 and $0.14 for the three months ended and year to date June 30, 2018, respectively.
For additional information regarding the change in net income, refer to the Evergy Results of Operations section within this MD&A.
Regulatory Proceedings
See Note 54 to the consolidated financial statements for information regarding regulatory proceedings.
Impact of Recently Issued Accounting StandardsEarnings Overview
See Note 1The following table summarizes Evergy's net income and diluted EPS.
Three Months Ended March 312020 Change 2019
 (millions, except per share amounts)
Net income attributable to Evergy, Inc.$69.4
 $(30.1) $99.5
Earnings per common share, diluted0.31
 (0.08) 0.39
Net income attributable to Evergy, Inc. decreased for the three months ended March 31, 2020, compared to the consolidated financial statementssame period in 2019, primarily due to lower retail sales driven by unfavorable weather and lower corporate-owned life insurance (COLI) benefits in 2020, partially offset by lower transmission and distribution operating and maintenance expenses in 2020 due to costs incurred from storms in January 2019 and lower administrative and general expenses.
Diluted EPS decreased for the three months ended March 31, 2020, compared to the same period in 2019, primarily due to the decrease in net income attributable to Evergy, Inc. discussed above, partially offset by a lower number of diluted weighted average common shares outstanding in 2020, which increased EPS by $0.04 for the three months ended March 31, 2020.
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For additional information regarding the impactchange in net income, refer to the Evergy Results of recently issued accounting standards.Operations section within this MD&A.
Adjusted Earnings (non-GAAP) and Adjusted EPS (non-GAAP)
Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) for the three months ended March 31, 2020, were $94.2 million or $0.41 per share, respectively. For the three months ended March 31, 2019, Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) were$111.1 million or $0.44 per share, respectively. In addition to net income attributable to Evergy, Inc. and diluted EPS, Evergy's management uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without the costs resulting from rebranding, voluntary severance and advisor expenses.
Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are intended to enhance an investor's overall understanding of results. Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are used internally to measure performance against budget and in reports for management and the Evergy Board. Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are financial measures that are not calculated in accordance with GAAP and may not be comparable to other companies' presentations or more useful than the GAAP information provided elsewhere in this report.
The following table provides a reconciliation between net income attributable to Evergy, Inc. and diluted EPS as determined in accordance with GAAP and adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP).
 Earnings (Loss) Earnings (Loss) per Diluted Share Earnings (Loss) Earnings (Loss) per Diluted Share
Three Months Ended March 312020 2019
 (millions, except per share amounts)
Net income attributable to Evergy, Inc.$69.4
 $0.31
 $99.5
 $0.39
Non-GAAP reconciling items:       
Rebranding costs, pre-tax(a)
—
 —
 0.2
 —
Voluntary severance costs, pre-tax(b)
27.0
 0.12
 14.8
 0.06
Advisor expenses, pre-tax(c)
6.6
 0.02
 —
 —
Income tax benefit(d)
(8.8) (0.04) (3.4) (0.01)
Adjusted earnings (non-GAAP)$94.2
 $0.41
 $111.1
 $0.44
(a)
Reflects external costs incurred to rebrand the legacy Westar Energy and KCP&L utility brands to Evergy and are included in operating and maintenance expense on the consolidated statements of comprehensive income.
(b)
Reflects severance costs incurred associated with certain voluntary severance programs at the Evergy Companies and are included in operating and maintenance expense on the consolidated statements of comprehensive income.
(c)
Reflects advisor expenses incurred associated with strategic planning and are included in operating and maintenance expense on the consolidated statements of comprehensive income.
(d)
Reflects an income tax effect calculated at a statutory rate of approximately 26%, with the exception of certain non-deductible items.
Wolf Creek Refueling Outage
Wolf Creek's most recent refueling outage began in March 2018September 2019 and the unit returned to service in May 2018.November 2019. Wolf Creek's next refueling outage is planned to begin in the thirdfirst quarter of 2019.2021.
ENVIRONMENTAL MATTERS
See Note 129 to the consolidated financial statements for information regarding environmental matters.
RELATED PARTY TRANSACTIONS
See Note 1410 to the consolidated financial statements for information regarding related party transactions.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. Management considers an accounting estimate to be critical if it requires assumptions to be made that were uncertain at the time the estimate was made and changes in the estimate or different estimates that could have been used could have a material impact on Evergy's results of operations and financial position. The accounting policies and estimates that Evergy believes were the most critical in nature were reported in the Westar Energy 2017 Form 10-K and the Great Plains Energy and KCP&L combined 2017 Form 10-K. There have been no material changes with regard to these critical accounting policies and estimates.
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EVERGY RESULTS OF OPERATIONS
Evergy's results of operations and financial position are affected by a variety of factors including rate regulation, fuel costs, weather, customer behavior and demand, the economy and competitive forces.
Substantially all of Evergy's revenues are subject to state or federal regulation. This regulation has a significant impact on the price the Evergy Companies charge for electric service. Evergy's results of operations and financial position are affected by its ability to align overall spending, both operating and capital, within the frameworks established by its regulators.
Wholesale revenues are impacted by, among other factors, demand, cost and availability of fuel and purchased power, price volatility, available generation capacity, transmission availability and weather.
The Evergy Companies primarily use coal and nuclear fuel for the generation of electricity for their customers and also purchase power on the open market. The prices for these commodities can fluctuate significantly due to a variety of factors including supply, demand, weather and the broader economic environment. Westar Energy, KCP&L and GMO have fuel recovery mechanisms in their Kansas and Missouri jurisdictions, as applicable, that allow them to defer and subsequently recover or refund, through customer rates, substantially all of the variance in net energy costs from the amount set in base rates without a general rate case proceeding.
Weather significantly affects the amount of electricity that Evergy's customers use as electricity sales are seasonal. As summer peaking utilities, the third quarter typically accounts for the greatest electricity sales by the Evergy Companies. Hot summer temperatures and cold winter temperatures prompt more demand, especially among residential and commercial customers, and to a lesser extent, industrial customers. Mild weather reduces customer demand.
Energy efficiency investments by customers and the Evergy Companies also can affect the demand for electric service. Through the Missouri Energy Efficiency Investment Act (MEEIA), KCP&L and GMO offer energy efficiency and demand side management programs to their Missouri retail customers and recover program costs, throughput disincentive and as applicable, certain performance incentives in retail rates through a rider mechanism.
The following table summarizes Evergy's comparative results of operations.
Three Months Ended
June 30
 
Year to Date
June 30
2018 2017 Change 2018 2017 Change
Three Months Ended March 312020 Change 2019
(millions)(millions)
Operating revenues$893.4
 $609.3
 $284.1
 $1,493.6
 $1,181.9
 $311.7
$1,116.7
 $(100.2) $1,216.9
Fuel and purchased power229.7
 111.8
 117.9
 365.2
 225.6
 139.6
258.2
 (71.8) 330.0
SPP network transmission costs68.4
 61.8
 6.6
 136.0
 122.4
 13.6
62.0
 (1.5) 63.5
Other operating expenses340.4
 181.5
 158.9
 524.3
 359.6
 164.7
Operating and maintenance288.2
 (18.7) 306.9
Depreciation and amortization128.0
 94.0
 34.0
 217.7
 182.7
 35.0
218.5
 4.9
 213.6
Taxes other than income tax92.3
 (1.0) 93.3
Income from operations126.9
 160.2
 (33.3) 250.4
 291.6
 (41.2)197.5
 (12.1) 209.6
Other income (expense)(10.5) (6.1) (4.4) (19.4) (13.8) (5.6)
Other expense, net(21.2) (13.2) (8.0)
Interest expense58.4
 43.7
 14.7
 102.2
 84.8
 17.4
96.2
 5.1
 91.1
Income tax expense (benefit)(45.0) 35.9
 (80.9) (35.8) 56.8
 (92.6)
Income tax expense10.1
 0.8
 9.3
Equity in earnings of equity method investees, net of income taxes1.4
 1.5
 (0.1) 2.7
 3.3
 (0.6)2.2
 —
 2.2
Net income104.4
 76.0
 28.4
 167.3
 139.5
 27.8
72.2
 (31.2) 103.4
Less: Net income attributable to noncontrolling interests2.6
 3.9
 (1.3) 5.0
 7.8
 (2.8)2.8
 (1.1) 3.9
Net income attributable to Evergy, Inc.$101.8
 $72.1
 $29.7
 $162.3
 $131.7
 $30.6
$69.4
 $(30.1) $99.5

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Evergy Utility Gross Margin and MWh Sales
Utility gross margin is a financial measure that is not calculated in accordance with GAAP.  Utility gross margin, as used by the Evergy Companies, is defined as operating revenues less fuel and purchased power costs and amounts billed by the SPP for network transmission costs. Expenses for fuel and purchased power costs, offset by wholesale sales margin, are subject to recovery through cost adjustment mechanisms.  As a result, changes in fuel and purchased power costs are offset in operating revenues with minimal impact on net income. In addition, SPP network transmission costs fluctuate primarily due to investments by SPP members for upgrades to the transmission grid within the SPP Regional Transmission Organization (RTO).RTO.  As with fuel and purchased power costs, changes in SPP network transmission costs are mostly reflected in the prices charged to customers with minimal impact on net income.
Management believes that utility gross margin provides a meaningful basis for evaluating the Evergy Companies' operations across periods compared with operating revenues because utility gross margin excludes the revenue effect of fluctuations in these expenses.  Utility gross margin is used internally to measure performance against budget and in reports for management and the Evergy Board.  Utility gross margin should be viewed as a supplement to, and not a substitute for, income from operations, which is the most directly comparable financial measure prepared in accordance with GAAP. The Evergy Companies' definition of utility gross margin may differ from similar terms used by other companies.
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The following tables summarizetable summarizes Evergy's utility gross margin and MWhs sold.sold and provides a reconciliation of utility gross margin to income from operations.
 Revenues and Costs MWhs Sold
Three Months Ended June 302018 2017Change2018 2017 Change
Retail revenues(millions) (thousands)
Residential$342.0
 $181.6
 $160.4
 3,326
 1,393
 1,933
Commercial259.1
 175.7
 83.4
 3,695
 1,814
 1,881
Industrial108.6
 104.1
 4.5
 1,852
 1,422
 430
Other retail revenues6.4
 7.3
 (0.9) 29
 25
 4
Total electric retail716.1
 468.7
 247.4
 8,902
 4,654
 4,248
Wholesale revenues89.7
 68.8
 20.9
 3,004
 1,993
 1,011
Transmission revenues75.1
 71.5
 3.6
 N/A
 N/A
 N/A
Other revenues12.5
 0.3
 12.2
 N/A
 N/A
 N/A
Operating revenues893.4
 609.3
 284.1
 11,906
 6,647
 5,259
Fuel and purchased power(229.7) (111.8) (117.9)      
SPP network transmission costs(68.4) (61.8) (6.6)      
Utility gross margin (a)
$595.3
 $435.7
 $159.6
      
(a) Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin above.
            
 Revenues and Costs MWhs Sold
Year to Date June 302018 2017 Change 2018 2017 Change
Retail revenues(millions) (thousands)
Residential$522.3
 $350.9
 $171.4
 4,798
 2,747
 2,051
Commercial414.5
 325.3
 89.2
 5,392
 3,432
 1,960
Industrial202.1
 198.7
 3.4
 3,211
 2,756
 455
Other retail revenues10.6
 12.3
 (1.7) 43
 44
 (1)
Total electric retail1,149.5
 887.2
 262.3
 13,444
 8,979
 4,465
Wholesale revenues183.9
 152.7
 31.2
 5,905
 4,484
 1,421
Transmission revenues147.0
 142.2
 4.8
 N/A
 N/A
  N/A
Other revenues13.2
 (0.2) 13.4
 N/A
 N/A
  N/A
Operating revenues1,493.6
 1,181.9
 311.7
 19,349
 13,463
 5,886
Fuel and purchased power(365.2) (225.6) (139.6)      
SPP network transmission costs(136.0) (122.4) (13.6)      
Utility gross margin (a)
$992.4
 $833.9
 $158.5
      
(a) Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin above.
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 Revenues and Expenses MWhs Sold
Three Months Ended March 312020 Change 2019 2020 Change 2019
Retail revenues(millions) (thousands)
Residential$402.5
 $(49.2) $451.7
 3,578
 (386) 3,964
Commercial384.7
 (28.8) 413.5
 4,206
 (218) 4,424
Industrial140.6
 (6.4) 147.0
 1,999
 (12) 2,011
Other retail revenues10.6
 0.8
 9.8
 33
 (3) 36
Total electric retail938.4
 (83.6) 1,022.0
 9,816
 (619) 10,435
Wholesale revenues63.5
 (19.6) 83.1
 2,874
 (1,155) 4,029
Transmission revenues75.6
 (1.1) 76.7
 N/A
 N/A
 N/A
Other revenues39.2
 4.1
 35.1
 N/A
 N/A
 N/A
Operating revenues1,116.7
 (100.2) 1,216.9
 12,690
 (1,774) 14,464
Fuel and purchased power(258.2) 71.8
 (330.0)   

  
SPP network transmission costs(62.0) 1.5
 (63.5)   

  
Utility gross margin (a)
796.5
 (26.9) 823.4
   

  
Operating and maintenance(288.2) 18.7
 (306.9)      
Depreciation and amortization(218.5) (4.9) (213.6)      
Taxes other than income tax(92.3) 1.0
 (93.3)      
Income from operations$197.5
 $(12.1) $209.6
      
(a) Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin above.
Evergy's utility gross margin increased $159.6decreased $26.9 million for the three months ended June 30, 2018,March 31, 2020, compared to the same period in 20172019 driven by:
a $170.8an $18.5 million increase due to the inclusion of KCP&L's and GMO's utility gross margin beginning in June 2018; and
a $34.6 million increasedecrease primarily due to higher Westar Energylower Evergy Kansas Central, Evergy Metro and Evergy Missouri West retail sales driven by warmer spring weather.winter weather, partially offset by a weather-normalized increase in residential demand at Evergy Metro and Evergy Missouri West. For the three months ended June 30, 2018,March 31, 2020, compared to the same period in 2017, cooling2019, heating degree days increased 73%decreased 19%;
a $9.6 million decrease in revenue recognized for the Missouri Energy Efficiency Investment Act (MEEIA) earnings opportunity in 2020 related to the achievement of certain energy savings levels in the second cycle of Evergy Metro's and Evergy Missouri West's MEEIA programs; and
a $2.7 million decrease in revenue related to the granting of an Accounting Authority Order (AAO) by the MPSC in October 2019 requiring Evergy Missouri West to record a regulatory liability for the estimated amount of revenues it has collected from customers for certain costs related to Sibley Station since its retirement in November 2018; partially offset by
a $26.7$3.9 million obligation recorded at Westar Energyincrease for one-timerecovery of programs costs for energy efficiency programs under MEEIA, which have a direct offset in operating 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;maintenance expense.
Operating and Maintenance
a $19.1Evergy's operating and maintenance expense decreased $18.7 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.
Evergy's utility gross margin increased $158.5 million year to date June 30, 2018,three months ended March 31, 2020, compared to the same period in 2017 driven by:
a $170.8 million increase due to the inclusion of KCP&L's and GMO's utility gross margin beginning in June 2018; and
a $52.6 million increase primarily due to higher Westar Energy retail sales driven by warmer spring weather and colder winter weather. For year to date June 30, 2018, compared to the same period in 2017, cooling degree days increased 69% and heating degree days increased 27%; partially offset by
a $38.2 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 $26.7 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.
Other Operating Expenses (including operating and maintenance expense and taxes other than income tax)
Evergy's other operating expenses increased $158.9 million and $164.7 million for the three months ended and year to date June 30, 2018, respectively, compared to the same periods in 20172019 primarily driven by:
a $61.7$17.3 million increasedecrease in transmission and distribution operating and maintenance expense primarily due to the inclusion$13.1 million of KCP&L'scosts at Evergy Metro and GMO'sEvergy Missouri West incurred from storms that occurred in January 2019 and lower employee headcount in 2020;
an $11.6 million decrease in various administrative and general operating and maintenance expenses beginningprimarily driven by a $4.8 million decrease in June 2018, excluding the deferrallabor and employee benefits expense which included lower medical claims at Evergy Metro in 2020 and a lower employee headcount in 2020 and a $3.7 million decrease in property insurance expense due to a higher annual refund of merger transition costs discussed below;nuclear insurance premiums
$57.5
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received by Evergy Kansas Central and Evergy Metro in 2020 related to their ownership interest in Wolf Creek; and
an $8.5 million of merger-related costs incurreddecrease in June 2018, consisting of:plant operating and maintenance expense at fossil-fuel generating units primarily due to:
◦$24.7a $5.5 million of unconditional charitable contributions and community support recorded bydecrease at Evergy Kansas Central primarily due to a $4.4 million decrease from a maintenance outage at Jeffrey Energy Center (JEC) Unit 2 in accordance with conditions in the KCC and MPSC merger orders;
◦$39.9 million of Westar Energy 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;March 2019; and
◦$40.7a $1.5 million decrease at Evergy Metro primarily driven by a $2.5 million decrease from outages at Hawthorn Station, Iatan Unit 1 and La Cygne Unit 1 in the first quarter of merger consulting fees and fees for other outside services incurred, primarily consisting of merger success fees;2020; 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;
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$12.3an $11.6 million increase due to $6.4 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 are expected to be retiredvoluntary severance expenses incurred in the second halffirst quarter of 2018;2020 by Evergy Kansas Central and Evergy Metro related to a Wolf Creek voluntary exit program and a $5.2 million increase of voluntary severance expenses at Evergy Kansas Central, Evergy Metro and Evergy Missouri West related to additional Evergy voluntary exit programs in 2020;
$6.6 million of advisor expenses incurred in the first quarter of 2020 associated with strategic planning; and
a $13.9$3.9 million increase in taxes other than income taxes due to the inclusion of KCP&L and GMO amounts beginningprogram costs for energy efficiency programs under MEEIA, which have a direct offset in June 2018.revenue.
Depreciation and Amortization
Evergy's depreciation and amortization increased $34.0 million and $35.0$4.9 million for the three months ended and year to date June 30, 2018, respectively,March 31, 2020, compared to the same periodsperiod in 20172019 primarily driven by capital additions at Evergy Kansas Central and Evergy Metro.
Other Expense, Net
Evergy's other expense, net increased $13.2 million for the three months ended March 31, 2020, compared to the same period in 2019, primarily driven by:
a $32.0$6.5 million increase due to the inclusion of KCP&L'srecording lower Evergy Kansas Central COLI benefits in 2020; and GMO's depreciation expense beginning
a $3.2 million increase due to higher net unrealized losses in June 2018.Evergy Kansas Central's rabbi trust in 2020.
Interest Expense
Evergy's interest expense increased $14.7 million and $17.4$5.1 million for the three months ended and year to date June 30, 2018, respectively, compared to the same periods in 2017 primarily driven by a $14.0 million increase due to the inclusion of KCP&L's and GMO's interest expense beginning in June 2018 and Evergy's assumption of Great Plains Energy's $350.0 million of 4.850% unsecured Senior Notes and $287.5 million of 5.292% unsecured Senior Notes upon the consummation of the merger.
Income Tax Expense
Evergy's income tax expense decreased $80.9 million for the three months ended June 30, 2018,March 31, 2020, compared to the same period in 20172019, primarily driven by:
a $52.6$12.4 million decrease relatedincrease due to Evergy's issuance of $1.6 billion of senior notes in September 2019; and
a $2.4 million increase due to the revaluationissuance of Westar Energy's deferred income tax assets and liabilities based on the Evergy composite tax rate as a resultKansas Central's $300.0 million of the merger;3.25% FMBs in August 2019; partially offset by
a $35.7$5.0 million decrease due to lower Westar Energy pre-tax income;the repayment of Evergy Kansas South's $300.0 million of 6.70% FMBs at maturity in June 2019; and
a $2.8$4.6 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
an $8.7 million increase as a result of the inclusion of income tax expense related to the subsidiaries of Great Plains Energy beginning in June 2018.
Evergy's income tax expense decreased $92.6 million year to date June 30, 2018, compared to the same period in 2017 primarily driven by:
a $52.6 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 $40.6 millionnet decrease due to lower Westar Energy pre-tax income; and
a $12.2 million decrease in Westar Energy's income tax expense as a resultthe repayment of the decrease in the federal statutory income tax rate in 2018; partially offset by
an $8.7 million increase as a result of the inclusion of income tax expense related to the subsidiaries of Great Plains Energy beginning in June 2018.
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EVERGY SIGNIFICANT BALANCE SHEET CHANGES
(June 30, 2018 compared to December 31, 2017)
The following table summarizes Evergy's significant balance sheet changes.
 
Total
Change
 Change Due to Merger 
Remaining
Change
Assets(in millions)
Cash and cash equivalents$1,276.7
 $1,154.2
 $122.5
Accounts receivable, net198.0
 155.6
 42.4
Accounts receivable pledged as collateral195.0
 180.0
 15.0
Fuel inventories and supplies246.3
 271.5
 (25.2)
Regulatory assets - current248.2
 207.8
 40.4
Prepaid expenses and other assets46.1
 41.5
 4.6
Property, plant and equipment, net9,266.1
 9,179.7
 86.4
Property, plant and equipment of variable interest entities, net(3.6) —
 (3.6)
Regulatory assets852.5
 829.1
 23.4
Nuclear decommissioning trust261.1
 261.3
 (0.2)
Goodwill2,333.7
 2,333.7
 —
Other114.8
 145.5
 (30.7)
Liabilities     
Current maturities of long-term debt819.3
 415.3
 404.0
Current maturities of long-term debt of variable interest entities1.8
 —
 1.8
Notes payable and commercial paper803.6
 561.0
 242.6
Collateralized note payable195.0
 180.0
 15.0
Accounts payable123.4
 191.4
 (68.0)
Accrued dividends(53.8) —
 (53.8)
Accrued taxes122.6
 82.0
 40.6
Accrued interest9.3
 48.0
 (38.7)
Regulatory liabilities - current77.9
 17.7
 60.2
Other current liabilities155.1
 119.1
 36.0
Long-term debt, net2,953.5
 3,358.6
 (405.1)
Long-term debt of variable interest entities, net(30.3) —
 (30.3)
Deferred income taxes620.6
 664.9
 (44.3)
Unamortized investment tax credits122.8
 124.3
 (1.5)
Regulatory liabilities1,267.8
 1,172.9
 94.9
Pension and post-retirement liability467.9
 477.3
 (9.4)
Asset retirement obligations247.9
 366.1
 (118.2)
Other long-term liabilities95.5
 83.1
 12.4
See Note 2 to the consolidated financial statements for additional information regarding changes in Evergy's balance sheet due to the merger.
The following are significant balance sheet changes in addition to those due to the Great Plains Energy and Westar Energy merger:
Evergy's cash and cash equivalents increased $122.5 million primarily due to receiving $140.6 million in proceeds from the settlement of Great Plains Energy's deal-contingent interest rate swaps following the closing of the merger in June 2018.
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Evergy's receivables, net increased $42.4 million primarily due to seasonal increases in customer accounts receivable.
Evergy's current maturities of long-term debt increased by $404.0 million and long-term debt decreased by $405.1 million primarily due to the reclassification of KCP&L'sEvergy Metro's $400.0 million of 7.15% Series 2009A General Mortgage Bonds from long-term to current.
Evergy's notes payable and commercial paper increased $242.6at maturity in April 2019, which decreased interest expense by $8.5 million, primarilypartially offset by a $3.9 million increase due to borrowings for general corporate purposes.
Evergy's accounts payable decreased $68.0Evergy Metro's issuance of $400.0 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 declared4.125% Mortgage Bonds in May 2018, which was paid in June 2018, and its common stock dividend declared in November 2017, which was paid in January 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 $118.2 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.March 2019.
LIQUIDITY AND CAPITAL RESOURCES
Evergy relies primarily upon cash from operations, short-term borrowings, debt and equity issuances and its existing cash and cash equivalents to fund its capital requirements. Evergy's capital requirements primarily consist of capital expenditures, payment of contractual obligations and other commitments and the payment of dividends to shareholdersshareholders. See the Evergy Companies' combined 2019 Form 10-K for more information on Evergy's sources and uses of cash.
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Impact of Recent Market Volatility
The Evergy Companies have historically accessed the commercial paper market for working capital. The pandemic caused a disruption in the commercial paper market in the first quarter of 2020 and the anticipatedEvergy Companies instead fulfilled their short-term liquidity needs through cash borrowings under their master credit facility as detailed further in Note 6 to the consolidated financial statements. In addition, as of March 31, 2020, Evergy Kansas Central and Evergy Metro had $121.9 million and $146.5 million, respectively, of outstanding variable rate tax-exempt bonds where the interest rate is reset on a weekly basis subject to successful market participation, which can be impacted by volatility in the capital markets. These variable rate tax-exempt bonds contain provisions allowing the holders to require Evergy Kansas Central or Evergy Metro, as applicable, to repurchase the bonds at the holder's option with minimal notice. Finally, to the extent that the Evergy Companies experience a significant increase in customer non-payment or delay in the timely receipt of common shares.customer payments, Evergy Kansas Central, Evergy Metro and Evergy Missouri West may not have sufficient eligible receivables under their receivable sales facilities and could be required to pay down portions of the borrowings under the facilities. As of March 31, 2020, Evergy's total borrowings under receivable sales facilities were $322.0 million.
Capital SourcesIn April 2020, Evergy Kansas Central issued, at a discount, $500.0 million of 3.45% FMBs, maturing in 2050 and issued a notice of redemption for its $250.0 million of 5.10% FMBs, which had an original maturity date of July 2020. The proceeds from this issuance will be used to redeem the $250.0 million of 5.10% FMBs in May 2020 and for general corporate purposes. In April 2020, Evergy Metro filed a long-term debt financing authorization request with the MPSC to issue $400.0 million of long-term debt through December 31, 2021 with the proceeds to be used to repay or refinance outstanding indebtedness, including the potential to redeem the $146.5 million of variable rate long-term debt discussed above. In May 2020, the MPSC approved Evergy Metro's request.
Cash Flows from Operations
Evergy's cash flows from operations are driven by the regulated saleAs of electricity. These cash flows are relatively stable but the timing and level of these cash flows can vary based on weather and economic conditions, future regulatory proceedings, the timingApril 30, 2020, Evergy had approximately $400 million of cash payments madeand cash equivalents in addition to approximately $250 million of restricted cash to be used to redeem Evergy Kansas Central's $250.0 million of 5.10% FMBs in May 2020, and $1.6 billion of available borrowing capacity under its master credit facility. Further, as of April 30, 2020, the Evergy Companies had returned to fulfilling their short-term liquidity needs through the commercial paper market. Evergy believes that its existing cash on hand and available borrowing capacity under its master credit facility provide sufficient liquidity for costs recoverable under regulatory mechanisms and the time such costs are recovered, and unanticipated expenses such as unplanned plant outages and/or storms.its existing capital requirements.
Short-Term Borrowings
As of June 30, 2018,March 31, 2020, Evergy had $1.1$1.4 billion of available borrowing capacity from unused bank lines ofunder its master credit and receivable sale agreements. Westar Energy's, KCP&L's and GMO'sfacility. The available borrowing capacity under their revolvingthe master credit facilitiesfacility consisted of $394.3 million for Evergy, Inc., $605.5 million for Evergy Kansas Central, $140.0 million for Evergy Metro and $277.9 million for Evergy Missouri West. Evergy Kansas Central's, Evergy Metro's and Evergy Missouri West's borrowing capacity under the master credit facility also supportsupports their issuance of commercial paper. The available borrowing capacity consisted of $139.0 million from Evergy's revolving credit facility, $472.8 million from Westar Energy's credit facilities, $274.9 million from KCP&L's credit facilities and $239.3 million from GMO's credit facilities. See Notes 4 and 9Note 6 to the consolidated financial statements for more information regarding the receivable sale agreements and revolvingmaster credit facilities, respectively.facility. Along with cash flows from operations and receivable sales facilities, Evergy generally uses these liquid resourcesborrowings under its master credit facility and the issuance of commercial paper to meet its day-to-day cash flow requirements.
Significant Debt Issuances
TableSee Note 7 to the consolidated financial statements for information regarding significant debt issuances.
Pensions
For the three months ended March 31, 2020, Evergy made pension contributions of Contents$21.4 million. Evergy expects to make additional pension contributions of $106.7 million in 2020 to satisfy ERISA funding requirements and KCC and MPSC rate orders, of which $27.5 million is expected to be paid by Evergy Kansas Central and $79.2 million is expected to be paid by Evergy Metro. Also in 2020, Evergy expects to make contributions of $3.8 million to the post-retirement benefit plans.

Debt Covenants

Long-Term Debt and Equity Issuances
From time to time, Evergy issues long-term debt and/or equity to repay short-term debt, refinance maturing long-term debt and finance growth. As of June 30, 2018 and DecemberMarch 31, 2017, Evergy’s capital structure, excluding short-term2020, Evergy was in compliance with all debt was as follows:
 June 30 December 31
 2018 2017
Common equity59% 51%
Noncontrolling interests<0% <0%
Long-term debt, including VIEs41% 49%
Followingcovenants under the completion of its anticipated common stock repurchase plan, Evergy anticipates having a common equity to total capitalization ratio of approximately 50%.
Under stipulations with the MPSC and KCC, Evergy, Westar Energy and KCP&L are required to maintain common equity at not less than 35%, 40% and 40%, respectively, of total capitalization. The revolvingmaster credit facilitiesfacility and certain debt instruments of the Evergy Companies alsothat contain restrictions that require the maintenance of certain capitalization and leverage ratios. As of June 30, 2018, the Evergy Companies were in compliance with these covenants.
Significant Debt Issuances
See Note 106 to the consolidated financial statements for information regarding significant debt issuances.
Credit Ratings
The ratings of the Evergy Companies' securities by the credit rating agencies impact their liquidity, including the cost of borrowings under their revolving credit agreements and in the capital markets. The Evergy Companies view maintenance of strong credit ratings as extremely important to the Evergy Companies' access to and cost of debt financing and, to that end, maintain an active and ongoing dialogue with the agencies with respect to results of operations, financial position and future prospects. While a decrease in these credit ratings would not cause any acceleration of the Evergy Companies' debt, it could increase interest charges under revolving credit agreements. A decrease in credit ratings could also have, among other things, an adverse impact, which could be material, on the Evergy Companies' access to capital, the cost of funds, the ability to recover actual interest costs in state regulatory proceedings, the type and amounts of collateral required under supply agreements and Evergy's ability to provide credit support for its subsidiaries.more information.
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As of August 8, 2018, the major credit rating agencies rated the Evergy Companies' securities as detailed in the following table.
Moody'sS&P Global
Investors ServiceRatings
Evergy
OutlookStableStable
Corporate Credit Rating--A-
Senior Unsecured DebtBaa2BBB+
Westar Energy
OutlookStableStable
Corporate Credit RatingBaa1A-
Senior Secured DebtA2A
Commercial PaperP-2A-2
KGE
OutlookStableStable
Corporate Credit RatingBaa1A-
Senior Secured DebtA2A
KCP&L
OutlookStableStable
Corporate Credit RatingBaa1A-
Senior Secured DebtA2A
Senior Unsecured DebtBaa1A-
Commercial PaperP-2A-2
GMO
OutlookStableStable
Corporate Credit RatingBaa2A-
Senior Unsecured DebtBaa2A-
Commercial PaperP-2A-2
A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.
Shelf Registration Statements and Regulatory Authorizations
Westar Energy
Westar Energy has an effective shelf registration statement providing for the sale of unlimited amounts of unsecured debt securities and first mortgage bonds with the SEC that expires in March 2019.
KCP&L
KCP&L has an effective shelf registration statement providing for the sale of $1.1 billion in aggregate principal amount of notes and mortgage bonds that expires in April 2021.
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The following table summarizes the short-term and long-term debt financing authorizations for Westar Energy, KGE, KCP&L and GMO and the remaining amount available under these authorizations as of June 30, 2018.
Type of AuthorizationCommissionExpiration DateAuthorization AmountAvailable Under Authorization
Westar Energy & KGE  (in millions)
Short-Term DebtFERCFebruary 2020$1,000.0$511.8
KCP&L   
Short-Term DebtFERCDecember 2018$1,000.0$677.6
Long-Term DebtMPSCSeptember 2019$750.0$450.0
GMO    
Short-Term DebtFERCMarch 2020$750.0$541.3
In addition to the above regulatory authorizations for KCP&L and GMO, the Westar Energy and KGE mortgages each contain provisions restricting the amount of First Mortgage Bonds (FMBs) that can be issued by each entity. Westar Energy and KGE must comply with these restrictions prior to the issuance of additional FMBs or other secured indebtedness.
Under the Westar Energy mortgage, the issuance of bonds is subject to limitations based on the amount of bondable property additions. In addition, so long as any bonds issued prior to January 1, 1997, remain outstanding, the mortgage prohibits additional FMBs from being issued, except in connection with certain refundings, unless Westar Energy’s unconsolidated net earnings available for interest, depreciation and property retirement (which as defined, does not include earnings or losses attributable to the ownership of securities of subsidiaries), for a period of 12 consecutive months within 15 months preceding the issuance, are not less than the greater of twice the annual interest charges on or 10% of the principal amount of all FMBs outstanding after giving effect to the proposed issuance. As of June 30, 2018, $382.8 million principal amount of additional FMBs could be issued under the most restrictive provisions in the mortgage, except in connection with certain refundings.
Under the KGE mortgage, the amount of FMBs authorized is limited to a maximum of $3.5 billion and the issuance of bonds is subject to limitations based on the amount of bondable property additions. In addition, the mortgage prohibits additional FMBs from being issued, except in connection with certain refundings, unless KGE’s net earnings before income taxes and before provision for retirement and depreciation of property for a period of 12 consecutive months within 15 months preceding the issuance are not less than either two and one-half times the annual interest charges on or 10% of the principal amount of all KGE FMBs outstanding after giving effect to the proposed issuance. As of June 30, 2018, approximately $1.5 billion principal amount of additional KGE FMBs could be issued under the most restrictive provisions in the mortgage, except in connection with certain refundings.

Cash and Cash Equivalents
At June 30, 2018, Evergy had approximately $1.3 billion of cash and cash equivalents on hand. Under the Amended Merger Agreement, Great Plains Energy was required to have not less than $1.25 billion in cash and cash equivalents on its balance sheet at the closing of the merger with Westar Energy. Evergy anticipates that this excess cash will be returned to its shareholders through the repurchase of common stock.
Capital Requirements
Capital Expenditures
Evergy requires significant capital investments and expects to need cash primarily for utility construction programs designed to improve and expand facilities related to providing electric service, which include, but are not limited to, expenditures to develop new transmission lines and improvements to power plants, transmission and distribution lines and equipment.
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Off-Balance Sheet Arrangement
Evergy's anticipated capital expenditures for the next several yearsoff-balance sheet arrangements were reported in the Westar Energy 2017 Form 10-K and the Great Plains Energy and KCP&LEvergy Companies' combined 20172019 Form 10-K. There have been no material changes with regard to these anticipated capital expenditures.
Contractual Obligations and Other Commitments
In the courseAs of its business activities, the Evergy Companies enter into a variety of contracts and commercial commitments. Some of these result in direct obligations reflected on Evergy's consolidated balance sheets while others are commitments, some firm and some based on uncertainties, not reflected in Evergy's underlying consolidated financial statements. ThereMarch 31, 2020, there have been no material changes with regards to the contractual obligations and commitments disclosed in Supplemental Capital Requirements and Liquidity Information in MD&A in the Great Plains Energy and KCP&L combined 2017 Form 10-K and in Contractual Obligations and Commercial Commitments in the Westar Energy 2017 Form 10-K.
Common Stock Dividends
The amount and timing of dividends payable on Evergy's common stock are within the sole discretion of Evergy's Board of Directors. The amount and timing of dividends declared by the Evergy Board of Directors will be dependent on considerations such as Evergy's earnings, financial position, cash flows, capitalization ratios, regulation, reinvestment opportunities and debt covenants. Evergy targets a long-term dividend payout ratio of 60% to 70% of earnings.
The Evergy Companies also have certain restrictions stemming from statutory requirements, corporate organizational documents, covenants and other conditions that could affect dividend levels. See Note 15 to the consolidated financial statements for further discussion of restrictions on dividend payments.
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. See "Executive Summary - Share Repurchase Program" for additional information.

Impact of Tax Cuts and Jobs Act
The Tax Cuts and Jobs Act will result in lower operating cash flows for the Evergy Companies as a result of lower customer rates resulting from lower income tax expense recoveries and the settlement of related deferred income tax regulatory liabilities, which are significant. These decreases in operating cash flows are expected to exceed the increase in operating cash flows for the Evergy Companies resulting from the lower corporate federal income tax rate. These net regulatory liabilities will be refunded in future rates by amortizing amounts related to plant assets over the remaining useful life of the assets and amortizing the amounts related to the other items over periods to be determined in future rate cases.
Off-Balance Sheet Arrangements
In the ordinary course of business, Evergy and certain of its subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for example, guarantees and letters of credit. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiary's intended business purposes. In connection with the closing of the merger, Evergy assumed the guarantees previously provided to GMO by Great Plains Energy. The majority of these agreements guarantee Evergy's own future performance, so a liability for the fair value of the obligation is not recorded.
At June 30, 2018, Evergy has provided $112.3 million of credit support for GMO as follows:
Evergy direct guarantees to GMO counterparties totaling $18.0 million, which expire in 2018, and
Evergy's guarantee of GMO long-term debt totaling $94.3 million, which includes debt with maturity dates ranging from 2019 to 2023.
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Evergy has also guaranteed GMO's commercial paper program. At June 30, 2018, GMO had $208.7 million of commercial paper outstanding. None of the guaranteed obligations are subject to default or prepayment if GMO's credit ratings were downgraded.
The Evergy Companies also have off-balance sheet arrangements in the form of operating leases and letters of credit entered into in the ordinary course of business.arrangements.
Cash Flows
The following table presents Evergy's cash flows from operating, investing and financing activities.
Year to Date June 3020182017
 (in millions)
Cash flows from operating activities$397.2
$363.7
Cash flows from (used in) investing activities846.9
(399.5)
Cash flows from financing activities32.6
35.9
Three Months Ended March 3120202019
 (millions)
Cash Flows from Operating Activities$320.6
$362.1
Cash Flows used in Investing Activities(333.4)(271.4)
Cash Flows from Financing Activities294.0
296.9
Cash Flows from Operating Activities
Evergy's cash flows from operating activities increased $33.5decreased $41.5 million year to date June 30, 2018,for the three months ended March 31, 2020, compared to the same period in 2017,2019, primarily driven by:
$22.1 million of interest payments made in March 2020 on Evergy's $1.6 billion of senior notes issued in September 2019; and
a $21.1 million decrease related to fuel recovery mechanisms in 2020 driven by an $85.5a $33.8 million increase duein the under recovery of costs subject to the inclusion of KCP&L'sfuel recovery mechanisms at Evergy Kansas Central and GMO's cash flows from operating activities beginning in June 2018;Evergy Metro, partially offset by $35.6a $12.7 million decrease in the under recovery of merger success fees paid bycosts at Evergy and Westar Energy upon the completion of the merger and an increase of $15.2 million in Wolf Creek refueling outage costs paid by Westar Energy related to the outage that concluded in May 2018.Missouri West.
Cash Flows fromused in Investing Activities
Evergy's cash flows fromused in investing activities increased $1,246.4$62.0 million year to date June 30, 2018,for the three months ended March 31, 2020, compared to the same period in 2017,2019, primarily driven by:
a $45.4 million increase in additions to property, plant and equipment primarily due to the inclusiona $21.0 million increase at Evergy Metro primarily due to increased spending on customer meters and a customer billing system and a $17.9 million increase at Evergy Missouri West due to a variety of $1,154.2capital projects including transmission infrastructure additions and upgrades of telecommunications equipment; and
a decrease of $10.1 million in proceeds from COLI investments, primarily from Evergy Kansas Central due to a higher number of cash acquired from Great Plains Energy as of the merger date.policy settlements in 2019.
Cash Flows from Financing Activities
Evergy's cash flows from financing activities decreased $3.3$2.9 million year to date June 30, 2018,for the three months ended March 31, 2020, compared to the same period in 2017.2019, primarily driven by:
a $494.0 million decrease in proceeds from long-term debt, net due to Evergy Metro's issuance of $400.0 million of 4.125% Mortgage Bonds and Evergy Missouri West's issuance of $100.0 million of 3.74% Senior Notes in March 2019; and
a $79.3 million decrease in short-term borrowings primarily driven by Evergy's $500.0 million of borrowings under its term loan credit facility in March 2019, partially offset by an increase of $420.7 million in cash borrowings under Evergy's master credit facility and commercial paper in the first quarter of 2020; partially offset by
$578.3 million of common stock repurchased as a result of Evergy's share repurchase program for the three months ended March 31, 2019.
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WESTAR ENERGY,EVERGY KANSAS CENTRAL, INC.
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
The below results of operations and related discussion for Westar EnergyEvergy Kansas Central is presented in a reduced disclosure format in accordance with General Instruction (H)(2)(a) to Form 10-Q.
The following table summarizes Westar Energy'sEvergy Kansas Central's comparative results of operations.
Year to Date
June 30
2018 2017 Change
Three Months Ended March 312020 Change 2019
(millions)(millions)
Operating revenues$1,251.1
 $1,181.9
 $69.2
$560.1
 $(36.7) $596.8
Fuel and purchased power293.5
 225.6
 67.9
99.2
 (23.5) 122.7
SPP network transmission costs136.0
 122.4
 13.6
62.0
 (1.5) 63.5
Other operating expenses436.3
 359.6
 76.7
Operating and maintenance123.7
 (4.9) 128.6
Depreciation and amortization185.7
 182.7
 3.0
112.1
 2.3
 109.8
Taxes other than income tax48.6
 0.7
 47.9
Income from operations199.6
 291.6
 (92.0)114.5
 (9.8) 124.3
Other income (expense)(17.7) (13.8) (3.9)
Other expense, net(11.1) (9.3) (1.8)
Interest expense88.2
 84.8
 3.4
41.6
 (3.3) 44.9
Income tax expense (benefit)(44.4) 56.8
 (101.2)
Income tax expense7.8
 (2.7) 10.5
Equity in earnings of equity method investees, net of income taxes2.4
 3.3
 (0.9)1.2
 —
 1.2
Net income140.5
 139.5
 1.0
55.2

(13.1) 68.3
Less: Net income attributable to noncontrolling interests5.0
 7.8
 (2.8)2.8
 (1.1) 3.9
Net income attributable to Westar Energy, Inc.$135.5
 $131.7
 $3.8
Net income attributable to Evergy Kansas Central, Inc.$52.4

$(12.0) $64.4
Westar EnergyEvergy Kansas Central Utility Gross Margin and MWh Sales
The following table summarizes Westar Energy'sEvergy Kansas Central's utility gross margin and MWhs sold.sold and provides a reconciliation of utility gross margin to income from operations.
Revenues and Costs MWhs SoldRevenues and ExpensesMWhs Sold
Year to Date June 302018 2017 Change 2018 2017 Change
Three Months Ended March 312020 Change 2019 2020 Change 2019
Retail revenues(millions) (thousands)(millions)(thousands)
Residential$401.4
 $350.9
 $50.5
 3,249
 2,747
 502
$167.8
 $(24.5) $192.3
 1,407
 (139) 1,546
Commercial325.4
 325.3
 0.1
 3,567
 3,432
 135
151.1
 (13.2) 164.3
 1,624
 (104) 1,728
Industrial185.3
 198.7
 (13.4) 2,725
 2,756
 (31)92.1
 (6.3) 98.4
 1,278
 (64) 1,342
Other retail revenues9.9
 12.3
 (2.4) 30
 44
 (14)4.7
 (0.4) 5.1
 11
 (1) 12
Total electric retail922.0
 887.2
 34.8
 9,571
 8,979
 592
415.7
 (44.4) 460.1
 4,320
 (308) 4,628
Wholesale revenues181.3
 152.7
 28.6
 5,477
 4,484
 993
54.8
 (6.5) 61.3
 1,469
 (604) 2,073
Transmission revenues144.1
 142.2
 1.9
 N/A
 N/A
 N/A
68.2
 (1.0) 69.2
 N/A
 N/A
 N/A
Other revenues3.7
 (0.2) 3.9
 N/A
 N/A
 N/A
21.4
 15.2
 6.2
 N/A
 N/A
 N/A
Operating revenues1,251.1
 1,181.9
 69.2
 15,048
 13,463
 1,585
560.1
 (36.7) 596.8
 5,789
 (912) 6,701
Fuel and purchased power(293.5) (225.6) (67.9)      (99.2) 23.5
 (122.7)      
SPP network transmission costs(136.0) (122.4) (13.6)      (62.0) 1.5
 (63.5)      
Utility gross margin (a)
$821.6
 $833.9
 $(12.3)      398.9
 (11.7) 410.6
      
Operating and maintenance(123.7) 4.9
 (128.6)      
Depreciation and amortization(112.1) (2.3) (109.8)      
Taxes other than income tax(48.6) (0.7) (47.9)      
Income from operations$114.5
 $(9.8) $124.3
      
(a) 
Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin under Evergy's Results of Operations.
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Westar Energy'sEvergy Kansas Central's utility gross margin decreased $12.3$11.7 million year to date June 30, 2018,for the three months ended March 31, 2020, compared to the same period in 2017, driven by:
a $38.2 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 $26.7 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 $52.6 million increase2019 primarily due to higherlower retail sales driven by warmer spring weather and colder winter weather. For year to date June 30, 2018,the three months ended March 31, 2020, compared to the same period in 2017, cooling degree days increased 69% and2019, heating degree days increased 27%decreased 17%.
Westar Energy OtherEvergy Kansas Central Operating Expenses (includingand Maintenance
Evergy Kansas Central's operating and maintenance expense and taxes other than income tax)
Westar Energy's other operating expenses increased $76.7decreased $4.9 million year to date June 30, 2018,for the three months ended March 31, 2020, compared to the same period in 2017,2019 primarily driven by:
$45.1a $5.6 million decrease in various administrative and general operating and maintenance expenses primarily driven by a $2.5 million decrease in labor and employee benefits expense driven by a lower employee headcount in 2020 and a $1.9 million decrease in property insurance expense due to a higher annual refund of nuclear insurance premiums received by Evergy Kansas Central related to its indirect ownership interest in Wolf Creek; and
a $5.5 million decrease in plant operating and maintenance expense at fossil-fuel generating units primarily due to a $4.4 million decrease from a maintenance outage at JEC Unit 2 in March 2019; partially offset by
a $5.6 million increase due to $3.2 million of merger-related costsvoluntary severance expenses incurred in June 2018, consisting of:
◦$39.9 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
◦$19.0 million of merger consulting fees and fees for other outside services incurred, primarily consisting of merger success fees; partially offset by
◦a $13.8 million decrease in operating and maintenance expense due to the net reallocation of incurred merger transition costs between 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; and
$12.3the first quarter of 2020 related to a Wolf Creek voluntary exit program and a $2.4 million increase of obsolete inventory write-offsvoluntary severance expenses in 2020 related to additional Evergy voluntary exit programs.
Evergy Kansas Central Depreciation and Amortization
Evergy Kansas Central's depreciation and amortization expense increased $2.3 million 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 are expected to be retired in the second half of 2018.
Westar Energy Income Tax Expense
Westar Energy's income tax expense decreased $101.2 million year to dateJune 30, 2018,three months ended March 31, 2020, compared to the same period in 2017,2019 primarily driven by capital additions.
Evergy Kansas Central Other Expense, Net
Evergy Kansas Central's other expense, net increased $9.3 million for the three months ended March 31, 2020, compared to the same period in 2019 primarily driven by:
a $52.6$6.5 million decrease relatedincrease due to recording lower COLI benefits in 2020; and
a $3.2 million increase due to higher net unrealized losses in Evergy Kansas Central's rabbi trust in 2020.
Evergy Kansas Central Interest Expense
Evergy Kansas Central's interest expense decreased $3.3 million for the three months ended March 31, 2020, compared to the revaluation of deferred income tax assets and liabilities based on the Evergy composite tax rate as a result of the merger;same period in 2019 primarily driven by:
a $40.6$5.0 million decrease due to lower pre-tax income; andthe repayment of Evergy Kansas South's $300.0 million of 6.70% FMBs at maturity in June 2019; partially offset by
a $12.2$2.4 million decrease as a resultincrease due to the issuance of the decreaseEvergy Kansas Central's $300.0 million of 3.25% FMBs in the federal statutory income tax rate in 2018.August 2019.
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KANSAS CITY POWER & LIGHT COMPANYEVERGY METRO, INC.
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS
The below results of operations and related discussion for KCP&LEvergy Metro is presented in a reduced disclosure format in accordance with General Instruction (H)(2)(a) to Form 10-Q.
The following table summarizes KCP&L'sEvergy Metro's comparative results of operations.
Year to Date
June 30
2018 2017 Change
Three Months Ended March 312020 Change 2019
(millions)(millions)
Operating revenues$849.3
 $878.6
 $(29.3)$375.5
 $(49.9) $425.4
Fuel and purchased power250.0
 223.4
 26.6
92.5
 (42.4) 134.9
Other operating expenses286.5
 325.2
 (38.7)
Operating and maintenance105.9
 (16.1) 122.0
Depreciation and amortization137.1
 133.6
 3.5
81.4
 2.5
 78.9
Taxes other than income tax32.0
 (0.7) 32.7
Income from operations175.7
 196.4
 (20.7)63.7
 6.8

56.9
Other income (expense)(11.0) (24.6) 13.6
Other expense, net(6.9) (3.5) (3.4)
Interest expense67.6
 71.2
 (3.6)28.6
 (5.2) 33.8
Income tax expense52.3
 36.8
 15.5
2.6
 (1.1) 3.7
Net income$44.8
 $63.8
 $(19.0)$25.6
 $9.6

$16.0
KCP&LEvergy Metro Utility Gross Margin and MWh Sales
The following table summarizes KCP&L'sEvergy Metro's utility gross margin and MWhs sold.sold and provides a reconciliation of utility gross margin to income from operations.
Revenues and Costs MWhs SoldRevenues and Expenses MWhs Sold
Year to Date June 302018 2017 Change 2018 2017 Change
Three Months Ended March 312020 Change 2019 2020 Change 2019
Retail revenues(millions) (thousands)(millions) (thousands)
Residential$341.9
 $318.0
 $23.9
 2,789
 2,383
 406
$147.4
 $(16.8) $164.2
 1,265
 (132) 1,397
Commercial378.1
 394.9
 (16.8) 3,820
 3,621
 199
172.1
 (11.7) 183.8
 1,811
 (83) 1,894
Industrial66.3
 74.0
 (7.7) 857
 860
 (3)30.1
 0.4
 29.7
 415
 38
 377
Other retail revenues5.0
 5.4
 (0.4) 38
 38
 —
3.5
 0.9
 2.6
 17
 (2) 19
Total electric retail791.3
 792.3
 (1.0) 7,504
 6,902
 602
353.1
 (27.2) 380.3
 3,508
 (179) 3,687
Wholesale revenues8.6
 52.0
 (43.4) 2,139
 3,759
 (1,620)6.8
 (11.3) 18.1
 1,271
 (526) 1,797
Transmission revenues7.2
 8.4
 (1.2) N/A
 N/A
 N/A
3.1
 —
 3.1
 N/A
 N/A
 N/A
Other revenues42.2
 25.9
 16.3
 N/A
 N/A
 N/A
12.5
 (11.4) 23.9
 N/A
 N/A
 N/A
Operating revenues849.3
 878.6
 (29.3) 9,643
 10,661
 (1,018)375.5
 (49.9) 425.4
 4,779
 (705) 5,484
Fuel and purchased power(250.0) (223.4) (26.6)      (92.5) 42.4
 (134.9)      
Utility gross margin (a)
$599.3
 $655.2
 $(55.9) 

 

  283.0
 (7.5) 290.5
      
Operating and maintenance(105.9) 16.1
 (122.0)      
Depreciation and amortization(81.4) (2.5) (78.9)      
Taxes other than income tax(32.0) 0.7
 (32.7)      
Income from operations$63.7
 $6.8
 $56.9
      
(a) 
Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin under Evergy's Results of Operations.
KCP&L'sEvergy Metro's utility gross margin decreased $55.9$7.5 million year to date June 30, 2018for three months ended March 31, 2020, compared to the same period in 2017,2019 driven by:
a $39.8$4.7 million refund obligationdecrease in revenue recognized for the changeMEEIA earnings opportunity in 2020 related to the achievement of certain energy savings levels in the corporate income tax rate caused by the passagesecond cycle of the Tax Cuts and Jobs Act. See Note 17 to the consolidated financial statements for additional information;
$32.3 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;Evergy Metro's MEEIA program; and
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a $23.6$3.9 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 $39.8 million increasedecrease primarily due to higherlower retail sales driven by warmer springwinter weather, and colder winter weather.partially offset by a weather-normalized increase in residential demand. For year to date June 30, 2018,the three months ended March 31, 2020, compared to the same period in 2017, cooling degree days increased 63% and2019, heating degree days increased 29%.decreased 20%; partially offset by
KCP&L Othera $1.1 million increase for recovery of programs costs for energy efficiency programs under MEEIA, which have a direct offset in operating and maintenance expense.
Evergy Metro Operating Expenses (includingand Maintenance
Evergy Metro's operating and maintenance expense and taxes other than income tax)
KCP&L's other operating expenses decreased $38.7$16.1 million for the year to date June 30, 2018,three months ended March 31, 2020, compared to the same period in 2017,2019 primarily driven by:
a $29.5$14.5 million decrease in taxes other than income tax primarily 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 $23.2 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 in June 2018 for future recovery by KCP&L in accordance with the KCC and MPSC merger orders; partially offset by
a $4.8 million increase in transmission and distribution operating and maintenance expense; and
a $3.1 million increase in injuries and damages expense primarily due to an$11.7 million of costs incurred from storms that occurred in January 2019 and lower employee headcount in 2020;
a $3.7 million decrease in various administrative and general operating and maintenance expenses primarily driven by a $1.8 million decrease in property insurance expense due to a higher annual refund of nuclear insurance premiums received by Evergy Metro related to its ownership interest in Wolf Creek and a $1.4 million decrease in labor and employee benefits expense primarily due to lower medical claims and lower employee headcount in 2020; and
a $1.5 million decrease in plant operating and maintenance expense at fossil-fuel generating units primarily due to a $2.5 million decrease from outages at Hawthorn Station, Iatan Unit 1 and La Cygne Unit 1 in the first quarter of 2020; partially offset by
a $5.2 million increase due to $3.2 million of voluntary severance expenses incurred in the first quarter of 2020 related to a Wolf Creek voluntary exit program and a $2.0 million increase of voluntary severance expenses in 2020 related to additional Evergy voluntary exit programs; and
a $1.1 million increase in estimated worker's compensation losses.program costs for energy efficiency programs under MEEIA, which have a direct offset in revenue.
KCP&L Other Income (Expense)Evergy Metro Depreciation and Amortization
KCP&L's other income (expense) decreased $13.6Evergy Metro's depreciation and amortization increased $2.5 million year to date June 30, 2018,for the three months ended March 31, 2020, compared to the same period in 2017,2019 primarily driven by an $11.4capital additions.
Evergy Metro Interest Expense
Evergy Metro's interest expense decreased $5.2 million decrease in pension non-service costs due to KCP&L's adoption of ASU 2017-07, Compensation-Retirement Benefits, which requires the non-service cost components to be reported separately from service costs and outside of a subtotal of income from operations. For retrospective application of the 2017 non-service cost components, KCP&L utilized the practical expedient that allows for the use of the amounts disclosed in a company's pension and other post-retirement benefit plan footnote as the estimation basis for retrospective presentation. The 2017 amounts disclosed in KCP&L's pension and other post-retirement benefit plan footnote are presented prior to the effects of capitalization and sharing with joint owners of power plants. See Note 1 and Note 7 to the consolidated financial statements for additional information.

KCP&L Income Tax Expense
KCP&L's income tax expense increased $15.5 million year to date June 30, 2018,three months ended March 31, 2020, compared to the same period in 2017,2019 primarily driven by:
by a $51.0$4.6 million net decrease due to the repayment of Evergy Metro's $400.0 million of 7.15% Mortgage Bonds at maturity in April 2019, which decreased interest expense by $8.5 million, partially offset by a $3.9 million increase relateddue to the revaluationEvergy Metro's issuance of deferred income tax assets and liabilities based on the Evergy composite tax rate as a result$400.0 million of the merger; partially offset by
a $12.5 million decrease4.125% Mortgage Bonds in income tax expense as a result of the decrease in the federal statutory income tax rate in 2018; and
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.March 2019.
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the ordinary course of business, Evergy faces risks that are either non-financial or non-quantifiable. Such risks principally include business, legal, operational and credit risks and are discussed elsewhere in this document as well as in the Evergy Companies' combined 2019 Form 10-K and therefore are not represented here.
Evergy's interim period disclosures about market risk included in quarterly reports on Form 10-Q address material changes, if any, from the following analysis. Seemost recently filed annual report on Form 10-K. Therefore, these interim period disclosures should be read in conjunction with Part II, Item 1A,7A, Quantitative and Qualitative Disclosures About Market Risk Factors and Part I, Item 2, MD&A for further discussion of risk factors.
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The Evergy Companies are exposed to market risks associated with commodity price and supply, interest rates and equity prices. Commodity price risk is the potential adverse price impact related to the purchase or sale of electricity and energy-related products. Credit risk is the potential adverse financial impact resulting from non-performance by a counterparty of its contractual obligations. Interest rate risk is the potential adverse financial impact related to changesincluded in interest rates. In addition, Evergy's investments in trusts to fund nuclear plant decommissioning and to fund non-qualified retirement benefits give rise to security price risk.
Management has established risk management policies and strategies to reduce the potentially adverse effects that the volatility of the markets may have on Evergy's operating results. During the ordinary course of business, under the direction and control of an internal commodity risk committee, the Evergy Companies' hedging strategies are reviewed to determine the hedging approach deemed appropriate based upon the circumstances of each situation. Though management believes its risk management practices are effective, it is not possible to identify and eliminate all risk. Evergy could experience losses, which could have a material adverse effect on its results of operations or financial position, due to many factors, including unexpectedly large or rapid movements or disruptions in the energy markets, regulatory-driven market rule changes and/or bankruptcy or non-performance of customers or counterparties, and/or failure of underlying transactions that have been hedged to materialize.
Hedging Strategies
From time to time, Evergy utilizes derivative instruments to execute risk management and hedging strategies. Derivative instruments, such as futures, forward contracts, swaps or options, derive their value from underlying assets, indices, reference rates or a combination of these factors. These derivative instruments include negotiated contracts, which are referred to as over-the-counter derivatives, and instruments listed and traded on an exchange.
Commodity Price Risk
The Evergy Companies engage in the wholesale and retail marketing of electricity and are exposed to risk associated with the price of electricity and other energy-related products. Exposure to these risks is affected by a number of factors including the quantity and availability of fuel used for generation and the quantity of electricity customers consume. Customers' electricity usage could also vary from year to year based on the weather or other factors. Quantities of fossil fuel used for generation vary from year to year based on the availability, price and deliverability of a given fuel type as well as planned and unplanned outages at facilities that use fossil fuels. Evergy's exposure to fluctuations in these factors is limited by the cost-based regulation of its regulated operations in Kansas and Missouri as these operations are typically allowed to recover substantially all of these costs through cost-recovery mechanisms, primarily through fuel recovery mechanisms. While there may be a delay in timing between when these costs are incurred and when they are recovered through rates, changes from year to year generally do not have a material impact on operating results.
Interest Rate Risk
Evergy manages interest rate risk and short- and long-term liquidity by limiting its exposure to variable interest rate debt to a percentage of total debt, diversifying maturity dates and, from time to time, entering into interest rate hedging transactions. At June 30, 2018, 4% of Evergy's long-term debt was variable rate debt. Evergy computes and presents information regarding the sensitivity to changes in interest rates for variable rate debt and current maturities of fixed rate debt by assuming a 100 basis point change in the current interest rates applicable to such debt over the remaining time the debt is outstanding.
Evergy had $2,197.4 million of variable rate debt, including notes payable and commercial paper, and current maturities of fixed rate debt as of June 30, 2018. A 100 basis point change in interest rates applicable to this debt would impact income before income taxes on an annualized basis by approximately $17.7 million.
Credit Risk
Evergy is exposed to counterparty credit risk largely in the form of accounts receivable from its retail and wholesale electric customers and through executory contracts with market risk exposure. The credit risk associated with accounts receivable from retail and wholesale customers is largely mitigated by Evergy's large number of individual customers spread across diverse customer classes and the ability to recover bad debt expense in customer rates. The
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Evergy Companies maintain credit policies and employ credit risk control mechanisms, such as letters of credit, when necessary to minimize their overall credit risk and monitor exposure.
Investment Risk
Evergy maintains trust funds, as required by the NRC, to fund its 94% share of decommissioning the Wolf Creek nuclear power plant and also maintains trusts to fund pension benefits as well as certain non-qualified retirement benefits. As of June 30, 2018, these funds were primarily invested in a diversified mix of equity and debt securities and reflected at fair value on Evergy's balance sheet. The equity securities in the trusts are exposed to price fluctuations in equity markets and the value of debt securities are exposed to changes in interest rates and other market factors.
As nuclear decommissioning costs are currently recovered in customer rates, Evergy defers both realized and unrealized gains and losses for the vast majority of these securities as an offset to its regulatory asset for decommissioning Wolf Creek and as such, fluctuations in the value of these securities do not have a material impact on Evergy's earnings. A significant decline in the value of pension or non-qualified retirement assets could require Evergy to increase funding of its pension plans in future periods, which could adversely affect cash flows in those periods. In addition, a decline in the fair value of these plan assets, in the absence of additional cash contributions to the plans by Evergy, could increase the amount of pension cost required to be recorded in future periods by Evergy.combined 2019 Form 10-K.
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ITEM 4. CONTROLS AND PROCEDURES
EVERGY
Disclosure Controls and Procedures
Evergy carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) orand 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)).  This evaluation was conducted under the supervision, and with the participation, of Evergy's management, including the chief executive officer and chief financial officer, and Evergy's disclosure committee.  Based upon this evaluation, the chief executive officer and chief financial officer of Evergy have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Evergy were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
Effective June 4, 2018, pursuant to the merger transaction, Westar Energy and KCP&L became wholly-owned subsidiaries of Evergy. EvergyThere has designedbeen no change in Evergy’s internal control over financial reporting for itself, while maintaining(as defined in Rules 13a-15(f) and 15d-15(f) of the internal control over financial reporting for its wholly-owned subsidiaries, Westar Energy and KCP&L.
As of May 7, 2018, KCP&L implemented a new customer billing systemExchange Act) that will changeoccurred during the quarterly period ended March 31, 2020, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting. In connection with this implementation, Evergy has updated its internal controls over financial reporting, as necessary, to accommodate modifications to its business processes.
WESTAR ENERGYEVERGY KANSAS CENTRAL
Disclosure Controls and Procedures
Westar EnergyEvergy Kansas Central carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) orand 15d-15(e) under the Exchange Act).  This evaluation was conducted under the supervision, and with the participation, of Westar Energy'sEvergy Kansas Central's management, including the chief executive officer and chief financial officer, and Westar Energy'sEvergy Kansas Central's disclosure committee.  Based upon this evaluation, the chief executive officer and chief financial officer of Westar EnergyEvergy Kansas Central have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Westar EnergyEvergy Kansas Central were effective at a reasonable assurance level.
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Changes in Internal Control Over Financial Reporting
There has been no change in Westar Energy'sEvergy Kansas Central's internal control over financial reporting (as defined in RuleRules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended June 30, 2018,March 31, 2020, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
KCP&LEVERGY METRO
Disclosure Controls and Procedures
KCP&LEvergy Metro carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) orand 15d-15(e) under the Exchange Act).  This evaluation was conducted under the supervision, and with the participation, of KCP&L'sEvergy Metro's management, including the chief executive officer and chief financial officer, and KCP&L'sEvergy Metro's disclosure committee.  Based upon this evaluation, the chief executive officer and chief financial officer of KCP&LEvergy Metro have concluded as of the end of the period covered by this report that the disclosure controls and procedures of KCP&LEvergy Metro were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
As of May 7, 2018, KCP&L implemented a new customer billing system that will change its internal control over financial reporting. In connection with this implementation, KCP&L has updated its internal controls over financial reporting, as necessary, to accommodate modifications to its business processes.

Except as described above, thereThere has been no change in KCP&L'sEvergy Metro's internal control over financial reporting (as defined in RuleRules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended June 30, 2018,March 31, 2020, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

PART II - OTHER INFORMATION
ITEM 1.  LEGAL PROCEEDINGS
Other Proceedings
The Evergy Companies are parties to various lawsuits and regulatory proceedings in the ordinary course of their respective businesses.  For information regarding material lawsuits and proceedings, see Notes 2, 54 and 129 to the consolidated financial statements.  Such information is incorporated herein by reference.
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ITEM 1A. RISK FACTORS
Actual results in future periods for the Evergy Companies could differ materially from historical results and the forward-looking statements contained in this report. The business of the Evergy Companies is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond their control. Additional risks and uncertainties not presently known or that management currently believes to be immaterial may also adversely affect the Evergy Companies. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in Part I, Item 1A, Risk Factors included in the 20172019 Form 10-K for each of Great Plains Energy, Westar EnergyEvergy, Evergy Kansas Central and KCP&L.Evergy Metro, as well as Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by Evergy, Evergy Kansas Central and Evergy Metro. Except as describedset forth below, there have been no material changes with regards to those risk factors. This information, as well as the other information included in this report and in the other documents filed with the SEC, should be carefully considered before making an investment in the securities of the Evergy Companies. Risk factors of KCP&LEvergy Kansas Central and Westar EnergyEvergy Metro are also risk factors of Evergy.
The spread of COVID-19 and resulting impact on business and economic conditions could negatively affect the Evergy Companies.Companies' business and operations.
The COVID-19 pandemic has had a significant impact on the manner in which the Evergy Companies conduct their operations and could adversely impact their results of operations, cash flows and liquidity. The continued spread of COVID-19 and efforts to contain the virus, such as quarantines or closures or reduced operations of businesses, governmental agencies and other institutions, has caused and could continue to cause a continued economic slowdown or recession, result in significant disruptions or reductions in various public, commercial or industrial activities and cause employee absences, which could interfere with our operations. In addition, the COVID-19 pandemic has led to disruption and volatility in the financial markets, which could increase the Evergy Companies' cost of capital and impair their ability to access the capital markets.
The COVID-19 pandemic has altered electricity usage patterns, including an overall reduction in demand and shifting usage away from customers with relatively higher load requirements, such as industrial and commercial customers, toward customers with relatively lower load requirements, such as residential customers. These changes in electricity usage patterns, their duration and the extent to which some of these shifts could become long-term or permanent could result in a significant decrease in the Evergy Companies’ sales of electricity.
The Evergy Companies have also incurred, and will continue to incur, significant costsexpenses related to monitoring the COVID-19 pandemic and modifying operations in response to the pandemic. Regulators might not allow for recovery of these expenses in a timely manner, or at all. In addition, in connection with the integrationmerger, Evergy Kansas Central and Evergy Metro agreed to a five-year base rate moratorium in Kansas beginning in December 2018. Also, effective as of Great Plain EnergyJanuary 1, 2019, Evergy Metro and Westar Energy.Evergy Missouri West elected into plant-in service accounting (PISA) in Missouri, which, by law, requires each company to keep base rates constant for three years following Evergy Metro’s and Evergy Missouri West’s last general rate case. These and other factors may result in under-recovery of costs or failure to earn the authorized return on investment, or both.
The Evergy Companies have temporarily implemented policies, and may in the future implement additional policies, that are intended to ease the financial burden of the pandemic on customers, such as temporarily extending payment options, eliminating late payment fees, eliminating disconnections for non-payment and reducing security deposits for reconnections. There is also the possibility that legislation or regulations could be enacted at the federal or state level that would further restrict the Evergy Companies’ ability to discontinue service to customers in the event of non-payment or to collect amounts owed from customers for service provided. These measures could result in an overall increase in customer non-payment or delay in the timely receipt of customer payments, which could result in a significant increase in the Evergy Companies’ credit loss expense or significant decrease in operating cash flows.
Evergy has incurred,Kansas Central, Evergy Metro and expectsEvergy Missouri West sell retail electric accounts receivable to incur additional,independent outside investors as a source of liquidity. These arrangements include covenants that limit the extent to which accounts receivable can be delinquent or unpaid. A decrease in the amount of, or a delay in receiving,
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customer collections due to the COVID-19 pandemic or otherwise could result in a breach of these accounts receivable financing arrangements and require the borrowers to repay any outstanding loans.
The Evergy Companies are planning to make significant capital expenditures in 2020 and beyond, and they regularly conduct maintenance on their facilities. The pandemic could disrupt the supply chains that provide services and equipment to the Evergy Companies as part of their capital expenditures or maintenance efforts. If the Evergy Companies' supply chains are disrupted, the Evergy Companies may be unable to perform necessary maintenance, which could result in increased costs associated with combiningas the operations of Great Plains Energy and Westar Energy. Additional unanticipated costsEvergy Companies implement contingency plans to allow them to continue to operate. Supply chain interruptions may also be incurredincrease the cost of maintenance and capital expenditures or result in the integrationdelay or cancellation of the businessesplanned projects, any of Great Plains Energy and Westar Energy. Any net benefit from the anticipated elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may not be achieved in the near term or at all. Integration costswhich could have a material adverse impact on the Evergy Companies' results of operations.
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net operating loss, tax credit and other tax carryforwards that are recorded as deferred income tax assets on their balance sheets. These tax benefits have various expiration dates and other limitations on the extent to which the benefits can be realized. The Evergy Companies regularly assess their future ability to utilize tax benefits to determine whether a valuation allowance is necessary. A significant reduction in the Evergy Companies’ taxable income due to the impacts of the COVID-19 pandemic or otherwise could require the Evergy Companies to record a valuation allowance against a portion of those tax assets, which in turn reduces earnings, and the failureEvergy Companies may in general not be able to achieveutilize these tax benefits.

Any of these circumstances, or other impacts of the anticipated benefits and efficiencies frompandemic, could adversely affect customer demand or revenues, impact the merger,ability of the Evergy Companies’ suppliers, vendors or the incurrence of additional expenses,contractors to perform, or cause other unpredictable events, which could have a materialsignificant adverse impact on the results of operations, of Evergyfinancial position, liquidity and its ability to pay dividends in the future.
The anticipated benefitscash flows of the merger may not be realized.
Evergy expects the merger to produce various benefits, including, among other things, operating efficiencies and cost savings. However, achieving the anticipated benefits is subject to a number of uncertainties, including:
the ability to efficiently and effectively combine operations of the merged companies;
general market and economic conditions;
general competitive factors in the marketplace; and
higher than expected costs required to achieve the anticipated benefits of the merger.
No assurance can be given that these benefits will be achieved or, if achieved, the timing of their achievement. Failure to achieve these anticipated benefits could result in increased costs and decreases in the amount of expected revenues or net income of the combined company. In addition, Evergy may encounter difficulties in integrating the operations of the companies, including inconsistencies in standards, systems and controls, and management’s focus and resources may be diverted from ordinary business activities and opportunities to focus on integration. Any of the foregoing could have a material adverse effect on Evergy.
The price of Evergy common stock may experience volatility.
The price of Evergy common stock may be volatile. Some of the factors that could affect the price of Evergy common stock are quarterly increases or decreases in revenue or earnings, changes in revenue or earnings estimates by the investment community, the ability of Evergy to implement its integration strategy and to realize the expected synergies and other benefits from the merger, the ability of Evergy to implement its share repurchase program and speculation in the press or investment community about Evergy's financial condition or results of operations. General market conditions and U.S. economic factors and political events unrelated to the performance of Evergy may also affect its stock price. For these reasons, shareholders should not rely on historical trends in the price of Great Plains Energy or Westar Energy common stock to predict the price of Evergy's common stock or its financial results.
Capital and credit market conditions may adversely impact Evergy's share repurchase program.
Evergy expects to repurchase a significant number of shares over the next several years using a combination of existing cash on the balance sheet, internally generated cash, proceeds from capital markets activities and short-term debt. Disruptions in capital and credit markets, credit rating actions and volatility in the market price of Evergy’s common stock may make capital more difficult and costly to obtain, may restrict liquidity and may adversely impact the ability to execute the share repurchase program in a timely or cost-effective manner.Companies.
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.Purchases of Equity Securities
The following table provides information regarding purchases by Evergy of its equity securities that are registered pursuant to Section 12 of the Exchange Act during the three months ended March 31, 2020.
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(b)
January 1 - 31 —
——
14,834,979
February 1 - 29 —
——
14,834,979
March 1 - 31 58,717
$65.95—
14,834,979
Total 58,717
$65.95—
14,834,979
(a) Represents shares Evergy purchased for withholding taxes related to restricted stock and performance shares.
(b) In July 2018, the Evergy Board authorized the repurchase of up to 60 million shares of Evergy's common stock with no expiration date. Evergy does not anticipate making additional repurchases under its share repurchase program while the Strategic Review & Operations Committee of the Evergy Board conducts its review of ways to enhance long-term shareholder value, which is expected to conclude in the third quarter of 2020.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
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ITEM 4.  MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.  OTHER INFORMATION
Annual Shareholder Meeting Results:
Evergy's annual meeting of shareholders was held on May 5, 2020. In accordance with the recommendations of the Evergy Board, the shareholders (i) elected thirteen directors; (ii) approved, on an advisory and non-binding basis, the 2019 compensation of Evergy's named executive officers; and (iii) ratified the appointment of Deloitte & Touche LLP as independent registered public accountants for 2020. The proposals voted upon at the annual meeting, as well as the voting results for each proposal are set forth below.
Item 1 on the Proxy Card. The thirteen persons named below were elected, as proposed in the proxy statement, to serve as directors until Evergy's annual meeting in 2021, and until their successors are elected and qualified. The voting regarding the election was as follows:
 Number of Votes
 For Against Abstain Broker Non-Votes
Kirkland B. Andrews120,706,038 36,965,933 435,819 26,870,395
Terry Bassham155,913,501 1,829,607 364,682 26,870,395
Mollie Hale Carter152,866,831 4,878,487 362,472 26,870,395
Richard L. Hawley156,565,052 1,136,930 405,808 26,870,395
Thomas D. Hyde156,286,883 1,403,940 416,967 26,870,395
B. Anthony Isaac152,759,759 4,931,655 416,376 26,870,395
Paul M. Keglevic113,414,493 44,252,652 440,645 26,870,395
Sandra A.J. Lawrence149,258,789 8,489,075 359,926 26,870,395
Ann D. Murtlow156,647,725 1,093,725 366,340 26,870,395
Sandra J. Price156,613,095 1,153,627 341,068 26,870,395
Mark A. Ruelle154,355,602 3,355,743 396,445 26,870,395
S. Carl Soderstrom Jr.156,464,474 1,202,101 441,215 26,870,395
John Arthur Stall156,564,604 1,113,928 429,258 26,870,395
Item 2 on the Proxy Card. In an advisory and non-binding "say on pay" vote, shareholders approved the 2019 compensation of Evergy’s named executive officers, with the following vote:
Number of Votes
For Against Abstain Broker Non-Votes
153,663,895 3,602,095 841,800 26,870,395
Item 3 on the Proxy Card. Shareholders voted for the ratification and confirmation of the appointment of Deloitte & Touche LLP as Evergy's independent registered public accounting firm for 2020, with the following vote:
Number of Votes
For Against Abstain Broker Non-Votes
182,331,816 2,103,690 542,679 —
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Corporate Governance Matters
Mr. Charles Q. Chandler IV, formerly the Lead Independent Director of the Evergy Board of Directors, and Mr. John J. Sherman, formerly the chair of the Compensation and Leadership Development Committee of the Evergy Board of Directors, retired in connection with the 2020 annual meeting of shareholders, along with Mr. Gary D. Forsee and Mr. Scott D. Grimes. On May 5, 2020, the Evergy Board of Directors appointed Mr. Thomas D. Hyde to serve as the Lead Independent Director and Ms. Mollie Hale Carter to serve as chair of the Compensation and Leadership Development Committee.
Available Information
The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at sec.gov. Additionally, information about the Evergy Companies, including their combined annual reports on Form 10-K, combined quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed with the SEC, is also available through the Evergy Companies' website, www.evergy.com. Such reports are accessible at no charge and are made available as soon as reasonably practical after such material is filed with or furnished to the SEC.
Investors should note that the Evergy Companies announce material financial information in SEC filings, press releases and public conference calls. In accordance with SEC guidance,guidelines, the Evergy Westar Energy and KCP&L mayCompanies also use the Investor Relations section of Evergy'stab on their website, (www.evergyinc.com)www.evergy.com, to communicate with investors about the Evergy Companies.investors. It is possible that the financial and other information posted there could be deemed
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to be material information. The Investors Relations section of the website also contains historical financial and other information relating to Great Plains Energy and Westar. The information on theEvergy's website is not part of this document.

ITEM 6. EXHIBITS
Exhibit
Number
 Description of Document 
 
Registrant
     
     
3.1*
Evergy, Inc. Amended and Restated ArticlesBy-Laws of Incorporation (filedEvergy, Inc., as Exhibitamended February 28, 2020 (Exhibit 3.1 to Evergy’s Current Report on Form 8-K filed on June 4, 2018 (File No. 001-38515))March 2, 2020).
 Evergy
     
3.2*
Evergy, Inc. Amended and Restated By-laws (filedBy-Laws of Evergy Kansas Central, Inc., as Exhibitamended February 28, 2020 (Exhibit 3.2 to Evergy’s Current Report on Form 8-K filed on June 4, 2018 (File No. 001-38515))March 2, 2020).
 Evergy Kansas Central
     
3.3*
Westar Energy, Inc. Amended and Restated ArticlesBy-Laws of Incorporation.Evergy Metro, Inc., as amended February 28, 2020 (Exhibit 3.3 to Form 8-K filed on March 2, 2020).
 Westar Energy
3.4
Westar Energy, Inc. Amended and Restated By-laws.
Westar EnergyEvergy Metro
     
4.1*
SixthFiftieth Supplemental Indenture, dated as of June 4, 2018, by and among Great Plains Energy Incorporated,April 9, 2020 between Evergy Inc. and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.) (as successor to BNY Midwest Trust Company), as trustee (filed as Exhibit 4.1 to Evergy’s Current Report on Form 8-K filed on June 4, 2018 (File No. 001-38515)).
Evergy
4.2*
Supplemental Indenture No. 3, dated as of June 4, 2018, by and among Great Plains Energy Incorporated, Evergy,Kansas Central, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2(Exhibit 4.1 to Evergy’s Current Report on Form 8-K filed on June 4, 2018 (File No. 001-38515))April 9, 2020).
 
Evergy
4.3*
Form of Forty-Eighth Supplemental Indenture, dated as of June 4, 2018, by and among Westar Energy, Inc. and The Bank of New York Mellon Trust Company, N.A., as successor to Harris Trust and Savings Bank (filed as Exhibit 4.1 to Westar’s Current Report on Form 8-K filed on June 4, 2018 (File No. 001-03523)).Evergy Kansas Central
Westar Energy
     
10.1*
Assumption Agreement, dated as of June 4, 2018, betweenFebruary 28, 2020, among Evergy, Inc., Elliot Investment Management L.P., Elliot Associates, L.P. and Wells Fargo Bank, National Association, as administrative agent (filed as ExhibitElliot International, L.P. (Exhibit 10.1 to Evergy’s Current Report on Form 8-K filed on June 4, 2018 (File No. 001-38515))March 2, 2020).
 Evergy
     
10.2*+
Amendment, dated March 25, 2020 among Evergy, Inc. Long-Term Incentive Plan (formerly named the Great Plains Energy Incorporated Long-Term Incentive Plan, as amended), effective as of June 4, 2018 (filed as Exhibit 99.1Elliot Investment Management L.P., Elliott Associates, L.P. and Elliot International, L.P. (Exhibit 10.1 to Evergy’s Registration Statement on Form S-88-K filed on June 15, 2018 (File No. 333-225673)March 26, 2020).
 Evergy
Westar Energy
KCP&L
     
10.3*+
Great Plains Energy IncorporatedEvergy, Inc. 2020 Annual Incentive Plan (Exhibit 10.24 to Evergy's Form of Restricted Share Units Award (Grant Date June 3, 2018) (filed as Exhibit 10.1 to Great Plains Energy Incorporated’s Current Report on Form 8-K filed on June 4, 2018 (File No. 001-32206))10-K for the period ended December 31, 2019).
 
Evergy
KCP&L
Evergy Kansas Central
Evergy Metro
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Exhibit
Number
Description of Document
Registrant
     
10.4*+
Great Plains Energy Incorporated Form of Cash Retention PaymentEvergy, Inc. 2020 Performance-Based Restricted Stock Unit Agreement (Grant Date June 3, 2018) (filed as Exhibit 10.2(Exhibit 10.19 to Great Plains Energy Incorporated’s Current Report onEvergy's Form 8-K filed on June 4, 2018 (File No. 001-32206))10-K for the period ended December 31, 2019).
 
Evergy
KCP&L
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10.5*+Evergy Kansas Central
Westar Energy, Inc. Form of Restricted Share Units Award (Grant Date June 3, 2018) (filed as Exhibit 10.1 to Westar’s Current Report on Form 8-K filed on June 4, 2018 (File No. 001-03523))Evergy Metro
Evergy
Westar Energy
     
10.610.5*+
Form of Evergy, Inc. Supplemental Executive Retirement Plan, effective as of June 4, 2018.2020 Time-Based Restricted Stock Unit Agreement (Exhibit 10.20 to Evergy's Form 10-K for the period ended December 31, 2019).
 
Evergy
10.7+
Evergy Inc. Nonqualified Deferred Compensation Plan, effective as of June 4, 2018.Kansas Central
Evergy
10.8+
Westar Energy, Inc. Non-Employee Director Deferred Compensation Plan, as amended and restated effective as of May 17, 2018.
Evergy
Westar Energy
10.9+
Summary of Evergy Inc. Non-Employee Director Compensation.Metro
Evergy
     
31.1 
Rule 13a-14(a)/15d-14(a) Certification of Terry Bassham.
 Evergy
     
31.2 
Rule 13a-14(a)/15d-14(a) Certification of Anthony D. Somma.
 Evergy
     
31.3 
Rule 13a-14(a)/15d-14(a) Certification of Terry Bassham.
 Westar EnergyEvergy Metro
     
31.4 
Rule 13a-14(a)/15d-14(a) Certification of Anthony D. Somma.
 Westar EnergyEvergy Metro
     
31.5 
Rule 13a-14(a)/15d-14(a) Certification of Terry Bassham.
 KCP&LEvergy Kansas Central
     
31.6 
Rule 13a-14(a)/15d-14(a) Certification of Anthony D. Somma.
 KCP&LEvergy Kansas Central
     
32.1**
Section 1350 Certifications.
 Evergy
     
32.2**
Section 1350 Certifications.
 Westar EnergyEvergy Metro
     
32.3**
Section 1350 Certifications.
 KCP&LEvergy Kansas Central
     
101.INS***XBRL Instance Document. Evergy
Westar Energy
KCP&Ln/a
     
101.SCH Inline XBRL Taxonomy Extension Schema Document. Evergy
Westar Energy
KCP&L
Evergy Kansas Central
Evergy Metro
     
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. Evergy
Westar Energy
KCP&L
Evergy Kansas Central
Evergy Metro
     
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. Evergy
Westar Energy
KCP&L
Evergy Kansas Central
Evergy Metro
     
101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document. Evergy
Westar Energy
KCP&L
Evergy Kansas Central
Evergy Metro
     
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. Evergy
Westar Energy
KCP&L
Evergy Kansas Central
Evergy Metro
104Cover Page Interactive Data File (embedded within the Inline XBRL document).Evergy
Evergy Kansas Central
Evergy Metro
* Filed with the SEC as exhibits to prior SEC filings and are incorporated herein by reference and made a part hereof. The SEC filings and the exhibit number of the documents so filed, and incorporated herein by reference, are stated in parenthesis in the description of such exhibit.
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** Furnished and shall not be deemed filed for the purpose of Section 18 of the Exchange Act. Such document shall not be incorporated by reference into any registration statement or other document pursuant to the Exchange Act or the Securities Act of 1933, as amended, unless otherwise indicated in such registration statement or other document.
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*** The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
+ Indicates management contract or compensatory plan or arrangement.
Copies of any of the exhibits filed with the SEC in connection with this document may be obtained from Evergy, Westar EnergyEvergy Kansas Central or KCP&L,Evergy Metro, as applicable, upon written request.
The registrants agree to furnish to the SEC upon request any instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of total assets of such registrant and its subsidiaries on a consolidated basis.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Evergy, Inc., Westar Energy,Evergy Kansas Central, Inc. and Kansas City Power & Light CompanyEvergy Metro, Inc. have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.
  EVERGY, INC.
   
Dated:August 8, 2018May 6, 2020
By:  /s/ Anthony D. Somma
  (Anthony D. Somma)
  (Executive Vice President and Chief Financial Officer)
  WESTAR ENERGY,EVERGY KANSAS CENTRAL, INC.
   
Dated:August 8, 2018May 6, 2020
By:  /s/ Anthony D. Somma
  (Anthony D. Somma)
  (Executive Vice President and Chief Financial Officer)


  KANSAS CITY POWER & LIGHT COMPANYEVERGY METRO, INC.
   
Dated:August 8, 2018May 6, 2020
By:  /s/ Anthony D. Somma
  (Anthony D. Somma)
  (Executive Vice President and Chief Financial Officer)




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