CAUTIONARY STATEMENTS REGARDING CERTAIN FORWARD-LOOKING INFORMATION
Statements made in this report that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, statements relating to the expected financial and operational benefits of the merger of Great Plains Energy Incorporated (Great Plains Energy) and Westar Energy that resulted in the creation of Evergy (including cost savings, operational efficiencies and the impact of the merger on earnings per share), cost estimates of capital projects, dividend growth, share repurchases, balance sheet and credit ratings, rebates to customers, the outcome of regulatory and legal proceedings, employee issues and other matters affecting future operations.
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Evergy Companies are providing a number of important factors that could cause actual results to differ materially from the provided forward-looking information. These important factors include: future economic conditions and any related impact on sales, prices and costs; prices and availability of electricity in wholesale markets; market perception of the energy industry and the Evergy Companies; changes in business strategy or operations; the impact of unpredictable federal, state and local political, legislative, judicial and regulatory actions or developments, including deregulation, re-regulation and restructuring of the electric utility industry; decisions of regulators regarding rates that Westar Energy and KCP&L (or other regulated subsidiaries of Evergy) can charge for electricity; changes in applicable laws, regulations, rules, principles or practices, or the interpretations thereof, governing tax, accounting and environmental matters, including air and water quality and waste management and disposal; changes in the energy trading markets in which the Evergy Companies participate, including retroactive repricing of transactions by regional transmission organizations and independent system operators; the impact of climate change, including reduced demand for coal-based energy because of actual or perceived climate impacts and the development of alternate energy sources; financial market conditions and performance, including changes in interest rates and credit spreads and in availability and cost of capital and the effects on derivatives and hedges, nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of terrorist acts, including cyber terrorism; ability to carry out marketing and sales plans; weather conditions, including weather-related damage and the impact on sales, prices and costs; cost, availability, quality and timely provision of equipment, supplies, labor and fuel; the inherent uncertainties in estimating the effects of weather, economic conditions, climate change and other factors on customer consumption and financial results; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution or other projects; the Evergy Companies' ability to successfully manage their transmission and distribution development plans and transmission joint ventures; the inherent risks associated with the ownership and operation of a nuclear facility, including environmental, health, safety, regulatory and financial risks; workforce risks, including increased costs of retirement, health care and other benefits; the possibility that the expected value creation from the merger will not be realized, or will not be realized within the expected time period; difficulties related to the integration of the two companies; disruption from the merger making it more difficult to maintain relationships with customers, employees, regulators or suppliers; the diversion of management time; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Part I, Item 1A, Risk Factors included in this report should be carefully read for further understanding of potential risks for the Evergy Companies. Other sections of this report and other periodic reports filed by the Evergy Companies with the Securities and Exchange Commission (SEC) should also be read for more information regarding risk factors. Each forward-looking statement speaks only as of the date of the particular statement. The Evergy Companies undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
GLOSSARY OF TERMS
The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report.
Abbreviation or Acronym
Definition
AEP
American Electric Power Company, Inc.
AFUDC
Allowance for Funds Used During Construction
Amended Merger Agreement
Amended and Restated Agreement and Plan of Merger, dated as of July 9, 2017, by and among Great Plains Energy, Westar Energy, Monarch Energy Holding, Inc. and King Energy, Inc.
AMT
Alternative Minimum Tax
ARO
Asset Retirement Obligation
ASC
Accounting Standards Codification
ASR
Accelerated share repurchase
ASU
Accounting Standards Update
CCRs
Coal combustion residuals
CAA
Clean Air Act Amendments of 1990
CO2
Carbon dioxide
COLI
Corporate-owned life insurance
CPP
Clean Power Plan
CWA
Clean Water Act
DOE
Department of Energy
EIRR
Environmental Improvement Revenue Refunding
EPA
Environmental Protection Agency
EPS
Earnings per common share
ERISA
Employee Retirement Income Security Act of 1974, as amended
Evergy
Evergy, Inc. and its consolidated subsidiaries
Evergy Board
Evergy Board of Directors
Evergy Companies
Evergy, Westar Energy, and KCP&L, collectively, which are individual registrants within the Evergy consolidated group
Exchange Act
The Securities Exchange Act of 1934, as amended
FASB
Financial Accounting Standards Board
FERC
The Federal Energy Regulatory Commission
FMBs
First mortgage bonds
GAAP
Generally Accepted Accounting Principles
GHG
Greenhouse gas
GMO
KCP&L Greater Missouri Operations Company, a wholly-owned subsidiary of Evergy
GPETHC
GPE Transmission Holding Company LLC, a wholly-owned subsidiary of Evergy
Great Plains Energy
Great Plains Energy Incorporated
KCC
State Corporation Commission of the State of Kansas
KCP&L
Kansas City Power & Light Company, a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
KDHE
Kansas Department of Health & Environment
KGE
Kansas Gas and Electric Company, a wholly-owned subsidiary of Westar Energy
King Energy
King Energy, Inc., a wholly-owned subsidiary of Evergy
kWh
Kilowatt hour
LTISA
Long-Term Incentive and Share Award plan
MEEIA
Missouri Energy Efficiency Investment Act
MMBtu
Millions of British thermal units
Monarch Energy
Monarch Energy Holding, Inc.
MPSC
Public Service Commission of the State of Missouri
MW
Megawatt
MWh
Megawatt hour
NAAQs
National Ambient Air Quality Standards
NAV
Net Asset Value
NO2
Nitrogen dioxide
NRC
Nuclear Regulatory Commission
PISA
Plant-in service accounting
PM
Particulate matter
Prairie Wind
Prairie Wind Transmission, LLC, 50% owned by Westar Energy
RSU
Restricted share unit
RTO
Regional transmission organization
SEC
Securities and Exchange Commission
SO2
Sulfur dioxide
SPP
Southwest Power Pool, Inc.
TCJA
Tax Cuts and Jobs Act
TCR
Transmission Congestion Rights
TFR
Transmission formula rate
Transource
Transource Energy, LLC and its subsidiaries, 13.5% owned by GPETHC
WACC
Weighted average cost of capital
VIE
Variable interest entity
Westar Energy
Westar Energy, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
WIIN
Water Infrastructure Improvements for the Nation
Wolf Creek
Wolf Creek Generating Station
WOTUS
Waters of the United States