Evergy Inc.

The stable outlook reflects our base-case scenario that the combined entity's regulated utility operations will continue to generate sufficient cash flow to maintain financial measures that support adjusted FFO to debt of 15%-16% from 2019 through 2021. This range places the company below the midpoint of our significant financial risk profile assessment. The outlook also reflects our expectation of a strengthened business risk profile and a clear path to realizing proposed synergies that result in operational improvements and cost savings. Further enhancing the business risk profile will be the almost full ownership of the Wolf Creek nuclear plant, strengthening control and leading to additional operating efficiencies. We could lower the ratings if the combined company's financial risk profile post-merger weakens

...Merger efficiencies, cost management, and share repurchases are driving the company's growth strategy. Evergy indicated significant synergies from its recent merger such as cost reductions and system consolidations, which it committed to share with customers in both Kansas and Missouri. Specifically, the company targets net merger savings of about $100 million to $150 million through 2022 that we expect will increase margins and provide additional cash flows for future projects. We expect revenue growth will be lower due to merger commitments. Following the provision in 2018 of upfront bill credits in Kansas and Missouri, we expect future cash flows will be lower as additional bill credit credits will be paid annually through 2022. Compounding this reduction is the five-year base rate moratorium in Kansas that will limit the replacement of these cash flows through future rate increases. Financial risk profile will remain stable given 2018 commitments. We expect the company's financial measures...

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