Evergy Inc.

The stable outlook reflects our base-case scenario that Evergy will continue to generate sufficient cash flow to maintain financial measures that support adjusted FFO to debt of 15%-16% in 2019-2021. 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 such that adjusted FFO to debt is

...We expect EBITDA growth to be driven by cost reductions. Over the next few years, Evergy Inc.'s revenue growth will likely be flat as the company continues to fulfill its 2018 merger commitments, which include $46 million in total annual bill credits through 2022 and a rate moratorium in Kansas through December 2023. The company also continues to face the provision to keep base rates constant for three years as per Missouri Senate Bill 564 and its utilities' election of plant-in-service accounting (PISA). Irrespective of weather, the potential loss of demand from its commercial and industrial retail customer segment due to COVID-19 and/or changing economic conditions across its service territory could further reduce our revenue growth assumptions for the company. We expect, however, that its cost-management strategy, which incorporates merger-related savings in fuel costs and operations and maintenance expenses, could offset these headwinds and lead to EBITDA growth. Specifically, the company...

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