Evergy Kansas Central Inc.

The stable outlook on EKC incorporates that of its parent Evergy Inc., which 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 stronger 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

...Evergy Kansas Central's (EKC) retail electric sales are exposed to industrial customer economics. EKC's revenues are split between its electric retail sales (75%), sales of power and capacity to wholesale customers (10%), steam for industrial usage (5%), and revenues generated by the use of its transmission network (10%). Of its retail electric sales, about 20% are generated by the sale to industrial customers, exposing EKC's cash flows somewhat to economic cyclicality. EKC continues to fulfill its 2018 merger commitments. EKC's merger commitments include one-time and annual bill credits totaling about $75 million through 2022, committed savings of $30 million, a five-year general rate case moratorium, and an earnings sharing plan through which EKC is required to refund customers for earnings above an authorized level. Demonstrated by its recent offering, EKC continues to access the capital markets through the COVID-19 pandemic. In April 2020, EKC issued $500 million in 30-year first-mortgage...

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