Westar Energy Inc.

The stable outlook reflects S&P Global Ratings' 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

...Revenue growth will be lower due to merger commitments. Following the provision in 2018 of upfront bill credits in Kansas, 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 that will limit the replacement of these cash flows through future rate increases. Back-office centralization of Wolf Creek to generate savings. Parent company Evergy, Inc. indicated significant synergies from its recent merger, such as cost reductions and system consolidations. We expect some of these savings to originate from the back-office centralization of the Wolf Creek nuclear plant, in which Westar subsidiary Kansas Gas & Electric Co. and Evergy subsidiary Kansas City Power & Light Co. jointly own a 94% interest. The financial risk profile will remain stable given 2018 commitments. The company's financial measures are likely to remain in the significant category over the next three years,...

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