Document
false000171126900000545070000054476 0001711269 2020-08-05 2020-08-05 0001711269 evrg:EvergyMetroIncMember 2020-08-05 2020-08-05 0001711269 evrg:EvergyKansasCentralIncMember 2020-08-05 2020-08-05
__________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549 
________________________________________________________________________________________________________________________
FORM 8-K 
________________________________________________________________________________________________________________________
 CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 5, 2020 
________________________________________________________________________________________________________________________
Evergy, Inc.
(Exact Name of Registrant as Specified in Charter) 
__________________________________________________________________________________________
Missouri
 
001-38515
 
82-2733395
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)

1200 Main Street
Kansas City, Missouri 64105
(Address of Principal Executive Offices, and Zip Code)

(816) 556-2200
Registrant’s Telephone Number, Including Area Code

Not Applicable
(Former Name or Former Address, if Changed Since Last Report) 
__________________________________________________________________________________________
Evergy Kansas Central, Inc.
(Exact Name of Registrant as Specified in Charter) 
 _________________________________________________________________________________________
Kansas
 
001-03523
 
48-0290150
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)

818 South Kansas Avenue
Topeka, Kansas 66612
(Address of Principal Executive Offices, and Zip Code)

(785) 575-6300
Registrant’s Telephone Number, Including Area Code

Not Applicable
(Former Name or Former Address, if Changed Since Last Report) 


__________________________________________________________________________________________
Evergy Metro, Inc.
(Exact Name of Registrant as Specified in Charter) 
__________________________________________________________________________________________ 
Missouri
 
000-51873
 
44-0308720
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)

1200 Main Street
Kansas City, Missouri 64105
(Address of Principal Executive Offices, and Zip Code)

(816) 556-2200
Registrant’s Telephone Number, Including Area Code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report) 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
☐
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐
Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐
Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Evergy, Inc. common stock
EVRG
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



This combined Current Report on Form 8-K is provided by the following registrants:  Evergy, Inc. (“Evergy”), Evergy Kansas Central, Inc. (“Evergy Kansas Central”) and Evergy Metro, Inc. (“Evergy Metro”). Information relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.
Item 2.02
Results of Operations and Financial Condition
On August 5, 2020, Evergy issued a press release announcing its results for the second quarter ended June 30, 2020. A copy of this press release is attached as Exhibit 99.1 and is incorporated herein by reference. Information in the press release attached as Exhibit 99.1 that relates to Evergy Kansas Central and Evergy Metro is also being furnished on behalf of Evergy Kansas Central and Evergy Metro.
The information under this Item 2.02 and in Exhibit 99.1 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information under this Item 2.02 and Exhibit 99.1 shall not be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless otherwise expressly indicated in such registration statement or other document.
Item 7.01
Regulation FD Disclosure
Evergy is also furnishing earnings guidance for the 2020 fiscal year in the press release attached as Exhibit 99.1, which is incorporated herein by reference. In addition, on August 5, 2020, Evergy issued a press release regarding long-term financial and operating projections. A copy of this press release is attached as Exhibit 99.2 and is incorporated herein by reference. Information in the press release attached as Exhibit 99.2 that relates to Evergy Kansas Central and Evergy Metro is also being furnished on behalf of Evergy Kansas Central and Evergy Metro.
The information under this Item 7.01 and in Exhibits 99.1 and 99.2 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information under this Item 7.01 and in Exhibits 99.1 and 99.2 shall not be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless otherwise expressly indicated in such registration statement or other document.
Item 9.01
Financial Statements and Exhibits
 
 
(d) Exhibits
 
 
 
Exhibit No.
Description
 
 
99.1
99.2
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.


 
Evergy, Inc.
 
 
 
 
 
 
 
/s/ Lori A. Wright
 
Lori A. Wright
 
Vice President – Corporate Planning, Investor Relations and Treasurer
 
 
 
Evergy Kansas Central, Inc.
 
 
 
 
 
 
 
/s/ Lori A. Wright
 
Lori A. Wright
 
Vice President – Corporate Planning, Investor Relations and Treasurer
 
 
 
Evergy Metro, Inc.
 
 
 
 
 
 
 
/s/ Lori A. Wright
 
Lori A. Wright
 
Vice President – Corporate Planning, Investor Relations and Treasurer
 
 
Date: August 5, 2020
 




Exhibit 99.1



NEWS RELEASE
FOR IMMEDIATE RELEASE
 
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Evergy Announces 2020 Second Quarter Results

•
GAAP EPS of $0.59; Adjusted EPS (Non-GAAP) of $0.68
•
Declares Quarterly Dividend of $0.505
•
Issues 2020 GAAP EPS Guidance of $2.66 to $2.86; Adjusted EPS Guidance of $2.90 to $3.10

KANSAS CITY, MO., August 5, 2020 - Evergy, Inc. (NYSE: EVRG) today announced second quarter 2020 earnings of $133 million, or $0.59 per share, compared with earnings of $140 million, or $0.57 per share, for the second quarter of 2019.

Evergy’s adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) were $154 million and $0.68, respectively, in the second quarter of 2020 compared with $140 million and $0.58, respectively, in the second quarter of 2019. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) are reconciled to GAAP earnings in the financial table included in this release.

Second quarter earnings per share were driven higher by favorable weather and lower operations and maintenance expense due to continued cost management and fewer shares outstanding. These benefits were partially offset by the impact of COVID-19 on sales and an adjustment to account for a new Kansas tax law that makes electric utilities income tax-exempt.

“Our team’s unwavering focus on safety, customer service and efficient operations contributed to positive results in the quarter,” said Terry Bassham, Evergy president and chief executive officer. “As we continue to navigate an unprecedented environment, employee and public safety, and ensuring our customers receive reliable energy remain priorities. We enhanced our community giving and introduced flexible payment options to help our customers and communities during these challenging times.”

2020 Outlook

In a separate press release issued today, the Company announced its new Sustainability Transformation Plan to drive increased value and benefits for the Company’s stakeholders. Including the contributions from this plan, Evergy expects 2020 GAAP EPS of $2.66 to $2.86 and 2020 adjusted EPS of $2.90 to $3.10. Adjusted EPS (non-GAAP) is reconciled to GAAP EPS in the financial table included in this release.

Dividend Declaration

The Board of Directors declared a dividend on the company’s common stock of $0.505 per share payable on September 21, 2020. The dividends are payable to shareholders of record as of August 20, 2020.

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evergyinc.com

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Earnings Conference Call
    
Evergy management will host a conference call Wednesday, August 5, with the investment community at 8:30 a.m. ET (7:30 a.m. CT). Investors, media and the public may listen to the conference call by dialing (888) 353-7071, conference ID 3885865. A webcast of the live conference call will be available at investors.evergy.com.

Members of the media are invited to listen to the conference call and then contact Gina Penzig with any follow-up questions.

This earnings announcement, a package of detailed second-quarter financial information, the Company’s quarterly report on Form 10-Q for the period ended June 30, 2020 and other filings the Company has made with the Securities and Exchange Commission are available on the Company’s website at investors.evergy.com.

Adjusted Earnings (non-GAAP) and Adjusted Earnings Per Share (non-GAAP)

Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) exclude costs resulting from rebranding, voluntary severance, advisor expenses and the revaluation of deferred tax assets and liabilities from the Kansas state income tax rate change. This information is intended to enhance an investor’s overall understanding of results. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) are used internally to measure performance against budget and in reports for management and the Evergy Board of Directors. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) are financial measures that are not calculated in accordance with GAAP and may not be comparable to other companies’ presentations or more useful than the GAAP information provided elsewhere in this report.

The following tables provide a reconciliation between net income attributable to Evergy, Inc. and diluted earnings per common share as determined in accordance with GAAP and adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP).

______________________________________________________________________________________________________
evergyinc.com

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Evergy, Inc.
Consolidated Earnings and Diluted Earnings Per Share
(Unaudited)
 
Earnings (Loss)
 
Earnings (Loss) per Diluted Share
 
Earnings (Loss)
 
Earnings (Loss) per Diluted Share
Three Months Ended June 30
2020
 
2019
 
(millions, except per share amounts)
Net income attributable to Evergy, Inc.
$
133.4

 
$
0.59

 
$
139.7

 
$
0.57

Non-GAAP reconciling items:
 
 
 
 
 
 
 
Rebranding costs, pre-tax(a)
—

 
—

 
0.9

 
0.01

Voluntary severance costs, pre-tax(b)
(0.4
)
 
—

 
(0.1
)
 
—

Advisor expenses, pre-tax(c)
9.8

 
0.04

 
—

 
—

Income tax benefit(d)
(2.4
)
 
(0.01
)
 
(0.2
)
 
—

Kansas corporate income tax change(e)
13.8

 
0.06

 
—

 
—

Adjusted earnings (non-GAAP)
$
154.2

 
$
0.68

 
$
140.3

 
$
0.58

 
Earnings (Loss)
 
Earnings (Loss) per Diluted Share
 
Earnings (Loss)
 
Earnings (Loss) per Diluted Share
Year to Date June 30
2020
 
2019
 
(millions, except per share amounts)
Net income attributable to Evergy, Inc.
$
202.8

 
$
0.89

 
$
239.2

 
$
0.96

Non-GAAP reconciling items:
 
 
 
 
 
 
 
Rebranding costs, pre-tax(a)
—

 
—

 
1.1

 
—

Voluntary severance costs, pre-tax(b)
26.6

 
0.12

 
14.7

 
0.06

Advisor expenses, pre-tax(c)
16.4

 
0.07

 
—

 
—

Income tax benefit(d)
(11.2
)
 
(0.05
)
 
(3.6
)
 
(0.01
)
Kansas corporate income tax change(e)
13.8

 
0.06

 
—

 
—

Adjusted earnings (non-GAAP)
$
248.4

 
$
1.09

 
$
251.4

 
$
1.01

(a) 
Reflects external costs incurred to rebrand the legacy Westar Energy and KCP&L utility brands to Evergy and are included in operating and maintenance expense on the consolidated statements of comprehensive income.  
(b) 
Reflects severance costs incurred associated with certain voluntary severance programs at the Evergy Companies and are included in operating and maintenance expense on the consolidated statements of comprehensive income.  
(c) 
Reflects advisor expenses incurred associated with strategic planning and are included in operating and maintenance expense on the consolidated statements of comprehensive income.  
(d) 
Reflects an income tax effect calculated at a statutory rate of approximately 26%, with the exception of certain non-deductible items.  

______________________________________________________________________________________________________
evergyinc.com

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(e) 
Reflects the revaluation of Evergy Kansas Central’s, Evergy Metro’s and Evergy Missouri West’s deferred income tax assets and liabilities from the Kansas corporate income tax rate change and are included in income tax expense on the consolidated statements of comprehensive income.  
GAAP to Non-GAAP Earnings Guidance

 
Earnings per Diluted Share Guidance
2020 Net income attributable to Evergy, Inc.
$2.66 - $2.86
Non-GAAP reconciling items:
 
Voluntary severance costs, pre-tax(a)
0.16
Advisor expenses, pre-tax(b)
0.08
Income tax benefit(c)
(0.06)
Kansas corporate income tax change(d)
0.06
2020 Adjusted earnings (non-GAAP)
$2.90 - $3.10
(a) 
Reflects severance costs associated with certain voluntary severance programs at the Evergy Companies.  
(b) 
Reflects our advisor expense incurred associated with strategic planning.
(c) 
Reflects an income tax effect calculated at a statutory rate of approximately 26% with the exception of certain non-deductible items.  
(d) 
Reflects the revaluation of Evergy Kansas Central’s, Evergy Metro’s and Evergy Missouri West’s deferred income tax assets and liabilities from the Kansas corporate income tax rate change.

About Evergy

Evergy, Inc. (NYSE: EVRG), through its operating subsidiaries Evergy Metro and Evergy Kansas Central, provides clean, safe and reliable energy to 1.6 million customers in Kansas and Missouri. The 2018 combination of KCP&L and Westar Energy to form Evergy created a leading energy company that provides value to shareholders and a stronger company for customers.

Evergy’s mission is to empower a better future. Today, about half the power supplied to homes and businesses by Evergy comes from emission-free sources, creating more reliable energy with less impact to the environment. We will continue to innovate and adopt new technologies that give our customers better ways to manage their energy use.

For more information about Evergy, visit us at www.evergy.com.

Forward Looking Statements

Statements made in this press release 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 our strategic plan, including, without limitation, those related to earnings per share, dividend, operating and maintenance expense and capital investment goals; the outcome of regulatory and legal proceedings; future energy demand; future power

______________________________________________________________________________________________________
evergyinc.com

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prices; plans with respect to existing and potential future generation resources; the availability and cost of generation resources and energy storage; targeted emissions reductions; and other matters relating to expected financial performance or affecting future operations. Forward-looking statements are often accompanied by forward-looking words such as “anticipates,” “believes,” “expects,” “estimates,” “forecasts,” “should,” “could,” “may,” “seeks,” “intends,” “proposed,” “projects,” “planned,” “target,” “outlook,” “remain confident,” “goal,” “will” or other words of similar meaning. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the forward-looking information.

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Evergy, Inc., Evergy Kansas Central, Inc. and Evergy Metro, Inc. (collectively, the Evergy Companies) are providing a number of risks, uncertainties and other factors that could cause actual results to differ from the forward-looking information. These risks, uncertainties and other factors include, but are not limited to: economic and weather conditions and any impact on sales, prices and costs; changes in business strategy or operations; the impact of 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, among other things, customer rates and the prudency of operational decisions such as capital expenditures and asset retirements; 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; the impact of climate change, including increased frequency and severity of significant weather events and reduced demand for coal-based energy; prices and availability of electricity in wholesale markets; market perception of the energy industry and the Evergy Companies; the impact of the Coronavirus (COVID-19) pandemic on, among other things, sales, results of operations, financial condition, liquidity and cash flows, and also on operational issues, such as the availability and ability of our employees and suppliers to perform the functions that are necessary to operate the Evergy Companies; 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; 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; the transition to a replacement for the London Interbank Offered Rate (LIBOR) benchmark interest rate; 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; cost, availability, quality and timely provision of equipment, supplies, labor and fuel; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays and cost increases of generation, transmission, distribution or other projects; the Evergy Companies’ ability to 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 those related to increased costs of, or changes in, retirement, health care and other benefits; disruption, costs and uncertainties caused by or related to the actions of individuals or entities, such as activist shareholders or special interest groups, that seek to influence our strategic plan, financial results or operations; the possibility that strategic initiatives, including mergers, acquisitions and divestitures may not create the value that they are expected to achieve in a timely manner or at all; difficulties in maintaining relationships with customers, employees, regulators or suppliers; and other risks and uncertainties.

This list of factors is not all-inclusive because it is not possible to predict all factors. Additional risks and uncertainties are discussed from time to time in current, quarterly and annual reports filed by the Evergy Companies with the Securities and Exchange Commission (SEC). Reports filed by the Evergy

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evergyinc.com

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Companies with the 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, except as required by law.

Investor Contact:
Cody VandeVelde
Director, Investor Relations
Phone: 785-575-8227

Media Contact:
Gina Penzig
Manager, External Communications
Phone: 785-575-8089
Media line: 888-613-0003


______________________________________________________________________________________________________
evergyinc.com

Exhibit 99.2


FOR IMMEDIATE RELEASE


Evergy Announces ‘Sustainability Transformation Plan’

New Five-Year Strategic Plan Delivers Increased Value Creation for Evergy Shareholders and
Benefits to Evergy Customers, Employees and Communities

Transitions Evergy to Top-Quartile Electric Utility with 6% to 8% EPS CAGR through 2024,
Translating into EPS of $3.87 to $4.25 in 2024

Rate Base Growth of 5% to 6% from 2019 to 2024 with No New Equity Required

Accelerates Expansion of Evergy’s Renewables Footprint, Enabling Faster Transition to Cleaner Energy


Kansas City, MO - August 5, 2020 - Evergy, Inc. (NYSE: EVRG) today announced its new ‘Sustainability Transformation Plan’ (STP) to drive increased value and benefits for all of the Company’s stakeholders, including Evergy’s shareholders, customers, employees and the communities it serves. The Sustainability Transformation Plan was unanimously approved by Evergy’s Board of Directors and follows a comprehensive, independent review that began earlier this year and was conducted by the Board’s Strategic Review & Operations Committee.

“Our new Sustainability Transformation Plan accelerates our work to create a forward-thinking, sustainable energy company,” said Terry Bassham, Evergy president and chief executive officer. “This plan is focused on additional investments to drive decarbonization and grid modernization, while continuing the cost conscious, financially strong and ‘People First’ culture fundamentals that are core to Evergy’s foundation. The result is greener, more reliable and affordable energy for our customers, and enhanced earnings growth and value creation for Evergy’s shareholders. We respect the views of our regulators and regulatory staff. We have had an ongoing positive dialogue with them regarding the Sustainability Transformation Plan and believe that they will recognize the meaningful benefits our plan creates.”

The comprehensive review was announced in February following Evergy’s entry into a cooperation agreement with Elliott Management Corporation. “We have appreciated our dialogue with Terry, the rest of the management team and the Board over the past several months,” said Jeff Rosenbaum, senior portfolio manager at Elliott Management Corporation. “The new Sustainability Transformation Plan is well positioned to deliver enhanced, best-in-class rate base and earnings growth, optimize capital allocation and significantly increase operational efficiencies in Evergy’s transmission and distribution networks. We look forward to continuing our engagement with the management team and the Board during the implementation phase.”

Sustainability Transformation Plan

Evergy’s Sustainability Transformation Plan honors prior regulatory and merger commitments made in connection with Evergy’s formation, while enhancing the Company’s focus on grid modernization, renewable energy investment and cost management. The plan is built around the following key tenets to ensure benefits for all stakeholders:

•
Increasing investments in critical utility infrastructure to unlock significant operational efficiencies and keep customer electricity rates competitive. Over the next five years, Evergy expects to invest approximately $4.8 billion in upgrades to transmission and distribution infrastructure, and



customer-facing platforms to improve reliability, lower operating costs, provide further access to renewable energy and enhance the customer experience.

•
Optimizing capital allocation to create a stronger grid for the future. The Company’s new plan contemplates approximately $500 million of investments in asset hardening, distribution automation and technology through 2024 to expedite the evolution to a smarter, more reliable and more efficient grid.

•
Accelerating Evergy’s transition to a clean energy provider. Since 2005, Evergy has retired more than 2,400 megawatts of fossil generation and added or contracted for over 4,600 megawatts of renewables, making Kansas #2 in the nation for wind generation as a percentage of total generation. Additionally, there are opportunities related to decarbonization and renewables deployment that are not included in our STP which could support additional investment depending on outcomes from our stakeholder engagement process that is under way as we update our long-term energy plan. Evergy has the potential to reduce CO2 emissions 85% by 2030 compared to 2005 levels. The pace of decarbonization will ultimately be defined in collaboration with the Company’s stakeholders. Currently, Evergy is targeting an 80% reduction by 2050.

Financial benefits of the Company’s new plan include:

•
Increased system investment and rate base growth. Under the Company’s new plan, Evergy expects $8.9 billion of base capital investments through 2024, or approximately $1.4 billion more than its prior plan. These capital investments are expected to support 5% to 6% compounded annual rate base growth from 2019 to 2024. Evergy has identified and is currently evaluating additional projects that have the potential to create incremental capital investment opportunities. Importantly, the plan does not require any new equity issuances and maintains Evergy’s strong investment grade credit metrics.

•
Enhanced earnings growth. The Company is targeting EPS compounded annual growth of 6% to 8% through 2024, consistent with top-performing utilities, compared to its previous target of 5% to 7% through 2023.1 This translates into a long-term guidance range of $3.87 to $4.25 per share in 2024.

•
Continued cost discipline. Since closing its merger, Evergy has achieved in excess of $250 million of merger savings, well ahead of its original target. Strong execution to-date builds a solid foundation for Evergy to achieve its plan of 25% reduction in O&M costs by 2024 from 2018 levels.2 Evergy will achieve these savings while protecting jobs, supporting the continued health and safety of its employees and providing reliable service to customers.

•
Value creating total returns. Evergy expects dividend growth in line with EPS growth targeting a payout ratio of 60% to 70%. Together with the current dividend yield of over 3% and EPS

__________________________
1Growth rate over 2019 adjusted EPS of $2.89 per share. A reconciliation of adjusted EPS guidance (non-GAAP) to projected earnings per share, the most comparable GAAP measure, is included in the appendix of the Company’s Q2 2020 earnings presentation

2O&M reduction targets based on 2018 adjusted O&M of $1.306 billion. Adjusted O&M (non-GAAP) is a financial measure that is not calculated in accordance with GAAP and may not be comparable to other companies’ presentations of similarly named measures or more useful than the GAAP information. See Appendix of the Company’s Q2 2020 earnings presentation



growth in the top quartile of U.S. electric utilities, Evergy plans to generate total annual shareholder returns of 9% to 11% through 2024.

Information Sharing Agreement

During the initial 90-day implementation phase of the Sustainability Transformation Plan, Evergy and Elliott will continue their collaboration. To facilitate this ongoing dialogue, Evergy and Elliott have entered into a new Information Sharing Agreement that will allow Elliott, at its option, to receive certain non-public information and to continue to engage with members of the Board and senior management. Consistent with the Strategic Review & Operations Committee’s charter, as previously announced, Elliott may consult with the Committee during its review and evaluation of the optimal management team to execute on the Sustainability Transformation Plan. While no management changes are currently contemplated, if any are determined, Evergy expects it would announce such changes within 90 days.

2020 EPS Guidance

As separately announced today in connection with its second quarter 2020 results, including the contributions from Evergy’ Sustainability Transformation Plan, Evergy expects 2020 GAAP EPS guidance of $2.66 to $2.86 and Adjusted EPS guidance of $2.90 to $3.10.

Conference Call and Webcast

Evergy management will host a conference call Wednesday, August 5, with the investment community at 8:30 a.m. ET (7:30 a.m. CT) to discuss this announcement and its second quarter 2020 results. Investors, media and the public may listen to the conference call by dialing (888) 353-7071, conference ID 3885865. A webcast of the live conference call will be available at investors.evergy.com.

Members of the media are invited to listen to the conference call and then contact Gina Penzig with any follow-up questions.

This earnings announcement, a package of detailed second-quarter financial information, the Company’s quarterly report on Form 10-Q for the period ended June 30, 2020 and other filings the Company has made with the Securities and Exchange Commission are available on the Company’s website at investors.evergy.com.

Advisors

Morgan Stanley and Goldman Sachs & Co. LLC are acting as financial advisors to Evergy, and Cravath, Swaine & Moore LLP and Morgan, Lewis & Bockius LLP are acting as legal advisors to Evergy.

Centerview Partners LLC acted as financial advisor to the Strategic Review & Operations Committee.

About Evergy, Inc.

Evergy, Inc. (NYSE: EVRG) serves approximately 1.6 million customers in Kansas and Missouri. We were formed in 2018 when long-term local energy providers KCP&L and Westar Energy merged. We generate nearly half the power we provide to homes and businesses with emission-free sources. We support our local communities where we live and work and strive to meet the needs of customers through energy savings and innovative solutions.




GAAP to Non-GAAP Earnings Guidance

 
Earnings per Diluted Share Guidance
2020 Net income attributable to Evergy, Inc.
$2.66 - $2.86
Non-GAAP reconciling items:
 
Voluntary severance costs, pre-tax(a)
0.16
Advisor expenses, pre-tax(b)
0.08
Income tax benefit(c)
(0.06)
Kansas corporate income tax change(d)
0.06
2020 Adjusted earnings (non-GAAP)
$2.90 - $3.10
(a) 
Reflects severance costs associated with certain voluntary severance programs at the Evergy Companies.  
(b) 
Reflects our advisor expense incurred associated with strategic planning.
(c) 
Reflects an income tax effect calculated at a statutory rate of approximately 26% with the exception of certain non-deductible items.  
(d) 
Reflects the revaluation of Evergy Kansas Central’s, Evergy Metro’s and Evergy Missouri West’s deferred income tax assets and liabilities from the Kansas corporate income tax rate change.

Forward Looking Statements

Statements made in this press release 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 our strategic plan, including, without limitation, those related to earnings per share, dividend, operating and maintenance expense and capital investment goals; the outcome of regulatory and legal proceedings; future energy demand; future power prices; plans with respect to existing and potential future generation resources; the availability and cost of generation resources and energy storage; targeted emissions reductions; and other matters relating to expected financial performance or affecting future operations. Forward-looking statements are often accompanied by forward-looking words such as “anticipates,” “believes,” “expects,” “estimates,” “forecasts,” “should,” “could,” “may,” “seeks,” “intends,” “proposed,” “projects,” “planned,” “target,” “outlook,” “remain confident,” “goal,” “will” or other words of similar meaning. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the forward-looking information.

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Evergy, Inc., Evergy Kansas Central, Inc. and Evergy Metro, Inc. (collectively, the Evergy Companies) are providing a number of risks, uncertainties and other factors that could cause actual results to differ from the forward-looking information. These risks, uncertainties and other factors include, but are not limited to: economic and weather conditions and any impact on sales, prices and costs; changes in business strategy or operations; the impact of 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, among other things, customer rates and the prudency of



operational decisions such as capital expenditures and asset retirements; 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; the impact of climate change, including increased frequency and severity of significant weather events and reduced demand for coal-based energy; prices and availability of electricity in wholesale markets; market perception of the energy industry and the Evergy Companies; the impact of the Coronavirus (COVID-19) pandemic on, among other things, sales, results of operations, financial condition, liquidity and cash flows, and also on operational issues, such as the availability and ability of our employees and suppliers to perform the functions that are necessary to operate the Evergy Companies; 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; 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; the transition to a replacement for the London Interbank Offered Rate (LIBOR) benchmark interest rate; 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; cost, availability, quality and timely provision of equipment, supplies, labor and fuel; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays and cost increases of generation, transmission, distribution or other projects; the Evergy Companies’ ability to 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 those related to increased costs of, or changes in, retirement, health care and other benefits; disruption, costs and uncertainties caused by or related to the actions of individuals or entities, such as activist shareholders or special interest groups, that seek to influence our strategic plan, financial results or operations; the possibility that strategic initiatives, including mergers, acquisitions and divestitures may not create the value that they are expected to achieve in a timely manner or at all; difficulties in maintaining relationships with customers, employees, regulators or suppliers; and other risks and uncertainties.

This list of factors is not all-inclusive because it is not possible to predict all factors. Additional risks and uncertainties are discussed from time to time in current, quarterly and annual reports filed by the Evergy Companies with the Securities and Exchange Commission (SEC). Reports filed by the Evergy Companies with the 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, except as required by law.



Contacts

Media Contact:
Gina Penzig
Manager, External Communications
Phone: 785-575-8089
[email protected]
Media line: 888-613-0003

Investor Contact:
Cody VandeVelde
Director, Investor Relations
Phone: 785-575-8227
[email protected]