SEC Filing | Evergy, Inc.

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evrg-20210930

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _______to_______

https://cdn.kscope.io/b19e50016873cf4db7a59985aa4a58da-evrg-20210930_g1.jpg

Exact name of registrant as specified in its charter,

Commission

state of incorporation, address of principal

I.R.S. Employer

File Number

executive offices and telephone number

Identification Number

001-38515

EVERGY, INC.

82-2733395

(a Missouri corporation)

1200 Main Street

Kansas City, Missouri 64105

(816) 556-2200

001-03523

EVERGY KANSAS CENTRAL, INC.

48-0290150

(a Kansas corporation)

818 South Kansas Avenue

Topeka, Kansas 66612

(785) 575-6300

000-51873

EVERGY METRO, INC.

44-0308720

(a Missouri corporation)

1200 Main Street

Kansas City, Missouri 64105

(816) 556-2200

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

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Evergy, Inc.

Yes

☐

Evergy Kansas Central, Inc.

Yes

☐

Evergy Metro, Inc.

Yes

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Evergy, Inc.

Yes

☐

Evergy Kansas Central, Inc.

Yes

☐

Evergy Metro, Inc.

Yes

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Evergy, Inc.

Large Accelerated Filer

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

Evergy Kansas Central, Inc.

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

Smaller Reporting Company

☐

Emerging Growth Company

☐

Evergy Metro, Inc.

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

Smaller Reporting Company

☐

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 pursuant to Section 13(a) of the Exchange Act.

Evergy, Inc.

☐

Evergy Kansas Central, Inc.

☐

Evergy Metro, Inc.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Evergy, Inc.

Yes

☐

Evergy Kansas Central, Inc.

Yes

☐

Evergy Metro, Inc.

Yes

☐

On October 29, 2021, Evergy, Inc. had 229,302,700 shares of common stock outstanding. On October 29, 2021, Evergy Metro, Inc. and Evergy Kansas Central, Inc. each had one share of common stock outstanding and held by Evergy, Inc.

Evergy Kansas Central, Inc. and Evergy Metro, Inc. meet the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format.

This combined Quarterly Report on Form 10-Q is provided by the following registrants: Evergy, Inc. (Evergy), Evergy Kansas Central, Inc. (Evergy Kansas Central) and Evergy Metro, Inc. (Evergy Metro) (collectively, the Evergy Companies). 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.

This report should be read in its entirety. No one section of the report deals with all aspects of the subject matter. It should be read in conjunction with the consolidated financial statements and related notes and with the management's discussion and analysis of financial condition and results of operations included in the 2020 Form 10-K for each of Evergy, Evergy Kansas Central and Evergy Metro.

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TABLE OF CONTENTS
			Page Number
Cautionary Statements Regarding Certain Forward-Looking Information			4
Glossary of Terms			6

Part I - Financial Information

Item 1.	Financial Statements
	Evergy, Inc.
	Unaudited Consolidated Balance Sheets		8
	Unaudited Consolidated Statements of Comprehensive Income		10
	Unaudited Consolidated Statements of Cash Flows		2
	Unaudited Consolidated Statements of Changes in Equity		3
	Evergy Kansas Central, Inc.
	Unaudited Consolidated Balance Sheets		5
	Unaudited Consolidated Statements of Income		7
	Unaudited Consolidated Statements of Cash Flows		8
	Unaudited Consolidated Statements of Changes in Equity		9
	Evergy Metro, Inc.
	Unaudited Consolidated Balance Sheets		10
	Unaudited Consolidated Statements of Comprehensive Income		12
	Unaudited Consolidated Statements of Cash Flows		13
	Unaudited Consolidated Statements of Changes in Equity		14

	Combined Notes to Unaudited Consolidated Financial Statements for Evergy, Inc., Evergy Kansas Central, Inc. and Evergy Metro, Inc.		15
	Note 1:	Organization and Basis of Presentation	15
	Note 2:	Revenue	20
	Note 3:	Receivables	22
	Note 4:	Rate Matters and Regulation	23
	Note 5:	Goodwill	26

	Note 6:	Pension Plans and Post-Retirement Benefits	27
	Note 7:	Short-Term Borrowings and Short-Term Bank Lines of Credit	29
	Note 8:	Long-Term Debt	30
	Note 9:	Fair Value Measurements	30
	Note 10:	Commitments and Contingencies	35
	Note 11:	Related Party Transactions and Relationships	38
	Note 12:	Shareholders' Equity	39
	Note 13:	Taxes	40
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		61
Item 4.	Controls and Procedures		61

Part II - Other Information

Item 1.	Legal Proceedings		62
Item 1A.	Risk Factors		62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		63
Item 3.	Defaults Upon Senior Securities		63
Item 4.	Mine Safety Disclosures		63
Item 5.	Other Information		63
Item 6.	Exhibits		65

Signatures			67

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CAUTIONARY STATEMENTS REGARDING CERTAIN FORWARD-LOOKING INFORMATION

Statements made in this document 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 Evergy's strategic plan, including, without limitation, those related to earnings per share, dividend, operating and maintenance expense and capital investment goals; the outcome of legislative efforts and 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; target 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, 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, securitization 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 the extent to which counterparties are willing to do business with, finance the operations of or purchase energy from the Evergy Companies due to the fact that the Evergy Companies operate coal-fired generation; 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 the Evergy Companies' 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 (RTO) 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 physical and cybersecurity breaches, criminal activity, terrorist attacks and other disruptions to the Evergy Companies' facilities or information technology infrastructure or the facilities and infrastructure of third-party service providers on which the Evergy Companies rely; 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 the Evergy Companies' ability to attract and retain qualified personnel, maintain satisfactory relationships with their labor unions and manage 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 Evergy's strategic plan, financial results or operations; the possibility that strategic initiatives, including mergers, acquisitions and divestitures, and long-term financial plans, 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. You should also carefully consider the information contained in our other filings with the Securities and Exchange Commission (SEC). Additional risks and uncertainties are discussed in the Annual Report on Form 10-K for the year ended December 31, 2020 filed by the Evergy Companies with the SEC, and from time to time in current reports on Form 8-K and

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quarterly reports on Form 10-Q filed by the Evergy Companies with the SEC. 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.

AVAILABLE INFORMATION

The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at sec.gov. Additionally, information about the Evergy Companies, including their combined annual reports on Form 10-K, combined quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed with the SEC, is also available through the Evergy Companies' website, www.evergy.com. Such reports are accessible at no charge and are made available as soon as reasonably practical after such material is filed with or furnished to the SEC.

Investors should note that the Evergy Companies announce material financial information in SEC filings, press releases and public conference calls. In accordance with SEC guidelines, the Evergy Companies also use the Investor Relations section of their website, www.evergy.com, to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on the Evergy Companies' website is not part of this document.

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GLOSSARY OF TERMS

The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report.


Abbreviation or Acronym						Definition

AAO						Accounting authority order
ACE						Affordable Clean Energy
AEP						American Electric Power Company, Inc.
AFUDC						Allowance for funds used during construction
AOCI						Accumulated other comprehensive income
AROs						Asset retirement obligations



Bluescape						Bluescape Energy Partners, LLC
BSER						Best system of emission reduction
CAA						Clean Air Act Amendments of 1990
CCRs						Coal combustion residuals
CO2						Carbon dioxide
COLI						Corporate-owned life insurance
COVID-19						Coronavirus
CPP						Clean Power Plan
CSAPR						Cross-State Air Pollution


ELG						Effluent limitations guidelines
EPA						Environmental Protection Agency
EPS						Earnings per common share
ERCOT						Electric Reliability Council of Texas
ERISA						Employee Retirement Income Security Act of 1974, as amended
ERSP						Earnings Review and Sharing Plan
Evergy						Evergy, Inc. and its consolidated subsidiaries
Evergy Board						Evergy Board of Directors
Evergy Companies						Evergy, Evergy Kansas Central, and Evergy Metro, collectively, which are individual registrants within the Evergy consolidated group
Evergy Kansas Central						Evergy Kansas Central, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
Evergy Kansas South						Evergy Kansas South, Inc., a wholly-owned subsidiary of Evergy Kansas Central
Evergy Metro						Evergy Metro, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries

Evergy Missouri West						Evergy Missouri West, Inc., a wholly-owned subsidiary of Evergy
Evergy Transmission Company						Evergy Transmission Company, LLC
Exchange Act						The Securities Exchange Act of 1934, as amended

February 2021 winter weather event						Significant winter weather event in February 2021 that resulted in extremely cold temperatures over a multi-day period across much of the central and southern United States
FERC						Federal Energy Regulatory Commission

GAAP						Generally Accepted Accounting Principles
GHG						Greenhouse gas
Great Plains Energy						Great Plains Energy Incorporated
JEC						Jeffrey Energy Center
KCC						State Corporation Commission of the State of Kansas

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Abbreviation or Acronym						Definition
KDHE						Kansas Department of Health & Environment
kV						Kilovolt
kWh						Kilowatt hour
LEC						Lawrence Energy Center

MDNR						Missouri Department of Natural Resources
MECG						Midwest Energy Consumers Group

MPSC						Public Service Commission of the State of Missouri
MW						Megawatt
MWh						Megawatt hour
NAAQS						National Ambient Air Quality Standards
NAV						Net asset value


OCI						Other comprehensive income
OPC						Office of the Public Counsel

Prairie Wind						Prairie Wind Transmission, LLC, 50% owned by Evergy Kansas Central
RSU						Restricted share unit
RTO						Regional transmission organization
SEC						Securities and Exchange Commission
SIP						State implementation plan
SPP						Southwest Power Pool, Inc.


TDC						Transmission delivery charge
TFR						Transmission formula rate
Transource						Transource Energy, LLC and its subsidiaries, 13.5% owned by Evergy Transmission Company
UFSA						Utility Financing and Securitization Act
VIE						Variable interest entity
Wolf Creek						Wolf Creek Generating Station

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


EVERGY, INC.
Consolidated Balance Sheets
(Unaudited)


	September 30 2021			December 31 2020
ASSETS	(millions, except share amounts)
CURRENT ASSETS:
Cash and cash equivalents		$	25.3		$	144.9

Receivables, net of allowance for credit losses of $19.0 and $19.3, respectively		335.1			273.9
Accounts receivable pledged as collateral		395.0			360.0
Fuel inventory and supplies		545.0			504.5
Income taxes receivable		63.3			62.9
Regulatory assets		331.5			206.2
Prepaid expenses and other assets		106.6			71.9
Total Current Assets		1,801.8			1,624.3
PROPERTY, PLANT AND EQUIPMENT, NET		20,603.9			19,951.0
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET		149.6			154.9
OTHER ASSETS:
Regulatory assets		2,003.9			1,868.2
Nuclear decommissioning trust fund		732.0			652.1
Goodwill		2,336.6			2,336.6
Other		554.3			527.7
Total Other Assets		5,626.8			5,384.6
TOTAL ASSETS		$	28,182.1		$	27,114.8

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY, INC.
Consolidated Balance Sheets
(Unaudited)


	September 30 2021			December 31 2020
LIABILITIES AND EQUITY	(millions, except share amounts)
CURRENT LIABILITIES:
Current maturities of long-term debt		$	471.4		$	436.4
Current maturities of long-term debt of variable interest entities		—			18.8
Notes payable and commercial paper		620.5			315.0
Collateralized note payable		395.0			360.0
Accounts payable		437.0			654.0

Accrued taxes		313.7			143.8
Accrued interest		118.4			123.4
Regulatory liabilities		73.1			26.1
Asset retirement obligations		26.5			40.2
Accrued compensation and benefits		50.9			55.5
Other		164.1			182.6
Total Current Liabilities		2,670.6			2,355.8
LONG-TERM LIABILITIES:
Long-term debt, net		9,297.3			9,190.9
Deferred income taxes		1,829.3			1,664.8
Unamortized investment tax credits		182.7			186.7
Regulatory liabilities		2,676.6			2,638.8
Pension and post-retirement liability		988.7			1,149.4
Asset retirement obligations		920.1			901.7
Other		304.8			308.2
Total Long-Term Liabilities		16,199.5			16,040.5
Commitments and Contingencies (Note 10)
EQUITY:
Evergy, Inc. Shareholders' Equity:
Common stock - 600,000,000 shares authorized, without par value 229,301,079 and 226,836,670 shares issued, stated value		7,201.8			7,080.0
Retained earnings		2,161.3			1,702.8
Accumulated other comprehensive loss		(45.3)			(49.4)
Total Evergy, Inc. Shareholders' Equity		9,317.8			8,733.4
Noncontrolling Interests		(5.8)			(14.9)
Total Equity		9,312.0			8,718.5
TOTAL LIABILITIES AND EQUITY		$	28,182.1		$	27,114.8

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY, INC.
Consolidated Statements of Comprehensive Income
(Unaudited)
	Three Months Ended September 30				Year to Date September 30

	2021		2020		2021		2020
	(millions, except per share amounts)
OPERATING REVENUES	$	1,616.5	$	1,517.6	$	4,464.6	$	3,819.0
OPERATING EXPENSES:
Fuel and purchased power	355.8		316.2		1,275.0		832.5
SPP network transmission costs	73.6		66.1		216.8		197.8
Operating and maintenance	265.2		304.6		800.6		865.5
Depreciation and amortization	225.0		218.0		669.5		658.1
Taxes other than income tax	96.2		91.0		289.0		274.2
Total Operating Expenses	1,015.8		995.9		3,250.9		2,828.1
INCOME FROM OPERATIONS	600.7		521.7		1,213.7		990.9
OTHER INCOME (EXPENSE):
Investment earnings	8.8		1.7		18.8		4.0
Other income	11.0		7.1		36.9		17.0
Other expense	(19.2)		(20.1)		(58.9)		(57.7)
Total Other Income (Expense), Net	0.6		(11.3)		(3.2)		(36.7)
Interest expense	93.6		94.8		281.4		290.5
INCOME BEFORE INCOME TAXES	507.7		415.6		929.1		663.7
Income tax expense	57.2		50.0		99.8		93.8
Equity in earnings of equity method investees, net of income taxes	2.0		1.9		6.1		6.1
NET INCOME	452.5		367.5		835.4		576.0
Less: Net income attributable to noncontrolling interests	3.1		3.0		9.1		8.7
NET INCOME ATTRIBUTABLE TO EVERGY, INC.	$	449.4	$	364.5	$	826.3	$	567.3
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY, INC. (see Note 1)
Basic earnings per common share	$	1.96	$	1.60	$	3.61	$	2.50
Diluted earnings per common share	$	1.95	$	1.60	$	3.60	$	2.49
AVERAGE COMMON SHARES OUTSTANDING
Basic	229.7		227.3		228.8		227.2
Diluted	230.2		227.5		229.3		227.5
COMPREHENSIVE INCOME
NET INCOME	$	452.5	$	367.5	$	835.4	$	576.0
Derivative hedging activity



Reclassification to expenses, net of tax	1.3		1.4		4.1		1.7
Derivative hedging activity, net of tax	1.3		1.4		4.1		1.7
Defined benefit pension plans



Amortization of net losses included in net periodic benefit costs, net of tax	—		—		—		(0.1)
Change in unrecognized pension expense, net of tax	—		—		—		(0.1)
Total other comprehensive income	1.3		1.4		4.1		1.6
COMPREHENSIVE INCOME	453.8		368.9		839.5		577.6
Less: comprehensive income attributable to noncontrolling interest	3.1		3.0		9.1		8.7
COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC.	$	450.7	$	365.9	$	830.4	$	568.9

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY, INC.
Consolidated Statements of Cash Flows
(Unaudited)

Year to Date September 30	2021		2020
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:	(millions)
Net income	$	835.4	$	576.0
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization	669.5		658.1
Amortization of nuclear fuel	35.7		43.8
Amortization of deferred refueling outage	18.8		19.1
Amortization of corporate-owned life insurance	18.5		14.8
Non-cash compensation	11.4		12.1
Net deferred income taxes and credits	98.6		136.5
Allowance for equity funds used during construction	(20.8)		(9.9)
Payments for asset retirement obligations	(10.0)		(11.0)
Equity in earnings of equity method investees, net of income taxes	(6.1)		(6.1)
Income from corporate-owned life insurance	(13.7)		(6.8)
Other	(4.5)		0.7
Changes in working capital items:
Accounts receivable	(39.6)		(68.6)
Accounts receivable pledged as collateral	(35.0)		(56.0)
Fuel inventory and supplies	(40.0)		(30.0)
Prepaid expenses and other current assets	(167.9)		20.9
Accounts payable	(206.8)		(87.5)
Accrued taxes	169.5		192.3
Other current liabilities	(14.1)		(43.9)
Changes in other assets	(308.7)		88.4
Changes in other liabilities	45.8		(21.2)
Cash Flows from Operating Activities	1,036.0		1,421.7
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(1,394.7)		(1,058.1)
Purchase of securities - trusts	(108.4)		(50.3)
Sale of securities - trusts	95.3		44.2
Investment in corporate-owned life insurance	(13.5)		(16.4)
Proceeds from investment in corporate-owned life insurance	76.3		60.6

Other investing activities	(4.1)		(9.9)
Cash Flows used in Investing Activities	(1,349.1)		(1,029.9)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	301.6		(361.9)


Collateralized short-term borrowings, net	35.0		56.0
Issuance of common stock	112.5		—
Proceeds from long-term debt	497.3		889.3

Retirements of long-term debt	(351.1)		(251.1)
Retirements of long-term debt of variable interest entities	(18.8)		(32.3)

Borrowings against cash surrender value of corporate-owned life insurance	53.1		54.5
Repayment of borrowings against cash surrender value of corporate-owned life insurance	(62.1)		(52.5)
Cash dividends paid	(366.7)		(343.6)


Other financing activities	(7.3)		(11.8)
Cash Flows from (used in) Financing Activities	193.5		(53.4)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(119.6)		338.4
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period	144.9		23.2
End of period	$	25.3	$	361.6

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY, INC.
Consolidated Statements of Changes in Equity
(Unaudited)

	Evergy, Inc. Shareholders
	Common stock shares	Common stock		Retained earnings		AOCI		Non-controlling interests		Total equity
	(millions, except share amounts)
Balance as of December 31, 2019	226,641,443	$	7,070.4	$	1,551.5	$	(50.0)	$	(26.6)	$	8,545.3
Net income	—	—		69.4		—		2.8		72.2

Issuance of stock compensation and reinvested dividends, net of tax withholding	97,305	(3.0)		—		—		—		(3.0)
Dividends declared on common stock ($0.505 per share)	—	—		(114.5)		—		—		(114.5)
Dividend equivalents declared	—	—		(0.7)		—		—		(0.7)
Stock compensation expense	—	4.6		—		—		—		4.6



Derivative hedging activity, net of tax	—	—		—		1.3		—		1.3
Other	—	0.2		—		—		—		0.2
Balance as of March 31, 2020	226,738,748	7,072.2		1,505.7		(48.7)		(23.8)		8,505.4
Net income	—	—		133.4		—		2.9		136.3
Issuance of stock compensation and reinvested dividends, net of tax withholding	86,357	(2.9)		—		—		—		(2.9)
Dividends declared on common stock ($0.505 per share)	—	—		(114.6)		—		—		(114.6)
Dividend equivalents declared	—	—		(0.4)		—		—		(0.4)
Stock compensation expense	—	4.1		—		—		—		4.1


Derivative hedging activity, net of tax	—	—		—		(1.0)		—		(1.0)
Change in unrecognized pension expense, net of tax	—	—		—		(0.1)		—		(0.1)
Other	—	0.1		—		—		—		0.1
Balance as of June 30, 2020	226,825,105	7,073.5		1,524.1		(49.8)		(20.9)		8,526.9
Net income	—	—		364.5		—		3.0		367.5


Issuance of stock compensation and reinvested dividends, net of tax withholding	7,305	—		—		—		—		—

Dividends declared on common stock ($0.505 per share)	—	—		(114.5)		—		—		(114.5)
Dividend equivalents declared		—		(0.6)		—		—		(0.6)
Stock compensation expense	—	3.4		—		—		—		3.4


Derivative hedging activity, net of tax	—	—		—		1.4		—		1.4
Other	—	0.1		—		—		—		0.1
Balance as of September 30, 2020	226,832,410	$	7,077.0	$	1,773.5	$	(48.4)	$	(17.9)	$	8,784.2

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY, INC.
Consolidated Statements of Changes in Equity
(Unaudited)

	Evergy, Inc. Shareholders
	Common stock shares	Common stock		Retained earnings		AOCI		Non-controlling interests		Total equity
	(millions, except share amounts)
Balance as of December 31, 2020	226,836,670	$	7,080.0	$	1,702.8	$	(49.4)	$	(14.9)	$	8,718.5
Net income	—	—		191.6		—		3.0		194.6

Issuance of stock compensation and reinvested dividends, net of tax withholding	104,896	(1.1)		—		—		—		(1.1)
Issuance of restricted common stock	54,054	2.9		—		—		—		2.9
Dividends declared on common stock ($0.535 per share)	—	—		(121.4)		—		—		(121.4)
Dividend equivalents declared	—	—		(0.2)		—		—		(0.2)
Stock compensation expense	—	2.6		—		—		—		2.6
Unearned compensation
Issuance of restricted common stock	—	(2.9)		—		—		—		(2.9)
Compensation expense recognized	—	0.4		—		—		—		0.4
Derivative hedging activity, net of tax	—	—		—		1.4		—		1.4
Other	—	(0.4)		—		—		—		(0.4)
Balance as of March 31, 2021	226,995,620	7,081.5		1,772.8		(48.0)		(11.9)		8,794.4
Net income	—	—		185.3		—		3.0		188.3
Issuance of stock, net of issuance costs	2,269,447	112.5		—		—		—		112.5
Issuance of stock compensation and reinvested dividends, net of tax withholding	31,147	(0.6)		—		—		—		(0.6)
Dividends declared on common stock ($0.535 per share)	—	—		(122.6)		—		—		(122.6)
Dividend equivalents declared	—	—		(0.5)		—		—		(0.5)
Stock compensation expense	—	3.8		—		—		—		3.8
Unearned compensation
Compensation expense recognized	—	0.5		—		—		—		0.5
Derivative hedging activity, net of tax	—	—		—		1.4		—		1.4

Other	—	(0.1)		—		—		—		(0.1)
Balance as of June 30, 2021	229,296,214	7,197.6		1,835.0		(46.6)		(8.9)		8,977.1
Net income	—	—		449.4		—		3.1		452.5

Issuance of stock compensation and reinvested dividends, net of tax withholding	4,865	—		—		—		—		—
Dividends declared on common stock ($0.535 per share)	—	—		(122.7)		—		—		(122.7)
Dividend equivalents declared	—	—		(0.4)		—		—		(0.4)
Stock compensation expense	—	3.6		—		—		—		3.6
Unearned compensation
Compensation expense recognized	—	0.4		—		—		—		0.4
Derivative hedging activity, net of tax	—	—		—		1.3		—		1.3
Other	—	0.2		—		—		—		0.2
Balance as of September 30, 2021	229,301,079	$	7,201.8	$	2,161.3	$	(45.3)	$	(5.8)	$	9,312.0

The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
(Unaudited)


	September 30 2021			December 31 2020
ASSETS	(millions, except share amounts)
CURRENT ASSETS:
Cash and cash equivalents		$	11.4		$	28.7
Receivables, net of allowance for credit losses of $7.3 and $7.5, respectively		241.2			218.9
Related party receivables		12.4			6.7
Accounts receivable pledged as collateral		200.0			180.0
Fuel inventory and supplies		279.8			276.4
Income taxes receivable		14.7			25.3
Regulatory assets		180.7			96.2
Prepaid expenses and other assets		54.8			27.4
Total Current Assets		995.0			859.6
PROPERTY, PLANT AND EQUIPMENT, NET		10,415.3			10,193.6
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET		149.6			154.9
OTHER ASSETS:
Regulatory assets		764.1			800.1
Nuclear decommissioning trust fund		353.8			309.8
Other		270.3			271.1
Total Other Assets		1,388.2			1,381.0
TOTAL ASSETS		$	12,948.1		$	12,589.1

The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
(Unaudited)


	September 30 2021			December 31 2020
LIABILITIES AND EQUITY	(millions, except share amounts)
CURRENT LIABILITIES:

Current maturities of long-term debt of variable interest entities		$	—		$	18.8
Notes payable and commercial paper		236.0			50.0
Collateralized note payable		200.0			180.0
Accounts payable		189.6			280.1
Related party payables		15.6			21.7

Accrued taxes		162.0			101.5
Accrued interest		64.3			72.8
Regulatory liabilities		12.9			11.9
Asset retirement obligations		11.2			11.2
Accrued compensation and benefits		19.2			11.1
Other		112.4			133.5
Total Current Liabilities		1,023.2			892.6
LONG-TERM LIABILITIES:
Long-term debt, net		3,933.5			3,931.5
Deferred income taxes		848.1			824.5
Unamortized investment tax credits		62.8			65.7
Regulatory liabilities		1,456.2			1,461.0
Pension and post-retirement liability		453.4			560.3
Asset retirement obligations		427.0			416.0
Other		171.7			156.7
Total Long-Term Liabilities		7,352.7			7,415.7
Commitments and Contingencies (Note 10)
EQUITY:
Evergy Kansas Central, Inc. Shareholder's Equity:
Common stock - 1,000 shares authorized, $0.01 par value, 1 share issued		2,737.6			2,737.6
Retained earnings		1,840.4			1,558.1
Total Evergy Kansas Central, Inc. Shareholder's Equity		4,578.0			4,295.7
Noncontrolling Interests		(5.8)			(14.9)
Total Equity		4,572.2			4,280.8
TOTAL LIABILITIES AND EQUITY		$	12,948.1		$	12,589.1

The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Income
(Unaudited)
	Three Months Ended September 30				Year to Date September 30

	2021		2020		2021		2020
	(millions)
OPERATING REVENUES	$	777.8	$	733.6	$	2,277.4	$	1,864.5
OPERATING EXPENSES:
Fuel and purchased power	143.2		128.6		543.7		329.9
SPP network transmission costs	73.6		66.1		216.8		197.8
Operating and maintenance	126.9		137.4		387.9		376.3
Depreciation and amortization	117.3		113.4		349.1		339.0
Taxes other than income tax	50.9		47.4		153.2		145.1
Total Operating Expenses	511.9		492.9		1,650.7		1,388.1
INCOME FROM OPERATIONS	265.9		240.7		626.7		476.4
OTHER INCOME (EXPENSE):
Investment earnings	0.1		1.0		0.6		3.4
Other income	5.6		2.7		23.2		11.3
Other expense	(9.3)		(9.7)		(26.2)		(26.9)
Total Other Expense, Net	(3.6)		(6.0)		(2.4)		(12.2)
Interest expense	40.1		40.3		120.2		127.7
INCOME BEFORE INCOME TAXES	222.2		194.4		504.1		336.5
Income tax expense	22.6		22.5		45.7		149.2
Equity in earnings of equity method investees, net of income taxes	1.1		1.2		3.0		3.4
NET INCOME	200.7		173.1		461.4		190.7
Less: Net income attributable to noncontrolling interests	3.1		3.0		9.1		8.7
NET INCOME ATTRIBUTABLE TO EVERGY KANSAS CENTRAL, INC.	$	197.6	$	170.1	$	452.3	$	182.0

The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Cash Flows
(Unaudited)

Year to Date September 30	2021		2020
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:	(millions)
Net income	$	461.4	$	190.7
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization	349.1		339.0
Amortization of nuclear fuel	17.8		21.6
Amortization of deferred refueling outage	9.4		9.5
Amortization of corporate-owned life insurance	18.5		14.8

Net deferred income taxes and credits	(2.0)		155.0
Allowance for equity funds used during construction	(11.6)		(5.8)
Payments for asset retirement obligations	(2.3)		(2.1)
Equity in earnings of equity method investees, net of income taxes	(3.0)		(3.4)
Income from corporate-owned life insurance	(13.7)		(6.8)
Other	(4.1)		(4.1)
Changes in working capital items:
Accounts receivable	(6.3)		(124.4)
Accounts receivable pledged as collateral	(20.0)		(29.0)
Fuel inventory and supplies	(2.9)		(12.9)
Prepaid expenses and other current assets	(116.2)		7.0
Accounts payable	(74.9)		88.4
Accrued taxes	71.1		61.9
Other current liabilities	(55.7)		(47.1)
Changes in other assets	(81.9)		33.3
Changes in other liabilities	(4.4)		(35.8)
Cash Flows from Operating Activities	528.3		649.8
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(605.4)		(494.2)
Purchase of securities - trusts	(88.0)		(16.7)
Sale of securities - trusts	82.9		16.3
Investment in corporate-owned life insurance	(13.5)		(15.6)
Proceeds from investment in corporate-owned life insurance	76.3		60.6
Other investing activities	2.0		(2.3)
Cash Flows used in Investing Activities	(545.7)		(451.9)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	184.0		(249.2)
Collateralized short-term debt, net	20.0		29.0
Proceeds from long-term debt	—		493.0
Retirements of long-term debt	—		(250.0)
Retirements of long-term debt of variable interest entities	(18.8)		(32.3)

Borrowings against cash surrender value of corporate-owned life insurance	50.1		51.5
Repayment of borrowings against cash surrender value of corporate-owned life insurance	(62.1)		(52.5)
Cash dividends paid	(170.0)		(120.0)

Other financing activities	(3.1)		(4.2)
Cash Flows from (used in) Financing Activities	0.1		(134.7)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(17.3)		63.2
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period	28.7		5.2
End of period	$	11.4	$	68.4

The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Changes in Equity
(Unaudited)

	Evergy Kansas Central, Inc. Shareholder
	Common stock shares	Common stock		Retained earnings		Non-controlling interests		Total equity
	(millions, except share amounts)
Balance as of December 31, 2019	1	$	2,737.6	$	1,494.0	$	(26.6)	$	4,205.0
Net income	—	—		52.4		2.8		55.2
Dividends declared on common stock	—	—		(60.0)		—		(60.0)


Balance as of March 31, 2020	1	2,737.6		1,486.4		(23.8)		4,200.2
Net income (loss)	—	—		(40.5)		2.9		(37.6)
Dividends declared on common stock	—	—		(60.0)		—		(60.0)
Balance as of June 30, 2020	1	2,737.6		1,385.9		(20.9)		4,102.6
Net income	—	—		170.1		3.0		173.1

Balance as of September 30, 2020	1	$	2,737.6	$	1,556.0	$	(17.9)	$	4,275.7

Balance as of December 31, 2020	1	$	2,737.6	$	1,558.1	$	(14.9)	$	4,280.8
Net income	—	—		178.1		3.0		181.1

Balance as of March 31, 2021	1	2,737.6		1,736.2		(11.9)		4,461.9
Net income	—	—		76.6		3.0		79.6

Balance as of June 30, 2021	1	2,737.6		1,812.8		(8.9)		4,541.5
Net income	—	—		197.6		3.1		200.7
Dividends declared on common stock	—	—		(170.0)		—		(170.0)
Balance as of September 30, 2021	1	$	2,737.6	$	1,840.4	$	(5.8)	$	4,572.2

The disclosures regarding Evergy Kansas Central included in the accompanying Unaudited Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY METRO, INC.
Consolidated Balance Sheets
(Unaudited)


	September 30 2021			December 31 2020
ASSETS	(millions, except share amounts)
CURRENT ASSETS:
Cash and cash equivalents		$	3.6		$	71.6
Receivables, net of allowance for credit losses of $8.0 and $8.1, respectively		82.3			45.0
Related party receivables		368.6			225.6
Accounts receivable pledged as collateral		130.0			130.0
Fuel inventory and supplies		195.5			170.4
Income taxes receivable		43.0			3.2
Regulatory assets		88.3			82.0
Prepaid expenses		23.2			22.9
Other assets		18.7			14.2
Total Current Assets		953.2			764.9
PROPERTY, PLANT AND EQUIPMENT, NET		7,337.4			7,141.2
OTHER ASSETS:
Regulatory assets		422.1			533.5
Nuclear decommissioning trust fund		378.2			342.3
Other		134.6			133.9
Total Other Assets		934.9			1,009.7
TOTAL ASSETS		$	9,225.5		$	8,915.8

The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY METRO, INC.
Consolidated Balance Sheets
(Unaudited)


	September 30 2021			December 31 2020
LIABILITIES AND EQUITY	(millions, except share amounts)
CURRENT LIABILITIES:


Collateralized note payable		$	130.0		$	130.0
Accounts payable		202.8			280.1
Related party payables		1.5			0.1
Accrued taxes		104.9			34.9
Accrued interest		37.1			30.0
Regulatory liabilities		57.2			8.0
Asset retirement obligations		12.1			21.2
Accrued compensation and benefits		31.7			44.4
Other		43.0			37.3
Total Current Liabilities		620.3			586.0
LONG-TERM LIABILITIES:
Long-term debt, net		2,924.5			2,923.0
Deferred income taxes		605.5			558.8
Unamortized investment tax credits		117.4			118.5
Regulatory liabilities		940.6			899.4
Pension and post-retirement liability		510.9			565.1
Asset retirement obligations		359.6			357.7
Other		134.4			148.1
Total Long-Term Liabilities		5,592.9			5,570.6
Commitments and Contingencies (Note 10)
EQUITY:
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value		1,563.1			1,563.1
Retained earnings		1,444.8			1,191.5
Accumulated other comprehensive income		4.4			4.6
Total Equity		3,012.3			2,759.2
TOTAL LIABILITIES AND EQUITY		$	9,225.5		$	8,915.8

The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY METRO, INC.
Consolidated Statements of Comprehensive Income
(Unaudited)
	Three Months Ended September 30				Year to Date September 30

	2021		2020		2021		2020
	(millions)
OPERATING REVENUES	$	571.8	$	528.5	$	1,526.7	$	1,328.3
OPERATING EXPENSES:
Fuel and purchased power	133.2		112.2		489.3		306.0
Operating and maintenance	87.0		101.3		262.1		305.7
Depreciation and amortization	81.5		79.4		238.3		243.6
Taxes other than income tax	32.6		31.2		97.2		92.4
Total Operating Expenses	334.3		324.1		1,086.9		947.7
INCOME FROM OPERATIONS	237.5		204.4		439.8		380.6
OTHER INCOME (EXPENSE):
Investment earnings	—		0.5		0.1		1.3
Other income	4.8		4.0		12.1		5.1
Other expense	(6.3)		(6.9)		(21.8)		(20.2)
Total Other Expense, Net	(1.5)		(2.4)		(9.6)		(13.8)
Interest expense	27.8		29.2		83.2		85.5
INCOME BEFORE INCOME TAXES	208.2		172.8		347.0		281.3
Income tax expense	26.5		25.1		43.7		5.1
NET INCOME	$	181.7	$	147.7	$	303.3	$	276.2
COMPREHENSIVE INCOME
NET INCOME	$	181.7	$	147.7	$	303.3	$	276.2
OTHER COMPREHENSIVE INCOME:
Derivative hedging activity
Reclassification to expenses, net of tax	(0.2)		(0.2)		(0.2)		(0.1)
Derivative hedging activity, net of tax	(0.2)		(0.2)		(0.2)		(0.1)
Total other comprehensive loss	(0.2)		(0.2)		(0.2)		(0.1)
COMPREHENSIVE INCOME	$	181.5	$	147.5	$	303.1	$	276.1

The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY METRO, INC.
Consolidated Statements of Cash Flows
(Unaudited)

Year to Date September 30	2021		2020
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:	(millions)
Net income	$	303.3	$	276.2
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization	238.3		243.6
Amortization of nuclear fuel	17.9		22.1
Amortization of deferred refueling outage	9.4		9.5
Net deferred income taxes and credits	16.6		3.0
Allowance for equity funds used during construction	(8.7)		(4.1)
Payments for asset retirement obligations	(4.7)		(2.7)
Other	(0.3)		(0.3)
Changes in working capital items:
Accounts receivable	(25.2)		(84.3)
Accounts receivable pledged as collateral	—		(12.0)
Fuel inventory and supplies	(25.1)		(10.2)
Prepaid expenses and other current assets	(14.2)		(4.7)
Accounts payable	(83.9)		(20.1)
Accrued taxes	30.2		74.2
Other current liabilities	51.9		14.5
Changes in other assets	45.2		37.7
Changes in other liabilities	44.6		14.2
Cash Flows from Operating Activities	595.3		556.6
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(474.4)		(384.9)
Purchase of securities - trusts	(20.4)		(33.7)
Sale of securities - trusts	12.4		27.9
Net money pool lending	(138.0)		(78.0)
Other investing activities	5.5		2.5
Cash Flows used in Investing Activities	(614.9)		(466.2)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	—		(199.3)
Collateralized short-term debt, net	—		12.0
Proceeds from long-term debt	—		396.4


Cash dividends paid	(50.0)		(80.0)
Other financing activities	1.6		2.8
Cash Flows from (used in) Financing Activities	(48.4)		131.9
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(68.0)		222.3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period	71.6		2.0
End of period	$	3.6	$	224.3

The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

Table of Contents


EVERGY METRO, INC
Consolidated Statements of Changes in Equity
(Unaudited)

	Common stock shares	Common Stock		Retained earnings		AOCI - Net gains (losses) on cash flow hedges		Total Equity
	(millions, except share amounts)
Balance as of December 31, 2019	1	$	1,563.1	$	1,012.8	$	4.8	$	2,580.7
Net income	—	—		25.6		—		25.6
Dividends declared on common stock	—	—		(60.0)		—		(60.0)
Derivative hedging activity, net of tax	—	—		—		(0.1)		(0.1)
Balance as of March 31, 2020	1	1,563.1		978.4		4.7		2,546.2
Net income	—	—		102.9		—		102.9
Dividends declared on common stock	—	—		(20.0)		—		(20.0)
Derivative hedging activity, net of tax	—	—		—		0.2		0.2
Balance as of June 30, 2020	1	1,563.1		1,061.3		4.9		2,629.3
Net income	—	—		147.7		—		147.7

Derivative hedging activity, net of tax	—	—		—		(0.2)		(0.2)
Balance as of September 30, 2020	1	$	1,563.1	$	1,209.0	$	4.7	$	2,776.8

Balance as of December 31, 2020	1	$	1,563.1	$	1,191.5	$	4.6	$	2,759.2
Net income	—	—		33.5		—		33.5


Balance as of March 31, 2021	1	1,563.1		1,225.0		4.6		2,792.7
Net income	—	—		88.1		—		88.1


Balance as of June 30, 2021	1	1,563.1		1,313.1		4.6		2,880.8
Net income	—	—		181.7		—		181.7
Dividends declared on common stock	—	—		(50.0)		—		(50.0)
Derivative hedging activity, net of tax	—	—		—		(0.2)		(0.2)
Balance as of September 30, 2021	1	$	1,563.1	$	1,444.8	$	4.4	$	3,012.3

The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY, INC.

EVERGY KANSAS CENTRAL, INC.

EVERGY METRO, INC.

Combined Notes to Unaudited Consolidated Financial Statements

The notes to unaudited consolidated financial statements that follow are a combined presentation for Evergy, Inc., Evergy Kansas Central, Inc. and Evergy Metro, Inc., all registrants under this filing. The terms "Evergy," "Evergy Kansas Central," "Evergy Metro" and "Evergy Companies" are used throughout this report. "Evergy" refers to Evergy, Inc. and its consolidated subsidiaries, unless otherwise indicated. "Evergy Kansas Central" refers to Evergy Kansas Central, Inc. and its consolidated subsidiaries, unless otherwise indicated. "Evergy Metro" refers to Evergy Metro, Inc. and its consolidated subsidiaries, unless otherwise indicated. "Evergy Companies" refers to Evergy, Evergy Kansas Central, and Evergy Metro, collectively, which are individual registrants within the Evergy consolidated group.

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

Evergy is a public utility holding company incorporated in 2017 and headquartered in Kansas City, Missouri. Evergy operates primarily through the following wholly-owned direct subsidiaries listed below.

•Evergy Kansas Central, Inc. (Evergy Kansas Central) is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Evergy Kansas Central has one active wholly-owned subsidiary with significant operations, Evergy Kansas South, Inc. (Evergy Kansas South).

•Evergy Metro, Inc. (Evergy Metro) is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas.

•Evergy Missouri West, Inc. (Evergy Missouri West) is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.

•Evergy Transmission Company, LLC (Evergy Transmission Company) owns 13.5% of Transource Energy, LLC (Transource) with the remaining 86.5% owned by AEP Transmission Holding Company, LLC, a subsidiary of American Electric Power Company, Inc. (AEP). Transource is focused on the development of competitive electric transmission projects. Evergy Transmission Company accounts for its investment in Transource under the equity method.

Evergy Kansas Central also owns a 50% interest in Prairie Wind Transmission, LLC (Prairie Wind), which is a joint venture between Evergy Kansas Central and subsidiaries of AEP and Berkshire Hathaway Energy Company. Prairie Wind owns a 108-mile, 345 kV double-circuit transmission line that provides transmission service in the Southwest Power Pool, Inc. (SPP). Evergy Kansas Central accounts for its investment in Prairie Wind under the equity method.

Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West conduct business in their respective service territories using the name Evergy. Collectively, the Evergy Companies have approximately 15,400 MWs of owned generating capacity and renewable purchased power agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri.

Basis of Presentation

These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements and should be read in conjunction with the consolidated financial statements in the Evergy Companies' combined 2020 Form 10-K.

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These unaudited consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary to fairly present the unaudited consolidated financial statements for each of the Evergy Companies for these interim periods. In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Principles of Consolidation

Each of Evergy's, Evergy Kansas Central's and Evergy Metro's unaudited consolidated financial statements includes the accounts of their subsidiaries and variable interest entities (VIEs) of which they are the primary beneficiary. Undivided interests in jointly-owned generation facilities are included on a proportionate basis. Intercompany transactions have been eliminated. The Evergy Companies assess financial performance and allocate resources on a consolidated basis (i.e., operate in one segment).

Fuel Inventory and Supplies

The Evergy Companies record fuel inventory and supplies at average cost. The following table separately states the balances for fuel inventory and supplies.



	September 30 2021		December 31 2020
Evergy	(millions)
Fuel inventory	$	150.3	$	145.0
Supplies	394.7		359.5
Fuel inventory and supplies	$	545.0	$	504.5
Evergy Kansas Central
Fuel inventory	$	74.4	$	79.3
Supplies	205.4		197.1
Fuel inventory and supplies	$	279.8	$	276.4
Evergy Metro
Fuel inventory	$	52.7	$	44.9
Supplies	142.8		125.5
Fuel inventory and supplies	$	195.5	$	170.4

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Property, Plant and Equipment

The following tables summarize the property, plant and equipment of Evergy, Evergy Kansas Central and Evergy Metro.


September 30, 2021	Evergy			Evergy Kansas Central			Evergy Metro
		(millions)
Electric plant in service		$	29,964.3		$	14,522.1		$	11,579.2
Electric plant acquisition adjustment		724.3			724.3			—
Accumulated depreciation		(11,462.2)			(5,524.7)			(4,724.9)
Plant in service, net		19,226.4			9,721.7			6,854.3
Construction work in progress		1,253.2			631.2			421.2
Nuclear fuel, net		123.4			61.5			61.9
Plant to be retired, net(a)		0.9			0.9			—
Property, plant and equipment, net		$	20,603.9		$	10,415.3		$	7,337.4

December 31, 2020	Evergy			Evergy Kansas Central			Evergy Metro
		(millions)
Electric plant in service		$	28,914.8		$	14,095.1		$	11,161.8
Electric plant acquisition adjustment		724.3			724.3			—
Accumulated depreciation		(10,998.4)			(5,293.5)			(4,532.7)
Plant in service, net		18,640.7			9,525.9			6,629.1
Construction work in progress		1,153.5			589.1			433.9
Nuclear fuel, net		155.9			77.7			78.2
Plant to be retired, net(a)		0.9			0.9			—
Property, plant and equipment, net		$	19,951.0		$	10,193.6		$	7,141.2

(a) As of September 30, 2021 and December 31, 2020, represents the planned retirement of Evergy Kansas Central analog meters prior to the end of their remaining useful lives.

Other Income (Expense), Net

The table below shows the detail of other expense for each of the Evergy Companies.


	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Evergy	(millions)
Non-service cost component of net benefit cost	$	(12.8)	$	(13.7)	$	(41.4)	$	(43.7)
Other	(6.4)		(6.4)		(17.5)		(14.0)
Other expense	$	(19.2)	$	(20.1)	$	(58.9)	$	(57.7)
Evergy Kansas Central
Non-service cost component of net benefit cost	$	(3.4)	$	(4.1)	$	(11.1)	$	(14.1)
Other	(5.9)		(5.6)		(15.1)		(12.8)
Other expense	$	(9.3)	$	(9.7)	$	(26.2)	$	(26.9)
Evergy Metro
Non-service cost component of net benefit cost	$	(5.8)	$	(6.5)	$	(19.8)	$	(19.7)
Other	(0.5)		(0.4)		(2.0)		(0.5)
Other expense	$	(6.3)	$	(6.9)	$	(21.8)	$	(20.2)

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Earnings Per Share

To compute basic earnings per share (EPS), Evergy divides net income attributable to Evergy, Inc. by the weighted average number of common shares outstanding. Diluted EPS includes the effect of issuable common shares resulting from restricted share units (RSUs), performance shares, restricted stock and a warrant. Evergy computes the dilutive effects of potential issuances of common shares using the treasury stock method or the contingently issuable share method, as applicable.

The following table reconciles Evergy's basic and diluted EPS.


	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Income	(millions, except per share amounts)
Net income	$	452.5	$	367.5	$	835.4	$	576.0
Less: Net income attributable to noncontrolling interests	3.1		3.0		9.1		8.7
Net income attributable to Evergy, Inc.	$	449.4	$	364.5	$	826.3	$	567.3
Common Shares Outstanding
Weighted average number of common shares outstanding - basic	229.7		227.3		228.8		227.2
Add: Effect of dilutive securities	0.5		0.2		0.5		0.3
Weighted average number of common shares outstanding - dilutive	230.2		227.5		229.3		227.5
Basic EPS	$	1.96	$	1.60	$	3.61	$	2.50
Diluted EPS	$	1.95	$	1.60	$	3.60	$	2.49

There were no anti-dilutive shares excluded from the computation of diluted EPS for the three months ended and year to date September 30, 2021. Anti-dilutive shares excluded from the computation of diluted EPS for the three months ended and year to date September 30, 2020, were 124,136 RSUs with performance measures.

Dividends Declared

In November 2021, Evergy's Board of Directors (Evergy Board) declared a quarterly dividend of $0.5725 per share on Evergy's common stock. The common dividend is payable on December 20, 2021, to shareholders of record as of November 19, 2021.

In November 2021, Evergy Kansas Central's Board of Directors declared a cash dividend to Evergy of up to $70.0 million, payable on December 17, 2021.

Supplemental Cash Flow Information


Evergy
Year to Date September 30	2021		2020
Cash paid for (received from):	(millions)
Interest, net of amounts capitalized	$	257.0	$	267.8
Interest of VIEs	0.2		0.8
Income taxes, net of refunds	1.7		(73.8)
Right-of-use assets obtained in exchange for new operating lease liabilities	8.1		4.1
Right-of-use assets obtained in exchange for new finance lease liabilities	0.6		5.0
Non-cash investing transactions:
Property, plant and equipment additions	184.8		371.0

Non-cash financing transactions:
Issuance of stock for compensation and reinvested dividends	0.7		0.9

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Evergy Kansas Central
Year to Date September 30	2021		2020
Cash paid for (received from):	(millions)
Interest, net of amounts capitalized	$	105.8	$	114.1
Interest of VIEs	0.2		0.8
Income taxes, net of refunds	37.2		(6.4)
Right-of-use assets obtained in exchange for new operating lease liabilities	3.6		3.8
Right-of-use assets obtained in exchange for new finance lease liabilities	0.6		3.7
Non-cash investing transactions:
Property, plant and equipment additions	64.6		183.8


Evergy Metro
Year to Date September 30	2021		2020
Cash paid for (received from):	(millions)
Interest, net of amounts capitalized	$	73.3	$	73.3
Income taxes, net of refunds	66.8		(7.3)
Right-of-use assets obtained in exchange for new operating lease liabilities	4.5		0.3
Right-of-use assets obtained in exchange for new finance lease liabilities	—		1.3
Non-cash investing transactions:
Property, plant and equipment additions	75.2		165.6

Non-cash property, plant and equipment additions year to date September 30, 2020 for Evergy, Evergy Kansas Central and Evergy Metro include non-cash additions of $259.1 million, $140.7 million and $118.4 million, respectively, related to the revision in estimate of the Wolf Creek Generating Station (Wolf Creek) asset retirement obligation (ARO) liability in the third quarter of 2020.

February 2021 Winter Weather Event

In February 2021, much of the central and southern United States, including the service territories of the Evergy Companies, experienced a significant winter weather event that resulted in extremely cold temperatures over a multi-day period (February 2021 winter weather event). The February 2021 winter weather event resulted in an increase in the demand for natural gas used by the Evergy Companies for generating electricity and also contributed to the limited availability of other generation resources, including coal and renewables, within the SPP Integrated Marketplace. The Evergy Companies are members of the SPP and, as a result, principally sell and purchase power for the Evergy Companies' retail electric customers through the SPP Integrated Marketplace. These circumstances resulted in higher than normal market prices for both natural gas and power for the duration of the February 2021 winter weather event. These higher than normal market prices also included make-whole payments calculated by the SPP to compensate natural gas generators within the SPP Integrated Marketplace for costs incurred in excess of revenues. As part of the February 2021 winter weather event and inclusive of the aforementioned items, Evergy incurred natural gas and purchased power costs, net of wholesale revenues, of $349.7 million. This $349.7 million of net fuel and purchased power costs was primarily driven by $293.4 million of costs at Evergy Missouri West and $127.9 million of costs at Evergy Kansas Central, partially offset by $71.6 million of net wholesale revenues at Evergy Metro. The amount of purchased power costs incurred by the Evergy Companies during the February 2021 winter weather event is subject to resettlement activity and further review by the SPP. This review and any subsequent resettlement activity could result in increases or decreases to the final amount of purchased power costs incurred by the Evergy Companies during the February 2021 winter weather event and these changes could be material.

The Evergy Companies have fuel recovery mechanisms in their Kansas and Missouri jurisdictions, as applicable, that allow them to defer substantially all of any increased fuel and purchased power costs, net of wholesale revenues, to a regulatory asset or liability for future recovery from or refund to customers. Further, in February 2021, the State Corporation Commission of the State of Kansas (KCC) issued an emergency Accounting Authority

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Order (AAO) that allowed Evergy Kansas Central and Evergy Metro's Kansas jurisdiction to defer to a regulatory asset any extraordinary costs, including carrying costs, incurred to provide electric service during the February 2021 winter weather event for consideration in future rate proceedings. Additionally, in June 2021, Evergy Metro and Evergy Missouri West filed a joint request for an AAO with the Public Service Commission of the State of Missouri (MPSC) that would allow for the extraordinary costs and revenues to provide service during the February 2021 winter weather event, including carrying costs, to be deferred to a regulatory asset or a regulatory liability for consideration in future proceedings. See Note 4 for additional information regarding the AAOs.

As of September 30, 2021, the Evergy Companies have deferred substantially all of the fuel and purchased power costs, net of wholesale revenues, related to the February 2021 winter weather event to a regulatory asset or liability pursuant to the mechanisms discussed above. While the Evergy Companies expect to recover substantially all of any increased fuel and purchased power costs related to the February 2021 winter weather event from customers, the timing of the cost recovery could be delayed or spread over a longer than typical recovery timeframe by the KCC or the MPSC to help moderate monthly customer bill impacts given the extraordinary nature of the February 2021 winter weather event.

The Evergy Companies also engage in limited non-regulated energy marketing activities in various regional power markets that have historically not had a significant impact on the Evergy Companies' results of operations. These energy marketing margins are recorded net in operating revenues on the Evergy Companies' statements of income and comprehensive income. As a result of the elevated market prices experienced in regional power markets across the central and southern United States driven by the February 2021 winter weather event discussed above, Evergy and Evergy Kansas Central recorded $95.0 million of energy marketing margins in 2021 related to the February 2021 winter weather event, primarily driven by activities in the Electric Reliability Council of Texas (ERCOT). The amount of energy marketing margins recorded as a result of the February 2021 winter weather event is subject to resettlement activities and/or legislative action in Texas that could result in increases or decreases to the final amount of energy marketing margins earned by Evergy and Evergy Kansas Central and these changes could be material.

2. REVENUE

Evergy's, Evergy Kansas Central's and Evergy Metro's revenues disaggregated by customer class are summarized in the following tables.


Evergy
	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Revenues	(millions)
Residential	$	677.4	$	636.4	$	1,533.9	$	1,515.6
Commercial	525.0		499.5		1,293.5		1,272.9
Industrial	166.0		166.8		449.6		446.7
Other retail	9.2		9.5		26.1		29.2
Total electric retail	$	1,377.6	$	1,312.2	$	3,303.1	$	3,264.4
Wholesale	105.0		85.0		662.5		195.8
Transmission	90.3		80.7		266.7		238.5
Industrial steam and other	7.2		5.6		18.3		16.8
Total revenue from contracts with customers	$	1,580.1	$	1,483.5	$	4,250.6	$	3,715.5
Other	36.4		34.1		214.0		103.5
Operating revenues	$	1,616.5	$	1,517.6	$	4,464.6	$	3,819.0

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Evergy Kansas Central
	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Revenues	(millions)
Residential	$	282.3	$	262.9	$	657.3	$	627.5
Commercial	218.0		205.2		536.8		511.0
Industrial	105.0		105.7		293.0		284.6
Other retail	4.5		4.4		12.9		13.3
Total electric retail	$	609.8	$	578.2	$	1,500.0	$	1,436.4
Wholesale	76.8		68.7		402.7		168.1
Transmission	81.9		72.9		241.5		215.2
Other	0.6		0.9		1.7		2.1
Total revenue from contracts with customers	$	769.1	$	720.7	$	2,145.9	$	1,821.8
Other	8.7		12.9		131.5		42.7
Operating revenues	$	777.8	$	733.6	$	2,277.4	$	1,864.5


Evergy Metro
	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Revenues	(millions)
Residential	$	254.5	$	241.2	$	550.6	$	572.2
Commercial	221.9		213.3		542.5		558.1
Industrial	35.9		36.6		91.9		99.6
Other retail	2.8		2.7		7.7		8.9
Total electric retail	$	515.1	$	493.8	$	1,192.7	$	1,238.8
Wholesale	24.0		9.7		237.3		16.7
Transmission	4.3		3.5		12.8		10.4
Other	1.2		0.8		2.6		2.7
Total revenue from contracts with customers	$	544.6	$	507.8	$	1,445.4	$	1,268.6
Other	27.2		20.7		81.3		59.7
Operating revenues	$	571.8	$	528.5	$	1,526.7	$	1,328.3

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3. RECEIVABLES

The Evergy Companies' receivables are detailed in the following table.


	September 30		December 31
	2021		2020
Evergy	(millions)
Customer accounts receivable - billed	$	27.1	$	5.3
Customer accounts receivable - unbilled	143.7		110.0
Other receivables	183.3		177.9
Allowance for credit losses	(19.0)		(19.3)
Total	$	335.1	$	273.9
Evergy Kansas Central
Customer accounts receivable - billed	$	12.8	$	—
Customer accounts receivable - unbilled	38.0		50.7
Other receivables	197.7		175.7
Allowance for credit losses	(7.3)		(7.5)
Total	$	241.2	$	218.9
Evergy Metro
Customer accounts receivable - billed	$	4.9	$	3.3
Customer accounts receivable - unbilled	69.9		27.9
Other receivables	15.5		21.9
Allowance for credit losses	(8.0)		(8.1)
Total	$	82.3	$	45.0

The Evergy Companies' other receivables at September 30, 2021 and December 31, 2020, consisted primarily of receivables from partners in jointly-owned electric utility plants, wholesale sales receivables and receivables related to alternative revenue programs. The Evergy Companies' other receivables also included receivables from contracts with customers as summarized in the following table.


	September 30		December 31
	2021		2020
	(millions)
Evergy	$	85.3	$	57.5
Evergy Kansas Central	82.7		49.9
Evergy Metro	1.7		6.9

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The change in the Evergy Companies' allowance for credit losses is summarized in the following table.


	2021		2020
Evergy	(millions)
Beginning balance January 1	$	19.3	$	10.5
Credit loss expense	7.6		15.5
Write-offs	(17.1)		(20.8)
Recoveries of prior write-offs	9.2		10.0
Ending balance September 30	$	19.0	$	15.2
Evergy Kansas Central
Beginning balance January 1	$	7.5	$	3.8
Credit loss expense	3.2		6.9
Write-offs	(6.9)		(7.3)
Recoveries of prior write-offs	3.5		2.1
Ending balance September 30	$	7.3	$	5.5
Evergy Metro
Beginning balance January 1	$	8.1	$	4.6
Credit loss expense	2.8		5.5
Write-offs	(6.9)		(8.9)
Recoveries of prior write-offs	4.0		5.3
Ending balance September 30	$	8.0	$	6.5

Sale of Accounts Receivable

Evergy Kansas Central, Evergy Metro and Evergy Missouri West sell an undivided percentage ownership interest in their retail electric accounts receivable to independent outside investors. These sales are accounted for as secured borrowings with accounts receivable pledged as collateral and a corresponding short-term collateralized note payable recognized on the balance sheets. The Evergy Companies' accounts receivable pledged as collateral and the corresponding short-term collateralized note payable are summarized in the following table.


	September 30		December 31
	2021		2020
	(millions)
Evergy	$	395.0	$	360.0
Evergy Kansas Central	200.0		180.0
Evergy Metro	130.0		130.0

Each receivable sale facility expires in 2024. Evergy Kansas Central's facility allows for $185.0 million in aggregate outstanding principal amount of borrowings from mid-October through mid-June and then $200.0 million from mid-June through mid-October. Evergy Metro's facility allows for $130.0 million in aggregate outstanding principal amount of borrowings at any time. Evergy Missouri West's facility allows for $50.0 million in aggregate outstanding principal amount of borrowings from mid-November through mid-June and then $65.0 million from mid-June through mid-November.

4. RATE MATTERS AND REGULATION

KCC Proceedings

Evergy Kansas Central 2021 Transmission Delivery Charge (TDC)

In April 2021, the KCC issued an order adjusting Evergy Kansas Central's retail prices to include updated transmission costs as reflected in the Federal Energy Regulatory Commission (FERC) transmission formula rate (TFR). The new prices were effective in April 2021 and are expected to increase Evergy Kansas Central's annual retail revenues by $37.9 million when compared to 2020.

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Evergy Metro 2021 TDC

In April 2021, the KCC issued an order adjusting Evergy Metro's retail prices to include updated transmission costs as reflected in the FERC TFR. The new prices were effective in May 2021 and are expected to decrease Evergy Metro's annual retail revenues by $2.4 million when compared to 2020.

Evergy Kansas Central and Evergy Metro Earnings Review and Sharing Plan (ERSP)

As part of their merger settlement agreement with the KCC, Evergy Kansas Central and Evergy Metro agreed to participate in an ERSP for the years 2019 through 2022. Under the ERSP, Evergy Kansas Central's and Evergy Metro's Kansas jurisdiction are required to refund to customers 50% of annual earnings in excess of their authorized return on equity of 9.3% to the extent the excess earnings exceed the amount of annual bill credits that Evergy Kansas Central and Evergy Metro agreed to provide in connection with the merger that resulted in the formation of Evergy.

Evergy Kansas Central's and Evergy Metro's 2020 calculations of annual earnings did not result in a significant refund obligation. These calculations were filed with the KCC in March 2021. As of September 30, 2021, Evergy Kansas Central and Evergy Metro estimate their 2021 annual earnings will not result in a significant refund obligation. The final refund obligations for 2020 and 2021 will be decided by the KCC and could vary from the current estimates.

Evergy Kansas Central and Evergy Metro February 2021 Winter Weather Event AAO

In February 2021, the KCC issued an emergency AAO directing all Kansas-jurisdictional natural gas and electric utilities, including Evergy Kansas Central and Evergy Metro, to defer to a regulatory asset or regulatory liability any extraordinary costs or revenues, including carrying costs, to provide electric service during the February 2021 winter weather event for consideration in future rate proceedings.

As of September 30, 2021, Evergy Kansas Central had recognized a regulatory asset pursuant to the AAO of $115.0 million related to its costs incurred during the February 2021 winter weather event, primarily consisting of increased fuel and purchased power costs. As of September 30, 2021, Evergy Metro's Kansas jurisdiction had recognized a regulatory liability of $42.4 million related to its increased wholesale revenues during the February 2021 winter weather event.

In July 2021, Evergy Kansas Central and Evergy Metro made a joint filing with the KCC regarding the timing and method of recovery or refund for costs and revenues deferred pursuant to the February 2021 winter weather event AAO. In the filing, Evergy Kansas Central and Evergy Metro requested to recover or refund, as appropriate, their deferred February 2021 winter weather event amounts to customers through their fuel recovery mechanisms over two years and one year, respectively, beginning in April 2022. As part of the filing, Evergy Metro also requested an approximately $6 million decrease to its February 2021 winter weather event refund to Kansas customers, which is not currently reflected in its regulatory liability for the February 2021 winter weather event, for jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms. A decision by the KCC regarding Evergy Kansas Central's and Evergy Metro's request is expected in the first half of 2022.

Lawrence Energy Center (LEC) Unit 4 Securitization

In April 2021, the state of Kansas passed the Utility Financing and Securitization Act (UFSA) which allows certain public utilities, including Evergy Kansas Central and Evergy Metro, to securitize utility assets in order to recover energy transition costs relating to the early retirement of certain generating assets. To recover the energy transition costs through securitization as allowed in the UFSA, a public utility must obtain a predetermination order from the KCC finding that the retirement of the subject generation facility is reasonable. Upon the receipt of a successful predetermination order, the public utility must then file an application with the KCC for a financing order to issue securitized bonds to recover the energy transition costs. The UFSA also allows the pursuit of securitization to help finance qualified extraordinary expenses, such as fuel costs incurred during extreme weather events.

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which are expected to occur between December 2023 and the first half of 2024. An evidentiary hearing in the case is currently scheduled to begin in January 2022 and a decision by the KCC regarding the request is expected in the first or second quarter of 2022.

If the KCC finds that Evergy Kansas Central's planned retirement of LEC Unit 4 and investment in 190 MW of solar generation is prudent as part of the predetermination request, Evergy Kansas Central then plans to file an application with the KCC later in 2022 for a financing order authorizing the issuance of securitized bonds to recover energy transition costs associated with the retirement of LEC Unit 4 and the related coal-handling facilities for LEC Units 4 and 5.

MPSC Proceedings

Evergy Missouri West Other Proceedings

In December 2018, the Office of the Public Counsel (OPC) and the Midwest Energy Consumers Group (MECG) filed a petition with the MPSC requesting an AAO that would require Evergy Missouri West to record a regulatory liability for all revenues collected from customers for return on investment, non-fuel operations and maintenance costs, taxes including accumulated deferred income taxes, and all other costs associated with Sibley Station following the station’s retirement in November 2018.

In October 2019, the MPSC granted OPC's and MECG's request for an AAO and required Evergy Missouri West to record a regulatory liability for the revenues discussed above for consideration in Evergy Missouri West's next rate case, which is expected to be completed no later than the end of 2022. Depending on the MPSC's decision in this next rate case, Evergy Missouri West could be required to refund to customers all or a portion of amounts collected in revenue for Sibley Station since December 2018 or, alternatively, could be required to make no refunds.

As a result of the MPSC order, Evergy has recorded a regulatory liability of $26.5 million as of September 30, 2021 for the estimated amount of revenues that Evergy Missouri West has collected from customers for Sibley Station since December 2018 that Evergy has determined is probable of refund. Evergy expects that it will continue to defer such amounts as collected from customers until new rates become effective in Evergy Missouri West's next rate case.

The accrual for this estimated amount does not include certain revenues collected related to Sibley Station that Evergy has determined to not be probable of refund in the next rate case based on the relevant facts and circumstances. Although Evergy has determined these additional revenues to not be probable of refund, the ultimate resolution of this matter in the next Evergy Missouri West rate case is uncertain and could result in an estimated loss of up to approximately $12 million per year in excess of the amount accrued until new rates become effective. Evergy's regulatory liability for probable refunds as of September 30, 2021 and estimated loss in excess of the amount accrued represent estimates that could change significantly based on ongoing developments including decisions in other regulatory proceedings that establish precedent applicable to this matter and positions of parties on this issue in a future Evergy Missouri West rate case.

Evergy Metro and Evergy Missouri West February 2021 Winter Weather Event AAO

In June 2021, Evergy Metro and Evergy Missouri West filed a joint request for an AAO with the MPSC that would allow Evergy Metro and Evergy Missouri West to defer to a regulatory asset or regulatory liability any extraordinary costs or revenues, including carrying costs, to provide electric service during the February 2021 winter weather event for consideration in future proceedings.

Evergy Metro and Evergy Missouri West have currently deferred substantially all of their fuel and purchased power costs, net of wholesale revenues, related to the February 2021 winter weather event to a regulatory asset or liability pursuant to their ability to recover or refund these amounts through their fuel recovery mechanisms, which allow for the recovery or refund of 95% of increases in fuel and purchased power costs, net of wholesale revenues, to customers. This AAO request is intended to address the recovery or refund of the February 2021 winter weather event amounts separate from the normal fuel recovery mechanism process given the extraordinary nature of the February 2021 winter weather event and to help moderate customer bill impacts. As of September 30, 2021, Evergy Metro's Missouri jurisdiction had recognized a regulatory liability of $28.0 million related to its increased wholesale

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revenues during the February 2021 winter weather event. As of September 30, 2021, Evergy Missouri West had recognized a regulatory asset of $278.7 million related to its costs incurred during the February 2021 winter weather event, primarily consisting of increased fuel and purchased power costs.

In the AAO filing, Evergy Metro requested to refund its deferred February 2021 winter weather event amounts to customers through its fuel recovery mechanism over one year, beginning in April 2022. In the same AAO filing, Evergy Missouri West requested to exclude its deferred February 2021 winter weather event amounts from recovery through its fuel recovery mechanism and indicated its intent to recover them through issuing securitized bonds pursuant to the securitization legislation signed into law in Missouri in July 2021. As part of the filing, Evergy Metro also requested an approximately $5 million decrease to its February 2021 winter weather refund to Missouri customers, which is not currently reflected in its regulatory liability for the February 2021 winter weather event, for jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms and for the portion of net wholesale revenues not traditionally refundable because of the 5% sharing provision of its fuel recovery mechanism. Evergy Missouri West requested an approximately $15 million increase to its February 2021 winter weather event recovery from Missouri customers, which is not currently reflected in its regulatory asset for the February 2021 winter weather event, for the portion of net fuel and purchased power costs not traditionally recoverable because of the 5% sharing provision of its fuel recovery mechanism. A decision by the MPSC regarding Evergy Metro's and Evergy Missouri West's AAO request is expected by the end of 2021.

FERC Proceedings

In October of each year, Evergy Kansas Central and Evergy Metro post an updated TFR that includes projected transmission capital expenditures and operating costs for the following year. This rate is the most significant component in the retail rate calculation for Evergy Kansas Central's and Evergy Metro's annual request with the KCC to adjust retail prices to include updated transmission costs through the TDC.

Evergy Kansas Central TFR

In the most recent two years, the updated TFR was expected to adjust Evergy Kansas Central's annual transmission revenues by approximately:

•$32.4 million increase effective in January 2021; and

•$6.8 million increase effective in January 2020.

Evergy Metro TFR

In the most recent two years, the updated TFR was expected to adjust Evergy Metro's annual transmission revenues by approximately:

•$3.9 million decrease effective in January 2021; and

•$1.7 million decrease effective in January 2020.

5. GOODWILL

GAAP requires goodwill to be tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. Evergy's impairment test for the $2,336.6 million of goodwill that was recorded as a result of the Great Plains Energy Incorporated (Great Plains Energy) and Evergy Kansas Central merger was conducted as of May 1, 2021. The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount, including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting unit and its fair value. Evergy's consolidated operations are considered one reporting unit for assessment of impairment, as management assesses financial performance and allocates resources on a consolidated basis. The determination of fair value of the reporting unit consisted of two valuation techniques: an income approach consisting of a discounted cash flow analysis and a market approach consisting of a determination of reporting unit invested capital using a market multiple derived from the historical earnings before interest, income taxes, depreciation and amortization and market prices of the stock of peer companies. The results of the two techniques were evaluated and weighted to determine a point within the range that management considered

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representative of fair value for the reporting unit. The fair value of the reporting unit exceeded the carrying amount, including goodwill. As a result, there was no impairment of goodwill.

6. PENSION PLANS AND POST-RETIREMENT BENEFITS

Evergy and certain of its subsidiaries maintain, and Evergy Kansas Central and Evergy Metro participate in, qualified non-contributory defined benefit pension plans covering the majority of Evergy Kansas Central's and Evergy Metro's employees as well as certain non-qualified plans covering certain active and retired officers. Evergy is also responsible for its indirect 94% ownership share of Wolf Creek's defined benefit plans, consisting of Evergy Kansas South's and Evergy Metro's respective 47% ownership shares.

For the majority of employees, pension benefits under these plans reflect the employees' compensation, years of service and age at retirement. However, for the plan covering Evergy Kansas Central's employees, the benefits for non-union employees hired between 2002 and the second quarter of 2018 and union employees hired beginning in 2012 are derived from a cash balance account formula. The plan was closed to future non-union employees in 2018. For the plans covering Evergy Metro's employees, the benefits for union employees hired beginning in 2014 are derived from a cash balance account formula and the plans were closed to future non-union employees in 2014.

Evergy and its subsidiaries also provide post-retirement health care and life insurance benefits for certain retirees of Evergy Kansas Central and Evergy Metro and their respective shares of Wolf Creek's post-retirement benefit plans.

The Evergy Companies record pension and post-retirement expense in accordance with rate orders from the KCC and MPSC that allow the difference between pension and post-retirement costs under GAAP and costs for ratemaking to be recognized as a regulatory asset or liability. This difference between financial and regulatory accounting methods is due to timing and will be eliminated over the life of the plans.

For the three months ended and year to date September 30, 2021, Evergy, Evergy Kansas Central and Evergy Metro recorded pension settlement charges of $30.4 million, $22.5 million and $12.5 million, respectively. For the three months ended and year to date September 30, 2020, Evergy and Evergy Metro recorded pension settlement charges of $10.0 million and $12.7 million, respectively. These settlement charges were the result of accelerated distributions as a result of employee retirements and annuity purchases for certain plan participants. Evergy, Evergy Kansas Central and Evergy Metro deferred substantially all of the charges to a regulatory asset and expect to recover these amounts over future periods pursuant to regulatory agreements.

The following tables provide the components of net periodic benefit costs prior to the effects of capitalization and sharing with joint owners of power plants.


	Pension Benefits						Post-Retirement Benefits
Three Months Ended September 30, 2021	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Components of net periodic benefit costs	(millions)
Service cost	$	21.0	$	7.4	$	13.6	$	0.8	$	0.4	$	0.4
Interest cost	21.2		10.3		10.7		2.0		1.0		1.0
Expected return on plan assets	(26.5)		(13.6)		(14.2)		(2.3)		(1.6)		(0.7)
Prior service cost	0.5		0.5		—		0.1		0.2		(0.3)
Recognized net actuarial loss	14.7		9.8		11.1		0.4		0.1		—
Settlement and special termination benefits	30.4		22.5		12.5		—		—		—
Net periodic benefit costs before regulatory adjustment and intercompany allocations	61.3		36.9		33.7		1.0		0.1		0.4
Regulatory adjustment	(20.1)		(22.6)		(7.1)		(1.2)		(0.9)		0.1
Intercompany allocations	—		1.0		(6.8)		—		0.1		(0.1)
Net periodic benefit costs (income)	$	41.2	$	15.3	$	19.8	$	(0.2)	$	(0.7)	$	0.4

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	Pension Benefits						Post-Retirement Benefits
Year to Date September 30, 2021	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Components of net periodic benefit costs	(millions)
Service cost	$	63.3	$	22.3	$	41.0	$	2.5	$	1.2	$	1.3
Interest cost	63.8		31.0		32.3		5.9		3.0		2.9
Expected return on plan assets	(80.1)		(40.7)		(43.1)		(6.7)		(4.7)		(2.0)
Prior service cost	1.5		1.5		—		0.4		0.4		(0.8)
Recognized net actuarial (gain)/loss	44.2		29.1		33.4		1.0		0.4		(0.1)
Settlement and special termination benefits	30.4		22.5		12.5		—		—		—
Net periodic benefit costs before regulatory adjustment and intercompany allocations	123.1		65.7		76.1		3.1		0.3		1.3
Regulatory adjustment	(6.4)		(23.4)		(2.5)		(3.7)		(2.5)		0.2
Intercompany allocations	—		2.2		(19.0)		—		0.1		(0.3)
Net periodic benefit costs (income)	$	116.7	$	44.5	$	54.6	$	(0.6)	$	(2.1)	$	1.2


	Pension Benefits						Post-Retirement Benefits
Three Months Ended September 30, 2020	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Components of net periodic benefit costs	(millions)
Service cost	$	20.1	$	6.8	$	13.3	$	0.7	$	0.3	$	0.4
Interest cost	24.0		11.7		12.1		2.3		1.2		1.1
Expected return on plan assets	(26.3)		(13.3)		(13.5)		(2.4)		(1.7)		(0.7)
Prior service cost	0.4		0.4		0.2		0.1		0.1		—
Recognized net actuarial (gain)/loss	12.1		8.5		11.6		0.1		—		(0.1)
Settlement and special termination benefits	10.0		—		12.7		—		—		—
Net periodic benefit costs before regulatory adjustment and intercompany allocations	40.3		14.1		36.4		0.8		(0.1)		0.7
Regulatory adjustment	(0.4)		0.4		(11.3)		(1.0)		(0.7)		(0.2)
Intercompany allocations	—		1.6		(5.8)		—		0.1		(0.1)
Net periodic benefit costs (income)	$	39.9	$	16.1	$	19.3	$	(0.2)	$	(0.7)	$	0.4


	Pension Benefits						Post-Retirement Benefits
Year to Date September 30, 2020	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Components of net periodic benefit costs	(millions)
Service cost	$	59.2	$	20.4	$	38.8	$	2.1	$	0.9	$	1.2
Interest cost	72.9		35.2		37.1		6.9		3.6		3.3
Expected return on plan assets	(79.7)		(39.9)		(41.5)		(7.0)		(5.0)		(2.0)
Prior service cost	1.3		1.2		0.6		0.3		0.3		—
Recognized net actuarial (gain)/loss	34.8		25.4		34.2		0.2		—		(0.4)
Settlement and special termination benefits	10.0		—		12.7		—		—		—
Net periodic benefit costs before regulatory adjustment and intercompany allocations	98.5		42.3		81.9		2.5		(0.2)		2.1
Regulatory adjustment	18.6		1.1		(9.2)		(2.9)		(2.1)		(0.3)
Intercompany allocations	—		(0.1)		(17.0)		—		0.1		(0.1)
Net periodic benefit costs (income)	$	117.1	$	43.3	$	55.7	$	(0.4)	$	(2.2)	$	1.7

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The components of net periodic benefit costs other than the service cost component are included in other expense on the Evergy Companies' consolidated statements of income and comprehensive income.

Year to date September 30, 2021, Evergy, Evergy Kansas Central and Evergy Metro made pension contributions of $41.7 million, $26.2 million and $15.5 million, respectively. Evergy expects to make additional pension contributions of $68.2 million in 2021 to satisfy the Employee Retirement Income Security Act of 1974, as amended (ERISA) funding requirements and KCC and MPSC rate orders, of which $11.1 million is expected to be paid by Evergy Kansas Central and $57.1 million is expected to be paid by Evergy Metro.

Year to date September 30, 2021, Evergy, Evergy Kansas Central and Evergy Metro made post-retirement benefit contributions of $1.2 million, $0.6 million and $0.6 million, respectively. Evergy, Evergy Kansas Central and Evergy Metro expect to make additional contributions in 2021 of $3.7 million, $0.5 million and $3.2 million, respectively, to the post-retirement benefit plans.

7. SHORT-TERM BORROWINGS AND SHORT-TERM BANK LINES OF CREDIT

In August 2021, Evergy amended and restated its $2.5 billion master credit facility and extended the maturity until 2026. Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West have borrowing capacity under the master credit facility with specific sublimits for each borrower. These sublimits can be unilaterally adjusted by Evergy for each borrower provided the sublimits remain within minimum and maximum sublimits as specified in the facility. Evergy adjusted these sublimits in the first quarter of 2021 as further detailed in the table below. The applicable interest rates and commitment fees of the facility are subject to upward or downward adjustments, within certain limitations, if Evergy achieves, or fails to achieve, certain sustainability-linked targets based on two key performance indicator metrics: (i) Non-Emitting Generation Capacity and (ii) Diverse Supplier Spend (as defined in the facility).

A default by any borrower under the facility or one of its significant subsidiaries on other indebtedness totaling more than $100.0 million constitutes a default by that borrower under the facility. Under the terms of this facility, each of Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West is required to maintain a total indebtedness to total capitalization ratio, as defined in the facility, of not greater than 0.65 to 1.00 at all times. As of September 30, 2021, Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West were in compliance with this covenant.

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The following table summarizes the committed credit facilities (excluding receivable sale facilities discussed in Note 3) available to the Evergy Companies as of September 30, 2021 and December 31, 2020.


			Amounts Drawn
	Master Credit Facility		Commercial Paper		Letters of Credit		Cash Borrowings		Available Borrowings		Weighted Average Interest Rate on Short-Term Borrowings
September 30, 2021	(millions)
Evergy, Inc.	$	700.0	$	289.0	$	0.7	$	—	$	410.3	0.21%
Evergy Kansas Central	750.0		236.0		0.1		—		513.9		0.19%
Evergy Metro	350.0		—		—		—		350.0		—%
Evergy Missouri West	700.0		95.5		—		—		604.5		0.17%
Evergy	$	2,500.0	$	620.5	$	0.8	$	—	$	1,878.7

December 31, 2020
Evergy, Inc.	$	450.0	n/a		$	0.7	$	200.0	$	249.3	1.40%
Evergy Kansas Central	1,000.0		50.0		17.0		—		933.0		0.23%
Evergy Metro	600.0		—		—		—		600.0		—%
Evergy Missouri West	450.0		65.0		2.0		—		383.0		0.36%
Evergy	$	2,500.0	$	115.0	$	19.7	$	200.0	$	2,165.3

In May 2021, Evergy, Inc. established a commercial paper program supported by its borrowing capacity under the master credit facility.

8. LONG-TERM DEBT

Senior Notes

In April 2021, Evergy Missouri West issued in a private placement $350.0 million of 2.86% Series A Senior Notes, maturing in 2031, $75.0 million of 3.01% Series B Senior Notes, maturing in 2033, and $75.0 million of 3.21% Series C Senior Notes, maturing in 2036, pursuant to a note purchase agreement. In connection with the issuance, Evergy entered into an agreement to provide an unconditional guaranty of the Series A, B and C Senior Notes, and as required by certain existing note purchase agreements, also agreed to provide unconditional guaranty of the following series of outstanding Evergy Missouri West unsecured senior notes:

•$36.0 million of 3.49% Series A, maturing in 2025;

•$60.0 million of 4.06% Series B, maturing in 2033;

•$150.0 million of 4.74% Series C, maturing in 2043; and

•$100.0 million of 3.74% Series, maturing in 2022.

In April 2021, Evergy redeemed its $350.0 million of 4.85% Senior Notes, which had a maturity date of June 2021.

9. FAIR VALUE MEASUREMENTS

Values of Financial Instruments

GAAP establishes a hierarchical framework for disclosing the transparency of the inputs utilized in measuring assets and liabilities at fair value. Management's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of assets and liabilities within the fair value hierarchy levels. In addition, the Evergy Companies measure certain investments that do not have a readily determinable fair value at net asset value (NAV), which are not included in the fair value hierarchy. Further explanation of these levels and NAV is summarized below.

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Level 1 – Quoted prices are available in active markets for identical assets or liabilities. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on public exchanges.

Level 2 – Pricing inputs are not quoted prices in active markets but are either directly or indirectly observable. The types of assets and liabilities included in Level 2 are certain marketable debt securities, financial instruments traded in less than active markets or other financial instruments priced with models using highly observable inputs.

Level 3 – Significant inputs to pricing have little or no transparency. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation.

NAV - Investments that do not have a readily determinable fair value are measured at NAV. These investments do not consider the observability of inputs and, therefore, they are not included within the fair value hierarchy. The Evergy Companies include in this category investments in private equity, real estate and alternative investment funds that do not have a readily determinable fair value. The underlying alternative investments include collateralized debt obligations, mezzanine debt and a variety of other investments.

The Evergy Companies record cash and cash equivalents, accounts receivable and short-term borrowings on their consolidated balance sheets at cost, which approximates fair value due to the short-term nature of these instruments.

Fair Value of Long-Term Debt

The Evergy Companies measure the fair value of long-term debt using Level 2 measurements available as of the measurement date. The book value and fair value of the Evergy Companies' long-term debt and long-term debt of variable interest entities is summarized in the following table.



	September 30, 2021				December 31, 2020
	Book Value		Fair Value		Book Value		Fair Value
Long-term debt(a)	(millions)
Evergy(b)	$	9,768.7	$	10,967.0	$	9,627.3	$	11,274.2
Evergy Kansas Central	3,933.5		4,552.9		3,931.5		4,801.7
Evergy Metro	2,924.5		3,440.2		2,923.0		3,591.2
Long-term debt of variable interest entities(a)
Evergy	$	—	$	—	$	18.8	$	19.1
Evergy Kansas Central	—		—		18.8		19.1

(a) Includes current maturities.

(b) Book value as of September 30, 2021 and December 31, 2020, includes $100.3 million and $110.4 million, respectively, of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger, which are not part of future principal payments and will amortize over the remaining life of the associated debt instrument.

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Recurring Fair Value Measurements

The following tables include the Evergy Companies' balances of financial assets and liabilities measured at fair value on a recurring basis.


Description	September 30, 2021			Level 1		Level 2			Level 3			NAV
Evergy Kansas Central		(millions)
Assets
Nuclear decommissioning trust(a)
Domestic equity funds		$	131.1	$	118.7		$	—		$	—		$	12.4
International equity funds		71.6		71.6			—			—			—
Core bond fund		57.7		57.7			—			—			—
High-yield bond fund		29.3		29.3			—			—			—
Emerging markets bond fund		17.9		17.9			—			—			—

Alternative investments fund		31.5		—			—			—			31.5
Real estate securities fund		14.1		—			—			—			14.1
Cash equivalents		0.6		0.6			—			—			—

Total nuclear decommissioning trust		353.8		295.8			—			—			58.0
Rabbi trust
Fixed income funds		19.7		19.7			—			—			—
Equity funds		9.4		9.4			—			—			—
Combination debt/equity/other fund		2.4		2.4			—			—			—
Cash equivalents		0.1		0.1			—			—			—
Total rabbi trust		31.6		31.6			—			—			—
Total		$	385.4	$	327.4		$	—		$	—		$	58.0
Evergy Metro
Assets
Nuclear decommissioning trust(a)
Equity securities		$	278.0	$	278.0		$	—		$	—		$	—
Debt securities
U.S. Treasury		47.3		47.3			—			—			—
U.S. Agency		0.4		—			0.4			—			—
State and local obligations		4.0		—			4.0			—			—
Corporate bonds		44.5		—			44.5			—			—
Foreign governments		0.1		—			0.1			—			—
Cash equivalents		3.2		3.2			—			—			—
Other		0.7		—			0.7			—			—
Total nuclear decommissioning trust		378.2		328.5			49.7			—			—
Self-insured health plan trust(b)
Equity securities		1.9		1.9			—			—			—
Debt securities		8.9		2.7			6.2			—			—
Cash and cash equivalents		3.1		3.1			—			—			—
Total self-insured health plan trust		13.9		7.7			6.2			—			—
Total		$	392.1	$	336.2		$	55.9		$	—		$	—
Other Evergy
Assets
Rabbi trusts
Core bond fund		$	12.5	$	12.5		$	—		$	—		$	—

Total rabbi trusts		$	12.5	$	12.5		$	—		$	—		$	—



Evergy
Assets
Nuclear decommissioning trust(a)		$	732.0	$	624.3		$	49.7		$	—		$	58.0
Rabbi trusts		44.1		44.1			—			—			—
Self-insured health plan trust(b)		13.9		7.7			6.2			—			—
Total		$	790.0	$	676.1		$	55.9		$	—		$	58.0

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Description	December 31, 2020			Level 1			Level 2			Level 3			NAV
Evergy Kansas Central		(millions)
Assets
Nuclear decommissioning trust(a)
Domestic equity funds		$	102.7		$	95.1		$	—		$	—		$	7.6
International equity funds		63.8			63.8			—			—			—
Core bond fund		40.6			40.6			—			—			—
High-yield bond fund		25.0			25.0			—			—			—
Emerging markets bond fund		21.0			21.0			—			—			—
Combination debt/equity/other fund		20.1			20.1			—			—			—
Alternative investments fund		23.2			—			—			—			23.2
Real estate securities fund		12.9			—			—			—			12.9
Cash equivalents		0.5			0.5			—			—			—
Total nuclear decommissioning trust		309.8			266.1			—			—			43.7
Rabbi trust
Core bond fund		25.6			—			—			—			25.6
Combination debt/equity/other fund		7.1			—			—			—			7.1

Total rabbi trust		32.7			—			—			—			32.7
Total		$	342.5		$	266.1		$	—		$	—		$	76.4
Evergy Metro
Assets
Nuclear decommissioning trust(a)
Equity securities		$	243.1		$	243.1		$	—		$	—		$	—
Debt securities
U.S. Treasury		47.7			47.7			—			—			—
U.S. Agency		0.5			—			0.5			—			—
State and local obligations		4.1			—			4.1			—			—
Corporate bonds		43.1			—			43.1			—			—
Foreign governments		0.1			—			0.1			—			—
Cash equivalents		3.2			3.2			—			—			—
Other		0.5			0.5			—			—			—
Total nuclear decommissioning trust		342.3			294.5			47.8			—			—
Self-insured health plan trust(b)
Equity securities		1.7			1.7			—			—			—
Debt securities		8.0			2.8			5.2			—			—
Cash and cash equivalents		3.5			3.5			—			—			—
Total self-insured health plan trust		13.2			8.0			5.2			—			—
Total		$	355.5		$	302.5		$	53.0		$	—		$	—
Other Evergy
Assets
Rabbi trusts
Fixed income fund		$	13.1		$	—		$	—		$	—		$	13.1
Cash and cash equivalents		0.5			0.5			—			—			—
Total rabbi trusts		$	13.6		$	0.5		$	—		$	—		$	13.1



Evergy
Assets
Nuclear decommissioning trust(a)		$	652.1		$	560.6		$	47.8		$	—		$	43.7
Rabbi trust		46.3			0.5			—			—			45.8
Self-insured health plan trust(b)		13.2			8.0			5.2			—			—
Total		$	711.6		$	569.1		$	53.0		$	—		$	89.5

(a)With the exception of investments measured at NAV, fair value is based on quoted market prices of the investments held by the trust and/or valuation models.

(b)Fair value is based on quoted market prices of the investments held by the trust. Debt securities classified as Level 1 are comprised of U.S. Treasury securities. Debt securities classified as Level 2 are comprised of corporate bonds, U.S. Agency, state and local obligations, and other asset-backed securities.

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Certain Evergy and Evergy Kansas Central investments included in the table above are measured at NAV as they do not have readily determinable fair values. In certain situations, these investments may have redemption restrictions.

The following table provides additional information on these Evergy and Evergy Kansas Central investments.


	September 30, 2021				December 31, 2020				September 30, 2021
	Fair		Unfunded		Fair		Unfunded		Redemption	Length of
	Value		Commitments		Value		Commitments		Frequency	Settlement
Evergy Kansas Central	(millions)
Nuclear decommissioning trust:
Domestic equity funds	$	12.4	$	1.7	$	7.6	$	2.2	(a)	(a)
Alternative investments fund(b)	31.5		—		23.2		—		Quarterly	65 days
Real estate securities fund(b)	14.1		—		12.9		—		Quarterly	65 days
Total	$	58.0	$	1.7	$	43.7	$	2.2
Rabbi trust:
Core bond fund	$	—	$	—	$	25.6	$	—	(c)	(c)
Combination debt/equity/other fund	—		—		7.1		—		(c)	(c)
Total	$	—	$	—	$	32.7	$	—
Other Evergy
Rabbi trust:
Fixed income fund	$	—	$	—	$	13.1	$	—	(c)	(c)
Total Evergy investments at NAV	$	58.0	$	1.7	$	89.5	$	2.2

(a)This investment is in five long-term private equity funds that do not permit early withdrawal. Investments in these funds cannot be distributed until the underlying investments have been liquidated, which may take years from the date of initial liquidation. Three funds have begun to make distributions. The initial investment in the fourth and fifth funds occurred in 2016 and 2018, respectively. The fourth fund's term is 15 years, subject to the general partner's right to extend the term for up to three additional one-year periods. The fifth fund's term is 15 years, subject to additional extensions approved by a fund advisory committee to provide for an orderly liquidation of fund investments and dissolution of the fund.

(b)There is a holdback on final redemptions.

(c)This investment can be redeemed immediately and is not subject to any restrictions on redemptions.

The Evergy Companies hold equity and debt investments classified as securities in various trusts including for the purposes of funding the decommissioning of Wolf Creek and for the benefit of certain retired executive officers of Evergy Kansas Central. The Evergy Companies record net realized and unrealized gains and losses on the nuclear decommissioning trusts in regulatory liabilities on their consolidated balance sheets and record net realized and unrealized gains and losses on the Evergy Companies' rabbi trusts in the consolidated statements of income and comprehensive income.

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The following table summarizes the net unrealized gains (losses) for the Evergy Companies' nuclear decommissioning trusts and rabbi trusts.


	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Evergy	(millions)
Nuclear decommissioning trust - equity securities	$	1.0	$	27.5	$	68.8	$	(8.5)
Nuclear decommissioning trust - debt securities	(0.6)		0.1		(4.0)		5.4
Rabbi trusts - equity securities	(0.1)		0.8		(0.4)		1.6
Total	$	0.3	$	28.4	$	64.4	$	(1.5)
Evergy Kansas Central
Nuclear decommissioning trust - equity securities	$	5.3	$	16.2	$	36.9	$	0.2
Rabbi trust - equity securities	(0.1)		0.6		(0.1)		1.1
Total	$	5.2	$	16.8	$	36.8	$	1.3
Evergy Metro
Nuclear decommissioning trust - equity securities	$	(4.3)	$	11.3	$	31.9	$	(8.7)
Nuclear decommissioning trust - debt securities	(0.6)		0.1		(4.0)		5.4
Total	$	(4.9)	$	11.4	$	27.9	$	(3.3)

10. COMMITMENTS AND CONTINGENCIES

Environmental Matters

Set forth below are descriptions of contingencies related to environmental matters that may impact the Evergy Companies' operations or their financial results. Management's assessment of these contingencies, which are based on federal and state statutes and regulations, and regulatory agency and judicial interpretations and actions, has evolved over time. These laws, regulations, interpretations and actions can also change, restrict or otherwise impact the Evergy Companies' operations or financial results. The failure to comply with these laws, regulations, interpretations and actions could result in the assessment of administrative, civil and criminal penalties and the imposition of remedial requirements. The Evergy Companies believe that all their operations are in substantial compliance with current federal, state and local environmental standards.

There are a variety of final and proposed laws and regulations that could have a material adverse effect on the Evergy Companies' operations and consolidated financial results. Due in part to the complex nature of environmental laws and regulations, the Evergy Companies are unable to assess the impact of potential changes that may develop with respect to the environmental contingencies described below.

Cross-State Air Pollution Update Rule

In September 2016, the Environmental Protection Agency (EPA) finalized the Cross-State Air Pollution (CSAPR) Update Rule. The final rule addresses interstate transport of nitrogen oxides emissions in 22 states including Kansas, Missouri and Oklahoma during the ozone season and the impact from the formation of ozone on downwind states with respect to the 2008 ozone National Ambient Air Quality Standards (NAAQS). In December 2018, the EPA finalized a determination, known as the CSAPR Close-Out Rule, demonstrating the CSAPR Update Rule fully addressed certain upwind states' 2008 ozone NAAQS interstate transport obligations. Various states and others challenged both the CSAPR Update Rule and the CSAPR Close-Out Rule in the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit). In 2019, the D.C. Circuit granted these petitions and remanded a portion of the CSAPR Update Rule back to the EPA and vacated the CSAPR Close-Out Rule in its entirety.

In response to the remand by the D.C. Circuit, the EPA published the final Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS in April 2021. The final rule finds that nine of the states that were subject to the CSAPR Update Rule do not significantly contribute to downwind states' nonattainment or maintenance issues during the ozone season and that there are no further reductions in allowance budgets for these states. These nine states are Alabama, Arkansas, Iowa, Kansas, Mississippi, Missouri, Oklahoma, Texas and Wisconsin. The Evergy

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Companies will continue to monitor this rule as any future changes to their NOx ozone season allowance allocations could be material.

Regional Haze Rule

In 1999, the EPA finalized the Regional Haze Rule which aims to restore national parks and wilderness areas to pristine conditions. The rule requires states in coordination with the EPA, the National Park Service, the U.S. Fish and Wildlife Service, the U.S. Forest Service, and other interested parties to develop and implement air quality protection plans to reduce the pollution that causes visibility impairment. There are 156 "Class I" areas across the U.S. that must be restored to pristine conditions by the year 2064. There are no Class I areas in Kansas, whereas Missouri has two: the Hercules-Glades Wilderness Area and the Mingo Wilderness Area. States must submit revisions to their Regional Haze Rule state implementation plans (SIPs) every ten years and the first round was due in 2007. For the second ten-year implementation period, the EPA issued a final rule revision in 2017 that allowed states to submit their SIP revisions by July 31, 2021. The Evergy Companies have been in contact with the Kansas Department of Health and Environmental (KDHE) and the Missouri Department of Natural Resources (MDNR) as they worked to draft their SIP revisions. The Missouri SIP revision is still being drafted. MDNR has indicated they intend to submit the Missouri SIP revision in early 2022 which will not require any additional reductions from the Evergy Companies' generating units in the state. The Kansas SIP revision was placed on public notice in June 2021 and requested no additional emission reductions by electric utilities based on the significant reductions that were achieved during the first implementation period. The EPA provided comments on the Kansas SIP revision in June 2021 that each state is statutorily required to conduct a "four-factor analysis" on at least two sources within the state to help determine if further emission reductions are necessary. The EPA also stated it would be difficult to approve the Kansas SIP revision if at least two four-factor analyses are not conducted on Kansas emission sources. These sources could be from the electric utility industry or others. KDHE submitted the Kansas SIP revision in July 2021. If a Kansas generating unit of the Evergy Companies is selected for analysis, the possibility exists that the state or EPA, through a federal implementation plan could determine that additional operational or physical modifications are required on the generating unit to further reduce emissions. If the EPA were to determine the emission reduction expenses are cost effective, the modifications could be required. The overall cost of those modifications could be material to the Evergy Companies.

Greenhouse Gases

Burning coal and other fossil fuels releases carbon dioxide (CO2) and other gases referred to as greenhouse gases (GHG). Various regulations under the federal Clean Air Act Amendments of 1990 (CAA) limit CO2 and other GHG emissions, and in addition, other measures are being imposed or offered by individual states, municipalities and regional agreements with the goal of reducing GHG emissions.

In July 2019, the EPA published the final Affordable Clean Energy (ACE) rule in the Federal Register. This rule contained (1) emission guidelines for GHG emissions from existing electric utility generating units (EGUs) and (2) revisions to emission guideline implementing regulations. This rule defined the "best system of emission reduction" (BSER) for GHG emissions from existing coal-fired EGUs as on-site, heat-rate efficiency improvements. The final rule also provided states with a list of candidate technologies that can be used to establish standards of performance and incorporate these performance standards into state plans. In conjunction with the finalization of the ACE rule, the EPA repealed its previously adopted Clean Power Plan (CPP). In January 2021, the D.C. Circuit vacated and remanded the ACE rule back to the EPA. In February 2021, the D.C. Circuit granted a motion filed by the EPA for a partial stay of its January 2021 vacatur discussed above. The partial stay leaves the vacatur of the ACE rule in place while staying the mandate that vacates the repeal of the CPP. As a result of the partial stay, neither the ACE rule nor the CPP will be in effect while the EPA forms a new rule to regulate GHG emissions. In April 2021, 18 states filed a petition for a writ of certiorari to the Supreme Court requesting review of the D.C. Circuit ruling. In October 2021, the Supreme Court granted petitions for certiorari to review the D.C. Circuit decision to vacate and remand the ACE rule.

Due to uncertainty regarding the future of the ACE rule or other potential GHG regulations, the Evergy Companies cannot determine the impacts on their operations or consolidated financial results, but the cost to comply with the ACE rule or other potential GHG rules, could be material.

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Water

The Evergy Companies discharge some of the water used in generation and other operations containing substances deemed to be pollutants. A November 2015 EPA rule applicable to steam-electric power generating plants establishes effluent limitations guidelines (ELG) and standards for wastewater discharges, including limits on the amount of toxic metals and other pollutants that can be discharged. Implementation timelines for this 2015 rule vary from 2018 to 2023. In April 2019, the U.S. Court of Appeals for the 5th Circuit (5th Circuit) issued a ruling that vacated and remanded portions of the original ELG rule. Due to this ruling, the EPA announced a plan in July 2021 to release a proposed rulemaking in September 2022 to address the vacated limitations for legacy wastewater and landfill leachate. Future ELG modifications for the best available technology economically achievable for the discharge of legacy wastewater and leachate are likely and could be material.

In October 2020, the EPA published the final ELG reconsideration rule. This rule adjusts numeric limits for flue gas desulfurization (FGD) wastewater and adds a 10% volumetric purge limit for bottom ash transport water. The timeline for final FGD wastewater compliance is as soon as possible on or after one year following publication of the final rule in the Federal Register but no later than December 31, 2025. In August 2021, the EPA published notice in the Federal Register that it is initiating a supplemental rulemaking to revise the ELG regulations after completing review of the reconsideration rule as a result of an executive order from President Biden. As part of the rulemaking process, the EPA will determine if more stringent limitations and standards are appropriate. The 2020 ELG reconsideration rules will remain in effect while the EPA undertakes this new rulemaking.

The Evergy Companies have reviewed the 2020 ELG reconsideration regulation, and the costs to comply with these changes are not expected to be material. However, the Evergy Companies cannot predict what revisions the EPA may make under its supplemental rulemaking to revise the ELG regulations and compliance costs associated with any revisions could be material.

In July 2021, the EPA and the Department of the Army released a pre-publication version of a notice announcing their intent to revise the definition of "Waters of the United States." After reviewing the Navigable Waters Protection Rule as directed by President Biden's administration, the EPA and Department of the Army have determined a need to revise the definition to prevent environmental degradation. The Evergy Companies cannot predict the outcome of any new rulemaking but will be monitoring proposals on this topic for any impact to operations.

Regulation of Coal Combustion Residuals

In the course of operating their coal generation plants, the Evergy Companies produce coal combustion residuals (CCRs), including fly ash, gypsum and bottom ash. The EPA published a rule to regulate CCRs in April 2015 that requires additional CCR handling, processing and storage equipment and closure of certain ash disposal units.

In March 2019, the D.C. Circuit issued a ruling to grant the EPA's request to remand the Phase I, Part I CCR rule in response to a prior court ruling requiring the EPA to address un-lined surface impoundment closure requirements. In August 2020, the EPA published the Part A CCR Rule. This rule reclassified clay-lined surface impoundments from "lined" to "un-lined" and established a deadline of April 11, 2021 to initiate closure. In November 2020, the EPA published the final Part B CCR Rule. This rule includes a process to allow un-lined impoundments to continue to operate if a demonstration is made to prove that the un-lined impoundments are not adversely impacting groundwater, human health or the environment. The Evergy Companies initiated closure of all un-lined impoundments by the deadline in the Part A CCR rule and therefore the Part B CCR rule is not expected to have a material impact.

The Evergy Companies have recorded AROs for their current estimates for the closure of ash disposal ponds, but the revision of these AROs may be required in the future due to changes in existing CCR regulations, the results of groundwater monitoring of CCR units or changes in interpretation of existing CCR regulations or changes in the timing or cost to close ash disposal ponds. If revisions to these AROs are necessary, the impact on the Evergy Companies' operations or consolidated financial results could be material.

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11. RELATED PARTY TRANSACTIONS AND RELATIONSHIPS

In the normal course of business, Evergy Kansas Central, Evergy Metro and Evergy Missouri West engage in related party transactions with one another. A summary of these transactions and the amounts associated with them is provided below.

Jointly-Owned Plants and Shared Services

Employees of Evergy Kansas Central and Evergy Metro manage Evergy Missouri West's business and operate its facilities at cost, including Evergy Missouri West's 18% ownership interest in Evergy Metro's Iatan Nos. 1 and 2. Employees of Evergy Kansas Central manage Jeffrey Energy Center (JEC) and operate its facilities at cost, including Evergy Missouri West's 8% ownership interest in JEC. Employees of Evergy Metro manage La Cygne Station and operate its facilities at cost, including Evergy Kansas Central's 50% interest in La Cygne Station. Employees of Evergy Metro and Evergy Kansas Central also provide one another with shared service support, including costs related to human resources, information technology, accounting and legal services.

The operating expenses and capital costs billed for jointly-owned plants and shared services are detailed in the following table.


	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
	(millions)
Evergy Kansas Central billings to Evergy Missouri West	$	7.3	$	13.1	$	24.1	$	27.4
Evergy Metro billings to Evergy Missouri West	35.4		46.5		103.2		121.8
Evergy Kansas Central billings to Evergy Metro	5.4		5.4		22.4		24.9
Evergy Metro billings to Evergy Kansas Central	36.9		26.9		90.8		94.5

Money Pool

Evergy Kansas Central, Evergy Metro and Evergy Missouri West are authorized to participate in the Evergy, Inc. money pool, which is an internal financing arrangement in which funds may be lent on a short-term basis between Evergy Kansas Central, Evergy Metro, Evergy Missouri West and Evergy, Inc. Evergy, Inc. can lend but not borrow under the money pool. The Evergy, Inc. money pool was amended in July 2021 to include Evergy Kansas Central as a participant.

At September 30, 2021, Evergy Metro had a $238.0 million outstanding receivable from Evergy Missouri West under the money pool. At December 31, 2020, Evergy Metro had a $100.0 million outstanding receivable from Evergy Missouri West under the money pool.

Related Party Net Receivables and Payables

The following table summarizes Evergy Kansas Central's and Evergy Metro's related party net receivables and payables.


	September 30		December 31

	2021		2020
Evergy Kansas Central	(millions)
Net receivable from Evergy	$	4.0	$	0.1
Net payable to Evergy Metro	(15.6)		(21.7)
Net receivable from Evergy Missouri West	8.4		6.6

Evergy Metro
Net receivable from Evergy	$	15.8	$	15.7
Net receivable from Evergy Kansas Central	15.6		21.7
Net receivable from Evergy Missouri West	335.7		188.1

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Tax Allocation Agreement

Evergy files a consolidated federal income tax return as well as unitary and combined income tax returns in several state jurisdictions with Kansas and Missouri being the most significant. Income taxes for consolidated or combined subsidiaries are allocated to the subsidiaries based on separate company computations of income or loss. The following table summarizes Evergy Kansas Central's and Evergy Metro's income taxes receivable from Evergy.


	September 30		December 31

	2021		2020
Evergy Kansas Central	(millions)
Income taxes receivable from Evergy	$	14.7	$	25.3

Evergy Metro
Income taxes receivable from Evergy	$	43.0	$	3.2

Leases

Evergy Metro leases certain transmission equipment from Evergy Kansas Central. This lease was entered into prior to the merger in an arms-length transaction and is accounted for as an operating lease. The right-of-use asset related to this lease is recorded within other long-term assets and the current and long-term lease liabilities are recorded within other current liabilities and other long-term liabilities, respectively, on the consolidated balance sheet. The assets and liabilities related to this lease between Evergy Kansas Central and Evergy Metro are eliminated at consolidated Evergy. The following table summarizes Evergy Metro's right-of-use assets and related liabilities on its consolidated balance sheet.


	September 30		December 31

	2021		2020
Evergy Metro	(millions)
Right-of-use asset recorded within other long-term assets	$	28.4	$	28.9
Lease liability recorded in other current liabilities	0.7		0.7
Lease liability recorded in other long-term liabilities	27.7		28.2

12. SHAREHOLDERS' EQUITY

Bluescape Energy Partners, LLC (Bluescape) Securities Purchase Agreement

In February 2021, Evergy entered into a securities purchase agreement with an affiliate of Bluescape. Pursuant to the securities purchase agreement, an affiliate of Bluescape agreed to purchase 2,269,447 shares of Evergy’s common stock for approximately $113.2 million and to receive a warrant to purchase up to 3,950,000 additional shares of Evergy’s common stock. Under the terms of the warrant, Evergy will have the option to elect a net cash settlement with respect to the exercise of the warrant under certain circumstances, or to net settle in shares of Evergy's common stock. The warrant expires three years from issuance and has an exercise price equal to $64.70 per share. Following the satisfaction of customary closing conditions, Evergy completed the sale of its common stock and warrant to the affiliate of Bluescape in April 2021 for $112.5 million, net of issuance costs of $0.7 million. The Executive Chairman of Bluescape, C. John Wilder, joined the Evergy Board in March 2021.

Evergy Registration Statements

In September 2021, Evergy filed an automatic registration statement providing for the sale of unlimited amounts of securities with the SEC, which expires in September 2024.

In September 2021, Evergy registered shares of its common stock with the SEC for its Dividend Reinvestment and Direct Stock Purchase Plan. Shares issued under the plan may be either newly issued shares or shares purchased on the open market.

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13. TAXES

Components of income tax expense are detailed in the following tables.


Evergy
	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Current income taxes	(millions)
Federal	$	(6.5)	$	(16.4)	$	(0.5)	$	(35.0)
State	2.2		(0.4)		1.7		(7.7)
Total	(4.3)		(16.8)		1.2		(42.7)
Deferred income taxes
Federal	61.3		46.6		94.0		83.4
State	1.6		21.5		8.6		57.7
Total	62.9		68.1		102.6		141.1





Investment tax credit
Deferral	—		—		0.4		—
Amortization	(1.4)		(1.3)		(4.4)		(4.6)
Total	(1.4)		(1.3)		(4.0)		(4.6)
Income tax expense	$	57.2	$	50.0	$	99.8	$	93.8


Evergy Kansas Central
	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Current income taxes	(millions)
Federal	$	25.6	$	(4.6)	$	45.1	$	7.5
State	1.1		(6.4)		2.6		(13.3)
Total	26.7		(11.0)		47.7		(5.8)
Deferred income taxes
Federal	(3.6)		17.9		(2.6)		(10.7)
State	0.6		16.6		3.5		169.4
Total	(3.0)		34.5		0.9		158.7







Investment tax credit
Deferral	—		—		0.4		—
Amortization	(1.1)		(1.0)		(3.3)		(3.7)
Total	(1.1)		(1.0)		(2.9)		(3.7)
Income tax expense	$	22.6	$	22.5	$	45.7	$	149.2

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Evergy Metro
	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Current income taxes	(millions)
Federal	$	(24.2)	$	(8.9)	$	23.9	$	(8.4)
State	2.0		9.5		3.2		10.5
Total	(22.2)		0.6		27.1		2.1
Deferred income taxes
Federal	49.5		22.2		18.5		38.9
State	(0.4)		2.6		(0.8)		(35.1)
Total	49.1		24.8		17.7		3.8


Investment tax credit amortization	(0.4)		(0.3)		(1.1)		(0.8)

Income tax expense	$	26.5	$	25.1	$	43.7	$	5.1

Effective Income Tax Rates

Effective income tax rates reflected in the financial statements and the reasons for their differences from the statutory federal rates are detailed in the following tables.


Evergy
	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Federal statutory income tax rate	21.0	%	21.0	%	21.0	%	21.0	%
Effect of:
COLI policies	(1.0)		(1.6)		(1.0)		(1.6)
State income taxes	0.5		3.5		0.8		3.4
Flow through depreciation for plant-related differences	(5.7)		(4.9)		(5.9)		(4.8)
Federal tax credits	(3.1)		(4.6)		(3.1)		(4.6)
Non-controlling interest	(0.3)		(0.3)		(0.3)		(0.3)
AFUDC equity	(0.6)		(0.2)		(0.6)		(0.3)
Amortization of federal investment tax credits	(0.4)		(0.7)		(0.4)		(0.7)

State tax rate change	—		—		—		2.0
Valuation allowance	—		(0.4)		—		(0.2)
Stock compensation	—		—		—		(0.1)
Officer compensation limitation	0.5		0.2		0.5		0.2
Other	0.3		—		(0.3)		—
Effective income tax rate	11.2	%	12.0	%	10.7	%	14.0	%

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Evergy Kansas Central
	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Federal statutory income tax rate	21.0	%	21.0	%	21.0	%	21.0	%
Effect of:
COLI policies	(1.7)		(2.9)		(1.7)		(2.9)
State income taxes	0.5		2.3		0.8		2.9
Flow through depreciation for plant-related differences	(3.6)		(0.4)		(3.7)		(0.2)
Federal tax credits	(5.2)		(6.8)		(5.2)		(6.8)
Non-controlling interest	(0.5)		(0.7)		(0.5)		(0.6)
AFUDC equity	(0.5)		0.1		(0.6)		(0.4)
Amortization of federal investment tax credits	(0.5)		(1.1)		(0.5)		(1.0)

State tax rate change	—		—		—		32.0

Stock compensation	—		—		(0.1)		(0.1)
Officer compensation limitation	0.4		—		0.3		—
Other	0.2		—		(0.8)		—
Effective income tax rate	10.1	%	11.5	%	9.0	%	43.9	%


Evergy Metro
	Three Months Ended September 30				Year to Date September 30
	2021		2020		2021		2020
Federal statutory income tax rate	21.0	%	21.0	%	21.0	%	21.0	%
Effect of:
COLI policies	(0.1)		(0.2)		(0.2)		(0.2)
State income taxes	0.6		5.5		0.6		4.5
Flow through depreciation for plant-related differences	(7.8)		(9.1)		(8.0)		(9.1)
Federal tax credits	(0.6)		(2.4)		(0.6)		(2.4)
AFUDC equity	(0.7)		(0.5)		(0.7)		(0.3)
Amortization of federal investment tax credits	(0.4)		(0.4)		(0.4)		(0.4)
State tax rate change	—		—		—		(11.4)

Stock compensation	—		—		—		(0.4)
Officer compensation limitation	0.9		0.5		0.9		0.5
Other	(0.2)		0.1		—		—
Effective income tax rate	12.7	%	14.5	%	12.6	%	1.8	%

Kansas Tax Reform

In May 2020, the state of Kansas exempted certain public utilities, including Evergy Kansas Central and Evergy Metro, from Kansas corporate income tax beginning in 2021 and authorized the KCC to approve changes in rates related to increases or decreases in federal or state income tax rates.

As a result of the exemption from Kansas corporate income tax, the Evergy Companies revalued their deferred income tax assets and liabilities in May 2020. Evergy decreased its net deferred income tax liabilities by $233.8 million, primarily consisting of a $400.4 million adjustment for the revaluation of deferred income tax assets and liabilities included in rate base and a $31.7 million tax gross-up adjustment on this amount for ratemaking purposes and $13.8 million of income tax expense primarily related to the revaluation of deferred income taxes that will not be recovered from customers in future rates; partially offset by a decrease to unamortized investment tax credits of $183.6 million due to the revaluation of certain Kansas income tax credits and a $16.9 million tax gross-up adjustment on this amount for ratemaking purposes.

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Evergy Kansas Central decreased its net deferred income tax liabilities by $17.6 million, primarily consisting of a $293.7 million adjustment for the revaluation of deferred income tax assets and liabilities included in rate base and a $17.3 million tax gross-up adjustment on this amount for ratemaking purposes; partially offset by a decrease to unamortized investment tax credits of $183.6 million due to the revaluation of certain Kansas income tax credits and a $16.9 million tax gross-up adjustment on this amount for ratemaking purposes and $109.0 million of income tax expense primarily related to the revaluation of deferred income taxes that will not be recovered from customers in future rates.

Evergy Metro decreased its net deferred income tax liabilities by $152.9 million, primarily consisting of a $106.7 million adjustment for the revaluation of deferred income tax assets and liabilities included in rate base and a $14.4 million tax gross-up adjustment on this amount for ratemaking purposes and $32.2 million of income tax benefit primarily related to the revaluation of deferred income taxes that will not be refunded to customers in future rates.

The changes to the Evergy Companies' net deferred income tax liabilities included in rate base were offset by corresponding changes in regulatory liabilities. The net regulatory liabilities will be refunded to customers in future rates by amortizing the amounts related to plant assets over the remaining useful life of the assets, and amortizing the amounts related to other items over a period to be determined in a future rate case. The changes to the Evergy Companies' unamortized investment tax credits were related to the portion of certain Kansas income tax credits that were not expected to be used after December 31, 2020. The amounts of income tax expense (benefit) recognized by the Evergy Companies related to the revaluation of deferred income taxes that will not be recovered from or refunded to customers in future rates primarily pertain to deferred tax adjustments related to the difference between Evergy's consolidated tax rate and the statutory tax rates used for setting rates at Evergy Kansas Central, Evergy Metro and Evergy Missouri West as well as deferred income tax adjustments related to non-regulated operations.

Prior to 2021, Evergy Kansas Central and Evergy Metro recovered the cost of Kansas corporate income taxes in rates from their customers at the prior statutory rate of 7%. In accordance with the provisions of the income tax exemption, Evergy Metro and Evergy Kansas Central filed a joint application with the KCC in July 2020 to reduce their retail rates to reflect their exemption from Kansas corporate income taxes beginning in 2021. In the joint application, Evergy Metro requested to implement its rate reduction in one phase, effective January 1, 2021, and Evergy Kansas Central requested to implement its rate reduction in three phases, effective January 1 in each of 2021, 2022 and 2023. In November 2020, the KCC approved Evergy Kansas Central's and Evergy Metro's joint application.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following combined Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the consolidated financial statements and accompanying notes in this combined Quarterly Report on Form 10-Q and the Evergy Companies' combined 2020 Form 10-K. None of the registrants make any representation as to information related solely to Evergy, Evergy Kansas Central or Evergy Metro other than itself.

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EVERGY, INC.

EXECUTIVE SUMMARY

•Evergy Kansas Central is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Evergy Kansas Central has one active wholly-owned subsidiary with significant operations, Evergy Kansas South.

•Evergy Metro is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas.

•Evergy Missouri West is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.

•Evergy Transmission Company owns 13.5% of Transource with the remaining 86.5% owned by AEP Transmission Holding Company, LLC, a subsidiary of AEP. Transource is focused on the development of competitive electric transmission projects. Evergy Transmission Company accounts for its investment in Transource under the equity method.

Evergy Kansas Central also owns a 50% interest in Prairie Wind, which is a joint venture between Evergy Kansas Central and subsidiaries of AEP and Berkshire Hathaway Energy Company. Prairie Wind owns a 108-mile, 345 kV double-circuit transmission line that provides transmission service in the SPP. Evergy Kansas Central accounts for its investment in Prairie Wind under the equity method.

Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West conduct business in their respective service territories using the name Evergy. Collectively, the Evergy Companies have approximately 15,400 MWs of owned generating capacity and renewable power purchase agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri. The Evergy Companies assess financial performance and allocate resources on a consolidated basis (i.e., operate in one segment).

February 2021 Winter Weather Event

As of September 30, 2021, the Evergy Companies have deferred substantially all of the fuel and purchased power costs, net of wholesale revenues, related to the February 2021 winter weather event to a regulatory asset or liability pursuant to their fuel recovery mechanisms and an emergency AAO issued by the KCC in February 2021. Further, in June 2021, Evergy Metro and Evergy Missouri West filed a joint request for an AAO with the MPSC regarding the deferral and subsequent recovery or refund of the February 2021 winter weather event amounts. While the Evergy Companies expect to recover substantially all of any increased fuel and purchased power costs related to the February 2021 winter weather event from customers, the timing of the cost recovery could be delayed or spread

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over a longer than typical recovery timeframe by the KCC or the MPSC to help moderate monthly customer bill impacts given the extraordinary nature of the February 2021 winter weather event.

The Evergy Companies also engage in limited non-regulated energy marketing activities in various regional power markets that have historically not had a significant impact on the Evergy Companies' results of operations. These energy marketing margins are recorded net in operating revenues on the Evergy Companies' statements of income and comprehensive income. As a result of the elevated market prices experienced in regional power markets across the central and southern United States driven by the February 2021 winter weather event discussed above, Evergy and Evergy Kansas Central recorded $95.0 million of energy marketing margins in 2021 related to the February 2021 winter weather event, primarily driven by activities in ERCOT. The amount of energy marketing margins recorded as a result of the February 2021 winter weather event is subject to resettlement activities and/or legislative action in Texas that could result in increases or decreases to the final amount of energy marketing margins earned by Evergy and Evergy Kansas Central and these changes could be material.

See Notes 1 and 4 to the consolidated financial statements for additional information regarding the February 2021 winter weather event and related AAOs.

Transforming Evergy's Generation Fleet

The Evergy Companies are committed to a long-term strategy to reduce CO2 emissions in a cost-effective and reliable manner. In 2020, Evergy achieved a reduction of CO2 emissions of approximately 50% from 2005 levels in connection with its then-stated goal to achieve an 80% reduction from 2005 levels by 2050. In connection with the filing of its triennial integrated resource plan in Missouri in April 2021, Evergy announced a revised goal to achieve net-zero carbon emissions by 2045, which includes an interim goal of a 70% reduction of CO2 emissions from 2005 levels by 2030. The trajectory and timing of reaching Evergy's net-zero carbon emissions goal are dependent on enabling technology developments, the reliability of the power grid, and supportive energy policies and regulations.

LEC Unit 4 Securitization

In April 2021, the state of Kansas passed the UFSA which allows certain public utilities, including Evergy Kansas Central and Evergy Metro, to securitize utility assets in order to recover energy transition costs relating to the early retirement of certain generating assets. To recover the energy transition costs through securitization as allowed in the UFSA, a public utility must obtain a predetermination order from the KCC finding that the retirement of the subject generation facility is reasonable. Upon the receipt of a successful predetermination order, the public utility must then file an application with the KCC for a financing order to issue securitized bonds to recover the energy transition costs. The UFSA also allows the pursuit of securitization to help finance qualified extraordinary expenses, such as fuel costs incurred during extreme weather events.

In September 2021, Evergy Kansas Central filed a predetermination request with the KCC for the ratemaking principles and treatment related to its planned investment in approximately 190 MW of solar generation and the planned retirement of coal-fired LEC Unit 4 and related coal-handling facilities for LEC Units 4 and 5, both of which are expected to occur between December 2023 and the first half of 2024. An evidentiary hearing in the case is currently scheduled to begin in January 2022 and a decision by the KCC regarding the request is expected in the first or second quarter of 2022.

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Evergy Equity Investment

From time to time, Evergy makes limited equity investments in early-stage energy solution companies that are privately held. These investments have historically not had a significant impact on Evergy's results of operations. In October 2021, an equity investment in which Evergy held a minority stake was acquired through a transaction involving a special purpose acquisition company (SPAC). As a result of its equity investment in the company that was acquired in the SPAC transaction, Evergy received shares of the resulting public company upon the closing of the transaction, which are subject to a restriction on sale of up to 180 days. Evergy expects to record an unrealized gain in the fourth quarter of 2021 for the conversion of its shares into the newly formed public company along with any changes in the fair value of this investment during the fourth quarter of 2021. The fair value of Evergy's investment will also be affected by its restriction on sale of the shares of the new company. The ultimate amount of this unrealized gain in the fourth quarter of 2021, if any, cannot be estimated at this time as it is largely dependent on the performance of the new public company's stock which is subject to market volatility. However, Evergy currently expects that this gain could have a significant impact on its fourth quarter 2021 earnings when compared with its historical fourth quarter results of operations.

Bluescape Securities Purchase Agreement

See Note 12 to the consolidated financial statements for information regarding Evergy's securities purchase agreement with an affiliate of Bluescape to purchase Evergy's common stock and a warrant that was completed in April 2021.

Impact of COVID-19

See Part II, Item 7, MD&A - Executive Summary in the Evergy Companies' combined 2020 Form 10-K and Part II, Item 1A, Risk Factors in this combined Quarterly Report on Form 10-Q for information regarding the impact of COVID-19 on the Evergy Companies.

Regulatory Proceedings

See Note 4 to the consolidated financial statements for information regarding regulatory proceedings.

Earnings Overview

The following table summarizes Evergy's net income and diluted EPS.


	Three Months Ended September 30						Year to Date September 30
	2021		Change		2020		2021		Change		2020
	(millions, except per share amounts)
Net income attributable to Evergy, Inc.	$	449.4	$	84.9	$	364.5	$	826.3	$	259.0	$	567.3
Earnings per common share, diluted	1.95		0.35		1.60		3.60		1.11		2.49

Net income attributable to Evergy, Inc. increased for the three months ended September 30, 2021, compared to the same period in 2020, primarily due to higher retail sales driven by warmer weather, lower operating and maintenance expenses and higher investment earnings; partially offset by higher depreciation expense, higher property taxes and higher income tax expense.

Diluted EPS increased for the three months ended September 30, 2021, compared to the same period in 2020, primarily due to the increase in net income attributable to Evergy, Inc. discussed above.

Net income attributable to Evergy, Inc. increased year to date September 30, 2021, compared to the same period in 2020, primarily due to non-regulated energy marketing margins related to the February 2021 winter weather event, higher retail sales driven by favorable weather, lower operating and maintenance expenses, higher equity allowance for funds used during construction (AFUDC), higher investment earnings and lower interest expense; partially offset by higher property taxes, higher depreciation expense and higher income tax expense.

Diluted EPS increased year to date September 30, 2021, compared to the same period in 2020, primarily due to the increase in net income attributable to Evergy, Inc. discussed above.

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For additional information regarding the change in net income, refer to the Evergy Results of Operations section within this MD&A.

Adjusted Earnings (non-GAAP) and Adjusted EPS (non-GAAP)

Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) for the three months ended and year to date September 30, 2021, were $454.8 million or $1.98 per share and $775.3 million or $3.38 per share, respectively. For the three months ended and year to date September 30, 2020, Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) were $393.3 million or $1.73 per share and $641.7 million or $2.82 per share, respectively. In addition to net income attributable to Evergy, Inc. and diluted EPS, Evergy's management uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without the income or costs resulting from non-regulated energy marketing margins from the February 2021 winter weather event, as well as costs resulting from executive transition, severance, advisor expenses and the revaluation of deferred tax assets and liabilities from the Kansas corporate income tax rate change.

Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are intended to enhance an investor's overall understanding of results. Management believes that adjusted earnings (non-GAAP) provides a meaningful basis for evaluating Evergy's operations across periods because it excludes certain items that management does not believe are indicative of Evergy's ongoing performance. Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are used internally to measure performance against budget and in reports for management and the Evergy Board. Adjusted earnings (non-GAAP) and adjusted EPS (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 EPS as determined in accordance with GAAP and adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP).


	Earnings (Loss)		Earnings (Loss) per Diluted Share		Earnings (Loss)		Earnings (Loss) per Diluted Share
Three Months Ended September 30	2021				2020
	(millions, except per share amounts)
Net income attributable to Evergy, Inc.	$	449.4	$	1.95	$	364.5	$	1.60
Non-GAAP reconciling items:

Non-regulated energy marketing costs related to February 2021 winter weather event, pre-tax(b)	1.9		0.01		—		—
Executive transition costs, pre-tax(c)	3.3		0.02		—		—
Severance costs, pre-tax(d)	—		—		28.7		0.13
Advisor expenses, pre-tax(e)	1.2		—		9.7		0.04
Income tax benefit(f)	(1.0)		—		(9.6)		(0.04)

Adjusted earnings (non-GAAP)	$	454.8	$	1.98	$	393.3	$	1.73

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	Earnings (Loss)		Earnings (Loss) per Diluted Share		Earnings (Loss)		Earnings (Loss) per Diluted Share
Year to Date September 30	2021				2020
	(millions, except per share amounts)
Net income attributable to Evergy, Inc.	$	826.3	$	3.60	$	567.3	$	2.49
Non-GAAP reconciling items:
Non-regulated energy marketing margin related to February 2021 winter weather event, pre-tax(a)	(95.0)		(0.42)		—		—
Non-regulated energy marketing costs related to February 2021 winter weather event, pre-tax(b)	5.9		0.03		—		—
Executive transition costs, pre-tax(c)	10.6		0.05		—		—
Severance costs, pre-tax(d)	2.8		0.01		55.3		0.24
Advisor expenses, pre-tax(e)	8.4		0.04		26.1		0.12
Income tax expense (benefit)(f)	16.3		0.07		(20.8)		(0.09)
Kansas corporate income tax change(g)	—		—		13.8		0.06
Adjusted earnings (non-GAAP)	$	775.3	$	3.38	$	641.7	$	2.82

(a)Reflects non-regulated energy marketing margins related to the February 2021 winter weather event and are included in operating revenues on the consolidated statements of comprehensive income.

(b)Reflects non-regulated energy marketing incentive compensation costs related to the February 2021 winter weather event and are included in operating and maintenance expense on the consolidated statements of comprehensive income.

(c)Reflects costs associated with executive transition including inducement bonuses, severance agreements and other transition expenses and are included in operating and maintenance expense on the consolidated statements of comprehensive income.

(d)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.

(e)Reflects advisor expenses incurred associated with strategic planning and are included in operating and maintenance expense on the consolidated statements of comprehensive income.

(f)Reflects an income tax effect calculated at a statutory rate of approximately 22% in 2021 and 26% in 2020, with the exception of certain non-deductible items.

(g)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.

Wolf Creek Refueling Outage

Wolf Creek's most recent refueling outage began in March 2021 and the unit returned to service in May 2021. Wolf Creek's next refueling outage is planned to begin in the third quarter of 2022.

ENVIRONMENTAL MATTERS

See Note 10 to the consolidated financial statements for information regarding environmental matters.

RELATED PARTY TRANSACTIONS

See Note 11 to the consolidated financial statements for information regarding related party transactions.

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EVERGY RESULTS OF OPERATIONS

The following table summarizes Evergy's comparative results of operations.


	Three Months Ended September 30						Year to Date September 30
	2021		Change		2020		2021		Change		2020
	(millions)
Operating revenues	$	1,616.5	$	98.9	$	1,517.6	$	4,464.6	$	645.6	$	3,819.0
Fuel and purchased power	355.8		39.6		316.2		1,275.0		442.5		832.5
SPP network transmission costs	73.6		7.5		66.1		216.8		19.0		197.8
Operating and maintenance	265.2		(39.4)		304.6		800.6		(64.9)		865.5
Depreciation and amortization	225.0		7.0		218.0		669.5		11.4		658.1
Taxes other than income tax	96.2		5.2		91.0		289.0		14.8		274.2
Income from operations	600.7		79.0		521.7		1,213.7		222.8		990.9
Other income (expense), net	0.6		11.9		(11.3)		(3.2)		33.5		(36.7)
Interest expense	93.6		(1.2)		94.8		281.4		(9.1)		290.5
Income tax expense	57.2		7.2		50.0		99.8		6.0		93.8
Equity in earnings of equity method investees, net of income taxes	2.0		0.1		1.9		6.1		—		6.1
Net income	452.5		85.0		367.5		835.4		259.4		576.0
Less: Net income attributable to noncontrolling interests	3.1		0.1		3.0		9.1		0.4		8.7
Net income attributable to Evergy, Inc.	$	449.4	$	84.9	$	364.5	$	826.3	$	259.0	$	567.3

Evergy Utility Gross Margin and MWh Sales

Utility gross margin is a financial measure that is not calculated in accordance with GAAP. Utility gross margin, as used by the Evergy Companies, is defined as operating revenues less fuel and purchased power costs and amounts billed by the SPP for network transmission costs. Expenses for fuel and purchased power costs, offset by wholesale sales margin, are subject to recovery through cost adjustment mechanisms. As a result, changes in fuel and purchased power costs are offset in operating revenues with minimal impact on net income. In addition, SPP network transmission costs fluctuate primarily due to investments by SPP members for upgrades to the transmission grid within the SPP RTO. As with fuel and purchased power costs, changes in SPP network transmission costs are mostly reflected in the prices charged to customers with minimal impact on net income.

Management believes that utility gross margin provides a meaningful basis for evaluating the Evergy Companies' operations across periods because utility gross margin excludes the revenue effect of fluctuations in these expenses. Utility gross margin is used internally to measure performance against budget and in reports for management and the Evergy Board. Utility gross margin should be viewed as a supplement to, and not a substitute for, income from operations, which is the most directly comparable financial measure prepared in accordance with GAAP. The Evergy Companies' definition of utility gross margin may differ from similar terms used by other companies.

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The following tables summarize Evergy's utility gross margin and MWhs sold and provide a reconciliation of utility gross margin to income from operations.


	Revenues and Expenses						MWhs Sold
Three Months Ended September 30	2021		Change		2020		2021	Change	2020
Retail revenues	(millions)						(thousands)
Residential	$	677.4	$	41.0	$	636.4	5,135	322	4,813
Commercial	525.0		25.5		499.5		5,146	232	4,914
Industrial	166.0		(0.8)		166.8		2,293	20	2,273
Other retail revenues	9.2		(0.3)		9.5		32	(2)	34
Total electric retail	1,377.6		65.4		1,312.2		12,606	572	12,034
Wholesale revenues	105.0		20.0		85.0		5,883	2,376	3,507
Transmission revenues	90.3		9.6		80.7		N/A	N/A	N/A
Other revenues	43.6		3.9		39.7		N/A	N/A	N/A
Operating revenues	1,616.5		98.9		1,517.6		18,489	2,948	15,541
Fuel and purchased power	(355.8)		(39.6)		(316.2)
SPP network transmission costs	(73.6)		(7.5)		(66.1)
Utility gross margin (a)	1,187.1		51.8		1,135.3
Operating and maintenance	(265.2)		39.4		(304.6)
Depreciation and amortization	(225.0)		(7.0)		(218.0)
Taxes other than income tax	(96.2)		(5.2)		(91.0)
Income from operations	$	600.7	$	79.0	$	521.7
(a) Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin above.


	Revenues and Expenses						MWhs Sold
Year to Date September 30	2021		Change		2020		2021	Change	2020
Retail revenues	(millions)						(thousands)
Residential	$	1,533.9	$	18.3	$	1,515.6	12,556	442	12,114
Commercial	1,293.5		20.6		1,272.9		13,538	564	12,974
Industrial	449.6		2.9		446.7		6,424	253	6,171
Other retail revenues	26.1		(3.1)		29.2		98	(1)	99
Total electric retail	3,303.1		38.7		3,264.4		32,616	1,258	31,358
Wholesale revenues	662.5		466.7		195.8		13,087	2,845	10,242
Transmission revenues	266.7		28.2		238.5		N/A	N/A	N/A
Other revenues	232.3		112.0		120.3		N/A	N/A	N/A
Operating revenues	4,464.6		645.6		3,819.0		45,703	4,103	41,600
Fuel and purchased power	(1,275.0)		(442.5)		(832.5)
SPP network transmission costs	(216.8)		(19.0)		(197.8)
Utility gross margin (a)	2,972.8		184.1		2,788.7
Operating and maintenance	(800.6)		64.9		(865.5)
Depreciation and amortization	(669.5)		(11.4)		(658.1)
Taxes other than income tax	(289.0)		(14.8)		(274.2)
Income from operations	$	1,213.7	$	222.8	$	990.9
(a) Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin above.

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Evergy's utility gross margin increased $51.8 million for the three months ended September 30, 2021, compared to the same period in 2020, driven by:

•a $41.3 million increase primarily due to higher retail sales driven by warmer weather (cooling degree days increased by 22%), partially offset by a decrease in weather-normalized residential demand;

•a $10.0 million increase related to TDC riders in 2021, primarily at Evergy Kansas Central; and

•a $9.6 million increase in transmission revenue due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2021; partially offset by

•a $9.1 million decrease in revenues at Evergy Kansas Central and Evergy Metro due to rate reductions beginning January 1, 2021 in Kansas to reflect their exemption from Kansas corporate income taxes.

Evergy's utility gross margin increased $184.1 million year to date September 30, 2021, compared to the same period in 2020, driven by:

•$95.0 million of non-regulated energy marketing margins recognized at Evergy Kansas Central related to the February 2021 winter weather event;

•a $72.4 million increase primarily due to higher retail sales driven by favorable weather (heating degree days increased by 5% and cooling degree days increased by 14%);

•a $28.2 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2021;

•a $10.1 million increase related to TDC riders in 2021, primarily at Evergy Kansas Central; and

•a $1.6 million net increase due to other impacts from the February 2021 winter weather event driven by:

◦a $33.9 million increase at Evergy Kansas Central driven by higher utility gross margin at its non-regulated 8% ownership share of JEC due to higher wholesale sales prices and MWhs sold in February 2021; partially offset by

◦a $20.9 million decrease at Evergy Missouri West driven by $14.7 million of increased fuel and purchased power costs in February 2021 that are not currently recoverable from customers through its fuel recovery mechanism and a $6.2 million decrease related to a special requirements contract with an industrial customer; and

◦an $11.4 million decrease at Evergy Metro primarily driven by jurisdictional allocation differences currently present between its fuel recovery mechanisms in Missouri and Kansas regarding its refund to customers for the net increase in wholesale revenues in February 2021; partially offset by

•a $23.2 million decrease in revenues at Evergy Kansas Central and Evergy Metro due to rate reductions beginning January 1, 2021 in Kansas to reflect their exemption from Kansas corporate income taxes.

Operating and Maintenance

Evergy's operating and maintenance expense decreased $39.4 million for the three months ended September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $28.7 million decrease in voluntary severance expenses due to a $28.3 million decrease at Evergy Kansas Central, Evergy Metro and Evergy Missouri West related to Evergy voluntary exit programs in 2020 and a $0.4 million decrease in voluntary severance expenses incurred at Evergy Kansas Central and Evergy Metro related to Wolf Creek voluntary exit programs in 2020;

•an $8.5 million decrease in advisor expenses incurred in the third quarter of 2021 associated with strategic planning; and

•a $3.0 million decrease in various transmission and distribution operating and maintenance expenses primarily due to lower labor and contractor costs primarily driven by a higher mix of transmission capital projects in the third quarter of 2021; partially offset by

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•$3.3 million of costs associated with executive transition in the third quarter of 2021, including severance agreements and other transition expenses; and

•$1.9 million of costs at Evergy Kansas Central related to non-regulated energy marketing margins recognized related to the February 2021 winter weather event.

Evergy's operating and maintenance expense decreased $64.9 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $52.5 million decrease in voluntary severance expenses due to a $45.5 million decrease at Evergy Kansas Central, Evergy Metro and Evergy Missouri West related to Evergy voluntary exit programs in 2020 and a $7.0 million decrease in voluntary severance expenses incurred at Evergy Kansas Central and Evergy Metro related to Wolf Creek voluntary exit programs in 2020;

•a $17.7 million decrease in advisor expenses incurred in 2021 associated with strategic planning;

•a $10.4 million decrease in various transmission and distribution operating and maintenance expenses primarily due to lower labor and contractor costs primarily driven by a higher mix of transmission capital projects in 2021; and

•a $7.9 million decrease in credit loss expense at Evergy Kansas Central, Evergy Metro and Evergy Missouri West primarily due to increases made to the allowance for credit losses in 2020 related to the economic slowdown resulting from the COVID-19 pandemic and a lower level of write-offs in 2021; partially offset by

•$10.6 million of costs associated with executive transition in 2021, including inducement bonuses, severance agreements and other transition expenses;

•a $6.6 million increase in plant operating and maintenance expense at fossil-fuel generating units primarily due to an $8.0 million increase at Evergy Kansas Central primarily driven by a major maintenance outage at JEC in 2021;

•$5.9 million of costs at Evergy Kansas Central related to non-regulated energy marketing margins recognized during the February 2021 winter weather event; and

•a $2.7 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received by Evergy Kansas Central and Evergy Metro in 2021 related to their ownership interests in Wolf Creek.

Depreciation and Amortization

Evergy's depreciation and amortization increased $7.0 million for the three months ended September 30, 2021 and $11.4 million year to date September 30, 2021, compared to the same periods in 2020; primarily driven by higher capital additions at Evergy Kansas Central in 2021.

Taxes Other Than Income Tax

Evergy's taxes other than income tax increased $5.2 million for the three months ended September 30, 2021 and $14.8 million year to date September 30, 2021, compared to the same periods in 2020; driven by an increase in property taxes in Missouri and Kansas primarily due to higher assessed property tax values.

Other Income (Expense), Net

Evergy's other expense, net decreased $11.9 million for the three months ended September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $7.1 million decrease due to higher investment earnings primarily driven by a $5.2 million realized gain from the sale of an equity investment in the third quarter of 2021; and

•$3.0 million of other income recorded in 2021 related to a contract termination fee.

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Evergy's other expense, net decreased $33.5 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $14.8 million decrease due to higher investment earnings primarily driven by a $5.2 million realized gain from the sale of an equity investment in the third quarter of 2021 and a $10.5 million increase in unrealized gains from equity investments in 2021;

•a $10.9 million decrease due to higher Evergy Kansas Central and Evergy Metro equity AFUDC primarily driven by higher construction work in progress balances at Evergy Kansas Central and Evergy Metro and a lower short-term debt balance at Evergy Metro in 2021;

•$6.1 million of other income recorded in 2021 related to contract termination fees; and

•a $1.6 million decrease due to recording higher Evergy Kansas Central corporate-owned life insurance (COLI) benefits in 2021.

Interest Expense

Evergy's interest expense decreased $9.1 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•an $8.8 million decrease primarily due to lower weighted-average interest rates on short-term borrowings at Evergy Kansas Central and Evergy Metro and lower commercial paper balances at Evergy Metro in 2021;

•an $8.4 million decrease due to the redemption of Evergy's $350.0 million of 4.85% Senior Notes in April 2021; and

•a $2.1 million net decrease due to the redemption of Evergy Kansas Central's $250.0 million of 5.10% FMBs in May 2020, which decreased interest expense by $6.8 million, partially offset by a $4.7 million increase due to the issuance of Evergy Kansas Central's $500.0 million of 3.45% FMBs in April 2020; partially offset by

•a $6.6 million increase due to the issuance in a private placement of Evergy Missouri West's $500.0 million of Series A, B and C Senior Notes in April 2021; and

•a $3.6 million increase due to the issuance of Evergy Metro's $400.0 million of 2.25% Mortgage Bonds in May 2020.

Income Tax Expense

Evergy's income tax expense increased $7.2 million for the three months ended September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $21.8 million increase due to higher Evergy Kansas Central and Evergy Metro pre-tax income in the third quarter of 2021;

•a $5.0 million increase due to lower wind and other income tax credits in the third quarter of 2021; and

•a $1.3 million increase due to higher non-deductible officer compensation in 2021; partially offset by

•a $15.3 million decrease as a result of the state of Kansas exempting certain public utilities, including Evergy Kansas Central and Evergy Metro, from Kansas corporate income tax beginning in January 2021; and

•an $8.3 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes at Evergy Kansas Central.

Evergy's income tax expense increased $6.0 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $69.6 million increase due to higher Evergy Kansas Central and Evergy Metro pre-tax income in 2021;

•a $2.5 million increase due to higher non-deductible officer compensation in 2021; and

•a $2.5 million increase due to lower wind and other income tax credits in 2021; partially offset by

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•a $34.2 million decrease as a result of the state of Kansas exempting certain public utilities, including Evergy Kansas Central and Evergy Metro, from Kansas corporate income tax beginning in January 2021;

•a $22.3 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes at Evergy Kansas Central; and

•a $13.8 million decrease related to the revaluation of deferred income tax assets and liabilities in the second quarter of 2020 due to the change in the Kansas corporate income tax rate.

LIQUIDITY AND CAPITAL RESOURCES

Evergy relies primarily upon cash from operations, short-term borrowings, debt and equity issuances and its existing cash and cash equivalents to fund its capital requirements. Evergy's capital requirements primarily consist of capital expenditures, payment of contractual obligations and other commitments, and the payment of dividends to shareholders. See the Evergy Companies' combined 2020 Form 10-K for more information on Evergy's sources and uses of cash.

Short-Term Borrowings

As of September 30, 2021, Evergy had $1.9 billion of available borrowing capacity under its master credit facility. The available borrowing capacity under the master credit facility consisted of $410.3 million for Evergy, Inc., $513.9 million for Evergy Kansas Central, $350.0 million for Evergy Metro and $604.5 million for Evergy Missouri West. The Evergy Companies' borrowing capacity under the master credit facility also supports their issuance of commercial paper. See Note 7 to the consolidated financial statements for more information regarding the master credit facility. Along with cash flows from operations and receivable sales facilities, Evergy generally uses borrowings under its master credit facility and the issuance of commercial paper to meet its day-to-day cash flow requirements. Evergy believes that its existing cash on hand and available borrowing capacity under its master credit facility provide sufficient liquidity for its existing capital requirements.

In May 2021, Evergy, Inc. established a commercial paper program supported by its borrowing capacity under the master credit facility.

Significant Debt Issuances

See Note 8 to the consolidated financial statements for information regarding significant debt issuances.

Equity Issuance

Shelf Registration Statements and Regulatory Authorizations

Evergy

In September 2021, Evergy filed an automatic shelf registration statement providing for the sale of unlimited amounts of securities with the SEC, which expires in September 2024.

Evergy Kansas Central

In September 2021, Evergy Kansas Central filed an automatic shelf registration statement providing for the sale of unlimited amounts of unsecured debt and first mortgage bonds (FMBs) with the SEC, which expires in September 2024.

Evergy Metro

In September 2021, Evergy Metro filed an automatic shelf registration statement providing for the sale of unlimited amounts of notes and mortgage bonds with the SEC, which expires in September 2024.

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Capital Expenditures

Evergy requires significant capital investments and expects to need cash for utility construction programs designed to improve and expand facilities related to providing electric service, which include, but are not limited to, expenditures to develop new transmission lines and improvements to power plants, transmission and distribution lines and equipment.

Capital expenditures projected for the next five years, excluding AFUDC and including costs of removal, are detailed in the following table, which updates the projected capital expenditures table disclosed under "Management's Discussion and Analysis - Liquidity and Capital Resources - Capital Requirements - Capital Expenditures" in Evergy's 2020 Form 10-K. This capital expenditure plan is subject to continual review and change.


		2021		2022		2023		2024		2025
	(millions)
Generating facilities - new renewable generation		$	—	$	—	$	253.0	$	450.0	$	750.0
Generating facilities - other		346.0		326.0		285.0		200.0		236.0
Transmission facilities		643.0		650.0		617.0		649.0		601.0
Distribution facilities		667.0		726.0		571.0		528.0		574.0
General facilities		297.0		314.0		267.0		228.0		256.0
Total capital expenditures		$	1,953.0	$	2,016.0	$	1,993.0	$	2,055.0	$	2,417.0

Pensions

Year to date September 30, 2021, Evergy made pension contributions of $41.7 million. Evergy expects to make additional pension contributions of $68.2 million in 2021 to satisfy ERISA funding requirements and KCC and MPSC rate orders, of which $11.1 million is expected to be paid by Evergy Kansas Central and $57.1 million is expected to be paid by Evergy Metro. Also in 2021, Evergy expects to make additional post-retirement benefit contributions of $3.7 million.

Debt Covenants

As of September 30, 2021, Evergy was in compliance with all debt covenants under the master credit facility and certain debt instruments that contain restrictions that require the maintenance of certain capitalization and leverage ratios. See Note 7 to the consolidated financial statements for more information.

Off-Balance Sheet Arrangements

Evergy's off-balance sheet arrangements were reported in the Evergy Companies' combined 2020 Form 10-K. See Note 8 to the consolidated financial statements for information regarding Evergy's agreement to unconditionally guarantee certain series of Evergy Missouri West long-term debt in April 2021.

Cash Flows

The following table presents Evergy's cash flows from operating, investing and financing activities.



Year to Date September 30	2021		2020
	(millions)
Cash Flows from Operating Activities	$	1,036.0	$	1,421.7
Cash Flows used in Investing Activities	(1,349.1)		(1,029.9)
Cash Flows from (used in) Financing Activities	193.5		(53.4)

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Cash Flows from Operating Activities

Evergy's cash flows from operating activities decreased $385.7 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•$371.8 million of cash payments for net fuel and purchased power costs during the February 2021 winter weather event;

•a $97.4 million increase in cash payments in 2021 due to the timing of payments made to taxing authorities for property tax payments as well as various suppliers and other service providers for goods and services purchased in the ordinary course of business; and

•$34.8 million in payments made for a Wolf Creek refueling outage in 2021; partially offset by

•a $124.5 million increase in cash receipts for retail electric sales in 2021 primarily driven by favorable weather; and

•$89.2 million of cash receipts related to non-regulated energy marketing margins earned during the February 2021 winter weather event.

Cash Flows used in Investing Activities

Evergy's cash flows used in investing activities increased $319.2 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $336.6 million increase in additions to property, plant and equipment due to increases at Evergy Kansas Central, Evergy Metro and Evergy Missouri West of $111.2 million, $89.5 million and $134.9 million, respectively, primarily due to increased spending for a variety of capital projects including transmission and distribution projects related to grid resiliency and other infrastructure improvements; partially offset by

•an increase of $15.7 million in proceeds from COLI investments at Evergy Kansas Central due to a higher number of policy settlements in 2021.

Cash Flows from (used in) Financing Activities

Evergy's cash flows from financing activities increased $246.9 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $663.5 million increase in short-term debt borrowings primarily driven by:

◦a $433.2 million increase at Evergy Kansas Central primarily due to an increase in cash capital expenditures in 2021 of $111.2 million and the repayment of $249.2 million of outstanding commercial paper in 2020; and

◦a $122.9 million increase at Evergy Missouri West primarily due to an increase in cash capital expenditures in 2021 of $134.9 million; and

•$112.5 million of Evergy common stock issued in April 2021 pursuant to a securities purchase agreement with an affiliate of Bluescape; partially offset by

•a $392.0 million decrease in proceeds from long-term debt, net due to Evergy Kansas Central's issuance of $500.0 million of 3.45% FMBs in April 2020 and Evergy Metro's issuance of $400.0 million of 2.25% Mortgage Bonds in May 2020; partially offset by Evergy Missouri West's issuance of $500.0 million of Series A, B and C Senior Notes in April 2021;

•a $100.0 million increase in retirements of long-term debt, net due to Evergy's repayment of $350.0 of 4.85% Senior Notes in April 2021; partially offset by Evergy Kansas Central's repayment of $250.0 million of 5.10% FMBs in May 2020; and

•a $9.6 million increase in the repayment of borrowings against cash surrender value of corporate-owned life insurance primarily due to a higher number of policy settlements in 2021.

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EVERGY KANSAS CENTRAL, INC.

MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

The below results of operations and related discussion for Evergy Kansas Central is presented in a reduced disclosure format in accordance with General Instruction (H)(2)(a) to Form 10-Q.

The following table summarizes Evergy Kansas Central's comparative results of operations.


Year to Date September 30	2021		Change		2020

	(millions)
Operating revenues	$	2,277.4	$	412.9	$	1,864.5
Fuel and purchased power	543.7		213.8		329.9
SPP network transmission costs	216.8		19.0		197.8
Operating and maintenance	387.9		11.6		376.3
Depreciation and amortization	349.1		10.1		339.0
Taxes other than income tax	153.2		8.1		145.1
Income from operations	626.7		150.3		476.4
Other expense, net	(2.4)		9.8		(12.2)
Interest expense	120.2		(7.5)		127.7
Income tax expense	45.7		(103.5)		149.2
Equity in earnings of equity method investees, net of income taxes	3.0		(0.4)		3.4
Net income	461.4		270.7		190.7
Less: Net income attributable to noncontrolling interests	9.1		0.4		8.7
Net income attributable to Evergy Kansas Central, Inc.	$	452.3	$	270.3	$	182.0

Evergy Kansas Central Utility Gross Margin and MWh Sales

The following table summarizes Evergy Kansas Central's utility gross margin and MWhs sold and provides a reconciliation of utility gross margin to income from operations.


	Revenues and Expenses						MWhs Sold

Year to Date September 30	2021		Change		2020		2021	Change	2020
Retail revenues	(millions)						(thousands)
Residential	$	657.3	$	29.8	$	627.5	5,259	149	5,110
Commercial	536.8		25.8		511.0		5,467	201	5,266
Industrial	293.0		8.4		284.6		4,106	195	3,911
Other retail revenues	12.9		(0.4)		13.3		30	(1)	31
Total electric retail	1,500.0		63.6		1,436.4		14,862	544	14,318
Wholesale revenues	402.7		234.6		168.1		7,906	2,131	5,775
Transmission revenues	241.5		26.3		215.2		N/A	N/A	N/A
Other revenues	133.2		88.4		44.8		N/A	N/A	N/A
Operating revenues	2,277.4		412.9		1,864.5		22,768	2,675	20,093
Fuel and purchased power	(543.7)		(213.8)		(329.9)
SPP network transmission costs	(216.8)		(19.0)		(197.8)
Utility gross margin (a)	1,516.9		180.1		1,336.8
Operating and maintenance	(387.9)		(11.6)		(376.3)
Depreciation and amortization	(349.1)		(10.1)		(339.0)
Taxes other than income tax	(153.2)		(8.1)		(145.1)
Income from operations	$	626.7	$	150.3	$	476.4

(a)Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin under Evergy's Results of Operations.

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Evergy Kansas Central's utility gross margin increased $180.1 million year to date September 30, 2021, compared to the same period in 2020, driven by:

•$95.0 million of non-regulated energy marketing margins recognized during the February 2021 winter weather event;

•a $33.9 million increase due to other impacts from the February 2021 winter weather event driven by higher utility gross margin at Evergy Kansas Central's non-regulated 8% ownership share of JEC due to higher wholesale sales prices and MWhs sold in February 2021;

•a $27.1 million increase primarily due to higher retail sales driven by favorable weather (heating degree days increased by 8% and cooling degree days increased by 5%) and an increase in weather-normalized commercial and industrial demand partially offset by a decrease in weather-normalized residential demand;

•a $26.4 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2021; and

•a $14.3 million increase related to Evergy Kansas Central's TDC rider in 2021; partially offset by

•a $16.6 million decrease in revenues due to rate reductions beginning January 1, 2021 in Kansas to reflect the exemption of Evergy Kansas Central from Kansas corporate income taxes.

Evergy Kansas Central Operating and Maintenance

Evergy Kansas Central's operating and maintenance expense increased $11.6 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $15.7 million increase in various administrative and general operating and maintenance expenses primarily driven by an increase in costs billed for common use assets from Evergy Metro in 2021 primarily related to software assets placed into service in the third quarter of 2020;

•an $8.0 million increase in plant operating and maintenance expense at fossil-fuel generating units primarily driven by a major maintenance outage at JEC in 2021;

•$7.3 million of costs associated with executive transition in 2021, including inducement bonuses, severance agreements and other transition expenses;

•$5.9 million of costs related to non-regulated energy marketing margins recognized during the February 2021 winter weather event; and

•a $1.4 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received by Evergy Kansas Central in 2021 related to its ownership interest in Wolf Creek; partially offset by

•a $25.6 million decrease in voluntary severance expenses due to a $22.1 million decrease related to Evergy voluntary exit programs in 2020 and a $3.5 million decrease in voluntary severance expenses related to Wolf Creek voluntary exit programs in 2020; and

•a $3.7 million decrease in credit loss expense primarily due to increases made to the allowance for credit losses in 2020 related to the economic slowdown resulting from the COVID-19 pandemic and a lower level of write-offs in 2021.

Evergy Kansas Central Depreciation and Amortization

Evergy Kansas Central's depreciation and amortization expense increased $10.1 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by higher capital additions in 2021.

Evergy Kansas Central Other Income (Expense), Net

Evergy Kansas Central's other expense, net decreased $9.8 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $5.8 million decrease due to higher equity AFUDC primarily driven by higher construction work in progress balances in 2021;

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•$2.8 million of other income recorded in 2021 related to contract termination fees; and

•a $1.6 million decrease due to recording higher COLI benefits in 2021.

Evergy Kansas Central Interest Expense

Evergy Kansas Cental's interest expense decreased $7.5 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $5.3 million decrease primarily due to lower weighted-average interest rates on short-term borrowings in 2021; and

Evergy Kansas Central Income Tax Expense

Evergy Kansas Central's income tax expense decreased $103.5 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $109.0 million decrease related to the revaluation of deferred income tax assets and liabilities in the second quarter of 2020 due to the change in the Kansas corporate income tax rate;

•a $19.3 million decrease as a result of the state of Kansas exempting certain public utilities, including Evergy Kansas Central, from Kansas corporate income tax beginning in January 2021;

•a $17.6 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes; and

•a $2.8 million decrease due to higher wind and other income tax credits in 2021; partially offset by

•a $44.4 million increase due to higher pre-tax income in 2021.

EVERGY METRO, INC.

MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

The below results of operations and related discussion for Evergy Metro is presented in a reduced disclosure format in accordance with General Instruction (H)(2)(a) to Form 10-Q.

The following table summarizes Evergy Metro's comparative results of operations.



Year to Date September 30	2021		Change		2020
	(millions)
Operating revenues	$	1,526.7	$	198.4	$	1,328.3
Fuel and purchased power	489.3		183.3		306.0
Operating and maintenance	262.1		(43.6)		305.7
Depreciation and amortization	238.3		(5.3)		243.6
Taxes other than income tax	97.2		4.8		92.4
Income from operations	439.8		59.2		380.6
Other expense, net	(9.6)		4.2		(13.8)
Interest expense	83.2		(2.3)		85.5
Income tax expense	43.7		38.6		5.1
Net income	$	303.3	$	27.1	$	276.2

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Evergy Metro Utility Gross Margin and MWh Sales

The following table summarizes Evergy Metro's utility gross margin and MWhs sold and provides a reconciliation of utility gross margin to income from operations.


	Revenues and Expenses						MWhs Sold
Year to Date September 30	2021		Change		2020		2021	Change	2020

Retail revenues	(millions)						(thousands)
Residential	$	550.6	$	(21.6)	$	572.2	4,412	163	4,249
Commercial	542.5		(15.6)		558.1		5,572	212	5,360
Industrial	91.9		(7.7)		99.6		1,249	(30)	1,279
Other retail revenues	7.7		(1.2)		8.9		53	(1)	54
Total electric retail	1,192.7		(46.1)		1,238.8		11,286	344	10,942
Wholesale revenues	237.3		220.6		16.7		4,958	1,268	3,690
Transmission revenues	12.8		2.4		10.4		N/A	N/A	N/A
Other revenues	83.9		21.5		62.4		N/A	N/A	N/A
Operating revenues	1,526.7		198.4		1,328.3		16,244	1,612	14,632
Fuel and purchased power	(489.3)		(183.3)		(306.0)
Utility gross margin (a)	1,037.4		15.1		1,022.3
Operating and maintenance	(262.1)		43.6		(305.7)
Depreciation and amortization	(238.3)		5.3		(243.6)
Taxes other than income tax	(97.2)		(4.8)		(92.4)
Income from operations	$	439.8	$	59.2	$	380.6

(a)Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin under Evergy's Results of Operations.

Evergy Metro's utility gross margin increased $15.1 million year to date September 30, 2021, compared to the same period in 2020, driven by:

•a $33.1 million increase primarily due to higher retail sales driven by favorable weather (heating degree days increased by 2% and cooling degree days increased by 22%), partially offset by a decrease in weather-normalized residential and industrial demand; partially offset by

•an $11.4 million decrease due to impacts from the February 2021 winter weather event primarily driven by jurisdictional allocation differences currently present between Evergy Metro's fuel recovery mechanisms in Missouri and Kansas regarding its refund to customers for the net increase in wholesale revenues in February 2021; and

•a $6.6 million decrease in revenues due to a rate reduction beginning January 1, 2021 in Kansas to reflect Evergy Metro's exemption from Kansas corporate income taxes.

Evergy Metro Operating and Maintenance

Evergy Metro's operating and maintenance expense decreased $43.6 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $19.8 million decrease in voluntary severance expenses due to a $16.3 million decrease related to Evergy voluntary exit programs in 2020 and a $3.5 million decrease in voluntary severance expenses related to Wolf Creek voluntary exit programs in 2020;

•a $15.6 million decrease in various administrative and general operating and maintenance expenses primarily driven by an increase in costs billed for common use assets to Evergy Kansas Central in 2021 primarily related to software assets placed into service in the third quarter of 2020; and

•a $2.7 million decrease in credit loss expense primarily due to increases made to the allowance for credit losses in 2020 related to the economic slowdown resulting from the COVID-19 pandemic and a lower level of write-offs in 2021; partially offset by

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•$2.5 million of costs associated with executive transition in 2021, including inducement bonuses, severance agreements and other transition expenses; and

•a $1.3 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received in 2021 by Evergy Metro related to its ownership interest in Wolf Creek.

Evergy Metro Other Expense, Net

Evergy Metro's other expense, net decreased $4.2 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by a $4.6 million increase in equity AFUDC primarily due to lower short-term debt and higher construction work in progress balances in 2021.

Evergy Metro Income Tax Expense

Evergy Metro's income tax expense increased $38.6 million year to date September 30, 2021, compared to the same period in 2020, primarily driven by:

•a $32.2 million increase related to the revaluation of deferred income tax assets and liabilities in the second quarter of 2020 due to the change in the Kansas corporate income tax rate;

•a $16.8 million increase due to higher pre-tax income in 2021; and

•a $4.2 million increase due to lower wind and other income tax credits in 2021; partially offset by

•a $13.7 million decrease as a result of the state of Kansas exempting certain public utilities, including Evergy Metro, from Kansas corporate income tax beginning in January 2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the ordinary course of business, Evergy faces risks that are either non-financial or non-quantifiable. Such risks principally include business, legal, operational and credit risks and are discussed elsewhere in this report as well as in the Evergy Companies' combined 2020 Form 10-K and therefore are not represented here.

Evergy's interim period disclosures about market risk included in quarterly reports on Form 10-Q address material changes, if any, from the most recently filed annual report on Form 10-K. Therefore, these interim period disclosures should be read in conjunction with Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk included in the Evergy Companies' combined 2020 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

EVERGY

Disclosure Controls and Procedures

Evergy carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). This evaluation was conducted under the supervision, and with the participation, of Evergy's management, including the chief executive officer and chief financial officer, and Evergy's disclosure committee. Based upon this evaluation, the chief executive officer and chief financial officer of Evergy have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Evergy were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There has been no change in Evergy’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended September 30, 2021, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

EVERGY KANSAS CENTRAL

Disclosure Controls and Procedures

Evergy Kansas Central carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). This evaluation was conducted under the supervision, and with

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the participation, of Evergy Kansas Central's management, including the chief executive officer and chief financial officer, and Evergy Kansas Central's disclosure committee. Based upon this evaluation, the chief executive officer and chief financial officer of Evergy Kansas Central have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Evergy Kansas Central were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There has been no change in Evergy Kansas Central’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended September 30, 2021, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

EVERGY METRO

Disclosure Controls and Procedures

Evergy Metro carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). This evaluation was conducted under the supervision, and with the participation, of Evergy Metro's management, including the chief executive officer and chief financial officer, and Evergy Metro's disclosure committee. Based upon this evaluation, the chief executive officer and chief financial officer of Evergy Metro have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Evergy Metro were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There has been no change in Evergy Metro’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended September 30, 2021, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Other Proceedings

The Evergy Companies are parties to various lawsuits and regulatory proceedings in the ordinary course of their respective businesses. For information regarding material lawsuits and proceedings, see Notes 4 and 10 to the consolidated financial statements. Such information is incorporated herein by reference.

ITEM 1A. RISK FACTORS

Actual results in future periods for the Evergy Companies could differ materially from historical results and the forward-looking statements contained in this report. The business of the Evergy Companies is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond their control. Additional risks and uncertainties not presently known or that management currently believes to be immaterial may also adversely affect the Evergy Companies. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in Part I, Item 1A, Risk Factors included in the 2020 Form 10-K for each of Evergy, Evergy Kansas Central and Evergy Metro, as well as Quarterly Reports on Form 10-Q and from time to time in Current Reports on Form 8-K filed by Evergy, Evergy Kansas Central and Evergy Metro. Except as set forth below, there have been no material changes with regards to those risk factors. This information, as well as the other information included in this report and in the other documents filed with the SEC, should be carefully considered before making an investment in the securities of the Evergy Companies. Risk factors of Evergy Kansas Central and Evergy Metro are also risk factors of Evergy.

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Failure to attract and retain an appropriately qualified workforce or to maintain satisfactory collective bargaining agreements could negatively impact the Evergy Companies' business and operations and adversely impact the Evergy Companies' results of operations, financial position and cash flows.

The Evergy Companies' workforce includes professional, managerial and technical employees. Failure to attract and retain qualified talent, or successfully transition retirements with adequate replacements could impede the Evergy Companies' strategy and/or adversely impact the Evergy Companies' ability to execute on their strategy. For example, certain skills, such as those related to construction, maintenance and repair of transmission and distribution systems are in high demand and have a limited supply. Evergy competes for qualified employees with these skills on a national level.

In addition, federal COVID-19 vaccination and testing mandates could result in employee or contractor labor disruptions, and complying with any mandates and managing any related labor disruptions could have a significant adverse impact on the Evergy Companies' results of operations, financial position and cash flows.

A significant portion of the Evergy Companies' workforce is represented by five local unions of the International Brotherhood of Electrical Workers (IBEW) and one local union of the United Government Security Officers of America (UGSOA). The collective bargaining agreements with the five IBEW locals all expired in 2021 and are currently being renegotiated. The collective bargaining agreement with the UGSOA expires in 2022. A failure to successfully negotiate these collective bargaining agreements could result in labor disruptions and have a significant adverse impact on the Evergy Companies' results of operations, financial position and cash flows.

The Evergy Companies' strategic plan includes enhanced technology and transmission and distribution investments and a reduction in reliance on coal-fired generation. The Evergy Companies will need to attract and retain personnel that are qualified to implement the Evergy Companies' strategy and may need to retrain or reskill certain employees to support the Evergy Companies' long-term objectives. A failure to attract and retain qualified employees, retrain or reskill existing employees and maintain satisfactory collective bargaining agreements could have a significant adverse impact on the results of operations, financial position and cash flows of the Evergy Companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Available Information

Table of Contents

financial and other information posted there could be deemed to be material information. The information on the Evergy Companies' website is not part of this document.

Table of Contents

ITEM 6. EXHIBITS

Exhibit

Number

Description of Document

Registrant

10.1

Amended and Restated Credit Agreement dated as of August 31, 2021, by and among Evergy , Inc., Evergy Missouri West , Inc. (formerly KCP&L Greater Missouri Operations Company), Evergy Metro , Inc. (formerly Kansas City Power & Light Company), E vergy Kansas Central , Inc. (formerly Westar Energy, Inc.), as Borrowers, the lenders referred to therein, as Lenders, and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender and Issuing Lender, Bank of America, N.A., Citibank, N.A., MUFG Bank, Ltd., TD Bank, N.A. and U.S. Bank National Association as Co-Syndication Ag ents and Issuing Lenders, Wells Fargo Securities, LLC, as Sustainability Struc turing Agent, and Wells Fargo Securities, LLC, Citigroup Global M a rkets Inc., BOFA Securities, Inc., MUFG Bank, L td., TD Securities (USA) LLC and U.S. Bank National Association as Joint Lead Arrangers and Joint Bookrunners. (Exhibit 10.1 to Evergy's Current Report on Form 8-K filed on August 31, 2021).

Evergy
Evergy Kansas Central
Evergy Metro

31.1

Rule 13a-14(a)/15d-14(a) Certification of David A. Campbell.

Evergy

31.2

Rule 13a-14(a)/15d-14(a) Certification of Kirkland B. Andrews.

Evergy

31.3

Rule 13a-14(a)/15d-14(a) Certification of David A. Campbell.

Evergy Metro

31.4

Rule 13a-14(a)/15d-14(a) Certification of Kirkland B. Andrews.

Evergy Metro

31.5

Rule 13a-14(a)/15d-14(a) Certification of David A. Campbell.

Evergy Kansas Central

31.6

Rule 13a-14(a)/15d-14(a) Certification of Kirkland B. Andrews.

Evergy Kansas Central

32.1

Section 1350 Certifications.

Evergy

32.2

Section 1350 Certifications.

Evergy Metro

32.3

Section 1350 Certifications.

Evergy Kansas Central

101.INS

***

XBRL Instance Document.

n/a

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

Evergy
Evergy Kansas Central
Evergy Metro

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Evergy
Evergy Kansas Central
Evergy Metro

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Evergy
Evergy Kansas Central
Evergy Metro

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document.

Evergy
Evergy Kansas Central
Evergy Metro

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Evergy
Evergy Kansas Central
Evergy Metro

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104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

Evergy
Evergy Kansas Central
Evergy Metro

* Filed with the SEC as exhibits to prior SEC filings and are incorporated herein by reference and made a part hereof. The SEC filings and the exhibit number of the documents so filed, and incorporated herein by reference, are stated in parenthesis in the description of such exhibit.

** Furnished and shall not be deemed filed for the purpose of Section 18 of the Exchange Act. Such document shall not be incorporated by reference into any registration statement or other document pursuant to the Exchange Act or the Securities Act of 1933, as amended, unless otherwise indicated in such registration statement or other document.

*** The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

Copies of any of the exhibits filed with the SEC in connection with this document may be obtained from Evergy, Evergy Kansas Central or Evergy Metro, as applicable, upon written request.

The registrants agree to furnish to the SEC upon request any instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of total assets of such registrant and its subsidiaries on a consolidated basis.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Evergy, Inc., Evergy Kansas Central, Inc. and Evergy Metro, Inc. have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.


		EVERGY, INC.

Dated:	November 2, 2021	By: /s/ Kirkland B. Andrews
		(Kirkland B. Andrews)
		(Executive Vice President and Chief Financial Officer)


		EVERGY KANSAS CENTRAL, INC.

Dated:	November 2, 2021	By: /s/ Kirkland B. Andrews
		(Kirkland B. Andrews)
		(Executive Vice President and Chief Financial Officer)


		EVERGY METRO, INC.

Dated:	November 2, 2021	By: /s/ Kirkland B. Andrews
		(Kirkland B. Andrews)
		(Executive Vice President and Chief Financial Officer)

Document

Exhibit 31.1

CERTIFICATIONS

I, David A. Campbell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Evergy, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date:	November 2, 2021	/s/ David A. Campbell
		David A. Campbell President and Chief Executive Officer

Document

Exhibit 31.2

CERTIFICATIONS

I, Kirkland B. Andrews, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Evergy, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date:	November 2, 2021	/s/Kirkland B. Andrews
		Kirkland B. Andrews Executive Vice President and Chief Financial Officer

Document

Exhibit 31.3

CERTIFICATIONS

I, David A. Campbell, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Evergy Metro, Inc.;