PART I [Item 1. Business](index=9&type=section&id=Item%201.%20Business) Evergy, Inc. is a public utility holding company serving approximately 1.6 million customers in Kansas and Missouri, focused on affordability, reliability, and sustainability, with a net-zero CO2 emissions goal by 2045 [Evergy, Inc. - General](index=9&type=section&id=Evergy%2C%20Inc.%20-%20General) Evergy, Inc. is a public utility holding company serving approximately 1.64 million customers across Kansas and Missouri, with a strategy built on affordability, reliability, and sustainability - Evergy is a public utility holding company operating through its wholly-owned subsidiaries: Evergy Kansas Central, Evergy Metro, and Evergy Missouri West[33](index=33&type=chunk)[34](index=34&type=chunk) - The company serves approximately **1,640,800 customers** in Kansas and Missouri, comprising **1,433,500 residences**, **199,400 commercial firms**, and **7,900 industrial and other clients**[37](index=37&type=chunk) - Evergy's core strategic tenets are **affordability** (keeping rates competitive), **reliability** (targeting top-tier performance), and **sustainability** (reducing CO2 emissions and transitioning its generation fleet)[38](index=38&type=chunk) Revenue Percentage by Customer Classification (2019-2021) | Customer Class | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Residential | 34% | 39% | 37% | | Commercial | 30% | 33% | 35% | | Industrial | 11% | 12% | 12% | | Wholesale | 13% | 5% | 7% | | Transmission | 6% | 6% | 6% | | Other | 6% | 5% | 3% | [Regulation](index=10&type=section&id=Regulation) Evergy's utility operations are primarily regulated by the KCC and MPSC for retail rates, FERC for transmission and wholesale rates, and NRC for the Wolf Creek Generating Station Retail Rate Orders in Effect | Jurisdiction | Regulator | Allowed Return on Equity | Rate-Making Equity Ratio | Effective Date | | :--- | :--- | :--- | :--- | :--- | | Evergy Kansas Central | KCC | 9.3% | 51.46% | September 2018 | | Evergy Metro - Kansas | KCC | 9.3% | 49.09% | December 2018 | | Evergy Metro - Missouri | MPSC | Not Specified | Not Specified | December 2018 | | Evergy Missouri West | MPSC | Not Specified | Not Specified | December 2018 | - For 2022, Evergy anticipates approximately **60% of its retail revenues** will come from its Kansas jurisdiction and **40% from its Missouri jurisdiction**[45](index=45&type=chunk) [Power Supply](index=11&type=section&id=Power%20Supply) Evergy controls approximately 15,400 MW of generating capacity, with a mix led by coal (38%) and wind (28%), and maintains a 12% reserve margin as an SPP member Total Capacity by Fuel Type (Estimated 2022) | Fuel Type | MW Capacity | Percent of Total Capacity | | :--- | :--- | :--- | | Coal | 5,913 | 38% | | Wind | 4,326 | 28% | | Natural gas and oil | 3,971 | 26% | | Uranium | 1,108 | 7% | | Solar, landfill gas and hydroelectric | 78 | 1% | | **Total capacity** | **15,396** | **100%** | - Evergy's projected peak summer demand for 2022 is approximately **10,200 MW**[52](index=52&type=chunk) - As members of the Southwest Power Pool (SPP), Evergy's utilities are required to maintain a minimum reserve margin of **12%** to support regional electric supply reliability[55](index=55&type=chunk) [Environmental Matters and Generation Fleet Transition](index=12&type=section&id=Environmental%20Matters%20and%20Generation%20Fleet%20Transition) Evergy aims for net-zero CO2 emissions by 2045, with a 70% reduction by 2030, achieved by retiring fossil fuel plants and adding renewable generation - Evergy has a goal to achieve **net-zero CO2 emissions by 2045**, with an interim goal of a **70% reduction from 2005 levels by 2030**[57](index=57&type=chunk) - Since 2005, the company has added over **4,400 MW of renewable generation** while retiring more than **2,400 MW of fossil fuel generation**[60](index=60&type=chunk) - Strategies to reduce emissions include retiring fossil fuel generation, developing renewable energy facilities, collaborating with regulators on renewable energy programs, and investing in customer energy efficiency[59](index=59&type=chunk) [Fuel](index=13&type=section&id=Fuel) In 2021, coal was 50% of Evergy's fuel mix, followed by renewables at 30%, with 85% of 2022 coal requirements secured by contract 2021 Fuel Mix and Cost | Fuel | Fuel Mix (Actual 2021) | Fuel cost (cents per net kWh delivered) | | :--- | :--- | :--- | | Coal | 50% | 1.94¢ | | Wind, hydroelectric, landfill gas and solar | 30% | 2.06¢ | | Uranium | 16% | 0.64¢ | | Natural gas and oil | 4% | 11.72¢ | - For 2022, Evergy has contracted approximately **85% of its projected 19 million tons of coal requirements**[64](index=64&type=chunk) - The owners of Wolf Creek have secured all uranium, enrichment, and conversion services needed through **Q1 2030** and all fabrication services through **2045**[67](index=67&type=chunk) [Human Capital Resources](index=14&type=section&id=Human%20Capital%20Resources) As of December 31, 2021, Evergy employed 4,930 people, with 2,632 union-represented, emphasizing safety, integrity, and competitive compensation - At year-end 2021, the company had **4,930 employees**, of which **2,632 were represented by unions**[73](index=73&type=chunk) - As of December 31, 2021, the workforce was **77% male** and **23% female**, with an ethnicity breakdown of **85% White**, **5% Black**, **4% Hispanic**, and **6% other**[77](index=77&type=chunk) [Item 1A. Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) Evergy faces risks from regulatory challenges, environmental compliance costs, financial market disruptions, operational failures, and the ongoing impacts of the COVID-19 pandemic - Utility Regulatory Risks: Prices established by regulators may not be sufficient to recover costs or provide an adequate return on investment, exacerbated by regulatory lag and rate moratoriums in Kansas and Missouri[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - Environmental Risks: Compliance with evolving federal and state environmental laws regarding air, water, and coal combustion residuals (CCRs) requires significant capital and carries the risk of substantial fines and sanctions[103](index=103&type=chunk)[104](index=104&type=chunk) - Financial Risks: The company is exposed to risks from financial market disruptions, credit rating downgrades (a ratings agency assigned a negative outlook in 2021), and its holding company structure, which relies on dividends from subsidiaries[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) - Operational Risks: The business faces risks from aging infrastructure, equipment failure, physical and cybersecurity breaches, and potential cost overruns or delays in its significant capital projects[137](index=137&type=chunk)[140](index=140&type=chunk)[147](index=147&type=chunk) - COVID-19 Risks: The pandemic could continue to negatively affect operations through altered electricity usage patterns, increased credit loss expense, supply chain disruptions for capital projects, and increased cybersecurity vulnerabilities from remote work[165](index=165&type=chunk)[166](index=166&type=chunk)[172](index=172&type=chunk) [Item 1B. Unresolved Staff Comments](index=30&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[178](index=178&type=chunk) [Item 2. Properties](index=31&type=section&id=Item%202.%20Properties) Evergy's properties include 15,396 MW of generation capacity, 10,200 circuit miles of transmission, and 60,400 circuit miles of distribution lines, all subject to mortgage indentures Total Generation and Renewable Purchased Power by Type (MW) | Generation Type | Total Company Generation (Owned) | Renewable Purchased Power | Total | | :--- | :--- | :--- | :--- | | Renewable | 584 | 3,820 | 4,404 | | Nuclear | 1,108 | — | 1,108 | | Coal | 5,913 | — | 5,913 | | Gas and Oil | 3,971 | — | 3,971 | | **Total** | **11,576** | **3,820** | **15,396** | - Evergy's electric transmission system consists of approximately **10,200 circuit miles of lines**[188](index=188&type=chunk) - The distribution system includes approximately **44,900 circuit miles of overhead lines** and **15,500 circuit miles of underground lines**[188](index=188&type=chunk) [Item 3. Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) The company is party to various lawsuits and regulatory proceedings in the ordinary course of business, with details in Notes 4 and 14 - Information regarding material lawsuits and proceedings is incorporated by reference from Notes 4 and 14 to the consolidated financial statements[191](index=191&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[192](index=192&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=35&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Evergy's common stock trades on the NYSE under "EVRG," with 18,297 shareholders of record as of February 18, 2022, and minor share repurchases in Q4 2021 - Evergy's common stock is listed on the NYSE under the symbol "**EVRG**" On February 18, 2022, there were **18,297 shareholders of record**[194](index=194&type=chunk) Issuer Purchases of Equity Securities (Q4 2021) | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | October 1 - 31 | — | — | | November 1 - 30 | 680 | $64.92 | | December 1 - 31 | 8,495 | $68.56 | | **Total** | **9,175** | **$68.29** | [Item 6. Selected Financial Data](index=36&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable - Not applicable[200](index=200&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Evergy's 2021 financial performance, covering strategy, regulatory impacts, the February 2021 winter weather event, earnings, critical accounting policies, and liquidity [Executive Summary](index=36&type=section&id=Executive%20Summary) Evergy's 2021 net income increased to $879.7 million, driven by winter weather event margins, higher retail sales, and lower O&M, with strategic goals for emissions reduction and capital investments - Strategic objectives include targeting a **$345 million reduction in operating and maintenance expense by 2025**, investing approximately **$10.7 billion in base capital through 2026**, and achieving a **70% reduction in CO2 emissions by 2030** (from 2005 levels) en route to **net-zero by 2045**[209](index=209&type=chunk) - The February 2021 winter weather event resulted in Evergy incurring **$365.5 million in net natural gas and purchased power costs**, which have been substantially deferred to a regulatory asset for future recovery[217](index=217&type=chunk)[220](index=220&type=chunk) Earnings Overview (2021 vs. 2020) | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Net income attributable to Evergy, Inc. | $879.7M | $618.3M | $261.4M | | Diluted EPS | $3.83 | $2.72 | $1.11 | Reconciliation of GAAP to Adjusted Earnings (non-GAAP) | (in millions, except per share) | 2021 Earnings | 2021 EPS | 2020 Earnings | 2020 EPS | | :--- | :--- | :--- | :--- | :--- | | **Net income attributable to Evergy, Inc.** | **$879.7** | **$3.83** | **$618.3** | **$2.72** | | Non-GAAP reconciling items (net) | (67.1) | (0.29) | 87.2 | 0.38 | | **Adjusted earnings (non-GAAP)** | **$812.6** | **$3.54** | **$705.5** | **$3.10** | [Critical Accounting Policies and Estimates](index=42&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant management estimates for pensions, revenue recognition, regulatory assets and liabilities, asset and goodwill impairments, and asset retirement obligations - Key critical accounting policies involve significant management estimates for pensions, revenue recognition, regulatory assets and liabilities, asset and goodwill impairments, income taxes, and asset retirement obligations (AROs)[242](index=242&type=chunk) Sensitivity of Pension Assumptions | Actuarial Assumption | Change in Assumption | Impact on Projected Benefit Obligation (millions) | Impact on 2022 Pension Expense (millions) | | :--- | :--- | :--- | :--- | | Discount rate | 0.5% increase | $(193.6) | $(18.5) | | Rate of return on plan assets | 0.5% increase | — | $(7.9) | | Discount rate | 0.5% decrease | $219.6 | $20.7 | | Rate of return on plan assets | 0.5% decrease | — | $7.9 | - Goodwill of **$2.34 billion** was tested for impairment as of May 1, 2021, with no impairment found as the fair value of the reporting unit substantially exceeded its carrying amount[254](index=254&type=chunk) [Evergy Results of Operations](index=45&type=section&id=Evergy%20Results%20of%20Operations) Evergy's 2021 income from operations increased by $211.0 million to $1,354.9 million, driven by higher utility gross margin and lower O&M, partially offset by increased depreciation and property taxes Comparative Results of Operations (in millions) | | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Operating revenues | $5,586.7 | $4,913.4 | $673.3 | | Income from operations | $1,354.9 | $1,143.9 | $211.0 | | Net income attributable to Evergy, Inc. | $879.7 | $618.3 | $261.4 | - Utility gross margin (a non-GAAP measure) increased by **$188.1 million in 2021**, primarily due to **$94.5 million in non-regulated energy marketing margins** from the February 2021 winter weather event and an **$84.1 million increase from higher retail sales** driven by weather and demand[279](index=279&type=chunk) - Operating and maintenance expense decreased by **$55.5 million**, largely due to a **$63.5 million decrease in voluntary severance expenses** compared to 2020[283](index=283&type=chunk) - Other income increased by **$54.9 million**, mainly driven by **$49.1 million in higher investment earnings**, which included a **$27.7 million unrealized gain on an equity investment**[285](index=285&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Evergy funds capital through operations, borrowings, and debt/equity, with $1.3 billion available credit, a 49% common equity structure, and $10.7 billion projected capital expenditures through 2026 - As of December 31, 2021, Evergy had **$1.3 billion of available borrowing capacity** under its master credit facility[303](index=303&type=chunk) Capital Structure (excluding short-term debt) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Common equity | 49% | 47% | | Long-term debt | 51% | 53% | Projected Capital Expenditures (2022-2026, in millions) | Category | 2022 | 2023 | 2024 | 2025 | 2026 | | :--- | :--- | :--- | :--- | :--- | :--- | | New renewable generation | $0 | $258.0 | $450.0 | $750.0 | $500.0 | | Other generating facilities | $331.0 | $337.0 | $223.0 | $250.0 | $216.0 | | Transmission facilities | $626.0 | $600.0 | $591.0 | $592.0 | $679.0 | | Distribution facilities | $655.0 | $652.0 | $549.0 | $595.0 | $632.0 | | General facilities | $364.0 | $270.0 | $194.0 | $182.0 | $173.0 | | **Total** | **$1,976.0** | **$2,117.0** | **$2,007.0** | **$2,369.0** | **$2,200.0** | - Cash flows from operating activities decreased by **$402.1 million in 2021**, primarily due to **$365.5 million in cash payments** for net fuel and purchased power costs during the February 2021 winter weather event[340](index=340&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Evergy manages market risks including commodity prices, interest rates, credit, and security prices using derivatives, with commodity price risk largely mitigated by fuel recovery mechanisms - The company is exposed to commodity price, interest rate, credit, and security price risks[370](index=370&type=chunk) - As of December 31, 2021, a **100-basis-point change in interest rates** on its **$1,815.3 million of variable rate and short-term debt** would impact annual income before taxes by approximately **$16.1 million**[375](index=375&type=chunk)[376](index=376&type=chunk) - Investment risk is present in the nuclear decommissioning and pension trust funds; a significant decline in pension asset value could require increased future funding[378](index=378&type=chunk)[379](index=379&type=chunk) - Evergy holds a **$31.4 million investment** in an early-stage energy solutions company, which is subject to significant equity price risk; a **50% decline in its stock price** would impact pre-tax income by approximately **$14 million**[381](index=381&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=64&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents consolidated financial statements for Evergy, Inc. and its subsidiaries, including the Independent Registered Public Accounting Firm's Report and comprehensive notes detailing financial policies and figures [Consolidated Financial Statements](index=72&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for Evergy, Inc. and its subsidiaries show 2021 operating revenues of $5.59 billion and net income of $879.7 million, with total assets of $28.52 billion Evergy, Inc. Consolidated Financial Highlights (Year Ended Dec 31, 2021) | Metric | Amount (millions) | | :--- | :--- | | **Income Statement** | | | Operating Revenues | $5,586.7 | | Income from Operations | $1,354.9 | | Net Income Attributable to Evergy, Inc. | $879.7 | | **Balance Sheet** | | | Total Assets | $28,520.5 | | Total Liabilities | $19,278.8 | | Total Equity | $9,241.7 | [Notes to Consolidated Financial Statements](index=87&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial figures, including the $365.5 million impact of the February 2021 winter weather event, ongoing regulatory proceedings, $9.7 billion in long-term debt, and an $847.0 million underfunded pension status - Note 1: The February 2021 winter weather event resulted in **$365.5 million of net fuel and purchased power costs**, which have been largely deferred for future recovery; the company also recorded **$94.5 million in non-regulated energy marketing margins** from the event[564](index=564&type=chunk)[567](index=567&type=chunk) - Note 4: Details ongoing rate cases in Missouri filed in January 2022 and regulatory proceedings in Kansas concerning the recovery of costs from the winter weather event and potential securitization for the retirement of Lawrence Energy Center Unit 4[604](index=604&type=chunk)[607](index=607&type=chunk)[609](index=609&type=chunk) - Note 9: The company's defined benefit pension plans had a total projected benefit obligation of **$2.56 billion** against plan assets of **$1.71 billion**, resulting in an underfunded status of **$847.0 million** as of December 31, 2021[684](index=684&type=chunk) - Note 12 & 14: As of December 31, 2021, Evergy had **$9.7 billion in long-term debt principal** and significant future commitments for fuel (**$1.1 billion**) and power (**$0.6 billion**)[755](index=755&type=chunk)[815](index=815&type=chunk) - Note 19: The state of Kansas exempted certain public utilities from state corporate income tax beginning in 2021, leading to a revaluation of deferred tax assets and liabilities and a reduction in retail rates[868](index=868&type=chunk)[874](index=874&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=157&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[892](index=892&type=chunk) [Item 9A. Controls and Procedures](index=157&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with no material changes during Q4 2021 - Management for Evergy, Evergy Kansas Central, and Evergy Metro concluded that disclosure controls and procedures were effective as of December 31, 2021[893](index=893&type=chunk)[907](index=907&type=chunk)[912](index=912&type=chunk) - There were no material changes in internal control over financial reporting during the fourth quarter of 2021[894](index=894&type=chunk)[908](index=908&type=chunk)[913](index=913&type=chunk) - Management concluded that Evergy's internal control over financial reporting was effective as of December 31, 2021, based on the COSO framework; this assessment was audited by Deloitte & Touche LLP, which issued an unqualified opinion[898](index=898&type=chunk)[901](index=901&type=chunk) PART III [Items 10-14](index=161&type=section&id=Items%2010-14) Information for Items 10 through 14, covering governance, compensation, and security ownership, is incorporated by reference from Evergy's 2022 definitive proxy statement - Information for Part III (Items 10-14) will be incorporated by reference from Evergy's 2022 definitive proxy statement[922](index=922&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=165&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K report, including consolidated financial statements and various legal documents - This section contains the list of all financial statements, schedules, and exhibits filed with the annual report[946](index=946&type=chunk)

Third Quarter 2021 Earnings Call November 3, 2021 = evergy Public Important Information Forward Looking Statements 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 expens ...

Evergy, Inc. (NASDAQ:EVRG) Q3 Earnings Conference Call November 3, 2021 9:00 AM ET Company Participants Lori Wright – Vice President Investor Relations and Treasurer David Campbell – President and Chief Executive Officer Kirk Andrews – Executive Vice President and Chief Financial Officer Conference Call Participants Shar Pourreza – Guggenheim Partners Darius Anderson – Bank of America Michael Sullivan – Wolfe Research Michael Lapides – Goldman Sachs Paul Patterson – Glenrock Associates Operator Thank you fo ...

[Part I - Financial Information](index=8&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) The company presents unaudited consolidated financial statements for Evergy, Inc and its subsidiaries for the period ended September 30, 2021 [Evergy, Inc. Financial Statements](index=8&type=section&id=Evergy%2C%20Inc.%20Financial%20Statements) Evergy, Inc reported a significant increase in net income to $826.3 million for the nine months ended September 30, 2021 Evergy, Inc. Consolidated Financial Highlights (YTD September 30, 2021 vs 2020) | Metric | YTD Sep 30, 2021 (millions) | YTD Sep 30, 2020 (millions) | | :--- | :--- | :--- | | **Operating Revenues** | $4,464.6 | $3,819.0 | | **Net Income Attributable to Evergy, Inc.** | $826.3 | $567.3 | | **Diluted EPS** | $3.60 | $2.49 | | **Total Assets (as of period end)** | $28,182.1 | N/A | | **Total Liabilities (as of period end)** | $18,870.1 | N/A | | **Total Equity (as of period end)** | $9,312.0 | N/A | Evergy, Inc. Consolidated Cash Flow Summary (YTD September 30) | Cash Flow Activity | 2021 (millions) | 2020 (millions) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $1,036.0 | $1,421.7 | | **Net Cash used in Investing Activities** | $(1,349.1) | $(1,029.9) | | **Net Cash from (used in) Financing Activities** | $193.5 | $(53.4) | [Evergy Kansas Central, Inc. Financial Statements](index=14&type=section&id=Evergy%20Kansas%20Central%2C%20Inc.%20Financial%20Statements) Evergy Kansas Central's net income rose substantially to $452.3 million, driven by higher operating revenues Evergy Kansas Central, Inc. Financial Highlights (YTD September 30, 2021 vs 2020) | Metric | YTD Sep 30, 2021 (millions) | YTD Sep 30, 2020 (millions) | | :--- | :--- | :--- | | **Operating Revenues** | $2,277.4 | $1,864.5 | | **Net Income Attributable to Evergy Kansas Central, Inc.** | $452.3 | $182.0 | | **Total Assets (as of period end)** | $12,948.1 | N/A | | **Total Equity (as of period end)** | $4,572.2 | N/A | [Evergy Metro, Inc. Financial Statements](index=19&type=section&id=Evergy%20Metro%2C%20Inc.%20Financial%20Statements) Evergy Metro's net income increased to $303.3 million for the nine-month period, supported by growth in operating revenues Evergy Metro, Inc. Financial Highlights (YTD September 30, 2021 vs 2020) | Metric | YTD Sep 30, 2021 (millions) | YTD Sep 30, 2020 (millions) | | :--- | :--- | :--- | | **Operating Revenues** | $1,526.7 | $1,328.3 | | **Net Income** | $303.3 | $276.2 | | **Total Assets (as of period end)** | $9,225.5 | N/A | | **Total Equity (as of period end)** | $3,012.3 | N/A | [Note 1: Organization and Basis of Presentation](index=24&type=section&id=Note%201%3A%20Organization%20and%20Basis%20of%20Presentation) The company details its corporate structure and the significant financial impact of the February 2021 winter weather event - Evergy is a public utility holding company serving approximately **1.6 million customers** in Kansas and Missouri with **15,400 MW** of generating capacity[70](index=70&type=chunk)[71](index=71&type=chunk)[75](index=75&type=chunk) - The February 2021 winter weather event resulted in **$349.7 million** in net fuel and purchased power costs, primarily impacting Evergy Missouri West and Evergy Kansas Central[94](index=94&type=chunk) - The company deferred nearly all winter weather event costs to a **regulatory asset** for future recovery from customers[95](index=95&type=chunk)[97](index=97&type=chunk) - Evergy recorded **$95.0 million** in non-regulated energy marketing margins in 2021 related to the winter weather event[98](index=98&type=chunk) [Note 4: Rate Matters and Regulation](index=32&type=section&id=Note%204%3A%20Rate%20Matters%20and%20Regulation) This note outlines key regulatory proceedings, including rate adjustments and cost deferrals from the 2021 winter storm - In April 2021, the KCC approved TDC adjustments, resulting in an expected annual revenue increase of **$37.9 million** for Evergy Kansas Central[110](index=110&type=chunk)[112](index=112&type=chunk) - Due to the February 2021 winter weather event, Evergy Kansas Central recognized a **regulatory asset of $115.0 million** for increased costs[116](index=116&type=chunk) - Evergy Kansas Central filed a predetermination request with the KCC to retire the coal-fired LEC Unit 4 and invest in **190 MW of solar generation**[118](index=118&type=chunk)[119](index=119&type=chunk)[121](index=121&type=chunk) - As of September 30, 2021, Evergy Missouri West had a **regulatory asset of $278.7 million** related to the winter storm[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk) [Note 10: Commitments and Contingencies](index=44&type=section&id=Note%2010%3A%20Commitments%20and%20Contingencies) The company details environmental contingencies and regulations that could result in material compliance costs - The future of **GHG regulations is uncertain** following the vacatur of the ACE rule, and compliance costs could be material[192](index=192&type=chunk)[193](index=193&type=chunk) - The EPA is undertaking a new rulemaking to potentially revise Effluent Limitations Guidelines, which could result in **more stringent and material compliance costs**[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) - The company initiated closure of all un-lined Coal Combustion Residuals impoundments, and future revisions to **Asset Retirement Obligations could be material**[200](index=200&type=chunk)[201](index=201&type=chunk) [Note 12: Shareholders' Equity](index=48&type=section&id=Note%2012%3A%20Shareholders'%20Equity) This note describes a significant equity transaction with Bluescape Energy Partners and the filing of new shelf registration statements - In April 2021, Evergy sold common stock and issued a warrant to an affiliate of Bluescape for **net proceeds of $112.5 million**[216](index=216&type=chunk) - In September 2021, Evergy filed an automatic shelf registration statement for the **sale of unlimited amounts of securities**, expiring in September 2024[217](index=217&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, the impact of the winter weather event, strategic initiatives, and capital resource allocation [Evergy, Inc. MD&A](index=53&type=section&id=Evergy%2C%20Inc.%20MD%26A) Management discusses strong earnings driven by winter storm margins and favorable weather, alongside its net-zero emissions goal - Evergy announced a revised goal to achieve **net-zero carbon emissions by 2045**, with an interim goal of a 70% reduction by 2030[248](index=248&type=chunk) - Utility gross margin for YTD 2021 increased by **$184.1 million**, driven by **$95.0 million** in non-regulated energy marketing margins from the winter storm[287](index=287&type=chunk) Evergy, Inc. Earnings Overview (YTD September 30) | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | **Net Income Attributable to Evergy, Inc. (millions)** | $826.3 | $567.3 | $259.0 | | **Diluted EPS** | $3.60 | $2.49 | $1.11 | Projected Capital Expenditures (2021-2025) | Year | Amount (millions) | | :--- | :--- | | 2021 | $1,953.0 | | 2022 | $2,016.0 | | 2023 | $1,993.0 | | 2024 | $2,055.0 | | 2025 | $2,417.0 | | **Total** | **$10,434.0** | [Evergy Kansas Central, Inc. MD&A](index=66&type=section&id=Evergy%20Kansas%20Central%2C%20Inc.%20MD%26A) Net income surged due to a significant increase in utility gross margin, fueled by winter storm-related marketing margins - Utility gross margin increased by **$180.1 million** year-to-date, primarily due to **$95.0 million** in non-regulated energy marketing margins[328](index=328&type=chunk) - Income tax expense decreased by **$103.5 million** year-to-date, mainly due to a **$109.0 million benefit** from the 2020 revaluation of deferred taxes[333](index=333&type=chunk) Evergy Kansas Central, Inc. Results of Operations (YTD September 30) | Metric | 2021 (millions) | 2020 (millions) | Change (millions) | | :--- | :--- | :--- | :--- | | **Operating Revenues** | $2,277.4 | $1,864.5 | $412.9 | | **Income from Operations** | $626.7 | $476.4 | $150.3 | | **Net Income Attributable** | $452.3 | $182.0 | $270.3 | [Evergy Metro, Inc. MD&A](index=68&type=section&id=Evergy%20Metro%2C%20Inc.%20MD%26A) Net income increased due to favorable weather and lower operating expenses, partially offset by higher income tax expense - Utility gross margin increased by **$15.1 million** year-to-date, driven by a **$33.1 million** increase from favorable weather[341](index=341&type=chunk) - Operating and maintenance expense decreased by **$43.6 million** year-to-date, primarily due to a **$19.8 million** decrease in severance costs[342](index=342&type=chunk) - Income tax expense increased by **$38.6 million** year-to-date, as the prior year included a **$32.2 million tax benefit**[346](index=346&type=chunk) Evergy Metro, Inc. Results of Operations (YTD September 30) | Metric | 2021 (millions) | 2020 (millions) | Change (millions) | | :--- | :--- | :--- | :--- | | **Operating Revenues** | $1,526.7 | $1,328.3 | $198.4 | | **Income from Operations** | $439.8 | $380.6 | $59.2 | | **Net Income** | $303.3 | $276.2 | $27.1 | [Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk disclosures since its most recent Annual Report on Form 10-K - There have been **no material changes** in market risk from the disclosures in the 2020 Form 10-K[348](index=348&type=chunk) [Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures for all reporting entities were effective as of September 30, 2021 - The CEO and CFO of Evergy, Inc and its subsidiaries have all concluded that their respective **disclosure controls and procedures were effective**[349](index=349&type=chunk)[352](index=352&type=chunk)[354](index=354&type=chunk) - **No changes in internal control** over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[350](index=350&type=chunk)[353](index=353&type=chunk)[355](index=355&type=chunk) [Part II - Other Information](index=71&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various ordinary course lawsuits and regulatory proceedings, detailed in the financial statement notes - Information regarding material lawsuits and regulatory proceedings is incorporated by reference from **Notes 4 and 10** to the consolidated financial statements[356](index=356&type=chunk) [Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) The company identifies new significant risks related to workforce management, including talent retention and labor negotiations - A new risk factor has been added concerning the **failure to attract and retain a qualified workforce**, which could impede the company's strategy[359](index=359&type=chunk)[360](index=360&type=chunk) - Federal COVID-19 vaccination and testing mandates could result in **employee or contractor labor disruptions**, potentially impacting operations[361](index=361&type=chunk) - Collective bargaining agreements with five local IBEW unions expired in 2021 and are being renegotiated, posing a **risk of labor disruptions**[362](index=362&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - **None reported**[364](index=364&type=chunk) [Exhibits](index=74&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including a new credit agreement and officer certifications - Exhibit 10.1 is the **Amended and Restated Credit Agreement** dated August 31, 2021, among Evergy, Inc and its subsidiaries[371](index=371&type=chunk) - Exhibits 31.1 through 31.6 contain the required **Rule 13a-14(a)/15d-14(a) certifications** from the CEO and CFO for each registrant[371](index=371&type=chunk)

Second Quarter 2021 Earnings Call August 5, 2021 %evergy Public Important Information Forward Looking Statements Statements made in this presentation 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 expe ...

Evergy, Inc. (NASDAQ:EVRG) Q2 2021 Results Earnings Conference Call August 5, 2021 8:00 AM ET Company Participants Lori Wright - Vice President, Corporate Planning, Investor Relations & Treasurer David Campbell - President & Chief Executive Officer Kirk Andrews - Executive Vice President & Chief Financial Officer Conference Call Participants Michael Lapides - Goldman Sachs Operator Thank you for standing by. And welcome to the Second Quarter 2021 Evergy, Inc. Earnings Conference Call. At this time, all part ...

[Part I - Financial Information](index=8&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements and combined notes for Evergy, Evergy Kansas Central, and Evergy Metro as of June 30, 2021 [Evergy, Inc. Financial Statements](index=8&type=section&id=Evergy%2C%20Inc.%20Financial%20Statements) Presents Evergy, Inc.'s unaudited consolidated financial statements for the three and six months ended June 30, 2021 and 2020 Evergy, Inc. Key Financial Data (Unaudited) | Financial Metric | June 30, 2021 (millions) | December 31, 2020 (millions) | | :--- | :--- | :--- | | **Balance Sheet** | | | | Total Assets | $28,008.8 | $27,114.8 | | Total Liabilities | $19,031.7 | $18,396.3 | | Total Equity | $8,977.1 | $8,718.5 | | **Income Statement (YTD)** | **June 30, 2021** | **June 30, 2020** | | Operating Revenues | $2,848.1 | $2,301.4 | | Net Income Attributable to Evergy, Inc. | $376.9 | $202.8 | | Diluted EPS | $1.65 | $0.89 | [Evergy Kansas Central, Inc. Financial Statements](index=14&type=section&id=Evergy%20Kansas%20Central%2C%20Inc.%20Financial%20Statements) Presents Evergy Kansas Central, Inc.'s unaudited consolidated financial statements for the three and six months ended June 30, 2021 and 2020 Evergy Kansas Central, Inc. Key Financial Data (Unaudited) | Financial Metric | June 30, 2021 (millions) | December 31, 2020 (millions) | | :--- | :--- | :--- | | **Balance Sheet** | | | | Total Assets | $12,962.1 | $12,589.1 | | Total Liabilities | $8,420.6 | $8,308.3 | | Total Equity | $4,541.5 | $4,280.8 | | **Income Statement (YTD)** | **June 30, 2021** | **June 30, 2020** | | Operating Revenues | $1,499.6 | $1,130.9 | | Net Income Attributable to Evergy Kansas Central, Inc. | $254.7 | $11.9 | [Evergy Metro, Inc. Financial Statements](index=19&type=section&id=Evergy%20Metro%2C%20Inc.%20Financial%20Statements) Presents Evergy Metro, Inc.'s unaudited consolidated financial statements for the three and six months ended June 30, 2021 and 2020 Evergy Metro, Inc. Key Financial Data (Unaudited) | Financial Metric | June 30, 2021 (millions) | December 31, 2020 (millions) | | :--- | :--- | :--- | | **Balance Sheet** | | | | Total Assets | $9,025.4 | $8,915.8 | | Total Liabilities | $6,144.6 | $6,156.6 | | Total Equity | $2,880.8 | $2,759.2 | | **Income Statement (YTD)** | **June 30, 2021** | **June 30, 2020** | | Operating Revenues | $954.9 | $799.8 | | Net Income | $121.6 | $128.5 | [Combined Notes to Unaudited Consolidated Financial Statements](index=24&type=section&id=Combined%20Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations for the Evergy Companies' consolidated financial statements, including accounting policies, regulatory matters, and commitments - The February 2021 winter weather event resulted in Evergy incurring **$349.5 million** in net natural gas and purchased power costs. These costs were primarily deferred to regulatory assets for future recovery from customers[97](index=97&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) - In February 2021, Evergy entered into a securities purchase agreement with an affiliate of Bluescape, selling **2,269,447 shares** of common stock for approximately **$113.2 million** and issuing a warrant to purchase up to **3,950,000 additional shares**[211](index=211&type=chunk) - In May 2020, Kansas exempted certain public utilities, including Evergy Kansas Central and Evergy Metro, from state corporate income tax starting in 2021. This led to a revaluation of deferred income tax assets and liabilities, resulting in a net decrease of **$233.8 million** in Evergy's net deferred income tax liabilities[221](index=221&type=chunk)[222](index=222&type=chunk) - In April 2021, Evergy Missouri West issued **$500.0 million** in Senior Notes, and Evergy redeemed its **$350.0 million** of 4.85% Senior Notes[156](index=156&type=chunk)[157](index=157&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results for Evergy, Evergy Kansas Central, and Evergy Metro, covering key events, strategic initiatives, and operational performance [Evergy, Inc. MD&A](index=53&type=section&id=Evergy%2C%20Inc.%20MD%26A) Provides an overview of Evergy, Inc.'s performance, detailing financial impacts from the winter event, strategic investments, and drivers of earnings and cash flow changes - The February 2021 winter weather event led to **$349.5 million** in net fuel and purchased power costs, largely deferred for future recovery, and generated **$95.0 million** in non-regulated energy marketing margins[236](index=236&type=chunk)[240](index=240&type=chunk) - Evergy announced a revised goal to achieve net-zero carbon emissions by **2045**, with an interim goal of a **70% reduction** in CO2 emissions from 2005 levels by **2030**[243](index=243&type=chunk) Evergy, Inc. Earnings Summary (YTD June 30) | Metric | 2021 (millions) | 2020 (millions) | Change (millions) | | :--- | :--- | :--- | :--- | | Net Income Attributable to Evergy, Inc. | $376.9 | $202.8 | $174.1 | | Diluted EPS | $1.65 | $0.89 | $0.76 | - YTD utility gross margin increased by **$132.3 million**, primarily driven by **$95.0 million** in non-regulated energy marketing margins from the winter event, higher retail sales from weather and demand, and increased transmission revenue[274](index=274&type=chunk) - YTD operating and maintenance expense decreased by **$25.5 million**, mainly due to lower voluntary severance costs, reduced advisor expenses, and lower credit loss expense compared to 2020[278](index=278&type=chunk) Evergy, Inc. Cash Flow Summary (YTD June 30, in millions) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Operating Activities | $224.6 | $522.5 | | Investing Activities | $(918.2) | $(601.2) | | Financing Activities | $607.1 | $231.7 | [Evergy Kansas Central, Inc. MD&A](index=64&type=section&id=Evergy%20Kansas%20Central%2C%20Inc.%20MD%26A) Analyzes Evergy Kansas Central, Inc.'s financial results, highlighting significant net income increase driven by utility gross margin and favorable income tax impacts Evergy Kansas Central, Inc. Results of Operations (YTD June 30, in millions) | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $1,499.6 | $1,130.9 | $368.7 | | Income from Operations | $360.8 | $235.7 | $125.1 | | Net Income Attributable to Evergy Kansas Central, Inc. | $254.7 | $11.9 | $242.8 | - YTD utility gross margin increased by **$158.0 million**, driven by **$95.0 million** in non-regulated energy marketing margins from the February winter event and a **$33.9 million** increase at its non-regulated share of the Jeffrey Energy Center[308](index=308&type=chunk) - YTD operating and maintenance expense increased by **$22.1 million**, primarily due to higher administrative costs billed from Evergy Metro, increased plant maintenance outage costs, and costs related to the winter event, partially offset by lower severance expenses[309](index=309&type=chunk) - YTD income tax expense decreased by **$103.6 million**, mainly due to a **$109.0 million** decrease from the 2020 revaluation of deferred taxes related to the Kansas tax rate change and a **$13.4 million** decrease from the new tax exemption, partially offset by higher pre-tax income[314](index=314&type=chunk) [Evergy Metro, Inc. MD&A](index=67&type=section&id=Evergy%20Metro%2C%20Inc.%20MD%26A) Analyzes Evergy Metro, Inc.'s financial results, noting a slight net income decrease due to utility gross margin and increased income tax expense Evergy Metro, Inc. Results of Operations (YTD June 30, in millions) | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Operating Revenues | $954.9 | $799.8 | $155.1 | | Income from Operations | $202.3 | $176.2 | $26.1 | | Net Income | $121.6 | $128.5 | $(6.9) | - YTD utility gross margin decreased by **$7.2 million**, primarily due to an **$11.4 million** negative impact from jurisdictional allocation differences in its fuel recovery mechanisms related to the February 2021 winter event[321](index=321&type=chunk) - YTD operating and maintenance expense decreased by **$29.3 million**, mainly due to lower voluntary severance expenses (**$9.1 million**), reduced administrative costs (**$7.8 million**), and lower credit loss expense (**$4.4 million**)[324](index=324&type=chunk) - YTD income tax expense increased by **$37.2 million**, primarily driven by a **$32.2 million** increase related to the 2020 revaluation of deferred taxes from the Kansas tax rate change[327](index=327&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Confirms no material changes to market risk disclosures since the 2020 Form 10-K, directing readers to that report for full details - There have been no material changes in market risk from the disclosures in the 2020 Form 10-K[330](index=330&type=chunk) [Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms the effectiveness of disclosure controls and procedures for all Evergy entities, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures for Evergy, Inc., Evergy Kansas Central, Inc., and Evergy Metro, Inc. were effective at a reasonable assurance level as of June 30, 2021[331](index=331&type=chunk)[333](index=333&type=chunk)[335](index=335&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the internal control over financial reporting for any of the registrants[332](index=332&type=chunk)[334](index=334&type=chunk)[337](index=337&type=chunk) [Part II - Other Information](index=71&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) The Evergy Companies are involved in various lawsuits and regulatory proceedings, with details referenced in Notes 4 and 10 of the financial statements - Information regarding material lawsuits and regulatory proceedings is located in Notes 4 (Rate Matters and Regulation) and 10 (Commitments and Contingencies) of the consolidated financial statements[339](index=339&type=chunk) [Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) Confirms no material changes to previously disclosed risk factors in the 2020 Form 10-K, which remain applicable to all Evergy entities - There have been no material changes to the risk factors discussed in the 2020 Form 10-K for Evergy, Evergy Kansas Central, and Evergy Metro[340](index=340&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details Evergy's Q2 2021 equity security purchases, primarily for withholding taxes on restricted stock units, not a buyback plan Issuer Purchases of Equity Securities (Q2 2021) | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | May 1 - 31 | 1,241 | $62.12 | | June 1 - 30 | 9,385 | $62.15 | | **Total** | **10,626** | **$62.15** | - The shares purchased were for withholding taxes related to the vesting of restricted stock units[342](index=342&type=chunk) [Defaults Upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults on its senior securities during the reporting period - None[343](index=343&type=chunk) [Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[344](index=344&type=chunk) [Other Information](index=72&type=section&id=Item%205.%20Other%20Information) Provides access information for SEC filings and other material financial information on the SEC and company investor relations websites - SEC filings and other material financial information are available on the SEC website and the Investor Relations section of the company's website, www.evergy.com[346](index=346&type=chunk)[347](index=347&type=chunk) [Exhibits](index=73&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including key agreements, certifications, and interactive data files - Exhibits filed include agreements related to the April 2021 Note Purchase Agreement and the April 2021 Registration Rights Agreement and Warrant with BEP Special Situations V LLC (an affiliate of Bluescape)[349](index=349&type=chunk) - Certifications by the CEO and CFO pursuant to Rule 13a-14(a)/15d-14(a) and Section 1350 are included for Evergy, Evergy Metro, and Evergy Kansas Central[349](index=349&type=chunk)

Financial Data and Key Metrics Changes - Adjusted earnings per share (EPS) for Q1 2021 were $0.55, up from $0.41 in Q1 2020, driven by favorable weather, income tax benefits, and higher other income [7][41] - The company reaffirmed its 2021 adjusted EPS guidance of $3.20 to $3.40 per share and targeted long-term annual EPS growth of 6% to 8% from 2019 through 2024 [8][39] Business Line Data and Key Metrics Changes - The power marketing business achieved unusually high gross margins during the February weather event, contributing approximately $0.41 per share to pre-tax earnings, which was excluded from adjusted EPS [13][41] - Weather-normalized retail sales increased by 1.1% in Q1 2021, with residential sales up 3.2% and industrial sales up 2.9%, while commercial sales declined by 1.5% [45][46] Market Data and Key Metrics Changes - The company experienced its 40th consecutive quarter of customer growth, with total customers increasing by 1% compared to Q1 2020 [48] - National unemployment rates have declined, with Kansas City metro area unemployment landing at around 4.2%, below the national average of 6.2% [48] Company Strategy and Development Direction - The company is focused on a balanced strategic plan that emphasizes reliability, affordability, and sustainability, with a phased approach to adding renewables and retiring coal plants [19][34] - The Integrated Resource Plan (IRP) reflects a commitment to reducing carbon emissions by 70% by 2030 and achieving net zero carbon emissions by 2045 [36][37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of the February extreme weather event on costs and emphasized the importance of balancing reliability with the transition to renewables [9][32] - The company plans to retire the last two units at the Lawrence Energy Center by late 2023 and add 700 megawatts of utility-scale solar, consistent with its Sustainability Transformation Plan [30][31] Other Important Information - The company is actively pursuing regulatory mechanisms to recover costs associated with the extreme weather event, including accounting authority orders in Kansas and Missouri [10][11] - Securitization legislation is under review in Missouri, which could provide a beneficial cost recovery approach [12][25] Q&A Session Summary Question: Anticipated pushback from customer groups regarding Missouri IRP - Management believes the IRP reflects a balanced approach focusing on rates, reliability, and sustainability, with a phased addition of renewables [54] Question: Opportunities for transmission spend and partnerships - Management sees incremental opportunities for transmission and has an existing partnership with AEP, evaluating potential projects like the Greenbelt D.C. line [62][65] Question: Differences between competing securitization bills in Missouri - Management indicated that the bills are similar with no significant differences, and they are optimistic about the outcome [78][79] Question: Potential size of securitization related to the Lawrence plant - The anticipated securitization amount related to the Lawrence plant retirement is about $350 million [84] Question: Timeline for the STP process in Kansas - The STP process is informational, with the next steps including filing responsive comments and holding a workshop in late May [90] Question: Impact of the February weather event on the IRP - Management noted that the event reinforced the need for a balanced approach to reliability and sustainability, with ongoing evaluations of the IRP [92][95]

First Quarter 2021 Earnings Call May 6, 2021 %evergy. Important Information Forward Looking Statements Statements made in this presentation that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, statements relating to our strategic plan, including, without limitation, those related to earnings per share, dividend, operating and maintenance expense and capital ...

Part I - Financial Information [Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements for Evergy, Inc., Evergy Kansas Central, and Evergy Metro, detailing financial position, performance, cash flows, and notes on significant events, including the February 2021 winter weather event [Evergy, Inc. Financial Statements](index=8&type=section&id=Evergy%2C%20Inc.%20Financial%20Statements) Evergy, Inc. reported a significant increase in Q1 2021 net income to **$191.6 million**, with operating revenues reaching **$1.61 billion**, while operating cash flow turned negative due to winter weather event costs Evergy, Inc. Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $2,001.9 | $1,624.3 | | **Total Assets** | $28,020.1 | $27,114.8 | | **Total Current Liabilities** | $3,244.4 | $2,355.8 | | **Total Liabilities** | $19,225.7 | $18,396.3 | | **Total Equity** | $8,794.4 | $8,718.5 | Evergy, Inc. Consolidated Income Statement Highlights (in millions, except EPS) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Operating Revenues** | $1,611.9 | $1,116.7 | | **Income from Operations** | $317.7 | $197.5 | | **Net Income Attributable to Evergy, Inc.** | $191.6 | $69.4 | | **Diluted EPS** | $0.84 | $0.31 | Evergy, Inc. Consolidated Cash Flow Highlights (in millions) | Cash Flow Category | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $(28.6) | $320.6 | | **Net Cash used in Investing Activities** | $(475.2) | $(333.4) | | **Net Cash from Financing Activities** | $840.9 | $294.0 | [Evergy Kansas Central, Inc. Financial Statements](index=13&type=section&id=Evergy%20Kansas%20Central%2C%20Inc.%20Financial%20Statements) Evergy Kansas Central, Inc. reported a substantial Q1 2021 net income increase to **$178.1 million**, driven by operating revenues of **$901.1 million**, influenced by the February 2021 winter weather event Evergy Kansas Central, Inc. Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | $12,871.5 | $12,589.1 | | **Total Liabilities** | $8,409.6 | $8,308.3 | | **Total Equity** | $4,461.9 | $4,280.8 | Evergy Kansas Central, Inc. Consolidated Income Statement Highlights (in millions) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Operating Revenues** | $901.1 | $560.1 | | **Income from Operations** | $240.3 | $114.5 | | **Net Income Attributable to Evergy Kansas Central, Inc.** | $178.1 | $52.4 | [Evergy Metro, Inc. Financial Statements](index=18&type=section&id=Evergy%20Metro%2C%20Inc.%20Financial%20Statements) Evergy Metro, Inc. reported Q1 2021 net income of **$33.5 million** and operating revenues of **$516.2 million**, but operating cash flow turned negative at (**$117.1 million**) Evergy Metro, Inc. Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | $9,053.5 | $8,915.8 | | **Total Liabilities** | $6,260.8 | $6,156.6 | | **Total Equity** | $2,792.7 | $2,759.2 | Evergy Metro, Inc. Consolidated Income Statement Highlights (in millions) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Operating Revenues** | $516.2 | $375.5 | | **Income from Operations** | $71.2 | $63.7 | | **Net Income** | $33.5 | $25.6 | [Combined Notes to Unaudited Consolidated Financial Statements](index=23&type=section&id=Combined%20Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Detailed notes explain financial statements, highlighting the **$341.3 million** impact of the February 2021 winter weather event, deferred to regulatory assets, and a securities purchase agreement with Bluescape Energy Partners - The February 2021 winter weather event caused Evergy to incur **$341.3 million** in net fuel and purchased power costs. These costs were primarily driven by Evergy Missouri West (**$297.3M**) and Evergy Kansas Central (**$120.7M**), offset by net wholesale revenues at Evergy Metro (**$76.7M**)[92](index=92&type=chunk) - The company has deferred substantially all of the winter weather event costs to a regulatory asset or liability, expecting future recovery from or refund to customers, though the timing may be extended to moderate customer bill impacts[93](index=93&type=chunk)[94](index=94&type=chunk) - In February 2021, Evergy entered into a securities purchase agreement with an affiliate of Bluescape for approximately **$113.2 million** in common stock and a warrant to purchase up to **3.95 million** additional shares. The transaction was completed in April 2021[193](index=193&type=chunk) Revenue from Contracts with Customers by Segment (Q1 2021 vs Q1 2020, in millions) | Segment | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Evergy, Inc.** | | | | Total electric retail | $883.7 | $938.4 | | Wholesale | $487.5 | $63.5 | | **Evergy Kansas Central** | | | | Total electric retail | $433.3 | $415.7 | | Wholesale | $272.4 | $54.8 | | **Evergy Metro** | | | | Total electric retail | $279.1 | $353.1 | | Wholesale | $200.5 | $6.8 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2021 financial results, highlighting a net income increase to **$191.6 million** from winter weather event margins, a new net-zero carbon goal by 2045, and sufficient liquidity Evergy, Inc. Earnings Overview (in millions, except EPS) | Metric | Q1 2021 | Q1 2020 | Change | | :--- | :--- | :--- | :--- | | **Net income attributable to Evergy, Inc.** | $191.6 | $69.4 | $122.2 | | **Earnings per common share, diluted** | $0.84 | $0.31 | $0.53 | - The increase in net income was primarily due to non-regulated energy marketing margins from the February 2021 winter weather event, higher retail sales from favorable weather, and increased weather-normalized demand[221](index=221&type=chunk) - Evergy announced a revised goal to achieve net-zero carbon emissions by **2045**, with an interim goal of a **70% reduction** in CO2 emissions from 2005 levels by **2030**[217](index=217&type=chunk) Reconciliation of GAAP to Adjusted (non-GAAP) Earnings (in millions) | Description | Q1 2021 Earnings | Q1 2021 EPS | Q1 2020 Earnings | Q1 2020 EPS | | :--- | :--- | :--- | :--- | :--- | | **Net income attributable to Evergy, Inc. (GAAP)** | $191.6 | $0.84 | $69.4 | $0.31 | | Non-regulated energy marketing margin (pre-tax) | $(96.5) | $(0.42) | — | — | | Severance costs, pre-tax | $1.6 | $0.01 | $27.0 | $0.12 | | Advisor expenses, pre-tax | $1.5 | $0.01 | $6.6 | $0.02 | | Income tax effect | $19.7 | $0.08 | $(8.8) | $(0.04) | | *Other adjustments not shown* | ... | ... | ... | ... | | **Adjusted earnings (non-GAAP)** | $125.4 | $0.55 | $94.2 | $0.41 | [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures have occurred since the 2020 Form 10-K, which provides a comprehensive discussion of business, legal, operational, and credit risks - There have been no material changes in market risk from the disclosures provided in the Evergy Companies' combined 2020 Form 10-K[280](index=280&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2021, with a new customer billing system implemented at Evergy Kansas Central in January 2021 requiring internal control updates - The chief executive officer and chief financial officer of Evergy, Evergy Kansas Central, and Evergy Metro concluded that disclosure controls and procedures were effective as of the end of the period[281](index=281&type=chunk)[285](index=285&type=chunk)[288](index=288&type=chunk) - In January 2021, Evergy Kansas Central implemented a new customer billing system, which constituted a change to its internal control over financial reporting. Corresponding updates to internal controls were made[283](index=283&type=chunk)[286](index=286&type=chunk) Part II - Other Information [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits and regulatory proceedings, with material legal matters detailed in Notes 4 and 9 of the consolidated financial statements - The company is party to various lawsuits and regulatory proceedings. Information regarding material proceedings is incorporated by reference from Notes 4 and 9 to the consolidated financial statements[290](index=290&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the 2020 Form 10-K, and the business remains subject to unpredictable factors that could materially affect future results - There have been no material changes to the risk factors discussed in the 2020 Form 10-K for Evergy, Evergy Kansas Central, and Evergy Metro[291](index=291&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Evergy purchased **29,851** shares of its equity securities at **$56.96** per share in Q1 2021 to cover withholding taxes for employee restricted stock vesting, not as part of a repurchase plan Issuer Purchases of Equity Securities (Q1 2021) | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January | — | — | | February | — | — | | March | 29,851 | $56.96 | | **Total** | **29,851** | **$56.96** | - The shares were purchased for withholding taxes related to the vesting of restricted stock and performance shares[293](index=293&type=chunk) [Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults on its senior securities during the period - None[294](index=294&type=chunk) [Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[295](index=295&type=chunk) [Other Information](index=60&type=section&id=Item%205.%20Other%20Information) Evergy's annual shareholder meeting on May 4, 2021, resulted in the election of thirteen directors, advisory approval of executive compensation, and ratification of Deloitte & Touche LLP as the 2021 independent auditor - At the annual shareholder meeting on May 4, 2021, shareholders elected all thirteen director nominees, approved executive compensation on an advisory basis, and ratified the appointment of Deloitte & Touche LLP as the independent auditor for 2021[297](index=297&type=chunk)[298](index=298&type=chunk) [Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists Form 10-Q exhibits, including various agreements, CEO/CFO certifications, and XBRL data files, with key agreements like the Note Purchase Agreement and Securities Purchase Agreement incorporated by reference - Key exhibits filed include the Note Purchase Agreement from April 2021, the Securities Purchase Agreement with an affiliate of Bluescape from February 2021, and CEO/CFO certifications[306](index=306&type=chunk)[314](index=314&type=chunk)[322](index=322&type=chunk)