Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following combined MD&A should be read in conjunction with the consolidated financial statements and accompanying notes in this combined annual report on 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.

The following MD&A generally discusses 2020 and 2019 items and year-to-year comparisons between 2020 and 2019. Discussions of 2018 items and year-to-year comparisons between 2019 and 2018 can be found in MD&A in Part II, Item 7, of the Evergy Companies' combined annual report on Form 10-K for the fiscal year ended December 31, 2019.

EVERGY, INC.

EXECUTIVE SUMMARY

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 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).

Strategy

Evergy expects to continue operating its integrated utilities within the currently existing regulatory frameworks. In August 2020, Evergy announced a five-year Sustainability Transformation Plan, or STP, to optimize and enhance value creation for shareholders, customers, communities and employees. Significant elements of the plan include:

• targeting a reduction of approximately $330 million of operating and maintenance expense by 2024 from 2018 adjusted operating and maintenance expense (non-GAAP) (see "Non-GAAP Measures" within this Executive Summary for a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure);

• targeting a reduction of approximately $145 million of fuel and purchased power expense between 2019 and 2024; and

• targeting approximately $8.9 billion of expected base capital investments through 2024. Of this amount, Evergy estimates approximately $2.9 billion to qualify for PISA in Missouri, and approximately $1.9 billion to be focused on FERC-jurisdictional improvements. See "Liquidity and Capital Resources; Capital Expenditures", for further information regarding Evergy's projected capital expenditures through 2024.

The STP also enhances Evergy's efforts to mitigate future strategic risk through the responsible and accelerated reduction of CO2 emissions. In 2020, Evergy achieved a reduction of CO2 emissions of approximately 50% from 2005 levels and announced a goal to achieve an 80% reduction from 2005 levels by 2050. The STP has the potential to reduce CO2 emissions by as much as 85% by 2030 compared to 2005 levels. The STP includes steps that would expedite CO2 emission reductions by pursuing constructive legislative and regulatory recovery mechanisms to facilitate the retirement of coal-fired generation and expansion of Evergy's wind and solar footprint, while maintaining reliability. The pace of CO2 emission reductions will ultimately be defined by continued collaboration with stakeholders as part of Evergy's triennial integrated resource plan. Furthermore, the trajectory and timing for reaching this goal could be impacted by political, legal and regulatory actions and applicable technology developments.

See "Cautionary Statements Regarding Certain Forward-Looking Information" and Part I, Item 1A, Risk Factors, for additional information.

Agreements with Elliott Investment Management L.P. and Bluescape Energy Partners, LLC

On February 25, 2021, Evergy entered into separate agreements with Bluescape Energy Partners, LLC, (Bluescape) Elliott Investment Management L.P. (Elliott) and affiliates of Elliott. As part of the agreement with Bluescape (the Bluescape Agreement), C. John Wilder, Executive Chairman of Bluescape, and Mary L. Landrieu, former U.S. Senator for Louisiana, will join the Evergy Board effective as of March 1, 2021.

In addition, pursuant to a securities purchase agreement, by and between Evergy and an affiliate of Bluescape, dated as of February 25, 2021 (the Bluescape Investment Agreement), Bluescape has agreed to purchase 2,269,447 shares of Evergy’s common stock for approximately $113.2 million and will receive a warrant to purchase up to 3,950,000 additional shares of Evergy’s common stock, in each case subject to satisfaction of customary closing conditions,

including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The warrant will have a term of three years and an exercise price equal to $64.70.

Each of Bluescape and Elliott also agreed to customary standstill, voting and other provisions in connection with the foregoing. The foregoing summaries of the Bluescape Agreement and the Bluescape Investment Agreement are qualified in their entirety by reference to the Bluescape Agreement and the Bluescape Investment Agreement, respectively, a copy of which is attached as Exhibit 10.1 and Exhibit 10.2, respectively, to Evergy’s Current Report on Form 8-K filed on February 26, 2021 and are incorporated herein by reference.

Impact of COVID-19

The COVID-19 pandemic has had, and may continue to have, a significant impact on the way that the Evergy Companies conduct their operations, including the implementation of social distancing and other preventative protocols and the direction of employees to work remotely when possible. Further, the spread of COVID-19 has resulted in efforts to contain the virus, such as quarantines, restrictions on travel, closures and the reduced operations of businesses, governmental agencies and other institutions. The pandemic, along with the efforts to contain the virus, has caused and could continue to cause an economic slowdown or recession, result in significant disruptions or reductions in various public, commercial or industrial activities and cause employee absences. In the states of Missouri and Kansas as well as certain counties and municipalities within the Evergy Companies' service territory, "stay-at-home" orders were in effect for parts of 2020 and could be implemented again in the future.

Governmental mandates that restrict the operation of businesses, governmental agencies and other institutions continue to remain in effect and a substantial portion of the Evergy Companies' service territory is also required to utilize preventative measures such as the wearing of face coverings while in public areas. The announcement in late 2020 of multiple COVID-19 vaccines with high expected effectiveness rates could serve to mitigate both the severity and ongoing duration of the COVID-19 outbreak. However, both the magnitude and timing of the impact of the COVID-19 vaccines is not yet known and could be subject to multiple factors including the available supply of vaccine, the vaccine adoption rate by the general public and the achievement of the vaccines' expected effectiveness rates. Management cannot foresee whether the outbreak of COVID-19 will be effectively contained, nor can it predict the severity and ongoing duration of its impact.

During 2020, Evergy experienced an overall reduction in demand and shift of usage away from customers with relatively higher load requirements, such as industrial and commercial customers, towards customers with relatively lower load requirements, such as residential customers. In 2020, approximately 39% of Evergy's total revenues came from residential customers and approximately 45% came from commercial and industrial customers, compared with approximately 37% from residential customers and 47% from commercial and industrial customers in 2019. The KCC and MPSC have established different prices for the Evergy Companies' residential, commercial and industrial customers and a similar change in demand across each customer class will have a different impact on earnings. As a result, the impacts to Evergy's earnings from a reduction in demand from industrial and commercial customers have been partially offset by an increase in demand from residential customers.

The Evergy Companies have also temporarily implemented policies, and in the future may implement additional policies, that are intended to ease the financial burden of the pandemic on customers. These policies, such as temporarily extending payment options and offering incentives for customer payments on overdue balances as well as the elimination of late payment fees and disconnections for non-payment, could lead to lower levels of operating cash flows compared to historical levels for the Evergy Companies. In addition, these policies, along with lower electric sales as a result of the overall reduction in demand discussed above, could also lead to the additional repayment of portions of the Evergy Companies' borrowings under receivable sale facilities.

Finally, the Evergy Companies have incurred, and will continue to incur, expenses related to monitoring the COVID-19 pandemic and modifying operations in response to the pandemic that are recorded in operating and maintenance expense.

In May 2020, Evergy Kansas Central, Evergy Metro and Evergy Missouri West filed joint requests for AAOs with the KCC and MPSC, as applicable, that would allow for the extraordinary costs and lost revenues incurred by the

companies, net of any COVID-19-related savings, as a result of the COVID-19 pandemic to be considered for future recovery from customers as part of their next rate cases. The KCC approved the AAO request in July 2020.

In October 2020, Evergy Metro and Evergy Missouri West entered into a non-unanimous stipulation and agreement with the MPSC staff and other intervenors that would allow Evergy Metro and Evergy Missouri West to defer to a regulatory asset certain net incremental costs incurred associated with the COVID-19 pandemic for consideration in their next rate cases. The MPSC approved the AAO request in January 2021.

Evergy's management is actively monitoring the evolving impact of COVID-19 on its results of operations and developments affecting its workforce and suppliers and will take additional actions as it believes are warranted. The situation is continuously evolving and future impacts may materialize that are not yet known. Accordingly, the extent to which COVID-19 and the factors noted above may impact the results of operations, financial position, cash flows and liquidity of the Evergy Companies will depend on future developments that are highly uncertain and cannot be predicted, including new information concerning the severity and ongoing duration of the COVID-19 outbreak and the actions taken to contain it or to seek recovery of its impact, among others.

See "Cautionary Statements Regarding Certain Forward-Looking Information" and Part I, Item 1A, Risk Factors, for additional information.

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. This 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 through the SPP’s Integrated Marketplace for the Evergy Companies’ retail electric customers. These circumstances resulted in higher than normal market prices for both natural gas and power for the duration of the winter weather event. Evergy estimates that as part of the winter weather event, it experienced an increase in natural gas and purchased power costs, net of wholesale revenues, of approximately $300 million. This $300 million increase in net fuel and purchased power costs was primarily driven by a $260 million increase in costs at Evergy Missouri West and a $100 million increase at Evergy Kansas Central, partially offset by a $60 million net increase in wholesale revenues at Evergy Metro. These amounts represent preliminary estimates and are still under development. Further, the final amount of purchased power costs incurred by the Evergy Companies is subject to final settlement pricing by the SPP Integrated Marketplace, which is currently expected to take an additional 30 to 45 days, though the ultimate timing is uncertain.

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 for future recovery from customers. Further, in February 2021, the KCC issued an emergency order that would allow the Evergy Companies, as applicable, to defer to a regulatory asset any extraordinary costs incurred to continue providing electric service during the winter weather event for consideration in future rate proceedings. While the Evergy Companies expect to recover substantially all of any increased fuel and purchased power costs related to the winter weather event from customers, it is possible that the timing of the cost recovery could be delayed or spread over a longer than typical recovery timeframe by the KCC or the MPSC given the extraordinary nature of the 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. As a result of the elevated market prices experienced in regional power markets in February 2021 across the central and southern United States driven by the winter weather event discussed above, the Evergy Companies currently expect that their energy marketing margins will be higher in 2021 compared with historical results.

The full financial statement impact of the winter weather event is unknown and cannot be estimated at this time due in part to the timing of market settlement data. The Evergy Companies believe they have sufficient liquidity to pay any outstanding balances or fulfill collateral posting requirements related to purchases made during the winter storm event and to operate their retail electric businesses through their cash on hand and master credit facility with available borrowing capacity as of February 25, 2021 of approximately $2 billion.

Regulatory Proceedings

See Note 5 to the consolidated financial statements for information regarding regulatory proceedings.

Earnings Overview

The following table summarizes Evergy's net income and diluted earnings per share (EPS).

																					2020						Change						2019
																		(millions, except per share amounts)
Net income attributable to Evergy, Inc.																					$	618.3					$	(51.6)					$	669.9
Earnings per common share, diluted																					2.72						(0.07)						2.79

Net income attributable to Evergy, Inc. decreased in 2020, compared to 2019, primarily due to lower retail sales driven by unfavorable weather and a decrease in weather-normalized commercial and industrial demand primarily due to temporary business closures and hours of operation and capacity limitations as a result of COVID-19 that were partially offset by an increase in weather-normalized residential demand and higher depreciation expense and higher interest expense; partially offset by lower operating and maintenance expenses in 2020.

Diluted EPS decreased in 2020 compared to 2019, primarily due to the decrease in net income attributable to Evergy discussed above, partially offset by a lower number of diluted weighted average common shares outstanding in 2020, which increased EPS by $0.14 for 2020.

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 2020 were $705.5 million or $3.10 per share, respectively. For 2019, Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) were $694.0 million or $2.89 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 costs resulting from rebranding, voluntary severance, advisor expenses and the revaluation of deferred tax assets and liabilities from a change in the Kansas corporate income tax rate.

Non-GAAP Measures

Adjusted Earnings and Adjusted EPS

Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are intended to enhance an investor's overall understanding of results. 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 table provides 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
			2020												2019
			(millions, except per share amounts)
Net income attributable to Evergy, Inc.			$	618.3					$	2.72					$	669.9					$	2.79
Non-GAAP reconciling items:
Rebranding costs, pre-tax(a)			—						—						12.1						0.05
Voluntary severance costs, pre-tax(b)			66.3						0.29						19.8						0.08
Advisor expenses, pre-tax(c)			32.3						0.14						—						—
Income tax benefit(d)			(25.2)						(0.11)						(7.8)						(0.03)
Kansas corporate income tax change(e)			13.8						0.06						—						—
Adjusted earnings (non-GAAP)			$	705.5					$	3.10					$	694.0					$	2.89

(a)Reflects external costs incurred to rebrand the legacy Westar Energy and KCP&L utility brands to Evergy and are included in operating and maintenance expense on the consolidated statements of comprehensive income.

(b)Reflects severance costs incurred associated with certain voluntary severance programs at the Evergy Companies and are included in operating and maintenance expense on the consolidated statements of comprehensive income.

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

(d)Reflects an income tax effect calculated at a statutory rate of approximately 26%, with the exception of certain non-deductible items.

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

2018 Adjusted Operating and Maintenance Expense

The following table provides a reconciliation between 2018 operating and maintenance expense and 2018 pro forma operating and maintenance expense as determined in accordance with GAAP and 2018 adjusted operating and maintenance expense (non-GAAP). Evergy's 2018 adjusted operating and maintenance expense (non-GAAP) is used as the base for targeted operating and maintenance expense reductions by 2024 as part of Evergy's STP.

			(millions)
2018 Operating and maintenance expense			$	1,115.8
Pro forma adjustments(a):
Great Plains Energy operating and maintenance expense prior to the merger			317.9
Non-recurring merger costs and other			(101.3)
2018 Pro forma operating and maintenance expense			$	1,332.4
Non-GAAP reconciling items:
Voluntary severance costs(b)			(23.5)
Deferral of merger transition costs(c)			28.5
Inventory write-offs at retiring generating units(d)			(31.0)
2018 Adjusted operating and maintenance expense (non-GAAP)			$	1,306.4

(a)Reflects pro forma adjustments made in accordance with Article 11 of Regulation S-X and ASC 805 - Business Combinations. See Note 2 to the consolidated financial statements in the Evergy Companies' combined 2018 Annual Report on Form 10-K for further information regarding these adjustments.

(b)Reflects severance costs incurred associated with certain voluntary severance programs at the Evergy Companies and are included in operating and maintenance expense on the 2018 consolidated statements of comprehensive income in the Evergy Companies' combined 2018 Annual Report on Form 10-K.

(c)Reflects the portion of the $47.8 million deferral of merger transition costs to a regulatory asset in June 2018 that related to costs incurred prior to 2018. The remaining merger transition costs included within the $47.8 million deferral were both incurred and deferred in 2018 and did not impact earnings. This item is included in operating and maintenance expense on the 2018 consolidated statements of comprehensive income in the Evergy Companies' combined 2018 Annual Report on Form 10-K.

(d)Reflects obsolete inventory write-offs for Evergy Kansas Central's Unit 7 at Tecumseh Energy Center, Units 3 and 4 at Murray Gill Energy Center, Units 1 and 2 at Gordon Evans Energy Center, Evergy Metro's Montrose Station and Evergy Missouri West's Sibley Station and are included in operating and maintenance expense on the 2018 consolidated statements of comprehensive income in the Evergy Companies' combined 2018 Annual Report on Form 10-K.

ENVIRONMENTAL MATTERS

See Note 15 to the consolidated financial statements for information regarding environmental matters.

RELATED PARTY TRANSACTIONS

See Note 17 to the consolidated financial statements for information regarding related party transactions.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. Management considers an accounting estimate to be critical if it requires assumptions to be made that were uncertain at the time the estimate was made and changes in the estimate, or different estimates that could have been used, could have a material impact on Evergy's results of operations and financial position. Management has identified the following accounting policies as critical to the understanding of Evergy's results of operations and financial position. Management has discussed the development and selection of these critical accounting policies with the Audit Committee of the Evergy Board.

Pensions

Evergy incurs significant costs in providing non-contributory defined pension benefits. The costs are measured using actuarial valuations that are dependent upon numerous factors derived from actual plan experience and assumptions of future plan experience.

Pension costs are impacted by actual employee demographics (including age, life expectancies, compensation levels and employment periods), earnings on plan assets, the level of contributions made to the plan, and plan amendments. In addition, pension costs are also affected by changes in key actuarial assumptions, including anticipated rates of return on plan assets and the discount rates used in determining the projected benefit obligation and pension costs.

The assumed rate of return on plan assets was developed based on the weighted-average of long-term returns forecast for the expected portfolio mix of investments held by the plan. The assumed discount rate was selected based on the prevailing market rate of fixed income debt instruments with maturities matching the expected timing of the benefit obligation. These assumptions, updated annually at the measurement date, are based on management's best estimates and judgment; however, material changes may occur if these assumptions differ from actual events. See Note 10 to the consolidated financial statements for information regarding the assumptions used to determine benefit obligations and net costs.

The following table reflects the sensitivities associated with a 0.5% increase or a 0.5% decrease in key actuarial assumptions for Evergy's qualified pension plans. Each sensitivity reflects the impact of the change based on a change in that assumption only.

									Impact on									Impact on
									Projected									2021
			Change in						Benefit									Pension
Actuarial assumption			Assumption						Obligation									Expense
									(millions)
Discount rate			0.5		%	increase						$	(221.2)								$	(21.9)
Rate of return on plan assets			0.5		%	increase						—									(8.2)
Rate of compensation			0.5		%	increase						59.6									10.8
Discount rate			0.5		%	decrease						255.5									24.4
Rate of return on plan assets			0.5		%	decrease						—									8.2
Rate of compensation			0.5		%	decrease						(51.6)									(10.0)

Pension expense for Evergy Kansas Central, Evergy Metro and Evergy Missouri West is recorded in accordance with rate orders from the KCC and MPSC. The orders allow the difference between pension costs under GAAP and pension costs for ratemaking to be recorded as a regulatory asset or liability with future ratemaking recovery or refunds, as appropriate.

In 2020, Evergy's pension expense was $129.5 million under GAAP and $159.1 million for ratemaking. The impact on 2021 pension expense in the table above reflects the impact on GAAP pension costs. Under the Evergy Companies' rate agreements, any increase or decrease in GAAP pension expense is deferred to a regulatory asset or liability for future ratemaking treatment. See Note 10 to the consolidated financial statements for additional information regarding the accounting for pensions.

Market conditions and interest rates significantly affect the future assets and liabilities of the plan. It is difficult to predict future pension costs, changes in pension liability and cash funding requirements due to the inherent uncertainty of market conditions.

Revenue Recognition

Evergy recognizes revenue on the sale of electricity to customers over time as the service is provided in the amount it has the right to invoice. Revenues recorded include electric services provided but not yet billed by Evergy. Unbilled revenues are recorded for kWh usage in the period following the customers' billing cycle to the end of the month. This estimate is based on net system kWh usage less actual billed kWhs. Evergy's estimated unbilled kWhs are allocated and priced by regulatory jurisdiction across the rate classes based on actual billing rates. Evergy's unbilled revenue estimate is affected by factors including fluctuations in energy demand, weather, line losses and

changes in the composition of customer classes. See Note 4 to the consolidated financial statements for the balance of unbilled receivables for Evergy as of December 31, 2020 and 2019.

Regulatory Assets and Liabilities

Evergy has recorded assets and liabilities on its consolidated balance sheets resulting from the effects of the ratemaking process, which would not otherwise be recorded under GAAP. Regulatory assets represent incurred costs that are probable of recovery from future revenues. Regulatory liabilities represent future reductions in revenues or refunds to customers.

Management regularly assesses whether regulatory assets and liabilities are probable of future recovery or refund by considering factors such as decisions by the MPSC, KCC or FERC in Evergy's rate case filings; decisions in other regulatory proceedings, including decisions related to other companies that establish precedent on matters applicable to Evergy; and changes in laws and regulations. If recovery or refund of regulatory assets or liabilities is not approved by regulators or is no longer deemed probable, these regulatory assets or liabilities are recognized in the current period results of operations. Evergy's continued ability to meet the criteria for recording regulatory assets and liabilities may be affected in the future by restructuring and deregulation in the electric industry or changes in accounting rules. In the event that the criteria no longer applied to all or a portion of Evergy's operations, the related regulatory assets and liabilities would be written off unless an appropriate regulatory recovery mechanism were provided. Additionally, these factors could result in an impairment on utility plant assets. See Note 5 to the consolidated financial statements for additional information.

Impairments of Assets and Goodwill

Long-lived assets are required to be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed under GAAP.

Accounting rules require goodwill to be tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. 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 annual impairment test for the $2,336.6 million of goodwill from the Great Plains Energy and Evergy Kansas Central merger was conducted as of May 1, 2020. The fair value of the reporting unit substantially exceeded the carrying amount, including goodwill. As a result, there was no impairment of goodwill.

The determination of fair value for 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 representative of fair value for the reporting unit, which involves a significant amount of management judgment.

The discounted cash flow analysis is most significantly impacted by two assumptions: estimated future cash flows and the discount rate applied to those cash flows. Management determines the appropriate discount rate to be based on the reporting unit's weighted average cost of capital (WACC). The WACC takes into account both the return on equity authorized by the KCC and MPSC and after-tax cost of debt. Estimated future cash flows are based on Evergy's internal business plan, which assumes the occurrence of certain events in the future, such as the outcome of future rate filings, future approved rates of return on equity, anticipated returns of and earnings on future capital investments, continued recovery of cost of service and the renewal of certain contracts. Management also makes assumptions regarding the run rate of operations, maintenance and general and administrative costs based on the expected outcome of the aforementioned events. Should the actual outcome of some or all of these assumptions differ significantly from the current assumptions, revisions to current cash flow assumptions could cause the fair

value of the Evergy reporting unit under the income approach to be significantly different in future periods and could result in a future impairment charge to goodwill.

The market approach analysis is most significantly impacted by management's selection of relevant peer companies as well as the determination of an appropriate control premium to be added to the calculated invested capital of the reporting unit, as control premiums associated with a controlling interest are not reflected in the quoted market price of a single share of stock. Management determines an appropriate control premium by using an average of control premiums for recent acquisitions in the industry. Changes in results of peer companies, selection of different peer companies and future acquisitions with significantly different control premiums could result in a significantly different fair value of the Evergy reporting unit.

Income Taxes

Income taxes are accounted for using the asset/liability approach. Deferred tax assets and liabilities are determined based on the temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted statutory tax rates in effect for the year in which the differences are expected to reverse. Deferred investment tax credits are amortized ratably over the life of the related property. Deferred tax assets are also recorded for net operating losses, capital losses and tax credit carryforwards. Evergy is required to estimate the amount of taxes payable or refundable for the current year and the deferred tax liabilities and assets for future tax consequences of events reflected in Evergy's consolidated financial statements or tax returns. Actual results could differ from these estimates for a variety of reasons including changes in income tax laws, enacted tax rates and results of audits by taxing authorities. This process also requires management to make assessments regarding the timing and probability of the ultimate tax impact from which actual results may differ. Evergy records valuation allowances on deferred tax assets if it is determined that it is more likely than not that the asset will not be realized. See Note 20 to the consolidated financial statements for additional information.

Asset Retirement Obligations

Evergy has recognized legal obligations associated with the disposal of long-lived assets that result from the acquisition, construction, development or normal operation of such assets. Concurrent with the recognition of the liability, the estimated cost of the ARO incurred at the time the related long-lived assets were either acquired, placed in service or when regulations establishing the obligation became effective is also recorded to property, plant and equipment, net on the consolidated balance sheets. The recording of AROs for regulated operations has no income statement impact due to the deferral of the adjustments through the establishment of a regulatory asset or an offset to a regulatory liability.

Evergy initially recorded AROs at fair value for the estimated cost to decommission Wolf Creek (94% indirect share), retire wind generating facilities, dispose of asbestos insulating material at its power plants, remediate ash disposal ponds and close ash landfills, among other items. ARO refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement may be conditional on a future event that may or may not be within the control of the entity. In determining Evergy's AROs, assumptions are made regarding probable future disposal costs and the timing of their occurrence. A change in these assumptions could have a significant impact on Evergy's AROs reflected on its consolidated balance sheets.

As of December 31, 2020 and 2019, Evergy had recorded AROs of $941.9 million and $674.1 million, respectively. See Note 7 to the consolidated financial statements for more information regarding Evergy's AROs.

EVERGY RESULTS OF OPERATIONS

Evergy's results of operations and financial position are affected by a variety of factors including rate regulation, fuel costs, weather, customer behavior and demand, the economy and competitive forces.

Substantially all of Evergy's revenues are subject to state or federal regulation. This regulation has a significant impact on the price the Evergy Companies charge for electric service. Evergy's results of operations and financial position are affected by its ability to align overall spending, both operating and capital, within the frameworks established by its regulators.

Wholesale revenues are impacted by, among other factors, demand, cost and availability of fuel and purchased power, price volatility, available generation capacity, transmission availability and weather.

The Evergy Companies primarily use coal and uranium for the generation of electricity for their customers and also purchase power through renewable power purchase agreements or on the open market. The prices for fuel used in generation or the market price of power purchases can fluctuate significantly due to a variety of factors including supply, demand, weather and the broader economic environment. Evergy Kansas Central, Evergy Metro and Evergy Missouri West have fuel recovery mechanisms in their Kansas and Missouri jurisdictions, as applicable, that allow them to defer and subsequently recover or refund, through customer rates, substantially all of the variance in net energy costs from the amount set in base rates without a general rate case proceeding.

Weather significantly affects the amount of electricity that Evergy's customers use as electricity sales are seasonal. As summer peaking utilities, the third quarter typically accounts for the greatest electricity sales by the Evergy Companies. Hot summer temperatures and cold winter temperatures prompt more demand, especially among residential and commercial customers, and to a lesser extent, industrial customers. Mild weather reduces customer demand.

Energy efficiency investments by customers and the Evergy Companies also can affect the demand for electric service. Through the Missouri Energy Efficiency Investment Act (MEEIA), Evergy Metro and Evergy Missouri West offer energy efficiency and demand side management programs to their Missouri retail customers and recover program costs, throughput disincentive, and as applicable, certain earnings opportunities in retail rates through a rider mechanism.

The Evergy Companies' taxes other than income taxes, of which property taxes are a significant component, can fluctuate significantly due to a variety of factors, including changes in taxable values and property tax rates. Evergy Kansas Central and Evergy Metro's Kansas jurisdiction have property tax surcharges that allow them to defer and subsequently recover or refund, through customer rates, substantially all of the variance in property tax costs from the amounts set in base rates without a general rate case proceeding.

See "Executive Summary - Impact of COVID-19" for information regarding the effects of COVID-19 on Evergy's results of operation and financial position.

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

			2020						Change						2019
			(millions)
Operating revenues			$	4,913.4					$	(234.4)					$	5,147.8
Fuel and purchased power			1,099.0						(166.0)						1,265.0
SPP network transmission costs			263.2						11.9						251.3
Operating and maintenance			1,163.0						(55.5)						1,218.5
Depreciation and amortization			880.1						18.4						861.7
Taxes other than income tax			364.2						(1.3)						365.5
Income from operations			1,143.9						(41.9)						1,185.8
Other expense, net			(36.1)						2.9						(39.0)
Interest expense			383.9						9.9						374.0
Income tax expense			102.2						5.2						97.0
Equity in earnings of equity method investees, net of income taxes			8.3						(1.5)						9.8
Net income			630.0						(55.6)						685.6
Less: Net income attributable to noncontrolling interests			11.7						(4.0)						15.7
Net income attributable to Evergy, Inc.			$	618.3					$	(51.6)					$	669.9

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. See Note 3 to the consolidated financial statements for additional information regarding the manner in which Evergy reflects SPP revenues and expenses.

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.

The following table summarizes Evergy's utility gross margin and MWhs sold.

			Revenues and Expenses																		MWhs Sold
Utility Gross Margin			2020						Change						2019						2020						Change						2019
Retail revenues			(millions)																		(thousands)
Residential			$	1,909.2					$	1.1					$	1,908.1					15,483						(9)						15,492
Commercial			1,641.7						(139.9)						1,781.6						16,995						(1,300)						18,295
Industrial			588.7						(32.9)						621.6						8,243						(327)						8,570
Other retail revenues			38.5						(8.6)						47.1						132						(7)						139
Total electric retail			4,178.1						(180.3)						4,358.4						40,853						(1,643)						42,496
Wholesale revenues			264.0						(63.5)						327.5						14,860						711						14,398
Transmission revenues			318.5						9.3						309.2						N/A						N/A						N/A
Other revenues			152.8						0.1						152.7						N/A						N/A						N/A
Operating revenues			4,913.4						(234.4)						5,147.8						55,713						(932)						56,894
Fuel and purchased power			(1,099.0)						166.0						(1,265.0)
SPP network transmission costs			(263.2)						(11.9)						(251.3)
Utility gross margin (a)			3,551.2						(80.3)						3,631.5
Operating and maintenance			(1,163.0)						55.5						(1,218.5)
Depreciation and amortization			(880.1)						(18.4)						(861.7)
Taxes other than income tax			(364.2)						1.3						(365.5)
Income from operations			$	1,143.9					$	(41.9)					$	1,185.8

(a) Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin above.

Evergy's utility gross margin decreased $80.3 million in 2020, compared to 2019, driven by:

• a $71.4 million decrease primarily due to lower retail sales driven by unfavorable weather (cooling degree days decreased 5% and heating degree days decreased 11%) and a decrease in weather-normalized commercial and industrial demand primarily due to temporary business closures and hours of operation and capacity limitations resulting from government restrictions to slow the spread of COVID-19 in 2020, partially offset by an increase in weather-normalized residential demand;

• a $14.4 million decrease in revenue recognized for the MEEIA earnings opportunity in 2020 related to the achievement of certain customer energy savings levels in the second cycle of Evergy Metro's and Evergy Missouri West's MEEIA programs; and

• a $5.9 million decrease related to Evergy Kansas Central's and Evergy Metro's transmission delivery charge (TDC) riders in 2020; partially offset by

• a $7.6 million increase in Evergy Metro's and Evergy Missouri West's MEEIA throughput disincentive in 2020 primarily driven by the cumulative amount of customer energy savings achieved in the second and third cycles of Evergy Metro's and Evergy Missouri West's MEEIA programs; and

• a $3.8 million increase for recovery of programs costs for energy efficiency programs under MEEIA in 2020, which have a direct offset in operating and maintenance expense.

Operating and Maintenance

Evergy's operating and maintenance expense decreased $55.5 million in 2020, compared to 2019, primarily driven by:

• a $44.2 million decrease in transmission and distribution operating and maintenance expense primarily due to $13.1 million of costs at Evergy Metro and Evergy Missouri West incurred from storms that occurred in January 2019, a $6.9 million decrease due to lower vegetation management expense at Evergy Kansas Central and Evergy Metro in 2020 and lower labor expense in 2020;

• a $37.4 million decrease in various administrative and general operating and maintenance expenses primarily driven by:

◦a $15.5 million decrease in labor and employee benefits expense that included lower employee headcount in 2020;

◦an $8.9 million decrease in outside services expenses including lower consulting and legal fees at Evergy Kansas Central and Evergy Metro in 2020; and

◦a $3.7 million decrease in property insurance expense due to a higher annual refund of nuclear insurance premiums received by Evergy Kansas Central and Evergy Metro in 2020 related to their ownership interest in Wolf Creek;

• a $27.2 million decrease in plant operating and maintenance expense at fossil-fuel generating units primarily due to:

◦a $14.5 million decrease at Evergy Metro driven by a $12.4 million decrease primarily due to outages at Hawthorn Station, Iatan Station and La Cygne Unit 2 as well as lower employee headcount in 2020; and

◦a $8.3 million decrease at Evergy Kansas Central primarily due to an $8.4 million write-off of a regulatory asset for costs incurred during the Jeffrey Energy Center (JEC) lease extension in 2019, a $6.0 million decrease related to maintenance outages at JEC, La Cygne Unit 2 and Lawrence Energy Center as well as lower employee headcount in 2020; partially offset by a $3.9 million asset write-off in 2020; and

• $12.1 million of external costs incurred to rebrand the legacy Westar Energy and KCP&L utility brands to Evergy in 2019; partially offset by

• a $46.7 million increase in voluntary severance expenses due to a $39.3 million increase at Evergy Kansas Central, Evergy Metro and Evergy Missouri West related to Evergy voluntary exit programs in 2020 and $7.4 million of voluntary severance expenses incurred in 2020 by Evergy Kansas Central and Evergy Metro related to Wolf Creek voluntary exit programs;

• $32.3 million of advisor expenses incurred in 2020 by Evergy associated with strategic planning; and

• a $3.8 million increase in program costs for energy efficiency programs under MEEIA in 2020, which have a direct offset in revenue.

Depreciation and Amortization

Evergy's depreciation and amortization increased $18.4 million in 2020, compared to 2019, primarily driven by capital additions at Evergy Kansas Central and Evergy Metro.

Other Expense, Net

Evergy's other expense, net decreased $2.9 million in 2020, compared to 2019, primarily driven by:

• a $15.0 million decrease due to higher Evergy Kansas Central and Evergy Metro equity allowance for funds used during construction (AFUDC) in 2020 primarily driven by lower short-term debt and higher construction work in progress balances in 2020; partially offset by

• a $10.3 million increase due to recording lower Evergy Kansas Central corporate-owned life insurance (COLI) benefits in 2020; and

• a $2.9 million increase primarily due to higher Evergy Metro pension non-service costs in 2020.

Interest Expense

Evergy's interest expense increased $9.9 million in 2020, compared to 2019, primarily driven by:

• a $35.3 million increase due to the issuance of Evergy's $1.6 billion of senior notes in September 2019;

• a $6.6 million net increase due to the issuance of Evergy Kansas Central's $500.0 million of 3.45% first mortgage bonds (FMBs) in April 2020, which increased interest expense by $12.6 million, partially offset by a $6.0 million decrease due to the repayment of Evergy Kansas Central's $250.0 million of 5.10% FMBs in May 2020; and

• a $5.4 million increase due to the issuance of Evergy Metro's $400.0 million of 2.25% Mortgage Bonds in May 2020; partially offset by

• a $29.5 million decrease primarily due to Evergy's borrowings under its $1.0 billion term loan credit agreement in 2019 and lower commercial paper balances and weighted-average interest rates on short-term borrowings at Evergy Kansas Central and Evergy Metro in 2020;

• a $4.6 million net decrease due to the repayment of Evergy Metro's $400.0 million of 7.15% Mortgage Bonds at maturity in April 2019, which decreased interest expense by $8.5 million, partially offset by a $3.9 million increase due to Evergy Metro's issuance of $400.0 million of 4.125% Mortgage Bonds in March 2019; and

• a $3.1 million net decrease due to the repayment of Evergy Kansas South's $300.0 million of 6.70% FMBs at maturity in June 2019, which decreased interest expense by $9.2 million, partially offset by a $6.1 million increase due to the issuance of Evergy Kansas Central's $300.0 million of 3.25% FMBs in August 2019.

Income Tax Expense

Evergy's income tax expense increased $5.2 million in 2020, compared to 2019, driven by a $13.8 million net increase due 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 $5.8 million valuation allowance reversal in 2019 primarily related to alternative minimum tax (AMT) credits and the expiration of certain state NOL carryforwards and a $3.9 million increase due to lower wind and other income tax credits in 2020; partially offset by a $13.3 million decrease due to lower Evergy pre-tax income in 2020 and a $5.1 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes.

See Note 20 to the consolidated financial statements for more information regarding the change in the Kansas corporate income tax rate.

EVERGY SIGNIFICANT BALANCE SHEET CHANGES

(December 31, 2020 compared to December 31, 2019)

• Evergy's cash and cash equivalents increased $121.7 million primarily due to proceeds from the issuance of Evergy Metro's $400.0 million of 2.25% Mortgage Bonds in May 2020 and the issuance of Evergy

Kansas Central's $500.0 million of 3.45% FMBs in April 2020 after the redemption of Evergy Kansas Central's $250.0 million of 5.10% FMBs in May 2020 and the repayment of certain short-term borrowings.

• Evergy's income tax receivable decreased by $22.6 million primarily due to Evergy's receipt of a federal AMT tax credit refund in the third quarter of 2020.

• Evergy's current maturities of long-term debt increased $185.3 million primarily due to the reclassification of Evergy's $350.0 million of 4.85% Senior Notes and Evergy Missouri West's $80.9 million of 8.27% Senior Notes from long-term to current, partially offset by the repayment of Evergy Kansas Central's $250.0 million of 5.10% FMBs in May 2020.

• Evergy's notes payable and commercial paper decreased $246.9 million primarily due to a $199.2 million decrease at Evergy Kansas Central and a $199.3 million decrease at Evergy Metro due to the repayment of short-term borrowings with funds from operations and with the issuance of Evergy Kansas Central's $500.0 million of 3.45% FMBs in April 2020 and Evergy Metro's $400.0 million of 2.25% Mortgage Bonds in May 2020, partially offset by a $180.0 million increase at Evergy, Inc. due to cash borrowings under its master credit facility.

• Evergy's accounts payable increased $125.2 million primarily due to the timing of cash payments, including for property tax payments, at Evergy Kansas Central and Evergy Metro.

• Evergy's regulatory liabilities - current decreased $37.2 million primarily due to a $30.2 million decrease in Evergy Kansas Central's regulatory liability for its fuel recovery mechanism due to refunds exceeding over-collections.

• Evergy's asset retirement obligations - current decreased $31.1 million primarily due to settlements incurred in 2020 and the expected timing of remediation at several Evergy Kansas Central and Evergy Metro ash ponds.

• Evergy's unamortized investment tax credits decreased $188.7 million primarily due to the revaluation of certain Kansas income tax credits due to the exemption of Evergy Kansas Central from Kansas corporate income tax beginning in 2021. See Note 20 to the consolidated financial statements for additional information.

• Evergy's asset retirement obligation - long-term increased $298.9 million primarily due to a $259.1 million increase due to the change in estimate of Evergy's ARO relating to the decommissioning of Wolf Creek.

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.

Capital Sources

Cash Flows from Operations

Evergy's cash flows from operations are driven by the regulated sale of electricity. These cash flows are relatively stable but the timing and level of these cash flows can vary based on weather and economic conditions, future regulatory proceedings, the timing of cash payments made for costs recoverable under regulatory mechanisms and the time such costs are recovered, and unanticipated expenses such as unplanned plant outages and storms.

Short-Term Borrowings

As of December 31, 2020, Evergy had $2.2 billion of available borrowing capacity from its master credit facility. The available borrowing capacity under the master credit facility consisted of $249.3 million for Evergy, Inc., $933.0 million for Evergy Kansas Central, $600.0 million for Evergy Metro and $383.0 million for Evergy Missouri West. Evergy Kansas Central's, Evergy Metro's and Evergy Missouri West's borrowing capacity under the master

credit facility also supports their issuance of commercial paper. See Note 12 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.

Long-Term Debt and Equity Issuances

From time to time, Evergy issues long-term debt and equity to repay short-term debt, refinance maturing long-term debt and finance growth. As of December 31, 2020 and 2019, Evergy’s capital structure, excluding short-term debt, was as follows:

			December 31
			2020						2019
Common equity			47%						49%
Long-term debt, including VIEs			53%						51%

Under stipulations with the MPSC and KCC, Evergy, Evergy Kansas Central and Evergy Metro are required to maintain common equity at not less than 35%, 40% and 40%, respectively, of total capitalization. The master credit facility and certain debt instruments of the Evergy Companies also contain restrictions that require the maintenance of certain capitalization and leverage ratios. As of December 31, 2020, the Evergy Companies were in compliance with these covenants.

Significant Debt Issuances

See Note 13 to the consolidated financial statements for information regarding significant debt issuances.

Equity Issuance

See Note 18 to the consolidated financial statements for information regarding Evergy's securities purchase agreement with Bluescape to purchase Evergy's common stock in 2021.

Credit Ratings

The ratings of the Evergy Companies' debt securities by the credit rating agencies impact the Evergy Companies' liquidity, including the cost of borrowings under their master credit facility and in the capital markets. The Evergy Companies view maintenance of strong credit ratings as vital to their access to and cost of debt financing and, to that end, maintain an active and ongoing dialogue with the agencies with respect to results of operations, financial position and future prospects. While a decrease in these credit ratings would not cause any acceleration of the Evergy Companies' debt, it could increase interest charges under the master credit facility. A decrease in credit ratings could also have, among other things, an adverse impact, which could be material, on the Evergy Companies' access to capital, the cost of funds, the ability to recover actual interest costs in state regulatory proceedings, the type and amounts of collateral required under supply agreements and Evergy's ability to provide credit support for its subsidiaries.

As of February 25, 2021, the major credit rating agencies rated the Evergy Companies' securities as detailed in the following table.

			Moody's												S&P Global
			Investors Service**(a)**												Ratings**(a)**
Evergy
Outlook						Stable												Stable
Corporate Credit Rating						--												A-
Senior Unsecured Debt						Baa2												BBB+
Short-Term Rating						--												A-2
Evergy Kansas Central
Outlook						Stable												Stable
Corporate Credit Rating						Baa1												A-
Senior Secured Debt						A2												A
Commercial Paper						P-2												A-2
Evergy Kansas South
Outlook						Stable												Stable
Corporate Credit Rating						Baa1												A-
Senior Secured Debt						--												A
Short-Term Rating						P-2												A-2
Evergy Metro
Outlook						Stable												Stable
Corporate Credit Rating						Baa1												A
Senior Secured Debt						A2												A+
Senior Unsecured Debt						--												A
Commercial Paper						P-2												A-1
Evergy Missouri West
Outlook						Stable												Stable
Corporate Credit Rating						Baa2												A-
Senior Unsecured Debt						Baa2												A-
Commercial Paper						P-2												--

(a)A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.

Shelf Registration Statements and Regulatory Authorizations

Evergy

In November 2018, Evergy filed an automatic shelf registration statement providing for the sale of unlimited amounts of securities with the SEC, which expires in November 2021.

Evergy Kansas Central

In November 2018, Evergy Kansas Central filed an automatic shelf registration statement providing for the sale of unlimited amounts of unsecured debt securities and FMBs with the SEC, which expires in November 2021.

Evergy Metro

In November 2018, Evergy Metro filed an automatic shelf registration statement providing for the sale of unlimited amounts of unsecured notes and mortgage bonds with the SEC, which expires in November 2021.

The following table summarizes the regulatory short-term and long-term debt financing authorizations for Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West and the remaining amount available under these authorizations as of December 31, 2020.

Type of Authorization			Commission			Expiration Date			Authorization Amount			Available Under Authorization
Evergy Kansas Central & Evergy Kansas South									(in millions)
Short-Term Debt			FERC			December 2022			$1,250.0			$1,200.0
Evergy Metro
Short-Term Debt			FERC			December 2022			$1,250.0			$1,250.0
Evergy Missouri West
Short-Term Debt			FERC			December 2022			$750.0			$585.0
Long-Term Debt(a)			FERC			February 2023			$1,000.0			$1,000.0

(a) Evergy Missouri West's application for long-term debt authority with FERC was approved in February 2021.

In addition to the above regulatory authorizations, the Evergy Kansas Central, Evergy Kansas South and Evergy Metro mortgages each contain provisions restricting the amount of FMBs or mortgage bonds, as applicable, that can be issued by each entity. Evergy Kansas Central, Evergy Kansas South and Evergy Metro must comply with these restrictions prior to the issuance of additional FMBs, mortgage bonds or other secured indebtedness.

Under the Evergy Kansas Central mortgage, the issuance of FMBs is subject to limitations based on the amount of bondable property additions. In addition, so long as any bonds issued prior to January 1, 1997, remain outstanding, the mortgage prohibits additional FMBs from being issued, except in connection with certain refundings, unless Evergy Kansas Central’s unconsolidated net earnings available for interest, depreciation and property retirement (which, as defined, does not include earnings or losses attributable to the ownership of securities of subsidiaries), for a period of 12 consecutive months within 15 months preceding the issuance, are not less than the greater of twice the annual interest charges on or 10% of the principal amount of all FMBs outstanding after giving effect to the proposed issuance. As of December 31, 2020, $780.6 million principal amount of additional FMBs could be issued under the most restrictive provisions in the mortgage, except in connection with certain refundings.

Under the Evergy Kansas South mortgage, the amount of FMBs authorized is limited to a maximum of $3.5 billion and the issuance of FMBs is subject to limitations based on the amount of bondable property additions. In addition, the mortgage prohibits additional FMBs from being issued, except in connection with certain refundings, unless Evergy Kansas South's net earnings before income taxes and before provision for retirement and depreciation of property for a period of 12 consecutive months within 15 months preceding the issuance are not less than either two and one-half times the annual interest charges on or 10% of the principal amount of all Evergy Kansas South FMBs outstanding after giving effect to the proposed issuance. As of December 31, 2020, approximately $2,828.6 million principal amount of additional Evergy Kansas South FMBs could be issued under the most restrictive provisions in the mortgage, except in connection with certain refundings.

Under the General Mortgage Indenture and Deed of Trust dated as of December 1, 1986, as supplemented (Evergy Metro Mortgage Indenture), additional Evergy Metro mortgage bonds may be issued on the basis of 75% of property additions or retired bonds. As of December 31, 2020, approximately $4,733.1 million principal amount of additional Evergy Metro mortgage bonds could be issued under the most restrictive provisions in the mortgage.

Cash and Cash Equivalents

At December 31, 2020, Evergy had approximately $144.9 million of cash and cash equivalents on hand.

Capital Requirements

Capital Expenditures

Evergy requires significant capital investments and expects to need cash for the STP as well as other 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. See "Executive Summary - Strategy", above for further information regarding the STP. Evergy's capital expenditures were $1,560.3 million, $1,210.1 million and $1,069.7 million in 2020, 2019 and 2018, respectively.

Capital expenditures projected for the next five years, excluding AFUDC and including costs of removal, are detailed in the following table. This capital expenditure plan is subject to continual review and change.

						2021						2022						2023						2024						2025
			(millions)
Generating facilities - new renewable generation						$	—					$	—					$	337.0					$	338.0					$	—
Generating facilities - other						319.0						306.0						264.0						186.0						236.0
Transmission facilities						629.0						590.0						567.0						513.0						734.0
Distribution facilities						648.0						656.0						481.0						487.0						624.0
General facilities						284.0						283.0						248.0						214.0						256.0
Total capital expenditures						$	1,880.0					$	1,835.0					$	1,897.0					$	1,738.0					$	1,850.0

Contractual Obligations and Other Commitments

In the course of its business activities, the Evergy Companies enter into a variety of contracts and commercial commitments. Some of these result in direct obligations reflected on Evergy's consolidated balance sheets while others are commitments, some firm and some based on uncertainties, not reflected in Evergy's underlying consolidated financial statements.

The information in the following table is provided to summarize Evergy's cash obligations and commercial commitments.

Payment due by period			2021						2022						2023						2024						2025			After 2025									Total
Long-term debt			(millions)
Principal			$	432.0					$	387.5					$	439.5					$	800.0					$	636.0					$	6,906.8					$	9,601.8
Interest			350.2						327.1						311.9						302.6						282.6						4,201.3						5,775.7
Long-term debt of VIEs
Principal			18.8						—						—						—						—						—						18.8
Interest			0.2						—						—						—						—						—						0.2
Lease commitments
Operating leases			18.5						15.3						12.2						10.4						7.9						37.3						101.6
Finance leases			8.8						7.3						6.6						5.3						4.6						42.4						75.0
Pension and other post-retirement plans (a)			135.7						135.7						135.7						135.7						135.7						(a)						678.5
Purchase commitments
Fuel			311.2						118.3						134.6						97.6						88.4						94.0						844.1
Power			62.4						62.6						63.2						57.6						58.0						349.7						653.5
Other			135.4						25.7						19.3						23.6						21.9						86.0						311.9
Total contractual commitments (a)			$	1,473.2					$	1,079.5					$	1,123.0					$	1,432.8					$	1,235.1					$	11,717.5					$	18,061.1

(a) Evergy expects to make contributions to the pension and other post-retirement plans beyond 2025 but the amounts are not yet determined.

Long-term debt includes current maturities. Long-term debt principal excludes $84.9 million of unamortized net discounts and debt issuance costs and a $110.4 million fair value adjustment recorded in connection with purchase

accounting for the Great Plains Energy and Evergy Kansas Central merger that was completed in June 2018. Variable rate interest obligations are based on rates as of December 31, 2020.

Operating lease commitments include leases for office buildings, computer equipment, operating facilities, vehicles and rail cars to serve jointly-owned generating units where Evergy Kansas Central or Evergy Metro is the managing partner and is reimbursed by other joint-owners for its proportionate share of the cost. Finance lease commitments include obligations for both principal and interest.

Evergy expects to contribute $135.7 million to the pension and other post-retirement plans in 2021, of which the majority is expected to be paid by Evergy Kansas Central and Evergy Metro. Additional contributions to the plans are expected beyond 2025 in amounts at least sufficient to meet the greater of Employee Retirement Income Security Act of 1974, as amended (ERISA) or regulatory funding requirements; however, these amounts have not yet been determined. Amounts for years after 2021 are estimates based on information available in determining the amount for 2021. Actual amounts for years after 2021 could be significantly different than the estimated amounts in the table above.

Fuel commitments consist of commitments for nuclear fuel, coal and coal transportation costs. Power commitments consist of certain commitments for renewable energy under power purchase agreements, capacity purchases and firm transmission service. Other represents individual commitments entered into in the ordinary course of business.

Evergy has other insignificant long-term liabilities recorded on its consolidated balance sheet at December 31, 2020, which do not have a definitive cash payout date and are not included in the table above.

Common Stock Dividends

The amount and timing of dividends payable on Evergy's common stock are within the sole discretion of the Evergy Board. The amount and timing of dividends declared by the Evergy Board will be dependent on considerations such as Evergy's earnings, financial position, cash flows, capitalization ratios, regulation, reinvestment opportunities and debt covenants. Evergy targets a long-term dividend payout ratio of 60% to 70% of earnings. See Note 1 to the consolidated financial statements for information on the common stock dividend declared by the Evergy Board in February 2021.

The Evergy Companies also have certain restrictions stemming from statutory requirements, corporate organizational documents, covenants and other conditions that could affect dividend levels. See Note 18 to the consolidated financial statements for further discussion of restrictions on dividend payments.

Off-Balance Sheet Arrangements

In the ordinary course of business, Evergy and certain of its subsidiaries enter into various agreements providing financial or performance assurance to third parties on behalf of certain subsidiaries. Such agreements include, for example, guarantees and letters of credit. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiary's intended business purposes. The majority of these agreements guarantee Evergy's own future performance, so a liability for the fair value of the obligation is not recorded.

At December 31, 2020, Evergy has provided $140.0 million of credit support for certain of its subsidiaries as follows:

• Evergy direct guarantees to Evergy Kansas Central and Evergy Metro counterparties for certain fuel supply contracts totaling $48.0 million, which expire in 2027; and

• Evergy's guarantee of Evergy Missouri West long-term debt totaling $92.0 million, which includes debt with maturity dates ranging from 2021 to 2023.

Evergy has also guaranteed Evergy Missouri West's short-term debt, including its commercial paper program. At December 31, 2020, Evergy Missouri West had $65.0 million of commercial paper outstanding. None of the

guaranteed obligations are subject to default or prepayment if Evergy Missouri West's credit ratings were downgraded.

The Evergy Companies also have off-balance sheet arrangements in the form of letters of credit entered into in the ordinary course of business.

Cash Flows

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

			2020			2019
			(millions)
Cash flows from operating activities			$	1,753.8		$	1,749.0
Cash flows from (used in) investing activities			(1,533.7)			(1,080.3)
Cash flows used in financing activities			(98.4)			(805.8)

Cash Flows from Operating Activities

Evergy's cash flows from operating activities increased $4.8 million in 2020 compared to 2019 primarily driven by:

• a $99.5 million increase due to the the timing of cash 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;

• a $64.3 million one-time refund made to certain Evergy Metro and Evergy Missouri West customers in 2019 reflecting customer benefits associated with the Tax Cuts and Jobs Act;

• a $41.3 million increase in cash receipts for net tax refunds in 2020 primarily driven by a $57.2 million increase in refunds related to federal AMT credits;

• $34.6 million in payments made for a Wolf Creek refueling outage in 2019; and

• an $8.8 million decrease in payments made for rebranding costs in 2020 related to rebranding the legacy Westar Energy and KCP&L utility brands to Evergy in 2019; partially offset by

• a $185.6 million decrease in cash receipts for retail electric sales in 2020 primarily driven by lower retail sales as a result of unfavorable weather and a decrease in weather-normalized commercial and industrial demand primarily due to temporary business closures and hours of operation and capacity limitations resulting from government restrictions to slow the spread of COVID-19 in 2020;

• a $38.1 million increase in interest payments in 2020 primarily due to payments made in March and September of 2020 on Evergy's $1.6 billion of senior notes issued in September 2019; and

• $27.6 million in cash payments to advisors associated with strategic planning in 2020.

Cash Flows used in Investing Activities

Evergy's cash flows used in investing activities increased $453.4 million in 2020 compared to 2019 primarily driven by:

• a $350.2 million increase in additions to property, plant and equipment due to increases at Evergy Kansas Central, Evergy Metro and Evergy Missouri West of $122.9 million, $120.4 million and $107.0 million, respectively, primarily due to increased spending for a variety of capital projects including transmission infrastructure additions, customer meters and a customer billing system; and

• a decrease of $95.8 million in proceeds from COLI investments, primarily from Evergy Kansas Central due to a higher number of policy settlements in 2019.

Cash Flows used in Financing Activities

Evergy's cash flows used in financing activities decreased $707.4 million in 2020 compared to 2019 primarily driven by:

• $1,628.7 million of common stock repurchased as a result of Evergy's share repurchase program in 2019;

• a $450.0 million decrease in retirements of long-term debt, net due to Evergy Metro's repayment of $400.0 million of 7.15% Mortgage Bonds in April 2019 and Evergy Kansas South's repayment of its $300.0 million of 6.70% FMBs in June 2019; partially offset by Evergy Kansas Central's repayment of its $250.0 million of 5.10% FMBs in May 2020;

• a $72.7 million decrease in the repayment of borrowings against cash surrender value of corporate-owned life insurance primarily due to a higher number of policy settlements in 2019; and

• a $69.8 million payment for the settlement of an interest rate swap accounted for as a cash flow hedge of Evergy's $800.0 million of 2.90% Senior Notes issued in September 2019; partially offset by

• a $1,483.9 million decrease in proceeds from long-term debt, net primarily due to Evergy's issuance of $800.0 million of 2.45% Senior Notes and $800.0 million of 2.90% Senior Notes in September 2019.

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 (I)(2)(a) to Form 10-K.

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

			2020						Change						2019
			(millions)
Operating revenues			$	2,418.1					$	(89.3)					$	2,507.4
Fuel and purchased power			427.6						(65.4)						493.0
SPP network transmission costs			263.2						11.9						251.3
Operating and maintenance			513.6						(16.9)						530.5
Depreciation and amortization			453.1						9.3						443.8
Taxes other than income tax			193.3						1.0						192.3
Income from operations			567.3						(29.2)						596.5
Other expense, net			(12.7)						0.2						(12.9)
Interest expense			167.6						(9.4)						177.0
Income tax expense			155.8						103.7						52.1
Equity in earnings of equity method investees, net of income taxes			4.6						—						4.6
Net income			235.8						(123.3)						359.1
Less: Net income attributable to noncontrolling interests			11.7						(4.0)						15.7
Net income attributable to Evergy Kansas Central, Inc.			$	224.1					$	(119.3)					$	343.4

Evergy Kansas Central Utility Gross Margin and MWh Sales

The following table summarizes Evergy Kansas Central's utility gross margin and MWhs sold.

			Revenues and Expenses																		MWhs Sold
			2020						Change						2019						2020						Change						2019
Retail revenues			(millions)																		(thousands)
Residential			$	801.2					$	7.3					$	793.9					6,491						31						6,460
Commercial			665.6						(43.5)						709.1						6,875						(524)						7,399
Industrial			379.9						(21.4)						401.3						5,242						(380)						5,622
Other retail revenues			17.7						(3.3)						21.0						41						(4)						45
Total electric retail			1,864.4						(60.9)						1,925.3						18,649						(877)						19,526
Wholesale revenues			215.4						(24.5)						239.9						7,851						311						7,540
Transmission revenues			287.3						14.0						273.3						N/A						N/A						N/A
Other revenues			51.0						(17.9)						68.9						N/A						N/A						N/A
Operating revenues			2,418.1						(89.3)						2,507.4						26,500						(566)						27,066
Fuel and purchased power			(427.6)						65.4						(493.0)
SPP network transmission costs			(263.2)						(11.9)						(251.3)
Utility gross margin (a)			1,727.3						(35.8)						1,763.1
Operating and maintenance			(513.6)						16.9						(530.5)
Depreciation and amortization			(453.1)						(9.3)						(443.8)
Taxes other than income tax			(193.3)						(1.0)						(192.3)
Income from operations			$	567.3					$	(29.2)					$	596.5

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

Evergy Kansas Central's utility gross margin decreased $35.8 million in 2020, compared to 2019, driven by:

• a $27.2 million decrease primarily due to lower retail sales driven by unfavorable weather (cooling degree days decreased 5% and heating degree days decreased 10%) and a decrease in weather-normalized commercial and industrial demand primarily due to temporary business closures and hours of operation and capacity limitations resulting from government restrictions to slow the spread of COVID-19 in 2020, partially offset by an increase in weather-normalized residential demand; and

• an $8.6 million decrease related to Evergy Kansas Central's TDC rider in 2020.

Evergy Kansas Central Operating and Maintenance

Evergy Kansas Central's operating and maintenance expense decreased $16.9 million in 2020, compared to 2019, primarily driven by:

• a $13.6 million decrease in transmission and distribution operating and maintenance expense primarily due to lower labor expense in 2020 and a $3.4 million decrease due to lower vegetation management expense in 2020;

• a $13.2 million decrease in various administrative and general operating and maintenance expenses primarily driven by a $15.4 million decrease in labor and employee benefits expense that included lower employee headcount in 2020 and a $1.9 million decrease in property insurance expense due to a higher annual refund of nuclear insurance premiums received by Evergy Kansas Central related to its indirect ownership interest in Wolf Creek; and

• an $8.3 million decrease in plant operating and maintenance expense at fossil-fuel generating units primarily due to an $8.4 million write-off of a regulatory asset for costs incurred during the JEC lease extension in 2019, a $6.0 million decrease related to maintenance outages at JEC, La Cygne Unit 2 and Lawrence Energy Center as well as lower employee headcount in 2020; partially offset by a $3.9 million asset write-off in 2020; partially offset by

• a $22.8 million increase in voluntary severance expenses due to a $19.1 million increase related to Evergy voluntary exit programs in 2020 and $3.7 million of voluntary severance expenses incurred in 2020 related to Wolf Creek voluntary exit programs.

Evergy Kansas Central Depreciation and Amortization

Evergy Kansas Central's depreciation and amortization expense increased $9.3 million in 2020, compared to 2019, primarily driven by capital additions.

Evergy Kansas Central Interest Expense

Evergy Kansas Central's interest expense decreased $9.4 million in 2020, compared to 2019, primarily driven by:

• an $11.9 million decrease due to lower commercial paper balances and weighted-average interest rates on short-term borrowings in 2020; and

• a $3.1 million net decrease due to the repayment of Evergy Kansas South's $300.0 million of 6.70% FMBs at maturity in June 2019, which decreased interest expense by $9.2 million, partially offset by a $6.1 million increase due to the issuance of Evergy Kansas Central's $300.0 million of 3.25% FMBs in August 2019; partially offset by

• a $6.6 million net increase due to the issuance of Evergy Kansas Central's $500.0 million of 3.45% FMBs in April 2020, which increased interest expense by $12.6 million, partially offset by a $6.0 million decrease due to the repayment of Evergy Kansas Central's $250.0 million of 5.10% FMBs in May 2020.

Evergy Kansas Central Income Tax Expense

Evergy Kansas Central's income tax expense increased $103.7 million in 2020, compared to 2019, primarily driven by a $109.0 million net increase due 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, partially offset by a $5.2 million decrease due to lower pre-tax income in 2020.

See Note 20 to the consolidated financial statements for more information regarding the change in the Kansas corporate income tax rate.

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 (I)(2)(a) to Form 10-K.

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

			2020						Change						2019
			(millions)
Operating revenues			$	1,705.6					$	(100.9)					$	1,806.5
Fuel and purchased power			416.1						(66.0)						482.1
Operating and maintenance			407.5						(44.4)						451.9
Depreciation and amortization			326.1						7.7						318.4
Taxes other than income tax			121.6						(6.0)						127.6
Income from operations			434.3						7.8						426.5
Other expense, net			(14.9)						0.9						(15.8)
Interest expense			113.6						(6.2)						119.8
Income tax expense			7.1						(28.6)						35.7
Net income			$	298.7					$	43.5					$	255.2

Evergy Metro Utility Gross Margin and MWh Sales

The following table summarizes Evergy Metro's utility gross margin and MWhs sold.

			Revenues and Expenses																		MWhs Sold
			2020						Change						2019						2020						Change						2019
Retail revenues			(millions)																		(thousands)
Residential			$	714.7					2.3						$	712.4					5,430						5						5,425
Commercial			717.1						(69.0)						786.1						7,028						(595)						7,623
Industrial			128.8						(8.1)						136.9						1,695						(18)						1,713
Other retail revenues			11.7						(4.6)						16.3						71						(4)						75
Total electric retail			1,572.3						(79.4)						1,651.7						14,224						(612)						14,836
Wholesale revenues			35.0						(35.9)						70.9						5,957						(141)						6,098
Transmission revenues			13.9						(3.6)						17.5						N/A						N/A						N/A
Other revenues			84.4						18.0						66.4						N/A						N/A						N/A
Operating revenues			1,705.6						(100.9)						1,806.5						20,181						(753)						20,934
Fuel and purchased power			(416.1)						66.0						(482.1)
Utility gross margin (a)			1,289.5						(34.9)						1,324.4
Operating and maintenance			(407.5)						44.4						(451.9)
Depreciation and amortization			(326.1)						(7.7)						(318.4)
Taxes other than income tax			(121.6)						6.0						(127.6)
Income from operations			$	434.3					$	42.7					$	426.5

(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 decreased $34.9 million in 2020, compared to 2019, driven by:

• a $35.4 million decrease primarily due to lower retail sales driven by unfavorable weather (cooling degree days decreased 5% and heating degree days decreased 12%) and a decrease in weather-normalized commercial and industrial demand primarily due to temporary business closures and hours of operation and capacity limitations resulting from government restrictions to slow the spread of COVID-19 in 2020, partially offset by an increase in weather-normalized residential demand; and

• a $6.4 million decrease in revenue recognized for the MEEIA earnings opportunity in 2020 related to the achievement of certain customer energy savings levels in the second cycle of Evergy Metro's MEEIA program; partially offset by

• a $4.4 million increase in MEEIA throughput disincentive in 2020 primarily driven by the cumulative amount of customer energy savings achieved in the second and third cycles of Evergy Metro's MEEIA program; and

• a $2.5 million increase for recovery of programs costs for energy efficiency programs under MEEIA, which have a direct offset in operating and maintenance expense.

Evergy Metro Operating and Maintenance

Evergy Metro's operating and maintenance expense decreased $44.4 million in 2020, compared to 2019, primarily driven by:

• a $26.7 million decrease in transmission and distribution operating and maintenance expense primarily due to $11.7 million of costs incurred from storms that occurred in January 2019, a $3.5 million decrease due to lower vegetation management expense in 2020 and lower labor expense in 2020;

• a $14.0 million decrease in various administrative and general operating and maintenance expenses primarily due to a $4.7 million decrease in credit loss expense due to lower levels of customer disconnections in 2020, a $3.9 million decrease in outside services expenses including lower consulting and legal fees in 2020 and a $1.8 million decrease in property insurance expense due to a higher annual refund of nuclear insurance premiums received by Evergy Metro related to its ownership interest in Wolf Creek in the first quarter of 2020; and

• a $14.5 million decrease in plant operating and maintenance expense at fossil-fuel generating units driven by a $12.4 million decrease primarily due to outages at Hawthorn Station, Iatan Station and La Cygne Unit 2 as well as lower employee headcount in 2020; partially offset by

• a $17.8 million increase in voluntary severance expenses due to a $14.1 million increase related to Evergy voluntary exit programs in 2020 and $3.7 million of voluntary severance expenses incurred in 2020 related to Wolf Creek voluntary exit programs; and

• a $2.5 million increase in program costs for energy efficiency programs under MEEIA, which have a direct offset in revenue.

Evergy Metro Depreciation and Amortization

Evergy Metro's depreciation and amortization increased $7.7 million in 2020, compared to 2019, primarily driven by capital additions.

Evergy Metro Other Expense, Net

Evergy Metro's other expense, net decreased $0.9 million in 2020, compared to the same period in 2019, primarily driven by:

• a $5.8 million increase in equity AFUDC in 2020 primarily driven by lower short-term debt and higher construction work in progress balances in 2020; partially offset by

• a $3.3 million increase in pension non-service costs in 2020.

Evergy Metro Interest Expense

Evergy Metro's interest expense decreased $6.2 million in 2020, compared to 2019, primarily driven by:

• a $4.6 million net decrease due to the repayment of Evergy Metro's $400.0 million of 7.15% Mortgage Bonds at maturity in April 2019, which decreased interest expense by $8.5 million, partially offset by a $3.9 million increase due to Evergy Metro's issuance of $400.0 million of 4.125% Mortgage Bonds in March 2019; and

• a $3.8 million decrease due to lower commercial paper balances and weighted-average interest rates on short-term borrowings in 2020; partially offset by

• a $5.4 million increase due to the issuance of Evergy Metro's $400.0 million of 2.25% Mortgage Bonds in May 2020.

Evergy Metro Income Tax Expense

Evergy Metro's income tax expense decreased $28.6 million in 2020, compared to 2019, primarily driven by a $32.2 million net decrease due 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, partially offset by a $3.9 million increase due to higher pre-tax income in 2020.

See Note 20 to the consolidated financial statements for more information regarding the change in the Kansas corporate income tax rate.