Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



Report of Independent Registered Public Accounting Firm
Evergy, Inc.		63
Evergy Kansas Central, Inc.		66
Evergy Metro, Inc.		69

Evergy, Inc.
Consolidated Statements of Comprehensive Income		72
Consolidated Balance Sheets		73
Consolidated Statements of Cash Flows		75
Consolidated Statements of Changes in Equity		76

Evergy Kansas Central, Inc.
Consolidated Statements of Income		77
Consolidated Balance Sheets		78
Consolidated Statements of Cash Flows		80
Consolidated Statements of Changes in Equity		81

Evergy Metro, Inc.
Consolidated Statements of Comprehensive Income		82
Consolidated Balance Sheets		83
Consolidated Statements of Cash Flows		85
Consolidated Statements of Changes in Equity		86

Combined Notes to Consolidated Financial Statements
Note 1:	Summary of Significant Accounting Policies	87
Note 2:	Revenue	9 3
Note 3:	Receivables	99
Note 4:	Rate Matters and Regulation	100
Note 5:	Goodwill	109
Note 6:	Asset Retirement Obligations	109
Note 7:	Property, Plant & Equipment	110
Note 8:	Jointly-Owned Electric Utility Plants	111
Note 9:	Pension Plans and Post-Retirement Benefits	112
Note 10:	Equity Compensation	125
Note 11:	Short-Term Borrowings and Short-Term Bank Lines of Credit	126
Note 12:	Long-Term Debt	128
Note 13:	Fair Value Measurements	131
Note 14:	Commitments and Contingencies	136
Note 15:	Guarantees	140
Note 16:	Related Party Transactions and Relationships	141
Note 17:	Shareholders' Equity	142
Note 18:	Variable Interest Entities	143
Note 19:	Taxes	144
Note 20:	Leases	150

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Evergy, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Evergy, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements

Critical Audit Matter Description

The Company is subject to rate regulation by the Kansas Corporation Commission and by the Missouri Public Service Commission (collectively the "Commissions"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas and Missouri, respectively. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the

economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant, and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.

The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commissions' regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Decisions to be made by the Commissions in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve (1) full recovery of the costs of providing utility service or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.

When the Company retires a regulated plant, the Company must assess the probability of recovery of the regulated plant, which is dependent upon amounts that may be recovered through regulated rates, including any return. Pending receipt of regulatory approval for the retirement and/or recovery of the affected plants, accounting for early retirements of regulated plants involves judgment related to the nature of the early retirement and the likelihood that the Company will recover its remaining investment in these retired generating plants with a return. Auditing the judgments related to the nature and likelihood of the retirement and the probability of recovering the generating plant investment with a return involves especially subjective and complex judgment.

We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:

We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates, including Company management's determination of the likelihood of recovery of the full investment of certain regulated plants and probability of refunding amounts previously collected from customers related to certain regulated plants.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commissions for the Company and other public utilities in Kansas and Missouri, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available

information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions' treatment of similar costs under similar circumstances.

For regulatory matters in process, including those that could impact the early retirement of regulated plants, we inspected the Company's filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company's future rates, for any evidence that might contradict management's assertions.
We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:

◦We inquired of management about property, plant, and equipment that may be abandoned.

◦We inspected the capital projects budget and construction-in-process listings and inquired of management to identify projects that are designed to replace assets that may be retired prior to the end of the useful life.

◦We inspected minutes of the board of directors and regulatory orders and other filings with the Commissions to identify any evidence that may contradict management's assertion regarding probability of an abandonment.

We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.
We evaluated management's conclusions for the probable recovery of the retired regulated plant investment with a return. We evaluated management's conclusions regarding the accounting for the abandonment of certain regulated plants and the impact of recent rate orders on the accounting.

/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri

February 24, 2022

We have served as the Company's auditor since 2002.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholder and the Board of Directors of Evergy Kansas Central, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Evergy Kansas Central, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements

Critical Audit Matter Description

The Company is subject to rate regulation by the Kansas Corporation Commission (the "Commission"), which has jurisdiction with respect to the rates of electric distribution companies in Kansas. Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures,

such as property, plant, and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.

The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commission's regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commission will not approve (1) full recovery of the costs of providing utility service or (2) recovery of all amounts invested in the utility business and a reasonable return on that investment.

We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) probability of potential charges related to the abandonment of regulated plants, and (3) a refund to customers. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commission, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the uncertainty of future decisions by the Commission included the following, among others:

We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commission for the Company and other public utilities in Kansas, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commission's treatment of similar costs under similar circumstances.
For regulatory matters in process, we inspected the Company’s filings with the Commission and the filings with the Commission by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:

◦We inquired of management about property, plant, and equipment that may be abandoned.

◦We inspected minutes of the board of directors and regulatory orders and other filings with the Commission to identify any evidence that may contradict management's assertion regarding probability of an abandonment.

We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.

/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri

February 24, 2022

We have served as the Company's auditor since 2002.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholder and the Board of Directors of Evergy Metro, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Evergy Metro, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Critical Audit Matter

Rate Matters and Regulation - Impact of Rate Regulation on the Financial Statements - Refer to Notes 1 and 4 to the financial statements

Critical Audit Matter Description

and equipment, including asset retirements and abandonments; regulatory assets and liabilities; operating revenues; operating and maintenance expense; and depreciation expense.

The Company's rates are subject to regulatory rate-setting processes and annual earnings oversight. Rates are determined and approved in regulatory proceedings based on an analysis of the Company's costs to provide utility service and a return on, and recovery of, the Company's investment in the utility business. Regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investment, and the timing and amount of assets to be recovered by rates. The Commissions' regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve (1) full recovery of the costs of providing utility service or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:

We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as property, plant, and equipment and deferred as regulatory assets and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities.
We tested the effectiveness of management's controls over the initial recognition of amounts as property, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
We evaluated external information and compared it to management's recorded regulatory asset and liability balances for completeness. Such external information included relevant regulatory orders issued by the Commissions for the Company and other public utilities in Kansas and Missouri, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions' treatment of similar costs under similar circumstances.
For regulatory matters in process, we inspected the Company’s filings with the Commissions and the filings with the Commissions by intervenors that may impact the Company’s future rates, for any evidence that might contradict management’s assertions.
We evaluated the reasonableness of management's judgments for potential indicators of abandonment by performing the following:

◦We inquired of management about property, plant, and equipment that may be abandoned.

We compared actual spend for projects that have been capitalized to property, plant, and equipment to budget. We evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. For significant projects that were over budget or if full recovery of project costs is being challenged by intervenors, we evaluated management's assessment of the probability of a disallowance. We tested selected costs included in the capitalized project costs for completeness and accuracy.
We evaluated management's analysis, and letters from internal and external legal counsel, as appropriate, regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.

/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri

February 24, 2022

We have served as the Company's auditor since 2002.


EVERGY, INC.
Consolidated Statements of Comprehensive Income



Year Ended December 31		2021		2020		2019
	(millions, except per share amounts)
OPERATING REVENUES		$	5,586.7	$	4,913.4	$	5,147.8
OPERATING EXPENSES:
Fuel and purchased power		1,557.0		1,099.0		1,265.0
SPP network transmission costs		290.4		263.2		251.3
Operating and maintenance		1,107.5		1,163.0		1,218.5
Depreciation and amortization		896.4		880.1		861.7
Taxes other than income tax		380.5		364.2		365.5
Total Operating Expenses		4,231.8		3,769.5		3,962.0
INCOME FROM OPERATIONS		1,354.9		1,143.9		1,185.8
OTHER INCOME (EXPENSE):
Investment earnings		59.9		10.8		11.0
Other income		46.3		31.3		26.9
Other expense		(87.4)		(78.2)		(76.9)
Total Other Income (Expense), Net		18.8		(36.1)		(39.0)
Interest expense		372.6		383.9		374.0
INCOME BEFORE INCOME TAXES		1,001.1		723.9		772.8
Income tax expense		117.4		102.2		97.0
Equity in earnings of equity method investees, net of income taxes		8.2		8.3		9.8
NET INCOME		891.9		630.0		685.6
Less: Net income attributable to noncontrolling interests		12.2		11.7		15.7
NET INCOME ATTRIBUTABLE TO EVERGY, INC.		$	879.7	$	618.3	$	669.9
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY, INC. (see Note 1)
Basic earnings per common share		$	3.84	$	2.72	$	2.80
Diluted earnings per common share		$	3.83	$	2.72	$	2.79
AVERAGE COMMON SHARES OUTSTANDING
Basic		229.0		227.2		239.5
Diluted		229.6		227.5		239.9
COMPREHENSIVE INCOME
NET INCOME		$	891.9	$	630.0	$	685.6
Derivative hedging activity
Loss on derivative hedging instruments		—		—		(64.4)
Income tax benefit		—		—		16.5
Net loss on derivative hedging instruments		—		—		(47.9)
Reclassification to expenses, net of tax		5.5		3.0		1.5
Derivative hedging activity, net of tax		5.5		3.0		(46.4)
Defined benefit pension plans
Net loss arising during period		(0.1)		(3.0)		(0.8)
Income tax benefit		—		0.7		0.2
Net loss arising during period, net of tax		(0.1)		(2.3)		(0.6)
Amortization of net losses included in net periodic benefit costs, net of tax		—		(0.1)		—
Change in unrecognized pension expense, net of tax		(0.1)		(2.4)		(0.6)
Total other comprehensive income (loss)		5.4		0.6		(47.0)
COMPREHENSIVE INCOME		897.3		630.6		638.6
Less: comprehensive income attributable to noncontrolling interest		12.2		11.7		15.7
COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC.		$	885.1	$	618.9	$	622.9

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


EVERGY, INC.
Consolidated Balance Sheets


	December 31
	2021			2020
ASSETS	(millions, except share amounts)
CURRENT ASSETS:
Cash and cash equivalents		$	26.2		$	144.9

Receivables, net of allowance for credit losses of $32.9 and $19.3, respectively		221.6			273.9
Accounts receivable pledged as collateral		319.0			360.0
Fuel inventory and supplies		566.7			504.5
Income taxes receivable		28.0			62.9
Regulatory assets		424.1			206.2
Prepaid expenses		49.3			48.2
Other assets		75.4			23.7
Total Current Assets		1,710.3			1,624.3
PROPERTY, PLANT AND EQUIPMENT, NET		21,002.6			19,951.0
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET		147.8			154.9
OTHER ASSETS:
Regulatory assets		1,991.1			1,868.2
Nuclear decommissioning trust fund		768.7			652.1
Goodwill		2,336.6			2,336.6
Other		563.4			527.7
Total Other Assets		5,659.8			5,384.6
TOTAL ASSETS		$	28,520.5		$	27,114.8

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


EVERGY, INC.
Consolidated Balance Sheets


	December 31
	2021			2020
LIABILITIES AND EQUITY	(millions, except share amounts)
CURRENT LIABILITIES:
Current maturities of long-term debt		$	389.3		$	436.4
Current maturities of long-term debt of variable interest entities		—			18.8
Notes payable and commercial paper		1,159.3			315.0
Collateralized note payable		319.0			360.0
Accounts payable		639.7			654.0

Accrued taxes		150.4			143.8
Accrued interest		118.8			123.4
Regulatory liabilities		70.7			26.1
Asset retirement obligations		19.5			40.2
Accrued compensation and benefits		51.6			55.5
Other		184.6			182.6
Total Current Liabilities		3,102.9			2,355.8
LONG-TERM LIABILITIES:
Long-term debt, net		9,297.9			9,190.9
Deferred income taxes		1,861.9			1,664.8
Unamortized investment tax credits		181.4			186.7
Regulatory liabilities		2,705.0			2,638.8
Pension and post-retirement liability		879.1			1,149.4
Asset retirement obligations		940.6			901.7
Other		310.0			308.2
Total Long-Term Liabilities		16,175.9			16,040.5
Commitments and Contingencies (Note 14)
EQUITY:
Evergy, Inc. Shareholders' Equity:
Common stock - 600,000,000 shares authorized, without par value 229,299,900 and 226,836,670 shares issued, stated value		7,205.5			7,080.0
Retained earnings		2,082.9			1,702.8
Accumulated other comprehensive loss		(44.0)			(49.4)
Total Evergy, Inc. Shareholders' Equity		9,244.4			8,733.4
Noncontrolling Interests		(2.7)			(14.9)
Total Equity		9,241.7			8,718.5
TOTAL LIABILITIES AND EQUITY		$	28,520.5		$	27,114.8

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


EVERGY, INC.
Consolidated Statements of Cash Flows


Year Ended December 31	2021		2020		2019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:	(millions)
Net income	$	891.9	$	630.0	$	685.6
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization	896.4		880.1		861.7
Amortization of nuclear fuel	51.4		58.3		51.4
Amortization of deferred refueling outage	25.1		25.4		25.5
Amortization of corporate-owned life insurance	24.1		20.1		19.8
Non-cash compensation	15.6		16.0		16.3
Net deferred income taxes and credits	102.2		126.9		121.5
Allowance for equity funds used during construction	(29.4)		(17.2)		(2.2)
Payments for asset retirement obligations	(22.6)		(18.4)		(17.8)
Equity in earnings of equity method investees, net of income taxes	(8.2)		(8.3)		(9.8)
Income from corporate-owned life insurance	(14.2)		(8.2)		(29.6)
Other	(13.8)		0.8		(3.2)
Changes in working capital items:
Accounts receivable	69.9		(4.9)		(23.1)
Accounts receivable pledged as collateral	41.0		(21.0)		26.0
Fuel inventory and supplies	(61.6)		(22.3)		29.9
Prepaid expenses and other current assets	(299.8)		16.9		43.4
Accounts payable	(55.1)		134.3		16.9
Accrued taxes	41.4		6.7		(8.2)
Other current liabilities	(19.4)		(98.9)		(59.4)
Changes in other assets	(251.5)		119.5		79.8
Changes in other liabilities	(31.7)		(82.0)		(75.5)
Cash Flows from Operating Activities	1,351.7		1,753.8		1,749.0
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(1,972.5)		(1,560.3)		(1,210.1)
Purchase of securities - trusts	(158.2)		(65.6)		(55.8)
Sale of securities - trusts	115.7		56.5		47.3
Investment in corporate-owned life insurance	(14.2)		(19.1)		(18.3)
Proceeds from investment in corporate-owned life insurance	77.0		65.9		161.7

Other investing activities	38.4		(11.1)		(5.1)
Cash Flows used in Investing Activities	(1,913.8)		(1,533.7)		(1,080.3)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	840.5		(246.9)		(176.7)
Proceeds from term loan facility	—		—		1,000.0
Repayment of term loan facility	—		—		(1,000.0)
Collateralized short-term borrowings, net	(41.0)		21.0		(26.0)
Issuance of common stock	112.5		—		—
Proceeds from long-term debt	497.3		888.8		2,372.7

Retirements of long-term debt	(432.0)		(251.1)		(701.1)
Retirements of long-term debt of variable interest entities	(18.8)		(32.3)		(30.3)
Payment for settlement of interest rate swap accounted for as a cash flow hedge	—		—		(69.8)
Borrowings against cash surrender value of corporate-owned life insurance	54.4		55.5		59.4
Repayment of borrowings against cash surrender value of corporate-owned life insurance	(62.3)		(54.8)		(127.5)
Cash dividends paid	(497.9)		(465.0)		(462.5)
Repurchase of common stock under repurchase plan	—		—		(1,628.7)
Distributions to shareholders of noncontrolling interests	—		—		(8.6)
Other financing activities	(9.3)		(13.6)		(6.7)
Cash Flows from (used in) Financing Activities	443.4		(98.4)		(805.8)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(118.7)		121.7		(137.1)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period	144.9		23.2		160.3
End of period	$	26.2	$	144.9	$	23.2

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


EVERGY, INC.
Consolidated Statements of Changes in Equity

	Evergy, Inc. Shareholders
	Common stock shares	Common stock		Retained earnings		AOCI		Non-controlling interests		Total equity
	(millions, except share amounts)
Balance as of December 31, 2018	255,326,252	$	8,685.2	$	1,346.0	$	(3.0)	$	(37.5)	$	9,990.7
Net income	—	—		669.9		—		15.7		685.6
Issuance of stock compensation and reinvested dividends, net of tax withholding	111,849	(2.4)		—		—		—		(2.4)
Dividends declared on common stock ($1.93 per share)	—	—		(462.5)		—		—		(462.5)
Dividend equivalents declared	—	—		(1.9)		—		—		(1.9)
Stock compensation expense	—	16.3		—		—		—		16.3
Repurchase of common stock under repurchase plan	(28,796,658)	(1,628.7)		—		—		—		(1,628.7)
Consolidation of noncontrolling interests	—	—		—		—		3.8		3.8
Distributions to shareholders of noncontrolling interests	—	—		—		—		(8.6)		(8.6)
Derivative hedging activity, net of tax	—	—		—		(46.4)		—		(46.4)
Change in unrecognized pension expense, net of tax	—	—		—		(0.6)		—		(0.6)

Balance as of December 31, 2019	226,641,443	7,070.4		1,551.5		(50.0)		(26.6)		8,545.3
Net income	—	—		618.3		—		11.7		630.0

Issuance of stock compensation and reinvested dividends, net of tax withholding	195,227	(5.9)		—		—		—		(5.9)
Dividends declared on common stock ($2.05 per share)	—	—		(465.0)		—		—		(465.0)
Dividend equivalents declared	—	—		(2.0)		—		—		(2.0)
Stock compensation expense	—	16.0		—		—		—		16.0



Derivative hedging activity, net of tax	—	—		—		3.0		—		3.0
Change in unrecognized pension expense, net of tax	—	—		—		(2.4)		—		(2.4)
Other	—	(0.5)		—		—		—		(0.5)
Balance as of December 31, 2020	226,836,670	7,080.0		1,702.8		(49.4)		(14.9)		8,718.5
Net income	—	—		879.7		—		12.2		891.9
Issuance of stock, net of issuance costs	2,269,447	112.5		—		—		—		112.5
Issuance of stock compensation and reinvested dividends, net of tax withholding	139,729	(2.4)		—		—		—		(2.4)
Issuance of restricted common stock	54,054	2.9		—		—		—		2.9
Dividends declared on common stock ($2.178 per share)	—	—		(497.9)		—		—		(497.9)
Dividend equivalents declared	—	—		(1.7)		—		—		(1.7)
Stock compensation expense	—	13.8		—		—		—		13.8
Unearned compensation
Issuance of restricted common stock	—	(2.9)		—		—		—		(2.9)
Compensation expense recognized	—	1.8		—		—		—		1.8



Derivative hedging activity, net of tax	—	—		—		5.5		—		5.5
Change in unrecognized pension expense, net of tax	—	—		—		(0.1)		—		(0.1)
Other	—	(0.2)		—		—		—		(0.2)
Balance as of December 31, 2021	229,299,900	$	7,205.5	$	2,082.9	$	(44.0)	$	(2.7)	$	9,241.7

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


EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Income



Year Ended December 31		2021		2020		2019
	(millions)
OPERATING REVENUES		$	2,847.3	$	2,418.1	$	2,507.4
OPERATING EXPENSES:
Fuel and purchased power		638.7		427.6		493.0
SPP network transmission costs		290.4		263.2		251.3
Operating and maintenance		530.8		513.6		530.5
Depreciation and amortization		467.2		453.1		443.8
Taxes other than income tax		203.9		193.3		192.3
Total Operating Expenses		2,131.0		1,850.8		1,910.9
INCOME FROM OPERATIONS		716.3		567.3		596.5
OTHER INCOME (EXPENSE):
Investment earnings		1.3		4.8		4.1
Other income		27.0		21.4		23.1
Other expense		(35.9)		(38.9)		(40.1)
Total Other Expense, Net		(7.6)		(12.7)		(12.9)
Interest expense		160.3		167.6		177.0
INCOME BEFORE INCOME TAXES		548.4		387.0		406.6
Income tax expense		51.7		155.8		52.1
Equity in earnings of equity method investees, net of income taxes		4.0		4.6		4.6
NET INCOME		500.7		235.8		359.1
Less: Net income attributable to noncontrolling interests		12.2		11.7		15.7
NET INCOME ATTRIBUTABLE TO EVERGY KANSAS CENTRAL, INC.		$	488.5	$	224.1	$	343.4

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


EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets


	December 31
	2021			2020
ASSETS	(millions, except share amounts)
CURRENT ASSETS:
Cash and cash equivalents		$	3.1		$	28.7
Receivables, net of allowance for credit losses of $13.0 and $7.5, respectively		201.6			218.9
Related party receivables		21.2			6.7
Accounts receivable pledged as collateral		153.0			180.0
Fuel inventory and supplies		283.2			276.4
Income taxes receivable		9.6			25.3
Regulatory assets		257.3			96.2
Prepaid expenses and other assets		41.0			27.4
Total Current Assets		970.0			859.6
PROPERTY, PLANT AND EQUIPMENT, NET		10,548.9			10,193.6
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET		147.8			154.9
OTHER ASSETS:
Regulatory assets		753.6			800.1
Nuclear decommissioning trust fund		368.4			309.8
Other		286.9			271.1
Total Other Assets		1,408.9			1,381.0
TOTAL ASSETS		$	13,075.6		$	12,589.1

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


EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets


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

Current maturities of long-term debt of variable interest entities		$	—		$	18.8
Notes payable and commercial paper		406.0			50.0
Collateralized note payable		153.0			180.0
Accounts payable		232.2			280.1
Related party payables		27.5			21.7

Accrued taxes		106.1			101.5
Accrued interest		71.5			72.8
Regulatory liabilities		12.8			11.9
Asset retirement obligations		7.3			11.2
Accrued compensation and benefits		13.8			11.1
Other		126.3			133.5
Total Current Liabilities		1,156.5			892.6
LONG-TERM LIABILITIES:
Long-term debt, net		3,934.2			3,931.5
Deferred income taxes		867.9			824.5
Unamortized investment tax credits		61.7			65.7
Regulatory liabilities		1,469.4			1,461.0
Pension and post-retirement liability		435.6			560.3
Asset retirement obligations		436.6			416.0
Other		172.2			156.7
Total Long-Term Liabilities		7,377.6			7,415.7
Commitments and Contingencies (Note 14)
EQUITY:
Evergy Kansas Central, Inc. Shareholder's Equity:
Common stock - 1,000 shares authorized, $0.01 par value, 1 share issued		2,737.6			2,737.6
Retained earnings		1,806.6			1,558.1
Total Evergy Kansas Central, Inc. Shareholder's Equity		4,544.2			4,295.7
Noncontrolling Interests		(2.7)			(14.9)
Total Equity		4,541.5			4,280.8
TOTAL LIABILITIES AND EQUITY		$	13,075.6		$	12,589.1

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


EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Cash Flows


Year Ended December 31	2021		2020		2019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:	(millions)
Net income	$	500.7	$	235.8	$	359.1
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization	467.2		453.1		443.8
Amortization of nuclear fuel	25.6		28.8		25.6
Amortization of deferred refueling outage	12.6		12.7		12.8
Amortization of corporate-owned life insurance	24.1		20.1		19.8

Net deferred income taxes and credits	(1.4)		146.6		11.6
Allowance for equity funds used during construction	(14.9)		(9.1)		—
Payments for asset retirement obligations	(6.2)		(2.2)		(14.8)
Equity in earnings of equity method investees, net of income taxes	(4.0)		(4.6)		(4.6)
Income from corporate-owned life insurance	(14.2)		(8.2)		(29.0)
Other	(5.5)		(5.5)		(5.5)
Changes in working capital items:
Accounts receivable	23.5		(33.8)		(65.9)
Accounts receivable pledged as collateral	27.0		(9.0)		14.0
Fuel inventory and supplies	(6.2)		(9.4)		10.9
Prepaid expenses and other current assets	(196.1)		10.0		(11.7)
Accounts payable	(39.1)		111.6		6.9
Accrued taxes	20.3		(6.7)		20.2
Other current liabilities	(55.0)		(95.5)		12.1
Changes in other assets	(48.3)		42.9		47.0
Changes in other liabilities	(10.0)		(30.2)		(29.5)
Cash Flows from Operating Activities	700.1		847.4		822.8
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(835.7)		(719.0)		(596.1)
Purchase of securities - trusts	(129.9)		(20.2)		(21.8)
Sale of securities - trusts	97.5		18.6		21.6
Investment in corporate-owned life insurance	(14.2)		(18.3)		(17.6)
Proceeds from investment in corporate-owned life insurance	77.0		63.8		158.9
Other investing activities	26.5		(2.2)		(3.2)
Cash Flows used in Investing Activities	(778.8)		(677.3)		(458.2)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	354.0		(199.2)		(162.5)
Collateralized short-term debt, net	(27.0)		9.0		(14.0)
Proceeds from long-term debt	—		492.7		294.7
Retirements of long-term debt	—		(250.0)		(300.0)
Retirements of long-term debt of variable interest entities	(18.8)		(32.3)		(30.3)

Borrowings against cash surrender value of corporate-owned life insurance	51.4		52.7		56.5
Repayment of borrowings against cash surrender value of corporate-owned life insurance	(62.3)		(53.7)		(125.4)
Cash dividends paid	(240.0)		(160.0)		(110.0)
Distributions to shareholders of noncontrolling interests	—		—		(8.6)
Other financing activities	(4.2)		(5.8)		(4.3)
Cash Flows from (used in) Financing Activities	53.1		(146.6)		(403.9)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(25.6)		23.5		(39.3)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period	28.7		5.2		44.5
End of period	$	3.1	$	28.7	$	5.2

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


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


	Evergy Kansas Central, Inc. Shareholder
	Common stock shares	Common stock		Retained earnings		Non-controlling interests		Total equity
	(millions, except share amounts)
Balance as of December 31, 2018	1	$	2,737.6	$	1,260.6	$	(37.5)	$	3,960.7
Net income	—	—		343.4		15.7		359.1
Dividends declared on common stock	—	—		(110.0)		—		(110.0)
Consolidation of noncontrolling interests	—	—		—		3.8		3.8
Distributions to shareholders of noncontrolling interests	—	—		—		(8.6)		(8.6)


Balance as of December 31, 2019	1	2,737.6		1,494.0		(26.6)		4,205.0
Net income	—	—		224.1		11.7		235.8
Dividends declared on common stock	—	—		(160.0)		—		(160.0)


Balance as of December 31, 2020	1	2,737.6		1,558.1		(14.9)		4,280.8
Net income	—	—		488.5		12.2		500.7
Dividends declared on common stock	—	—		(240.0)		—		(240.0)

Balance as of December 31, 2021	1	$	2,737.6	$	1,806.6	$	(2.7)	$	4,541.5

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


EVERGY METRO, INC.
Consolidated Statements of Comprehensive Income



Year Ended December 31		2021		2020		2019
	(millions)
OPERATING REVENUES		$	1,913.7	$	1,705.6	$	1,806.5
OPERATING EXPENSES:
Fuel and purchased power		613.5		416.1		482.1
Operating and maintenance		365.4		407.5		451.9
Depreciation and amortization		321.0		326.1		318.4
Taxes other than income tax		126.2		121.6		127.6
Total Operating Expenses		1,426.1		1,271.3		1,380.0
INCOME FROM OPERATIONS		487.6		434.3		426.5
OTHER INCOME (EXPENSE):
Investment earnings		0.2		1.4		2.4
Other income		16.1		9.2		3.2
Other expense		(29.4)		(25.5)		(21.4)
Total Other Expense, Net		(13.1)		(14.9)		(15.8)
Interest expense		109.8		113.6		119.8
INCOME BEFORE INCOME TAXES		364.7		305.8		290.9
Income tax expense		52.4		7.1		35.7
NET INCOME		$	312.3	$	298.7	$	255.2
COMPREHENSIVE INCOME
NET INCOME		$	312.3	$	298.7	$	255.2
OTHER COMPREHENSIVE INCOME:
Derivative hedging activity
Reclassification to expenses, net of tax		(0.3)		(0.2)		0.7
Derivative hedging activity, net of tax		(0.3)		(0.2)		0.7
Total other comprehensive income (loss)		(0.3)		(0.2)		0.7
COMPREHENSIVE INCOME		$	312.0	$	298.5	$	255.9

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


EVERGY METRO, INC.
Consolidated Balance Sheets


	December 31
	2021			2020
ASSETS	(millions, except share amounts)
CURRENT ASSETS:
Cash and cash equivalents		$	2.1		$	71.6
Receivables, net of allowance for credit losses of $13.3 and $8.1, respectively		31.0			45.0
Related party receivables		277.8			225.6
Accounts receivable pledged as collateral		116.0			130.0
Fuel inventory and supplies		211.0			170.4
Income taxes receivable		—			3.2
Regulatory assets		86.3			82.0
Prepaid expenses		22.6			22.9
Other assets		19.7			14.2
Total Current Assets		766.5			764.9
PROPERTY, PLANT AND EQUIPMENT, NET		7,474.9			7,141.2
OTHER ASSETS:
Regulatory assets		410.7			533.5
Nuclear decommissioning trust fund		400.3			342.3
Other		104.4			133.9
Total Other Assets		915.4			1,009.7
TOTAL ASSETS		$	9,156.8		$	8,915.8

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


EVERGY METRO, INC.
Consolidated Balance Sheets


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


Collateralized note payable		$	116.0		$	130.0
Accounts payable		305.2			280.1
Related party payables		0.1			0.1
Accrued taxes		38.6			34.9
Accrued interest		26.4			30.0
Regulatory liabilities		54.6			8.0
Asset retirement obligations		11.0			21.2
Accrued compensation and benefits		37.8			44.4
Other		48.8			37.3
Total Current Liabilities		638.5			586.0
LONG-TERM LIABILITIES:
Long-term debt, net		2,925.0			2,923.0
Deferred income taxes		606.1			558.8
Unamortized investment tax credits		117.2			118.5
Regulatory liabilities		954.2			899.4
Pension and post-retirement liability		420.9			565.1
Asset retirement obligations		370.0			357.7
Other		103.7			148.1
Total Long-Term Liabilities		5,497.1			5,570.6
Commitments and Contingencies (Note 14)
EQUITY:
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value		1,563.1			1,563.1
Retained earnings		1,453.8			1,191.5
Accumulated other comprehensive income		4.3			4.6
Total Equity		3,021.2			2,759.2
TOTAL LIABILITIES AND EQUITY		$	9,156.8		$	8,915.8

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


EVERGY METRO, INC.
Consolidated Statements of Cash Flows


Year Ended December 31	2021		2020		2019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:	(millions)
Net income	$	312.3	$	298.7	$	255.2
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization	321.0		326.1		318.4
Amortization of nuclear fuel	25.8		29.5		25.9
Amortization of deferred refueling outage	12.6		12.7		12.8
Net deferred income taxes and credits	10.0		(3.5)		(30.6)
Allowance for equity funds used during construction	(12.6)		(8.0)		(2.2)
Payments for asset retirement obligations	(7.4)		(7.5)		(2.5)
Other	(0.4)		(0.4)		0.3
Changes in working capital items:
Accounts receivable	43.2		(13.2)		37.0
Accounts receivable pledged as collateral	14.0		(12.0)		12.0
Fuel inventory and supplies	(40.6)		(7.4)		14.6
Prepaid expenses and other current assets	(16.3)		(7.9)		28.0
Accounts payable	(1.1)		24.6		9.1
Accrued taxes	6.9		1.6		(9.6)
Other current liabilities	44.0		2.4		(53.2)
Changes in other assets	61.5		59.1		33.7
Changes in other liabilities	(38.7)		(47.3)		(34.7)
Cash Flows from Operating Activities	734.2		647.5		614.2
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Additions to property, plant and equipment	(682.9)		(565.4)		(445.0)
Purchase of securities - trusts	(28.3)		(45.4)		(34.0)
Sale of securities - trusts	18.2		37.9		25.7
Net money pool lending	(55.0)		(100.0)		—
Other investing activities	6.8		4.6		9.0
Cash Flows used in Investing Activities	(741.2)		(668.3)		(444.3)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Short-term debt, net	—		(199.3)		22.4
Collateralized short-term debt, net	(14.0)		12.0		(12.0)
Proceeds from long-term debt	—		396.2		393.2
Retirements of long-term debt	—		—		(400.0)

Cash dividends paid	(50.0)		(120.0)		(175.0)
Other financing activities	1.5		1.5		0.9
Cash Flows from (used in) Financing Activities	(62.5)		90.4		(170.5)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(69.5)		69.6		(0.6)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period	71.6		2.0		2.6
End of period	$	2.1	$	71.6	$	2.0

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


EVERGY METRO, INC
Consolidated Statements of Changes in Equity


	Common stock shares	Common Stock		Retained earnings		AOCI - Net gains (losses) on cash flow hedges		Total Equity
	(millions, except share amounts)
Balance as of December 31, 2018	1	$	1,563.1	$	932.6	$	4.1	$	2,499.8
Net income	—	—		255.2		—		255.2
Dividends declared on common stock	—	—		(175.0)		—		(175.0)
Derivative hedging activity, net of tax	—	—		—		0.7		0.7
Balance as of December 31, 2019	1	1,563.1		1,012.8		4.8		2,580.7
Net income	—	—		298.7		—		298.7
Dividends declared on common stock	—	—		(120.0)		—		(120.0)
Derivative hedging activity, net of tax	—	—		—		(0.2)		(0.2)
Balance as of December 31, 2020	1	1,563.1		1,191.5		4.6		2,759.2
Net income	—	—		312.3		—		312.3
Dividends declared on common stock	—	—		(50.0)		—		(50.0)
Derivative hedging activity, net of tax	—	—		—		(0.3)		(0.3)
Balance as of December 31, 2021	1	$	1,563.1	$	1,453.8	$	4.3	$	3,021.2

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

EVERGY, INC.

EVERGY KANSAS CENTRAL, INC.

EVERGY METRO, INC.

Combined Notes to Consolidated Financial Statements

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

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

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

Evergy Kansas Central, Inc. (Evergy Kansas Central) is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Evergy Kansas Central has one active wholly-owned subsidiary with significant operations, Evergy Kansas South, Inc. (Evergy Kansas South).
Evergy Metro, Inc. (Evergy Metro) is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas.
Evergy Missouri West, Inc. (Evergy Missouri West) is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.
Evergy Transmission Company, LLC (Evergy Transmission Company) owns 13.5% of Transource Energy, LLC (Transource) with the remaining 86.5% owned by AEP Transmission Holding Company, LLC, a subsidiary of American Electric Power Company, Inc. (AEP). Transource is focused on the development of competitive electric transmission projects. Evergy Transmission Company accounts for its investment in Transource under the equity method.

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

Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West conduct business in their respective service territories using the name Evergy. Collectively, the Evergy Companies have approximately 15,400 MWs of owned generating capacity and renewable 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.

Principles of Consolidation

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

Evergy Metro elected not to apply "push-down accounting" related to the Great Plains Energy Incorporated (Great Plains Energy) and Evergy Kansas Central merger in 2018, whereby the adjustments of assets and liabilities to fair value and the resulting goodwill would be recorded on the financial statements of the acquired subsidiary. These adjustments for Evergy Metro, as well as those related to the acquired assets and liabilities of Great Plains Energy and its other direct subsidiaries, are only reflected on Evergy's consolidated financial statements.

Use of Estimates

The process of preparing financial statements in conformity with generally accepted accounting principles (GAAP) requires the use of estimates and assumptions that affect the reported amounts of certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with original maturities of three months or less at acquisition.

Fuel Inventory and Supplies

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


	December 31
	2021		2020
Evergy	(millions)
Fuel inventory	$	160.9	$	145.0
Supplies	405.8		359.5
Fuel inventory and supplies	$	566.7	$	504.5
Evergy Kansas Central
Fuel inventory	$	74.3	$	79.3
Supplies	208.9		197.1
Fuel inventory and supplies	$	283.2	$	276.4
Evergy Metro
Fuel inventory	$	62.0	$	44.9
Supplies	149.0		125.5
Fuel inventory and supplies	$	211.0	$	170.4

Property, Plant and Equipment

The Evergy Companies record the value of property, plant and equipment, including that of VIEs, at cost. For plant, cost includes contracted services, direct labor and materials, indirect charges for engineering and supervision and an allowance for funds used during construction (AFUDC). AFUDC represents the allowed cost of capital used to finance utility construction activity. AFUDC equity funds are included as a non-cash item in other income and AFUDC borrowed funds are a reduction of interest expense. AFUDC is computed by applying a composite rate to qualified construction work in progress. The rates used to compute gross AFUDC are compounded semi-annually.

The amounts of the Evergy Companies' AFUDC for borrowed and equity funds are detailed in the following table.


	2021		2020		2019
Evergy	(millions)
AFUDC borrowed funds	$	14.7	$	16.5	$	14.5
AFUDC equity funds	29.4		17.2		2.2
Total	$	44.1	$	33.7	$	16.7
Evergy Kansas Central
AFUDC borrowed funds	$	7.1	$	8.5	$	7.5
AFUDC equity funds	14.9		9.1		—
Total	$	22.0	$	17.6	$	7.5
Evergy Metro
AFUDC borrowed funds	$	6.0	$	6.0	$	4.3
AFUDC equity funds	12.6		8.0		2.2
Total	$	18.6	$	14.0	$	6.5

The average rates used in the calculation of AFUDC are detailed in the following table.


	2021	2020	2019
Evergy Kansas Central	4.9%	4.7%	3.0%
Evergy Metro	5.6%	5.2%	4.6%
Evergy Missouri West	2.6%	3.5%	3.7%

When property units are retired or otherwise disposed, the original cost, net of salvage, is charged to accumulated depreciation. Repair of property and replacement of items not considered to be units of property are expensed as incurred, except for planned refueling and maintenance outages at Wolf Creek Generating Station (Wolf Creek). As authorized by regulators, the incremental maintenance cost incurred for such outages is deferred and amortized to expense ratably over the period between planned outages.

Depreciation and Amortization

Depreciation and amortization of utility plant other than nuclear fuel is computed using the straight-line method over the estimated lives of depreciable property based on rates approved by state regulatory authorities. Annual depreciation rates average approximately 3%. See Note 7 for more details. Nuclear fuel is amortized to fuel expense based on the quantity of heat produced during the generation of electricity.

The depreciable lives of Evergy's, Evergy Kansas Central's and Evergy Metro's property, plant and equipment are detailed in the following table.


	Evergy			Evergy Kansas Central				Evergy Metro
	(years)
Generating facilities	8	to	87		8	to	87	20	to	60
Transmission facilities	15	to	94		36	to	94	15	to	70
Distribution facilities	8	to	73		19	to	73	8	to	55
Other	5	to	84		7	to	84	5	to	50

Plant to be Retired, Net

When the Evergy Companies retire utility plant, the original cost, net of salvage, is charged to accumulated depreciation. However, when it becomes probable an asset will be retired significantly in advance of its original expected useful life and in the near term, the cost of the asset and related accumulated depreciation is recognized as a separate asset and a probable abandonment. If the asset is still in service, the net amount is classified as plant to

be retired, net on the consolidated balance sheets. If the asset is no longer in service, the net amount is classified as a regulatory asset on the consolidated balance sheets.

The Evergy Companies must also assess the probability of full recovery of the remaining net book value of the abandonment. The net book value that may be retained as an asset on the balance sheet for the abandonment is dependent upon amounts that may be recovered through regulated rates, including any return. An impairment charge, if any, would equal the difference between the remaining net book value of the asset and the present value of the future revenues expected from the asset.

Evergy Missouri West has determined that its November 2018 retirement of Sibley No. 3 Unit meets the criteria to be considered an abandonment. As of December 31, 2021, Evergy has classified the remaining Sibley No. 3 Unit net book value of $123.4 million as retired generation facilities within regulatory assets on its consolidated balance sheet. This regulatory asset is reduced by approximately $9 million of annual amortization expense, which is an amount equal to the annual depreciation expense for the asset reflected in retail rates.

In October 2019, the Missouri Public Service Commission (MPSC) granted the request of certain intervenors for an Accounting Authority Order (AAO) that requires Evergy Missouri West to record a regulatory liability for all revenues collected from customers for return on investment, non-fuel operations and maintenance costs, taxes including accumulated deferred income taxes and all other costs associated with Sibley Station following the station's retirement in November 2018 for consideration in Evergy Missouri West's current rate case, which was filed in January 2022. See Note 4 for additional information regarding the AAO and Evergy Missouri West's current rate case.

Evergy Missouri West expects that the MPSC's decision in its current rate case regarding the AAO could impact the valuation of its regulatory asset for retired generation facilities but as of December 31, 2021, has concluded that no impairment is required based on the relevant facts and circumstances.

Nuclear Plant Decommissioning Costs

Nuclear plant decommissioning cost estimates are based on either the immediate dismantlement method or the deferred dismantling method as determined by the State Corporation Commission of the State of Kansas (KCC) and MPSC and include the costs of decontamination, dismantlement and site restoration. Based on these cost estimates, Evergy Kansas Central and Evergy Metro each contribute to a tax-qualified trust fund to be used to decommission Wolf Creek. Related liabilities for decommissioning are included on Evergy's, Evergy Kansas Central's and Evergy Metro's consolidated balance sheets in asset retirement obligations (AROs).

As a result of the authorized regulatory treatment and related regulatory accounting, differences between the fair value of the assets held in the nuclear decommissioning trust and the amounts recorded for the accumulated accretion and depreciation expense associated with the decommissioning ARO are recorded as a regulatory liability on Evergy's, Evergy Kansas Central's and Evergy Metro's consolidated balance sheets. See Note 6 for discussion of AROs including those associated with nuclear plant decommissioning costs.

Regulatory Accounting

Accounting standards are applied that recognize the economic effects of rate regulation. Accordingly, regulatory assets and liabilities have been recorded when required by a regulatory order or based on regulatory precedent. See Note 4 for additional information concerning regulatory matters.

Cash Surrender Value of Life Insurance

Amounts related to corporate-owned life insurance (COLI) are recorded on the consolidated balance sheets in other long-term assets and are detailed in the following table for Evergy. Substantially all of Evergy's COLI-related balances relate to Evergy Kansas Central's COLI activity.


	December 31
	2021		2020
Evergy	(millions)
Cash surrender value of policies	$	1,363.0	$	1,369.6
Borrowings against policies	(1,232.3)		(1,237.6)
Corporate-owned life insurance, net	$	130.7	$	132.0

Increases in cash surrender value and death benefits are recorded in other income in the Evergy Companies' consolidated statements of income and comprehensive income. Interest expense incurred on policy loans is offset against the policy income. Income from death benefits is highly variable from period to period.

Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of the following financial instruments for which it was practicable to estimate that value.

Nuclear decommissioning trust fund - The Evergy Companies' nuclear decommissioning trust fund assets are recorded at fair value based on quoted market prices of the investments held by the fund and/or valuation models.

Pension plans - For financial reporting purposes, the market value of plan assets is the fair value based on quoted market prices of the investments held by the fund and/or valuation models.

Revenue Recognition

The Evergy Companies recognize revenue on the sale of electricity to customers over time as the service is provided in the amount they have the right to invoice. Revenues recorded include electric services provided but not yet billed by the Evergy Companies. 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. The Evergy Companies' estimated unbilled kWhs are allocated and priced by regulatory jurisdiction across the rate classes based on actual billing rates. The Evergy Companies' 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 3 for the balance of unbilled receivables for each of Evergy, Evergy Kansas Central and Evergy Metro as of December 31, 2021 and 2020.

The Evergy Companies also collect sales taxes and franchise fees from customers concurrent with revenue-producing activities that are levied by state and local governments. These items are excluded from revenue, and thus are not reflected on the consolidated statements of income and comprehensive income for Evergy, Evergy Kansas Central and Evergy Metro.

See Note 2 for additional details regarding revenue recognition from sales of electricity by the Evergy Companies.

Allowance for Credit Losses

Historical loss information generally provides the basis for the Evergy Companies' assessment of expected credit losses. The Evergy Companies use an aging of accounts receivable method to assess historical loss information. When historical experience may not fully reflect the Evergy Companies' expectations about the future, the Evergy Companies will adjust historical loss information, as necessary, to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information.

Receivables are charged off when they are deemed uncollectible, which is based on a number of factors including specific facts surrounding an account and management's judgment.

Asset Impairments

Long-lived assets and finite-lived intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the undiscounted expected future cash flows from an asset to be held and used is less than the carrying value of the asset, an asset impairment must be recognized in the financial statements. The amount of impairment recognized is the excess of the carrying value of the asset over its fair value.

Goodwill and indefinite lived intangible assets are tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. The annual test must be performed at the same time each year. 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. See Note 5 for additional details on goodwill.

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 tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized.

The Evergy Companies recognize tax benefits based on a "more-likely-than-not" recognition threshold. In addition, the Evergy Companies recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

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

The Evergy Companies have established a net regulatory liability for future refunds to be made to customers for amounts collected from customers in excess of income taxes in current rates. Tax credits are recognized in the year generated except for certain Evergy Kansas Central, Evergy Metro and Evergy Missouri West investment tax credits that have been deferred and amortized over the remaining service lives of the related properties.

Other Income (Expense), Net

In 2021, Evergy's investment earnings included a $27.7 million unrealized gain related to Evergy’s investment in an early-stage energy solutions company. See “Evergy Equity Investment” in this Note 1 for further information.

The Evergy Companies’ other income includes income from AFUDC equity funds. See “Property, Plant and Equipment” in this Note 1 for these amounts for 2021, 2020 and 2019.

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


	2021		2020		2019
Evergy	(millions)
Non-service cost component of net benefit cost	$	(55.6)	$	(58.6)	$	(55.6)
Other	(31.8)		(19.6)		(21.3)
Other expense	$	(87.4)	$	(78.2)	$	(76.9)
Evergy Kansas Central
Non-service cost component of net benefit cost	$	(15.6)	$	(21.2)	$	(20.1)
Other	(20.3)		(17.7)		(20.0)
Other expense	$	(35.9)	$	(38.9)	$	(40.1)
Evergy Metro
Non-service cost component of net benefit cost	$	(26.7)	$	(24.2)	$	(20.9)
Other	(2.7)		(1.3)		(0.5)
Other expense	$	(29.4)	$	(25.5)	$	(21.4)

Earnings Per Share

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

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


	2021		2020		2019
Income	(millions, except per share amounts)
Net income	$	891.9	$	630.0	$	685.6
Less: Net income attributable to noncontrolling interests	12.2		11.7		15.7
Net income attributable to Evergy, Inc.	$	879.7	$	618.3	$	669.9
Common Shares Outstanding
Weighted average number of common shares outstanding - basic	229.0		227.2		239.5
Add: effect of dilutive securities	0.6		0.3		0.4
Diluted average number of common shares outstanding	229.6		227.5		239.9
Basic EPS	$	3.84	$	2.72	$	2.80
Diluted EPS	$	3.83	$	2.72	$	2.79

There were no anti-dilutive securities excluded from the computation of diluted EPS for 2021. Anti-dilutive shares excluded from the computation of diluted EPS for 2020 and 2019 were 127,884 RSUs and 785 RSUs, respectively.

Supplemental Cash Flow Information


Year Ended December 31	2021		2020		2019
Evergy	(millions)
Cash paid for (received from):
Interest, net of amount capitalized	$	356.9	$	367.6	$	329.5
Interest of VIEs	0.2		0.8		1.6
Income taxes, net of refunds	(19.6)		(46.5)		(5.2)
Non-cash investing transactions:
Property, plant and equipment additions	269.3		463.3		186.0
Non-cash financing transactions:
Issuance of stock for compensation and reinvested dividends	0.7		0.9		(0.3)


Year Ended December 31	2021		2020		2019
Evergy Kansas Central	(millions)
Cash paid for (received from):
Interest, net of amount capitalized	$	149.3	$	157.5	$	143.0
Interest of VIEs	0.2		0.8		1.6
Income taxes, net of refunds	37.5		4.7		29.9
Non-cash investing transactions:
Property, plant and equipment additions	101.9		235.4		92.1


Year Ended December 31	2021		2020		2019
Evergy Metro	(millions)
Cash paid for (received from):
Interest, net of amount capitalized	$	110.8	$	109.9	$	118.4
Income taxes, net of refunds	36.6		4.8		77.0
Non-cash investing transactions:
Property, plant and equipment additions	102.2		192.5		80.7

Non-cash property, plant and equipment additions in 2020 for Evergy, Evergy Kansas Central and Evergy Metro include a non-cash addition related to the revision in estimate of the Wolf Creek ARO liability in the third quarter of 2020. See Note 6 for more details.

Dividends Declared

In February 2022, Evergy's Board of Directors (Evergy Board) declared a quarterly dividend of $0.5725 per share on Evergy's common stock. The common dividend is payable March 21, 2022, to shareholders of record as of March 7, 2022.

In February 2022, Evergy Kansas Central's Board of Directors declared a cash dividend to Evergy of up to $25.0 million, payable on March 18, 2022.

February 2021 Winter Weather Event

In February 2021, much of the central and southern United States, including the service territories of the Evergy Companies, experienced a significant winter weather event that resulted in extremely cold temperatures over a multi-day period (February 2021 winter weather event). The February 2021 winter weather event resulted in an increase in the demand for natural gas used by the Evergy Companies for generating electricity and also contributed to the limited availability of other generation resources, including coal and renewables, within the SPP Integrated Marketplace. The Evergy Companies are members of the SPP and, as a result, principally sell and purchase power for the Evergy Companies' retail electric customers through the SPP Integrated Marketplace. These circumstances

resulted in higher than normal market prices for both natural gas and power for the duration of the February 2021 winter weather event. These higher than normal market prices also included make-whole payments calculated by the SPP to compensate natural gas generators within the SPP Integrated Marketplace for costs incurred in excess of revenues. As part of the February 2021 winter weather event and inclusive of the aforementioned items, Evergy incurred natural gas and purchased power costs, net of wholesale revenues, of $365.5 million. This $365.5 million of net fuel and purchased power costs was primarily driven by $296.4 million of costs at Evergy Missouri West and $133.9 million of costs at Evergy Kansas Central, partially offset by $64.8 million of net wholesale revenues at Evergy Metro. The amount of purchased power costs incurred by the Evergy Companies during the February 2021 winter weather event is subject to resettlement activity and further review by the SPP. This review and any subsequent resettlement activity could result in increases or decreases to the final amount of purchased power costs incurred by the Evergy Companies during the February 2021 winter weather event and these changes could be material.

The Evergy Companies have fuel recovery mechanisms in their Kansas and Missouri jurisdictions, as applicable, that allow them to defer substantially all of any increased fuel and purchased power costs, net of wholesale revenues, to a regulatory asset or liability for future recovery from or refund to customers. Further, in February 2021, the KCC issued an emergency AAO that allowed Evergy Kansas Central and Evergy Metro's Kansas jurisdiction to defer to a regulatory asset any extraordinary costs, including carrying costs, incurred to provide electric service during the February 2021 winter weather event for consideration in future rate proceedings. Additionally, in June 2021, Evergy Metro and Evergy Missouri West filed a joint request for an AAO with the MPSC that would allow for the extraordinary costs and revenues to provide service during the February 2021 winter weather event, including carrying costs, to be deferred to a regulatory asset or a regulatory liability for consideration in future proceedings. See Note 4 for additional information regarding the AAOs.

As of December 31, 2021, the Evergy Companies have deferred substantially all of the fuel and purchased power costs, net of wholesale revenues, related to the February 2021 winter weather event to a regulatory asset or liability pursuant to the mechanisms discussed above. While the Evergy Companies expect to recover substantially all of any increased fuel and purchased power costs related to the February 2021 winter weather event from customers, the timing of the cost recovery could be delayed or spread over a longer than typical recovery timeframe by the KCC or the MPSC to help moderate monthly customer bill impacts given the extraordinary nature of the February 2021 winter weather event.

The Evergy Companies also engage in limited non-regulated energy marketing activities in various regional power markets that have historically not had a significant impact on the Evergy Companies' results of operations. These energy marketing margins are recorded net in operating revenues on the Evergy Companies' statements of income and comprehensive income. As a result of the elevated market prices experienced in regional power markets across the central and southern United States driven by the February 2021 winter weather event discussed above, Evergy and Evergy Kansas Central recorded $94.5 million of energy marketing margins in 2021 related to the February 2021 winter weather event, primarily driven by activities in the Electric Reliability Council of Texas (ERCOT).

Evergy Equity Investment

From time to time, Evergy makes limited equity investments in early-stage energy solution companies. These investments have historically not had a significant impact on Evergy's results of operations. In October 2021, an equity investment in which Evergy held a minority stake through an initial investment of $3.7 million was acquired through a transaction involving a special purpose acquisition company (SPAC). As a result of its equity investment in the company that was acquired in the SPAC transaction, Evergy received shares of the resulting public company upon the closing of the transaction, which are subject to a restriction on sale of up for 150 days. Evergy recorded a $27.7 million unrealized gain in the fourth quarter of 2021 for the conversion of its shares into the newly formed public company and based on the closing share price as of December 31, 2021 adjusted to reflect the restriction on the sale of the shares. The fair value of Evergy's investment is largely dependent on the performance of the new public company's stock, which is subject to significant market volatility and is also affected by the restriction on sale of the shares until March 2022, when the restriction expires.

2. REVENUE

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


Evergy

	2021		2020		2019
Revenues	(millions)
Residential	$	1,918.3	$	1,909.2	$	1,908.1
Commercial	1,681.3		1,641.7		1,781.6
Industrial	597.0		588.7		621.6
Other retail	33.1		38.5		47.1
Total electric retail	$	4,229.7	$	4,178.1	$	4,358.4
Wholesale	717.2		264.0		327.5
Transmission	356.8		318.5		309.2
Industrial steam and other	25.4		21.0		24.5
Total revenue from contracts with customers	$	5,329.1	$	4,781.6	$	5,019.6
Other	257.6		131.8		128.2
Operating revenues	$	5,586.7	$	4,913.4	$	5,147.8


Evergy Kansas Central

	2021		2020		2019
Revenues	(millions)
Residential	$	824.1	$	801.2	$	793.9
Commercial	694.1		665.6		709.1
Industrial	391.7		379.9		401.3
Other retail	17.1		17.7		21.0
Total electric retail	$	1,927.0	$	1,864.4	$	1,925.3
Wholesale	453.1		215.4		239.9
Transmission	322.9		287.3		273.3
Other	2.2		2.3		5.8
Total revenue from contracts with customers	$	2,705.2	$	2,369.4	$	2,444.3
Other	142.1		48.7		63.1
Operating revenues	$	2,847.3	$	2,418.1	$	2,507.4


Evergy Metro

	2021		2020		2019
Revenues	(millions)
Residential	$	691.9	$	714.7	$	712.4
Commercial	713.3		717.1		786.1
Industrial	122.0		128.8		136.9
Other retail	9.2		11.7		16.3
Total electric retail	$	1,536.4	$	1,572.3	$	1,651.7
Wholesale	242.6		35.0		70.9
Transmission	17.1		13.9		17.5
Other	3.6		2.6		2.8
Total revenue from contracts with customers	$	1,799.7	$	1,623.8	$	1,742.9
Other	114.0		81.8		63.6
Operating revenues	$	1,913.7	$	1,705.6	$	1,806.5

Retail Revenues

The Evergy Companies' retail revenues are generated by the regulated sale of electricity to their residential, commercial and industrial customers within their franchised service territories. The Evergy Companies recognize revenue on the sale of electricity to their customers over time as the service is provided in the amount they have a right to invoice. Retail customers are billed monthly at the tariff rates approved by the KCC and MPSC based on customer kWh usage.

Revenues recorded include electric services provided but not yet billed by the Evergy Companies. 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. The Evergy Companies' estimated unbilled kWhs are allocated and priced by regulatory jurisdiction across the rate classes based on actual billing rates.

The Evergy Companies also collect sales taxes and franchise fees from customers concurrent with revenue-producing activities that are levied by state and local governments. These items are excluded from revenue, and thus not reflected on the statements of income and comprehensive income, for Evergy, Evergy Kansas Central and Evergy Metro.

Wholesale Revenues

The Evergy Companies' wholesale revenues are generated by the sale of wholesale power and capacity in circumstances when the power that the Evergy Companies generate is not required for customers in their service territory. These sales primarily occur within the SPP Integrated Marketplace. The Evergy Companies also purchase power from the SPP Integrated Marketplace and record sale and purchase activity on a net basis in wholesale revenue or fuel and purchased power expense. In addition, the Evergy Companies sell wholesale power and capacity through bilateral contracts to other counterparties, such as electric cooperatives, municipalities and other electric utilities.

For both wholesale sales to the SPP Integrated Marketplace and through bilateral contracts, the Evergy Companies recognize revenue on the sale of wholesale electricity to their customers over time as the service is provided in the amount they have a right to invoice.

Wholesale sales within the SPP Integrated Marketplace are billed weekly based on the fixed transaction price determined by the market at the time of the sale and the MWh quantity purchased. Wholesale sales from bilateral contracts are billed monthly based on the contractually determined transaction price and the kWh quantity purchased.

Transmission Revenues

The Evergy Companies' transmission revenues are generated by the use of their transmission networks by the SPP. To enable optimal use of the diverse generating resources in the SPP region, the Evergy Companies, as well as other transmission owners, allow the SPP to access and operate their transmission networks. As new transmission lines are constructed, they are included in the transmission network available to the SPP. In exchange for providing access, the SPP pays the Evergy Companies consideration determined by formula rates approved by the Federal Energy Regulatory Commission (FERC), which include the cost to construct and maintain the transmission lines and a return on investment. The price for access to the Evergy Companies' transmission networks are updated annually based on projected costs. Projections are updated to actual costs and the difference is included in subsequent year's prices.

The Evergy Companies have different treatment for their legacy transmission facilities within the SPP, which results in different levels of transmission revenue being received from the SPP. Evergy Kansas Central's transmission revenues from SPP include amounts that Evergy Kansas Central pays to the SPP on behalf of its retail electric customers for the use of Evergy Kansas Central's legacy transmission facilities. These transmission revenues are mostly offset by SPP network transmission cost expense that Evergy Kansas Central pays on behalf of its retail customers. Evergy Metro and Evergy Missouri West do not pay the SPP for their retail customers’ use of the Evergy Metro and Evergy Missouri West legacy transmission facilities and correspondingly, their transmission revenues also do not reflect the associated transmission revenue from the SPP.

The Evergy Companies recognize revenue on the sale of transmission service to their customers over time as the service is provided in the amount they have a right to invoice. Transmission service to the SPP is billed monthly based on a fixed transaction price determined by FERC formula transmission rates along with other SPP-specific charges and the MW quantity purchased.

Industrial Steam and Other Revenues

Evergy's industrial steam and other revenues are primarily generated by the regulated sale of industrial steam to Evergy Missouri West's steam customers. Evergy recognizes revenue on the sale of industrial steam to its customers over time as the service is provided in the amount that it has the right to invoice. Steam customers are billed on a monthly basis at the tariff rate approved by the MPSC based on customer MMBtu usage.

3. RECEIVABLES

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



	December 31
	2021		2020
Evergy	(millions)
Customer accounts receivable - billed	$	13.7	$	5.3
Customer accounts receivable - unbilled	80.1		110.0
Other receivables	160.7		177.9
Allowance for credit losses	(32.9)		(19.3)
Total	$	221.6	$	273.9
Evergy Kansas Central
Customer accounts receivable - billed	$	9.7	$	—
Customer accounts receivable - unbilled	26.4		50.7
Other receivables	178.5		175.7
Allowance for credit losses	(13.0)		(7.5)
Total	$	201.6	$	218.9
Evergy Metro
Customer accounts receivable - billed	$	2.7	$	3.3
Customer accounts receivable - unbilled	25.9		27.9
Other receivables	15.7		21.9
Allowance for credit losses	(13.3)		(8.1)
Total	$	31.0	$	45.0

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



	December 31
	2021		2020
	(millions)
Evergy	$	63.7	$	57.5
Evergy Kansas Central	62.6		49.9
Evergy Metro	0.5		6.9

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


	2021		2020
Evergy	(millions)
Beginning balance January 1	$	19.3	$	10.5
Credit loss expense	28.0		24.9
Write-offs	(26.4)		(28.6)
Recoveries of prior write-offs	12.0		12.5
Ending balance December 31	$	32.9	$	19.3
Evergy Kansas Central
Beginning balance January 1	$	7.5	$	3.8
Credit loss expense	12.0		11.1
Write-offs	(11.0)		(10.0)
Recoveries of prior write-offs	4.5		2.6
Ending balance December 31	$	13.0	$	7.5
Evergy Metro
Beginning balance January 1	$	8.1	$	4.6
Credit loss expense	10.5		9.0
Write-offs	(10.6)		(12.4)
Recoveries of prior write-offs	5.3		6.9
Ending balance December 31	$	13.3	$	8.1

Sale of Accounts Receivable

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



	December 31
	2021		2020
	(millions)
Evergy	$	319.0	$	360.0
Evergy Kansas Central	153.0		180.0
Evergy Metro	116.0		130.0

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

4. RATE MATTERS AND REGULATION

KCC Proceedings

Evergy Kansas Central 2021 Transmission Delivery Charge (TDC)

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

Evergy Metro 2021 TDC

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

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

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

Evergy Kansas Central's and Evergy Metro's 2020 calculations of annual earnings did not result in a significant refund obligation. As of December 31, 2021, Evergy Kansas Central estimates its 2021 annual earnings will not result in a refund obligation. As of December 31, 2021, Evergy Metro estimates its 2021 annual earnings will result in a $2.0 million refund obligation. The final refund obligations for 2021 will be decided by the KCC and could vary from the current estimates.

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

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

As of December 31, 2021, Evergy Kansas Central had recognized a regulatory asset pursuant to the AAO of $121.5 million related to its costs incurred during the February 2021 winter weather event, primarily consisting of increased fuel and purchased power costs. As of December 31, 2021, Evergy Metro's Kansas jurisdiction had recognized a regulatory liability of $39.5 million related to its increased wholesale revenues during the February 2021 winter weather event.

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

In January 2022, KCC staff filed their report and recommendation regarding the February 2021 winter weather event and the related costs and revenues deferred by Evergy Kansas Central and Evergy Metro as a result of the AAO granted by the KCC in February 2021. The report concluded that the costs incurred and revenues earned by Evergy Kansas Central and Evergy Metro during the February 2021 winter weather event were prudent. The KCC staff also recommended the following: (1) that Evergy Metro extend the time period of its refund to customers from one year to two years; (2) that the KCC reject the approximately $6 million reduction in refund to customers requested by Evergy Metro due to jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms and (3) that Evergy Metro and the other active parties in the case work to determine the appropriate level of carrying charges that should apply to the amounts deferred related to the February 2021 winter weather event.

A decision by the KCC regarding Evergy Kansas Central’s and Evergy Metro’s joint filing is expected in the first half of 2022.

Lawrence Energy Center (LEC) Unit 4 Securitization

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

In September 2021, Evergy Kansas Central filed a predetermination request with the KCC for the ratemaking principles and treatment related to its planned investment in approximately 190 MW of solar generation and the planned retirement of coal-fired LEC Unit 4 and related coal-handling facilities for LEC Units 4 and 5, both of which are expected to occur between December 2023 and the first half of 2024. In February 2022, Evergy Kansas Central withdrew its predetermination request with the KCC in order to finalize definitive documentation associated with the solar investment and to develop additional information to enable the KCC to evaluate its predetermination request. Evergy Kansas Central anticipates refiling its predetermination request, including this additional information, later in 2022.

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

MPSC Proceedings

Evergy Metro 2022 Rate Case Proceeding

In January 2022, Evergy Metro filed an application with the MPSC to request an increase to its retail revenues of $43.9 million before rebasing fuel and purchased power expense, with a return on equity of 10% and a rate-making equity ratio of 51.19%. The request reflects increases related to higher property taxes and the recovery of infrastructure investments made to improve reliability and enhance customer service and were also partially offset by significant customer savings and cost reductions created since the Great Plains Energy and Evergy Kansas Central merger in 2018. Evergy Metro also requested an additional $3.8 million increase associated with rebasing fuel and purchased power expense as well as the implementation of tracking mechanisms for both property tax expense and credit loss expense and the creation of a storm reserve as part of its application with the MPSC.

An evidentiary hearing in the case is expected to occur in September 2022 and new rates are expected to be effective in December 2022.

Evergy Missouri West 2022 Rate Case Proceeding

In January 2022, Evergy Missouri West filed an application with the MPSC to request an increase to its retail revenues of $27.7 million before rebasing fuel and purchased power expense, with a return on equity of 10% and a rate-making equity ratio of 51.81%. The request reflects increases related to higher property taxes and the recovery of infrastructure investments made to improve reliability and enhance customer service and were also partially offset by significant customer savings and cost reductions created since the Great Plains Energy and Evergy Kansas Central merger in 2018. Evergy Missouri West also requested an additional $32.1 million increase associated with rebasing fuel and purchased power expense, the implementation of tracking mechanisms for both property tax expense and credit loss expense, the creation of a storm reserve, and the full return of and return on its unrecovered investment related to the 2018 retirement of Sibley Station as part of its application with the MPSC.

An evidentiary hearing in the case is expected to occur in September 2022 and new rates are expected to be effective in December 2022.

Evergy Missouri West Other Proceedings

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

In October 2019, the MPSC granted OPC's and MECG's request for an AAO and required Evergy Missouri West to record a regulatory liability for the revenues discussed above for consideration in Evergy Missouri West's current rate case. Depending on the MPSC's decision in the current rate case, Evergy Missouri West could be required to refund to customers all or a portion of amounts collected in revenue for Sibley Station since December 2018 or, alternatively, could be required to make no refunds. As part of its current rate case, Evergy Missouri West is proposing to refund to customers the revenues collected from customers for non-fuel operations and maintenance costs and other costs associated with Sibley Station following the station's retirement but not the return on investment.

As a result of the MPSC order, Evergy has recorded a regulatory liability of $29.3 million as of December 31, 2021 for the estimated amount of revenues that Evergy Missouri West has collected from customers for Sibley Station since December 2018 that Evergy has determined is probable of refund. Evergy expects that it will continue to defer such amounts as collected from customers until new rates become effective in Evergy Missouri West's current rate case.

The accrual for this estimated amount does not include certain revenues collected related to Sibley Station that Evergy has determined to not be probable of refund in the current rate case based on the relevant facts and circumstances. Although Evergy has determined these additional revenues to not be probable of refund, the ultimate resolution of this matter in Evergy Missouri West's current rate case is uncertain and could result in an estimated loss of approximately $50 million when new rates are expected to become effective in December 2022. Evergy's regulatory liability for probable refunds as of December 31, 2021 and estimated loss in excess of the amount accrued represent estimates that could change significantly based on ongoing developments including decisions in other regulatory proceedings that establish precedent applicable to this matter and positions of parties on this issue in Evergy Missouri West's 2022 rate case.

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

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

Evergy Metro and Evergy Missouri West have currently deferred substantially all of their fuel and purchased power costs, net of wholesale revenues, related to the February 2021 winter weather event to a regulatory asset or liability pursuant to their ability to recover or refund these amounts through their fuel recovery mechanisms, which allow for the recovery or refund of 95% of increases in fuel and purchased power costs, net of wholesale revenues, above the amount included in base rates to customers. This AAO request is intended to address the recovery or refund of the February 2021 winter weather event amounts separate from the normal fuel recovery mechanism process given the extraordinary nature of the February 2021 winter weather event and to help moderate customer bill impacts. As of December 31, 2021, Evergy Metro's Missouri jurisdiction had recognized a regulatory liability of $25.6 million related to its increased wholesale revenues during the February 2021 winter weather event. As of December 31, 2021, Evergy Missouri West had recognized a regulatory asset of $281.6 million related to its costs incurred during the February 2021 winter weather event, primarily consisting of increased fuel and purchased power costs.

In the AAO filing, Evergy Metro requested to refund its deferred February 2021 winter weather event amounts to customers through its fuel recovery mechanism over one year, beginning in April 2022. In the same AAO filing, Evergy Missouri West requested to exclude its deferred February 2021 winter weather event amounts from recovery through its fuel recovery mechanism and indicated its intent to recover them through issuing securitized bonds

pursuant to the securitization legislation signed into law in Missouri in July 2021. As part of the filing, Evergy Metro also requested an approximately $5 million decrease to its February 2021 winter weather refund to Missouri customers, which is not currently reflected in its regulatory liability for the February 2021 winter weather event, for jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms and for the portion of net wholesale revenues not traditionally refundable because of the 5% sharing provision of its fuel recovery mechanism. Evergy Missouri West requested an approximately $15 million increase to its February 2021 winter weather event recovery from Missouri customers, which is not currently reflected in its regulatory asset for the February 2021 winter weather event, for the portion of net fuel and purchased power costs not traditionally recoverable because of the 5% sharing provision of its fuel recovery mechanism.

In September 2021, MPSC staff filed their recommendation regarding the February 2021 winter weather event and the related costs and revenues deferred by Evergy Metro and Evergy Missouri West. The MPSC staff recommended that the MPSC reject Evergy Metro’s AAO request, including the approximately $5 million reduction in refund to customers requested by Evergy Metro due to jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms, and refund the excess wholesale revenues from the February 2021 winter weather event to customers through its normal fuel recovery mechanism process. The MPSC staff recommended that the MPSC approve Evergy Missouri West’s AAO request, including the approximately $15 million of additional recovery requested related to the 5% sharing provision of its fuel recovery mechanism, but that the AAO deferral should not include carrying costs as they should be determined in a future ratemaking proceeding.

A decision by the MPSC regarding Evergy Metro’s and Evergy Missouri West’s joint request is expected in the first half of 2022.

FERC Proceedings

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

Evergy Kansas Central TFR

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

$33.2 million increase effective in January 2022;
$32.4 million increase effective in January 2021; and
$6.8 million increase effective in January 2020.

Evergy Metro TFR

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

$18.1 million increase effective in January 2022;
$3.9 million decrease effective in January 2021; and
$1.7 million decrease effective in January 2020.

Regulatory Assets and Liabilities

The Evergy Companies have recorded assets and liabilities on their consolidated balance sheets resulting from the effects of the ratemaking process, which would not otherwise be recorded if they were not regulated. 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 Kansas Central's, Evergy Metro's and

Evergy Missouri West's rate case filings; decisions in other regulatory proceedings, including decisions related to other companies that establish precedent on matters applicable to the Evergy Companies; 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. The Evergy Companies 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 any or all of the Evergy Companies' 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.

The Evergy Companies' regulatory assets and liabilities are detailed in the following tables.


	December 31
	2021						2020
	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Regulatory Assets	(millions)
Pension and post-retirement costs	$	567.2	$	265.6	$	213.3	$	867.8	$	412.9	$	359.9
Debt reacquisition costs	94.4		86.7		6.7		98.9		91.3		6.8
Debt fair value adjustment	96.5		—		—		104.0		—		—
Asset retirement obligations fair value adjustment	117.9		—		—		116.2		—		—
Depreciation	98.5		50.1		27.0		70.0		52.7		9.4
Cost of removal	257.5		141.0		90.2		183.4		125.7		57.7
Asset retirement obligations	119.3		52.3		49.1		170.8		55.0		84.0
Analog meter unrecovered investment	18.4		18.4		—		24.1		24.1		—
Treasury yield hedges	20.4		20.4		—		21.5		21.5		—
Iatan No. 1 and common facilities	6.5		—		2.7		6.9		—		2.8
Iatan No. 2 construction accounting costs	24.7		—		12.4		25.4		—		12.7
Kansas property tax surcharge	39.6		31.6		8.0		28.9		23.7		5.2
Disallowed plant costs	14.2		14.2		—		14.5		14.5		—
La Cygne environmental costs	11.2		9.0		2.2		12.4		10.1		2.3
Deferred customer programs	18.7		6.4		7.8		16.3		5.7		8.6
Fuel recovery mechanisms	202.5		120.8		19.8		26.2		1.2		17.7
February 2021 winter weather event	403.1		121.5		—		—		—		—
Solar rebates	20.2		—		—		25.9		—		1.5

Wolf Creek outage	20.4		10.2		10.2		10.0		5.0		5.0
Pension and other post-retirement benefit non-service costs	65.6		23.0		29.6		49.8		12.8		23.4
Retired generation facilities	123.4		—		—		128.4		—		—
Merger transition costs	32.7		15.6		12.1		37.6		18.0		13.9
Other regulatory assets	42.3		24.1		5.9		35.4		22.1		4.6
Total	2,415.2		1,010.9		497.0		2,074.4		896.3		615.5
Less: current portion	(424.1)		(257.3)		(86.3)		(206.2)		(96.2)		(82.0)
Total noncurrent regulatory assets	$	1,991.1	$	753.6	$	410.7	$	1,868.2	$	800.1	$	533.5


	December 31
	2021						2020
	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Regulatory Liabilities	(millions)
Taxes refundable through future rates	$	1,969.5	$	1,143.7	$	616.1	$	2,055.7	$	1,184.5	$	650.2
Deferred regulatory gain from sale leaseback	42.6		42.6		—		48.1		48.1		—
Emission allowances	42.1		—		42.1		46.1		—		46.1
Nuclear decommissioning	400.1		175.7		224.4		319.7		138.2		181.5
Pension and post-retirement costs	44.4		23.2		15.9		50.8		31.4		13.1
Jurisdictional allowance for funds used during construction	27.5		25.8		1.7		28.7		27.0		1.7
La Cygne leasehold dismantling costs	29.6		29.6		—		29.6		29.6		—
Cost of removal	—		—		—		4.4		—		—
Kansas tax credits	16.7		16.7		—		—		—		—
Purchase power agreement	5.8		5.8		—		6.3		6.3		—

Fuel recovery mechanisms	6.5		—		6.5		1.3		—		—
February 2021 winter weather event	65.1		—		65.1		—		—		—
Sibley AAO	29.3		—		—		18.4		—		—

Other regulatory liabilities	96.5		19.1		37.0		55.8		7.8		14.8
Total	2,775.7		1,482.2		1,008.8		2,664.9		1,472.9		907.4
Less: current portion	(70.7)		(12.8)		(54.6)		(26.1)		(11.9)		(8.0)
Total noncurrent regulatory liabilities	$	2,705.0	$	1,469.4	$	954.2	$	2,638.8	$	1,461.0	$	899.4

The following summarizes the nature and period of recovery for each of the regulatory assets listed in the table above.

Pension and post-retirement costs: Represents unrecognized gains and losses and prior service costs that will be recognized in future net periodic pension and post-retirement costs, pension settlements amortized over various periods and financial and regulatory accounting method differences that will be eliminated over the life of the pension plans. Of these amounts, $494.6 million, $265.6 million and $179.0 million for Evergy, Evergy Kansas Central and Evergy Metro, respectively, are not included in rate base and are amortized over various periods. Additionally, $219.7 million, $(11.6) million and $123.3 million for Evergy, Evergy Kansas Central and Evergy Metro, respectively, represent differences between pension and post-retirement costs under GAAP and pension and post-retirement costs for ratemaking that will be recovered or refunded in future rates and differences in accumulated unrecognized gains and losses and prior service costs between Evergy and Evergy Metro due to Evergy Metro electing not to apply "push-down accounting" related to the Great Plains Energy and Evergy Kansas Central merger.

Debt reacquisition costs: Includes costs incurred to reacquire and refinance debt. These costs are amortized over the term of the new debt or the remaining lives of the old debt issuances if no new debt was issued and are not included in rate base.

Debt fair value adjustment: Represents purchase accounting adjustments recorded to state the carrying value of Evergy Metro and Evergy Missouri West long-term debt at fair value in connection with the Great Plains Energy and Evergy Kansas Central merger. Amount is amortized over the life of the related debt and is not included in rate base.

Asset retirement obligations fair value adjustment: Represents purchase accounting adjustments recorded to state the carrying value of Evergy Metro and Evergy Missouri West AROs at fair value in connection with the Great

Plains Energy and Evergy Kansas Central merger. Amount is amortized over the life of the related plant and is not included in rate base.

Depreciation: Represents the difference between regulatory depreciation expense and depreciation expense recorded for financial reporting purposes. These assets are included in rate base and the difference is amortized over the life of the related plant.

Cost of removal: Represents amounts spent, but not yet collected, to dispose of plant assets. This asset will decrease as removal costs are collected in rates and is included in rate base.

Asset retirement obligations: Represents amounts associated with AROs as discussed further in Note 6. These amounts are recovered over the life of the related plant and are not included in rate base.

Analog meter unrecovered investment: Represents the deferral of unrecovered investment of retired analog meters. Of this amount, $10.1 million is not included in rate base for Evergy and Evergy Kansas Central and is being amortized over a five-year period.

Treasury yield hedges: Represents the effective portion of treasury yield hedge transactions. Amortization of this amount will be included in interest expense over the term of the related debt and is not included in rate base.

Iatan No. 1 and common facilities: Represents depreciation and carrying costs related to Iatan No. 1 and common facilities. These costs are included in rate base and amortized over various periods.

Iatan No. 2 construction accounting costs: Represents the construction accounting costs related to Iatan No. 2. These costs are included in rate base and amortized through 2059.

Kansas property tax surcharge: Represents actual costs incurred for property taxes in excess of amounts collected in revenues. These costs are expected to be recovered over a one-year period and are not included in rate base.

Disallowed plant costs: The KCC originally disallowed certain costs related to the Wolf Creek plant. In 1987, the KCC revised its original conclusion and provided for recovery of an indirect disallowance with no return on investment. This regulatory asset represents the present value of the future expected revenues to be provided to recover these costs, net of the amounts amortized.

La Cygne environmental costs: Represents the deferral of depreciation and amortization expense and associated carrying charges related to the La Cygne Station environmental project. This amount will be amortized over the life of the related asset and is included in rate base.

Deferred customer programs: Represents costs related to various energy efficiency programs that have been accumulated and deferred for future recovery. Of these amounts, $12.3 million for Evergy and $7.8 million for Evergy Metro are not included in rate base and are amortized over various periods.

Fuel recovery mechanisms: Represents the actual cost of fuel consumed in producing electricity and the cost of purchased power in excess of the amounts collected from customers. This difference is expected to be recovered over a one-year period and is not included in rate base.

February 2021 winter weather event: Represents deferred extraordinary fuel and purchased power costs incurred to provide electric service as a result of the February 2021 winter weather event. These amounts are not included in rate base.

Solar rebates: Represents costs associated with solar rebates provided to retail electric customers. These amounts are not included in rate base and are amortized over various periods.

Wolf Creek outage: Represents deferred expenses associated with Wolf Creek's scheduled refueling and maintenance outages. These expenses are amortized during the period between planned outages and are not included in rate base.

Pension and other post-retirement benefit non-service costs: Represents the non-service component of pension and post-retirement net benefit costs that are capitalized as authorized by regulators. The amounts are included in rate base and are recovered over the life of the related asset.

Retired generation facilities: Represents amounts to be recovered for facilities that have been retired and are probable of recovery.

Merger transition costs: Represents recoverable transition costs related to the merger. The amounts are not included in rate base and are recovered from retail customers through 2028.

Other regulatory assets: Includes various regulatory assets that individually are small in relation to the total regulatory asset balance. These amounts have various recovery periods and are not included in rate base.

The following summarizes the nature and period of amortization for each of the regulatory liabilities listed in the table above.

Taxes refundable through future rates: Represents the obligation to return to customers income taxes recovered in earlier periods when corporate income tax rates were higher than current income tax rates. A large portion of this amount is related to depreciation and will be returned to customers over the life of the applicable property.

Deferred regulatory gain from sale leaseback: Represents the gain Evergy Kansas South recorded on the 1987 sale and leaseback of its 50% interest in La Cygne Unit 2. The gain is amortized over the term of the lease.

Emission allowances: Represents deferred gains related to the sale of emission allowances to be returned to customers.

Nuclear decommissioning: Represents the difference between the fair value of the assets held in the nuclear decommissioning trust and the amount recorded for the accumulated accretion and depreciation expense associated with the asset retirement obligation related to Wolf Creek.

Pension and post-retirement costs: Includes pension and post-retirement benefit obligations and expense recognized in setting prices in excess of actual pension and post-retirement expense.

Jurisdictional allowance for funds used during construction: Represents AFUDC that is accrued subsequent to the time the associated construction charges are included in prices and prior to the time the related assets are placed in service. The AFUDC is amortized to depreciation expense over the useful life of the asset that is placed in service.

La Cygne leasehold dismantling costs: Represents amounts collected but not yet spent on the contractual obligation to dismantle a portion of La Cygne Unit 2. The obligation will be discharged as the unit is dismantled.

Cost of removal: Represents amount collected, but not yet spent, to dispose of plant assets. This liability will be discharged as removal costs are incurred.

Kansas tax credits: Represents Kansas tax credits on investment in utility plant. Amounts will be credited to customers subsequent to the realization of the credits over the remaining lives of the utility plant giving rise to the tax credits.

Purchase power agreement: Represents the amount included in retail electric rates from customers in excess of costs incurred under purchase power agreements. Amounts are amortized over a five-year period.

Fuel recovery mechanisms: Represents the amount collected from customers in excess of the actual cost of fuel consumed in producing electricity and the cost of purchased power. This difference is expected to be refunded over a one-year period and is not included in rate base.

February 2021 winter weather event: Represents the deferral of increased wholesale revenues earned during the February 2021 winter weather event.

Sibley AAO: Represents the estimated amount of revenues that Evergy Missouri West has collected from customers for Sibley Station that Evergy has determined is probable of refund. These amounts were recorded in connection with an AAO granted by the MPSC in October 2019 and deferred amounts will be considered by the MPSC in Evergy Missouri West's 2022 rate case.

Other regulatory liabilities: Includes various regulatory liabilities that individually are relatively small in relation to the total regulatory liability balance. These amounts will be credited over various periods.

5. GOODWILL

GAAP requires goodwill to be tested for impairment annually and when an event occurs indicating the possibility that an impairment exists. Evergy's impairment test for the $2,336.6 million of goodwill that was recorded as a result of the Great Plains Energy and Evergy Kansas Central merger was conducted as of May 1, 2021. The goodwill impairment test consists of comparing the fair value of a reporting unit to its carrying amount, including goodwill, to identify potential impairment. In the event that the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized for the difference between the carrying amount of the reporting unit and its fair value. Evergy's consolidated operations are considered one reporting unit for assessment of impairment, as management assesses financial performance and allocates resources on a consolidated basis. The determination of fair value of the reporting unit consisted of two valuation techniques: an income approach consisting of a discounted cash flow analysis and a market approach consisting of a determination of reporting unit invested capital using a market multiple derived from the historical earnings before interest, income taxes, depreciation and amortization and market prices of the stock of peer companies. The results of the two techniques were evaluated and weighted to determine a point within the range that management considered representative of fair value for the reporting unit. The fair value of the reporting unit exceeded the carrying amount, including goodwill. As a result, there was no impairment of goodwill.

6. ASSET RETIREMENT OBLIGATIONS

AROs associated with tangible long-lived assets are legal obligations that exist under enacted laws, statutes and written or oral contracts, including obligations arising under the doctrine of promissory estoppel. These liabilities are recognized at estimated fair value as incurred with a corresponding amount capitalized as part of the cost of the related long-lived assets and depreciated over their useful lives. Accretion of the liabilities due to the passage of time is recorded to a regulatory asset and/or liability. Changes in the estimated fair values of the liabilities are recognized when known.

Evergy Kansas Central, Evergy Metro and Evergy Missouri West have AROs related to asbestos abatement and the closure and post-closure care of ponds and landfills containing coal combustion residuals (CCRs). In addition, Evergy Kansas Central and Evergy Metro have AROs related to decommissioning Wolf Creek and the retirement of wind generation facilities.

The MPSC and KCC require the owners of Wolf Creek, including Evergy Kansas South and Evergy Metro with their respective 47% ownership shares, to submit an updated decommissioning cost study every three years. The most recent study was submitted to the MPSC and KCC in September 2020. As a result of changes in estimates related to the study, Evergy, Evergy Kansas Central and Evergy Metro recorded increases to their AROs to decommission Wolf Creek of $259.1 million, $140.7 million and $118.4 million, respectively, in 2020.

The following table summarizes the change in the Evergy Companies' AROs for the periods ending December 31, 2021 and 2020.


	Evergy				Evergy Kansas Central				Evergy Metro
	2021		2020		2021		2020		2021		2020
	(millions)
Beginning balance January 1	$	941.9	$	674.1	$	427.2	$	272.9	$	378.9	$	253.6

Revision in timing and/or estimates	13.5		249.3		3.8		136.8		9.5		118.4
Settlements	(38.7)		(18.4)		(10.6)		(2.2)		(24.4)		(7.5)
Accretion	43.4		36.9		23.5		19.7		17.0		14.4
Ending balance	$	960.1	$	941.9	$	443.9	$	427.2	$	381.0	$	378.9
Less: current portion	(19.5)		(40.2)		(7.3)		(11.2)		(11.0)		(21.2)
Total noncurrent asset retirement obligation	$	940.6	$	901.7	$	436.6	$	416.0	$	370.0	$	357.7

7. PROPERTY, PLANT AND EQUIPMENT

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


December 31, 2021	Evergy			Evergy Kansas Central			Evergy Metro
		(millions)
Electric plant in service		$	30,289.9		$	14,686.3		$	11,656.9
Electric plant acquisition adjustment		724.3			724.3			—
Accumulated depreciation		(11,515.5)			(5,590.8)			(4,733.7)
Plant in service		19,498.7			9,819.8			6,923.2
Construction work in progress		1,350.6			652.2			475.3
Nuclear fuel, net		152.5			76.1			76.4
Plant to be retired, net (a)		0.8			0.8			—
Net property, plant and equipment		$	21,002.6		$	10,548.9		$	7,474.9

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

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

The following table summarizes the property, plant and equipment of VIEs for Evergy and Evergy Kansas Central.


		December 31
	2021			2020
		(millions)
Electric plant of VIEs		$	392.1		$	392.1
Accumulated depreciation of VIEs		(244.3)			(237.2)
Net property, plant and equipment of VIEs		$	147.8		$	154.9

Depreciation Expense

The Evergy Companies' depreciation expense is detailed in the following table.


	2021		2020		2019
	(millions)
Evergy (a)	$	813.6	$	804.7	$	786.3
Evergy Kansas Central (a)	450.3		435.1		425.8
Evergy Metro	255.9		269.5		262.7

(a) Approximately $7.1 million of depreciation expense in each of 2021, 2020 and 2019 was attributable to property, plant and equipment of VIEs.

8. JOINTLY-OWNED ELECTRIC UTILITY PLANTS

Evergy's, Evergy Kansas Central's and Evergy Metro's share of jointly-owned electric utility plants at December 31, 2021, are detailed in the following tables.


Evergy
	Wolf Creek Unit			La Cygne Units (a)			Iatan No. 1 Unit			Iatan No. 2 Unit			Iatan Common			Jeffrey Energy Center			State Line
	(millions, except MW amounts)
Evergy's share		94%			100%			88%			73%			79%			100%			40%

Electric plant in service		$	4,078.7		$	2,219.1		$	765.7		$	1,405.9		$	503.6		$	2,521.1		$	115.0
Accumulated depreciation		2,040.2			816.0			251.9			480.3			122.2			1,036.7			85.2
Nuclear fuel, net		152.5			—			—			—			—			—			—
Construction work in progress		187.4			52.6			4.4			8.1			7.4			48.7			25.5
2022 accredited capacity-MWs		1,108			1,426			618			640			n/a			2,191			200

(a) The VIE consolidated by Evergy and Evergy Kansas Central holds its 50% leasehold interest in La Cygne Unit 2. This 50% leasehold interest in La Cygne Unit 2 is reflected in the information provided above. See Note 18 for additional information.


Evergy Kansas Central
	Wolf Creek Unit			La Cygne Units (a)			Jeffrey Energy Center		State Line
	(millions, except MW amounts)
Evergy Kansas Central's share		47%			50%		92%			40%

Electric plant in service		$	2,019.8		$	1,047.4	$	2,307.6		$	115.0
Accumulated depreciation		992.2			475.2		944.5			85.2
Nuclear fuel, net		76.1			—		—			—
Construction work in progress		83.6			29.0		44.9			25.5
2022 accredited capacity-MWs		554			713		2,016			200


Evergy Metro
	Wolf Creek Unit			La Cygne Units			Iatan No. 1 Unit			Iatan No. 2 Unit			Iatan Common
	(millions, except MW amounts)
Evergy Metro's share		47%			50%			70%			55%			61%

Electric plant in service		$	2,058.9		$	1,171.7		$	594.8		$	1,066.4		$	399.6
Accumulated depreciation		1,048.0			340.8			205.3			412.5			103.3
Nuclear fuel, net		76.4			—			—			—			—
Construction work in progress		103.8			23.6			3.6			6.1			5.5
2022 accredited capacity-MWs		554			713			492			482			NA

Each owner must fund its own portion of the plant's operating expenses and capital expenditures. The Evergy Companies' share of direct expenses are included in the appropriate operating expense classifications in Evergy's, Evergy Kansas Central's and Evergy Metro's consolidated financial statements.

9. PENSION PLANS AND POST-RETIREMENT BENEFITS

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

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

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

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

For 2021, Evergy, Evergy Kansas Central and Evergy Metro recorded pension settlement charges of $34.3 million, $25.6 million and $13.7 million, respectively. For 2020, Evergy and Evergy Metro recorded pension settlement charges of $11.2 million and $14.3 million, respectively. For 2019, Evergy and Evergy Metro recorded pension settlement charges of $15.6 million and $23.0 million, respectively. These settlement charges were the result of accelerated pension distributions as a result of employee retirements and annuity purchases for certain plan participants in 2021. Evergy, Evergy Kansas Central and Evergy Metro deferred substantially all of the charges to a regulatory asset and expect to recover these amounts over future periods pursuant to regulatory agreements.

The following pension benefits tables provide information relating to the funded status of all defined benefit pension plans on an aggregate basis as well as the components of net periodic benefit costs. For financial reporting purposes, the market value of plan assets is the fair value. Net periodic benefit costs reflect total plan benefit costs prior to the effects of capitalization and sharing with joint owners of power plants.


	Pension Benefits						Post-Retirement Benefits
	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Change in projected benefit obligation (PBO)	(millions)
PBO at January 1, 2021	$	2,901.1	$	1,429.6	$	1,446.5	$	280.4	$	146.8	$	133.6
Service cost	82.6		29.1		53.5		3.3		1.7		1.6
Interest cost	84.2		41.0		42.5		7.8		4.0		3.8
Contribution by participants	—		—		—		9.0		1.4		7.6

Actuarial gain	(119.0)		(50.0)		(68.3)		(17.2)		(9.4)		(7.8)
Benefits paid	(93.5)		(54.8)		(37.5)		(24.9)		(10.6)		(14.3)
Settlements	(284.0)		(126.2)		(157.8)		—		—		—
Other	(9.7)		(4.3)		(5.4)		—		—		—
PBO at December 31, 2021	$	2,561.7	$	1,264.4	$	1,273.5	$	258.4	$	133.9	$	124.5
Change in plan assets
Fair value of plan assets at January 1, 2021	$	1,799.1	$	887.0	$	912.1	$	248.3	$	125.8	$	122.5
Actual return on plan assets	145.5		83.4		62.1		5.2		6.5		(1.3)
Contributions by employer and participants	148.7		46.5		102.2		11.8		1.7		10.1
Benefits paid	(89.4)		(52.3)		(37.1)		(23.0)		(10.0)		(13.0)
Settlements	(279.5)		(124.6)		(154.9)		—		—		—
Other	(9.7)		(4.3)		(5.4)		—		—		—
Fair value of plan assets at December 31, 2021	$	1,714.7	$	835.7	$	879.0	$	242.3	$	124.0	$	118.3
Funded status at December 31, 2021	$	(847.0)	$	(428.7)	$	(394.5)	$	(16.1)	$	(9.9)	$	(6.2)


	Pension Benefits						Post-Retirement Benefits
	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Amounts recognized in the consolidated balance sheets					(millions)
Non-current asset	$	—	$	—	$	—	$	21.5	$	—	$	21.5
Current pension and other post-retirement liability	(4.4)		(2.4)		(0.7)		(1.1)		(0.6)		(0.6)
Noncurrent pension liability and other post-retirement liability	(842.6)		(426.3)		(393.8)		(36.5)		(9.3)		(27.1)
Net amount recognized before regulatory treatment	(847.0)		(428.7)		(394.5)		(16.1)		(9.9)		(6.2)
Accumulated OCI or regulatory asset/liability	317.2		263.6		84.6		(11.4)		(9.6)		(10.5)
Net amount recognized at December 31, 2021	$	(529.8)	$	(165.1)	$	(309.9)	$	(27.5)	$	(19.5)	$	(16.7)
Amounts in accumulated OCI or regulatory asset/liability not yet recognized as a component of net periodic benefit cost:
Actuarial (gain) loss	$	302.4	$	246.6	$	86.4	$	(12.6)	$	(10.5)	$	(3.8)
Prior service cost	14.8		17.0		(1.8)		1.2		0.9		(6.7)
Net amount recognized at December 31, 2021	$	317.2	$	263.6	$	84.6	$	(11.4)	$	(9.6)	$	(10.5)


	Pension Benefits						Post-Retirement Benefits
	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Change in projected benefit obligation (PBO)	(millions)
PBO at January 1, 2020	$	2,718.2	$	1,323.4	$	1,371.4	$	264.3	$	138.7	$	125.6
Service cost	78.9		27.1		51.8		2.7		1.1		1.6
Interest cost	96.8		47.0		49.1		9.2		4.8		4.4
Contribution by participants	—		—		—		9.3		1.8		7.5
Plan amendments	4.2		8.1		(3.9)		1.0		0.5		0.5
Actuarial loss	273.9		127.0		144.8		19.6		11.0		8.6
Benefits paid	(202.5)		(102.3)		(99.0)		(25.7)		(11.1)		(14.6)
Settlements	(62.9)		—		(62.9)		—		—		—
Other	(5.5)		(0.7)		(4.8)		—		—		—
PBO at December 31, 2020	$	2,901.1	$	1,429.6	$	1,446.5	$	280.4	$	146.8	$	133.6
Change in plan assets
Fair value of plan assets at January 1, 2020	$	1,732.8	$	842.1	$	890.7	$	239.9	$	120.5	$	119.4
Actual return on plan assets	209.9		99.7		110.2		20.7		13.7		7.0
Contributions by employer and participants	123.4		45.8		77.6		11.7		2.1		9.6
Benefits paid	(198.6)		(99.9)		(98.7)		(24.0)		(10.5)		(13.5)
Settlements	(62.9)		—		(62.9)		—		—		—
Other	(5.5)		(0.7)		(4.8)		—		—		—
Fair value of plan assets at December 31, 2020	$	1,799.1	$	887.0	$	912.1	$	248.3	$	125.8	$	122.5
Funded status at December 31, 2020	$	(1,102.0)	$	(542.6)	$	(534.4)	$	(32.1)	$	(21.0)	$	(11.1)


	Pension Benefits						Post-Retirement Benefits
	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Amounts recognized in the consolidated balance sheets					(millions)
Non-current asset	$	—	$	—	$	—	$	21.3	$	—	$	21.3
Current pension and other post-retirement liability	(4.4)		(2.5)		(0.8)		(1.6)		(0.8)		(0.9)
Noncurrent pension liability and other post- retirement liability	(1,097.6)		(540.1)		(533.6)		(51.8)		(20.2)		(31.5)
Net amount recognized before regulatory treatment	(1,102.0)		(542.6)		(534.4)		(32.1)		(21.0)		(11.1)
Accumulated OCI or regulatory asset/liability	566.9		408.0		216.9		4.0		1.0		(7.7)
Net amount recognized at December 31, 2020	$	(535.1)	$	(134.6)	$	(317.5)	$	(28.1)	$	(20.0)	$	(18.8)
Amounts in accumulated OCI or regulatory asset/liability not yet recognized as a component of net periodic benefit cost:
Actuarial (gain) loss	$	551.8	$	388.9	$	218.6	$	2.2	$	(0.3)	$	—
Prior service cost	15.1		19.1		(1.7)		1.8		1.3		(7.7)
Net amount recognized at December 31, 2020	$	566.9	$	408.0	$	216.9	$	4.0	$	1.0	$	(7.7)

Actuarial gains for the Evergy Companies' pension benefit plans for 2021 were primarily driven by an increase in the discount rate used to measure the benefit obligation as a result of higher market interest rates. See the weighted average assumptions used to determine the benefit obligations in this Note 9 for further information. Actuarial losses for the Evergy Companies' pension benefit plans for 2020 were primarily driven by a decrease in the discount rate used to measure the benefit obligation of approximately 70 basis points as a result of lower market interest rates.

As of December 31, 2021 and 2020, Evergy's pension benefits include non-qualified benefit obligations of $49.2 million and $52.1 million, respectively, which are funded by trusts containing assets of $44.2 million and $46.3 million, respectively. As of December 31, 2021 and 2020, Evergy Kansas Central's pension benefits include non-qualified benefit obligations of $25.4 million and $27.0 million, respectively, which are funded by trusts containing assets of $31.7 million and $32.7 million, respectively. The assets in the aforementioned trusts are not included in the table above. See Note 13 for more information on these amounts.


	Pension Benefits						Post-Retirement Benefits
Year Ended December 31, 2021	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Components of net periodic benefit costs	(millions)
Service cost	$	82.6	$	29.1	$	53.5	$	3.3	$	1.7	$	1.6
Interest cost	84.2		41.0		42.5		7.8		4.0		3.8
Expected return on plan assets	(103.5)		(52.8)		(55.7)		(8.9)		(6.3)		(2.6)
Prior service cost	2.0		2.1		—		0.5		0.5		(1.0)
Recognized net actuarial (gain) loss	54.1		36.0		43.8		1.4		0.6		(0.1)
Settlement and special termination benefits	34.3		25.6		13.7		—		—		—
Net periodic benefit costs before regulatory adjustment and intercompany allocations	153.7		81.0		97.8		4.1		0.5		1.7
Regulatory adjustment	17.3		(13.1)		4.2		(4.8)		(3.3)		0.4
Intercompany allocations	n/a		3.2		(25.9)		n/a		—		(0.4)
Net periodic benefit costs (income)	171.0		71.1		76.1		(0.7)		(2.8)		1.7
Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities
Current year net gain	(195.3)		(106.3)		(88.4)		(13.6)		(9.6)		(3.9)
Amortization of gain (loss)	(52.4)		(36.0)		(43.9)		(1.3)		(0.5)		0.1

Amortization of prior service cost	(2.0)		(2.1)		—		(0.5)		(0.5)		1.0

Total recognized in OCI or regulatory asset/liability	(249.7)		(144.4)		(132.3)		(15.4)		(10.6)		(2.8)
Total recognized in net periodic benefit costs and OCI or regulatory asset/liability	$	(78.7)	$	(73.3)	$	(56.2)	$	(16.1)	$	(13.4)	$	(1.1)


	Pension Benefits						Post-Retirement Benefits
Year Ended December 31, 2020	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Components of net periodic benefit costs	(millions)
Service cost	$	78.9	$	27.1	$	51.8	$	2.7	$	1.1	$	1.6
Interest cost	96.8		47.0		49.1		9.2		4.8		4.4
Expected return on plan assets	(105.6)		(53.1)		(54.7)		(9.3)		(6.6)		(2.7)
Prior service cost	1.8		1.6		0.8		0.5		0.5		—
Recognized net actuarial loss	46.4		33.9		45.7		0.2		—		(0.6)
Settlement and special termination benefits	11.2		—		14.3		—		—		—
Net periodic benefit costs before regulatory adjustment and intercompany allocations	129.5		56.5		107.0		3.3		(0.2)		2.7
Regulatory adjustment	29.6		5.9		(11.6)		(4.0)		(3.0)		(0.2)
Intercompany allocations	n/a		(0.2)		(22.6)		n/a		0.1		(0.3)
Net periodic benefit costs (income)	159.1		62.2		72.8		(0.7)		(3.1)		2.2
Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities
Current year net loss	169.7		80.4		89.3		8.2		3.9		4.3
Amortization of gain (loss)	(59.2)		(33.8)		(60.0)		(0.2)		—		0.6
Prior service cost	4.1		8.1		(3.9)		0.9		0.5		0.4
Amortization of prior service cost	(1.8)		(1.6)		(0.8)		(0.5)		(0.5)		—
Total recognized in OCI or regulatory asset/liability	112.8		53.1		24.6		8.4		3.9		5.3
Total recognized in net periodic benefit costs and OCI or regulatory asset/liability	$	271.9	$	115.3	$	97.4	$	7.7	$	0.8	$	7.5


	Pension Benefits						Post-Retirement Benefits
Year Ended December 31, 2019	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Components of net periodic benefit costs	(millions)
Service cost	$	79.1	$	29.0	$	50.1	$	2.5	$	1.1	$	1.4
Interest cost	108.0		53.7		53.3		10.5		5.6		4.9
Expected return on plan assets	(106.3)		(54.8)		(48.9)		(10.0)		(6.7)		(3.3)
Prior service cost	1.9		1.7		0.9		0.5		0.5		—
Recognized net actuarial (gain) loss	33.0		25.5		49.8		(1.2)		(0.6)		(1.4)
Settlement and special termination benefits	15.6		—		23.0		—		—		—
Net periodic benefit costs before regulatory adjustment and intercompany allocations	131.3		55.1		128.2		2.3		(0.1)		1.6
Regulatory adjustment	37.4		3.0		(19.2)		(3.4)		(3.0)		0.4
Intercompany allocations	n/a		—		(34.4)		n/a		—		(0.4)
Net periodic benefit costs (income)	168.7		58.1		74.6		(1.1)		(3.1)		1.6
Other changes in plan assets and benefit obligations recognized in OCI or regulatory assets/liabilities
Current year net (gain) loss	84.7		44.6		35.9		0.9		(3.8)		4.7
Amortization of gain (loss)	(48.6)		(25.5)		(72.8)		1.2		0.6		1.4
Amortization of prior service cost	(1.9)		(1.7)		(0.9)		(0.5)		(0.5)		—
Total recognized in OCI or regulatory asset/liability	34.2		17.4		(37.8)		1.6		(3.7)		6.1
Total recognized in net periodic benefit costs and OCI or regulatory asset/liability	$	202.9	$	75.5	$	36.8	$	0.5	$	(6.8)	$	7.7

For financial reporting purposes, the estimated prior service cost and net actuarial (gain) loss for the defined benefit plans are amortized from accumulated other comprehensive income (OCI) or a regulatory asset into net periodic benefit cost. The Evergy Companies amortize prior service cost on a straight-line basis over the average future service of the active employees (plan participants) benefiting under the plan. Evergy and Evergy Kansas Central amortize the net actuarial (gain) loss on a straight-line basis over the average future service of active plan participants benefiting under the plan without application of an amortization corridor. Evergy Metro amortizes the net actuarial (gain) loss on a rolling five-year average basis.

Pension and other post-retirement benefit plans with the PBO, accumulated benefit obligation (ABO) or accumulated other post-retirement benefit obligation (APBO) in excess of the fair value of plan assets at year-end are detailed in the following tables.


December 31, 2021	Evergy		Evergy Kansas Central		Evergy Metro
	(millions)
ABO for all defined benefit pension plans	$	2,229.1	$	1,124.2	$	1,081.1
Pension plans with the PBO in excess of plan assets
Projected benefit obligation	$	2,561.7	$	1,264.4	$	1,273.5
Fair value of plan assets	1,714.7		835.7		879.0
Pension plans with the ABO in excess of plan assets
Accumulated benefit obligation	$	2,229.1	$	1,124.2	$	1,081.1
Fair value of plan assets	1,714.7		835.7		879.0
Other post-retirement benefit plans with the APBO in excess of plan assets
Accumulated other post-retirement benefit obligation	$	258.4	$	133.9	$	124.5
Fair value of plan assets	242.3		124.0		118.3


December 31, 2020	Evergy		Evergy Kansas Central		Evergy Metro
	(millions)
ABO for all defined benefit pension plans	$	2,534.1	$	1,281.6	$	1,227.4
Pension plans with the PBO in excess of plan assets
Projected benefit obligation	$	2,901.1	$	1,429.6	$	1,446.5
Fair value of plan assets	1,799.1		887.0		912.1
Pension plans with the ABO in excess of plan assets
Accumulated benefit obligation	$	2,534.1	$	1,281.6	$	1,227.4
Fair value of plan assets	1,799.1		887.0		912.1
Other post-retirement benefit plans with the APBO in excess of plan assets
Accumulated other post-retirement benefit obligation	$	280.4	$	146.8	$	133.6
Fair value of plan assets	248.3		125.8		122.5

The expected long-term rate of return on plan assets represents the Evergy Companies' estimate of the long-term return on plan assets and is based on historical and projected rates of return for current and planned asset classes in the plans' investment portfolios. Assumed projected rates of return for each asset class were selected after analyzing historical experience and future expectations of the returns of various asset classes. Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolios was developed and adjusted for the effect of projected benefits paid from plan assets and future plan contributions.

The following tables provide the weighted-average assumptions used to determine benefit obligations and net costs for the Evergy Companies' pension and post-retirement benefit plans.


Weighted-average assumptions used to determine the benefit obligation at December 31, 2021		Pension Benefits									Post-Retirement Benefits
	Evergy			Evergy Kansas Central			Evergy Metro			Evergy			Evergy Kansas Central			Evergy Metro
Discount rate		3.10	%		3.10	%		3.11	%		3.12	%		3.11	%		3.13	%
Rate of compensation increase		3.75	%		3.77	%		3.71	%		3.75	%		n/a			3.75	%
Interest crediting rate for cash balance plans		4.13	%		4.00	%		4.45	%		n/a			n/a			n/a

Weighted-average assumptions used to determine the benefit obligation at December 31, 2020		Pension Benefits									Post-Retirement Benefits
	Evergy			Evergy Kansas Central			Evergy Metro			Evergy			Evergy Kansas Central			Evergy Metro
Discount rate		2.95	%		2.93	%		2.97	%		2.84	%		2.80	%		2.88	%
Rate of compensation increase		3.71	%		3.76	%		3.71	%		3.75	%		n/a			3.75	%
Interest crediting rate for cash balance plans		4.12	%		4.00	%		4.46	%		n/a			n/a			n/a


Weighted-average assumptions used to determine net costs for the year ended December 31, 2021		Pension Benefits									Post-Retirement Benefits
	Evergy			Evergy Kansas Central			Evergy Metro			Evergy			Evergy Kansas Central			Evergy Metro
Discount rate		2.95	%		2.93	%		2.97	%		2.84	%		2.80	%		2.88	%
Expected long-term return on plan assets		6.63	%		6.70	%		6.57	%		3.93	%		5.55	%		2.27	%
Rate of compensation increase		3.71	%		3.78	%		3.71	%		3.75	%		n/a			3.75	%
Interest crediting rate for cash balance plans		4.12	%		4.00	%		4.46	%		n/a			n/a			n/a

Weighted-average assumptions used to determine net costs for the year ended December 31, 2020		Pension Benefits									Post-Retirement Benefits
	Evergy			Evergy Kansas Central			Evergy Metro			Evergy			Evergy Kansas Central			Evergy Metro
Discount rate		3.62	%		3.61	%		3.64	%		3.56	%		3.54	%		3.58	%
Expected long-term return on plan assets		6.63	%		6.70	%		6.56	%		4.19	%		6.00	%		2.37	%
Rate of compensation increase		3.74	%		3.75	%		3.71	%		3.75	%		n/a			3.75	%
Interest crediting rate for cash balance plans		4.32	%		4.21	%		4.50	%		n/a			n/a			n/a

Evergy expects to contribute $92.9 million to the pension plans in 2022 to meet Employee Retirement Income Security Act of 1974, as amended (ERISA) funding requirements and regulatory orders, of which $30.6 million is expected to be paid by Evergy Kansas Central and $62.3 million is expected to be paid by Evergy Metro. The Evergy Companies' funding policy is to contribute amounts sufficient to meet the ERISA funding requirements and MPSC and KCC rate orders plus additional amounts as considered appropriate; therefore, actual contributions may differ from expected contributions. Also in 2022, Evergy expects to contribute $2.2 million to the post-retirement benefit plans, of which $0.5 million is expected to be paid by Evergy Kansas Central and $1.7 million is expected to be paid by Evergy Metro.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid through 2031.


	Pension Benefits						Post-Retirement Benefits
	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
	(millions)
2022	$	159.5	$	80.8	$	77.5	$	16.1	$	9.2	$	6.9
2023	160.4		79.6		79.5		15.6		9.0		6.7
2024	163.8		80.6		81.7		15.1		8.5		6.6
2025	168.1		81.3		85.3		14.7		8.2		6.5
2026	173.5		83.2		88.8		14.3		8.0		6.4
2027-2031	862.9		399.5		455.7		68.5		37.2		31.2

As of December 31, 2021, Evergy Kansas Central and Evergy Metro maintained a master trust for their non-union and Evergy Kansas Central's union pension benefits and a separate trust for Evergy Metro's union pension benefits. Evergy Kansas Central and Evergy Metro maintained separate trusts for their post-retirement benefits as of December 31,2021. These plans are managed in accordance with prudent investor guidelines contained in the ERISA requirements.

The primary objective of Evergy Kansas Central's and Evergy Metro's pension plans is to provide a source of retirement income for its participants and beneficiaries, and the primary financial objectives of the plans are to minimize funding deficiencies and maintain the plans' ability to pay all benefit and expense obligations when due.

The primary objective of Evergy Kansas Central's and Evergy Metro's post-retirement benefit plans is to preserve capital, maintain sufficient liquidity and earn a consistent rate of return.

The investment strategies of both the Evergy Kansas Central and Evergy Metro pension and post-retirement plans support the above objectives of the plans. The portfolios are invested, and periodically rebalanced, to achieve the targeted allocations detailed below. The following table provides the target asset allocations by asset class for the Evergy Kansas Central and Evergy Metro pension and other post-retirement plan assets.


	Pension Benefits		Post-Retirement Benefits
	Evergy Kansas Central	Evergy Metro	Evergy Kansas Central	Evergy Metro
Domestic equities	26%	26%	26%	15%
International equities	20%	19%	18%	8%
Bonds	39%	37%	51%	68%
Mortgage & asset backed securities	—%	—%	—%	6%
Real estate investments	4%	7%	—%	—%
Other investments	11%	11%	5%	3%

Fair Value Measurements

Evergy classifies recurring and non-recurring fair value measurements based on the fair value hierarchy as discussed in Note 13. The following are descriptions of the valuation methods of the primary fair value measurements disclosed below.

Domestic equities - consist of individually held domestic equity securities and domestic equity mutual funds. Securities and funds, which are publicly quoted, are valued based on quoted prices in active markets and are categorized as Level 1. Funds that are valued by fund administrators using the net asset value (NAV) per fund share, derived from the quoted prices in active markets of the underlying securities are not classified within the fair value hierarchy.

International equities - consist of individually held international equity securities and international equity mutual funds. Securities and funds, which are publicly quoted, are valued based on quoted prices in active markets and are categorized as Level 1. Funds that are valued by fund administrators using the NAV per fund share, derived from the quoted prices in active markets of the underlying securities are not classified within the fair value hierarchy.

Bond funds - consist of funds maintained by investment companies that invest in various types of fixed income securities consistent with the funds' stated objectives. Securities and funds, which are publicly quoted, are valued based on quoted prices in active markets and are categorized as Level 1. Funds that are valued by fund administrators using the NAV per fund share, derived from the quoted prices in active markets of the underlying securities, are not classified within the fair value hierarchy.

Corporate bonds - consists of individually held, primarily domestic, corporate bonds that are traded in less than active markets or priced with models using highly observable inputs that are categorized as Level 2.

U.S. Treasury and agency bonds - consists of individually held U.S. Treasury securities and U.S. agency bonds. U.S. Treasury securities, which are publicly quoted, are valued based on quoted prices in active markets and are categorized as a Level 1. U.S. agency bonds, which are publicly quoted, are traded in less than active markets or priced with models using highly observable inputs and are categorized as Level 2.

Mortgage and asset backed securities - consists of individually held securities that are traded in less than active markets or valued with models using highly observable inputs that are categorized as Level 2.

Real estate investments - consists of traded real estate investment trusts valued at the closing price reported on the major market on which the trusts are traded and are categorized as Level 1 and institutional trust funds valued at NAV per fund share and are not categorized in the fair value hierarchy.

Combination debt/equity/other fund - consists of a fund that invests in various types of debt, equity and other asset classes consistent with the fund's stated objectives. The fund, which is publicly quoted, is valued based on quoted prices in active markets and is categorized as Level 1.

Alternative investments - consists of investments in institutional trust and hedge funds that are valued by fund administrators using the NAV per fund share, derived from the underlying investments of the fund, and are not classified within the fair value hierarchy.

Short-term investments - consists of fund investments in high-quality, short-term, U.S. dollar-denominated instruments with an average maturity of 60 days that are valued at NAV per fund share and are not categorized in the fair value hierarchy.

Cash and cash equivalents - consists of investments with original maturities of three months or less when purchased that are traded in active markets and are categorized as Level 1.

The fair values of the Evergy Companies' pension plan assets at December 31, 2021 and 2020, by asset category are in the following tables.


				Fair Value Measurements Using
Description	December 31 2021			Level 1			Level 2			Level 3			Assets measured at NAV
		(millions)
Evergy Kansas Central Pension Plans
Domestic equities		$	209.9		$	177.3		$	—		$	—		$	32.6
International equities		167.4			167.4			—			—			—
Bond funds		330.4			330.4			—			—			—



Real estate investments		28.1			—			—			—			28.1
Combination debt/equity/other fund		42.7			42.7			—			—			—
Alternative investment funds		44.1			—			—			—			44.1
Short-term investments		13.1			—			—			—			13.1


Total		$	835.7		$	717.8		$	—		$	—		$	117.9

Evergy Metro Pension Plans
Domestic equities		$	203.0		$	179.5		$	—		$	—		$	23.5
International equities		193.1			193.1			—			—			—
Bond funds		260.6			260.6			—			—			—
Corporate bonds		27.1			—			27.1			—			—
U.S. Treasury and agency bonds		14.5			4.7			9.8			—			—
Mortgage and asset backed securities		4.3			—			4.3			—			—
Real estate investments		55.9			—			—			—			55.9
Combination debt/equity/other fund		46.2			46.2			—			—			—
Alternative investment funds		47.5			—			—			—			47.5
Cash and cash equivalents		14.1			14.1			—			—			—
Short-term investments		9.5			—			—			—			9.5
Other		3.2			—			3.2			—			—
Total		$	879.0		$	698.2		$	44.4		$	—		$	136.4


				Fair Value Measurements Using
Description	December 31 2020			Level 1			Level 2			Level 3			Assets measured at NAV
		(millions)
Evergy Kansas Central Pension Plans
Domestic equities		$	248.5		$	151.3		$	—		$	—		$	97.2
International equities		171.2			103.8			—			—			67.4
Bond funds		281.2			230.7			—			—			50.5
Real estate investments		46.7			—			—			—			46.7
Combination debt/equity/other fund		30.4			30.4			—			—			—
Alternative investment funds		83.6			—			—			—			83.6
Short-term investments		25.4			—			—			—			25.4

Total		$	887.0		$	516.2		$	—		$	—		$	370.8

Evergy Metro Pension Plans
Domestic equities		$	247.4		$	191.9		$	—		$	—		$	55.5
International equities		220.8			153.4			—			—			67.4
Bond funds		78.1			21.1			—			—			57.0
Corporate bonds		133.6			—			133.6			—			—
U.S. Treasury and agency bonds		73.8			61.5			12.3			—			—
Mortgage and asset backed securities		5.0			—			5.0			—			—
Real estate investments		40.2			1.6			—			—			38.6
Combination debt/equity/other fund		15.6			15.6			—			—			—
Alternative investment funds		39.7			—			—			—			39.7
Cash and cash equivalents		57.3			57.3			—			—			—
Short-term investments		1.4			—			—			—			1.4
Other		(0.8)			—			(0.8)			—			—
Total		$	912.1		$	502.4		$	150.1		$	—		$	259.6

The fair values of the Evergy Companies' post-retirement plan assets at December 31, 2021 and 2020, by asset category are in the following tables.


				Fair Value Measurements Using
Description	December 31 2021			Level 1			Level 2			Level 3			Assets measured at NAV
		(millions)
Evergy Kansas Central Post-Retirement Benefit Plans
Domestic equities		$	32.5		$	32.5		$	—		$	—		$	—
International equities		22.1			22.1			—			—			—
Bond funds		62.3			62.3			—			—			—







Combination debt/equity/other fund		6.1			6.1			—			—			—
Short-term investments		1.0			—			—			—			1.0

Total		$	124.0		$	123.0		$	—		$	—		$	1.0

Evergy Metro Post-Retirement Benefit Plans
Domestic equities		$	20.0		$	20.0		$	—		$	—		$	—
International equities		12.3			12.3			—			—			—
Bond funds		50.2			50.2			—			—			—
Corporate bonds		18.1			—			18.1			—			—
U.S. Treasury and agency bonds		12.1			6.1			6.0			—			—
Mortgage and asset backed securities		0.8			—			0.8			—			—



Combination debt/equity/other fund		3.9			3.9			—			—			—
Cash and cash equivalents		0.5			0.5			—			—			—
Short-term investments		0.1			—			—			—			0.1
Other		0.3			—			0.3			—			—
Total		$	118.3		$	93.0		$	25.2		$	—		$	0.1


				Fair Value Measurements Using
Description	December 31 2020			Level 1			Level 2			Level 3			Assets measured at NAV
		(millions)
Evergy Kansas Central Post-Retirement Benefit Plans
Domestic equities		$	41.9		$	—		$	—		$	—		$	41.9
International equities		27.7			—			—			—			27.7
Bond funds		55.5			—			—			—			55.5
Cash and cash equivalents		0.7			0.7			—			—			—
Total		$	125.8		$	0.7		$	—		$	—		$	125.1

Evergy Metro Post-Retirement Benefit Plans
Domestic equities		$	4.6		$	4.6		$	—		$	—		$	—
International equities		1.2			1.2			—			—			—
Bond funds		79.0			0.2			—			—			78.8
Corporate bonds		17.9			—			17.9			—			—
U.S. Treasury and agency bonds		13.6			5.7			7.9			—			—
Mortgage and asset backed securities		0.5			—			0.5			—			—
Cash and cash equivalents		5.4			5.4			—			—			—
Other		0.3			—			0.3			—			—
Total		$	122.5		$	17.1		$	26.6		$	—		$	78.8

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The cost trend assumptions are detailed in the following tables.


Assumed annual health care cost growth rates as of December 31, 2021	Evergy		Evergy Kansas Central		Evergy Metro
Health care cost trend rate assumed for next year	6.0	%	6.0	%	6.0	%
Rate to which the cost trend is assumed to decline (the ultimate trend rate)	4.5	%	4.5	%	4.5	%
Year that rate reaches ultimate trend	2030		2030		2030

Assumed annual health care cost growth rates as of December 31, 2020	Evergy		Evergy Kansas Central		Evergy Metro
Health care cost trend rate assumed for next year	6.0	%	6.0	%	6.0	%
Rate to which the cost trend is assumed to decline (the ultimate trend rate)	4.5	%	4.5	%	4.5	%
Year that rate reaches ultimate trend	2027		2027		2027

Employee Savings Plans

Evergy has defined contribution savings plans (401(k)) that cover substantially all employees. Evergy matches employee contributions, subject to limits. The annual costs of the plans are detailed in the following table.


	2021		2020		2019
	(millions)
Evergy	$	25.6	$	17.4	$	17.6
Evergy Kansas Central	11.7		9.6		9.6
Evergy Metro	13.9		7.8		8.0

10. EQUITY COMPENSATION

Evergy's Long-Term Incentive Plan is an equity compensation plan approved by Evergy shareholders. The Long-Term Incentive Plan permits the grant of restricted stock, restricted stock units, bonus shares, stock options, stock appreciation rights, limited stock appreciation rights, director shares, director deferred share units and performance shares to directors, officers and other employees of Evergy. Common stock shares delivered by Evergy under the Long-Term Incentive Plan may be authorized but unissued, held in the treasury or purchased on the open market (including private purchases) in accordance with applicable securities laws. Evergy has a policy of delivering newly issued shares and does not expect to repurchase common shares during 2022 to satisfy equity compensation payments and director deferred share unit conversion. Forfeiture rates are based on historical forfeitures and future expectations and are reevaluated annually.

The following table summarizes the Evergy Companies' equity compensation expense and the associated income tax benefit.


	2021		2020		2019
Evergy	(millions)
Equity compensation expense	$	15.6	$	15.5	$	15.5
Income tax (expense) benefit	(0.1)		2.2		3.0
Evergy Kansas Central
Equity compensation expense	6.9		7.6		6.7
Income tax (expense) benefit	(0.2)		1.6		1.9
Evergy Metro
Equity compensation expense	5.1		5.7		5.7
Income tax (expense) benefit	(0.6)		0.2		0.3

Restricted Share Units

Evergy utilizes RSUs for new grants of stock-based compensation awards. RSU awards are grants that entitle the holder to receive shares of common stock as the awards vest. These RSU awards are defined as nonvested shares and do not include restrictions once the awards have vested. These RSUs either take the form of RSUs with performance measures that vest upon the achievement of specific performance goals or RSUs with only service requirements that vest solely upon the passage of time.

RSUs with Performance Measures

The payment of RSUs with performance measures is contingent upon achievement of specific performance goals over a stated period of time as approved by the Compensation and Leadership Development Committee of the Board. The numbers of RSUs with performances measures ultimately paid can vary from the numbers of RSUs with performance measures initially granted depending on Evergy's performance over the stated performance periods. Compensation expense for RSUs with performance measures is calculated by recognizing the portion of the fair value for each reporting period for which the requisite service has been rendered. Dividends are accrued over the vesting period and paid in cash based on the number of RSUs with performance measures ultimately paid.

The fair value of RSUs with performance measures is estimated using the market value of Evergy's stock at the valuation date and a Monte Carlo simulation technique that incorporates assumptions for inputs of expected volatilities, dividend yield and risk-free rates. Expected volatility is based on daily stock price change during a historical period commensurate with the remaining term of the performance period of the grant. The risk-free rate is based upon the rate at the time of the evaluation for zero-coupon government bonds with a maturity consistent with the remaining performance period of the grant. The dividend yield is based on the most recent dividends paid and the actual closing stock price on the valuation date. For shares granted in 2021, inputs for expected volatility, dividend yield and the risk-free rate were 32%, 3.99% and 0.24%, respectively.

RSU activity for awards with performance measures for 2021 is summarized in the following table.


	Nonvested Restricted Share Units		Grant Date Fair Value*
Beginning balance January 1, 2021		347,964		$	61.57
Granted		270,277		57.21

Forfeited		(104,526)		64.85
Ending balance December 31, 2021		513,715		58.79

weighted-average

At December 31, 2021, the remaining weighted-average contractual term related to RSU awards with performance measures was 1.4 years. The weighted-average grant-date fair value of RSUs granted with performance measures was $57.21, $87.98 and $37.87 in 2021, 2020 and 2019, respectively. At December 31, 2021, there was $15.3 million of unrecognized compensation expense related to unvested RSUs with performance measures. No RSUs with performance measures vested in 2021, 2020 and 2019.

RSUs with Only Service Requirements

Evergy measures the fair value of RSUs with only service requirements based on the fair market value of the underlying common stock as of the grant date. RSU awards with only service conditions recognize compensation expense by multiplying shares by the grant-date fair value related to the RSU and recognizing it on a straight-line basis over the requisite service period for the entire award. Dividends are accrued over the vesting period and are invested in additional RSU's subject to the same service conditions.

RSU activity for awards with only service requirements for 2021 is summarized in the following table.


	Nonvested Restricted Share Units		Grant Date Fair Value*
Beginning balance January 1, 2021		160,742		$	59.42
Granted		171,363		55.30
Vested		(43,785)		54.61
Forfeited		(35,274)		59.24
Ending balance December 31, 2021		253,046		57.18

weighted-average

At December 31, 2021, the remaining weighted-average contractual term related to RSU awards with only service requirements was 1.4 years. The weighted-average grant-date fair value of RSUs granted with only service requirements was $55.30, $68.92 and $54.47 in 2021, 2020 and 2019, respectively. At December 31, 2021, there was $7.0 million of unrecognized compensation expense related to unvested RSUs. The total fair value of RSUs with only service requirements that vested was $2.4 million, $6.5 million and $2.6 million in 2021, 2020 and 2019, respectively.

In addition to RSU's, Evergy also had 36,012 shares and 108,010 shares of restricted stock and performance shares, respectively, that vested in 2021 related to Great Plains Energy equity compensation awards that converted to equivalent Evergy awards at the closing of the Great Plains Energy and Evergy Kansas Central merger in 2018.

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

In August 2021, Evergy amended its $2.5 billion master credit facility and extended the maturity until 2026. Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West have borrowing capacity under the master credit facility with specific sublimits for each borrower. These sublimits can be unilaterally adjusted by Evergy for each borrower provided the sublimits remain within minimum and maximum sublimits as specified in the facility. Evergy adjusted these sublimits in the first quarter of 2021 as further detailed in the table below. The applicable interest rates and commitment fees of the facility are subject to upward or downward adjustments, within

certain limitations, if Evergy achieves, or fails to achieve, certain sustainability-linked targets based on two key performance indicator metrics: (i) Non-Emitting Generation Capacity and (ii) Diverse Supplier Spend (as defined in the facility).

A default by any borrower under the facility or one of its significant subsidiaries on other indebtedness totaling more than $100.0 million constitutes a default by that borrower under the facility. Under the terms of this facility, each of Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West is required to maintain a total indebtedness to total capitalization ratio, as defined in the facility, of not greater than 0.65 to 1.00 at all times. As of December 31, 2021, Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West were in compliance with this covenant.

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


			Amounts Drawn
	Master Credit Facility		Commercial Paper		Letters of Credit		Cash Borrowings		Available Borrowings		Weighted Average Interest Rate on Short-Term Borrowings
December 31, 2021	(millions)
Evergy, Inc.	$	700.0	$	358.0	$	0.7	$	—	$	341.3	0.34%
Evergy Kansas Central	750.0		406.0		0.1		—		343.9		0.41%
Evergy Metro	350.0		—		—		—		350.0		—%
Evergy Missouri West	700.0		395.3		—		—		304.7		0.40%
Evergy	$	2,500.0	$	1,159.3	$	0.8	$	—	$	1,339.9

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

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

12. LONG-TERM DEBT

The Evergy Companies' long-term debt is detailed in the following tables.


December 31, 2021	Issuing Entity	Year Due	Evergy		Evergy Kansas Central		Evergy Metro
Mortgage Bonds			(millions)
3.25% Series	Evergy Kansas Central, Inc.	2025	250.0		250.0		—
2.55% Series	Evergy Kansas Central, Inc.	2026	350.0		350.0		—
3.10% Series	Evergy Kansas Central, Inc.	2027	300.0		300.0		—
4.125% Series	Evergy Kansas Central, Inc.	2042	550.0		550.0		—
4.10% Series	Evergy Kansas Central, Inc.	2043	430.0		430.0		—
4.625% Series	Evergy Kansas Central, Inc.	2043	250.0		250.0		—
4.25% Series	Evergy Kansas Central, Inc.	2045	300.0		300.0		—
3.25% Series	Evergy Kansas Central, Inc.	2049	300.0		300.0
3.45% Series	Evergy Kansas Central, Inc.	2050	500.0		500.0		—
6.15% Series	Evergy Kansas South, Inc.	2023	50.0		50.0		—
6.53% Series	Evergy Kansas South, Inc.	2037	175.0		175.0		—
6.64% Series	Evergy Kansas South, Inc.	2038	100.0		100.0		—
4.30% Series	Evergy Kansas South, Inc.	2044	250.0		250.0		—
2.95% EIRR bonds	Evergy Metro, Inc.	2023	79.5		—		79.5
4.125% Series	Evergy Metro, Inc.	2049	400.0		—		400.0
2.25% Series	Evergy Metro, Inc.	2030	400.0		—		400.0
Pollution Control Bonds
0.132% Series(b)	Evergy Kansas Central, Inc.	2032	45.0		45.0		—
0.132% Series(b)	Evergy Kansas Central, Inc.	2032	30.5		30.5		—
0.132% Series(b)	Evergy Kansas South, Inc.	2027	21.9		21.9		—
2.50% Series	Evergy Kansas South, Inc.	2031	50.0		50.0		—
0.132% Series(b)	Evergy Kansas South, Inc.	2032	14.5		14.5		—
0.132% Series(b)	Evergy Kansas South, Inc.	2032	10.0		10.0		—
0.167% Series 2007A and 2007B(b)	Evergy Metro, Inc.	2035	146.5		—		146.5
2.75% Series 2008	Evergy Metro, Inc.	2038	23.4		—		23.4
Senior Notes
3.15% Series(g)	Evergy Metro, Inc.	2023	300.0		—		300.0
3.65% Series(g)	Evergy Metro, Inc.	2025	350.0		—		350.0
6.05% Series (5.78% rate)(a)(g)	Evergy Metro, Inc.	2035	250.0		—		250.0
5.30% Series(g)	Evergy Metro, Inc.	2041	400.0		—		400.0
4.20% Series(g)	Evergy Metro, Inc.	2047	300.0		—		300.0
4.20% Series(g)	Evergy Metro, Inc.	2048	300.0		—		300.0
3.49% Series A(h)	Evergy Missouri West, Inc.	2025	36.0		—		—
4.06% Series B(h)	Evergy Missouri West, Inc.	2033	60.0		—		—
4.74% Series C(h)	Evergy Missouri West, Inc.	2043	150.0		—		—
3.74% Series(h)	Evergy Missouri West, Inc.	2022	100.0		—		—
2.86% Series A(h)	Evergy Missouri West, Inc.	2031	350.0		—		—
3.01% Series B(h)	Evergy Missouri West, Inc.	2033	75.0		—		—
3.21% Series C(h)	Evergy Missouri West, Inc.	2036	75.0		—		—
5.292% Series	Evergy, Inc.(f)	2022	287.5		—		—
2.45% Series	Evergy, Inc.	2024	800.0		—		—
2.90% Series (3.77% rate)(a)	Evergy, Inc.	2029	800.0		—		—
Medium Term Notes
7.33% Series(h)	Evergy Missouri West, Inc.	2023	3.0		—		—
7.17% Series(h)	Evergy Missouri West, Inc.	2023	7.0		—		—
Fair value adjustment(e)			97.9		—		—
Current maturities(c)			(389.3)		—		—
Unamortized debt discount and debt issuance costs			(80.5)		(42.7)		(24.4)
Total excluding current maturities(d)			$	9,297.9	$	3,934.2	$	2,925.0


December 31, 2020	Issuing Entity	Year Due	Evergy		Evergy Kansas Central		Evergy Metro
Mortgage Bonds			(millions)
3.25% Series	Evergy Kansas Central, Inc.	2025	$	250.0	$	250.0	$	—
2.55% Series	Evergy Kansas Central, Inc.	2026	350.0		350.0		—
3.10% Series	Evergy Kansas Central, Inc.	2027	300.0		300.0		—
4.125% Series	Evergy Kansas Central, Inc.	2042	550.0		550.0		—
4.10% Series	Evergy Kansas Central, Inc.	2043	430.0		430.0		—
4.625% Series	Evergy Kansas Central, Inc.	2043	250.0		250.0		—
4.25% Series	Evergy Kansas Central, Inc.	2045	300.0		300.0		—
3.25% Series	Evergy Kansas Central, Inc.	2049	300.0		300.0
3.45% Series	Evergy Kansas Central, Inc.	2050	500.0		500.0		—
6.15% Series	Evergy Kansas South, Inc.	2023	50.0		50.0		—
6.53% Series	Evergy Kansas South, Inc.	2037	175.0		175.0		—
6.64% Series	Evergy Kansas South, Inc.	2038	100.0		100.0		—
4.30% Series	Evergy Kansas South, Inc.	2044	250.0		250.0		—
2.95% EIRR bonds	Evergy Metro, Inc.	2023	79.5		—		79.5
4.125% Series	Evergy Metro, Inc.	2049	400.0		—		400.0
2.25% Series	Evergy Metro, Inc.	2030	400.0		—		400.0
9.44% Series(h)	Evergy Missouri West, Inc.	2021	1.1		—		—
Pollution Control Bonds
0.18% Series(b)	Evergy Kansas Central, Inc.	2032	45.0		45.0		—
0.18% Series(b)	Evergy Kansas Central, Inc.	2032	30.5		30.5		—
0.18% Series(b)	Evergy Kansas South, Inc.	2027	21.9		21.9		—
2.50% Series	Evergy Kansas South, Inc.	2031	50.0		50.0		—
0.18% Series(b)	Evergy Kansas South, Inc.	2032	14.5		14.5		—
0.18% Series(b)	Evergy Kansas South, Inc.	2032	10.0		10.0		—
0.20% Series 2007A and 2007B(b)	Evergy Metro, Inc.	2035	146.5		—		146.5
2.75% Series 2008	Evergy Metro, Inc.	2038	23.4		—		23.4
Senior Notes
3.15% Series(g)	Evergy Metro, Inc.	2023	300.0		—		300.0
3.65% Series(g)	Evergy Metro, Inc.	2025	350.0		—		350.0
6.05% Series (5.78% rate)(a)(g)	Evergy Metro, Inc.	2035	250.0		—		250.0
5.30% Series(g)	Evergy Metro, Inc.	2041	400.0		—		400.0
4.20% Series(g)	Evergy Metro, Inc.	2047	300.0		—		300.0
4.20% Series(g)	Evergy Metro, Inc.	2048	300.0		—		300.0
8.27% Series(h)	Evergy Missouri West, Inc.	2021	80.9		—		—
3.49% Series A	Evergy Missouri West, Inc.	2025	36.0		—		—
4.06% Series B	Evergy Missouri West, Inc.	2033	60.0		—		—
4.74% Series C	Evergy Missouri West, Inc.	2043	150.0		—		—
3.74% Series	Evergy Missouri West, Inc.	2022	100.0		—		—
4.85% Series	Evergy, Inc.(f)	2021	350.0		—		—
5.292% Series	Evergy, Inc.(f)	2022	287.5		—		—
2.45% Series	Evergy, Inc.	2024	800.0		—		—
2.90% Series (3.77% rate)(a)	Evergy, Inc.	2029	800.0		—		—
Medium Term Notes
7.33% Series(h)	Evergy Missouri West, Inc.	2023	3.0		—		—
7.17% Series(h)	Evergy Missouri West, Inc.	2023	7.0		—		—
Fair value adjustment(e)			110.4		—		—
Current maturities(c)			(436.4)		—		—
Unamortized debt discount and debt issuance costs			(84.9)		(45.4)		(26.4)
Total excluding current maturities(d)			$	9,190.9	$	3,931.5	$	2,923.0

(a)Rate after amortizing gains/losses recognized in OCI on settlements of interest rate hedging instruments.

(b)Variable rate.

(c)Evergy's current maturities total as of December 31, 2021 and 2020, includes $1.8 million and $4.4 million, respectively, of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger.

(d)At December 31, 2021 and 2020, does not include $50.0 million and $21.9 million of secured Series 2005 Environmental Improvement Revenue Refunding (EIRR) bonds because the bonds were repurchased in September 2015 and are held by Evergy Metro.

(e)Represents the fair value adjustments recorded at Evergy consolidated related to the long-term debt of Great Plains Energy, Evergy Metro and Evergy Missouri West in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger. This amount is not part of future principal payments and will amortize over the remaining life of the associated debt instruments.

(f)Originally issued by Great Plains Energy but assumed by Evergy, Inc. as part of the Great Plains Energy and Evergy Kansas Central merger.

(g)Effectively secured pursuant to the General Mortgage Indenture and Deed of Trust dated as of December 1, 1986, as supplemented (Evergy Metro Mortgage Indenture) through the issuance of collateral mortgage bonds to the trustee in 2019.

(h)Unconditionally guaranteed by Evergy, Inc.

Mortgage Bonds

The Evergy Kansas Central and Evergy Kansas South mortgages each contain provisions restricting the amount of first mortgage bonds (FMBs) that could be issued by each entity. Evergy Kansas Central and Evergy Kansas South must be in compliance with such restrictions prior to the issuance of additional first mortgage bonds or other secured indebtedness. The amount of Evergy Kansas Central FMBs authorized by its Mortgage and Deed of Trust, dated July 1, 1939, as supplemented, is subject to certain limitations as described below. The amount of Evergy Kansas South FMBs authorized by the Evergy Kansas South Mortgage and Deed of Trust, dated April 1, 1940, as supplemented and amended, is limited to a maximum of $3.5 billion, unless amended further. FMBs are secured by utility assets. Amounts of additional FMBs that may be issued are subject to property, earnings and certain restrictive provisions, except in connection with certain refundings, of each mortgage. As of December 31, 2021, approximately $998.9 million and $2,828.6 million principal amounts of additional Evergy Kansas Central FMBs or Evergy Kansas South FMBs, respectively, could be issued under the most restrictive provisions of their mortgages.

Evergy Metro has issued mortgage bonds under the Evergy Metro Mortgage Indenture, which creates a mortgage lien on substantially all Evergy Metro's utility plant. Additional Evergy Metro bonds may be issued on the basis of 75% of property additions or retired bonds. As of December 31, 2021, approximately $5,075.8 million principal amount of additional Evergy Metro mortgage bonds could be issued under the most restrictive provisions in the mortgage.

Senior Notes

Under the terms of the note purchase agreements for certain Evergy Missouri West senior notes, Evergy Missouri West is required to maintain a consolidated indebtedness to consolidated capitalization ratio, as defined in the agreements, not greater than 0.65 to 1.00. In addition, Evergy Missouri West's priority debt, as defined in the agreements, cannot exceed 15% of consolidated tangible net worth, as defined in the agreements. At December 31, 2021, Evergy Missouri West was in compliance with these covenants.

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

$36.0 million of 3.49% Series A, maturing in 2025;
$60.0 million of 4.06% Series B, maturing in 2033;
$150.0 million of 4.74% Series C, maturing in 2043; and
$100.0 million of 3.74% Series, maturing in 2022.

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

In November 2021, Evergy Missouri West repaid its $80.9 million of 8.27% Senior Notes at maturity.

Scheduled Maturities

Evergy's, Evergy Kansas Central's and Evergy Metro's long-term debt maturities for the next five years are detailed in the following table.


	2022		2023		2024		2025		2026
	(millions)
Evergy	$	387.5	$	439.5	$	800.0	$	636.0	$	350.0
Evergy Kansas Central	—		50.0		—		250.0		350.0
Evergy Metro	—		379.5		—		350.0		—

13. FAIR VALUE MEASUREMENTS

Values of Financial Instruments

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

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

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

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

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

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

Interest Rate Derivatives

The Evergy Companies are exposed to market risks arising from changes in interest rates and may use derivative instruments to manage these risks. From time to time, risk management activities may include entering into interest rate swap agreements to protect against unfavorable interest rate changes relating to forecasted debt transactions. These interest rate swap agreements can be designated as cash flow hedges, in which case gains and losses on the interest rate swaps are deferred in other comprehensive income to be recognized as an adjustment to interest expense over the same period that the hedged interest payments affect earnings. The Evergy Companies classify all cash inflows and outflows for interest rate swap agreements accounted for as cash flow hedges of forecasted debt transactions as financing activities on their consolidated statements of cash flows.

In September 2019, Evergy issued $800.0 million of 2.90% Senior Notes maturing in 2029 and paid $69.8 million to settle an interest rate swap agreement with a notional amount of $500.0 million that was designated as a cash flow hedge of interest payments on the debt issuance. The $69.8 million pre-tax loss was recorded in accumulated other comprehensive loss on Evergy's consolidated balance sheet and is being reclassified into interest expense over

the ten-year term of the debt. For 2021, 2020 and 2019, $7.0 million, $7.0 million and $2.0 million, respectively, were reclassified from accumulated other comprehensive loss to interest expense on Evergy's consolidated statements of comprehensive income. For 2021, 2020 and 2019, $(1.5) million, $(4.0) million and $(0.5) million, respectively, were reclassified from accumulated other comprehensive loss to income tax expense on Evergy's consolidated statements of comprehensive income. As of December 31, 2021, Evergy expects to amortize $5.4 million to earnings from accumulated other comprehensive loss over the next twelve months.

Fair Value of Long-Term Debt

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



	December 31, 2021				December 31, 2020
	Book Value		Fair Value		Book Value		Fair Value
Long-term debt(a)	(millions)
Evergy(b)	$	9,687.2	$	10,758.5	$	9,627.3	$	11,274.2
Evergy Kansas Central	3,934.2		4,522.5		3,931.5		4,801.7
Evergy Metro	2,925.0		3,400.8		2,923.0		3,591.2
Long-term debt of variable interest entities(a)
Evergy	$	—	$	—	$	18.8	$	19.1
Evergy Kansas Central	—		—		18.8		19.1

(a) Includes current maturities.

(b) Book value as of December 31, 2021 and 2020, includes $97.9 million and $110.4 million, respectively, of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger, which are not part of future principal payments and will amortize over the remaining life of the associated debt instrument.

Recurring Fair Value Measurements

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


Description	December 31, 2021			Level 1		Level 2			Level 3			NAV
Evergy Kansas Central		(millions)
Assets
Nuclear decommissioning trust(a)
Domestic equity funds		$	140.4	$	126.5		$	—		$	—		$	13.9
International equity funds		74.0		74.0			—			—			—
Core bond fund		58.1		58.1			—			—			—
High-yield bond fund		29.6		29.6			—			—			—
Emerging markets bond fund		18.0		18.0			—			—			—

Alternative investments fund		32.7		—			—			—			32.7
Real estate securities fund		15.2		—			—			—			15.2
Cash equivalents		0.4		0.4			—			—			—

Total nuclear decommissioning trust		368.4		306.6			—			—			61.8
Rabbi trust
Fixed income funds		19.6		19.6			—			—			—
Equity funds		9.5		9.5			—			—			—
Combination debt/equity/other fund		2.4		2.4			—			—			—
Cash equivalents		0.2		0.2			—			—			—
Total rabbi trust		31.7		31.7			—			—			—
Total		$	400.1	$	338.3		$	—		$	—		$	61.8
Evergy Metro
Assets
Nuclear decommissioning trust(a)
Equity securities		$	299.2	$	299.2		$	—		$	—		$	—
Debt securities
U.S. Treasury		46.1		46.1			—			—			—
U.S. Agency		0.4		—			0.4			—			—
State and local obligations		4.0		—			4.0			—			—
Corporate bonds		43.7		—			43.7			—			—
Foreign governments		0.1		—			0.1			—			—
Cash equivalents		6.8		6.8			—			—			—
Other		—		—			—			—			—
Total nuclear decommissioning trust		400.3		352.1			48.2			—			—
Self-insured health plan trust(b)
Equity securities		2.0		2.0			—			—			—
Debt securities		8.7		2.7			6.0			—			—
Cash and cash equivalents		1.8		1.8			—			—			—
Total self-insured health plan trust		12.5		6.5			6.0			—			—
Total		$	412.8	$	358.6		$	54.2		$	—		$	—
Other Evergy
Other Evergy investments
Equity securities(c)		$	31.4	$	—		$	31.4		$	—		$	—
Total other Evergy investments		31.4		—			31.4			—			—
Rabbi trusts
Core bond fund		12.5		12.5			—			—			—

Total rabbi trusts		12.5		12.5			—			—			—



Total		$	43.9	$	12.5		$	31.4		$	—		$	—
Evergy
Assets
Nuclear decommissioning trust(a)		$	768.7	$	658.7		$	48.2		$	—		$	61.8
Rabbi trusts		44.2		44.2			—			—			—
Self-insured health plan trust(b)		12.5		6.5			6.0			—			—
Other Evergy investments(c)		31.4		—			31.4			—			—
Total		$	856.8	$	709.4		$	85.6		$	—		$	61.8


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

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



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

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

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

(c)Fair value is based on quoted market prices adjusted for a discount for lack of marketability based on a valuation model due to a restriction on the sale of the stock.

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

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


	December 31, 2021				December 31, 2020				December 31, 2021
	Fair		Unfunded		Fair		Unfunded		Redemption	Length of
	Value		Commitments		Value		Commitments		Frequency	Settlement
Evergy Kansas Central	(millions)
Nuclear decommissioning trust:
Domestic equity funds	$	13.9	$	1.7	$	7.6	$	2.2	(a)	(a)
Alternative investments fund(b)	32.7		—		23.2		—		Quarterly	65 days
Real estate securities fund(b)	15.2		—		12.9		—		Quarterly	65 days
Total	$	61.8	$	1.7	$	43.7	$	2.2
Rabbi trust:
Core bond fund	$	—	$	—	$	25.6	$	—	(c)	(c)
Combination debt/equity/other fund	—		—		7.1		—		(c)	(c)
Total	$	—	$	—	$	32.7	$	—
Other Evergy
Rabbi trust:
Fixed income fund	$	—	$	—	$	13.1	$	—	(c)	(c)
Total Evergy investments at NAV	$	61.8	$	1.7	$	89.5	$	2.2

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

(b)There is a holdback on final redemptions.

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

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

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



		2021		2020		2019
Evergy	(millions)
Nuclear decommissioning trust - equity securities		$	101.8	$	45.5	74.0
Nuclear decommissioning trust - debt securities		(4.5)		5.3		5.1
Rabbi trusts - equity securities		(1.8)		(5.6)		3.1
Total		$	95.5	$	45.2	$	82.2
Evergy Kansas Central
Nuclear decommissioning trust - equity securities		$	50.5	$	21.9	33.3
Rabbi trust - equity securities		(1.4)		(6.1)		3.2
Total		$	49.1	$	15.8	$	36.5
Evergy Metro
Nuclear decommissioning trust - equity securities		$	51.3	$	23.6	40.7
Nuclear decommissioning trust - debt securities		(4.5)		5.3		5.1
Total		$	46.8	$	28.9	$	45.8

14. COMMITMENTS AND CONTINGENCIES

Environmental Matters

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

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

Clean Air Act - Startup, Shutdown and Malfunction (SSM) Regulation

In 2015, the EPA issued a final rule addressing how state implementation plans (SIPs) can treat excess emissions during SSM events. This rule was referred to as the 2015 SIP Call Rule. The rule required 36 states to submit SIP revisions by November 2016 to remove certain exemptions and other discretionary enforcement provisions that apply to excess emissions during SSM events. Legal challenges ensued and the case was eventually placed in abeyance. In December 2021, the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) restarted the 2015 SIP Call Rule litigation. The outcome of this case could result in required SIP revisions in Oklahoma, Kansas and Missouri which could have a material impact on the Evergy Companies.

Ozone Interstate Transport State Implementation Plans

In 2015, the EPA lowered the Ozone National Ambient Air Quality Standards (NAAQS) from 75 ppb to 70 ppb. Impacted states were required to submit Interstate Transport State Implementation Plans (ITSIPs) in 2018 to comply with the good neighbor provisions of the Clean Air Act. The EPA did not act on these ITSIP submissions and was challenged in a court filing in May 2021 to address them. In January 2022, the U.S. District Court for the Northern District of California entered a final consent decree between the EPA and various environmental groups requiring the EPA to approve or disapprove, in whole or in part, by February 28, 2022, the ITSIPs for the 2015 Ozone NAAQS, for twenty-one states including Kansas, Missouri and Oklahoma. For any ITSIP fully or partially

disapproved by the EPA along with a corresponding federal implementation plan (FIP) proposed by February 28, 2022, the consent decree requires the EPA to sign a final action on the ITSIP for the affected state by December 15, 2022. On January 25, 2022, the EPA transmitted a proposed FIP to the Office of Management and Budget for review. On February 8, 2022, the EPA published a proposed approval of the Kansas ITSIP in the Federal Register. On February 22, 2022, the EPA published proposed disapprovals of ITSIPs for nineteen states including Missouri and Oklahoma. The EPA is also in the process of reconsidering the 2020 Ozone NAAQS and the 2020 PM2.5 NAAQS. Due to uncertainty regarding the disposition of these 2015 Ozone NAAQS ITSIPs for Kansas, Missouri and Oklahoma, along with potential lowering of the 2020 NAAQS, the Evergy Companies cannot determine the impacts on their operations or consolidated financial results, but the cost to comply with a FIP or a lower future NAAQS could be material.

Regional Haze Rule

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

Greenhouse Gases

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

In July 2019, the EPA published the final Affordable Clean Energy (ACE) rule in the Federal Register. This rule contained emission guidelines for GHG emissions from existing electric utility generating units (EGUs) and revisions to emission guideline implementing regulations. The rule defined the "best system of emission reduction" (BSER) for GHG emissions from existing coal-fired EGUs as on-site, heat-rate efficiency improvements. In conjunction with the finalization of the ACE rule, the EPA repealed its previously adopted Clean Power Plan (CPP). In January 2021, the D.C. Circuit vacated and remanded the ACE rule back to the EPA. In October 2021, the Supreme Court granted petitions for certiorari to review the D.C. Circuit decision to vacate and remand the ACE rule. A ruling from the Supreme Court is expected in mid-2022.

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

Water

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

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

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

After reviewing the Navigable Waters Protection Rule as directed by President Biden's administration, the EPA and Department of the Army determined a need to revise the definition to prevent environmental degradation. In December 2021, the EPA and the Department of the Army published a proposed rule that repeals the Navigable Waters Protection Rule and revises the definition of “Waters of the United States.” This proposed rule restores definitions of Waters of the United States that were in place prior to 2015. The Evergy Companies are reviewing the proposed rule and the impact on their operations or consolidated financial results could be material. A second rulemaking is expected in the future which will replace the Navigable Waters Protection Rule. The cost to comply with any future rulemaking that replaces the Navigable Waters Protection Rule could be material to the Evergy Companies.

Regulation of Coal Combustion Residuals

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

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

Nuclear Insurance

Nuclear liability, property and accidental outage insurance is maintained for Wolf Creek. These policies contain certain industry standard terms, conditions and exclusions, including, but not limited to, ordinary wear and tear and war. An industry aggregate limit of $3.2 billion for nuclear events ($1.8 billion of non-nuclear events) plus any reinsurance, indemnity or any other source recoverable by Nuclear Electric Insurance Limited (NEIL), provider of property and accidental outage insurance, exists for acts of terrorism affecting Wolf Creek or any other NEIL insured plant within 12 months from the date of the first act. In addition, participation is required in industry-wide retrospect assessment programs as discussed below.

Nuclear Liability Insurance

Pursuant to the Price-Anderson Act, liability insurance includes coverage against public nuclear liability claims resulting from nuclear incidents to the required limit of public liability, which is approximately $13.6 billion. This limit of liability consists of the maximum available commercial insurance of $0.5 billion and the remaining $13.1 billion is provided through mandatory participation in an industry-wide retrospective assessment program. Under this retrospective assessment program, the owners of Wolf Creek are jointly and severally subject to an assessment of up to $137.6 million (Evergy's share is $129.4 million and each of Evergy Kansas Central's and Evergy Metro's is $64.7 million), payable at no more than $20.5 million (Evergy's share is $19.2 million and each of Evergy Kansas Central's and Evergy Metro's is $9.6 million) per incident per year per reactor for any commercial U.S. nuclear reactor qualifying incident. Both the total and yearly assessment is subject to an inflationary adjustment based on the Consumer Price Index and applicable premium taxes. In addition, the U.S. Congress could impose additional revenue-raising measures to pay claims.

Nuclear Property and Accidental Outage Insurance

The owners of Wolf Creek carry decontamination liability, nuclear property damage and premature nuclear decommissioning liability insurance for Wolf Creek totaling approximately $2.8 billion. Insurance coverage for non-nuclear property damage accidents total approximately $2.3 billion. In the event of an extraordinary nuclear accident, insurance proceeds must first be used for reactor stabilization and site decontamination in accordance with a plan mandated by the NRC. The Evergy Companies' share of any remaining proceeds can be used to pay for property damage or, if certain requirements are met, including decommissioning the plant, toward a shortfall in the nuclear decommissioning trust fund. The owners also carry additional insurance with NEIL to help cover costs of replacement power and other extra expenses incurred during a prolonged outage resulting from accidental property damage at Wolf Creek. If significant losses were incurred at any of the nuclear plants insured under the NEIL policies, the owners of Wolf Creek may be subject to retrospective assessments under the current policies of approximately $30.0 million (Evergy's share is $28.2 million and each of Evergy Kansas Central's and Evergy Metro's is $14.1 million).

Nuclear Insurance Considerations

Although the Evergy Companies maintain various insurance policies to provide coverage for potential losses and liabilities resulting from an accident or an extended outage, the insurance coverage may not be adequate to cover the costs that could result from a catastrophic accident or extended outage at Wolf Creek. Any substantial losses not covered by insurance, to the extent not recoverable in prices, would have a material effect on the Evergy Companies' consolidated financial results.

Contractual Commitments - Fuel and Power

The Evergy Companies' contractual commitments for fuel and power at December 31, 2021 are detailed in the following tables. See Notes 9, 12 and 20 for information regarding pension, long-term debt and lease commitments, respectively.


Evergy
	2022		2023		2024		2025		2026		After 2026			Total
Purchase commitments	(millions)
Fuel	$	403.1	$	183.5	$	130.2	$	100.4	$	106.7		$	221.1		$	1,145.0
Power	63.0		63.6		58.0		58.4		58.4			294.2			595.6

Total fuel and power commitments	$	466.1	$	247.1	$	188.2	$	158.8	$	165.1		$	515.3		$	1,740.6


Evergy Kansas Central
	2022		2023		2024		2025		2026		After 2026			Total
Purchase commitments	(millions)
Fuel	$	232.4	$	102.6	$	83.3	$	69.4	$	72.6		$	121.3		$	681.6
Power	0.9		0.9		0.9		0.9		0.9			3.6			8.1

Total fuel and power commitments	$	233.3	$	103.5	$	84.2	$	70.3	$	73.5		$	124.9		$	689.7


Evergy Metro
	2022		2023		2024		2025		2026		After 2026			Total
Purchase commitments	(millions)
Fuel	$	145.3	$	73.7	$	43.3	$	28.4	$	31.4		$	99.8		$	421.9
Power	35.1		35.3		29.2		29.2		29.2			166.9			324.9

Total fuel and power commitments	$	180.4	$	109.0	$	72.5	$	57.6	$	60.6		$	266.7		$	746.8

Fuel commitments consist of commitments for nuclear fuel, coal and coal transportation. Power commitments consist of certain commitments for renewable energy under power purchase agreements, capacity purchases and firm transmission service.

15. GUARANTEES

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, 2021, Evergy has provided $904.0 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 $856.0 million, which includes debt with maturity dates ranging from 2022 to 2043.

Evergy has also guaranteed Evergy Missouri West's commercial paper program. At December 31, 2021, Evergy Missouri West had $395.3 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.

16. RELATED PARTY TRANSACTIONS AND RELATIONSHIPS

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

Jointly-Owned Plants and Shared Services

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

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



		2021		2020		2019
	(millions)
Evergy Kansas Central billings to Evergy Missouri West		$	32.5	$	37.6	$	24.9
Evergy Metro billings to Evergy Missouri West		142.1		168.7		172.8
Evergy Kansas Central billings to Evergy Metro		29.4		34.7		40.6
Evergy Metro billings to Evergy Kansas Central		134.7		130.8		154.9

Money Pool

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

At December 31, 2021, Evergy Metro had a $155.0 million outstanding receivable from Evergy Missouri West under the money pool. At December 31, 2020, Evergy Metro had a $100.0 million outstanding receivable from Evergy Missouri West under the money pool.

Related Party Net Receivables and Payables

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



	December 31
	2021		2020
Evergy Kansas Central	(millions)
Net receivable from (payable to) Evergy	$	(2.2)	$	0.1
Net payable to Evergy Metro	(14.5)		(21.7)
Net receivable from Evergy Missouri West	10.4		6.6

Evergy Metro
Net receivable from Evergy	$	8.7	$	15.7
Net receivable from Evergy Kansas Central	14.5		21.7
Net receivable from Evergy Missouri West	254.5		188.1

Tax Allocation Agreement

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



	December 31
	2021		2020
Evergy Kansas Central	(millions)
Income taxes receivable from Evergy	$	9.6	$	25.3

Evergy Metro
Income taxes receivable from (payable to) Evergy	$	(2.5)	$	3.2

17. SHAREHOLDERS' EQUITY

Evergy's authorized capital stock consists of 600 million shares of common stock, without par value, and 12 million shares of Preference Stock, without par value.

Bluescape Energy Partners, LLC (Bluescape) Securities Purchase Agreement

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

Evergy Registration Statements

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

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

Evergy has registered shares of its common stock with the SEC for the Evergy, Inc. 401(k) Savings Plan. Shares issued under the plan may be either newly issued shares or shares purchased on the open market.

Dividend Restrictions

Evergy depends on its subsidiaries to pay dividends on its common stock. The Evergy Companies have certain restrictions stemming from statutory requirements, corporate organizational documents, covenants and other conditions that could affect dividend levels or the ability to pay dividends.

The KCC order authorizing the merger transaction requires Evergy to maintain consolidated common equity of at least 35% of total consolidated capitalization.

Under the Federal Power Act, Evergy Kansas Central, Evergy Metro and Evergy Missouri West generally can pay dividends only out of retained earnings. Certain conditions in the MPSC and KCC orders authorizing the merger transaction also require Evergy Kansas Central and Evergy Metro to maintain consolidated common equity of at least 40% of total capitalization. Other conditions in the MPSC and KCC merger orders require Evergy Kansas

Central, Evergy Metro and Evergy Missouri West to maintain credit ratings of at least investment grade. If Evergy Kansas Central's, Evergy Metro's or Evergy Missouri West's credit ratings are downgraded below the investment grade level as a result of their affiliation with Evergy or any of Evergy's affiliates, the impacted utility shall not pay a dividend to Evergy without KCC or MPSC approval or until the impacted utility's investment grade credit rating has been restored.

The master credit facility of Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West and the note purchase agreements for certain Evergy Missouri West senior notes contain covenants requiring the respective company to maintain a consolidated indebtedness to consolidated total capitalization ratio of not more than 0.65 to 1.00 at all times.

As of December 31, 2021, all of Evergy's and Evergy Kansas Central's retained earnings and net income were free of restrictions and Evergy Metro had a retained earnings restriction of $386.9 million. As of December 31, 2021, Evergy's subsidiaries had restricted net assets of approximately $5.7 billion. These restrictions are not expected to affect the Evergy Companies' ability to pay dividends at the current level for the foreseeable future.

18. VARIABLE INTEREST ENTITIES

In determining the primary beneficiary of a VIE, the Evergy Companies assess the entity's purpose and design, including the nature of the entity's activities and the risks that the entity was designed to create and pass through to its variable interest holders. A reporting enterprise is deemed to be the primary beneficiary of a VIE if it has (a) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. The trust holding an 8% interest in JEC was a VIE until the expiration of a purchase option in July 2017 and then became a VIE again during 2019 until the 8% interest was purchased by Evergy Kansas Central in August 2019. The trust holding Evergy Kansas Central's 50% interest in La Cygne Unit 2 is a VIE and Evergy Kansas Central remains the primary beneficiary of the trust.

All involvement with entities by the Evergy Companies is assessed to determine whether such entities are VIEs and, if so, whether or not the Evergy Companies are the primary beneficiaries of the entities. The Evergy Companies also continuously assess whether they are the primary beneficiary of the VIE with which they are involved. Prospective changes in facts and circumstances may cause identification of the primary beneficiary to be reconsidered.

8% Interest in JEC

Under an agreement that expired in August 2019, Evergy Kansas Central leased an 8% interest in JEC from a trust. The trust was financed with an equity contribution from an owner participant and debt issued by the trust. The trust was created specifically to purchase the 8% interest in JEC and lease it to a third party and did not hold any other assets. Evergy Kansas Central met the requirements to be considered the primary beneficiary of the trust until July 2017, when a contractual option to purchase the 8% interest in the plant covered by the lease expired. Accordingly, Evergy Kansas Central deconsolidated the trust in 2017. Evergy Kansas Central then reconsolidated the trust as a VIE in the first quarter of 2019 following an agreement with the owner to purchase the 8% interest in JEC from the trust in August 2019. Evergy Kansas Central deconsolidated the trust for the final time following the closing of this purchase in August 2019.

50% Interest in La Cygne Unit 2

Under an agreement that expires in September 2029, Evergy Kansas Central entered into a sale-leaseback transaction with a trust under which the trust purchased Evergy Kansas Central's 50% interest in La Cygne Unit 2 and subsequently leased it back to Evergy Kansas Central. The trust was financed with an equity contribution from an owner participant and debt issued by the trust. The trust was created specifically to purchase the 50% interest in La Cygne Unit 2 and lease it back to Evergy Kansas Central and does not hold any other assets. Evergy Kansas Central meets the requirements to be considered the primary beneficiary of the trust. In determining the primary beneficiary of the trust, Evergy Kansas Central concluded that the activities of the trust that most significantly impact its economic performance and that Evergy Kansas Central has the power to direct include (1) the operation

and maintenance of the 50% interest in La Cygne Unit 2 and (2) Evergy Kansas Central's ability to exercise a purchase option at the end of the agreement at the lesser of fair value or a fixed amount. Evergy Kansas Central has the potential to receive benefits from the trust that could potentially be significant if the fair value of the 50% interest in La Cygne Unit 2 at the end of the agreement is greater than the fixed amount.

The following table summarizes the assets and liabilities related to the VIE described above that are recorded on Evergy's and Evergy Kansas Central's consolidated balance sheets.


	December 31
	2021		2020
Assets:	(millions)
Property, plant and equipment of variable interest entities, net	$	147.8	$	154.9
Liabilities:
Current maturities of long-term debt of variable interest entities	$	—	$	18.8
Accrued interest(a)	—		0.1

(a)Included in accrued interest on Evergy's and Evergy Kansas Central's consolidated balance sheets.

All of the liabilities noted in the table above relate to the purchase of the property, plant and equipment of the VIE. The assets of the VIE can be used only to settle obligations of the VIE and the VIE's debt holders have no recourse to the general credit of Evergy and Evergy Kansas Central. Evergy and Evergy Kansas Central have not provided financial or other support to the VIE and are not required to provide such support. Evergy and Evergy Kansas Central did not record any gain or loss upon the initial consolidation of the VIE.

19. TAXES

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


Evergy	2021		2020		2019
Current income taxes	(millions)
Federal	$	15.6	$	(26.8)	$	(39.5)
State	(0.4)		2.1		15.0
Total	15.2		(24.7)		(24.5)
Deferred income taxes
Federal	92.8		73.1		93.2
State	14.7		59.8		27.5
Total	107.5		132.9		120.7





Investment tax credit
Deferral	0.4		—		5.2
Amortization	(5.7)		(6.0)		(4.4)
Total	(5.3)		(6.0)		0.8
Income tax expense	$	117.4	$	102.2	$	97.0


Evergy Kansas Central	2021		2020		2019
Current income taxes	(millions)
Federal	$	53.3	$	14.5	$	37.9
State	(0.2)		(5.3)		2.6
Total	53.1		9.2		40.5
Deferred income taxes
Federal	3.8		(16.7)		(8.9)
State	(1.2)		168.1		18.4
Total	2.6		151.4		9.5




Investment tax credit
Deferral	0.3		—		5.2
Amortization	(4.3)		(4.8)		(3.1)
Total	(4.0)		(4.8)		2.1
Income tax expense	$	51.7	$	155.8	$	52.1


Evergy Metro	2021		2020		2019
Current income taxes	(millions)
Federal	$	39.2	$	(0.2)	$	43.9
State	3.2		10.8		22.4
Total	42.4		10.6		66.3
Deferred income taxes
Federal	6.5		29.8		(24.5)
State	4.8		(32.2)		(5.0)
Total	11.3		(2.4)		(29.5)




Investment tax credit

Amortization	(1.3)		(1.1)		(1.1)
Total	(1.3)		(1.1)		(1.1)
Income tax expense	$	52.4	$	7.1	$	35.7

Effective Income Tax Rates

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


Evergy	2021		2020		2019
Federal statutory income tax	21.0	%	21.0	%	21.0	%
COLI policies	(1.0)		(1.6)		(1.8)
State income taxes	1.0		4.3		5.0
Flow through depreciation for plant-related differences	(5.4)		(5.3)		(4.5)
Federal tax credits	(2.8)		(4.6)		(4.9)
Non-controlling interest	(0.3)		(0.3)		(0.4)
AFUDC equity	(0.6)		(0.5)		(0.1)
Amortization of federal investment tax credits	(0.4)		(0.6)		(0.5)
Changes in uncertain tax positions, net	—		—		(0.2)
Federal or state tax rate change	—		1.9		—
Valuation allowance	—		(0.2)		(1.0)
Stock compensation	—		(0.1)		0.1
Officer compensation limitation	0.5		0.2		0.1
Other	(0.4)		(0.2)		(0.4)
Effective income tax rate	11.6	%	14.0	%	12.4	%


Evergy Kansas Central	2021		2020		2019
Federal statutory income tax	21.0	%	21.0	%	21.0	%
COLI policies	(1.7)		(2.8)		(3.3)
State income taxes	(0.4)		3.8		5.3
Flow through depreciation for plant-related differences	(3.0)		(0.1)		(0.1)
Federal tax credits	(5.0)		(7.1)		(7.4)
Non-controlling interest	(0.5)		(0.6)		(0.8)
AFUDC equity	(0.6)		(0.5)		(0.1)
Amortization of federal investment tax credits	(0.5)		(0.7)		(0.7)
Changes in uncertain tax positions, net	—		—		(0.4)
Federal or state tax rate change	—		27.8		—
Valuation allowance	—		—		(0.4)
Stock compensation	(0.1)		(0.1)		(0.1)
Officer compensation limitation	0.3		—		—
Other	(0.1)		(0.9)		(0.3)
Effective income tax rate	9.4	%	39.8	%	12.7	%


Evergy Metro	2021		2020		2019
Federal statutory income tax	21.0	%	21.0	%	21.0	%
COLI policies	(0.2)		(0.3)		(0.2)
State income taxes	1.7		4.9		4.7
Flow through depreciation for plant-related differences	(7.8)		(10.0)		(9.4)
Federal tax credits	(0.2)		(1.9)		(2.5)
AFUDC equity	(0.7)		(0.5)		(0.2)
Amortization of federal investment tax credits	(0.4)		(0.4)		(0.4)

Federal or state tax rate change	—		(10.5)		—

Stock compensation	—		(0.4)		—
Officer compensation limitation	0.9		0.4		0.3
Other	0.1		—		(1.0)
Effective income tax rate	14.4	%	2.3	%	12.3	%

Deferred Income Taxes

The tax effects of major temporary differences resulting in deferred income tax assets (liabilities) in the consolidated balance sheets is in the following table.


	December 31
	2021						2020
	Evergy		Evergy Kansas Central		Evergy Metro		Evergy		Evergy Kansas Central		Evergy Metro
Deferred tax assets:	(millions)
Tax credit carryforward	$	375.2	$	206.3	$	162.1	$	379.6	$	176.5	$	195.9
Income taxes refundable to customers, net	336.6		168.5		123.8		418.2		237.5		132.8
Deferred employee benefit costs	158.3		84.8		86.8		227.6		105.4		117.9
Net operating loss carryforward	40.2		—		—		51.0		—		0.2
Deferred state income taxes	146.9		101.0		38.6		145.9		101.7		37.8

Accrued liabilities	157.6		71.3		56.4		152.7		61.8		61.0
Other	200.0		100.6		59.6		181.0		91.4		44.8
Total deferred tax assets before valuation allowance	1,414.8		732.5		527.3		1,556.0		774.3		590.4
Valuation allowances	(12.8)		—		—		(14.4)		—		—
Total deferred tax assets, net	1,402.0		732.5		527.3		1,541.6		774.3		590.4
Deferred tax liabilities:
Plant-related	(2,701.1)		(1,308.7)		(996.7)		(2,693.7)		(1,341.2)		(972.1)
Deferred employee benefit costs	(96.8)		(52.9)		(43.5)		(171.4)		(75.6)		(76.3)
ARO regulatory assets	(133.7)		(53.9)		(49.9)		(136.7)		(49.9)		(54.3)
Acquisition premium	(43.9)		(43.9)		—		(46.9)		(46.9)		—
Other regulatory assets	(152.1)		(53.3)		(20.4)		(28.8)		(2.8)		(16.4)
Other	(136.3)		(87.7)		(22.9)		(128.9)		(82.4)		(30.1)
Total deferred tax liabilities	(3,263.9)		(1,600.4)		(1,133.4)		(3,206.4)		(1,598.8)		(1,149.2)
Net deferred income tax liabilities	$	(1,861.9)	$	(867.9)	$	(606.1)	$	(1,664.8)	$	(824.5)	$	(558.8)

Tax Credit Carryforwards

At December 31, 2021 and 2020, Evergy had $373.6 million and $379.6 million, respectively, of federal general business income tax credit carryforwards. At December 31, 2021 and 2020, Evergy Kansas Central had $204.7 million and $176.5 million, respectively, of federal general business income tax credit carryforwards. At December 31, 2021 and 2020, Evergy Metro had $162.1 million and $195.9 million, respectively, of federal general business income tax credit carryforwards. The carryforwards for Evergy, Evergy Kansas Central and Evergy Metro relate primarily to wind production tax credits and advanced coal investment tax credits and expire in the years 2022 to 2041. Approximately $0.1 million of Evergy's credits are related to Low Income Housing credits that were acquired in Great Plains Energy's acquisition of Evergy Missouri West. Due to federal limitations on the utilization of income tax attributes acquired in the Evergy Missouri West acquisition, Evergy expects a portion of these credits to expire unutilized and has provided a valuation allowance against $0.1 million of the federal income tax benefit.

The year of origin of Evergy's, Evergy Kansas Central's and Evergy Metro's related tax benefit amounts for federal tax credit carryforwards as of December 31, 2021 are detailed in the following table.


	Amount of Benefit
Year of Origin	Evergy		Evergy Kansas Central		Evergy Metro
	(millions)


2004	0.1		—		—
2005	0.1		—		—
2006	0.1		—		—
2007	0.1		—		—
2009	38.2		0.2		37.9
2010	18.3		—		18.2
2011	13.3		—		13.2
2012	12.8		2.0		10.7
2013	24.3		11.3		12.9
2014	24.1		10.7		13.0
2015	24.7		10.9		13.2
2016	27.1		11.0		12.4
2017	43.9		35.1		8.2
2018	43.9		36.3		7.5
2019	37.7		30.9		6.7
2020	35.9		28.3		7.4
2021	29.0		28.0		0.8
	$	373.6	$	204.7	$	162.1

Net Operating Loss Carryforwards

At December 31, 2021 and 2020, Evergy had $33.6 million and $42.2 million, respectively, of tax benefits related to federal net operating loss (NOL) carryforwards. Approximately $7.1 million of Evergy's tax benefits at December 31, 2021 are related to NOLs that were acquired in the Evergy Missouri West acquisition. Due to federal limitations on the utilization of income tax attributes acquired in the Evergy Missouri West acquisition, Evergy expects a portion of these federal NOL carryforwards to expire unutilized and has provided a valuation allowance against $7.1 million of the federal income tax benefit. The federal NOL carryforwards expire in years 2023 to 2024.

The year of origin of Evergy's related tax benefit amounts for federal NOL carryforwards as of December 31, 2021 are detailed in the following table.


Year of Origin	Amount of Benefit
	(millions)




2005	$	1.9
2006	31.7
	$	33.6

In addition, Evergy also had deferred tax benefits of $6.6 million and $8.8 million related to state NOLs as of December 31, 2021 and 2020, respectively. Evergy Metro had deferred tax benefits of $0.2 million related to state NOLs as of 2020. The state NOL carryforwards expire in years 2022 to 2038. Evergy does not expect to utilize $5.6 million of NOLs before the expiration date of the carryforwards of NOLs in certain states. Therefore, a valuation allowance has been provided against $5.6 million of state tax benefits.

Alternative Minimum Tax (AMT) Carryforwards

At December 31, 2021, Evergy and Evergy Kansas Central had $1.6 million of federal AMT carryforwards.

Valuation Allowances

Evergy is required to assess the ultimate realization of deferred tax assets using a "more likely than not" assessment threshold. This assessment takes into consideration tax planning strategies within Evergy's control. As a result of this assessment, Evergy has established a partial valuation allowance for federal and state tax NOL carryforwards and tax credit carryforwards. During 2021, $1.5 million of tax benefit was recorded in continuing operations primarily related to utilization or expiration of certain state NOL carryforwards.

Uncertain Tax Positions

Evergy is considered open to U.S. federal examination for years after 2009 due to the carryforward of net operating losses and general business income tax credits. With few exceptions, Evergy is no longer subject to state and local tax examinations by tax authorities for years before 2016. As of December 31, 2021, Evergy does not have any significant income tax issues under examination.

Kansas Tax Reform

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

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

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

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

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

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

20. LEASES

The Evergy Companies lease office buildings, computer equipment, vehicles, rail cars, generating plant and other property and equipment, including 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 the other owners' proportionate share of the costs. Under GAAP, a contract is or contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Evergy Companies assess a contract as being or containing a lease if the contract identifies property, plant and equipment, provides the lessee the right to obtain substantially all of the economic benefits from use of the property, plant and equipment and provides the lessee the right to direct the use of the property, plant and equipment.

The Evergy Companies have entered into several agreements to purchase energy through renewable purchase power agreements that are accounted for as leases that commenced prior to the application of Topic 842-Leases. Due to the intermittent nature of renewable generation, these leases have significant variable lease payments not included in the initial and subsequent measurement of the lease liability. Variable lease payments are expensed as incurred. In addition, certain other contracts contain payment for activity that transfers a separate good or service such as utilities or common area maintenance. The Evergy Companies have elected a practical expedient permitted by GAAP to not separate such components of the lease from other lease components for all leases.

The Evergy, Evergy Kansas Central and Evergy Metro leases have remaining terms ranging from 1 to 17 years, 1 to 17 years and 1 to 11 years, respectively. Leases that have original lease terms of twelve months or less are not recognized on the Evergy Companies’ balance sheets. Some leases have options to renew the lease or terminate early at the election of the Evergy Companies. Judgment is applied at lease commencement to determine the reasonably certain lease term based on then-current assumptions about use of the leased asset, market conditions and terms in the contract. The judgment applied to determine the lease term can significantly impact the measurement of the lease liability and right-of-use asset and lease classification.

The Evergy Companies typically discount lease payments over the term of the lease using their incremental borrowing rates at lease commencement to measure its initial and subsequent lease liability. For leases that existed at the initial application of Topic 842, the Evergy Companies used the incremental borrowing rates that corresponded to the remaining lease term as of January 1, 2019.

Leases may be classified as either operating leases or finance leases. The lease classification is based on assumptions of the lease term and discount rate, as discussed above, and the fair market value and economic life of the leased asset. Operating leases recognize a consistent expense each period over the lease term, while finance leases will result in the separate presentation of interest expense on the lease liability and amortization of the right-of-use asset. Finance leases are treated as operating leases for rate-making purposes and as such, the Evergy Companies defer to a regulatory asset or liability any material differences between expense recognition and the timing of payments in order to match what is being recovered in customer rates.

The Evergy Companies’ lease expense is detailed in the following table.


Evergy	2021		2020		2019
Finance lease costs	(millions)
Amortization of right-of-use assets	$	5.1	$	7.7	$	5.2
Interest on lease liabilities	2.5		3.1		2.9
Operating lease costs	21.8		22.9		23.8
Short-term lease costs	5.9		2.1		4.0
Variable lease costs for renewable purchase power agreements	280.3		296.6		313.0
Total lease costs	$	315.6	$	332.4	$	348.9


Evergy Kansas Central	2021		2020		2019
Finance lease costs	(millions)
Amortization of right-of-use assets	$	4.5	$	7.2	$	5.0
Interest on lease liabilities	2.4		2.8		2.7
Operating lease costs	12.9		11.9		13.2
Short-term lease costs	1.8		0.5		1.2
Variable lease costs for renewable purchase power agreements	145.8		135.6		130.8
Total lease costs	$	167.4	$	158.0	$	152.9


Evergy Metro	2021		2020		2019
Finance lease costs	(millions)
Amortization of right-of-use assets	$	0.4	$	0.3	$	0.1
Interest on lease liabilities	0.1		0.1		0.1
Operating lease costs	9.0		9.3		9.2
Short-term lease costs	3.0		1.5		2.6
Variable lease costs for renewable purchase power agreements	101.0		112.2		129.2
Total lease costs	$	113.5	$	123.4	$	141.2

Supplemental cash flow information related to the Evergy Companies' leases is detailed in the following table.


Evergy	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:	(millions)
Operating cash flows from operating leases	$	20.7	$	22.2	$	21.7
Operating cash flows from finance leases	2.6		2.8		2.8
Financing cash flows from finance leases	5.3		5.6		5.0
Right-of-use assets obtained in exchange for new operating lease liabilities	16.4		6.9		10.4
Right-of-use assets obtained in exchange for new finance lease liabilities	1.4		5.6		8.3


Evergy Kansas Central	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:	(millions)
Operating cash flows from operating leases	$	11.8	$	12.9	$	13.7
Operating cash flows from finance leases	2.4		2.5		2.6
Financing cash flows from finance leases	4.7		5.1		4.8
Right-of-use assets obtained in exchange for new operating lease liabilities	7.1		6.6		6.1
Right-of-use assets obtained in exchange for new finance lease liabilities	1.4		4.0		8.3


Evergy Metro	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:	(millions)
Operating cash flows from operating leases	$	10.4	$	10.8	$	9.9
Operating cash flows from finance leases	0.1		0.1		0.1
Financing cash flows from finance leases	0.5		0.4		0.1
Right-of-use assets obtained in exchange for new operating lease liabilities	9.3		0.3		2.4
Right-of-use assets obtained in exchange for new finance lease liabilities	—		1.6		—

Finance Leases

Right-of-use assets for finance leases are included in property, plant and equipment on the Evergy Companies’ balance sheets. Lease liabilities for finance leases are included in other current and other long-term liabilities. Payments and other supplemental information for finance leases as of December 31, 2021, are detailed in the following table.


	Evergy			Evergy Kansas Central			Evergy Metro
	(millions)
2022	$	7.8		$	7.1		$	0.6
2023	6.7			5.9			0.6
2024	5.5			4.7			0.6
2025	4.7			4.2			0.3
2026	4.4			3.9			0.2
After 2026	38.5			37.8			0.3
Total finance lease payments	67.6			63.6			2.6
Amounts representing imputed interest	(21.3)			(20.6)			(0.4)
Present value of lease payments	46.3			43.0			2.2
Less: current portion	(5.4)			(4.9)			(0.5)
Total long-term obligations under finance leases	$	40.9		$	38.1		$	1.7

Right-of-use assets under finance leases included in property, plant and equipment, net on the consolidated balance sheets	$	310.3		$	50.6		$	2.2

Weighted-average remaining lease term (years)	13.3			13.9			5.0
Weighted-average discount rate	5.6		%	5.6		%	5.1		%

Operating Leases

Right-of-use assets for operating leases are included in other long-term assets on the Evergy Companies’ balance sheets. Lease liabilities for operating leases are included in other current and other long-term liabilities. Lease payments and other supplemental information for operating leases as of December 31, 2021, are detailed in the following table.


	Evergy			Evergy Kansas Central			Evergy Metro
	(millions)
2022	$	18.8		$	9.4		$	9.2
2023	15.3			6.5			8.6
2024	12.5			4.3			7.9
2025	8.5			2.2			6.4
2026	5.9			0.7			5.4
After 2026	30.3			0.1			30.3
Total operating lease payments	91.3			23.2			67.8
Amounts representing imputed interest	(7.3)			(1.0)			(6.3)
Present value of lease payments	84.0			22.2			61.5
Less: current portion	(17.1)			(9.0)			(8.0)
Total long-term obligations under operating leases	$	66.9		$	13.2		$	53.5

Right-of-use assets under operating leases included in other assets on the consolidated balance sheets	$	90.7		$	29.0		$	46.7

Weighted-average remaining lease term (years)	7.6			3.0			9.3
Weighted-average discount rate	2.2		%	2.4		%	2.1		%

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