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

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

EVERGY, INC.

EXECUTIVE SUMMARY

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

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

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

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

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

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

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

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. 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. As part of the February 2021 winter weather event, Evergy incurred natural gas and purchased power costs, net of wholesale revenues, of $349.7 million. This $349.7 million of net fuel and purchased power costs was primarily driven by $293.4 million of costs at Evergy Missouri West and $127.9 million of costs at Evergy Kansas Central, partially offset by $71.6 million of net wholesale revenues at Evergy Metro. The amount of purchased power costs incurred by the Evergy Companies during the February 2021 winter weather event is subject to resettlement activity and further review by the SPP. This review and any subsequent resettlement activity could result in increases or decreases to the final amount of purchased power costs incurred by the Evergy Companies during the February 2021 winter weather event and these changes could be material.

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

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

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

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

Transforming Evergy's Generation Fleet

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

LEC Unit 4 Securitization

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

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

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

Evergy Equity Investment

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

Bluescape Securities Purchase Agreement

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

Impact of COVID-19

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

Regulatory Proceedings

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

Earnings Overview

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

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

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

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

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

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

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

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

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

Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are intended to enhance an investor's overall understanding of results. Management believes that adjusted earnings (non-GAAP) provides a meaningful basis for evaluating Evergy's operations across periods because it excludes certain items that management does not believe are indicative of Evergy's ongoing performance. Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are used internally to measure performance against budget and in reports for management and the Evergy Board. Adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) are financial measures that are not calculated in accordance with GAAP and may not be comparable to other companies' presentations or more useful than the GAAP information provided elsewhere in this report.

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

			Earnings (Loss)						Earnings (Loss) per Diluted Share						Earnings (Loss)						Earnings (Loss) per Diluted Share
Three Months Ended September 30			2021												2020
			(millions, except per share amounts)
Net income attributable to Evergy, Inc.			$	449.4					$	1.95					$	364.5					$	1.60
Non-GAAP reconciling items:
Non-regulated energy marketing costs related to February 2021 winter weather event, pre-tax(b)			1.9						0.01						—						—
Executive transition costs, pre-tax(c)			3.3						0.02						—						—
Severance costs, pre-tax(d)			—						—						28.7						0.13
Advisor expenses, pre-tax(e)			1.2						—						9.7						0.04
Income tax benefit(f)			(1.0)						—						(9.6)						(0.04)
Adjusted earnings (non-GAAP)			$	454.8					$	1.98					$	393.3					$	1.73

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

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

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

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

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

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

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

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

Wolf Creek Refueling Outage

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

ENVIRONMENTAL MATTERS

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

RELATED PARTY TRANSACTIONS

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

EVERGY RESULTS OF OPERATIONS

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

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

Evergy Utility Gross Margin and MWh Sales

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Operating and Maintenance

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Depreciation and Amortization

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

Taxes Other Than Income Tax

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

Other Income (Expense), Net

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

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

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

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

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

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

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

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

Interest Expense

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

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

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

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

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

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

Income Tax Expense

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

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

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

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

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

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

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

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

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

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

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

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

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

LIQUIDITY AND CAPITAL RESOURCES

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

Short-Term Borrowings

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

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

Significant Debt Issuances

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

Equity Issuance

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

Shelf Registration Statements and Regulatory Authorizations

Evergy

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

Evergy Kansas Central

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

Evergy Metro

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

Capital Expenditures

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

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

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

Pensions

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

Debt Covenants

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

Off-Balance Sheet Arrangements

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

Cash Flows

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

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

Cash Flows from Operating Activities

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

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

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

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

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

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

Cash Flows used in Investing Activities

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

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

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

Cash Flows from (used in) Financing Activities

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

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

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

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

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

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

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

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

EVERGY KANSAS CENTRAL, INC.

MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

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

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

Year to Date September 30			2021						Change						2020
			(millions)
Operating revenues			$	2,277.4					$	412.9					$	1,864.5
Fuel and purchased power			543.7						213.8						329.9
SPP network transmission costs			216.8						19.0						197.8
Operating and maintenance			387.9						11.6						376.3
Depreciation and amortization			349.1						10.1						339.0
Taxes other than income tax			153.2						8.1						145.1
Income from operations			626.7						150.3						476.4
Other expense, net			(2.4)						9.8						(12.2)
Interest expense			120.2						(7.5)						127.7
Income tax expense			45.7						(103.5)						149.2
Equity in earnings of equity method investees, net of income taxes			3.0						(0.4)						3.4
Net income			461.4						270.7						190.7
Less: Net income attributable to noncontrolling interests			9.1						0.4						8.7
Net income attributable to Evergy Kansas Central, Inc.			$	452.3					$	270.3					$	182.0

Evergy Kansas Central Utility Gross Margin and MWh Sales

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

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

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

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

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

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

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

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

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

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

Evergy Kansas Central Operating and Maintenance

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

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

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

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

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

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

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

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

Evergy Kansas Central Depreciation and Amortization

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

Evergy Kansas Central Other Income (Expense), Net

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

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

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

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

Evergy Kansas Central Interest Expense

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

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

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

Evergy Kansas Central Income Tax Expense

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

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

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

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

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

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

EVERGY METRO, INC.

MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

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

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

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

Evergy Metro Utility Gross Margin and MWh Sales

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

			Revenues and Expenses																		MWhs Sold
Year to Date September 30			2021						Change						2020						2021						Change						2020
Retail revenues			(millions)																		(thousands)
Residential			$	550.6					$	(21.6)					$	572.2					4,412						163						4,249
Commercial			542.5						(15.6)						558.1						5,572						212						5,360
Industrial			91.9						(7.7)						99.6						1,249						(30)						1,279
Other retail revenues			7.7						(1.2)						8.9						53						(1)						54
Total electric retail			1,192.7						(46.1)						1,238.8						11,286						344						10,942
Wholesale revenues			237.3						220.6						16.7						4,958						1,268						3,690
Transmission revenues			12.8						2.4						10.4						N/A						N/A						N/A
Other revenues			83.9						21.5						62.4						N/A						N/A						N/A
Operating revenues			1,526.7						198.4						1,328.3						16,244						1,612						14,632
Fuel and purchased power			(489.3)						(183.3)						(306.0)
Utility gross margin (a)			1,037.4						15.1						1,022.3
Operating and maintenance			(262.1)						43.6						(305.7)
Depreciation and amortization			(238.3)						5.3						(243.6)
Taxes other than income tax			(97.2)						(4.8)						(92.4)
Income from operations			$	439.8					$	59.2					$	380.6

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

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

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

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

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

Evergy Metro Operating and Maintenance

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

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

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

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

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

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

Evergy Metro Other Expense, Net

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

Evergy Metro Income Tax Expense

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

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

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

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

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