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 2021 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).

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 were subject to a restriction on sale for 150 days. The equity investment had a fair value of $31.4 million as of December 31, 2021.

In March 2022, Evergy sold its shares in the equity investment to a financial institution through a share forward agreement following the expiration of the restriction on sale. As part of the share forward agreement, Evergy delivered its shares to the financial institution in exchange for a series of cash settlements totaling $15.1 million based primarily on the volume-weighted average price (VWAP) of the shares over the term of the agreement, which was completed in June 2022. As a result of the completion of the share forward agreement, Evergy no longer has an equity investment in the company.

For the three months ended and year to date June 30, 2022, Evergy recorded pre-tax losses of $2.1 million and $16.3 million, respectively, in investment earnings (loss) on its consolidated statements of comprehensive income related to the decrease in market value of its equity investment prior to sale and the settlement of the share forward agreement. Evergy uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without the gains or losses related to equity investments subject to a restriction on sale that can create period to period volatility, among other items. See "Non-GAAP Measures" within this Executive Summary for additional information.

Missouri Property Tax Tracker

On June 29, 2022, Missouri Senate Bill (S.B.) 745 was signed into law by the Governor of Missouri. Among other items, S.B. 745 includes a provision requiring Missouri electric utilities to defer to a regulatory asset or regulatory liability, as appropriate, any difference between state or local property tax expenses incurred and the amounts included in rates. Any amounts deferred to a regulatory asset or liability under this provision would be included in the electric utility's revenue requirement in subsequent rate cases and recovered over a reasonable period of time to be determined by the MPSC. Evergy Metro and Evergy Missouri West will begin deferring amounts associated with S.B. 745 in the third quarter of 2022.

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 June 30																		Year to Date June 30
			2022						Change						2021						2022						Change						2021
			(millions, except per share amounts)
Net income attributable to Evergy, Inc.			$	194.5					$	9.2					$	185.3					$	317.0					$	(59.9)					$	376.9
Earnings per common share, diluted			0.84						0.03						0.81						1.38						(0.27)						1.65

Net income attributable to Evergy, Inc. increased for the three months ended June 30, 2022, compared to the same period in 2021, primarily due to higher retail sales in 2022 driven by higher weather-normalized demand and favorable weather, higher transmission revenue and increases from TDC riders; partially offset by higher operating and maintenance expenses, higher depreciation expense, lower investment earnings and lower corporate-owned life insurance (COLI) proceeds.

Diluted EPS increased for the three months ended June 30, 2022, compared to the same period in 2021, primarily due to the increase in net income attributable to Evergy, Inc. discussed above.

Net income attributable to Evergy, Inc. decreased year to date June 30, 2022, compared to the same period in 2021, primarily due to non-regulated energy marketing margins recognized in 2021 related to the February 2021 winter weather event, higher depreciation expense, higher property taxes, lower investment earnings and lower COLI proceeds; partially offset by higher retail sales in 2022 driven by higher weather-normalized demand and favorable weather, higher transmission revenue, increases from TDC riders and lower income tax expense.

Diluted EPS decreased year to date June 30, 2022, compared to the same period in 2021, primarily due to the decrease in net income attributable to Evergy 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 June 30, 2022, were $198.4 million or $0.86 per share and $332.2 million or $1.44 per share, respectively. For the three months ended and year to date June 30, 2021, Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) were $195.1 million or $0.85 per share and $320.5 million or $1.40 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 and gains or losses related to equity investments subject to a restriction on sale that can create period to period volatility, as well as costs resulting from executive transition, severance and advisor expenses.

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), respectively.

			Earnings (Loss)						Earnings (Loss) per Diluted Share						Earnings (Loss)						Earnings (Loss) per Diluted Share
Three Months Ended June 30			2022												2021
			(millions, except per share amounts)
Net income attributable to Evergy, Inc.			$	194.5					$	0.84					$	185.3					$	0.81
Non-GAAP reconciling items:
Non-regulated energy marketing margin related to February 2021 winter weather event, pre-tax(a)			—						—						1.5						0.01
Non-regulated energy marketing costs related to February 2021 winter weather event, pre-tax(b)			0.3						—						2.0						0.01
Executive transition costs, pre-tax(c)			—						—						1.8						0.01
Severance costs, pre-tax(d)			—						—						1.2						—
Advisor expenses, pre-tax(e)			2.5						0.01						5.7						0.02
Restricted equity investment losses, pre-tax(f)			2.1						0.01						—						—
Income tax benefit(g)			(1.0)						—						(2.4)						(0.01)
Adjusted earnings (non-GAAP)			$	198.4					$	0.86					$	195.1					$	0.85

			Earnings (Loss)						Earnings (Loss) per Diluted Share						Earnings (Loss)						Earnings (Loss) per Diluted Share
Year to Date June 30			2022												2021
			(millions, except per share amounts)
Net income attributable to Evergy, Inc.			$	317.0					$	1.38					$	376.9					$	1.65
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)			0.6						—						4.0						0.02
Executive transition costs, pre-tax(c)			—						—						7.3						0.03
Severance costs, pre-tax(d)			—						—						2.8						0.01
Advisor expenses, pre-tax(e)			2.5						0.01						7.2						0.03
Restricted equity investment losses, pre-tax(f)			16.3						0.07						—						—
Income tax expense (benefit)(g)			(4.2)						(0.02)						17.3						0.08
Adjusted earnings (non-GAAP)			$	332.2					$	1.44					$	320.5					$	1.40

(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 losses related to equity investments which were subject to a restriction on sale and are included in investment earnings (loss) on the consolidated statements of comprehensive income.

(g)Reflects an income tax effect calculated at a statutory rate of approximately 22%, with the exception of certain non-deductible items.

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 fourth 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 June 30																		Year to Date June 30
			2022						Change						2021						2022						Change						2021
			(millions)
Operating revenues			$	1,446.5					$	210.3					$	1,236.2					$	2,670.4					$	(177.7)					$	2,848.1
Fuel and purchased power			414.3						130.2						284.1						723.3						(195.9)						919.2
SPP network transmission costs			81.5						7.7						73.8						160.2						17.0						143.2
Operating and maintenance			282.8						22.9						259.9						535.0						(0.4)						535.4
Depreciation and amortization			232.1						6.9						225.2						461.1						16.6						444.5
Taxes other than income tax			100.3						2.4						97.9						202.2						9.4						192.8
Income from operations			335.5						40.2						295.3						588.6						(24.4)						613.0
Other income (expense), net			(17.9)						(22.2)						4.3						(44.2)						(40.4)						(3.8)
Interest expense			99.3						5.5						93.8						191.1						3.3						187.8
Income tax expense			22.1						2.5						19.6						33.6						(9.0)						42.6
Equity in earnings of equity method investees, net of income taxes			1.4						(0.7)						2.1						3.5						(0.6)						4.1
Net income			197.6						9.3						188.3						323.2						(59.7)						382.9
Less: Net income attributable to noncontrolling interests			3.1						0.1						3.0						6.2						0.2						6.0
Net income attributable to Evergy, Inc.			$	194.5					$	9.2					$	185.3					$	317.0					$	(59.9)					$	376.9

Evergy Utility Gross Margin and MWh Sales

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

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 June 30			2022						Change						2021						2022						Change						2021
Retail revenues			(millions)																		(thousands)
Residential			$	513.4					$	53.6					$	459.8					3,754						295						3,459
Commercial			465.5						43.0						422.5						4,388						218						4,170
Industrial			170.1						20.1						150.0						2,207						134						2,073
Other retail revenues			9.8						0.3						9.5						33						(2)						35
Total electric retail			1,158.8						117.0						1,041.8						10,382						645						9,737
Wholesale revenues			79.5						9.5						70.0						4,372						886						3,486
Transmission revenues			101.0						10.6						90.4						N/A						N/A						N/A
Other revenues			107.2						73.2						34.0						N/A						N/A						N/A
Operating revenues			1,446.5						210.3						1,236.2						14,754						1,531						13,223
Fuel and purchased power			(414.3)						(130.2)						(284.1)
SPP network transmission costs			(81.5)						(7.7)						(73.8)
Utility gross margin (a)			950.7						72.4						878.3
Operating and maintenance			(282.8)						(22.9)						(259.9)
Depreciation and amortization			(232.1)						(6.9)						(225.2)
Taxes other than income tax			(100.3)						(2.4)						(97.9)
Income from operations			$	335.5					$	40.2					$	295.3
(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 June 30			2022						Change						2021						2022						Change						2021
Retail revenues			(millions)																		(thousands)
Residential			$	965.2					$	108.7					$	856.5					7,689						268						7,421
Commercial			868.6						100.1						768.5						8,644						252						8,392
Industrial			320.4						36.8						283.6						4,320						189						4,131
Other retail revenues			18.8						1.9						16.9						65						(1)						66
Total electric retail			2,173.0						247.5						1,925.5						20,718						708						20,010
Wholesale revenues			131.4						(426.1)						557.5						8,272						473						7,799
Transmission revenues			199.0						22.6						176.4						N/A						N/A						N/A
Other revenues			167.0						(21.7)						188.7						N/A						N/A						N/A
Operating revenues			2,670.4						(177.7)						2,848.1						28,990						1,181						27,809
Fuel and purchased power			(723.3)						195.9						(919.2)
SPP network transmission costs			(160.2)						(17.0)						(143.2)
Utility gross margin (a)			1,786.9						1.2						1,785.7
Operating and maintenance			(535.0)						0.4						(535.4)
Depreciation and amortization			(461.1)						(16.6)						(444.5)
Taxes other than income tax			(202.2)						(9.4)						(192.8)
Income from operations			$	588.6					$	(24.4)					$	613.0
(a) Utility gross margin is a non-GAAP financial measure. See explanation of utility gross margin above.

Evergy's utility gross margin increased $72.4 million for the three months ended June 30, 2022, compared to the same period in 2021, driven by:

• a $53.2 million increase due to higher retail sales driven by higher weather-normalized demand and favorable weather (cooling degree days increased by 16%);

• a $10.6 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2022; and

• an $8.6 million increase related to TDC riders at Evergy Kansas Central and Evergy Metro in 2022, which included higher revenues driven by updated transmission costs as reflected in Evergy Kansas Central's and Evergy Metro's TFRs with the new prices effective in April 2022 and May 2022, respectively.

Evergy's utility gross margin increased $1.2 million year to date June 30, 2022, compared to the same period in 2021, driven by:

• a $64.0 million increase due to higher retail sales driven by higher weather-normalized demand and favorable weather (cooling degree days increased by 16% and heating degree days increased by 2%);

• a $22.6 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2022; and

• an $11.2 million increase related to Evergy Kansas Central's and Evergy Metro's TDC riders in 2022, which included higher revenues driven by updated transmission costs as reflected in Evergy Kansas Central's and Evergy Metro's TFRs with the new prices effective in April 2022 and May 2022, respectively; partially offset by

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

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

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

◦a $20.9 million increase at Evergy Missouri West driven by $14.6 million of increased fuel and purchased power costs in February 2021 that are not currently recoverable from customers through its fuel recovery mechanism and $6.2 million related to a special requirements contract with an industrial customer; and

◦an $11.4 million increase 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.

Operating and Maintenance

Evergy's operating and maintenance expense increased $22.9 million for the three months ended June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $9.4 million increase in plant operating and maintenance expense at fossil-fuel generating units primarily due to a $4.0 million increase at Evergy Metro driven by major maintenance outages at Iatan Station Unit 1 and LaCygne Unit 2 in 2022 and a $3.8 million increase at Evergy Kansas Central driven by a major maintenance outage at JEC in 2022;

• a $9.4 million increase in transmission and distribution operating and maintenance expenses at Evergy Kansas Central, Evergy Metro and Evergy Missouri West driven by higher contractor costs and a $1.6 million increase in vegetation management costs in 2022; and

• an $8.0 million increase in credit loss expense at Evergy Kansas Central, Evergy Metro and Evergy Missouri West primarily due to a higher level of assumed uncollectible accounts used in establishing the allowance for credit losses in the second quarter of 2022 and higher actual write-offs incurred; partially offset by

• a $3.2 million decrease in advisor expenses incurred in the second quarter of 2022 associated with strategic planning;

• $1.8 million of costs recorded in the second quarter of 2021 associated with executive transition, including inducement bonuses, severance agreements and other transition expenses; and

• a $1.7 million decrease in costs at Evergy Kansas Central related to non-regulated energy marketing margins recognized during the February 2021 winter weather event.

Evergy's operating and maintenance expense decreased $0.4 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

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

• a $4.7 million decrease in advisor expenses incurred in 2022 associated with strategic planning;

• a $3.4 million decrease in costs at Evergy Kansas Central related to non-regulated energy marketing margins recognized during the February 2021 winter weather event; and

• a $2.2 million decrease in certain labor and employee benefits expenses; partially offset by

• an $11.2 million increase in plant operating and maintenance expense at fossil-fuel generating units primarily due to a $5.4 million increase at Evergy Metro driven by major maintenance outages at Iatan Station Unit 1 and LaCygne Unit 2 in 2022 and a $4.3 million increase at Evergy Kansas Central driven by a major maintenance outage at JEC in 2022; and

• a $5.8 million increase in transmission and distribution operating and maintenance expenses primarily at Evergy Metro and Evergy Missouri West driven by higher contractor costs and a $1.0 million increase in vegetation management costs in 2022.

Depreciation and Amortization

Evergy's depreciation and amortization increased $6.9 million for the three months ended June 30, 2022 and $16.6 million year to date June 30, 2022, compared to the same periods in 2021, primarily driven by higher capital additions at Evergy Kansas Central and Evergy Metro in 2022.

Taxes Other Than Income Tax

Evergy's taxes other than income tax increased $2.4 million for the three months ended June 30, 2022 and $9.4 million year to date June 30, 2022, compared to the same periods in 2021, primarily 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 income, net in the second quarter of 2021 became other expense, net in the second quarter of 2022 as a result of a $22.2 million increase in net other expense items, primarily driven by:

• a $9.3 million increase due to lower investment earnings primarily driven by a $4.1 million decrease in unrealized gains due to the change in fair value related to various equity investments and a $2.1 million loss related to Evergy's equity investment in an early-stage energy solutions company that was sold in March 2022 through a share forward agreement which was completed in June 2022 (see Evergy Equity Investment in Note 1 of the consolidated financial statements for additional information);

• a $6.2 million increase due to recording lower Evergy Kansas Central COLI benefits in the second quarter of 2022; and

• a $4.1 million increase due to higher pension non-service costs at Evergy Kansas Central and Evergy Metro in the second quarter of 2022.

Evergy's other expense, net increased $40.4 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $20.5 million increase due to lower investment earnings primarily driven by a $16.3 million loss related to Evergy's equity investment in an early-stage energy solutions company that was sold in March 2022 through a share forward agreement which was completed in June 2022 (see Evergy Equity Investment in Note 1 of the consolidated financial statements for additional information);

• a $7.7 million increase due to higher pension non-service costs at Evergy Kansas Central and Evergy Metro in 2022;

• a $6.1 million increase due to recording lower Evergy Kansas Central COLI benefits in 2022; and

• $3.1 million of other income recorded in 2021 related to contract termination fees.

Interest Expense

Evergy's interest expense increased $5.5 million for the three months ended June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $4.6 million increase in interest expense on short-term borrowings primarily due to higher short-term debt balances and weighted-average interest rates for Evergy, Inc., Evergy Kansas Central and Evergy Missouri West in 2022; partially offset by

• a $1.6 million decrease due to the repayment of Evergy Missouri West's $80.9 million of 8.27% Senior Notes at maturity in November 2021.

Evergy's interest expense increased $3.3 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $5.7 million increase in interest expense on short-term borrowings primarily due to higher short-term debt balances and weighted-average interest rates for Evergy, Inc., Evergy Kansas Central and Evergy Missouri West in 2022; partially offset by

• a $3.3 million decrease due to the repayment of Evergy Missouri West's $80.9 million of 8.27% Senior Notes at maturity in November 2021.

Income Tax Expense

Evergy's income tax expense increased $2.5 million for the three months ended June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $2.0 million increase primarily due to higher pre-tax income in the second quarter of 2022; and

• a $1.1 million increase due to lower expected COLI proceeds in the second quarter of 2022.

Evergy's income tax expense decreased $9.0 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $15.1 million decrease due to lower pre-tax income in 2022; partially offset by

• a $4.3 million increase due to lower amortization of flow-through items driven by a decrease in pre-tax income in 2022 at Evergy Kansas Central; and

• a $1.3 million increase due to lower wind and other income tax credits driven by a decrease in pre-tax income in 2022.

LIQUIDITY AND CAPITAL RESOURCES

Evergy relies primarily upon cash from operations, short-term borrowings, long-term 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 2021 Form 10-K for more information on Evergy's sources and uses of cash.

Short-Term Borrowings

As of June 30, 2022, Evergy had $1.0 billion of available borrowing capacity under its master credit facility. The available borrowing capacity under the master credit facility consisted of $339.8 million for Evergy, Inc., $271.4 million for Evergy Kansas Central, $350.0 million for Evergy Metro and $9.5 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 February 2022, Evergy, Inc. entered into a $500.0 million unsecured Term Loan Facility that expires in February 2023. As of June 30, 2022, Evergy had borrowed $500.0 million under the Term Loan Facility. Evergy's borrowings under the Term Loan Facility were used for, among other things, working capital, capital expenditures and general corporate purposes.

Significant Debt Issuances

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

Pensions

Year to date June 30, 2022, Evergy made pension contributions of $19.9 million. Evergy expects to make additional pension contributions of $78.8 million in 2022 to satisfy ERISA funding requirements and KCC and MPSC rate orders, of which $14.4 million is expected to be paid by Evergy Kansas Central and $64.4 million is expected to be paid by Evergy Metro. Also in 2022, Evergy expects to make post-retirement benefit contributions of $2.0 million.

Debt Covenants

As of June 30, 2022, Evergy was in compliance with all debt covenants under the master credit facility, the Term Loan 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.

Cash Flows

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

Year to Date June 30			2022			2021
			(millions)
Cash Flows from Operating Activities			$	588.9		$	224.6
Cash Flows used in Investing Activities			(1,128.9)			(918.2)
Cash Flows from Financing Activities			536.2			607.1

Cash Flows from Operating Activities

Evergy's cash flows from operating activities increased $364.3 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• $371.6 million of cash payments for net fuel and purchased power costs during the February 2021 winter weather event; and

• a $95.8 million increase in cash receipts for retail electric sales in 2022 primarily due to higher weather-normalized demand and favorable weather; partially offset by

• $89.1 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 $210.7 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by a $225.3 million increase in additions to property, plant and equipment due to increases at Evergy Kansas Central, Evergy Metro and Evergy Missouri West of $61.6 million, $108.3 million and $59.6 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.

Cash Flows from Financing Activities

Evergy's cash flows from financing activities decreased $70.9 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $250.8 million decrease in proceeds from long-term debt, net due to Evergy Missouri West's issuance of $500.0 million of Series A, B and C Senior Notes in April 2021, partially offset by Evergy Missouri West's issuance of $250.0 million of 3.75% First Mortgage Bonds in March 2022; and

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

• a $271.1 million increase in short-term debt borrowings driven by higher borrowings of $112.2 million at Evergy Missouri West, $78.5 million at Evergy Kansas Central and $80.4 million at Evergy, Inc., primarily due to higher capital expenditures in 2022 and for general corporate purposes.

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 June 30			2022						Change						2021
			(millions)
Operating revenues			$	1,337.9					$	(161.7)					$	1,499.6
Fuel and purchased power			287.1						(113.4)						400.5
SPP network transmission costs			160.2						17.0						143.2
Operating and maintenance			267.2						6.2						261.0
Depreciation and amortization			240.3						8.5						231.8
Taxes other than income tax			108.4						6.1						102.3
Income from operations			274.7						(86.1)						360.8
Other income (expense), net			(17.4)						(18.6)						1.2
Interest expense			85.6						5.5						80.1
Income tax expense			8.0						(15.1)						23.1
Equity in earnings of equity method investees, net of income taxes			2.0						0.1						1.9
Net income			165.7						(95.0)						260.7
Less: Net income attributable to noncontrolling interests			6.2						0.2						6.0
Net income attributable to Evergy Kansas Central, Inc.			$	159.5					$	(95.2)					$	254.7

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 June 30			2022						Change						2021						2022						Change						2021
Retail revenues			(millions)																		(thousands)
Residential			$	418.9					$	43.9					$	375.0					3,147						147						3,000
Commercial			358.9						40.1						318.8						3,400						109						3,291
Industrial			212.7						24.7						188.0						2,788						150						2,638
Other retail revenues			8.6						0.2						8.4						20						—						20
Total electric retail			999.1						108.9						890.2						9,355						406						8,949
Wholesale revenues			131.5						(194.4)						325.9						5,064						(273)						5,337
Transmission revenues			178.6						19.0						159.6						N/A						N/A						N/A
Other revenues			28.7						(95.2)						123.9						N/A						N/A						N/A
Operating revenues			1,337.9						(161.7)						1,499.6						14,419						133						14,286
Fuel and purchased power			(287.1)						113.4						(400.5)
SPP network transmission costs			(160.2)						(17.0)						(143.2)
Utility gross margin (a)			890.6						(65.3)						955.9
Operating and maintenance			(267.2)						(6.2)						(261.0)
Depreciation and amortization			(240.3)						(8.5)						(231.8)
Taxes other than income tax			(108.4)						(6.1)						(102.3)
Income from operations			$	274.7					$	(86.1)					$	360.8

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

Evergy Kansas Central's utility gross margin decreased $65.3 million year to date June 30, 2022, compared to the same period in 2021, driven by:

• $95.0 million of non-regulated energy marketing margins recognized in 2021 related to the February 2021 winter weather event; and

• a $33.9 million decrease related 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 prices and MWhs sold in February 2021; partially offset by

• a $37.4 million increase due to higher retail sales driven by higher weather-normalized demand and favorable weather (cooling degree days increased by 32%);

• a $19.0 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2022; and

• a $7.2 million increase related to Evergy Kansas Central's TDC rider in 2022, which included higher revenues driven by updated transmission costs as reflected in Evergy Kansas Central's TFR with the new prices effective in April 2022.

Evergy Kansas Central Operating and Maintenance

Evergy Kansas Central's operating and maintenance expense increased $6.2 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $6.7 million increase in costs billed for common use assets in 2022 from Evergy Metro related to facilities and software assets;

• a $4.3 million increase in plant operating and maintenance expense at fossil-fuel generating units driven by a major maintenance outage at JEC in 2022; and

• a $3.3 million increase in various administrative and general operating and maintenance expenses; partially offset by

• $3.6 million of costs recorded in 2021 associated with executive transition, including inducement bonuses, severance agreements and other transition expenses;

• a $3.5 million decrease in advisor expenses incurred in 2022 associated with strategic planning; and

• a $3.4 million decrease in costs related to non-regulated energy marketing margins recognized during the February 2021 winter weather event.

Evergy Kansas Central Depreciation and Amortization

Evergy Kansas Central's depreciation and amortization expense increased $8.5 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by higher capital additions in 2022.

Evergy Kansas Central Taxes Other Than Income Tax

Evergy Kansas Central's taxes other than income tax increased $6.1 million year to date June 30, 2022, compared to the same period in 2021, driven by an increase in property taxes in Kansas primarily due to higher assessed property tax values.

Evergy Kansas Central Other Income (Expense), Net

Evergy Kansas Central's other income, net year to date June 30, 2021 became other expense, net year to date June 30, 2022 as a result of an $18.6 million increase in net other expense items, primarily driven by:

• a $6.1 million increase due to recording lower COLI benefits in 2022;

• a $4.4 million decrease in investment earnings primarily due to $4.2 million of net unrealized losses in Evergy Kansas Central's rabbi trust in 2022;

• a $3.7 million increase due to lower equity AFUDC primarily driven by higher short-term debt balances in 2022; and

• $1.4 million of other income recorded in 2021 related to contract termination fees.

Evergy Kansas Central Interest Expense

Evergy Kansas Central's interest expense increased $5.5 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $1.9 million increase in interest expense on short-term borrowings primarily due to higher short-term debt balances and weighted-average interest rates in 2022; and

• a $1.2 million increase due to lower debt AFUDC primarily driven by higher short-term debt balances in 2022.

Evergy Kansas Central Income Tax Expense

Evergy Kansas Central's income tax expense decreased $15.1 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $24.2 million decrease due to lower pre-tax income in 2022; partially offset by

• a $3.7 million increase due to lower amortization of flow-through items primarily driven by a decrease in pre-tax income in 2022;

• a $3.0 million increase due to lower wind and other income tax credits in 2022; and

• a $3.3 million increase due to lower expected COLI proceeds in 2022.

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 June 30			2022						Change						2021
			(millions)
Operating revenues			$	922.6					$	(32.3)					$	954.9
Fuel and purchased power			291.4						(64.7)						356.1
Operating and maintenance			164.8						(10.3)						175.1
Depreciation and amortization			167.4						10.6						156.8
Taxes other than income tax			67.1						2.5						64.6
Income from operations			231.9						29.6						202.3
Other expense, net			(13.1)						(5.0)						(8.1)
Interest expense			53.8						(1.6)						55.4
Income tax expense			22.0						4.8						17.2
Net income			$	143.0					$	21.4					$	121.6

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 June 30			2022						Change						2021						2022						Change						2021
Retail revenues			(millions)																		(thousands)
Residential			$	344.8					48.7						$	296.1					2,704						66						2,638
Commercial			367.7						47.1						320.6						3,609						86						3,523
Industrial			62.2						6.2						56.0						824						15						809
Other retail revenues			5.6						0.7						4.9						35						(1)						36
Total electric retail			780.3						102.7						677.6						7,172						166						7,006
Wholesale revenues			5.2						(208.1)						213.3						3,046						1,303						1,743
Transmission revenues			9.8						1.3						8.5						N/A						N/A						N/A
Other revenues			127.3						71.8						55.5						N/A						N/A						N/A
Operating revenues			922.6						(32.3)						954.9						10,218						1,469						8,749
Fuel and purchased power			(291.4)						64.7						(356.1)
Utility gross margin (a)			631.2						32.4						598.8
Operating and maintenance			(164.8)						10.3						(175.1)
Depreciation and amortization			(167.4)						(10.6)						(156.8)
Taxes other than income tax			(67.1)						(2.5)						(64.6)
Income from operations			$	231.9					$	29.6					$	202.3

(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 $32.4 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $17.0 million increase due to higher retail sales driven by higher weather-normalized demand and favorable weather (cooling degree days increased by 5% and heating degree days increased by 3%);

• an $11.4 million increase due to impacts from the February 2021 winter weather event 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 $4.0 million increase related to Evergy Metro's TDC rider in 2022, which included higher revenues driven by updated transmission costs as reflected in Evergy Metro's TFR with the new prices effective in May 2022.

Evergy Metro Operating and Maintenance

Evergy Metro's operating and maintenance expense decreased $10.3 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $6.5 million decrease due to higher costs billed for common use assets in 2022, primarily to Evergy Kansas Central related to facilities and software assets;

• a $6.5 million decrease in certain labor and employee benefits expenses;

• $2.4 million of costs recorded in 2021 associated with executive transition, including inducement bonuses, severance agreements and other transition expenses; and

• a $2.4 million decrease in various administrative and general operating and maintenance expenses, including outside services expense and injuries and damages; partially offset by

• a $5.4 million increase in plant operating and maintenance expense at fossil-fuel generating units driven by major maintenance outages at Iatan Station Unit 1 and LaCygne Unit 2 in 2022; and

• a $4.1 million increase in various transmission and distribution operating and maintenance expenses primarily due to higher contractor costs and a $1.6 million increase in vegetation management costs in 2022.

Evergy Metro Depreciation Expense

Evergy Metro's depreciation and amortization expense increased $10.6 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by higher capital additions in 2022.

Evergy Metro Taxes Other Than Income Tax

Evergy Metro's taxes other than income tax increased $2.5 million year to date June 30, 2022, compared to the same period in 2021, driven by an increase in property taxes in Missouri and Kansas primarily due to higher assessed property tax values.

Evergy Metro Other Expense, Net

Evergy Metro's other expense, net increased $5.0 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by:

• a $5.6 million increase due to higher pension non-service costs; and

• $1.2 million of other income recorded in 2021 related to contract termination fees; partially offset by

• a $1.5 million decrease due to higher equity AFUDC primarily driven by lower short-term debt and higher construction work in progress balances in 2022.

Evergy Metro Income Tax Expense

Evergy Metro's income tax expense increased $4.8 million year to date June 30, 2022, compared to the same period in 2021, primarily driven by higher pre-tax income in 2022.