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 1.7 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).

Sibley Station

Evergy Missouri West retired its Sibley Station in 2018 and the retirement of Sibley Unit 3 met the criteria to be considered an abandonment. Evergy has classified the remaining net book value of Sibley Unit 3 as retired generation facilities within regulatory assets on its consolidated balance sheet and as of December 31, 2021, this amount was $123.4 million. Evergy Missouri West collects a full return of and on its investment in Sibley Station in current customer rates and has requested the continued return of and on its unrecovered investment in Sibley Station as part of its current rate case with the MPSC which was filed in January 2022.

In October 2019, the MPSC issued an AAO requiring Evergy Missouri West to defer to a regulatory liability all revenues collected from customers for return on investment, non-fuel operations and maintenance costs, taxes including accumulated deferred income taxes and all other costs associated with Sibley Station following its retirement in November 2018 to be considered in Evergy Missouri West's current rate case. Subsequent to the MPSC order in 2019, Evergy recorded a regulatory liability for the estimated amount of revenues that Evergy Missouri West had collected from customers for Sibley Station since December 2018 that Evergy had determined was probable of refund. This regulatory liability did not include revenues collected related to the return on investment in Sibley Station as Evergy determined that they were not probable of refund based on the relevant facts and circumstances. As of December 31, 2021, this Sibley AAO regulatory liability was $29.3 million.

In the third quarter of 2022, Evergy determined that the refund of revenues collected since December 2018 for return on investment in Sibley Station was now probable based on regulatory precedent from an August 2022 MPSC decision in a similar proceeding for an unaffiliated utility and the MPSC staff's position in Evergy Missouri West's current rate case. As a result of this determination, Evergy recorded a $47.5 million decrease to operating revenues on its consolidated statements of comprehensive income for the three months ended and year to date September 30, 2022, for the deferral to its Sibley AAO regulatory liability of revenues collected from customers for return on investment in Sibley Station since December 2018. The Sibley AAO regulatory liability had a total value as of September 30, 2022 of $84.7 million.

Based on the recent MPSC regulatory precedent, Evergy believes it is probable that the Sibley AAO regulatory liability will be offset for recovery purposes against its unrecovered investment in Sibley Unit 3 in its current rate case and as a result, has netted its Sibley AAO regulatory liability against its retired generation facilities regulatory asset for Sibley Unit 3 on its consolidated balance sheets as of September 30, 2022. Year to date September 30, 2022, the retired generation facilities regulatory asset has also been reduced by $7.1 million, primarily consisting of amortization expense equal to the depreciation expense for the asset reflected in retail rates.

Evergy also recorded a $6.0 million estimated impairment loss on Sibley Unit 3 on its consolidated statements of comprehensive income for the three months ended and year to date September 30, 2022, as it no longer expects to earn a return on its unrecovered investment in Sibley Unit 3 based on the regulatory precedent discussed above. As of September 30, 2022, and following the netting of the Sibley AAO regulatory liability, amortization expense and the estimated impairment loss recorded in the third quarter of 2022, Evergy's retired generation facilities regulatory asset for Sibley Unit 3 was $25.6 million.

The final value of Evergy's retired generation facilities regulatory asset for Sibley Unit 3 and any impairment loss will be determined by the MPSC in its rate order in Evergy Missouri West's current rate case, which is currently expected in November 2022, and could differ significantly from the amounts currently recorded. See "Abandoned Plant" in Note 1 and "Evergy Missouri West Other Proceedings" in Note 4 to the consolidated financial statements for additional information.

Evergy Missouri West February 2021 Winter Weather Event Securitization

In March 2022, Evergy Missouri West filed a petition for a financing order with the MPSC requesting authorization to finance its extraordinary fuel and purchased power costs incurred as part of the February 2021 winter weather event, including carrying costs, through the issuance of securitized bonds. Evergy Missouri West requested to repay the securitized bonds and collect the related amounts from customers over a period of approximately 15 years from the date of issuance of the securitized bonds.

In October 2022, the MPSC issued a financing order authorizing Evergy Missouri West to issue securitized bonds to recover its extraordinary fuel and purchased power costs incurred as part of the February 2021 winter weather event. As part of the order, the MPSC found that Evergy Missouri West's costs were prudently incurred, that it should only be allowed to recover 95% of its extraordinary fuel and purchased power costs consistent with the 5% sharing provision of its fuel recovery mechanism, that it should be allowed to recover carrying costs incurred since February 2021 at Evergy Missouri West's long-term debt rate of 5.06% and approved a 15 year repayment period for the bonds with a 17 year legal maturity.

In the third quarter of 2022, Evergy Missouri West recorded an increase of $15.0 million to its February 2021 winter weather event regulatory asset for the recovery of carrying charges granted in the MPSC's financing order. As of September 30, 2022, the value of Evergy Missouri West's February 2021 winter weather event regulatory asset was $303.1 million. Evergy Missouri West will continue to record carrying charges on its February 2021 winter weather event regulatory asset until it issues the securitized bonds authorized by the MPSC's financing order, which is currently expected in the first half of 2023.

Inflation Reduction Act

In August 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law by President Biden. The IRA extends tax credits for renewable energy technologies intended to reduce the impacts of climate change. The Production Tax Credit (PTC) and Investment Tax Credit (ITC) have been extended or reinstated for certain renewable energy projects beginning before January 1, 2025. The definition of property eligible for the ITC has been expanded to include standalone energy storage with a capacity of at least 5kWh. Both tax credits make a bonus credit available if certain prevailing wage, apprenticeship and domestic content requirements are met. The IRA modified and extended the Alternative Fuel Refueling Property Credit to include property placed in service before December 31, 2032 and it also removes the limitation per location. The IRA created a Nuclear Power Production Tax Credit for taxable years beginning on or after January 1, 2024 through December 31, 2032. For taxable years beginning after December 31, 2022, certain renewable energy tax credits may be transferred to third parties. The IRA also implemented a new 15% corporate minimum tax based on modified GAAP net income and a 1% excise tax on stock buybacks.

The Evergy Companies anticipate utilizing the PTC and ITC for future renewable generation projects and are evaluating the Nuclear Power Production Tax Credit in connection with operations at Wolf Creek. The new corporate minimum tax and excise tax on stock buybacks are not expected to have a material impact on the Evergy Companies' operations or consolidated financial results and the Evergy Companies continue to evaluate the remaining IRA provisions for the effect on their future financial results.

Missouri Property Tax Tracker

In June 2022, Missouri Senate Bill (S.B.) 745 was signed into law by the Governor of Missouri and became effective in August 2022. 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 began deferring the amounts associated with S.B. 745 in the third quarter of 2022.

Renewable Generation Investment

In August 2022, Evergy Missouri West entered into an agreement with a renewable energy development company to purchase for approximately $250 million an operational wind farm located in the state of Oklahoma with a generating capacity of approximately 199 MW. Subject to customary regulatory approvals and closing conditions, this transaction is expected to close in the first half of 2023.

Regulatory Proceedings

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

Wolf Creek Refueling Outage

Wolf Creek's most recent refueling outage began in October 2022 and the unit is expected to return to service in November 2022.

Earnings Overview

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

			Three Months Ended September 30																		Year to Date September 30
			2022						Change						2021						2022						Change						2021
			(millions, except per share amounts)
Net income attributable to Evergy, Inc.			$	428.2					$	(21.2)					$	449.4					$	745.2					$	(81.1)					$	826.3
Earnings per common share, diluted			1.86						(0.09)						1.95						3.23						(0.37)						3.60

Net income attributable to Evergy, Inc. decreased for the three months ended September 30, 2022, compared to the same period in 2021, primarily due to the expected refund of amounts collected from customers for the return on investment of Sibley Station, higher depreciation expense, higher unrealized losses from various equity investments and higher interest expense; partially offset by higher retail sales in the third quarter of 2022 driven by higher weather-normalized demand and favorable weather, higher transmission revenue, higher interest and dividend income and lower income tax expense.

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

Net income attributable to Evergy, Inc. decreased year to date September 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, the expected refund of amounts collected from customers for the return on investment of Sibley Station, higher depreciation expense, higher property taxes, higher realized and unrealized losses from various equity investments and higher interest expense; partially offset by higher retail sales in 2022 driven by higher weather-normalized demand and favorable weather, higher transmission revenue, higher interest and dividend income and lower income tax expense.

Diluted EPS decreased year to date September 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.

Non-GAAP Measures

Evergy Utility Gross Margin (non-GAAP)

Utility gross margin (non-GAAP) is a financial measure that is not calculated in accordance with GAAP. Utility gross margin (non-GAAP), 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. The Evergy Companies' definition of utility gross margin (non-GAAP) may differ from similar terms used by other companies.

Utility gross margin (non-GAAP) is intended to enhance an investor's overall understanding of results. Management believes that utility gross margin (non-GAAP) provides a meaningful basis for evaluating the Evergy Companies' operations across periods because utility gross margin (non-GAAP) excludes the revenue effect of fluctuations in fuel and purchased power costs and SPP network transmission costs. Utility gross margin (non-GAAP) is used internally to measure performance against budget and in reports for management and the Evergy Board. Utility gross margin (non-GAAP) should be viewed as a supplement to, and not a substitute for, gross margin, which is the most directly comparable financial measure prepared in accordance with GAAP. Gross margin under GAAP is defined as the excess of sales over cost of goods sold.

Utility gross margin (non-GAAP) differs from the GAAP definition of gross margin due to the exclusion of operating and maintenance expenses determined to be directly attributable to revenue-producing activities, depreciation and amortization and taxes other than income tax. See the Evergy Companies' Results of Operations for a reconciliation of utility gross margin (non-GAAP) to gross margin, the most comparable GAAP measure.

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

Effective in the third quarter of 2022, the calculation of adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) excludes the revenues collected from customers for the return on investment of the retired Sibley Station in the current period and the subsequent deferral of the cumulative amount of revenues collected since December 2018 for expected future refunds to customers. See "Sibley Station" within this Executive Summary for additional information. Management believes that this is a more representative measure of Evergy's recurring earnings, assists in the comparability of results and is consistent with how management reviews performance. Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) for the three months ended and year to date September 30, 2021 have been recast, as applicable, to conform to the current year presentation.

Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) for the three months ended and year to date September 30, 2022, were $462.3 million or $2.01 per share and $789.7 million or $3.43 per share, respectively. For the three months ended and year to date September 30, 2021, Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) were $452.4 million or $1.97 per share and $768.1 million or $3.35 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 i.) the income or costs resulting from non-regulated energy marketing margins from the February 2021 winter weather event; ii.) gains or losses related to equity investments subject to a restriction on sale; iii.) the revenues collected from customers for the return on investment of the retired Sibley Station in the current period and the subsequent deferral of the cumulative amount of revenues collected since December 2018 for expected future refunds to customers; iv.) the estimated impairment loss on Sibley Unit 3; v.) the mark-to-market impacts of economic hedges related to Evergy Kansas Central's non-regulated 8% ownership share of Jeffrey Energy Center; and vi.) 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 or that can create period to period earnings volatility.

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 September 30			2022												2021
			(millions, except per share amounts)
Net income attributable to Evergy, Inc.			$	428.2					$	1.86					$	449.4					$	1.95
Non-GAAP reconciling items:
Non-regulated energy marketing margin related to February 2021 winter weather event, pre-tax(a)			2.1						0.01						—						—
Sibley Station return on investment, pre-tax(b)			44.4						0.19						(3.1)						(0.01)
Mark-to-market impact of JEC economic hedges, pre-tax(c)			(10.3)						(0.04)						—						—
Non-regulated energy marketing costs related to February 2021 winter weather event, pre-tax(d)			0.3						—						1.9						0.01
Executive transition costs, pre-tax(e)			0.7						—						3.3						0.02
Advisor expenses, pre-tax(g)			0.6						—						1.2						—
Estimated impairment loss on Sibley Unit 3, pre-tax(h)			6.0						0.03						—						—
Income tax benefit(j)			(9.7)						(0.04)						(0.3)						—
Adjusted earnings (non-GAAP)			$	462.3					$	2.01					$	452.4					$	1.97

			Earnings (Loss)						Earnings (Loss) per Diluted Share						Earnings (Loss)						Earnings (Loss) per Diluted Share
Year to Date September 30			2022												2021
			(millions, except per share amounts)
Net income attributable to Evergy, Inc.			$	745.2					$	3.23					$	826.3					$	3.60
Non-GAAP reconciling items:
Non-regulated energy marketing margin related to February 2021 winter weather event, pre-tax(a)			2.1						0.01						(95.0)						(0.42)
Sibley Station return on investment, pre-tax(b)			38.2						0.17						(9.3)						(0.04)
Mark-to-market impact of JEC economic hedges, pre-tax(c)			(10.3)						(0.04)						—						—
Non-regulated energy marketing costs related to February 2021 winter weather event, pre-tax(d)			0.9						—						5.9						0.03
Executive transition costs, pre-tax(e)			0.7						—						10.6						0.05
Severance costs, pre-tax(f)			—						—						2.8						0.01
Advisor expenses, pre-tax(g)			3.1						0.01						8.4						0.04
Estimated impairment loss on Sibley Unit 3, pre-tax(h)			6.0						0.03						—						—
Restricted equity investment losses, pre-tax(i)			16.3						0.07						—						—
Income tax expense (benefit)(j)			(12.5)						(0.05)						18.4						0.08
Adjusted earnings (non-GAAP)			$	789.7					$	3.43					$	768.1					$	3.35

(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 revenues collected from customers for the return on investment of the retired Sibley Station in the current period and the subsequent deferral of the cumulative amount of revenues collected since December 2018 for expected future refunds to customers and are included in operating revenues on the consolidated statements of comprehensive income.

(c)Reflects mark to market gains or losses related to forward contracts for natural gas and electricity entered into as economic hedges against fuel price volatility related to Evergy Kansas Central's non-regulated 8% ownership share of JEC and are included in operating revenues on the consolidated statements of comprehensive income.

(d)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.

(e)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.

(f)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.

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

(h)Reflects the estimated impairment loss on Sibley Unit 3 and is included in estimated impairment loss on Sibley Unit 3 on the consolidated statements of comprehensive income.

(i)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.

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

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
			2022						Change						2021						2022						Change						2021
			(millions)
Operating revenues			$	1,909.1					$	292.6					$	1,616.5					$	4,579.5					$	114.9					$	4,464.6
Fuel and purchased power			643.0						287.2						355.8						1,366.3						91.3						1,275.0
SPP network transmission costs			81.6						8.0						73.6						241.8						25.0						216.8
Operating and maintenance			266.2						1.0						265.2						801.2						0.6						800.6
Depreciation and amortization			233.2						8.2						225.0						694.3						24.8						669.5
Taxes other than income tax			100.7						4.5						96.2						302.9						13.9						289.0
Estimated impairment loss on Sibley Unit 3			6.0						6.0						—						6.0						6.0						—
Income from operations			578.4						(22.3)						600.7						1,167.0						(46.7)						1,213.7
Other income (expense), net			2.6						2.0						0.6						(41.6)						(38.4)						(3.2)
Interest expense			102.3						8.7						93.6						293.4						12.0						281.4
Income tax expense			49.5						(7.7)						57.2						83.1						(16.7)						99.8
Equity in earnings of equity method investees, net of income taxes			2.0						—						2.0						5.5						(0.6)						6.1
Net income			431.2						(21.3)						452.5						754.4						(81.0)						835.4
Less: Net income attributable to noncontrolling interests			3.0						(0.1)						3.1						9.2						0.1						9.1
Net income attributable to Evergy, Inc.			$	428.2					$	(21.2)					$	449.4					$	745.2					$	(81.1)					$	826.3

Gross Margin (GAAP) and Utility Gross Margin (non-GAAP)

The following tables summarize Evergy's gross margin (GAAP) and MWhs sold and reconciles Evergy's gross margin (GAAP) to Evergy's utility gross margin (non-GAAP). See "Executive Summary - Non-GAAP Measures", above for additional information regarding gross margin (GAAP) and utility gross margin (non-GAAP).

			Revenues and Expenses																		MWhs Sold
Three Months Ended September 30			2022						Change						2021						2022						Change						2021
Retail revenues			(millions)																		(thousands)
Residential			$	746.6					$	69.2					$	677.4					5,245						110						5,135
Commercial			583.7						58.7						525.0						5,277						131						5,146
Industrial			197.2						31.2						166.0						2,357						64						2,293
Other retail revenues			(39.0)						(48.2)						9.2						33						1						32
Total electric retail			1,488.5						110.9						1,377.6						12,912						306						12,606
Wholesale revenues			250.6						145.6						105.0						5,591						(292)						5,883
Transmission revenues			101.3						11.0						90.3						N/A						N/A						N/A
Other revenues			68.7						25.1						43.6						N/A						N/A						N/A
Operating revenues			1,909.1						292.6						1,616.5						18,503						14						18,489
Fuel and purchased power			(643.0)						(287.2)						(355.8)
SPP network transmission costs			(81.6)						(8.0)						(73.6)
Operating and maintenance(a)			(138.8)						(4.4)						(134.4)
Depreciation and amortization			(233.2)						(8.2)						(225.0)
Taxes other than income tax			(100.7)						(4.5)						(96.2)
Gross margin (GAAP)			711.8						(19.7)						731.5
Operating and maintenance(a)			138.8						4.4						134.4
Depreciation and amortization			233.2						8.2						225.0
Taxes other than income tax			100.7						4.5						96.2
Utility gross margin (non-GAAP)			$	1,184.5					$	(2.6)					$	1,187.1
(a) Operating and maintenance expenses which are deemed to be directly attributable to revenue-producing activities include plant operating and maintenance expenses at generating units and transmission and distribution operating and maintenance expenses and have been separately presented in order to calculate gross margin as defined under GAAP. These amounts exclude general and administrative expenses not directly attributable to revenue-producing activities of $127.4 million and $130.8 million for the three months ended September 30, 2022 and 2021, respectively.

			Revenues and Expenses																		MWhs Sold
Year to Date September 30			2022						Change						2021						2022						Change						2021
Retail revenues			(millions)																		(thousands)
Residential			$	1,711.8					$	177.9					$	1,533.9					12,934						378						12,556
Commercial			1,452.3						158.8						1,293.5						13,921						383						13,538
Industrial			517.6						68.0						449.6						6,677						253						6,424
Other retail revenues			(20.2)						(46.3)						26.1						98						—						98
Total electric retail			3,661.5						358.4						3,303.1						33,630						1,014						32,616
Wholesale revenues			382.0						(280.5)						662.5						13,863						776						13,087
Transmission revenues			300.3						33.6						266.7						N/A						N/A						N/A
Other revenues			235.7						3.4						232.3						N/A						N/A						N/A
Operating revenues			4,579.5						114.9						4,464.6						47,493						1,790						45,703
Fuel and purchased power			(1,366.3)						(91.3)						(1,275.0)
SPP network transmission costs			(241.8)						(25.0)						(216.8)
Operating and maintenance(a)			(411.2)						(22.5)						(388.7)
Depreciation and amortization			(694.3)						(24.8)						(669.5)
Taxes other than income tax			(302.9)						(13.9)						(289.0)
Gross margin (GAAP)			1,563.0						(62.6)						1,625.6
Operating and maintenance(a)			411.2						22.5						388.7
Depreciation and amortization			694.3						24.8						669.5
Taxes other than income tax			302.9						13.9						289.0
Utility gross margin (non-GAAP)			$	2,971.4					$	(1.4)					$	2,972.8
(a) Operating and maintenance expenses which are deemed to be directly attributable to revenue-producing activities include plant operating and maintenance expenses at generating units and transmission and distribution operating and maintenance expenses and have been separately presented in order to calculate gross margin as defined under GAAP. These amounts exclude general and administrative expenses not directly attributable to revenue-producing activities of $390.0 million and $411.9 million year to date September 30, 2022 and 2021, respectively.

Evergy's gross margin (GAAP) decreased $19.7 million for the three months ended September 30, 2022, compared to the same period in 2021 and Evergy's utility gross margin (non-GAAP) decreased $2.6 million for the three months ended September 30, 2022, compared to the same period in 2021, both measures were driven by:

• a $47.5 million decrease due to the deferral of revenues in the third quarter of 2022 for the expected refund of amounts collected from customers since December 2018 for the return on investment of the retired Sibley Station; partially offset by

• a $33.9 million increase primarily due to higher retail sales driven by higher weather-normalized demand and favorable weather (cooling degree days increased by 3%); and

• an $11.0 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2022.

Additionally, the decrease in Evergy's gross margin (GAAP) was also driven by:

• a $4.4 million increase in operating and maintenance expenses which are determined to be directly attributable to revenue producing activities primarily driven by a $7.9 million increase in transmission and distribution operating and maintenance expenses, partially offset by a $2.1 million decrease in plant operating and maintenance expense at fossil-fuel generating units as further described below;

• an $8.2 million increase in depreciation and amortization as further described below; and

• a $4.5 million increase in taxes other than income taxes as further described below.

Evergy's gross margin (GAAP) decreased $62.6 million year to date September 30, 2022, compared to the same period in 2021 and Evergy's utility gross margin (non-GAAP) decreased $1.4 million year to date September 30, 2022, compared to the same period in 2021, both measures were driven by:

• a $97.1 million decrease in non-regulated energy marketing margins recognized at Evergy Kansas Central related to the February 2021 winter weather event;

• a $47.5 million decrease due to the deferral of revenues in the third quarter of 2022 for the expected refund of amounts collected from customers since December 2018 for the return on investment of the retired Sibley Station; 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 wholesale sales 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 $14.7 million of increased fuel and purchased power costs in February 2021 that are not currently recoverable from customers through its fuel recovery mechanism and $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; partially offset by

• a $111.2 million increase primarily due to higher retail sales driven by higher weather-normalized demand and favorable weather (cooling degree days increased by 7% and heating degree days increased by 2%); and

• a $33.6 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2022.

Additionally, the decrease in Evergy's gross margin (GAAP) was also driven by:

• a $22.5 million increase in operating and maintenance expenses which are determined to be directly attributable to revenue producing activities primarily driven by a $13.7 million increase in transmission and distribution operating and maintenance expenses and a $9.1 million increase in plant and operating and maintenance expense at fossil-fuel generating units as further described below;

• a $24.8 million increase in depreciation and amortization as further described below; and

• a $13.9 million increase in taxes other than income taxes as further described below.

Operating and Maintenance

Evergy's operating and maintenance expense increased $1.0 million for the three months ended September 30, 2022, compared to the same period in 2021, primarily driven by:

• a $7.9 million increase in transmission and distribution operating and maintenance expenses primarily at Evergy Kansas Central and Evergy Missouri West driven by higher contractor costs and a $4.9 million increase in vegetation management costs in 2022; partially offset by

• a $2.6 million decrease in costs recorded in the third quarter of 2022 associated with executive transition, including inducement bonuses, severance agreements and other transition expenses;

• a $2.1 million decrease in plant operating and maintenance expense at fossil-fuel generating units primarily due to a $1.6 million decrease at Evergy Metro; and

• a $1.6 million decrease in costs incurred in the third quarter of 2022 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 increased $0.6 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by:

• a $13.7 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 $5.8 million increase in vegetation management costs in 2022;

• a $9.1 million increase in plant operating and maintenance expense at fossil-fuel generating units primarily due to a $4.5 million increase at Evergy Kansas Central driven by major maintenance outages at JEC in 2022 and a $3.8 million increase at Evergy Metro driven by major maintenance outages at Iatan Unit 1 and La Cygne Unit 2 in 2022;

• a $4.3 million increase in program costs for energy efficiency programs under MEEIA in 2022, which have a direct offset in revenue; and

• a $2.0 million increase in injuries and damages expense primarily due to an increase in the reserves recorded at Evergy Kansas Central and Evergy Metro in 2022; partially offset by

• a $9.9 million decrease in costs recorded in 2022 associated with executive transition, including inducement bonuses, severance agreements and other transition expenses;

• a $5.3 million decrease in advisor expenses incurred in 2022 associated with strategic planning;

• a $5.0 million decrease in costs incurred in 2022 at Evergy Kansas Central related to non-regulated energy marketing margins recognized during the February 2021 winter weather event;

• a $5.0 million decrease in certain labor and employee benefits expenses; and

• a $2.8 million decrease in voluntary severance expenses due to a $2.6 million decrease at Evergy Kansas Central, Evergy Metro and Evergy Missouri West related to Evergy voluntary exit programs in 2021 and $0.2 million in voluntary severance expenses incurred at Evergy Kansas Central and Evergy Metro related to Wolf Creek voluntary exit programs.

Depreciation and Amortization

Evergy's depreciation and amortization increased $8.2 million for the three months ended September 30, 2022 and $24.8 million year to date September 30, 2022, compared to the same periods in 2021, 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 $4.5 million for the three months ended September 30, 2022 and $13.9 million year to date September 30, 2022, compared to the same periods in 2021, driven by an increase in property taxes in Missouri and Kansas primarily due to higher assessed property tax values.

Estimated Impairment Loss on Sibley Unit 3

Evergy's estimated impairment loss on Sibley Unit 3 increased $6.0 million for the three months ended and year to date September 30, 2022, compared to the same periods in 2021, due to the recording of an impairment charge on Evergy Missouri West's regulatory asset for retired generation facilities related to Sibley Unit 3 in the third quarter of 2022. See "Abandoned Plant" in Note 1 of the consolidated financial statements for additional information.

Other Income (Expense), Net

Evergy's other income, net increased $2.0 million for the three months ended September 30, 2022, primarily driven by:

• a $16.0 million increase in interest and dividend income primarily due to $15.0 million of carrying charges recorded by Evergy Missouri West in the third quarter of 2022 associated with its regulatory asset for fuel and purchased power costs related to the February 2021 winter weather event, driven by an MPSC order allowing for their recovery as part of Evergy Missouri West's securitization financing request; partially offset by

• a $10.4 million decrease due to a $5.2 million realized gain from the sale of an equity investment in the third quarter of 2021 and a $5.1 million decrease due to unrealized losses from various equity investments in the third quarter of 2022; and

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

Evergy's other expense, net increased $38.4 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by:

• a $27.3 million increase due to losses from equity investments 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 $5.9 million increase due to lower unrealized gains from various equity investments in 2022 and a $5.2 million realized gain from the sale of an equity investment in the third quarter of 2021;

• a $6.0 million increase due to recording lower Evergy Kansas Central COLI benefits in 2022; and

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

• a $16.6 million increase in interest and dividend income primarily due to $15.0 million of carrying charges recorded by Evergy Missouri West in the third quarter of 2022 associated with its regulatory asset for fuel and purchased power costs related to the February 2021 winter weather event, driven by an MPSC order allowing for their recovery as part of Evergy Missouri West's securitization financing request.

Interest Expense

Evergy's interest expense increased $8.7 million for the three months ended September 30, 2022, compared to the same period in 2021, primarily driven by:

• a $14.2 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 $1.7 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 $12.0 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by:

• a $19.9 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 $5.0 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 decreased $7.7 million for the three months ended September 30, 2022, compared to the same period in 2021, primarily driven by lower pre-tax income in the third quarter of 2022.

Evergy's income tax expense decreased $16.7 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by lower 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 September 30, 2022, Evergy had $1.3 billion of available borrowing capacity under its master credit facility. The available borrowing capacity under the master credit facility consisted of $449.3 million for Evergy, Inc., $361.7 million for Evergy Kansas Central, $350.0 million for Evergy Metro and $115.9 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 September 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 September 30, 2022, Evergy made pension contributions of $29.9 million. Evergy expects to make additional pension contributions of $53.9 million in 2022 to satisfy ERISA funding requirements and KCC and MPSC rate orders, of which $8.5 million is expected to be paid by Evergy Kansas Central and $45.4 million is expected to be paid by Evergy Metro. Also in 2022, Evergy expects to make additional post-retirement benefit contributions of $1.6 million.

Debt Covenants

As of September 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.

Regulatory Authorizations

The following table summarizes the regulatory short-term and long-term debt financing authorizations for Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West and the remaining amount available under these authorizations as of September 30, 2022.

Type of Authorization			Commission			Expiration Date			Authorization Amount									Available Under Authorization
Evergy Kansas Central & Evergy Kansas South												(in millions)
Short-Term Debt			FERC			December 2022						$	1,250.0								$	611.8
Evergy Metro
Short-Term Debt			FERC			December 2022						$	1,250.0								$	1,250.0
Evergy Missouri West
Short-Term Debt			FERC			December 2022						$	750.0								$	27.4
Long-Term Debt(a)			FERC			October 2024						$	600.0								$	600.0

(a)In October 2022, FERC approved Evergy Missouri West's long-term debt authorization request.

In September 2022, Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West filed requests with FERC to have outstanding at any one time up to $1,250.0 million (combined for both Evergy Kansas Central and Evergy Kansas South), $1,250.0 million and $750.0 million in short-term debt instruments, respectively, through December 2024. FERC is expected to issue an order regarding this request by November 15, 2022.

In September 2022, Evergy Missouri West filed a request with FERC to issue up to a total of $600.0 million in long-term debt instruments for a two-year authorization period beginning on the date of the FERC approval. FERC approved this request in October 2022.

Cash Flows

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

Year to Date September 30			2022			2021
			(millions)
Cash Flows from Operating Activities			$	1,477.7		$	1,036.0
Cash Flows used in Investing Activities			(1,625.1)			(1,349.1)
Cash Flows from Financing Activities			145.9			193.5

Cash Flows from Operating Activities

Evergy's cash flows from operating activities increased $441.7 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by:

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

• a $280.7 million increase in cash receipts for retail electric sales in 2022 primarily due to higher weather-normalized demand and favorable weather; partially offset by

• $89.2 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 $276.0 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by a $219.9 million increase in additions to property, plant and equipment due to increases at Evergy Kansas Central, Evergy Metro and Evergy Missouri West of $76.9 million, $100.1 million and $47.0 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 $47.6 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by:

• a $250.4 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 $261.3 million increase in short-term debt borrowings driven by higher borrowings of $159.2 million at Evergy Missouri West, $53.9 million at Evergy, Inc. and $48.2 million at Evergy Kansas Central, primarily due to higher capital expenditures in 2022 and for general corporate purposes; and

• a $60.9 million decrease in the repayment of borrowings against cash surrender value of corporate-owned life insurance primarily due to a higher number of policy settlements in 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			2022						Change						2021
			(millions)
Operating revenues			$	2,359.3					$	81.9					$	2,277.4
Fuel and purchased power			629.2						85.5						543.7
SPP network transmission costs			241.8						25.0						216.8
Operating and maintenance			402.3						14.4						387.9
Depreciation and amortization			361.9						12.8						349.1
Taxes other than income tax			163.3						10.1						153.2
Income from operations			560.8						(65.9)						626.7
Other expense, net			(26.9)						(24.5)						(2.4)
Interest expense			131.7						11.5						120.2
Income tax expense			23.5						(22.2)						45.7
Equity in earnings of equity method investees, net of income taxes			3.1						0.1						3.0
Net income			381.8						(79.6)						461.4
Less: Net income attributable to noncontrolling interests			9.2						0.1						9.1
Net income attributable to Evergy Kansas Central, Inc.			$	372.6					$	(79.7)					$	452.3

Evergy Kansas Central Gross Margin (GAAP) and Utility Gross Margin (non-GAAP)

The following table summarizes Evergy Kansas Central's gross margin (GAAP) and MWhs sold and reconciles Evergy Kansas Central's gross margin (GAAP) to Evergy Kansas Central's utility gross margin (non-GAAP). See "Executive Summary - Non-GAAP Measures", above for additional information regarding gross margin (GAAP) and utility gross margin (non-GAAP).

			Revenues and Expenses																		MWhs Sold
Year to Date September 30			2022						Change						2021						2022						Change						2021
Retail revenues			(millions)																		(thousands)
Residential			$	762.0					$	104.7					$	657.3					5,487						228						5,259
Commercial			625.9						89.1						536.8						5,615						148						5,467
Industrial			346.7						53.7						293.0						4,299						193						4,106
Other retail revenues			13.2						0.3						12.9						30						—						30
Total electric retail			1,747.8						247.8						1,500.0						15,431						569						14,862
Wholesale revenues			288.4						(114.3)						402.7						8,655						749						7,906
Transmission revenues			269.8						28.3						241.5						N/A						N/A						N/A
Other revenues			53.3						(79.9)						133.2						N/A						N/A						N/A
Operating revenues			2,359.3						81.9						2,277.4						24,086						1,318						22,768
Fuel and purchased power			(629.2)						(85.5)						(543.7)
SPP network transmission costs			(241.8)						(25.0)						(216.8)
Operating and maintenance (a)			(200.5)						(6.2)						(194.3)
Depreciation and amortization			(361.9)						(12.8)						(349.1)
Taxes other than income tax			(163.3)						(10.1)						(153.2)
Gross margin (GAAP)			762.6						(57.7)						820.3
Operating and maintenance (a)			200.5						6.2						194.3
Depreciation and amortization			361.9						12.8						349.1
Taxes other than income tax			163.3						10.1						153.2
Utility gross margin (non-GAAP)			$	1,488.3					$	(28.6)					$	1,516.9
(a) Operating and maintenance expenses which are deemed to be directly attributable to revenue-producing activities include plant operating and maintenance expenses at generating units and transmission and distribution operating and maintenance expenses and have been separately presented in order to calculate gross margin as defined under GAAP. These amounts exclude general and administrative expenses not directly attributable to revenue-producing activities of $201.8 million and $193.6 million year to date September 30, 2022 and 2021, respectively.

Evergy Kansas Central's gross margin (GAAP) decreased $57.7 million year to date September 30, 2022, compared to the same period in 2021 and Evergy Kansas Central's utility gross margin (non-GAAP) decreased $28.6 million year to date September 30, 2022, compared to the same period in 2021, both measures were driven by:

• a $97.1 million decrease in non-regulated energy marketing margins recognized at Evergy Kansas Central 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 wholesale sales 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 $74.1 million increase primarily due to higher retail sales driven by higher weather-normalized demand and favorable weather (cooling degree days increased by 15%); and

• a $28.3 million increase in transmission revenue primarily due to updated transmission costs reflected in Evergy Kansas Central's FERC TFR effective in January 2022.

Additionally, the decrease in Evergy Kansas Central's gross margin (GAAP) was also driven by:

• a $6.2 million increase in operating and maintenance expenses which are determined to be directly attributable to revenue producing activities primarily driven by a $4.5 million increase in operating and maintenance expense at fossil-fuel generating units and a $1.5 million increase in transmission and distribution operating and maintenance expenses as described further below;

• a $12.8 million increase in depreciation and amortization expense as described further below; and

• a $10.1 million increase in taxes other than income taxes as described further below.

Evergy Kansas Central Operating and Maintenance

Evergy Kansas Central's operating and maintenance expense increased $14.4 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by:

• a $10.8 million increase in costs billed for common use assets in 2022 from Evergy Metro related to facilities and software assets;

• a $4.5 million increase in plant operating and maintenance expense at fossil-fuel generating units driven by major maintenance outages at JEC in 2022;

• a $2.9 million increase in certain labor and employee benefits expenses;

• a $1.5 million increase in transmission and distribution operating and maintenance expenses primarily driven by higher contractor costs; and

• a $1.2 million increase in injuries and damages expense primarily due to an increase in the reserve recorded in 2022; partially offset by

• a $6.9 million decrease in costs recorded in 2022 associated with executive transition, including inducement bonuses, severance agreements and other transition expenses;

• a $5.0 million decrease in costs incurred in 2022 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 $12.8 million year to date September 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 $10.1 million year to date September 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 Expense, Net

Evergy Kansas Central's other expense, net increased $24.5 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by:

• a $6.0 million increase due to recording lower COLI benefits in 2022;

• a $5.7 million decrease in investment earnings primarily due to $5.5 million of higher net unrealized losses in Evergy Kansas Central's rabbi trust in 2022;

• a $4.7 million increase due to lower equity AFUDC primarily driven by higher average short-term debt balances in 2022; and

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

Evergy Kansas Central Interest Expense

Evergy Kansas Central's interest expense increased $11.5 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by a $7.0 million increase in interest expense on short-term borrowings primarily due to higher short-term debt balances and weighted-average interest rates in 2022.

Evergy Kansas Central Income Tax Expense

Evergy Kansas Central's income tax expense decreased $22.2 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by lower pre-tax income 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 September 30			2022						Change						2021
			(millions)
Operating revenues			$	1,564.4					$	37.7					$	1,526.7
Fuel and purchased power			487.2						(2.1)						489.3
Operating and maintenance			240.8						(21.3)						262.1
Depreciation and amortization			252.2						13.9						238.3
Taxes other than income tax			100.0						2.8						97.2
Income from operations			484.2						44.4						439.8
Other expense, net			(11.3)						(1.7)						(9.6)
Interest expense			81.5						(1.7)						83.2
Income tax expense			55.2						11.5						43.7
Net income			$	336.2					$	32.9					$	303.3

Evergy Metro Gross Margin (GAAP) and Utility Gross Margin (non-GAAP)

The following table summarizes Evergy Metro's gross margin (GAAP) and MWhs sold and reconciles Evergy Metro's gross margin (GAAP) to Evergy Metro's utility gross margin (non-GAAP). See "Executive Summary - Non-GAAP Measures", above for additional information regarding gross margin (GAAP) and utility gross margin (non-GAAP).

			Revenues and Expenses																		MWhs Sold
Year to Date September 30			2022						Change						2021						2022						Change						2021
Retail revenues			(millions)																		(thousands)
Residential			$	600.7					50.1						$	550.6					4,502						90						4,412
Commercial			589.7						47.2						542.5						5,700						128						5,572
Industrial			98.8						6.9						91.9						1,295						46						1,249
Other retail revenues			8.6						0.9						7.7						53						—						53
Total electric retail			1,297.8						105.1						1,192.7						11,550						264						11,286
Wholesale revenues			86.6						(150.7)						237.3						4,874						(84)						4,958
Transmission revenues			14.4						1.6						12.8						N/A						N/A						N/A
Other revenues			165.6						81.7						83.9						N/A						N/A						N/A
Operating revenues			1,564.4						37.7						1,526.7						16,424						180						16,244
Fuel and purchased power			(487.2)						2.1						(489.3)
Operating and maintenance (a)			(154.1)						(7.8)						(146.3)
Depreciation and amortization			(252.2)						(13.9)						(238.3)
Taxes other than income tax			(100.0)						(2.8)						(97.2)
Gross margin (GAAP)			570.9						15.3						555.6
Operating and maintenance (a)			154.1						7.8						146.3
Depreciation and amortization			252.2						13.9						238.3
Taxes other than income tax			100.0						2.8						97.2
Utility gross margin (non-GAAP)			$	1,077.2					$	39.8					$	1,037.4
(a) Operating and maintenance expenses which are deemed to be directly attributable to revenue-producing activities include plant operating and maintenance expenses at generating units and transmission and distribution operating and maintenance expenses and have been separately presented in order to calculate gross margin as defined under GAAP. These amounts exclude general and administrative expenses not directly attributable to revenue-producing activities of $86.7 million and $115.8 million year to date September 30, 2022 and 2021, respectively.

Evergy Metro's gross margin (GAAP) increased $15.3 million year to date September 30, 2022, compared to the same period in 2021 and Evergy Metro's utility gross margin (non-GAAP) increased $39.8 million year to date September 30, 2022, compared to the same period in 2021, both measures were driven by:

• a $28.4 million increase primarily due to higher retail sales driven by higher weather-normalized demand and favorable weather (heating degree days increased by 4%); and

• 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.

Additionally, the increase in Evergy Metro's gross margin (GAAP) was also partially offset by:

• a $7.8 million increase in operating and maintenance expenses which are determined to be directly attributable to revenue producing activities primarily driven by a $5.6 million increase in transmission and distribution operating and maintenance expenses and a $3.8 million increase in plant operating and maintenance expense at fossil-fuel generating units as described further below;

• a $13.9 million increase in depreciation and amortization expense as described further below; and

• a $2.8 million increase in taxes other than income taxes as described further below.

Evergy Metro Operating and Maintenance

Evergy Metro's operating and maintenance expense decreased $21.3 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by:

• a $10.1 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 $9.0 million decrease in certain labor and employee benefits expenses; and

• a $2.3 million decrease in costs recorded in 2022 associated with executive transition, including inducement bonuses, severance agreements and other transition expenses; partially offset by

• a $5.6 million increase in various transmission and distribution operating and maintenance expenses primarily due to higher contractor costs and a $3.8 million increase in vegetation management costs in 2022; and

• a $3.8 million increase in plant operating and maintenance expense at fossil-fuel generating units driven by major maintenance outages at Iatan Unit 1 and La Cygne Unit 2 in 2022.

Evergy Metro Depreciation Expense

Evergy Metro's depreciation and amortization expense increased $13.9 million year to date September 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 $2.8 million year to date September 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 Income Tax Expense

Evergy Metro's income tax expense increased $11.5 million year to date September 30, 2022, compared to the same period in 2021, primarily driven by higher pre-tax income in 2022.