

Evergy	2019			2018			2017
Current income taxes	(millions)
Federal	$	(39.5	)	$	(67.4	)	$	0.1
State	15.0			2.2			0.4
Total	(24.5		)	(65.2		)	0.5
Deferred income taxes
Federal	93.2			160.1			122.8
State	27.5			(32.3		)	30.7
Total	120.7			127.8			153.5
Investment tax credit
Deferral	5.2			—			—
Amortization	(4.4		)	(3.6		)	(2.8		)
Total	0.8			(3.6		)	(2.8		)
Income tax expense	$	97.0		$	59.0		$	151.2



Evergy Kansas Central	2019			2018			2017
Current income taxes	(millions)
Federal	$	37.9		$	(0.3	)	$	0.1
State	2.6			(1.8		)	0.4
Total	40.5			(2.1		)	0.5
Deferred income taxes
Federal	(8.9		)	43.5			122.8
State	18.4			(42.9		)	30.7
Total	9.5			0.6			153.5
Investment tax credit
Deferral	5.2			—			—
Amortization	(3.1		)	(2.8		)	(2.8		)
Total	2.1			(2.8		)	(2.8		)
Income tax expense (benefit)	$	52.1		$	(4.3	)	$	151.2



Evergy Metro^(a)	2019			2018			2017
Current income taxes	(millions)
Federal	$	43.9		$	29.8		$	37.4
State	22.4			8.9			8.3
Total	66.3			38.7			45.7
Deferred income taxes
Federal	(24.5		)	(3.4		)	74.7
State	(5.0		)	53.0			8.8
Total	(29.5		)	49.6			83.5
Investment tax credit
Amortization	(1.1		)	(1.0		)	(1.0		)
Total	(1.1		)	(1.0		)	(1.0		)
Income tax expense	$	35.7		$	87.3		$	128.2



Evergy	2019		2018		2017
Federal statutory income tax	21.0	%	21.0	%	35.0	%
COLI policies	(1.8	)	(1.9	)	(3.1	)
State income taxes	5.0		4.9		4.1
Flow through depreciation for plant-related differences	(4.5	)	0.8		2.3
Federal tax credits	(4.9	)	(6.4	)	(6.9	)
Non-controlling interest	(0.4	)	(0.4	)	(0.9	)
AFUDC equity	(0.1	)	(0.1	)	(0.2	)
Amortization of federal investment tax credits	(0.5	)	(0.6	)	(0.6	)
Changes in uncertain tax positions, net	(0.2	)	0.1		—
Federal or state tax rate change	—		(8.7	)	2.5
Valuation allowance	(1.0	)	0.4		0.3
Stock compensation	0.1		(0.4	)	(0.9	)
Officer compensation limitation	0.1		1.2		0.2
Other	(0.4	)	(0.2	)	(0.8	)
Effective income tax rate	12.4	%	9.7	%	31.0	%



Evergy Kansas Central	2019		2018		2017
Federal statutory income tax	21.0	%	21.0	%	35.0	%
COLI policies	(3.3	)	(3.3	)	(3.1	)
State income taxes	5.3		5.0		4.1
Flow through depreciation for plant-related differences	(0.1	)	1.6		2.3
Federal tax credits	(7.4	)	(10.4	)	(6.9	)
Non-controlling interest	(0.8	)	(0.6	)	(0.9	)
AFUDC equity	(0.1	)	(0.2	)	(0.2	)
Amortization of federal investment tax credits	(0.7	)	(0.8	)	(0.6	)
Changes in uncertain tax positions, net	(0.4	)	0.1		—
Federal or state tax rate change	—		(15.3	)	2.5
Valuation allowance	(0.4	)	0.5		0.3
Stock compensation	(0.1	)	(0.8	)	(0.9	)
Officer compensation limitation	—		1.8		0.2
Other	(0.3	)	0.2		(0.8	)
Effective income tax rate	12.7	%	(1.2	)%	31.0	%



Evergy Metro^(a)	2019		2018		2017
Federal statutory income tax	21.0	%	21.0	%	35.0	%
COLI policies	(0.2	)	(0.2	)	(0.3	)
State income taxes	4.7		5.5		3.8
Flow through depreciation for plant-related differences	(9.4	)	(2.5	)	0.5
Federal tax credits	(2.5	)	(2.1	)	(2.4	)
AFUDC equity	(0.2	)	(0.1	)	(0.7	)
Amortization of federal investment tax credits	(0.4	)	(0.4	)	(0.3	)
Federal or state tax rate change	—		14.1		5.3
Valuation allowance	—		—		0.4
Stock compensation	—		—		0.2
Officer compensation limitation	0.3		0.6		0.1
Other	(1.0	)	(1.0	)	—
Effective income tax rate	12.3	%	34.9	%	41.6	%



	December 31
	2019									2018
	Evergy			Evergy Kansas Central			Evergy Metro			Evergy			Evergy Kansas Central			Evergy Metro
Deferred tax assets:	(millions)
Tax credit carryforward	$	548.9		$	337.3		$	204.4		$	508.1		$	307.1		$	194.0
Income taxes refundable to customers, net	466.3			234.3			176.2			478.1			233.1			186.9
Deferred employee benefit costs	197.0			93.4			120.4			215.4			89.6			118.3
Net operating loss carryforward	163.4			23.1			61.9			383.3			60.7			119.2
Deferred state income taxes	64.4			64.4			—			62.5			62.5			—
Alternative minimum tax carryforward	37.9			13.4			—			73.4			26.7			—
Accrued liabilities	80.4			14.5			29.1			82.6			13.6			32.8
Other	183.2			99.1			55.1			193.5			101.7			46.7
Total deferred tax assets before valuation allowance	1,741.5			879.5			647.1			1,996.9			895.0			697.9
Valuation allowances	(17.5		)	—			—			(27.3		)	(1.7		)	—
Total deferred tax assets, net	1,724.0			879.5			647.1			1,969.6			893.3			697.9
Deferred tax liabilities:
Plant-related	(3,107.1		)	(1,481.7		)	(1,157.0		)	(3,164.9		)	(1,491.6		)	(1,199.7		)
Deferred employee benefit costs	(173.3		)	(93.4		)	(79.5		)	(199.9		)	(89.6		)	(86.1		)
Acquisition premium	(68.2		)	(68.2		)	—			(72.6		)	(72.6		)	—
Other	(119.8		)	(53.9		)	(53.4		)	(131.4		)	(54.9		)	(43.9		)
Total deferred tax liabilities	(3,468.4		)	(1,697.2		)	(1,289.9		)	(3,568.8		)	(1,708.7		)	(1,329.7		)
Net deferred income tax liabilities	$	(1,744.4	)	$	(817.7	)	$	(642.8	)	$	(1,599.2	)	$	(815.4	)	$	(631.8	)

At December 31, 2019 and 2018, Evergy had $379.0 million and $333.8 million, respectively, of federal general business income tax credit carryforwards. At December 31, 2019 and 2018, Evergy Kansas Central had $168.8 million and $134.0 million, respectively, of federal general business income tax credit carryforwards. At December 31, 2019 and 2018, Evergy Metro had $203.2 million and $192.8 million, respectively, of federal general business income tax credit carryforwards. The carryforwards for Evergy, Evergy Kansas Central and Evergy Metro relate primarily to wind production tax credits and advanced coal investment tax credits and expire in the years 2020 to 2039. Approximately $0.4 million of Evergy's credits are related to Low Income Housing credits that were acquired in Great Plains Energy's acquisition of Evergy Missouri West. Due to federal limitations on the utilization of income tax attributes acquired in the Evergy Missouri West acquisition, Evergy expects a portion of these credits to expire unutilized and has provided a valuation allowance against $0.3 million of the federal income tax benefit.



	Amount of Benefit
Year of Origin	Evergy		Evergy Kansas Central		Evergy Metro
	(millions)
2000	$	7.3	$	7.3	$	—
2001	9.7		9.7		—
2002	0.3		0.2		—
2003	0.3		0.2		—
2004	0.3		0.2		—
2005	0.3		0.2		—
2006	0.3		0.2		—
2007	0.6		0.6		—
2008	39.8		0.5		38.9
2009	47.7		0.2		47.4
2010	18.4		—		18.2
2011	13.3		—		13.2
2012	14.4		3.6		10.7
2013	24.3		11.3		12.9
2014	24.1		10.7		13.0
2015	24.7		10.9		13.2
2016	27.1		11.0		12.4
2017	43.9		35.1		8.2
2018	43.9		36.3		7.5
2019	38.3		30.6		7.6
	$	379.0	$	168.8	$	203.2

At December 31, 2019 and 2018, Evergy had $169.9 million and $174.3 million, respectively, of tax benefits related to state income tax credit carryforwards. At December 31, 2019 and 2018, Evergy Kansas Central had $168.5 million and $173.1 million, respectively, of tax benefit related to state income tax credit carryforwards. At December 31, 2019 and 2018, Evergy Metro had $1.2 million of tax benefits related to state income tax credit carryforwards. The state income tax credits relate primarily to the Kansas high performance incentive program tax credits and expire in the years 2024 to 2034.

At December 31, 2019 and 2018, Evergy had $132.4 million and $324.2 million, respectively, of tax benefits related to federal net operating loss (NOL) carryforwards. At December 31, 2019 and 2018, Evergy Kansas Central had $12.3 million and $40.1 million, respectively, of tax benefits related to federal NOL carryforwards. At December 31, 2019 and 2018, Evergy Metro had $56.2 million and $107.5 million, respectively, of tax benefits related to federal NOL carryforwards. Approximately $51.1 million at December 31, 2019 are tax benefits related to NOLs that were acquired in the Evergy Missouri West acquisition. Due to federal limitations on the utilization of income tax attributes acquired in the Evergy Missouri West acquisition, Evergy expects a portion of these credits to expire unutilized and has provided a valuation allowance against $7.1 million of the federal income tax benefit. The federal NOL carryforwards expire in years 2023 to 2037.

In addition, Evergy also had deferred tax benefits of $31.0 million and $59.1 million related to state NOLs as of December 31, 2019 and 2018, respectively. Evergy Kansas Central had deferred tax benefits of $10.8 million and $20.6 million related to state NOLs as of December 31, 2019 and 2018, respectively. Evergy Metro had deferred tax benefits of $5.7 million and $11.7 million related to state NOLs as of December 31, 2019 and 2018, respectively. The state NOL carryforwards expire in years 2020 to 2038. Evergy does not expect to utilize $10.1 million of NOLs before the expiration date of the carryforwards of NOLs in certain states. Therefore, a valuation allowance has been provided against $10.1 million of state tax benefits.

At December 31, 2019 and 2018, Evergy had $37.9 million and $73.4 million, respectively, of federal alternative minimum tax (AMT) credit carryforwards. At December 31, 2019 and 2018, Evergy Kansas Central had $13.4 million and $26.7 million, respectively, of federal AMT carryforwards. These credits do not expire and can be used to reduce taxes paid in the future or become refundable starting in 2018.

Evergy is required to assess the ultimate realization of deferred tax assets using a "more likely than not" assessment threshold. This assessment takes into consideration tax planning strategies within Evergy's control. As a result of this assessment, Evergy has established a partial valuation allowance for federal and state tax NOL carryforwards and tax credit carryforwards. During 2019, $9.8 million of tax benefit was recorded in continuing operations primarily related to AMT credits and the expiration of certain state NOL carryforwards.

In December 2017, the U.S. Congress passed and President Donald Trump signed Public Law No. 115-97, commonly referred to as the TCJA. The TCJA represents the first major reform in U.S. income tax law since 1986. Most notably, the TCJA reduces the current top corporate income tax rate from 35% to 21% beginning in 2018, repeals the corporate AMT, makes existing AMT tax credit carryforwards refundable, and changes the deductibility and taxability of certain items, among other things. Prior to the change in tax rates that has been reflected in their 2018 rate cases, Evergy Kansas Central, Evergy Metro and Evergy Missouri West recovered the cost of income taxes in rates from their customers based on the 35% federal corporate income tax rate.

In January 2018, the KCC issued an order requiring certain regulated public utilities, including Evergy Kansas Central and Evergy Metro, to begin recording a regulatory liability for the difference between the new federal corporate tax rate and amounts currently collected in rates. In the second quarter of 2018, Evergy Kansas Central and Evergy Metro entered into settlement agreements with KCC staff and other intervenors in which they further agreed to begin deferring any impacts of the TCJA on their excess accumulated deferred income taxes to a regulatory liability. The KCC approved these settlement agreements in June 2018. Evergy Metro and Evergy

The final regulatory treatment of these regulatory liabilities for the refund of tax reform benefits was determined in each of Evergy Kansas Central's, Evergy Metro's and Evergy Missouri West's rate cases with the KCC and MPSC. See Note 5 for more information and the amounts of the regulatory liabilities recorded by the Evergy Companies.

On June 1, 2018, the Missouri governor signed Senate Bill (S.B.) 884 into law. Most notably, S.B. 884 reduces the corporate income tax rate from 6.25% to 4.0% beginning in 2020, provides for the mandatory use of the single sales factor formula and eliminates intercompany transactions between corporations that file a consolidated Missouri income tax return.

As a result of the change in the Missouri corporate income tax rate, Evergy Metro revalued and restated its deferred income tax assets and liabilities as of June 1, 2018. Evergy Metro decreased its net deferred income tax liabilities by $46.6 million, primarily consisting of a $28.8 million adjustment for the revaluation and restatement of deferred income tax assets and liabilities included in Missouri jurisdictional rate base and a $9.9 million tax gross-up adjustment for ratemaking purposes. The decrease to Evergy Metro's net deferred income tax liabilities included in Missouri jurisdictional rate base were offset by a corresponding increase in regulatory liabilities. The net regulatory liabilities will be amortized to customers over a period to be determined in a future rate case.