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

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

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

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

Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West conduct business in their respective service territories using the name Evergy. Collectively, the Evergy Companies have approximately 15,400 MWs of owned generating capacity and renewable power purchase agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.7 million customers in the states of Kansas and Missouri.

These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements and should be read in conjunction with the consolidated financial statements in the Evergy Companies' combined 2021 Form 10-K.

These unaudited consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary to fairly present the unaudited consolidated financial statements for each of the Evergy Companies for these interim periods. In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

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


	September 30 2022		December 31 2021
Evergy	(millions)
Fuel inventory	$	155.6	$	160.9
Supplies	459.6		405.8
Fuel inventory and supplies	$	615.2	$	566.7
Evergy Kansas Central
Fuel inventory	$	80.4	$	74.3
Supplies	238.0		208.9
Fuel inventory and supplies	$	318.4	$	283.2
Evergy Metro
Fuel inventory	$	53.0	$	62.0
Supplies	166.2		149.0
Fuel inventory and supplies	$	219.2	$	211.0


September 30, 2022	Evergy			Evergy Kansas Central			Evergy Metro
		(millions)
Electric plant in service		$	31,548.4		$	15,053.8		$	12,172.7
Electric plant acquisition adjustment		724.3			724.3			—
Accumulated depreciation		(12,082.2)			(5,835.6)			(4,995.5)
Plant in service, net		20,190.5			9,942.5			7,177.2
Construction work in progress		1,328.3			797.4			414.3
Nuclear fuel, net		167.3			82.9			84.4
Plant to be retired, net(a)		0.8			0.8			—
Property, plant and equipment, net		$	21,686.9		$	10,823.6		$	7,675.9

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

When the Evergy Companies retire utility plant, the original cost, net of salvage, is charged to accumulated depreciation. However, when it becomes probable an asset will be retired significantly in advance of its original expected useful life and in the near term, the cost of the asset and related accumulated depreciation is recognized as a separate asset and a probable abandonment. If the asset is still in service, the net amount is classified as plant to be retired, net on the consolidated balance sheets. If the asset is no longer in service, the net amount is classified as a regulatory asset on the consolidated balance sheets.

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

Evergy Missouri West 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 Missouri Public Service Commission (MPSC) which was filed in January 2022.

In October 2019, the MPSC issued an accounting authority order (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 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 Note 4 for additional information regarding the AAO and Evergy Missouri West's current rate case.

Year to date September 30, 2022, Evergy's investment earnings (loss) included a pre-tax loss of $16.3 million related to Evergy's equity investment in an early-stage energy solutions company. See "Evergy Equity Investment" in this Note 1 for further information.


	Three Months Ended September 30				Year to Date September 30
	2022		2021		2022		2021
Evergy	(millions)
Non-service cost component of net benefit cost	$	(10.2)	$	(12.8)	$	(46.5)	$	(41.4)
Other	(6.5)		(6.4)		(18.0)		(17.5)
Other expense	$	(16.7)	$	(19.2)	$	(64.5)	$	(58.9)
Evergy Kansas Central
Non-service cost component of net benefit cost	$	(4.2)	$	(3.4)	$	(13.6)	$	(11.1)
Other	(6.3)		(5.9)		(16.2)		(15.1)
Other expense	$	(10.5)	$	(9.3)	$	(29.8)	$	(26.2)
Evergy Metro
Non-service cost component of net benefit cost	$	(2.2)	$	(5.8)	$	(21.8)	$	(19.8)
Other	(0.3)		(0.5)		(1.3)		(2.0)
Other expense	$	(2.5)	$	(6.3)	$	(23.1)	$	(21.8)

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


	Three Months Ended September 30				Year to Date September 30
	2022		2021		2022		2021
Income	(millions, except per share amounts)
Net income	$	431.2	$	452.5	$	754.4	$	835.4
Less: net income attributable to noncontrolling interests	3.0		3.1		9.2		9.1
Net income attributable to Evergy, Inc.	$	428.2	$	449.4	$	745.2	$	826.3
Common Shares Outstanding
Weighted average number of common shares outstanding - basic	229.9		229.7		229.9		228.8
Add: effect of dilutive securities	0.7		0.5		0.6		0.5
Diluted average number of common shares outstanding	230.6		230.2		230.5		229.3
Basic EPS	$	1.86	$	1.96	$	3.24	$	3.61
Diluted EPS	$	1.86	$	1.95	$	3.23	$	3.60

In November 2022, Evergy's Board of Directors (Evergy Board) declared a quarterly dividend of $0.6125 per share on Evergy's common stock. The common dividend is payable on December 20, 2022, to shareholders of record as of November 18, 2022.


Evergy
Year to Date September 30	2022		2021
Cash paid for (received from):	(millions)
Interest, net of amount capitalized	$	305.5	$	257.0
Interest of VIEs	—		0.2
Income taxes, net of refunds	8.0		1.7
Right-of-use assets obtained in exchange for new operating lease liabilities	8.2		8.1
Right-of-use assets obtained in exchange for new finance lease liabilities	7.0		0.6
Non-cash investing transactions:
Property, plant and equipment additions	128.6		184.8

Non-cash financing transactions:
Issuance of stock for compensation and reinvested dividends	—		0.7


Evergy Kansas Central
Year to Date September 30	2022		2021
Cash paid for (received from):	(millions)
Interest, net of amount capitalized	$	130.9	$	105.8
Interest of VIEs	—		0.2
Income taxes, net of refunds	43.1		37.2
Right-of-use assets obtained in exchange for new operating lease liabilities	8.0		3.6
Right-of-use assets obtained in exchange for new finance lease liabilities	7.0		0.6
Non-cash investing transactions:
Property, plant and equipment additions	51.7		64.6


Evergy Metro
Year to Date September 30	2022		2021
Cash paid for (received from):	(millions)
Interest, net of amount capitalized	$	84.3	$	73.3
Income taxes, net of refunds	(0.4)		66.8
Right-of-use assets obtained in exchange for new operating lease liabilities	0.2		4.5

Non-cash investing transactions:
Property, plant and equipment additions	53.7		75.2

In February 2021, much of the central and southern United States, including the service territories of the Evergy Companies, experienced a significant winter weather event that resulted in extremely cold temperatures over a multi-day period (February 2021 winter weather event). These circumstances resulted in higher than normal market

prices within the SPP Integrated Marketplace for both natural gas and power for the duration of the February 2021 winter weather event. As part of the February 2021 winter weather event and inclusive of the aforementioned items, Evergy incurred natural gas and purchased power costs, net of wholesale revenues, of $349.7 million for year to date September 30, 2021. This $349.7 million of net fuel and purchased power costs incurred was primarily driven by $293.4 million of costs at Evergy Missouri West and $127.9 million of costs at Evergy Kansas Central, partially offset by $71.6 million of net wholesale revenues at Evergy Metro.

The amount of purchased power costs incurred and wholesale revenues recorded by the Evergy Companies in the first quarter of 2021 during the February 2021 winter weather event have been subject to subsequent resettlement activity by the SPP that has resulted in net increases to the total cost of the February 2021 winter weather event from the amounts initially recorded. As of September 30, 2022, Evergy has incurred total natural gas and purchased power costs, net of wholesale revenues, of $367.9 million related to the February 2021 winter weather event and inclusive of these subsequent SPP resettlements. This $367.9 million of net fuel and purchased power costs was primarily driven by $296.6 million of costs at Evergy Missouri West and $134.3 million of costs at Evergy Kansas Central, partially offset by $63.0 million of net wholesale revenues at Evergy Metro.

As of September 30, 2022 and December 31, 2021, the Evergy Companies had deferred substantially all of the fuel and purchased power costs, net of wholesale revenues, related to the February 2021 winter weather event to a regulatory asset or liability for recovery or refund through the respective fuel recovery mechanisms of Evergy Kansas Central and Evergy Metro and through a securitization financing order at Evergy Missouri West. See Note 4 for additional information regarding these regulatory proceedings.

The Evergy Companies also engage in limited non-regulated energy marketing activities in various regional power markets that have historically not had a significant impact on the Evergy Companies' results of operations. These energy marketing margins are recorded net in operating revenues on the Evergy Companies' statements of income and comprehensive income. As a result of the elevated market prices experienced in regional power markets across the central and southern United States driven by the February 2021 winter weather event discussed above, Evergy and Evergy Kansas Central recorded $95.0 million of energy marketing margins year to date September 30, 2021, related to the February 2021 winter weather event, primarily driven by activities in the Electric Reliability Council of Texas (ERCOT).

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.

Year to date September 30, 2022, Evergy recorded a pre-tax loss of $16.3 million 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.

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.