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Evergy Metro

Filed: 5 May 21, 8:00pm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______to_______
evrg-20210331_g1.jpg
 Exact name of registrant as specified in its charter, 
Commissionstate of incorporation, address of principalI.R.S. Employer
File Numberexecutive offices and telephone numberIdentification Number
   
001-38515EVERGY, INC.82-2733395
(a Missouri corporation)
1200 Main Street
Kansas City, Missouri 64105
(816) 556-2200
  
001-03523EVERGY KANSAS CENTRAL, INC.48-0290150
(a Kansas corporation)
818 South Kansas Avenue
Topeka, Kansas 66612
(785) 575-6300
000-51873EVERGY METRO, INC.44-0308720
(a Missouri corporation)
1200 Main Street
Kansas City, Missouri 64105
(816) 556-2200
      Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Evergy, Inc. common stockEVRGNew York Stock Exchange


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Evergy, Inc.YesxNo
Evergy Kansas Central, Inc.YesxNo
Evergy Metro, Inc.YesxNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Evergy, Inc.YesxNo
Evergy Kansas Central, Inc.YesxNo
Evergy Metro, Inc.YesxNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Evergy, Inc.Large Accelerated FilerxAccelerated FilerNon-accelerated FilerSmaller Reporting CompanyEmerging Growth Company
Evergy Kansas Central, Inc.Large Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Evergy Metro, Inc.Large Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.
Evergy, Inc.
Evergy Kansas Central, Inc.
Evergy Metro, Inc.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Evergy, Inc.YesNox
Evergy Kansas Central, Inc.YesNox
Evergy Metro, Inc.YesNox
On April 30, 2021, Evergy, Inc. had 229,267,502 shares of common stock outstanding.  On April 30, 2021, Evergy Metro, Inc. and Evergy Kansas Central, Inc. each had 1 share of common stock outstanding and held by Evergy, Inc.
Evergy Kansas Central, Inc. and Evergy Metro, Inc. meet the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with the reduced disclosure format.
This combined Quarterly Report on Form 10-Q is provided by the following registrants: Evergy, Inc. (Evergy), Evergy Kansas Central, Inc. (Evergy Kansas Central) and Evergy Metro, Inc. (Evergy Metro) (collectively, the Evergy Companies). Information relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.
This report should be read in its entirety.  No one section of the report deals with all aspects of the subject matter.  It should be read in conjunction with the consolidated financial statements and related notes and with the management's discussion and analysis of financial condition and results of operations included in the 2020 Form 10-K for each of Evergy, Evergy Kansas Central and Evergy Metro.


TABLE OF CONTENTS
Page Number
Item 1.
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
Note 9:
Note 10:
Note 11:
Note 12:
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
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CAUTIONARY STATEMENTS REGARDING CERTAIN FORWARD-LOOKING INFORMATION
Statements made in this report that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, statements relating to Evergy's strategic plan, including, without limitation, those related to earnings per share, dividend, operating and maintenance expense and capital investment goals; the outcome of legislative efforts and regulatory and legal proceedings; future energy demand; future power prices; plans with respect to existing and potential future generation resources; the availability and cost of generation resources and energy storage; target emissions reductions; and other matters relating to expected financial performance or affecting future operations. Forward-looking statements are often accompanied by forward-looking words such as "anticipates," "believes," "expects," "estimates," "forecasts," "should," "could," "may," "seeks," "intends," "proposed," "projects," "planned," "target," "outlook," "remain confident," "goal," "will" or other words of similar meaning. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the forward-looking information.
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Evergy Companies are providing a number of risks, uncertainties and other factors that could cause actual results to differ from the forward-looking information. These risks, uncertainties and other factors include, but are not limited to: economic and weather conditions and any impact on sales, prices and costs; changes in business strategy or operations; the impact of federal, state and local political, legislative, judicial and regulatory actions or developments, including deregulation, re-regulation, securitization and restructuring of the electric utility industry; decisions of regulators regarding, among other things, customer rates and the prudency of operational decisions such as capital expenditures and asset retirements; changes in applicable laws, regulations, rules, principles or practices, or the interpretations thereof, governing tax, accounting and environmental matters, including air and water quality and waste management and disposal; the impact of climate change, including increased frequency and severity of significant weather events and the extent to which counterparties are willing to do business with, finance the operations of or purchase energy from the Evergy Companies due to the fact that the Evergy Companies operate coal-fired generation; prices and availability of electricity in wholesale markets; market perception of the energy industry and the Evergy Companies; the impact of the Coronavirus (COVID-19) pandemic on, among other things, sales, results of operations, financial condition, liquidity and cash flows, and also on operational issues, such as the availability and ability of the Evergy Companies' employees and suppliers to perform the functions that are necessary to operate the Evergy Companies; changes in the energy trading markets in which the Evergy Companies participate, including retroactive repricing of transactions by regional transmission organizations (RTO) and independent system operators; financial market conditions and performance, including changes in interest rates and credit spreads and in availability and cost of capital and the effects on derivatives and hedges, nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; the transition to a replacement for the London Interbank Offered Rate (LIBOR) benchmark interest rate; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of physical and cybersecurity breaches, criminal activity, terrorist attacks and other disruptions to the Evergy Companies' facilities or information technology infrastructure or the facilities and infrastructure of third-party service providers on which the Evergy Companies rely; ability to carry out marketing and sales plans; cost, availability, quality and timely provision of equipment, supplies, labor and fuel; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays and cost increases of generation, transmission, distribution or other projects; the Evergy Companies' ability to manage their transmission and distribution development plans and transmission joint ventures; the inherent risks associated with the ownership and operation of a nuclear facility, including environmental, health, safety, regulatory and financial risks; workforce risks, including those related to the Evergy Companies' ability to attract and retain qualified personnel, maintain satisfactory relationships with their labor unions and manage costs of, or changes in, retirement, health care and other benefits; disruption, costs and uncertainties caused by or related to the actions of individuals or entities, such as activist shareholders or special interest groups, that seek to influence Evergy's strategic plan, financial results or operations; the possibility that strategic initiatives, including mergers, acquisitions and divestitures, and long-term financial plans, may not create the value that they are expected to achieve in a timely manner or at all; difficulties in maintaining relationships with customers, employees, regulators or suppliers; and other risks and uncertainties.

This list of factors is not all-inclusive because it is not possible to predict all factors. Additional risks and uncertainties are discussed from time to time in current, quarterly and annual reports filed by the Evergy Companies with the Securities and Exchange Commission (SEC). Reports filed by the Evergy Companies with the SEC should also be read for more information regarding risk factors. Each forward-looking statement speaks only as of the date
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of the particular statement. The Evergy Companies undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
AVAILABLE INFORMATION
The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at sec.gov. Additionally, information about the Evergy Companies, including their combined annual reports on Form 10-K, combined quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed with the SEC, is also available through the Evergy Companies' website, www.evergy.com. Such reports are accessible at no charge and are made available as soon as reasonably practical after such material is filed with or furnished to the SEC.
Investors should note that the Evergy Companies announce material financial information in SEC filings, press releases and public conference calls. In accordance with SEC guidelines, the Evergy Companies also use the Investor Relations section of their website, www.evergy.com, to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on Evergy's website is not part of this document.
5

GLOSSARY OF TERMS 
The following is a glossary of frequently used abbreviations or acronyms that are found throughout this report.
Abbreviation or AcronymDefinition
  
AAOAccounting authority order
ACEAffordable Clean Energy
AEPAmerican Electric Power Company, Inc.
AFUDCAllowance for funds used during construction
AROsAsset retirement obligations
BluescapeBluescape Energy Partners, LLC
BSERBest system of emission reduction
CAAClean Air Act Amendments of 1990
CCRsCoal combustion residuals
CO2
Carbon dioxide
COLICorporate-owned life insurance
COVID-19Coronavirus
CPPClean Power Plan
DOEDepartment of Energy
ELGEffluent limitations guidelines
EPAEnvironmental Protection Agency
EPSEarnings per common share
ERISAEmployee Retirement Income Security Act of 1974, as amended
ERSPEarnings Review and Sharing Plan
EvergyEvergy, Inc. and its consolidated subsidiaries
Evergy BoardEvergy Board of Directors
Evergy CompaniesEvergy, Evergy Kansas Central, and Evergy Metro, collectively, which are individual registrants within the Evergy consolidated group
Evergy Kansas CentralEvergy Kansas Central, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
Evergy Kansas SouthEvergy Kansas South, Inc., a wholly-owned subsidiary of Evergy Kansas Central
Evergy MetroEvergy Metro, Inc., a wholly-owned subsidiary of Evergy, and its consolidated subsidiaries
Evergy Missouri WestEvergy Missouri West, Inc., a wholly-owned subsidiary of Evergy
Evergy Transmission CompanyEvergy Transmission Company, LLC
Exchange ActThe Securities Exchange Act of 1934, as amended
FERCFederal Energy Regulatory Commission
GAAPGenerally Accepted Accounting Principles
GHGGreenhouse gas
Great Plains EnergyGreat Plains Energy Incorporated
JECJeffrey Energy Center
KCCState Corporation Commission of the State of Kansas
kVKilovolt
kWhKilowatt hour
MECGMidwest Energy Consumers Group
MPSCPublic Service Commission of the State of Missouri
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Abbreviation or AcronymDefinition
MWMegawatt
MWhMegawatt hour
NAAQSNational Ambient Air Quality Standards
NAVNet asset value
OCIOther comprehensive income
OPCOffice of the Public Counsel
Prairie WindPrairie Wind Transmission, LLC, 50% owned by Evergy Kansas Central
RSURestricted share unit
RTORegional transmission organization
SECSecurities and Exchange Commission
SPPSouthwest Power Pool, Inc.
TDCTransmission delivery charge
TFRTransmission formula rate
TransourceTransource Energy, LLC and its subsidiaries, 13.5% owned by Evergy Transmission Company
VIEVariable interest entity
Wolf CreekWolf Creek Generating Station
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EVERGY, INC.
Consolidated Balance Sheets
(Unaudited)
 March 31
2021
December 31
2020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$482.0 $144.9 
Receivables, net of allowance for credit losses of $23.6 and $19.3, respectively247.5 273.9 
Accounts receivable pledged as collateral365.0 360.0 
Fuel inventory and supplies492.3 504.5 
Income taxes receivable59.9 62.9 
Regulatory assets255.9 206.2 
Prepaid expenses and other assets99.3 71.9 
Total Current Assets2,001.9 1,624.3 
PROPERTY, PLANT AND EQUIPMENT, NET20,102.2 19,951.0 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET153.2 154.9 
OTHER ASSETS:  
Regulatory assets2,192.0 1,868.2 
Nuclear decommissioning trust fund686.5 652.1 
Goodwill2,336.6 2,336.6 
Other547.7 527.7 
Total Other Assets5,762.8 5,384.6 
TOTAL ASSETS$28,020.1 $27,114.8 
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Balance Sheets
(Unaudited)
 March 31
2021
December 31
2020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Current maturities of long-term debt$533.5 $436.4 
Current maturities of long-term debt of variable interest entities0 18.8 
Notes payable and commercial paper1,295.0 315.0 
Collateralized note payable365.0 360.0 
Accounts payable345.3 654.0 
Accrued taxes231.2 143.8 
Accrued interest148.2 123.4 
Regulatory liabilities92.8 26.1 
Asset retirement obligations31.3 40.2 
Accrued compensation and benefits57.3 55.5 
Other144.8 182.6 
Total Current Liabilities3,244.4 2,355.8 
LONG-TERM LIABILITIES:  
Long-term debt, net9,090.6 9,190.9 
Deferred income taxes1,707.6 1,664.8 
Unamortized investment tax credits185.2 186.7 
Regulatory liabilities2,647.0 2,638.8 
Pension and post-retirement liability1,136.3 1,149.4 
Asset retirement obligations914.0 901.7 
Other300.6 308.2 
Total Long-Term Liabilities15,981.3 16,040.5 
Commitments and Contingencies (Note 9)00
EQUITY:
Evergy, Inc. Shareholders' Equity:
Common stock - 600,000,000 shares authorized, without par value
226,995,620 and 226,836,670 shares issued, stated value
7,081.5 7,080.0 
Retained earnings1,772.8 1,702.8 
Accumulated other comprehensive loss(48.0)(49.4)
Total Evergy, Inc. Shareholders' Equity8,806.3 8,733.4 
Noncontrolling Interests(11.9)(14.9)
Total Equity8,794.4 8,718.5 
TOTAL LIABILITIES AND EQUITY$28,020.1 $27,114.8 
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
9

EVERGY, INC.
Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended March 3120212020
(millions, except per share amounts)
OPERATING REVENUES$1,611.9 $1,116.7 
OPERATING EXPENSES:
Fuel and purchased power635.1 258.2 
SPP network transmission costs69.4 62.0 
Operating and maintenance275.5 288.2 
Depreciation and amortization219.3 218.5 
Taxes other than income tax94.9 92.3 
Total Operating Expenses1,294.2 919.2 
INCOME FROM OPERATIONS317.7 197.5 
OTHER INCOME (EXPENSE):
Investment earnings (loss)1.6 (0.8)
Other income11.2 2.3 
Other expense(20.9)(22.7)
Total Other Expense, Net(8.1)(21.2)
Interest expense94.0 96.2 
INCOME BEFORE INCOME TAXES215.6 80.1 
Income tax expense23.0 10.1 
Equity in earnings of equity method investees, net of income taxes2.0 2.2 
NET INCOME194.6 72.2 
Less: Net income attributable to noncontrolling interests3.0 2.8 
NET INCOME ATTRIBUTABLE TO EVERGY, INC.$191.6 $69.4 
BASIC AND DILUTED EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING ATTRIBUTABLE TO EVERGY, INC. (see Note 1)
Basic earnings per common share$0.84 $0.31 
Diluted earnings per common share$0.84 $0.31 
AVERAGE COMMON SHARES OUTSTANDING
Basic227.3 227.1 
Diluted227.6 227.5 
COMPREHENSIVE INCOME
NET INCOME$194.6 $72.2 
Derivative hedging activity
Reclassification to expenses, net of tax1.4 1.3 
Derivative hedging activity, net of tax1.4 1.3 
Total other comprehensive income1.4 1.3 
COMPREHENSIVE INCOME196.0 73.5 
Less:  comprehensive income attributable to noncontrolling interest3.0 2.8 
COMPREHENSIVE INCOME ATTRIBUTABLE TO EVERGY, INC.$193.0 $70.7 
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 3120212020
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$194.6 $72.2 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization219.3 218.5 
Amortization of nuclear fuel13.3 14.4 
Amortization of deferred refueling outage5.8 6.3 
Amortization of corporate-owned life insurance6.7 6.5 
Non-cash compensation3.1 4.6 
Net deferred income taxes and credits20.0 8.1 
Allowance for equity funds used during construction(7.5)(1.8)
Payments for asset retirement obligations(0.8)(3.1)
Equity in earnings of equity method investees, net of income taxes(2.0)(2.2)
Income from corporate-owned life insurance(0.6)(1.9)
Other0.2 0.3 
Changes in working capital items:
Accounts receivable26.3 42.6 
Accounts receivable pledged as collateral(5.0)17.0 
Fuel inventory and supplies12.4 (17.1)
Prepaid expenses and other current assets(82.6)0.4 
Accounts payable(242.4)(153.4)
Accrued taxes90.4 83.0 
Other current liabilities50.6 (9.4)
Changes in other assets(324.6)39.4 
Changes in other liabilities(5.8)(3.8)
Cash Flows from (used in) Operating Activities(28.6)320.6 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(467.7)(354.4)
Purchase of securities - trusts(44.6)(18.8)
Sale of securities - trusts40.9 15.0 
Investment in corporate-owned life insurance(1.0)(2.0)
Proceeds from investment in corporate-owned life insurance0.8 30.8 
Other investing activities(3.6)(4.0)
Cash Flows used in Investing Activities(475.2)(333.4)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net980.0 493.1 
Collateralized short-term borrowings, net5.0 (17.0)
Retirements of long-term debt(1.1)(1.1)
Retirements of long-term debt of variable interest entities(18.8)(32.3)
Borrowings against cash surrender value of corporate-owned life insurance0.4 
Repayment of borrowings against cash surrender value of corporate-owned life insurance(0.1)(27.8)
Cash dividends paid(121.4)(114.5)
Other financing activities(3.1)(6.4)
Cash Flows from Financing Activities840.9 294.0 
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH337.1 281.2 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period144.9 23.2 
End of period$482.0 $304.4 
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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EVERGY, INC.
Consolidated Statements of Changes in Equity
(Unaudited)
Evergy, Inc. Shareholders
Common stock sharesCommon stockRetained earningsAOCINon-controlling interestsTotal equity
(millions, except share amounts)
Balance as of December 31, 2019226,641,443 $7,070.4 $1,551.5 $(50.0)$(26.6)$8,545.3 
Net income— — 69.4 — 2.8 72.2 
Issuance of stock compensation and reinvested dividends, net of tax withholding97,305 (3.0)— — — (3.0)
Dividends declared on common stock ($0.505 per share)— — (114.5)— — (114.5)
Dividend equivalents declared— — (0.7)— — (0.7)
Stock compensation expense— 4.6 — — — 4.6 
Derivative hedging activity, net of tax— — — 1.3 — 1.3 
Other— 0.2 — — — 0.2 
Balance as of March 31, 2020226,738,748 $7,072.2 $1,505.7 $(48.7)$(23.8)$8,505.4 
Balance as of December 31, 2020226,836,670 $7,080.0 $1,702.8 $(49.4)$(14.9)$8,718.5 
Net income— — 191.6 — 3.0 194.6 
Issuance of stock compensation and reinvested dividends, net of tax withholding104,896 (1.1)— — — (1.1)
Issuance of restricted common stock54,054 2.9 — — — 2.9 
Dividends declared on common stock ($0.535 per share)— — (121.4)— — (121.4)
Dividend equivalents declared— — (0.2)— — (0.2)
Stock compensation expense— 2.6 — — — 2.6 
Unearned compensation
Issuance of restricted common stock— (2.9)— — — (2.9)
Compensation expense recognized— 0.4 — — — 0.4 
Derivative hedging activity, net of tax— — — 1.4 — 1.4 
Other— (0.4)— — — (0.4)
Balance as of March 31, 2021226,995,620 $7,081.5 $1,772.8 $(48.0)$(11.9)$8,794.4 
The accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
(Unaudited)
 March 31
2021
December 31
2020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$96.1 $28.7 
Receivables, net of allowance for credit losses of $8.8 and $7.5, respectively209.1 218.9 
Related party receivables11.8 6.7 
Accounts receivable pledged as collateral185.0 180.0 
Fuel inventory and supplies271.2 276.4 
Income taxes receivable19.0 25.3 
Regulatory assets122.4 96.2 
Prepaid expenses and other assets49.7 27.4 
Total Current Assets964.3 859.6 
PROPERTY, PLANT AND EQUIPMENT, NET10,246.4 10,193.6 
PROPERTY, PLANT AND EQUIPMENT OF VARIABLE INTEREST ENTITIES, NET153.2 154.9 
OTHER ASSETS:  
Regulatory assets900.3 800.1 
Nuclear decommissioning trust fund327.7 309.8 
Other279.6 271.1 
Total Other Assets1,507.6 1,381.0 
TOTAL ASSETS$12,871.5 $12,589.1 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
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EVERGY KANSAS CENTRAL, INC.
Consolidated Balance Sheets
(Unaudited)
 March 31
2021
December 31
2020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Current maturities of long-term debt of variable interest entities$0 $18.8 
Notes payable and commercial paper245.0 50.0 
Collateralized note payable185.0 180.0 
Accounts payable150.2 280.1 
Related party payables10.1 21.7 
Accrued taxes149.6 101.5 
Accrued interest92.0 72.8 
Regulatory liabilities12.9 11.9 
Asset retirement obligations11.2 11.2 
Accrued compensation and benefits24.5 11.1 
Other105.4 133.5 
Total Current Liabilities985.9 892.6 
LONG-TERM LIABILITIES:  
Long-term debt, net3,932.2 3,931.5 
Deferred income taxes841.8 824.5 
Unamortized investment tax credits64.6 65.7 
Regulatory liabilities1,468.3 1,461.0 
Pension and post-retirement liability546.1 560.3 
Asset retirement obligations421.9 416.0 
Other148.8 156.7 
Total Long-Term Liabilities7,423.7 7,415.7 
Commitments and Contingencies (Note 9)00
EQUITY: 
Evergy Kansas Central, Inc. Shareholder's Equity:  
Common stock - 1,000 shares authorized, $0.01 par value, 1 share issued2,737.6 2,737.6 
Retained earnings1,736.2 1,558.1 
Total Evergy Kansas Central, Inc. Shareholder's Equity4,473.8 4,295.7 
Noncontrolling Interests(11.9)(14.9)
Total Equity4,461.9 4,280.8 
TOTAL LIABILITIES AND EQUITY$12,871.5 $12,589.1 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 3120212020
(millions)
OPERATING REVENUES$901.1 $560.1 
OPERATING EXPENSES:
Fuel and purchased power294.8 99.2 
SPP network transmission costs69.4 62.0 
Operating and maintenance130.8 123.7 
Depreciation and amortization115.5 112.1 
Taxes other than income tax50.3 48.6 
Total Operating Expenses660.8 445.6 
INCOME FROM OPERATIONS240.3 114.5 
OTHER INCOME (EXPENSE):
Investment loss(0.5)(1.7)
Other income6.5 2.1 
Other expense(9.2)(11.5)
Total Other Expense, Net(3.2)(11.1)
Interest expense40.3 41.6 
INCOME BEFORE INCOME TAXES196.8 61.8 
Income tax expense16.6 7.8 
Equity in earnings of equity method investees, net of income taxes0.9 1.2 
NET INCOME181.1 55.2 
Less: Net income attributable to noncontrolling interests3.0 2.8 
NET INCOME ATTRIBUTABLE TO EVERGY KANSAS CENTRAL, INC.$178.1 $52.4 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.

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EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 3120212020
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$181.1 $55.2 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization115.5 112.1 
Amortization of nuclear fuel6.6 7.2 
Amortization of deferred refueling outage2.9 3.1 
Amortization of corporate-owned life insurance6.7 6.5 
Net deferred income taxes and credits7.9 (16.0)
Allowance for equity funds used during construction(4.7)(1.9)
Payments for asset retirement obligations0 (0.2)
Equity in earnings of equity method investees, net of income taxes(0.9)(1.2)
Income from corporate-owned life insurance(0.6)(1.9)
Other(1.4)(1.4)
Changes in working capital items:
Accounts receivable4.7 9.1 
Accounts receivable pledged as collateral(5.0)12.0 
Fuel inventory and supplies5.4 (4.3)
Prepaid expenses and other current assets(53.7)(1.2)
Accounts payable(109.9)(26.3)
Accrued taxes54.4 68.4 
Other current liabilities2.1 (11.0)
Changes in other assets(94.0)13.9 
Changes in other liabilities(16.5)(10.5)
Cash Flows from Operating Activities100.6 211.6 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(212.7)(158.2)
Purchase of securities - trusts(36.3)(6.0)
Sale of securities - trusts35.3 4.4 
Investment in corporate-owned life insurance(1.0)(2.0)
Proceeds from investment in corporate-owned life insurance0.8 30.8 
Other investing activities(0.1)0.2 
Cash Flows used in Investing Activities(214.0)(130.8)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net195.0 120.8 
Collateralized short-term debt, net5.0 (12.0)
Retirements of long-term debt of variable interest entities(18.8)(32.3)
Borrowings against cash surrender value of corporate-owned life insurance0.4 
Repayment of borrowings against cash surrender value of corporate-owned life insurance(0.1)(27.8)
Cash dividends paid0 (60.0)
Other financing activities(0.7)(1.7)
Cash Flows from (used in) Financing Activities180.8 (13.0)
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH67.4 67.8 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period28.7 5.2 
End of period$96.1 $73.0 
The disclosures regarding Evergy Kansas Central included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
16

EVERGY KANSAS CENTRAL, INC.
Consolidated Statements of Changes in Equity
(Unaudited)
Evergy Kansas Central, Inc. Shareholder
Common stock sharesCommon stockRetained earningsNon-controlling interestsTotal equity
(millions, except share amounts)
Balance as of December 31, 2019$2,737.6 $1,494.0 $(26.6)$4,205.0 
Net income— — 52.4 2.8 55.2 
Dividends declared on common stock— — (60.0)— (60.0)
Balance as of March 31, 2020$2,737.6 $1,486.4 $(23.8)$4,200.2 
Balance as of December 31, 2020$2,737.6 $1,558.1 $(14.9)$4,280.8 
Net income— — 178.1 3.0 181.1 
Balance as of March 31, 2021$2,737.6 $1,736.2 $(11.9)$4,461.9 
The disclosures regarding Evergy Kansas Central included in the accompanying Unaudited Notes to Consolidated Financial Statements are an integral part of these statements.
17

EVERGY METRO, INC.
Consolidated Balance Sheets
(Unaudited)
 March 31
2021
December 31
2020
ASSETS(millions, except share amounts)
CURRENT ASSETS: 
Cash and cash equivalents$8.4 $71.6 
Receivables, net of allowance for credit losses of $9.9 and $8.1, respectively37.9 45.0 
Related party receivables409.2 225.6 
Accounts receivable pledged as collateral130.0 130.0 
Fuel inventory and supplies167.5 170.4 
Income taxes receivable0 3.2 
Regulatory assets60.0 82.0 
Prepaid expenses25.3 22.9 
Other assets16.9 14.2 
Total Current Assets855.2 764.9 
PROPERTY, PLANT AND EQUIPMENT, NET7,189.2 7,141.2 
OTHER ASSETS:  
Regulatory assets515.5 533.5 
Nuclear decommissioning trust fund358.8 342.3 
Other134.8 133.9 
Total Other Assets1,009.1 1,009.7 
TOTAL ASSETS$9,053.5 $8,915.8 
The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
18

EVERGY METRO, INC.
Consolidated Balance Sheets
(Unaudited)
 March 31
2021
December 31
2020
LIABILITIES AND EQUITY(millions, except share amounts)
CURRENT LIABILITIES:  
Notes payable and commercial paper$115.0 $
Collateralized note payable130.0 130.0 
Accounts payable168.5 280.1 
Related party payables1.5 0.1 
Accrued taxes89.2 34.9 
Accrued interest39.7 30.0 
Regulatory liabilities73.1 8.0 
Asset retirement obligations13.2 21.2 
Accrued compensation and benefits32.9 44.4 
Other30.2 37.3 
Total Current Liabilities693.3 586.0 
LONG-TERM LIABILITIES:  
Long-term debt, net2,923.5 2,923.0 
Deferred income taxes545.7 558.8 
Unamortized investment tax credits118.1 118.5 
Regulatory liabilities904.6 899.4 
Pension and post-retirement liability564.8 565.1 
Asset retirement obligations361.6 357.7 
Other149.2 148.1 
Total Long-Term Liabilities5,567.5 5,570.6 
Commitments and Contingencies (Note 9)00
EQUITY:  
Common stock - 1,000 shares authorized, without par value, 1 share issued, stated value1,563.1 1,563.1 
Retained earnings1,225.0 1,191.5 
Accumulated other comprehensive income4.6 4.6 
Total Equity2,792.7 2,759.2 
TOTAL LIABILITIES AND EQUITY$9,053.5 $8,915.8 
The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
19

EVERGY METRO, INC.
Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended March 3120212020
(millions)
OPERATING REVENUES$516.2 $375.5 
OPERATING EXPENSES:  
Fuel and purchased power241.2 92.5 
Operating and maintenance93.4 105.9 
Depreciation and amortization78.4 81.4 
Taxes other than income tax32.0 32.0 
Total Operating Expenses445.0 311.8 
INCOME FROM OPERATIONS71.2 63.7 
OTHER INCOME (EXPENSE):
Investment earnings0.1 0.5 
Other income4.0 
Other expense(8.4)(7.4)
Total Other Expense, Net(4.3)(6.9)
Interest expense28.3 28.6 
INCOME BEFORE INCOME TAXES38.6 28.2 
Income tax expense5.1 2.6 
NET INCOME$33.5 $25.6 
COMPREHENSIVE INCOME
NET INCOME$33.5 $25.6 
OTHER COMPREHENSIVE INCOME:
Derivative hedging activity
Reclassification to expenses, net of tax0 (0.1)
Derivative hedging activity, net of tax0 (0.1)
Total other comprehensive loss0 (0.1)
COMPREHENSIVE INCOME$33.5 $25.5 
The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
20

EVERGY METRO, INC.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 3120212020
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:(millions)
Net income$33.5 $25.6 
Adjustments to reconcile income to net cash from operating activities:
Depreciation and amortization78.4 81.4 
Amortization of nuclear fuel6.6 7.2 
Amortization of deferred refueling outage2.9 3.2 
Net deferred income taxes and credits(23.2)(10.2)
Allowance for equity funds used during construction(2.6)0.1 
Payments for asset retirement obligations(0.3)(1.3)
Other(0.1)(0.1)
Changes in working capital items:
Accounts receivable(274.6)(22.3)
Accounts receivable pledged as collateral0 5.0 
Fuel inventory and supplies2.9 (12.1)
Prepaid expenses and other current assets15.9 (8.2)
Accounts payable(85.6)(76.0)
Accrued taxes57.5 39.0 
Other current liabilities57.3 8.3 
Changes in other assets10.2 17.7 
Changes in other liabilities4.1 7.9 
Cash Flows from (used in) Operating Activities(117.1)65.2 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:  
Additions to property, plant and equipment(160.2)(135.7)
Purchase of securities - trusts(8.4)(12.8)
Sale of securities - trusts5.6 10.6 
Net money pool lending100.0 
Other investing activities2.0 0.1 
Cash Flows used in Investing Activities(61.0)(137.8)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:  
Short-term debt, net115.0 260.7 
Collateralized short-term debt, net0 (5.0)
Cash dividends paid0 (60.0)
Other financing activities(0.1)
Cash Flows from Financing Activities114.9 195.7 
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(63.2)123.1 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period71.6 2.0 
End of period$8.4 $125.1 
The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
21

EVERGY METRO, INC
Consolidated Statements of Changes in Equity
(Unaudited)
 Common stock shares Common Stock Retained earnings AOCI - Net gains (losses) on cash flow hedges Total Equity
 (millions, except share amounts)
Balance as of December 31, 2019$1,563.1 $1,012.8 $4.8 $2,580.7 
Net income— — 25.6 — 25.6 
Dividends declared on common stock— — (60.0)— (60.0)
Derivative hedging activity, net of tax— — — (0.1)(0.1)
Balance as of March 31, 2020$1,563.1 $978.4 $4.7 $2,546.2 
Balance as of December 31, 2020$1,563.1 $1,191.5 $4.6 $2,759.2 
Net income— — 33.5 — 33.5 
Balance as of March 31, 2021$1,563.1 $1,225.0 $4.6 $2,792.7 
The disclosures regarding Evergy Metro included in the accompanying Notes to Unaudited Consolidated Financial Statements are an integral part of these statements.
22

EVERGY, INC.
EVERGY KANSAS CENTRAL, INC.
EVERGY METRO, INC.
Combined Notes to Unaudited Consolidated Financial Statements
The notes to unaudited consolidated financial statements that follow are a combined presentation for Evergy, Inc., Evergy Kansas Central, Inc. and Evergy Metro, Inc., all registrants under this filing.  The terms "Evergy," "Evergy Kansas Central," "Evergy Metro" and "Evergy Companies" are used throughout this report.  "Evergy" refers to Evergy, Inc. and its consolidated subsidiaries, unless otherwise indicated.  "Evergy Kansas Central" refers to Evergy Kansas Central, Inc. and its consolidated subsidiaries, unless otherwise indicated. "Evergy Metro" refers to Evergy Metro, Inc. and its consolidated subsidiaries, unless otherwise indicated. "Evergy Companies" refers to Evergy, Evergy Kansas Central, and Evergy Metro, collectively, which are individual registrants within the Evergy consolidated group.
1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
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 1 active wholly-owned subsidiary with significant operations, Evergy Kansas South, Inc. (Evergy Kansas South).
Evergy Metro, Inc. (Evergy Metro) is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas.
Evergy Missouri West, Inc. (Evergy Missouri West) is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.
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 purchased power agreements and engage in the generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri.
Basis of Presentation
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 2020 Form 10-K.
23

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.
Principles of Consolidation
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 1 segment).
Fuel Inventory and Supplies
The Evergy Companies record fuel inventory and supplies at average cost. The following table separately states the balances for fuel inventory and supplies.
March 31
2021
December 31
2020
Evergy(millions)
Fuel inventory$127.5 $145.0 
Supplies364.8 359.5 
Fuel inventory and supplies$492.3 $504.5 
Evergy Kansas Central
Fuel inventory$75.5 $79.3 
Supplies195.7 197.1 
Fuel inventory and supplies$271.2 $276.4 
Evergy Metro  
Fuel inventory$36.6 $44.9 
Supplies130.9 125.5 
Fuel inventory and supplies$167.5 $170.4 
24

Property, Plant and Equipment
The following tables summarize the property, plant and equipment of Evergy, Evergy Kansas Central and Evergy Metro.
March 31, 2021EvergyEvergy Kansas CentralEvergy Metro
(millions)
Electric plant in service$29,378.9 $14,239.8 $11,414.0 
Electric plant acquisition adjustment724.3 724.3 
Accumulated depreciation(11,146.4)(5,356.6)(4,597.8)
Plant in service, net18,956.8 9,607.5 6,816.2 
Construction work in progress999.8 565.8 300.5 
Nuclear fuel, net144.7 72.2 72.5 
Plant to be retired, net(a)
0.9 0.9 
Property, plant and equipment, net$20,102.2 $10,246.4 $7,189.2 
December 31, 2020EvergyEvergy Kansas CentralEvergy Metro
(millions)
Electric plant in service$28,914.8 $14,095.1 $11,161.8 
Electric plant acquisition adjustment724.3 724.3 
Accumulated depreciation(10,998.4)(5,293.5)(4,532.7)
Plant in service, net18,640.7 9,525.9 6,629.1 
Construction work in progress1,153.5 589.1 433.9 
Nuclear fuel, net155.9 77.7 78.2 
Plant to be retired, net(a)
0.9 0.9 
Property, plant and equipment, net$19,951.0 $10,193.6 $7,141.2 
(a) As of March 31, 2021 and December 31, 2020, represents the planned retirement of Evergy Kansas Central analog meters prior to the end of their remaining useful lives.
Other Income (Expense), Net
The table below shows the detail of other expense for each of the Evergy Companies.
Three Months Ended March 3120212020
Evergy(millions)
Non-service cost component of net benefit cost$(14.8)$(16.2)
Other(6.1)(6.5)
Other expense$(20.9)$(22.7)
Evergy Kansas Central
Non-service cost component of net benefit cost$(3.6)$(5.6)
Other(5.6)(5.9)
Other expense$(9.2)$(11.5)
Evergy Metro
Non-service cost component of net benefit cost$(7.9)$(6.9)
Other(0.5)(0.5)
Other expense$(8.4)$(7.4)
Earnings Per Share
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), performance shares, restricted stock and a warrant. Evergy computes the dilutive effects of potential issuances of common shares using the treasury stock method.
25


The following table reconciles Evergy's basic and diluted EPS.
Three Months Ended March 3120212020
Income(millions, except per share amounts)
Net income$194.6 $72.2 
Less: Net income attributable to noncontrolling interests3.0 2.8 
Net income attributable to Evergy, Inc.$191.6 $69.4 
Common Shares Outstanding
Weighted average number of common shares outstanding - basic227.3 227.1 
Add: Effect of dilutive securities0.3 0.4 
Weighted average number of common shares outstanding - dilutive227.6 227.5 
Basic and Diluted EPS$0.84 $0.31 
Anti-dilutive shares excluded from the computation of diluted EPS for the three months ended March 31, 2021, were 353,806 RSUs with performance measures and 3,950,000 common shares issuable pursuant to a warrant. Anti-dilutive shares excluded from the computation of diluted EPS for the three months ended March 31, 2020, were 175,991 RSUs with performance measures and 58,714 RSUs with only service requirements.
Dividends Declared
In May 2021, Evergy's Board of Directors (Evergy Board) declared a quarterly dividend of $0.535 per share on Evergy's common stock. The common dividend is payable June 21, 2021, to shareholders of record as of May 21, 2021.
Supplemental Cash Flow Information
Evergy
Three Months Ended March 3120212020
Cash paid for (received from):(millions)
Interest, net of amounts capitalized$78.6 $86.5 
Interest of VIEs0.2 0.6 
Income taxes, net of refunds2.6 0.2 
Right-of-use assets obtained in exchange for new operating lease liabilities2.2 2.6 
Right-of-use assets obtained in exchange for new finance lease liabilities0.2 3.1 
Non-cash investing transactions:
Property, plant and equipment additions104.4 75.7 
Non-cash financing transactions:
Issuance of stock for compensation and reinvested dividends0.7 0.9 
Evergy Kansas Central
Three Months Ended March 3120212020
Cash paid for (received from):(millions)
Interest, net of amounts capitalized$31.2 $37.4 
Interest of VIEs0.2 0.6 
Income taxes, net of refunds2.6 0.2 
Right-of-use assets obtained in exchange for new operating lease liabilities1.5 2.6 
Right-of-use assets obtained in exchange for new finance lease liabilities0.2 1.9 
Non-cash investing transactions:
Property, plant and equipment additions45.4 52.5 
26

Evergy Metro
Three Months Ended March 3120212020
Cash paid for (received from):(millions)
Interest, net of amounts capitalized$18.6 $18.7 
Income taxes, net of refunds(1.6)
Right-of-use assets obtained in exchange for new operating lease liabilities0.7 
Right-of-use assets obtained in exchange for new finance lease liabilities1.2 
Non-cash investing transactions:
Property, plant and equipment additions34.6 17.8 
February 2021 Winter Weather Event
In February 2021, much of the central and southern United States, including the service territories of the Evergy Companies, experienced a significant winter weather event that resulted in extremely cold temperatures over a multi-day period. This winter weather event resulted in an increase in the demand for natural gas used by the Evergy Companies for generating electricity and also contributed to the limited availability of other generation resources, including coal and renewables, within the SPP Integrated Marketplace. The Evergy Companies are members of the SPP and, as a result, principally sell and purchase power for the Evergy Companies' retail electric customers through the SPP Integrated Marketplace. These circumstances resulted in higher than normal market prices for both natural gas and power for the duration of the winter weather event. These higher than normal market prices also included make-whole payments calculated by the SPP to compensate natural gas generators within the SPP Integrated Marketplace for costs incurred in excess of revenues. As part of the winter weather event and inclusive of the aforementioned items, Evergy incurred natural gas and purchased power costs, net of wholesale revenues, of $341.3 million. This $341.3 million of net fuel and purchased power costs was primarily driven by $297.3 million of costs at Evergy Missouri West and $120.7 million of costs at Evergy Kansas Central, partially offset by $76.7 million of net wholesale revenues at Evergy Metro. The amount of purchased power costs incurred by the Evergy Companies during the winter weather event is subject to resettlement activity and further review by the SPP. This review and any subsequent resettlement activity could result in increases to the final amount of purchased power costs incurred by the Evergy Companies during the winter weather event and these increases could be material.
The Evergy Companies have fuel recovery mechanisms in their Kansas and Missouri jurisdictions, as applicable, that allow them to defer substantially all of any increased fuel and purchased power costs, net of wholesale revenues, to a regulatory asset or liability for future recovery from or refund to customers. Further, in February 2021, the State Corporation Commission of the State of Kansas (KCC) issued an emergency Accounting Authority Order (AAO) that allowed Evergy Kansas Central and Evergy Metro's Kansas jurisdiction to defer to a regulatory asset any extraordinary costs, including carrying costs, incurred to provide electric service during the winter weather event for consideration in future rate proceedings. See Note 4 for additional information regarding the AAO.
As of March 31, 2021, the Evergy Companies have deferred substantially all of the fuel and purchased power costs, net of wholesale revenues, related to the winter weather event to a regulatory asset or liability pursuant to the mechanisms discussed above. While the Evergy Companies expect to recover substantially all of any increased fuel and purchased power costs related to the winter weather event from customers, the timing of the cost recovery could be delayed or spread over a longer than typical recovery timeframe by the KCC or the Public Service Commission of the State of Missouri (MPSC) given the extraordinary nature of the winter weather event and to help moderate monthly customer bill impacts.
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 in February 2021 across the central and southern United States driven by the winter weather event discussed above,
27

Evergy and Evergy Kansas Central recorded $96.5 million of energy marketing margins in the first quarter of 2021 related to the winter weather event.
2. REVENUE
Evergy's, Evergy Kansas Central's and Evergy Metro's revenues disaggregated by customer class are summarized in the following tables.
Three Months Ended March 31, 2021EvergyEvergy Kansas CentralEvergy Metro
Revenues(millions)
Residential$396.7 $183.4 $122.2 
Commercial346.0 153.7 132.5 
Industrial133.6 93.0 22.3 
Other retail7.4 3.2 2.1 
Total electric retail$883.7 $433.3 $279.1 
Wholesale487.5 272.4 200.5 
Transmission86.0 77.9 4.0 
Industrial steam and other5.2 0.5 0.3 
Total revenue from contracts with customers$1,462.4 $784.1 $483.9 
Other149.5 117.0 32.3 
Operating revenues$1,611.9 $901.1 $516.2 
Three Months Ended March 31, 2020EvergyEvergy Kansas CentralEvergy Metro
Revenues(millions)
Residential$402.5 $167.8 $147.4 
Commercial384.7 151.1 172.1 
Industrial140.6 92.1 30.1 
Other retail10.6 4.7 3.5 
Total electric retail$938.4 $415.7 $353.1 
Wholesale63.5 54.8 6.8 
Transmission75.6 68.2 3.1 
Industrial steam and other8.4 3.5 0.4 
Total revenue from contracts with customers$1,085.9 $542.2 $363.4 
Other30.8 17.9 12.1 
Operating revenues$1,116.7 $560.1 $375.5 
28

3. RECEIVABLES
The Evergy Companies' receivables are detailed in the following table.
March 31December 31
20212020
Evergy(millions)
Customer accounts receivable - billed$3.8 $5.3 
Customer accounts receivable - unbilled62.2 110.0 
Other receivables205.1 177.9 
Allowance for credit losses(23.6)(19.3)
Total$247.5 $273.9 
Evergy Kansas Central
Customer accounts receivable - billed$$
Customer accounts receivable - unbilled17.0 50.7 
Other receivables200.9 175.7 
Allowance for credit losses(8.8)(7.5)
Total$209.1 $218.9 
Evergy Metro  
Customer accounts receivable - billed$0.9 $3.3 
Customer accounts receivable - unbilled20.5 27.9 
Other receivables26.4 21.9 
Allowance for credit losses(9.9)(8.1)
Total$37.9 $45.0 
The Evergy Companies' other receivables at March 31, 2021 and December 31, 2020, consisted primarily of receivables from partners in jointly-owned electric utility plants, wholesale sales receivables and receivables related to alternative revenue programs. The Evergy Companies' other receivables also included receivables from contracts with customers as summarized in the following table.
March 31December 31
20212020
(millions)
Evergy$85.7 $57.5 
Evergy Kansas Central70.5 49.9 
Evergy Metro13.8 6.9 
29

The change in the Evergy Companies' allowance for credit losses is summarized in the following table.
20212020
Evergy(millions)
Beginning balance January 1$19.3 $10.5 
Credit loss expense4.8 2.7 
Write-offs(4.0)(5.0)
Recoveries of prior write-offs3.5 3.3 
Ending balance March 31$23.6 $11.5 
Evergy Kansas Central
Beginning balance January 1$7.5 $3.8 
Credit loss expense0.6 0.8 
Write-offs(0.5)(1.2)
Recoveries of prior write-offs1.2 0.7 
Ending balance March 31$8.8 $4.1 
Evergy Metro
Beginning balance January 1$8.1 $4.6 
Credit loss expense2.5 1.4 
Write-offs(2.3)(2.6)
Recoveries of prior write-offs1.6 1.8 
Ending balance March 31$9.9 $5.2 
Sale of Accounts Receivable
Evergy Kansas Central, Evergy Metro and Evergy Missouri West sell an undivided percentage ownership interest in their retail electric accounts receivable to independent outside investors. These sales are accounted for as secured borrowings with accounts receivable pledged as collateral and a corresponding short-term collateralized note payable recognized on the balance sheets.  The Evergy Companies' accounts receivable pledged as collateral and the corresponding short-term collateralized note payable are summarized in the following table.
March 31December 31
20212020
(millions)
Evergy$365.0 $360.0 
Evergy Kansas Central185.0 180.0 
Evergy Metro130.0 130.0 
Each receivable sale facility expires in 2024. Evergy Kansas Central's facility allows for $185.0 million in aggregate outstanding principal amount of borrowings from mid-October through mid-June and then $200.0 million from mid-June through mid-October. Evergy Metro's facility allows for $130.0 million in aggregate outstanding principal amount of borrowings at any time. Evergy Missouri West's facility allows for $50.0 million in aggregate outstanding principal amount of borrowings from mid-November through mid-June and then $65.0 million from mid-June through mid-November.
4. RATE MATTERS AND REGULATION
KCC Proceedings
Evergy Kansas Central 2021 Transmission Delivery Charge (TDC)
In April 2021, the KCC issued an order adjusting Evergy Kansas Central's retail prices to include updated transmission costs as reflected in the Federal Energy Regulatory Commission (FERC) transmission formula rate (TFR). The new prices were effective in April 2021 and are expected to increase Evergy Kansas Central's annual retail revenues by $37.9 million when compared to 2020.
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Evergy Metro 2021 TDC
In April 2021, the KCC issued an order adjusting Evergy Metro's retail prices to include updated transmission costs as reflected in the FERC TFR. The new prices were effective in May 2021 and are expected to decrease Evergy Metro's annual retail revenues by $2.4 million when compared to 2020.
Evergy Kansas Central and Evergy Metro Earnings Review and Sharing Plan (ERSP)
As part of their merger settlement agreement with the KCC, Evergy Kansas Central and Evergy Metro agreed to participate in an ERSP for the years 2019 through 2022. Under the ERSP, Evergy Kansas Central's and Evergy Metro's Kansas jurisdiction are required to refund to customers 50% of annual earnings in excess of their authorized return on equity of 9.3% to the extent the excess earnings exceed the amount of annual bill credits that Evergy Kansas Central and Evergy Metro agreed to provide in connection with the merger that resulted in the formation of Evergy.
Evergy Kansas Central's and Evergy Metro's 2020 calculations of annual earnings did not result in a significant refund obligation. These calculations were filed with the KCC in March 2021. As of March 31, 2021, Evergy Kansas Central and Evergy Metro estimate their 2021 annual earnings will not result in a significant refund obligation. The final refund obligations for 2020 and 2021 will be decided by the KCC and could vary from the current estimates.
Evergy Kansas Central and Evergy Metro Winter Weather AAO
In February 2021, the KCC issued an emergency AAO directing all Kansas-jurisdictional natural gas and electric utilities, including Evergy Kansas Central and Evergy Metro, to defer to a regulatory asset any extraordinary costs, including carrying costs, incurred to provide electric service during the February 2021 winter weather event for consideration in future rate proceedings.
As of March 31, 2021, Evergy Kansas Central had recognized a regulatory asset pursuant to the AAO of $109.9 million related to its costs incurred during the winter weather event, primarily consisting of increased fuel and purchased power costs and including make-whole payments calculated by and paid to the SPP. Evergy Metro incurred a net increase in wholesale revenues of $76.7 million during the winter weather event, of which substantially all was deferred to a regulatory liability and is expected to be refunded to customers through its fuel recovery mechanisms in Kansas and Missouri.
MPSC Proceedings
Evergy Missouri West Other Proceedings
In December 2018, the Office of the Public Counsel (OPC) and the Midwest Energy Consumers Group (MECG) filed a petition with the MPSC requesting an AAO that would require Evergy Missouri West to record a regulatory liability for 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 the station’s retirement in November 2018.
In October 2019, the MPSC granted OPC's and MECG's request for an AAO and required Evergy Missouri West to record to a regulatory liability the revenues discussed above for consideration in Evergy Missouri West's next rate case, which is expected to be completed no later than the end of 2022. Depending on the MPSC's decision in this next rate case, Evergy Missouri West could be required to refund to customers all or a portion of amounts collected in revenue for Sibley Station since December 2018 or, alternatively, could be required to make no refunds.
As a result of the MPSC order, Evergy has recorded a regulatory liability of $21.1 million as of March 31, 2021 for the estimated amount of revenues that Evergy Missouri West has collected from customers for Sibley Station since December 2018 that Evergy has determined is probable of refund. Evergy expects that it will continue to defer such amounts as collected from customers until new rates become effective in Evergy Missouri West's next rate case.
The accrual for this estimated amount does not include certain revenues collected related to Sibley Station that Evergy has determined to not be probable of refund in the next rate case based on the relevant facts and circumstances. While Evergy has determined these additional revenues to not be probable of refund, the ultimate
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resolution of this matter in Evergy Missouri West's next rate case is uncertain and could result in an estimated loss of up to approximately $12 million per year in excess of the amount accrued until Evergy Missouri West's new rates become effective. Evergy's regulatory liability for probable refunds as of March 31, 2021 and estimated loss in excess of the amount accrued represent estimates that could change significantly based on ongoing developments including decisions in other regulatory proceedings that establish precedent applicable to this matter and positions of parties on this issue in a future Evergy Missouri West rate case.
FERC Proceedings
In October of each year, Evergy Kansas Central and Evergy Metro post an updated TFR that includes projected transmission capital expenditures and operating costs for the following year. This rate is the most significant component in the retail rate calculation for Evergy Kansas Central's and Evergy Metro's annual request with the KCC to adjust retail prices to include updated transmission costs through the TDC.
Evergy Kansas Central TFR
In the most recent two years, the updated TFR was expected to adjust Evergy Kansas Central's annual transmission revenues by approximately:
$32.4 million increase effective in January 2021; and
$6.8 million increase effective in January 2020.
Evergy Metro TFR
In the most recent two years, the updated TFR was expected to adjust Evergy Metro's annual transmission revenues by approximately:
$3.9 million decrease effective in January 2021; and
$1.7 million decrease effective in January 2020.
5. PENSION PLANS AND POST-RETIREMENT BENEFITS
Evergy and certain of its subsidiaries maintain, and Evergy Kansas Central and Evergy Metro participate in, qualified non-contributory defined benefit pension plans covering the majority of Evergy Kansas Central's and Evergy Metro's employees as well as certain non-qualified plans covering certain active and retired officers. Evergy is also responsible for its indirect 94% ownership share of Wolf Creek Generating Station's (Wolf Creek) defined benefit plans, consisting of Evergy Kansas South's and Evergy Metro's respective 47% ownership shares.
For the majority of employees, pension benefits under these plans reflect the employees' compensation, years of service and age at retirement. However, for the plan covering Evergy Kansas Central's employees, the benefits for non-union employees hired between 2002 and the second quarter of 2018 and union employees hired beginning in 2012 are derived from a cash balance account formula. The plan was closed to future non-union employees in 2018. For the plans covering Evergy Metro's employees, the benefits for union employees hired beginning in 2014 are derived from a cash balance account formula and the plans were closed to future non-union employees in 2014.
Evergy and its subsidiaries also provide certain post-retirement health care and life insurance benefits for substantially all retired employees of Evergy Kansas Central and Evergy Metro and their respective shares of Wolf Creek's post-retirement benefit plans.
The Evergy Companies record pension and post-retirement expense in accordance with rate orders from the KCC and MPSC that allow the difference between pension and post-retirement costs under GAAP and costs for ratemaking to be recognized as a regulatory asset or liability.  This difference between financial and regulatory accounting methods is due to timing and will be eliminated over the life of the plans.
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The following tables provide the components of net periodic benefit costs prior to the effects of capitalization and sharing with joint owners of power plants.
Pension BenefitsPost-Retirement Benefits
Three Months Ended March 31, 2021EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Components of net periodic benefit costs(millions)
Service cost$21.1 $7.4 $13.7 $0.8 $0.4 $0.4 
Interest cost21.3 10.3 10.8 2.0 1.0 1.0 
Expected return on plan assets(26.8)(13.6)(14.5)(2.2)(1.6)(0.7)
Prior service cost0.5 0.5 0.1 0.1 (0.3)
Recognized net actuarial loss14.8 9.8 11.2 0.3 0.2 
Net periodic benefit costs before regulatory adjustment and intercompany allocations30.9 14.4 21.2 1.0 0.1 0.4 
Regulatory adjustment7.1 (0.9)3.0 (1.2)(0.8)0.1 
Intercompany allocations0.4 (5.9)(0.1)
Net periodic benefit costs (income)$38.0 $13.9 $18.3 $(0.2)$(0.7)$0.4 
Pension BenefitsPost-Retirement Benefits
Three Months Ended March 31, 2020EvergyEvergy Kansas CentralEvergy MetroEvergyEvergy Kansas CentralEvergy Metro
Components of net periodic benefit costs(millions)
Service cost$19.6 $6.8 $12.8 $0.7 $0.3 $0.4 
Interest cost24.4 11.8 12.6 2.3 1.2 1.1 
Expected return on plan assets(26.7)(13.3)(14.1)(2.3)(1.7)(0.7)
Prior service cost0.4 0.4 0.2 0.1 0.1 
Recognized net actuarial (gain)/loss11.4 8.4 11.3 0.1 (0.1)
Net periodic benefit costs before regulatory adjustment and intercompany allocations29.1 14.1 22.8 0.9 (0.1)0.7 
Regulatory adjustment9.9 0.4 1.4 (0.9)(0.7)
Intercompany allocations(6.2)0.2 
Net periodic benefit costs (income)$39.0 $14.5 $18.0 $$(0.8)$0.9 
The components of net periodic benefit costs other than the service cost component are included in other expense on the Evergy Companies' consolidated statements of income and comprehensive income.

For the three months ended March 31, 2021, Evergy, Evergy Kansas Central and Evergy Metro made pension contributions of $27.8 million, $17.4 million and $10.4 million, respectively. Evergy expects to make additional pension contributions of $107.4 million in 2021 to satisfy the Employee Retirement Income Security Act of 1974, as amended (ERISA) funding requirements and KCC and MPSC rate orders, of which $42.1 million is expected to be paid by Evergy Kansas Central and $65.3 million is expected to be paid by Evergy Metro.
Also in 2021, Evergy, Evergy Kansas Central and Evergy Metro expect to make post-retirement benefit contributions of $4.0 million, $0.6 million and $3.4 million, respectively.
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6. SHORT-TERM BORROWINGS AND SHORT-TERM BANK LINES OF CREDIT
Evergy's $2.5 billion master credit facility expires in 2023. Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West have borrowing capacity under the master credit facility with specific sublimits for each borrower. These sublimits can be unilaterally adjusted by Evergy for each borrower provided the sublimits remain within minimum and maximum sublimits as specified in the facility. Evergy adjusted these sublimits in the first quarter of 2021 as further detailed in the table below. A default by any borrower under the facility or one of its significant subsidiaries on other indebtedness totaling more than $100.0 million constitutes a default by that borrower under the facility. Under the terms of this facility, each of Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West is required to maintain a total indebtedness to total capitalization ratio, as defined in the facility, of not greater than 0.65 to 1.00 at all times. As of March 31, 2021, Evergy, Evergy Kansas Central, Evergy Metro and Evergy Missouri West were in compliance with this covenant.
The following table summarizes the committed credit facilities (excluding receivable sale facilities discussed in Note 3) available to the Evergy Companies as of March 31, 2021 and December 31, 2020.
Amounts Drawn
Master Credit FacilityCommercial PaperLetters of CreditCash BorrowingsAvailable BorrowingsWeighted Average Interest Rate on Short-Term Borrowings
March 31, 2021(millions)
Evergy, Inc.$700.0 n/a$0.7 $345.0 $354.3 1.36%
Evergy Kansas Central750.0 245.0 0.8 504.2 0.23%
Evergy Metro350.0 115.0 235.0 0.17%
Evergy Missouri West700.0 590.0 110.0 0.24%
Evergy$2,500.0 $950.0 $1.5 $345.0 $1,203.5 
December 31, 2020
Evergy, Inc.$450.0 n/a$0.7 $200.0 $249.3 1.40%
Evergy Kansas Central1,000.0 50.0 17.0 933.0 0.23%
Evergy Metro600.0 600.0 0%
Evergy Missouri West450.0 65.0 2.0 383.0 0.36%
Evergy$2,500.0 $115.0 $19.7 $200.0 $2,165.3 
In May 2021, Evergy, Inc. established a commercial paper program that will be supported by its borrowing capacity under the master credit facility.
7. LONG-TERM DEBT
Senior Notes
In April 2021, Evergy Missouri West issued in a private placement $350.0 million of 2.86% Series A Senior Notes, maturing in 2031, $75.0 million of 3.01% Series B Senior Notes, maturing in 2033 and $75.0 million of 3.21% Series C Senior Notes, maturing in 2036, pursuant to a note purchase agreement. In connection with the issuance, Evergy entered into an agreement to provide an unconditional guaranty of the Series A, B and C Senior Notes, and as required by certain existing note purchase agreements, also agreed to provide unconditional guaranty of the following series of outstanding Evergy Missouri West unsecured senior notes:
$36.0 million of 3.49% Series A, maturing in 2025;
$60.0 million of 4.06% Series B, maturing in 2033;
$150.0 million of 4.74% Series C, maturing in 2043; and
$100.0 million of 3.74% Series, maturing in 2022.
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In April 2021, Evergy redeemed its $350.0 million of 4.85% Senior Notes, which had a maturity date of June 2021.
8. FAIR VALUE MEASUREMENTS
Values of Financial Instruments
GAAP establishes a hierarchical framework for disclosing the transparency of the inputs utilized in measuring assets and liabilities at fair value. Management's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of assets and liabilities within the fair value hierarchy levels. In addition, the Evergy Companies measure certain investments that do not have a readily determinable fair value at net asset value (NAV), which are not included in the fair value hierarchy. Further explanation of these levels and NAV is summarized below.
Level 1 – Quoted prices are available in active markets for identical assets or liabilities. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on public exchanges.
Level 2 –  Pricing inputs are not quoted prices in active markets but are either directly or indirectly observable. The types of assets and liabilities included in Level 2 are certain marketable debt securities, financial instruments traded in less than active markets or other financial instruments priced with models using highly observable inputs.
Level 3 – Significant inputs to pricing have little or no transparency. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation.
NAV - Investments that do not have a readily determinable fair value are measured at NAV. These investments do not consider the observability of inputs and, therefore, they are not included within the fair value hierarchy. The Evergy Companies include in this category investments in private equity, real estate and alternative investment funds that do not have a readily determinable fair value. The underlying alternative investments include collateralized debt obligations, mezzanine debt and a variety of other investments.
The Evergy Companies record cash and cash equivalents, accounts receivable and short-term borrowings on their consolidated balance sheets at cost, which approximates fair value due to the short-term nature of these instruments.
Fair Value of Long-Term Debt
The Evergy Companies measure the fair value of long-term debt using Level 2 measurements available as of the measurement date. The book value and fair value of the Evergy Companies' long-term debt and long-term debt of variable interest entities is summarized in the following table.
March 31, 2021December 31, 2020
Book ValueFair ValueBook ValueFair Value
Long-term debt(a)
(millions)
Evergy(b)
$9,624.1 $10,429.2 $9,627.3 $11,274.2 
Evergy Kansas Central3,932.2 4,348.5 3,931.5 4,801.7 
Evergy Metro2,923.5 3,312.1 2,923.0 3,591.2 
Long-term debt of variable interest entities(a)
Evergy$$$18.8 $19.1 
Evergy Kansas Central18.8 19.1 
(a) Includes current maturities.
(b) Book value as of March 31, 2021 and December 31, 2020, includes $106.6 million and $110.4 million, respectively, of fair value adjustments recorded in connection with purchase accounting for the Great Plains Energy and Evergy Kansas Central merger, which are not part of future principal payments and will amortize over the remaining life of the associated debt instrument.
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Recurring Fair Value Measurements
The following tables include the Evergy Companies' balances of financial assets and liabilities measured at fair value on a recurring basis.
DescriptionMarch 31, 2021Level 1Level 2Level 3NAV
Evergy Kansas Central(millions)
Assets
Nuclear decommissioning trust(a)
Domestic equity funds$110.3 $101.9 $$$8.4 
International equity funds67.3 67.3 
Core bond fund40.0 40.0 
High-yield bond fund26.1 26.1 
Emerging markets bond fund20.3 20.3 
Combination debt/equity/other fund22.1 22.1 
Alternative investments fund28.1 28.1 
Real estate securities fund13.1 13.1 
Cash equivalents0.4 0.4 
Total nuclear decommissioning trust327.7 278.1 49.6 
Rabbi trust
Fixed income funds25.8 25.8 
Equity funds5.0 5.0 
Combination debt/equity/other fund0.7 0.7 
Cash equivalents0.1 0.1 
Total rabbi trust31.6 31.6 
Total$359.3 $309.7 $$$49.6 
Evergy Metro
Assets    
Nuclear decommissioning trust(a)
    
Equity securities$262.9 $262.9 $$$
Debt securities
U.S. Treasury45.0 45.0 
U.S. Agency0.4 0.4 
State and local obligations4.1 4.1 
Corporate bonds43.1 43.1 
Foreign governments0.1 0.1 
Cash equivalents2.5 2.5 
Other0.7 0.7 
Total nuclear decommissioning trust358.8 310.4 48.4 
Self-insured health plan trust(b)
Equity securities1.8 1.8 
Debt securities8.6 3.0 5.6 
Cash and cash equivalents4.0 4.0 — 
Total self-insured health plan trust14.4 8.8 5.6 
Total$373.2 $319.2 $54.0 $$
Other Evergy
Assets
Rabbi trusts
Core bond fund$12.7 $12.7 $$$
Cash and cash equivalents0.5 0.5 
Total rabbi trusts$13.2 $13.2 $$$
Evergy    
Assets    
Nuclear decommissioning trust(a)
$686.5 $588.5 $48.4 $$49.6 
Rabbi trusts44.8 44.8 
Self-insured health plan trust(b)
14.4 8.8 5.6 
Total$745.7 $642.1 $54.0 $$49.6 
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DescriptionDecember 31, 2020Level 1Level 2Level 3NAV
Evergy Kansas Central(millions)
Assets
Nuclear decommissioning trust(a)
Domestic equity funds$102.7 $95.1 $$$7.6 
International equity funds63.8 63.8 
Core bond fund40.6 40.6 
High-yield bond fund25.0 25.0 
Emerging markets bond fund21.0 21.0 
Combination debt/equity/other fund20.1 20.1 
Alternative investments fund23.2 23.2 
Real estate securities fund12.9 12.9 
Cash equivalents0.5 0.5 
Total nuclear decommissioning trust309.8 266.1 43.7 
Rabbi trust
Core bond fund25.6 25.6 
Combination debt/equity/other fund7.1 7.1 
Total rabbi trust32.7 32.7 
Total$342.5 $266.1 $$$76.4 
Evergy Metro
Assets    
Nuclear decommissioning trust(a)
   
Equity securities$243.1 $243.1 $$$
Debt securities     
U.S. Treasury47.7 47.7 
U.S. Agency0.5 0.5 
State and local obligations4.1 4.1 
Corporate bonds43.1 43.1 
Foreign governments0.1 0.1 
Cash equivalents3.2 3.2 
Other0.5 0.5 
Total nuclear decommissioning trust342.3 294.5 47.8 
Self-insured health plan trust(b)
Equity securities1.7 1.7 
Debt securities8.0 2.8 5.2 
Cash and cash equivalents3.5 3.5 
Total self-insured health plan trust13.2 8.0 5.2 
Total$355.5 $302.5 $53.0 $$
Other Evergy
Assets
Rabbi trusts
Fixed income fund$13.1 $$$$13.1 
Cash and cash equivalents0.5 0.5 
Total rabbi trusts$13.6 $0.5 $$$13.1 
Evergy    
Assets    
Nuclear decommissioning trust(a)
$652.1 $560.6 $47.8 $$43.7 
Rabbi trust46.3 0.5 45.8 
Self-insured health plan trust(b)
13.2 8.0 5.2 
Total$711.6 $569.1 $53.0 $$89.5 
(a)With the exception of investments measured at NAV, fair value is based on quoted market prices of the investments held by the trust and/or valuation models.  
(b)Fair value is based on quoted market prices of the investments held by the trust. Debt securities classified as Level 1 are comprised of U.S. Treasury securities. Debt securities classified as Level 2 are comprised of corporate bonds, U.S. Agency, state and local obligations, and other asset-backed securities.
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Certain Evergy and Evergy Kansas Central investments included in the table above are measured at NAV as they do not have readily determinable fair values. In certain situations, these investments may have redemption restrictions.
The following table provides additional information on these Evergy and Evergy Kansas Central investments.
March 31, 2021December 31, 2020March 31, 2021
FairUnfundedFairUnfundedRedemptionLength of
ValueCommitmentsValueCommitmentsFrequencySettlement
Evergy Kansas Central
Nuclear decommissioning trust:(millions)
Domestic equity funds$8.4 $1.9 $7.6 $2.2 (a)(a)
Alternative investments fund(b)
28.1 23.2 Quarterly65 days
Real estate securities fund(b)
13.1 12.9 Quarterly65 days
Total$49.6 $1.9 $43.7 $2.2 
Rabbi trust:
Core bond fund$$$25.6 $(c)(c)
Combination debt/equity/other fund7.1 (c)(c)
Total$$$32.7 $
Other Evergy
Rabbi trust:
Fixed income fund$$$13.1 $(c)(c)
Total Evergy investments at NAV$49.6 $1.9 $89.5 $2.2 
(a)This investment is in 5 long-term private equity funds that do not permit early withdrawal. Investments in these funds cannot be distributed until the underlying investments have been liquidated, which may take years from the date of initial liquidation. NaN funds have begun to make distributions. The initial investment in the fourth and fifth funds occurred in 2016 and 2018, respectively. The fourth fund's term is 15 years, subject to the general partner's right to extend the term for up to 3 additional one-year periods.  The fifth fund's term is 15 years, subject to additional extensions approved by a fund advisory committee to provide for an orderly liquidation of fund investments and dissolution of the fund.
(b)There is a holdback on final redemptions.
(c)This investment can be redeemed immediately and is not subject to any restrictions on redemptions.
The Evergy Companies hold equity and debt investments classified as securities in various trusts including for the purposes of funding the decommissioning of Wolf Creek and for the benefit of certain retired executive officers of Evergy Kansas Central. The Evergy Companies record net realized and unrealized gains and losses on the nuclear decommissioning trusts in regulatory liabilities on their consolidated balance sheets and record net realized and unrealized gains and losses on the Evergy Companies' rabbi trusts in the consolidated statements of income and comprehensive income.
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The following table summarizes the net unrealized gains (losses) for the Evergy Companies' nuclear decommissioning trusts and rabbi trusts.
Three Months Ended March 3120212020
Evergy(millions)
Nuclear decommissioning trust - equity securities$33.1 $(89.3)
Nuclear decommissioning trust - debt securities(5.1)3.0 
Rabbi trusts - equity securities(1.3)(2.0)
Total$26.7 $(88.3)
Evergy Kansas Central
Nuclear decommissioning trust - equity securities$14.3 $(38.1)
Rabbi trust - equity securities(0.8)(2.1)
Total$13.5 $(40.2)
Evergy Metro
Nuclear decommissioning trust - equity securities$18.8 $(51.2)
Nuclear decommissioning trust - debt securities(5.1)3.0 
Total$13.7 $(48.2)
9. COMMITMENTS AND CONTINGENCIES
Environmental Matters
Set forth below are descriptions of contingencies related to environmental matters that may impact the Evergy Companies' operations or their financial results. Management's assessment of these contingencies, which are based on federal and state statutes and regulations, and regulatory agency and judicial interpretations and actions, has evolved over time. These laws, regulations, interpretations and actions can also change, restrict or otherwise impact the Evergy Companies' operations or financial results. The failure to comply with these laws, regulations, interpretations and actions could result in the assessment of administrative, civil and criminal penalties and/or the imposition of remedial requirements. The Evergy Companies believe that all their operations are in substantial compliance with current federal, state and local environmental standards.
There are a variety of final and proposed laws and regulations that could have a material adverse effect on the Evergy Companies' operations and consolidated financial results. Due in part to the complex nature of environmental laws and regulations, the Evergy Companies are unable to assess the impact of potential changes that may develop with respect to the environmental contingencies described below.
Cross-State Air Pollution Update Rule
In September 2016, the Environmental Protection Agency (EPA) finalized the Cross-State Air Pollution (CSAPR) Update Rule. The final rule addresses interstate transport of nitrogen oxides emissions in 22 states including Kansas, Missouri and Oklahoma during the ozone season and the impact from the formation of ozone on downwind states with respect to the 2008 ozone National Ambient Air Quality Standards (NAAQS). In December 2018, the EPA finalized a determination, known as the CSAPR Close-Out Rule, demonstrating the CSAPR Update Rule fully addressed certain upwind states' 2008 ozone NAAQS interstate transport obligations. Various states and others challenged both the CSAPR Update Rule and the CSAPR Close-Out Rule in the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit). In 2019, the D.C. Circuit granted these petitions and remanded a portion of the CSAPR Update Rule back to the EPA and vacated the CSAPR Close-Out Rule in its entirety.
In response to the remand by the D.C. Circuit, the EPA published the final Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS in April 2021. The final rule finds that nine of the states that were subject to the CSAPR Update Rule do not significantly contribute to downwind states' nonattainment and/or maintenance issues during the ozone season and that there are no further reductions in allowance budgets for these states. These nine states are Alabama, Arkansas, Iowa, Kansas, Mississippi, Missouri, Oklahoma, Texas and Wisconsin. The
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Evergy Companies will continue to monitor this rule as any future changes to their NOx ozone season allowance allocations could be material.
Greenhouse Gases
Burning coal and other fossil fuels releases carbon dioxide (CO2) and other gases referred to as greenhouse gases (GHG).  Various regulations under the federal Clean Air Act Amendments of 1990 (CAA) limit CO2 and other GHG emissions, and in addition, other measures are being imposed or offered by individual states, municipalities and regional agreements with the goal of reducing GHG emissions.
In July 2019, the EPA published the final Affordable Clean Energy (ACE) rule in the Federal Register. This rule contained (1) emission guidelines for GHG emissions from existing electric utility generating units (EGUs) and (2) revisions to emission guideline implementing regulations. This rule defined the "best system of emission reduction" (BSER) for GHG emissions from existing coal-fired EGUs as on-site, heat-rate efficiency improvements. The final rule also provided states with a list of candidate technologies that can be used to establish standards of performance and incorporate these performance standards into state plans. In conjunction with the finalization of the ACE rule, the EPA repealed its previously adopted Clean Power Plan (CPP). In January 2021, the D.C. Circuit vacated and remanded the ACE rule back to the EPA. In February 2021, the D.C. Circuit granted a motion filed by the EPA for a partial stay of its January 2021 vacatur discussed above. The partial stay leaves the vacatur of the ACE rule in place while staying the mandate that vacates the repeal of the CPP. As a result of the partial stay, neither the ACE rule nor the CPP will be in effect while the EPA forms a new rule to regulate greenhouse gas emissions. In April 2021, 18 states filed a petition for a writ of certiorari to the Supreme Court requesting review of the D.C. Circuit ruling.
Due to uncertainty regarding the future of the ACE rule or other potential GHG regulations, the Evergy Companies cannot determine the impact of the rule on their operations or consolidated financial results, but the cost to comply with the ACE rule or other potential GHG rules, could be material.
Water
The Evergy Companies discharge some of the water used in generation and other operations containing substances deemed to be pollutants. A November 2015 EPA rule applicable to steam-electric power generating plants establishes effluent limitations guidelines (ELG) and standards for wastewater discharges, including limits on the amount of toxic metals and other pollutants that can be discharged. Implementation timelines for this 2015 rule vary from 2018 to 2023. In April 2019, the U.S. Court of Appeals for the 5th Circuit (5th Circuit) issued a ruling that vacates and remands portions of the original ELG rule. Due to this ruling, future ELG modifications for the best available technology economically achievable for the discharge of legacy wastewater and leachate are likely and could be material.
In October 2020, the EPA published the final ELG reconsideration rule. This rule adjusts numeric limits for flue gas desulfurization (FGD) wastewater and adds a 10% volumetric purge limit for bottom ash transport water. The timeline for final FGD wastewater compliance is as soon as possible on or after one year following publication of the final rule in the Federal Register but no later than December 31, 2025. The Evergy Companies have reviewed the regulation and the costs to comply with these changes are not expected to be material.
Regulation of Coal Combustion Residuals
In the course of operating their coal generation plants, the Evergy Companies produce coal combustion residuals (CCRs), including fly ash, gypsum and bottom ash. The EPA published a rule to regulate CCRs in April 2015 that requires additional CCR handling, processing and storage equipment and closure of certain ash disposal units.
In March 2019, the D.C. Circuit issued a ruling to grant the EPA's request to remand the Phase I, Part I CCR rule in response to a prior court ruling requiring the EPA to address un-lined surface impoundment closure requirements. In August 2020, the EPA published the Part A CCR Rule. This rule reclassified clay-lined surface impoundments from "lined" to "un-lined" and established a deadline of April 11, 2021 to initiate closure. In November 2020, the EPA published the final Part B CCR Rule. This rule includes a process to allow un-lined impoundments to continue to operate if a demonstration is made to prove that the un-lined impoundments are not adversely impacting
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groundwater, human health or the environment. The Evergy Companies have initiated closure of all un-lined impoundments by the deadline in the Part A CCR rule and therefore the Part B CCR rule is not expected to have a material impact.
The Evergy Companies have recorded Asset Retirement Obligations (ARO) for their current estimates for the closure of ash disposal ponds, but the revision of these AROs may be required in the future due to changes in existing CCR regulations, the results of groundwater monitoring of CCR units or changes in interpretation of existing CCR regulations or changes in the timing or cost to close ash disposal ponds. If revisions to these AROs are necessary, the impact on the Evergy Companies' operations or consolidated financial results could be material.
10. RELATED PARTY TRANSACTIONS AND RELATIONSHIPS
In the normal course of business, Evergy Kansas Central, Evergy Metro and Evergy Missouri West engage in related party transactions with one another. A summary of these transactions and the amounts associated with them is provided below.
Jointly-Owned Plants and Shared Services
Employees of Evergy Kansas Central and Evergy Metro manage Evergy Missouri West's business and operate its facilities at cost, including Evergy Missouri West's 18% ownership interest in Evergy Metro's Iatan Nos. 1 and 2.  Employees of Evergy Kansas Central manage Jeffrey Energy Center (JEC) and operate its facilities at cost, including Evergy Missouri West's 8% ownership interest in JEC. Employees of Evergy Metro manage La Cygne Station and operate its facilities at cost, including Evergy Kansas Central's 50% interest in La Cygne Station. Employees of Evergy Metro and Evergy Kansas Central also provide one another with shared service support, including costs related to human resources, information technology, accounting and legal services.
The operating expenses and capital costs billed for jointly-owned plants and shared services are detailed in the following table.
Three Months Ended March 3120212020
(millions)
Evergy Kansas Central billings to Evergy Missouri West$9.5 $4.3 
Evergy Metro billings to Evergy Missouri West34.7 39.3 
Evergy Kansas Central billings to Evergy Metro9.9 15.0 
Evergy Metro billings to Evergy Kansas Central25.7 48.1 

Money Pool
Evergy Metro and Evergy Missouri West are authorized to participate in the Evergy, Inc. money pool, which is an internal financing arrangement in which funds may be lent on a short-term basis to Evergy Metro and Evergy Missouri West from Evergy, Inc. and between Evergy Metro and Evergy Missouri West. At March 31, 2021, Evergy Metro had 0 outstanding receivables or payables under the money pool. At December 31, 2020, Evergy Metro had a $100.0 million outstanding receivable from Evergy Missouri West and 0 outstanding payables under the money pool.
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Related Party Net Receivables and Payables
The following table summarizes Evergy Kansas Central's and Evergy Metro's related party net receivables and payables.
March 31December 31
20212020
Evergy Kansas Central(millions)
Net receivable from Evergy$0.9 $0.1 
Net payable to Evergy Metro(8.7)(21.7)
Net receivable from Evergy Missouri West9.5 6.6 
Evergy Metro
Net receivable from Evergy$19.4 $15.7 
Net receivable from Evergy Kansas Central8.7 21.7 
Net receivable from Evergy Missouri West379.6 188.1 
Tax Allocation Agreement
Evergy files a consolidated federal income tax return as well as unitary and combined income tax returns in several state jurisdictions with Kansas and Missouri being the most significant. Income taxes for consolidated or combined subsidiaries are allocated to the subsidiaries based on separate company computations of income or loss. The following table summarizes Evergy Kansas Central's and Evergy Metro's income taxes receivable from (payable to) Evergy.
March 31December 31
20212020
Evergy Kansas Central(millions)
Income taxes receivable from Evergy$19.0 $25.3 
Evergy Metro
Income taxes receivable from (payable to) Evergy$(26.7)$3.2 
Leases
Evergy Metro leases certain transmission equipment from Evergy Kansas Central. This lease was entered into prior to the merger in an arms-length transaction and is accounted for as an operating lease. The right-of-use asset related to this lease is recorded within other long-term assets and the current and long-term lease liabilities are recorded within other current liabilities and other long-term liabilities, respectively, on the consolidated balance sheet. The assets and liabilities related to this lease between Evergy Kansas Central and Evergy Metro are eliminated at consolidated Evergy. The following table summarizes Evergy Metro's right-of-use assets and related liabilities on its consolidated balance sheet.
March 31December 31
20212020
Evergy Metro(millions)
Right-of-use asset recorded within other long-term assets$28.8 $28.9 
Lease liability recorded in other current liabilities0.7 0.7 
Lease liability recorded in other long-term liabilities28.1 28.2 
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11. SHAREHOLDERS' EQUITY
Bluescape Energy Partners, LLC (Bluescape) Securities Purchase Agreement
In February 2021, Evergy entered into a securities purchase agreement with an affiliate of Bluescape. Pursuant to the securities purchase agreement, an affiliate of Bluescape agreed to purchase 2,269,447 shares of Evergy’s common stock for approximately $113.2 million and to receive a warrant to purchase up to 3,950,000 additional shares of Evergy’s common stock. Under the terms of the warrant, Evergy will have the option to elect a net cash settlement with respect to the exercise of the warrant under certain circumstances, or to net settle in shares of Evergy's common stock. The warrant expires three years from issuance and has an exercise price equal to $64.70 per share. Following the satisfaction of customary closing conditions, the affiliate of Bluescape completed the purchase of Evergy's common stock and the warrant in April 2021. The Executive Chairman of Bluescape, C. John Wilder, joined the Evergy Board in March 2021.
12. TAXES
Components of income tax expense are detailed in the following tables.
Evergy
Three Months Ended March 3120212020
Current income taxes(millions)
Federal$1.1 $2.4 
State1.9 (0.4)
Total3.0 2.0 
Deferred income taxes
Federal17.7 6.0 
State3.8 2.8 
Total21.5 8.8 
Investment tax credit amortization(1.5)(0.7)
Income tax expense$23.0 $10.1 
Evergy Kansas Central
Three Months Ended March 3120212020
Current income taxes(millions)
Federal$7.5 $24.2 
State1.2 (0.4)
Total8.7 23.8 
Deferred income taxes
Federal6.7 (18.2)
State2.3 2.6 
Total9.0 (15.6)
Investment tax credit amortization(1.1)(0.4)
Income tax expense$16.6 $7.8 
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Evergy Metro
Three Months Ended March 3120212020
Current income taxes(millions)
Federal$27.1 $11.6 
State1.2 1.2 
Total28.3 12.8 
Deferred income taxes  
Federal(22.0)(9.5)
State(0.8)(0.4)
Total(22.8)(9.9)
Investment tax credit amortization(0.4)(0.3)
Income tax expense$5.1 $2.6 
Effective Income Tax Rates
Effective income tax rates reflected in the financial statements and the reasons for their differences from the statutory federal rates are detailed in the following tables.
Evergy
Three Months Ended March 3120212020
Federal statutory income tax rate21.0 %21.0 %
Effect of:
COLI policies(1.0)(1.6)
State income taxes1.9 2.3 
Flow through depreciation for plant-related differences(5.8)(3.9)
Federal tax credits(3.1)(4.5)
Non-controlling interest(0.3)(0.3)
AFUDC equity(0.7)(0.3)
Amortization of federal investment tax credits(0.4)(0.5)
Stock compensation0.2 0.1 
Officer compensation limitation0.4 0.1 
Other(1.6)(0.2)
Effective income tax rate10.6 %12.2 %
Evergy Kansas Central
Three Months Ended March 3120212020
Federal statutory income tax rate21.0 %21.0 %
Effect of:
COLI policies(1.8)(3.1)
State income taxes1.2 2.7 
Flow through depreciation for plant-related differences(3.3)
Federal tax credits(5.2)(6.6)
Non-controlling interest(0.5)(0.6)
AFUDC equity(0.8)(0.4)
Amortization of federal investment tax credits(0.5)(0.7)
Stock compensation(0.1)(0.1)
Officer compensation limitation0.2 
Other(1.8)0.1 
Effective income tax rate8.4 %12.3 %
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Evergy Metro
Three Months Ended March 3120212020
Federal statutory income tax rate21.0 %21.0 %
Effect of:
COLI policies(0.2)
State income taxes0.6 2.2 
Flow through depreciation for plant-related differences(7.8)(7.7)
Federal tax credits(0.6)(2.4)
AFUDC equity(0.7)(0.2)
Amortization of federal investment tax credits(0.4)(0.4)
Stock compensation0.4 (3.6)
Officer compensation limitation0.9 
Other0.1 0.4 
Effective income tax rate13.3 %9.3 %
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following combined Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the consolidated financial statements and accompanying notes in this combined Quarterly Report on Form 10-Q and the Evergy Companies' combined 2020 Form 10-K. None of the registrants make any representation as to information related solely to Evergy, Evergy Kansas Central or Evergy Metro other than itself.
EVERGY, INC.
EXECUTIVE SUMMARY
Evergy is a public utility holding company incorporated in 2017 and headquartered in Kansas City, Missouri. Evergy operates primarily through the following wholly-owned direct subsidiaries listed below.
Evergy Kansas Central is an integrated, regulated electric utility that provides electricity to customers in the state of Kansas. Evergy Kansas Central has one active wholly-owned subsidiary with significant operations, Evergy Kansas South.
Evergy Metro is an integrated, regulated electric utility that provides electricity to customers in the states of Missouri and Kansas.
Evergy Missouri West is an integrated, regulated electric utility that provides electricity to customers in the state of Missouri.
Evergy Transmission Company owns 13.5% of Transource with the remaining 86.5% owned by AEP Transmission Holding Company, LLC, a subsidiary of AEP. Transource is focused on the development of competitive electric transmission projects. Evergy Transmission Company accounts for its investment in Transource under the equity method.
Evergy Kansas Central also owns a 50% interest in Prairie Wind, which is a joint venture between Evergy Kansas Central and subsidiaries of AEP and Berkshire Hathaway Energy Company. Prairie Wind owns a 108-mile, 345 kV double-circuit transmission line that provides transmission service in the SPP. Evergy Kansas Central accounts for its investment in Prairie Wind under the equity method.
Evergy Kansas Central, Evergy Kansas South, Evergy Metro and Evergy Missouri West conduct business in their respective service territories using the name Evergy. Collectively, the Evergy Companies have approximately 15,400 MWs of owned generating capacity and renewable power purchase agreements and engage in the
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generation, transmission, distribution and sale of electricity to approximately 1.6 million customers in the states of Kansas and Missouri. The Evergy Companies assess financial performance and allocate resources on a consolidated basis (i.e., operate in one segment).
February 2021 Winter Weather Event
In February 2021, much of the central and southern United States, including the service territories of the Evergy Companies, experienced a significant winter weather event that resulted in extremely cold temperatures over a multi-day period. This winter weather event resulted in an increase in the demand for natural gas used by the Evergy Companies for generating electricity and also contributed to the limited availability of other generation resources, including coal and renewables, within the SPP Integrated Marketplace. As part of the winter weather event, Evergy incurred natural gas and purchased power costs, net of wholesale revenues, of $341.3 million. This $341.3 million of net fuel and purchased power costs was primarily driven by $297.3 million of costs at Evergy Missouri West and $120.7 million of costs at Evergy Kansas Central, partially offset by $76.7 million of net wholesale revenues at Evergy Metro. The amount of purchased power costs incurred by the Evergy Companies during the winter weather event is subject to resettlement activity and further review by the SPP. This review and any subsequent resettlement activity could result in increases to the final amount of purchased power costs incurred by the Evergy Companies during the winter weather event and these increases could be material.
As of March 31, 2021, the Evergy Companies have deferred substantially all of the fuel and purchased power costs, net of wholesale revenues, related to the winter weather event to a regulatory asset or liability pursuant to their fuel recovery mechanisms and an emergency AAO issued by the KCC in February 2021. While the Evergy Companies expect to recover substantially all of any increased fuel and purchased power costs related to the winter weather event from customers, the timing of the cost recovery could be delayed or spread over a longer than typical recovery timeframe by the KCC or the MPSC given the extraordinary nature of the winter weather event and to help moderate monthly customer bill impacts.
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 in February 2021 across the central and southern United States driven by the winter weather event discussed above, Evergy and Evergy Kansas Central recorded $96.5 million of energy marketing margins in the first quarter of 2021 related to the winter weather event.
See Note 1 to the consolidated financial statements for additional information regarding the winter weather event.
Bluescape Securities Purchase Agreement
In February 2021, Evergy entered into a securities purchase agreement with an affiliate of Bluescape. Pursuant to the securities purchase agreement, an affiliate of Bluescape agreed to purchase 2,269,447 shares of Evergy’s common stock for approximately $113.2 million and to receive a warrant to purchase up to 3,950,000 additional shares of Evergy’s common stock. Under the terms of the warrant, Evergy will have the option to elect a net cash settlement with respect to the exercise of the warrant under certain circumstances, or to net settle in shares of Evergy's common stock. The warrant expires three years from issuance and has an exercise price equal to $64.70 per share. Following the satisfaction of customary closing conditions, the affiliate of Bluescape completed the purchase of Evergy's common stock and the warrant in April 2021. The Executive Chairman of Bluescape, C. John Wilder, joined the Evergy Board in March 2021.
Transforming Evergy’s Generation Fleet
The Evergy Companies are committed to a long-term strategy to reduce CO2 emissions in a cost-effective and reliable manner. In 2020, Evergy achieved a reduction of CO2 emissions of approximately 50% from 2005 levels in connection with its goal to achieve an 80% reduction from 2005 levels by 2050. In connection with the filing of its triennial integrated resource plan in Missouri in April 2021, Evergy announced a revised goal to achieve net-zero carbon emissions by 2045, which includes an interim goal of a 70% reduction of CO2 emissions from 2005 levels by 2030. Evergy’s five-year Sustainability Transformation Plan (STP) includes steps that would achieve significant
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CO2 emission reductions and provide a foundation to achieve future reductions by pursuing constructive legislative and regulatory recovery mechanisms to facilitate the retirement of coal-fired generation and expanding Evergy’s wind and solar footprint, while maintaining reliability. The trajectory and timing of reaching Evergy's net-zero carbon emissions goal are dependent on enabling technology developments and supportive energy policies and regulations.
Impact of COVID-19
See Part II, Item 7, MD&A - Executive Summary in the Evergy Companies' combined 2020 Form 10-K for information regarding the impact of COVID-19 on the Evergy Companies.
Regulatory Proceedings
See Note 4 to the consolidated financial statements for information regarding regulatory proceedings.
Earnings Overview
The following table summarizes Evergy's net income and diluted EPS.
Three Months Ended March 312021Change2020
(millions, except per share amounts)
Net income attributable to Evergy, Inc.$191.6 $122.2 $69.4 
Earnings per common share, diluted0.84 0.53 0.31 
Net income attributable to Evergy, Inc. increased for the three months ended March 31, 2021, compared to the same period in 2020, primarily due to non-regulated energy marketing margins related to the winter weather event in February 2021, higher retail sales driven by favorable weather and an increase in weather-normalized demand, and higher equity allowance for funds used during construction (AFUDC); partially offset by higher income tax expense.
Diluted EPS increased for the three months ended March 31, 2021, compared to the same period in 2020, primarily due to the increase in net income attributable to Evergy discussed above.
For additional information regarding the change in net income, refer to the Evergy Results of Operations section within this MD&A.
Adjusted Earnings (non-GAAP) and Adjusted EPS (non-GAAP)
Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) for the three months ended March 31, 2021, were $125.4 million or $0.55 per share, respectively. For the three months ended March 31, 2020, Evergy's adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) were $94.2 million or $0.41 per share, respectively. In addition to net income attributable to Evergy, Inc. and diluted EPS, Evergy's management uses adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP) to evaluate earnings and EPS without the income or costs resulting from non-regulated energy marketing margins from the February 2021 winter weather event, as well as 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. 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
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may not be comparable to other companies' presentations or more useful than the GAAP information provided elsewhere in this report.
The following table provides a reconciliation between net income attributable to Evergy, Inc. and diluted EPS as determined in accordance with GAAP and adjusted earnings (non-GAAP) and adjusted EPS (non-GAAP).
Earnings (Loss)Earnings (Loss) per Diluted ShareEarnings (Loss)Earnings (Loss) per Diluted Share
Three Months Ended March 3120212020
(millions, except per share amounts)
Net income attributable to Evergy, Inc.$191.6 $0.84 $69.4 $0.31 
Non-GAAP reconciling items:
Non-regulated energy marketing margin related to winter weather
   event, pre-tax(a)
(96.5)(0.42)— — 
Non-regulated energy marketing costs related to winter
   weather event, pre-tax(b)
2.0 0.01 — — 
Executive transition costs, pre-tax(c)
5.5 0.02 — — 
Severance costs, pre-tax(d)
1.6 0.01 27.0 0.12 
Advisor expenses, pre-tax(e)
1.5 0.01 6.6 0.02 
Income tax expense (benefit)(f)
19.7 0.08 (8.8)(0.04)
Adjusted earnings (non-GAAP)$125.4 $0.55 $94.2 $0.41 
(a)Reflects non-regulated energy marketing margins related to the winter weather event in February 2021 and are included in operating revenues on the consolidated statements of comprehensive income.
(b)Reflects non-regulated energy marketing incentive compensation costs related to the winter weather event in February 2021 and are included in operating and maintenance expense on the consolidated statements of comprehensive income.
(c)Reflects costs associated with executive transition including inducement bonuses, severance agreements and other transition expenses and are included in operating and maintenance expense on the consolidated statements of comprehensive income.
(d)Reflects severance costs incurred associated with certain voluntary severance programs at the Evergy Companies and are included in operating and maintenance expense on the consolidated statements of comprehensive income.
(e)Reflects advisor expenses incurred associated with strategic planning and are included in operating and maintenance expense on the consolidated statements of comprehensive income.
(f)Reflects an income tax effect calculated at a statutory rate of approximately 22% in 2021 and 26% in 2020, with the exception of certain non-deductible items.
Wolf Creek Refueling Outage
Wolf Creek's most recent refueling outage began in March 2021 and the unit is expected to return to service in May 2021.
ENVIRONMENTAL MATTERS
See Note 9 to the consolidated financial statements for information regarding environmental matters.
RELATED PARTY TRANSACTIONS
See Note 10 to the consolidated financial statements for information regarding related party transactions.
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EVERGY RESULTS OF OPERATIONS 
The following table summarizes Evergy's comparative results of operations.
Three Months Ended March 312021Change2020
 (millions)
Operating revenues$1,611.9 $495.2 $1,116.7 
Fuel and purchased power635.1 376.9 258.2 
SPP network transmission costs69.4 7.4 62.0 
Operating and maintenance275.5 (12.7)288.2 
Depreciation and amortization219.3 0.8 218.5 
Taxes other than income tax94.9 2.6 92.3 
Income from operations317.7 120.2 197.5 
Other expense, net(8.1)13.1 (21.2)
Interest expense94.0 (2.2)96.2 
Income tax expense23.0 12.9 10.1 
Equity in earnings of equity method investees, net of income taxes2.0 (0.2)2.2 
Net income194.6 122.4 72.2 
Less: Net income attributable to noncontrolling interests3.0 0.2 2.8 
Net income attributable to Evergy, Inc.$191.6 $122.2 $69.4 

Evergy Utility Gross Margin and MWh Sales
Utility gross margin is a financial measure that is not calculated in accordance with GAAP.  Utility gross margin, as used by the Evergy Companies, is defined as operating revenues less fuel and purchased power costs and amounts billed by the SPP for network transmission costs. Expenses for fuel and purchased power costs, offset by wholesale sales margin, are subject to recovery through cost adjustment mechanisms.  As a result, changes in fuel and purchased power costs are offset in operating revenues with minimal impact on net income. In addition, SPP network transmission costs fluctuate primarily due to investments by SPP members for upgrades to the transmission grid within the SPP RTO.  As with fuel and purchased power costs, changes in SPP network transmission costs are mostly reflected in the prices charged to customers with minimal impact on net income.
Management believes that utility gross margin provides a meaningful basis for evaluating the Evergy Companies' operations across periods because utility gross margin excludes the revenue effect of fluctuations in these expenses.  Utility gross margin is used internally to measure performance against budget and in reports for management and the Evergy Board.  Utility gross margin should be viewed as a supplement to, and not a substitute for, income from operations, which is the most directly comparable financial measure prepared in accordance with GAAP. The Evergy Companies' definition of utility gross margin may differ from similar terms used by other companies.
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The following table summarizes Evergy's utility gross margin and MWhs sold and provides a reconciliation of utility gross margin to income from operations.
 Revenues and ExpensesMWhs Sold
Three Months Ended March 312021Change20202021Change2020
Retail revenues(millions)(thousands)
Residential$396.7 $(5.8)$402.5 3,962 384 3,578 
Commercial346.0 (38.7)384.7 4,222 16 4,206 
Industrial133.6 (7.0)140.6 2,058 59 1,999 
Other retail revenues7.4 (3.2)10.6 31 (2)33 
Total electric retail883.7 (54.7)938.4 10,273 457 9,816 
Wholesale revenues487.5 424.0 63.5 4,313 1,439 2,874 
Transmission revenues86.0 10.4 75.6 N/AN/AN/A
Other revenues154.7 115.5 39.2 N/AN/AN/A
Operating revenues1,611.9 495.2 1,116.7 14,586 1,896 12,690 
Fuel and purchased power(635.1)(376.9)(258.2)
SPP network transmission costs(69.4)(7.4)(62.0)
Utility gross margin (a)
907.4 110.9 796.5 
Operating and maintenance(275.5)12.7 (288.2)
Depreciation and amortization(219.3)(0.8)(218.5)
Taxes other than income tax(94.9)(2.6)(92.3)
Income from operations$317.7 $120.2 $197.5 
(a) Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin above.
Evergy's utility gross margin increased $110.9 million for the three months ended March 31, 2021, compared to the same period in 2020, driven by:
$96.5 million of non-regulated energy marketing margins recognized at Evergy Kansas Central during the winter weather event in February 2021; and
a $22.0 million increase primarily due to colder winter weather (heating degree days increased by 11%) and an increase in weather-normalized residential and industrial demand, partially offset by a decrease in weather-normalized commercial demand; partially offset by
a $7.2 million decrease in revenues at Evergy Kansas Central and Evergy Metro due to rate reductions beginning January 1, 2021 in Kansas to reflect their exemption from Kansas corporate income taxes; and
a $0.4 million net decrease due to other impacts primarily from the February 2021 winter weather event driven by:
a $21.1 million decrease at Evergy Missouri West driven by $14.9 million of increased fuel and purchased power costs in February 2021 that are not recoverable from customers through its fuel recovery mechanism and $6.2 million related to a special requirements contract with an industrial customer; and
a $12.5 million decrease at Evergy Metro primarily driven by jurisdictional allocation differences 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 $34.0 million increase at Evergy Kansas Central driven by higher utility gross margin at its non-regulated 8% ownership share of JEC due to higher wholesale sales prices and MWhs sold in February 2021.
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Operating and Maintenance
Evergy's operating and maintenance expense decreased $12.7 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
a $24.9 million decrease in voluntary severance expenses due to an $18.7 million decrease at Evergy Kansas Central, Evergy Metro and Evergy Missouri West related to Evergy voluntary exit programs in 2020 and a $6.2 million decrease in voluntary severance expenses incurred at Evergy Kansas Central and Evergy Metro related to Wolf Creek voluntary exit programs in 2020; and
a $5.1 million decrease in advisor expenses incurred in the first quarter of 2021 by Evergy associated with strategic planning; partially offset by
a $6.5 million increase in plant operating and maintenance expense at Evergy Kansas Central related to a major maintenance outage at JEC in the first quarter of 2021;
$5.5 million of costs associated with executive transition in the first quarter of 2021, including inducement bonuses, severance agreements and other transition expenses;
a $3.0 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received by Evergy Kansas Central and Evergy Metro in the first quarter of 2021 related to their ownership interests in Wolf Creek; and
$2.0 million of costs at Evergy Kansas Central related to non-regulated energy marketing margins recognized during the winter weather event in February 2021.
Other Expense, Net
Evergy's other expense, net decreased $13.1 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
a $5.7 million decrease due to higher Evergy Kansas Central and Evergy Metro equity AFUDC primarily due to lower short-term debt and higher construction work in progress balances in the first quarter of 2021;
$3.1 million of other income recorded in the first quarter of 2021 related to a contract termination fee; and
a $2.4 million decrease due to higher investment earnings primarily due to an unrealized gain from equity investments in the first quarter of 2021.
Income Tax Expense
Evergy's income tax expense increased $12.9 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
a $36.5 million increase primarily due to higher Evergy Kansas Central pre-tax income in 2021; partially offset by
a $10.2 million decrease as a result of the state of Kansas exempting certain public utilities, including Evergy Kansas Central and Evergy Metro, from Kansas corporate income tax beginning in 2021;
a $9.0 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes; and
a $3.7 million decrease due to higher wind and other income tax credits in 2021.
LIQUIDITY AND CAPITAL RESOURCES 
Evergy relies primarily upon cash from operations, short-term borrowings, debt and equity issuances and its existing cash and cash equivalents to fund its capital requirements. Evergy's capital requirements primarily consist of capital expenditures, payment of contractual obligations and other commitments, and the payment of dividends to shareholders. See the Evergy Companies' combined 2020 Form 10-K for more information on Evergy's sources and uses of cash.
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As of March 31, 2021, Evergy had $482.0 million of cash and cash equivalents on hand and $1.2 billion of available borrowing capacity under its master credit facility. 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.
Short-Term Borrowings
As of March 31, 2021, Evergy had $1.2 billion of available borrowing capacity under its master credit facility. The available borrowing capacity under the master credit facility consisted of $354.3 million for Evergy, Inc., $504.2 million for Evergy Kansas Central, $235.0 million for Evergy Metro and $110.0 million for Evergy Missouri West. The Evergy Companies' borrowing capacity under the master credit facility also supports their issuance of commercial paper. See Note 6 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.
In May 2021, Evergy, Inc. established a commercial paper program that will be supported by its borrowing capacity under the master credit facility.
Significant Debt Issuances
See Note 7 to the consolidated financial statements for information regarding significant debt issuances.
Equity Issuance
See Note 11 to the consolidated financial statements for information regarding Evergy's securities purchase agreement with an affiliate of Bluescape to purchase Evergy's common stock and a warrant that was completed in April 2021.
Pensions
For the three months ended March 31, 2021, Evergy made pension contributions of $27.8 million. Evergy expects to make additional pension contributions of $107.4 million in 2021 to satisfy ERISA funding requirements and KCC and MPSC rate orders, of which $42.1 million is expected to be paid by Evergy Kansas Central and $65.3 million is expected to be paid by Evergy Metro. Also in 2021, Evergy expects to make post-retirement benefit contributions of $4.0 million.
Debt Covenants
As of March 31, 2021, Evergy was in compliance with all debt covenants under the master credit facility and certain debt instruments that contain restrictions that require the maintenance of certain capitalization and leverage ratios. See Note 6 to the consolidated financial statements for more information.
Off-Balance Sheet Arrangements
Evergy's off-balance sheet arrangements were reported in the Evergy Companies' combined 2020 Form 10-K. See Note 7 to the consolidated financial statements for information regarding Evergy's agreement to unconditionally guarantee certain series of Evergy Missouri West long-term debt in April 2021.
Cash Flows
The following table presents Evergy's cash flows from operating, investing and financing activities.
Three Months Ended March 3120212020
(millions)
Cash Flows from (used in) Operating Activities$(28.6)$320.6 
Cash Flows used in Investing Activities(475.2)(333.4)
Cash Flows from Financing Activities840.9 294.0 
52

Cash Flows from (used in) Operating Activities
Evergy's cash flows from (used in) operating activities decreased $349.2 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
$363.7 million of cash payments for net fuel and purchased power costs during the February 2021 winter weather event; and
a $99.5 million increase in cash payments due to the timing of payments made to taxing authorities for property tax payments as well as various suppliers and other service providers for goods and services purchased in the ordinary course of business; partially offset by
$90.6 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 $141.8 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
a $113.3 million increase in additions to property, plant and equipment due to increases at Evergy Kansas Central, Evergy Metro and Evergy Missouri West of $54.5 million, $24.5 million and $34.3 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; and
a decrease of $30.0 million in proceeds from corporate-owned life insurance (COLI) investments, primarily from Evergy Kansas Central, due to a higher number of policy settlements in 2020.
Cash Flows from Financing Activities
Evergy's cash flows from financing activities increased $546.9 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
a $486.9 million increase in short-term debt borrowings primarily driven by an increase of $525.0 million of commercial paper borrowings in 2021 at Evergy Missouri West to support the payment of costs related to the winter weather event and for the repayment of a $347.4 million affiliated note payable to Evergy prior to the issuance of Evergy Missouri West's $500.0 million of Series A, B and C Senior Notes in April 2021; and
a $27.7 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 2020.
53

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.
Three Months Ended March 312021Change2020
 (millions)
Operating revenues$901.1 $341.0 $560.1 
Fuel and purchased power294.8 195.6 99.2 
SPP network transmission costs69.4 7.4 62.0 
Operating and maintenance130.8 7.1 123.7 
Depreciation and amortization115.5 3.4 112.1 
Taxes other than income tax50.3 1.7 48.6 
Income from operations240.3 125.8 114.5 
Other expense, net(3.2)7.9 (11.1)
Interest expense40.3 (1.3)41.6 
Income tax expense16.6 8.8 7.8 
Equity in earnings of equity method investees, net of income taxes0.9 (0.3)1.2 
Net income181.1 125.9 55.2 
Less: Net income attributable to noncontrolling interests3.0 0.2 2.8 
Net income attributable to Evergy Kansas Central, Inc.$178.1 $125.7 $52.4 
Evergy Kansas Central Utility Gross Margin and MWh Sales
The following table summarizes Evergy Kansas Central's utility gross margin and MWhs sold and provides a reconciliation of utility gross margin to income from operations.
 Revenues and ExpensesMWhs Sold
Three Months Ended March 312021Change20202021Change2020
Retail revenues(millions)(thousands)
Residential$183.4 $15.6 $167.8 1,538 131 1,407 
Commercial153.7 2.6 151.1 1,635 11 1,624 
Industrial93.0 0.9 92.1 1,326 48 1,278 
Other retail revenues3.2 (1.5)4.7 (3)11 
Total electric retail433.3 17.6 415.7 4,507 187 4,320 
Wholesale revenues272.4 217.6 54.8 3,249 1,780 1,469 
Transmission revenues77.9 9.7 68.2 N/AN/AN/A
Other revenues117.5 96.1 21.4 N/AN/AN/A
Operating revenues901.1 341.0 560.1 7,756 1,967 5,789 
Fuel and purchased power(294.8)(195.6)(99.2)
SPP network transmission costs(69.4)(7.4)(62.0)
Utility gross margin (a)
536.9 138.0 398.9 
Operating and maintenance(130.8)(7.1)(123.7)
Depreciation and amortization(115.5)(3.4)(112.1)
Taxes other than income tax(50.3)(1.7)(48.6)
Income from operations$240.3 $125.8 $114.5 
(a)Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin under Evergy's Results of Operations.
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Evergy Kansas Central's utility gross margin increased $138.0 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
$96.5 million of non-regulated energy marketing margins recognized during the winter weather event in February 2021; and
a $34.0 million increase due to other impacts from the February 2021 winter weather event driven by higher utility gross margin at Evergy Kansas Central's non-regulated 8% ownership share of JEC due to higher wholesale sales prices and MWhs sold in February 2021; partially offset by
a $5.1 million decrease in revenues due to a rate reduction beginning January 1, 2021 in Kansas to reflect the exemption of Evergy Kansas Central from Kansas corporate income taxes.
Evergy Kansas Central Operating and Maintenance
Evergy Kansas Central's operating and maintenance expense increased $7.1 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
a $7.2 million increase in various administrative and general operating and maintenance expenses that included a $1.6 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received by Evergy Kansas Central in the first quarter of 2021 related to its ownership interest in Wolf Creek;
a $6.5 million increase in plant operating and maintenance expense related to a major maintenance outage at JEC in the first quarter of 2021;
$2.7 million of costs associated with executive transition in the first quarter of 2021, including inducement bonuses, severance agreements and other transition expenses; and
$2.0 million of costs related to non-regulated energy marketing margins recognized during the winter weather event in February 2021; partially offset by
a $12.2 million decrease in voluntary severance expenses due to a $9.1 million decrease related to Evergy voluntary exit programs in 2020 and a $3.1 million decrease in voluntary severance expenses related to Wolf Creek voluntary exit programs in 2020.
Evergy Kansas Central Other Expense, Net
Evergy Kansas Central's other expense, net decreased $7.9 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
a $2.8 million decrease due to higher equity AFUDC primarily due to lower short-term debt and higher construction work in progress balances in the first quarter of 2021;
$1.4 million of other income recorded in the first quarter of 2021 related to a contract termination fee; and
a $1.0 million decrease due to lower net unrealized losses in Evergy Kansas Central's rabbi trust in the first quarter of 2021.
Evergy Kansas Central Income Tax Expense
Evergy Kansas Central's income tax expense increased $8.8 million for the three months ended March��31, 2021, compared to the same period in 2020, primarily driven by:
a $36.1 million increase due to higher pre-tax income in 2021; partially offset by
a $10.9 million decrease as a result of the state of Kansas exempting certain public utilities, including Evergy Kansas Central, from Kansas corporate income tax beginning in 2021;
a $6.4 million decrease due to flow-through items primarily driven by higher amortization of excess deferred income taxes; and
a $7.1 million decrease due to higher wind and other income tax credits in 2021.
55

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.
Three Months Ended March 312021Change2020
 (millions)
Operating revenues$516.2 $140.7 $375.5 
Fuel and purchased power241.2 148.7 92.5 
Operating and maintenance93.4 (12.5)105.9 
Depreciation and amortization78.4 (3.0)81.4 
Taxes other than income tax32.0 — 32.0 
Income from operations71.2 7.5 63.7 
Other expense, net(4.3)2.6 (6.9)
Interest expense28.3 (0.3)28.6 
Income tax expense5.1 2.5 2.6 
Net income$33.5 $7.9 $25.6 
Evergy Metro Utility Gross Margin and MWh Sales
The following table summarizes Evergy Metro's utility gross margin and MWhs sold and provides a reconciliation of utility gross margin to income from operations.
 Revenues and ExpensesMWhs Sold
Three Months Ended March 312021Change20202021Change2020
Retail revenues(millions)(thousands)
Residential$122.2 $(25.2)$147.4 1,411 146 1,265 
Commercial132.5 (39.6)172.1 1,798 (13)1,811 
Industrial22.3 (7.8)30.1 396 (19)415 
Other retail revenues2.1 (1.4)3.5 17 — 17 
Total electric retail279.1 (74.0)353.1 3,622 114 3,508 
Wholesale revenues200.5 193.7 6.8 751 (520)1,271 
Transmission revenues4.0 0.9 3.1 N/AN/AN/A
Other revenues32.6 20.1 12.5 N/AN/AN/A
Operating revenues516.2 140.7 375.5 4,373 (406)4,779 
Fuel and purchased power(241.2)(148.7)(92.5)
Utility gross margin (a)
275.0 (8.0)283.0 
Operating and maintenance(93.4)12.5 (105.9)
Depreciation and amortization(78.4)3.0 (81.4)
Taxes other than income tax(32.0)— (32.0)
Income from operations$71.2 $7.5 $63.7 
(a)Utility gross margin is a non-GAAP financial measure.  See explanation of utility gross margin under Evergy's Results of Operations.
Evergy Metro's utility gross margin decreased $8.0 million for the three months ended March 31, 2021, compared to the same period in 2020, driven by:
a $12.5 million decrease due to impacts from the February 2021 winter weather event primarily driven by jurisdictional allocation differences between Evergy Metro's fuel recovery mechanisms in Missouri and Kansas regarding its refund to customers for the net increase in wholesale revenues in February 2021; and
56

a $2.1 million decrease in revenues due to a rate reduction beginning January 1, 2021 in Kansas to reflect Evergy Metro's exemption from Kansas corporate income taxes; partially offset by
a $6.6 million increase primarily due to colder winter weather (heating degree days increased by 9%) and an increase in weather-normalized residential demand, partially offset by a decrease in weather-normalized commercial demand.
Evergy Metro Operating and Maintenance
Evergy Metro's operating and maintenance expense decreased $12.5 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by:
a $9.8 million decrease in voluntary severance expenses due to a $6.7 million decrease related to Evergy voluntary exit programs in 2020 and a $3.1 million decrease in voluntary severance expenses related to Wolf Creek voluntary exit programs in 2020; and
a $4.2 million decrease in plant operating and maintenance expense at fossil-fuel generating units primarily driven by a $2.5 million decrease at Hawthorn Station, Iatan Station and La Cygne Station primarily due to lower employee headcount in 2021; partially offset by
a $3.3 million increase in various administrative and general operating and maintenance expenses including a $1.4 million increase in property insurance expense due to a lower annual refund of nuclear insurance premiums received in the first quarter of 2021 by Evergy Metro related to its ownership interest in Wolf Creek; and
$1.8 million of costs associated with executive transition in the first quarter of 2021, including inducement bonuses, severance agreements and other transition expenses.
Evergy Metro Other Expense, Net
Evergy Metro's other expense, net decreased $2.6 million for the three months ended March 31, 2021, compared to the same period in 2020, driven by a $2.7 million increase in equity AFUDC primarily due to lower short-term debt and higher construction work in progress balances in the first quarter of 2021.
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
In the ordinary course of business, Evergy faces risks that are either non-financial or non-quantifiable. Such risks principally include business, legal, operational and credit risks and are discussed elsewhere in this report as well as in the Evergy Companies' combined 2020 Form 10-K and therefore are not represented here.
Evergy's interim period disclosures about market risk included in quarterly reports on Form 10-Q address material changes, if any, from the most recently filed annual report on Form 10-K. Therefore, these interim period disclosures should be read in conjunction with Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk included in the Evergy Companies' combined 2020 Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
EVERGY
Disclosure Controls and Procedures
Evergy carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).  This evaluation was conducted under the supervision, and with the participation, of Evergy's management, including the chief executive officer and chief financial officer, and Evergy's disclosure committee.  Based upon this evaluation, the chief executive officer and chief financial officer of Evergy have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Evergy were effective at a reasonable assurance level.
57

Changes in Internal Control Over Financial Reporting
In January 2021, Evergy Kansas Central implemented a new customer billing system that changed its internal control over financial reporting. In connection with this implementation, Evergy has updated its internal controls over financial reporting, as necessary, to accommodate modifications to its business processes.

Except as described above, there has been no change in Evergy’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended March 31, 2021, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

EVERGY KANSAS CENTRAL
Disclosure Controls and Procedures
Evergy Kansas Central carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).  This evaluation was conducted under the supervision, and with the participation, of Evergy Kansas Central's management, including the chief executive officer and chief financial officer, and Evergy Kansas Central's disclosure committee.  Based upon this evaluation, the chief executive officer and chief financial officer of Evergy Kansas Central have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Evergy Kansas Central were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
In January 2021, Evergy Kansas Central implemented a new customer billing system that changed its internal control over financial reporting. In connection with this implementation, Evergy Kansas Central has updated its internal controls over financial reporting, as necessary, to accommodate modifications to its business processes.

Except as described above, there has been no change in Evergy Kansas Central’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended March 31, 2021, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

EVERGY METRO
Disclosure Controls and Procedures
Evergy Metro carried out an evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).  This evaluation was conducted under the supervision, and with the participation, of Evergy Metro's management, including the chief executive officer and chief financial officer, and Evergy Metro's disclosure committee.  Based upon this evaluation, the chief executive officer and chief financial officer of Evergy Metro have concluded as of the end of the period covered by this report that the disclosure controls and procedures of Evergy Metro were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There has been no change in Evergy Metro’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarterly period ended March 31, 2021, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting

58

PART II - OTHER INFORMATION
ITEM 1.  LEGAL PROCEEDINGS
Other Proceedings
The Evergy Companies are parties to various lawsuits and regulatory proceedings in the ordinary course of their respective businesses.  For information regarding material lawsuits and proceedings, see Notes 4 and 9 to the consolidated financial statements.  Such information is incorporated herein by reference.
ITEM 1A. RISK FACTORS
Actual results in future periods for the Evergy Companies could differ materially from historical results and the forward-looking statements contained in this report. The business of the Evergy Companies is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond their control. Additional risks and uncertainties not presently known or that management currently believes to be immaterial may also adversely affect the Evergy Companies. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in Part I, Item 1A, Risk Factors included in the 2020 Form 10-K for each of Evergy, Evergy Kansas Central and Evergy Metro, as well as Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by Evergy, Evergy Kansas Central and Evergy Metro. There have been no material changes with regards to those risk factors. This information, as well as the other information included in this report and in the other documents filed with the SEC, should be carefully considered before making an investment in the securities of the Evergy Companies. Risk factors of Evergy Kansas Central and Evergy Metro are also risk factors of Evergy.
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Purchases of Equity Securities
The following table provides information regarding purchases by Evergy of its equity securities that are registered pursuant to Section 12 of the Exchange Act during the three months ended March 31, 2021.
Issuer Purchases of Equity Securities
Month
Total Number of
Shares (or Units)
Purchased(a)
Average Price
Paid per Share
(or Unit)
Total Number of
Shares (or Units)
Purchased as
Part of Publicly
Announced Plans
or Programs
Maximum
Number of
Shares (or Units)
that May Yet Be
Purchased Under the Plans or Programs
January 1 - 31— — — — 
February 1 - 28— — — — 
March 1 - 3129,851$56.96— — 
Total29,851$56.96— — 
(a) Represents shares Evergy purchased for withholding taxes related to the vesting of restricted stock and performance shares.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.  MINE SAFETY DISCLOSURES
Not applicable.
59

ITEM 5.  OTHER INFORMATION
Annual Shareholder Meeting Results
Evergy's annual meeting of shareholders was held on May 4, 2021. In accordance with the recommendations of the Board, the shareholders (i) elected thirteen directors; (ii) approved, on an advisory and non-binding basis, the 2020 compensation of Evergy's named executive officers; and (iii) ratified the appointment of Deloitte & Touche LLP as independent registered public accountants for 2021. The proposals voted upon at the annual meeting, as well as the voting results for each proposal are set forth below.
Item 1 on the Proxy Card. The thirteen persons named below were elected, as proposed in the proxy statement, to serve as directors until Evergy's annual meeting in 2021, and until their successors are elected and qualified. The voting regarding the election was as follows:
Number of Votes
ForAgainstBroker Non-Votes
David A. Campbell175,518,0761,519,34222,330,458
Mollie Hale Carter166,771,04510,283,90122,330,458
Thomas D. Hyde164,965,01812,060,73622,330,458
B. Anthony Isaac169,944,4127,088,77622,330,458
Paul M. Keglevic175,539,5221,480,10122,330,458
Mary L. Landrieu175,606,4521,359,20822,330,458
Sandra A.J. Lawrence166,979,71910,076,27522,330,458
Ann D. Murtlow173,096,2953,945,27222,330,458
Sandra J. Price172,936,8484,108,85422,330,458
Mark A. Ruelle164,448,29712,502,92122,330,458
S. Carl Soderstrom Jr.171,512,4015,507,91722,330,458
John Arthur Stall173,057,2053,966,54022,330,458
C. John Wilder139,314,67337,619,56222,330,458
Item 2 on the Proxy Card. In an advisory and non-binding "say on pay" vote, shareholders approved the 2020 compensation of Evergy's named executive officers, with the following vote:
Number of Votes
ForAgainstAbstainBroker Non-Votes
169,208,0717,420,236723,66422,330,458
Item 3 on the Proxy Card. Shareholders voted for the ratification and confirmation of the appointment of Deloitte & Touche LLP as Evergy's independent registered public accounting firm for 2021, with the following vote:
Number of Votes
ForAgainstAbstainBroker Non-Votes
198,004,1961,290,711387,5220

Available Information
The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at sec.gov. Additionally, information about the Evergy Companies, including their combined annual reports on Form 10-K, combined quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed with the SEC, is also available through the
60

Evergy Companies' website, www.evergy.com. Such reports are accessible at no charge and are made available as soon as reasonably practical after such material is filed with or furnished to the SEC.
Investors should note that the Evergy Companies announce material financial information in SEC filings, press releases and public conference calls. In accordance with SEC guidelines, the Evergy Companies also use the Investor Relations section of their website, www.evergy.com, to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on Evergy's website is not part of this document.
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ITEM 6. EXHIBITS
Exhibit
Number 
 Description of Document
 
Registrant
    
4.1*Evergy
10.1*+Evergy
Evergy Kansas Central
Evergy Metro
10.2*+Evergy
Evergy Kansas Central
Evergy Metro
10.3*+Evergy
Evergy Kansas Central
Evergy Metro
10.4*+Evergy
Evergy Kansas Central
Evergy Metro
10.5*+Evergy
Evergy Kansas Central
Evergy Metro
10.6*Evergy
10.7*Evergy
10.8*Evergy
10.9*Evergy
10.10*Evergy
10.11*Evergy
10.12*Evergy
10.13*Evergy
62

10.14+Evergy
31.1Evergy
31.2Evergy
31.3Evergy Metro
31.4Evergy Metro
31.5Evergy Kansas Central
31.6Evergy Kansas Central
32.1**Evergy
32.2**Evergy Metro
32.3**Evergy Kansas Central
101.INS***XBRL Instance Document.n/a
101.SCHInline XBRL Taxonomy Extension Schema Document.Evergy
Evergy Kansas Central
Evergy Metro
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.Evergy
Evergy Kansas Central
Evergy Metro
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.Evergy
Evergy Kansas Central
Evergy Metro
101.LABInline XBRL Taxonomy Extension Labels Linkbase Document.Evergy
Evergy Kansas Central
Evergy Metro
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.Evergy
Evergy Kansas Central
Evergy Metro
104Cover Page Interactive Data File (embedded within the Inline XBRL document).Evergy
Evergy Kansas Central
Evergy Metro
* Filed with the SEC as exhibits to prior SEC filings and are incorporated herein by reference and made a part hereof. The SEC filings and the exhibit number of the documents so filed, and incorporated herein by reference, are stated in parenthesis in the description of such exhibit.
** Furnished and shall not be deemed filed for the purpose of Section 18 of the Exchange Act. Such document shall not be incorporated by reference into any registration statement or other document pursuant to the Exchange Act or the Securities Act of 1933, as amended, unless otherwise indicated in such registration statement or other document.
*** The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
+ Indicates management contract or compensatory plan or arrangement.
Copies of any of the exhibits filed with the SEC in connection with this document may be obtained from Evergy, Evergy Kansas Central or Evergy Metro, as applicable, upon written request.
63

The registrants agree to furnish to the SEC upon request any instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of total assets of such registrant and its subsidiaries on a consolidated basis.
64

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Evergy, Inc., Evergy Kansas Central, Inc. and Evergy Metro, Inc. have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.
 EVERGY, INC.
  
Dated:May 5, 2021
By:  /s/ Kirkland B. Andrews
 (Kirkland B. Andrews)
 (Executive Vice President and Chief Financial Officer)
 EVERGY KANSAS CENTRAL, INC.
  
Dated:May 5, 2021
By:  /s/ Kirkland B. Andrews
 (Kirkland B. Andrews)
 (Executive Vice President and Chief Financial Officer)

 EVERGY METRO, INC.
  
Dated:May 5, 2021
By:  /s/ Kirkland B. Andrews
 (Kirkland B. Andrews)
 (Executive Vice President and Chief Financial Officer)

65